Net Profit Estimation between HKD 1.7 Bln and HKD 2.5 Bln

MTR Corporation Limited (0066 HK) will announce its 2008 Semiannual Report on 5 Aug 2008. According to securities analysts, the merger of the company and Kowloon-Canton Railway Corporation (KCRC) will considerably increase its railway operations, but its profit from property development will shrink. Analysts estimate the company's net profit for 1H 2008 to be between HKD 1.70 bln and HKD 2.53 bln, with a YOY decrease between 17% and 23.4%, based on HKD 2.05 bln net profit for 1H 2007.

The Daiwa Institute of Research estimated that the 1H 2008 net profit of the company is HKD 2.53 bln, or a 23.4% YOY increase. Following deduction of profit from property development, the company's net profit will realize a 2.57 fold YOY gain, increasing from HKD 387 mln to HKD 1.38 bln, which is mainly attributable to a merger with KCRC and KCRC's project 'Elements'. This could offset the 31% net loss of property developments due to lowered train fares.

However, Credit Suisse and BOC International respectively estimated the 1H 2008 net profit of the company to be HKD 1.70 bln and HKD 1.87 bln, or a 17% YOY decrease and 9% YOY decrease. Credit Suisse booked HKD 4.08 bln in EBITDA of the company, or a 45.9% YOY increase. While BOC International booked a 51% YOY increase for EBITDA of the company.

UBS estimated the EBITA of the company's railway operations will be HKD 3.65 bln, or a 70% YOY increase.


Source: www.aastock.com

Date: 1 Aug 2008

CN01/RL/DM/BT/KM