BEM – Facing just near-term turbulence

Update on daily ridership post-incident. Regarding news reports about the fire on the MRT (Blue line) tracks between Tao Poon and Bang Pho stations on Sep 20, we reviewed the company's daily ridership data from the Ministry of Transport. Average ridership from Sep 21 to 24 (the latest data) was 465k trips per day, compared to its 8M26 average of 489k trips per working day. This decrease is minimal, and we also see a rising DoD trend. Therefore, ridership should normalize soon, which is in line with our expectation that the earnings impact will be minimal from this incident. We also do not expect the company to book additional expenses in its P&L for 3Q26F results.

Expect short-term negative impact from recent flooding in Bangkok. We have not yet received expressway traffic and MRT ridership data following the floods. However, we anticipate a temporary decline as people prefer to stay home and a work-from-home policy is in effect during 28-29 Sep. The toll-free expressway access during 26-29 Sep should have a limited impact on BEM because EXAT will subsidize the company. Additionally, we have not received any updates regarding the water leaks at the MRT (Blue line) stations.

Any drop in share price is a buying opportunity. Since last week, BEM's share price has fallen by 5.2% vs +1.2% for SET index, mainly due to a share sale by a major shareholder (CK) to institutional investors at Bt6.5/sh. Additionally, we expect the share price to face pressure from recent flooding, but this impact should be short-lived. Improving flood conditions should help boost sentiment on the stock.

Risks and concerns. Key concerns are the recovery of expressway traffic and MRT ridership. Key ESG risk for BEM is travel safety.