Company Overview

Bangkok Expressway and Metro Public Company Limited (BEM) is a key player in Bangkok’s transportation infrastructure, operating expressway and train services in the city and its suburban areas under the concessions of the Expressway Authority of Thailand and the Mass Rapid Transit Authority of Thailand. The company is well-positioned in the industrial sector, with its stock actively traded under the ticker BEM TB.

Current Financial Performance and Forecast

BEM has shown consistent year-over-year earnings growth, particularly highlighted in the third quarter of 2024, driven by robust ridership on the Blue Line railway. Looking ahead to 2025, the Blue Line is expected to remain a significant contributor to BEM’s earnings momentum. The company’s financial health is underscored by a net turnover of Btm 16,374 in 2023, projected to rise steadily to Btm 18,422 by 2026. EBITDA margins are also set to improve from 47.6% in 2023 to 49.4% in 2026, reflecting operational efficiency and revenue growth.

Key Projects and Strategic Initiatives

BEM’s strategic focus includes the Double Deck project, which is anticipated to be finalized by the first quarter of 2025 after previous delays. The company is also heavily invested in the Orange Line Project, with the western section expected to be operational by 2029 and the eastern section by 2028. These projects are crucial for BEM’s long-term growth strategy, offering significant upside potential for the company’s transport network.

Stock Performance and Market Positioning

BEM’s share price stands at Bt7.65, with a target price set at Bt10.60, suggesting a promising upside of 38.6%. The company’s defensive stock nature, primarily driven by domestic consumption, positions it as an attractive investment for those seeking steady growth amidst market volatility.

Future Growth Catalysts

The Blue Line railway is poised to be a pivotal growth engine for BEM, with increased ridership projected due to the development of mega projects like One Bangkok and Dusit Central Park. Additionally, improvements in the Yellow Line, which feeds into the Blue Line, along with organic growth through fare adjustments and heightened economic activity, are expected to drive future ridership.

Meanwhile, expressway and commercial developments are anticipated to see gradual improvements, with revenue growth likely following the completion of road construction near the Bang Pa-in toll station by mid-2025 and a recovery in traffic volumes due to increased toll prices.

ESG Initiatives

BEM is committed to sustainability, aiming for carbon neutrality by 2050 and net zero by 2065. The company emphasizes social responsibility, ensuring respect for human rights and fair treatment of workers, in line with its strong governance practices that have earned it an “Excellent” rating from the Thai Institute of Directors.

Conclusion and Analyst Recommendation

UOB Kay Hian maintains a “Buy” recommendation for BEM, with a revised SOTP-based target price of Bt10.60. The company’s strategic projects, strong financial performance, and commitment to ESG principles underscore its potential as a solid investment. The anticipated official announcement of Public-Private Partnerships in the Double Deck project and improved traffic mobility on the expressways and MRT Blue Line are expected to serve as significant share price catalysts.