Company Coverage
Bangkok Expressway and Metro (BEM TB): Top Land Transportation Stock With Record-High Earnings Expected
BUY (Maintained)
Current price:
Target price:
Upside:
Bt6.20
Bt8.50
+37.10%
Analyst
Highlights
- We are confident that the delivery and commercial opening schedules of the MRT Orange Line will be met.
- BEM is a key beneficiary of the common fare scheme, with every 10% increase in ridership expected to lift our 2027 earnings forecast by 3%.
- 3Q26 earnings are expected to reach a new all-time high, with even stronger momentum in 4Q26.
- Maintain BUY with a target price of Bt8.50. BEM is currently trading at 24x EV/EBITDA, in line with peers, but earnings are more promising.
Analysis
- MRT Orange Line to drive long-term ridership growth. We visited the Bozankaya factory, which manufactures trains for the MRT Orange Line. Based on our assessment, we are confident that the project remains on track and that the delivery and opening schedules will be met. The first train is expected to be delivered to Bangkok in Nov 26, with commercial operations scheduled to commence in Jan 28. Once operational, the MRT Orange Line East phase is expected to generate additional feeder traffic to the MRT Blue Line at Thailand Cultural Centre station. Under our base-case scenario, assuming 50% of Orange Line East phase passengers transfer to the Blue Line, we estimate that Blue Line ridership in 2028 could be 10% higher than our current forecast.
- Prime beneficiary of the common fare scheme. Under the government’s proposed common fare scheme, scheduled to take effect on 1 Jan 27, passengers will be able to travel across all Metro lines with an initial fare capped at Bt17.00 and a maximum fare of Bt45.00 per trip. We believe Bangkok Expressway and Metro (BEM) will benefit from higher ridership. The scheme is currently undergoing negotiations on the revenue-sharing arrangements, under which operators will return a portion of their additional fare revenue to the government. The scheme is also seeking Cabinet approval to allocate Bt5.85b from the 2027 central budget, comprising fare compensation for eight Metro lines and fees for transferring fare refunds to passengers. Every 10% increase in ridership is expected to boost our 2027 earnings forecast by 3% and our target price by Bt0.35.
Highlights
- We are confident that the delivery and commercial opening schedules of the MRT Orange Line will be met.
- BEM is a key beneficiary of the common fare scheme, with every 10% increase in ridership expected to lift our 2027 earnings forecast by 3%.
- 3Q26 earnings are expected to reach a new all-time high, with even stronger momentum in 4Q26.
- Maintain BUY with a target price of Bt8.50. BEM is currently trading at 24x EV/EBITDA, in line with peers, but earnings are more promising.
Analysis
- MRT Orange Line to drive long-term ridership growth. We visited the Bozankaya factory, which manufactures trains for the MRT Orange Line. Based on our assessment, we are confident that the project remains on track and that the delivery and opening schedules will be met. The first train is expected to be delivered to Bangkok in Nov 26, with commercial operations scheduled to commence in Jan 28. Once operational, the MRT Orange Line East phase is expected to generate additional feeder traffic to the MRT Blue Line at Thailand Cultural Centre station. Under our base-case scenario, assuming 50% of Orange Line East phase passengers transfer to the Blue Line, we estimate that Blue Line ridership in 2028 could be 10% higher than our current forecast.
- Prime beneficiary of the common fare scheme. Under the government’s proposed common fare scheme, scheduled to take effect on 1 Jan 27, passengers will be able to travel across all Metro lines with an initial fare capped at Bt17.00 and a maximum fare of Bt45.00 per trip. We believe Bangkok Expressway and Metro (BEM) will benefit from higher ridership. The scheme is currently undergoing negotiations on the revenue-sharing arrangements, under which operators will return a portion of their additional fare revenue to the government. The scheme is also seeking Cabinet approval to allocate Bt5.85b from the 2027 central budget, comprising fare compensation for eight Metro lines and fees for transferring fare refunds to passengers. Every 10% increase in ridership is expected to boost our 2027 earnings forecast by 3% and our target price by Bt0.35.
BUY (Maintained)
Current price:
Target price:
Upside:
Bt6.20
Bt8.50
+37.10%
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
