HONG KONG • Anti-government protests have caused a drop in passenger numbers on Hong Kong's subway, according to the chairman of mass-transit operator MTR Corp, which has been a regular target of demonstrators since June.

"We are seeing a downtrend of people using the system," Mr Rex Auyeung said in an interview with Bloomberg Television. Mr Auyeung became MTR's chairman in July, a month after unrest started boiling over and spilling into the subway, which - according to government data - carries more than five million passengers a day.

MTR stations became a target of anti-government protesters after televised scenes of police beating protesters as they cowered on the floor of a train on Aug 31.

Protesters, angry that the MTR closed stations to stop them from gathering and demanding CCTV footage of the beatings, have disrupted train services, smashed windows, sprayed graffiti and lit fires outside stations. Police have fired tear gas and wielded batons.

Besides the property damage, which Mr Auyeung said ranges between HK$30 million and HK$40 million (S$5 million and S$7 million), MTR has been accused of bias by both China's state-run media and protesters. Its share price has fallen by 17 per cent in two months.

Mr Auyeung said he was surprised that MTR had become a target. "It's like going through turbulence," he said in his first TV interview since becoming chairman.

But he said there has been only a "small drop" in passengers, and that was probably because more people are choosing to stay home on weekends, when many of the most intense protests have taken place. He also said it was too early to predict the impact that protests have had on revenue.

MTR shares ended the week down 3 per cent after one of its trains derailed, dealing another blow to the subway operator.

Both Moody's Investors Service and Fitch Ratings have downgraded MTR's outlook, following tweaks to their views on Hong Kong because of the unrest.

Ms Janet Liu, associate director at Fitch, said the financial impact of the disruptions is limited, thanks to solid public demand and multiple revenue streams.

MTR also owns assets and operates railway lines in mainland China, the United Kingdom, Australia and Sweden.

"MTR is a very solid company, financially speaking," Mr Auyeung said. MTR recorded HK$28.3 billion in revenue for the six months through June, an increase of 7.2 per cent from last year. The company declared an interim dividend of HK$0.25 per share.

BLOOMBERG