As FD of a global leader in railway operations, which employs more than 16,000 people in Hong Kong alone, Law has had a broad portfolio of six departments. In addition to financial control and management, treasury, investor relations, information technology, and materials and stores, he was tasked with creating a new function.
“I started the investment control and financial management department, which looks after MTR’s investments beyond Hong Kong,” he explains. “We review the feasibility study, evaluate the risk assessment and perform financial analysis for potential investments. Then, with input from other divisions, we can decide whether we should make the investment. If we decide to do so, my team will continue to monitor the financial aspects of the project. It’s a bit like managing a portfolio of companies, which is what I used to do in private equity.”
This aspect of Law’s role reflects how MTR’s core competencies in its home market – railway operations and property development – are being adapted beyond Hong Kong. The company was established in 1975 as the Mass Transit Railway Corporation to construct and operate Hong Kong’s urban metro system. Twenty-five years later, in June 2000, 23% of its share capital was issued to private investors in an IPO, and it was listed on the Hong Kong Stock Exchange in October 2000.
Today, MTR’s diverse operations include railways, residential and commercial real estate development, leasing and management, advertising, telecommunications and international consultancy services. Globally, MTR operates and manages London Overground, as well as TfL Rail (the first phase of the new Crossrail service), in the UK; Stockholm Metro and MTR Express (an intercity railway between Stockholm and Gothenburg) in Sweden; and Melbourne Metro in Australia, where it is also a shareholder in the Sydney Metro Northwest project.
Hong Kong remains central to MTR’s operations, however. “Here, almost 90% of people use public transport, and 48% of those use the MTR. This huge volume of passenger traffic makes us one of the most used subways in the world,” says Law. “Each year, we need to invest around HKD7b (approximately US$0.9b) just to maintain our existing level of service.”
As a public transport company listed in Hong Kong, MTR’s main stakeholders fall into two groups: investors and the general public. “Investors will focus on MTR’s financial performance, financial position, dividend policy and any changes in key performance factors, such as the performance of business segments, the market share, the patronage, and so on,” Law explains. “However, the general public will view MTR through the lens of our service quality and focus on how we deploy resources to maintain it, and how we develop the railway network in Hong Kong. To satisfy the needs of both groups, the reporting needs to be comprehensive and to cover financial performance as well as our contribution to society.”