BEM-BTS Rise in Hopes of Ridership Returns as Thailand Sets to Reopen Next Month

Two transportation stocks are rising in the morning session of Tuesday, October 12, 2021, in anticipation of passengers coming back following the government’s announcement that the country will reopen from November 1.

As of 10:51 local time in Thailand, the share price of BTS Group Holdings Public Company Limited (BTS) rose ฿0.20/share or 2.09% to ฿9.75/share, with a trading value of 295 million baht.

Meanwhile, the share price of Bangkok Expressway and Metro Public Company Limited (BEM) rose ฿0.15/share or 1.67% to ฿9.15/share, with a trading value of 407 million baht.

Thailand will welcome international tourists from low risk countries who are fully vaccinated and without the requirement for quarantine starting from November 1, 2021, said the Prime Minister in a televised broadcast on Monday night.

The countries such as England, Singapore, and Australia start to allow their citizens to travel to Thailand without much difficulty as Thailand sees a drop in Covid-19 infections and deaths. Thus, the government expects to welcome international tourists for the most benefit in the travelling season near the end of the year.

KGI Securities (KGI) has given a target price of 12.60 baht for BTS, believing that the company will benefit from the country’s reopening in 4Q21 and that ridership on BTS has bottomed out.

KTBST Securities (KTBST) upgraded a rating for BEM to “BUY” from HOLD and its target price to 10.50 baht from 8.50 baht based on SOTP, as KTBST rolls forward its valuation base to 2022E. 

KTBST had a positive view of the company’s guidance at a group conference call yesterday (Oct. 11). The momentum of toll volume and ridership has built up. On Oct. 8, the toll volume and ridership rose sharply to 980K cars per day (780K cars per day in September) and to 150K trips per day (100K cars per day in September), respectively. 

Additionally, the company was keen to enter into the bid for the Orange Line project where MRTA would announce TOR later in the month, and was confident that it would be awarded the O&M project for the southern route of the Purple Line project. 

KTBST forecast net profit to slump -87% YoY, -45% QoQ to 110 million baht in 3Q21E but to improve from 4Q21E onwards. KTBST thus maintains 2021E/2022E core profit forecast at  822 million baht (-60% YoY)/3.3 billion baht (+298%).