MTR’s First-Half Result Weak as Expected

In line with expectation, MTR’s first-half result reflected the impact of the lockdown with the transport operations losing money. The recurrent business excluding the booking of properties was at a HKD 678 million loss. However, revenue was 3.2% higher helped by better overseas contribution. We maintain our patronage assumption for the improvement seen in June to continue in the second half. Domestic patronage in June edged higher to 121.6 million and we assume patronage of 123 million per month in the third quarter, and further increase to 125 million per month in the fourth quarter. The opening of the final phase of the Shatin-Central Link in May is supportive of patronage growth in the overall network as population movement continues to improvement. We also note patronage is generally seasonally higher in the fourth quarter.