Transcription
Hello everyone, welcome to Clear Money. I am Editor-in-Chief, Quan Le. In this episode, we are very honored to have MTR Corporation CEO, Ms. Jennifer Mui. MTR serves nearly 5 million people in Hong Kong daily, making it an indispensable mode of transportation for Hong Kongers. Ms. Mui has been with MTR for over 20 years, actively promoting digital transformation. She is now responsible for the group's operations and development. Today, she will share with us how to maintain a world-leading position and inject new vitality into Hong Kong's economy.
Thank you for joining us on Clear Money. First of all, congratulations on taking over as CEO of MTR at the beginning of this year. Why? Because you have many stakeholders, including passengers, shareholders, and the government. I know your recent performance report was just released. Although in the past few years, everyone knows that the operating environment and global geopolitics have been full of challenges. Your previous profit fell by more than 6%. I would like to ask, in the external market, there may be some doubts. Will people feel that MTR's growth is still there? As CEO, what solutions do you have, or how do you view these numbers?
I think 2025 will indeed be a challenging year for the overall environment and for us. But we also feel that it can be a year with quite encouraging results. Regarding our overall profit, it has fallen by a few percent. In the overall historical context, it can be said to be a very high level. This is because there were many one-off property disposal gains. The recurring income has decreased somewhat. Apart from those one-off items, such as particularly bad weather and some impairment provisions, it is still at a good level. I think last year, I said it was good because apart from the challenges, we saw our cross-border businesses, high-speed rail, and our service demand. And although our shopping malls are under downward pressure, our occupancy rate is close to 100%. This shows the demand and the attractiveness of our shopping malls. Under these circumstances, I think in the coming period, the company can be described as very optimistic in the long term, of course, because we have many new projects under construction. New projects also mean new sources of income will come, whether it's fares or property subsidies. Apart from new railways, we see that in the short term, we will enhance our own services and our competitiveness. For example, we may renovate our shopping malls more, introduce more foreign brands, and diversify our business portfolio. For railway services, we will use technology, AI, and so on to continuously improve our services. This year, we feel the environment is starting to improve, and we hope our recurring income will perform better.
I'm not sure if I understand correctly. For example, MTR's income mainly comes from two or three parts. The first part is the fares, the ticket prices. The second is advertising and retail. The third is possibly real estate. If we consider these three, for example, the ticket prices, there might be a mechanism that cannot be adjusted arbitrarily. Another one is advertising and retail. Will this be affected by people going north for consumption or the overall environment? The third is real estate. Real estate has performed poorly in the past few years. But now it seems to be recovering, the market is reviving, and prices are starting to normalize. Will the growth points in the future come more from real estate?
I think in the coming years, as Vincent just said, we can divide our business into several categories. We believe that in terms of rent, including station shops and our shopping malls, MTR currently operates 16 shopping malls. We believe that the rental situation can be said to have stabilized. Of course, there will be situations of people going north for consumption or other challenges, but we feel that it is slowly improving compared to the previous situation. In addition, in terms of passengers, even in the first quarter, we still see that passenger volume from cross-border travel is still increasing, and local passenger volume is relatively stable. We also see a slight increase. This also reflects that Hong Kong has more cities, more tourists, and more activities. I think in terms of real estate projects, we have two sources of income. One is the income from our shopping malls, which is relatively stable, and as mentioned earlier, it is expected to improve. The other is the income from our property developments, such as new property sales. We actually have some property sales coming up, for example, recently we have seen sales at The Arch and other projects. Those who have bought properties will also contribute to our income. So, overall, we see some stability and some hope for growth in these aspects.
Earlier, we talked about income, and then about expenditure. In your recent press conference, you mentioned that in the next three years, MTR will invest 140 billion Hong Kong dollars in Hong Kong's infrastructure, including railway infrastructure. 140 billion is a very large expenditure. How will this be financed? Will it be through financing, or by increasing revenue to cover it?
