MTRC looking at 'innovative ways' to meet finance needs

Staff reporter

MTR Corp plans to come up with an innovative approach to meet more than HK$100 billion in financing needs for project developments, especially in the Northern Metropolis, sources say.

As the committed and projected investment amount of the MTRC in the next decade is around HK$165 billion, similar to its market capitalization, some believe that the rail firm may either stop developing new lines or they may face a serious cash-flow problem, sources said.

However, they pointed out that the company could be "innovative" in its approach, such as by mortgaging its malls while retaining control of them, issuing 30-year bonds, or even a combination of various funding measures.

MTRC may have booked a "handsome income" from property sales last year but sources said it needs to "save for rainy days" while projecting the company's market value to double in a decade. The railway operator has committed to invest around HK$65 billion in asset-renewal works in 2023-2027, sources said.

It aims to devote more than HK$100 billion in the next decade to invest in Hong Kong's future, they added.

These new projects, which are expected to be completed between 2027 and 2034, include Hung Shui Kiu station on the Tuen Ma Line, Tuen Mun South Extension, and Kwu Tung station on the East Rail Line.

Additionally, it has been actively supporting the development of the Northern Metropolis, they said, adding that the administration will commence planning and design of the Northern Link Spur Line soon.

MTRC could also rely more on technology - including unmanned driving - to cut costs, they said.

For instance, they said new technology can determine a facility's replacement time based on its condition.

In March, the company is scheduled to unveil its results from last year, which may include a rise in profit thanks to the reconciliation of the sales of several projects sold in the pandemic period, sources said.

Revenue from local operations may have only recovered to 90 percent of the pre-Covid level and the increase in mall floor area did not lead to higher sales, they explained.

MTRC paid more than HK$6 billion in dividends to its major shareholder - the government - in 2023, sources said.