Glonghui, January 3 | Citi said that in response to the still weak demand in the Hong Kong residential property market this year, and the bleak economic prospects in the Mainland and Hong Kong, it is believed that it will cause real estate developers to lower unit sales prices while weakening the willingness of real estate developers to make up land reserves. Under the negative sentiment of the residential property market, it is expected to drag down the performance of MTR (0066.HK). As a result, the MTR rating was downgraded two levels from “buy” to “sell”, and the target price was cut by 44% to HK$26.5. The first phase of the Tung Chung East Station property development project under the MTR did not receive any tenders last year. Citi believes that the Tung Chung East Station site bid reflects property developers' concerns about high interest rates, high construction costs, and the schedule for completion of Tung Chung East Station in 2029. It is believed that the MTR will eventually have to reduce the bid's prepayment fee (originally HK$1.1 billion) to enhance the attractiveness of the project, and the Siu Ho Wan Depot project is expected to take the same steps. Even though the bank has anticipated that the MTR will reduce the prepaid bid fee by half, considering the current macroeconomic environment, the possibility that the prepayment fee will be reduced to zero cannot be ruled out. Citi indicated that although the land tender date is delayed, it may cause the MTR to raise transition loans, it believes that the MTR's gradual dividend policy will still be maintained. It is expected that the MTR will pay HK$1.33 and HK$1.35 per share in 2023 and 2024, with a converted dividend ratio of about 5%, which is not attractive to “interest” chasers. MTR (0066.HK) recently dropped 4% to HK$28.65.