I think from now until the future, we actually have seven railway projects under construction. And there are several more coming, which are of course being discussed with the government. This does not include the expected Northern Link, which was mentioned earlier, nor the Western Section of the Island Line. This already amounts to 140 billion. I think the most important thing for us during this period is to have sufficient cash flow. Because eventually, when the properties and stations are completed, the income will come. But I think in the intermediate period, from now until perhaps the next few years, how we face the cash flow needs is indeed something we need to work hard on. For example, we are also financing, raising capital, and issuing bonds. For instance, at the beginning of this year, we issued what is actually the largest green bond in Australia. We are using different methods and tools in different places to finance and manage our cash flow to meet the needs of the upcoming 140 billion for various projects. This is indeed the focus now, and we will continue to do so. We will use different methods and tools to continue to solve the capital needs, that is, the cash flow needs. In terms of our own business, as mentioned earlier, we must continue to enhance our competitiveness. And we are also actively expanding our overseas businesses. For example, in Australia, we won a Metro project at the beginning of this year, which is a subway railway project. They are also building their subway network. We have just won a 20-year contract. In addition, in Beijing, we already operate one-fifth of their lines and passenger volume. We are also looking at whether we can expand our business in Beijing and have more new lines. We also operate in Shenzhen. So, apart from railways, we are now developing whether we can bring the model of managing small shops within Hong Kong stations to the mainland. And through this, we are contributing to the economic development of the mainland and also creating new revenue for the company. I think these two major directions, in terms of cash flow and recurring income, are the focus of all our colleagues now. Let's take a short break and continue our discussion.
"Clear Money" is a program that helps you see the situation clearly. How can a conversation lead to a smooth news report? Produced by "Clear Money" and "Sing Tao Daily" with the dual power of television and newspapers, we jointly produce cross-border new programs. I am Editor-in-Chief Quan Le, and host Yu Yongheng. Every week, we invite heavyweight financial figures to provide strategies for the long-term development of the economy. Guests share their true insights.
During the program, we continue to chat with Ms. Mui. Do you think Hong Kong's experience can be brought to foreign countries? For example, in real estate, railways, or shopping mall management experience. You see, when you go to foreign subway stations or train stations, they are not really communication hubs. But you are very good at it. Can this experience be brought to Russia? And what experience do you think Russia can offer Hong Kong?
I think, as we mentioned earlier, the main directions for our business development have actually utilized our Hong Kong experience. For example, as mentioned earlier, our railway and property integration. So, we have brought this model to Australia. We are also in Beijing and other locations, acting as consultants and sharing our experience in railway and property development with them. As mentioned earlier, station commercialization is precisely our new growth area in mainland China. Indeed, mainland stations have relatively few commercial activities. And mainland railways, like Hong Kong railways, require a lot of income to pay for operations and expenses. So, they are very welcome to our participation. We have signed agreements with Guangzhou, Xi'an, Zhengzhou, and Chengdu as developers to bring our Hong Kong experience there, so that stations can provide more facilities for passengers and also generate income for railway companies. After going out, we have strengthened ourselves. For example, as we saw in some mainland stations, they can build a shop in a short time. They can build shops at a much lower cost than us. So, we will study this. Do we have any way to bring such models to Hong Kong? For example, in Beijing and other places, our railways also utilize a lot of domestic technology. They have already used it. So, we will study it. For example, if a vending machine is good, we will consider it. Can we use it in Hong Kong? Yes, there is a lot of mutual help and mutual growth.
You mentioned earlier that we also have something to learn from Hong Kong. For example, in terms of national standards, can MTR teach us anything?
I think everyone has recently heard about Hong Kong's new railway standards. So, in this regard, we are actually studying how to utilize or use new railway lines to make our Northern Link more cost-effective in terms of construction and cost. I think these are directions that we feel have new potential for development. Speaking of cooperation with the mainland, I think we recently have another project in Australia, which is a model we call "integration." Because in that project, we are cooperating with a company. I think we can play a good role as a connector and value-added partner, enabling mainland companies and national standards to integrate into international standards. Turning back to Hong Kong, for example, we know that the Northern Metropolis is a major development. The government, the Hong Kong government, the mainland government, and many industries all want to develop it. But the Northern Metropolis is actually a very large area, one-third of Hong Kong's area. For example, MTR, as a stakeholder, how can we do a good job? Or do you have any plans on how to improve the transportation infrastructure?
