Overall, Sep traffic dropped MoM as schools closed for the first term, except for the Yellow Line; there was YoY growth for traffic except for the expressway. Based on this data, we expect earnings for BEM and BTSGIF to grow QoQ and YoY while BTS should see QoQ improvement, but drop YoY. Discussions with BTS and BEM indicate that the concession buyback may not take place anytime soon, as there have been no official talks yet. However, the local press says the budget is ~Bt200bn, which seems reasonable (see table below for details). BEM is our top pick with an SOTP-based of TP Bt10.5/sh (Bt8.2 for core business, Bt1.5 for Orange Line and Bt0.8 for investments). We rate BTS as NEUTRAL with an SOTP-based TP of Bt5.1/sh (Bt3.2 for core business and Bt1.9 for investments). We are NEUTRAL on BTSGIF with a DDM-based TP of Bt3.9/sh (5.9% WACC and no terminal value).
Land Transportation – September traffic down MoM on seasonality
Expressway traffic – Softer MoM, but flat YoY. Expressway traffic fell 1.6% MoM, but was essentially flat YoY at 1.1mn trips/day. The MoM drop was because schools closed for the end of first term, while YoY growth was impacted by a partial closure of the expressway network. Overall, 9M24 average traffic was 1.1mn trips/day, flat YoY. This is in line with our full-year forecast of no growth in 2024F.
MRT (Blue Line) – MoM impact from seasonality. Average ridership was 437.8k trips/day, down 2.8% MoM, but growing 4% YoY. This brings 9M24 average ridership to 420.6k trips/day, up 10.3% YoY against our assumption of 15% growth in 2024F. Based on 9M24 ridership, we see little downside to our full-year forecast. Our sensitivity analysis suggests that each 5ppt drop in ridership would negatively impact our 2024F for BEM by 3.6% and TP by Bt0.1/sh (concessionaire for this line).
BTS (core Green Line) – Following the trend. Average ridership was 563.3k trips/day, down 4.6% MoM, but up 3.0% YoY, bringing 6MFY25 (Apr–Sep 2024), trips to 548.5k (+6.2% YoY) against our FY2025F assumption of 6.5%, on track to meet our assumption. 9M24 average ridership is 551.2k trips/day, up 6.6% YoY.
Yellow Line – MoM improvement. Average ridership was 41.7k trips/day, up 2.5% MoM and 14.3% YoY. This brings 9M24 average ridership to 35.6k trips/day and its 6MFY25 to 35.7k trips against our assumption of 40k in FY2025F, which we view as still on track. Note that 50% of its ridership feeds to MRT (Blue Line) at Lat Phrao station. Ridership needs to reach 180k trips/day to reach breakeven point at the net profit level.
Pink Line – Ridership fell MoM. Average ridership was 58.6k trips/day, slipping 0.9% MoM. There is no YoY data since it only opened in Jan 2024 and the most recent data we have was for Mar 2024. Average Mar-Sep ridership was 53.1k trips/day and 54.1k trips in its 6MFY25 against our FY2025 assumptions of 60k, on track to meet our full-year forecast. Note that the Pink Line has no direct connection with MRT (Blue Line) or BTS (core Green Line). Ridership needs to reach 180k trips/day to reach breakeven point at the net profit level.
Key ESG risk for the sector. Service reliability (S) is the key ESG risk for the sector because it would negatively impact ridership numbers.