Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

A buy-side analyst with over 15 years of experience investing in Asian markets and specializing in the mid-small cap space, emphasizing value investing in companies with good free cash flows/dividends and long-term holding horizons. 
Exempt Financial Adviser (EFA) under CrossASEAN Research Pte Ltd. It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity, Bottom-up Analyst

MTR Corp: Paying a High Price for a Cheery Consensus

MTR's 2.4% Dividend Yield Makes It Less Attractive

It's Rail, It's Property: MTR Is Rail Estate

Kelusa Asia Focus Funds

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/13289" target="_blank" data-smartkarma-citation="entities:13289:1">MTR Corp (66 HK)</a> ticks all the boxes: 1. It is trading well above its normalized valuation band. Prevailing market conditions, and macro economic drivers should press yields higher. 2. We are at the cusp of a prolonged earnings downgrade cycle: <ul class="ember-tether-target ember-tether-element-attached-top ember-tether-element-attached-left ember-tether-target-attached-top ember-tether-target-attached-right"><li>Hong Kong Property and Retail sector is weakening</li><li>FAM formula revision due this quarter (Q1 2017) should play out negatively given populist pressures</li><li>Skinny property development pipeline, no development gains for the next three (3) years </li><li>Offshore operating rail assets in Europe / Australia will see negative from currency translation </li></ul>3. Corporate governance concerns, stemming from unstemmed cost over-runs. <ul><li>See:  <a href="https://www.smartkarma.com/insights/mtr-66hk-presents-strong-asymmetry-much-risk-minimal-reward" target="_blank" data-smartkarma-citation="insights:7099">MTR (66HK) Presents Strong Asymmetry. Much Risk, Minimal Reward.</a>  </li><li>See: <a href="https://www.smartkarma.com/insights/mtr-significant-negative-surprise" target="_blank" data-smartkarma-citation="insights:7179">MTR: Significant Negative Surprise?</a></li></ul>The above insights provided pertinent detail on cost overrun issues and how these could escalate into substantial one-off charges that will pressure the balance sheet. More below the fold.

MTR Corp (66 HK) ticks all the boxes: 1. It is trading well above its normalized valuation band. Prevailing market conditions, and macro economic drivers should press yields higher. 2. We are at the cusp of a prolonged earnings downgrade cycle: Hong Kong Property and Retail sector is weakeningFAM formula revision due this quarter (Q1 2017) should play out negatively given populist pressuresSkinny property development pipeline, no development gains for the next three (3) years Offshore operating rail assets in Europe / Australia will see negative from currency translation 3. Corporate governance concerns, stemming from unstemmed cost over-runs. See:  MTR (66HK) Presents Strong Asymmetry. Much Risk, Minimal Reward.  See: MTR: Significant Negative Surprise?The above insights provided pertinent detail on cost overrun issues and how these could escalate into substantial one-off charges that will pressure the balance sheet. More below the fold. 

MTR Corp

MTR (66 HK): Conviction Sell Thesis