[ET Net News Agency, 3 October 2018] HSBC Global Research hosted a tour of the new
Express Rail Link (XRL) between Hong Kong and China on 27-28 September. It said the
journey was pleasant and believes it should benefit the Hong Kong economy in the long term
as it provides better connections with the major cities of Mainland China.
However, the research house thinks it is likely to take more time for XRL to provide a
meaningful earnings contribution to MTR Corporation (00066). Average daily patronage
between 23 and 29 September was 50k, 38% below the projected 80k.
HSBC believes it is too early to conclude that XRL will benefit the Hong Kong retail
market in the near term. It noted the passenger traffic using the XRL West Kowloon for
arrival/departure to Hong Kong accounted for 5.9% of the total during 23-29 September, and
there has been no incremental increase in mainland visitors since the opening of XRL.
Mainland visitors and Hong Kong residents have accounted for 65% and 32% of XRL's
customers, respectively, since the line opened.
HSBC maintained its "hold" rating on MTR, with a target price of HK$42.8. (KL)