The Northern Metropolis is indeed crucial for Hong Kong's future. So, MTR will definitely cooperate. Last year, we signed an agreement with the government for the first phase of the Northern Link. And today's East Rail Line and today's Tuen Ma Line will extend from the stations to become main lines in the future. These main lines will connect the two lines horizontally. The main line is targeted to be completed by 2034. But at the same time, we are also planning. Although we have not signed with the government, we are planning simultaneously, hoping to complete it before 2034. That branch line will go from the main line to the north. This will be another new gateway. It will also go to the north. It will play a very important role in the development of the entire Northern District. The Northern Link main line and the future will play a very important role. It can be said that it will connect the entire northern region horizontally and further north, connecting the entire area by railway. This has become one of our most important projects in the coming period. What are the main challenges we face now? Is it funding, or even time? I think for the construction of the seven railway projects, we can say that we have made good progress last year. They are already under construction. As mentioned earlier, the Northern Link Phase 1 has already started. As for other projects like the Northern Link extension, I think it is mainly still being discussed with the government, such as the detailed planning, funding, and overall operation. We hope to reach an agreement with the government within this year.
Speaking of the 14th Five-Year Plan, as you mentioned, Hong Kong has its own 14th Five-Year Plan. Does MTR have its own 14th Five-Year Plan? We just started our five-year plan at the end of last year. We have finalized our five-year plan. Of course, our five-year plan is based on our discussions with the government and Hong Kong's development. It is also based on the national 14th Five-Year Plan. Of course, we will also cooperate with the Hong Kong government's five-year plan in the future. But I think among the existing plans, there are a few that can be considered highlights. Of course, as mentioned earlier, the construction of the Northern Link, the development of technology, and the establishment of another new port. These are all very important. In addition, we will continue to expand our overseas businesses. I think in the 15th Five-Year Plan, we hope to jointly develop overseas businesses. This is another focus. The third focus for the company, of course, is to continue to operate well and to participate in the development of new technologies, or to play a significant role. For example, we are currently working on a project for next year. We hope to operate driverless trains between the West Kowloon Station and the Airport Station to take passengers who need it, perhaps VIPs or the elderly, from the High-Speed Rail Station to the Airport Station. These are developments in technology and coordination. I think these are several different aspects that we see as very exciting. There are many things to develop in the future.
Will the cross-border aspect be integrated with the Greater Bay Area as a whole? I think we are currently playing a very important role. As everyone knows, the High-Speed Rail carried nearly 150,000 passengers on Easter. We see that it continues to develop. Because we have just signed a new agreement with the mainland this month. Our High-Speed Rail can now reach many cities across the country, not to mention the Greater Bay Area. So, the High-Speed Rail is a continued focus. We need to improve the service in Hong Kong stations, and then the destinations, routes, and everything else need to be done well. Of course, Lok Ma Chau is also our focus, because it handles a lot of passengers every day, including friends who live in Shenzhen and commute to Hong Kong every day. We will continue to do a good job at these ports.
At the end of the program, our program is called "Clear Money." We hope you can share a word of wisdom from your life, or your workplace experience, with the audience. After all, you have been with MTR for over 20 years. Do you have any wisdom to share?
I think this is something I have always believed in throughout my life. I am a Christian. Since I was young, I have had a saying: "We do our best, God will do the rest." This means that we do everything we can, and then God will take care of the rest. I believe in this because I am a Christian. So, God will take care of other things. I think this is also an attitude towards life. We do our best in everything, and then we don't have to worry about the consequences. Usually, even if we don't achieve 100 points, we will definitely achieve some results. I think this is very important, because I think Hong Kong is a society with a lot of pressure. How to motivate yourself forward, and on the other hand, manage your own stress so as not to be overwhelmed by it. Sometimes, with this kind of mindset, I think you will be happier. Thank you for joining us on today's program. We will see you next week.
Regarding passengers, we have data and then use AI to analyze the benefits of this background. For example, women are more focused on communication, and the two lines can be connected horizontally.