BTS Group Holdings Public Company Limited

BTS Group Holdings reported first-quarter fiscal 2027 operating revenue of THB6.1 billion, up 5% year-on-year, while a net loss of THB388 million attributable to shareholders persisted. Recurring EBITDA rose 3% to THB2.8 billion, and the balance sheet strengthened with adjusted net debt-to-equity improving to 1.3 times from 1.4 times. The MIX business saw net profit excluding nonrecurring items jump 92% year-on-year, driven by digital services and distribution, while ROCTEC achieved 11% revenue growth and a 12.4% net profit margin. However, MOVE operating revenue fell 12% due to the absence of construction revenue from the completed Pink Line extension, and BTSGIF share of profit dropped 47% on fund investment amortization. Management highlighted the government's common ticketing scheme targeting January 1, 2027, and VGI's confidence in achieving its THB5 billion to THB5.5 billion revenue target.

Krungsri Securities maintains a buy recommendation on BTS but has lowered its 2027 target price under the sum-of-the-parts method to 3.57 baht from 4.00 baht, after trimming its 2027-2028 operating forecasts due to higher selling and administrative expenses. It now expects BTS to post a net loss of 2.9 billion baht in 2027 and 1.84 billion baht in 2028, compared with previous forecasts of losses of 2 billion baht and 853 million baht respectively. The main reason is that selling and administrative expenses in the first quarter of 2027 rose 31 percent year on year to 1.9 billion baht, driven by marketing expenses at VGI, costs from transferring the European hotel business back to RABBIT, and costs from closing the Verso international school. Meanwhile, the government policy to cut electric train fares to 17 to 45 baht took effect on 1 January 2027. BTS has confirmed it will join the programme, but still faces limitations from incomplete EMV system coverage and the issue of sharing excess passenger revenue. It expects to take about one and a half years to install the EMV system. BTS also believes the Pink Line will benefit more from the fare policy than the Yellow Line, expecting Pink Line ridership to rise 15 to 20 percent from the current 80,000 trips per day, while the Yellow Line carries 30,000 to 40,000 trips per day. It has also pushed back the break-even point from 2033 to 2038. The new target price implies upside of about 72 percent from the closing price of 2.08 baht.

KGI Securities Thailand noted that BTS held a briefing on its first-quarter results for fiscal 2027 and its outlook for fiscal 2027. The key issue is the joint ticketing system, where the fare structure of 17 to 45 baht has not yet been concluded and requires further discussion. The train operations and maintenance business is expected to see no revenue impact unless there are additional train purchases or higher operating costs. Passengers who use only one rail line, who account for more than 50% of the total, may benefit only to a limited extent compared with those who need to change across multiple lines. The Rabbit card, with more than 20 million cards issued, remains the main tool even if EMV contactless payment is introduced in the future. BTS would be pleased if supervisory authority were transferred from the Bangkok Metropolitan Administration to the Mass Rapid Transit Authority of Thailand, which is directly under the central government. It also intends to seek an extension of the Green Line concession, which ends in 2029, by submitting a request at least three years before expiry. A buyback of the rail system concession by the public sector through a fund is unlikely in the near term, but continued annual subsidies are not sustainable in the long run. On the property side, the Thai freehold housing project is expected to begin construction around April 2027. The first project, D:CODE Srinakarin, is split between 50% cash buyers and 50% bank mortgage applicants, while D:CRAFT Khlong Luang is awaiting allocation. The securities firm maintains a negative long-term outlook, expecting the company to post operating losses in fiscal 2027 and 2028, and has no recommendation for BTS.

BTS Group Holdings reported a first-quarter net loss of 388 million baht, widening from a loss of 229 million baht in the same period last year, as operating profit declined and finance costs remained high at 1.9 billion baht. Analysts at DAOL Securities Thailand cut their target price to 2.00 baht from 2.40 baht, while maintaining a Hold rating, and revised their forecast for normalized operating results in fiscal 2027 to a loss of 844 million baht from a previous loss of 104 million baht to reflect higher-than-expected SG&A expenses. They view the Yellow Line and Pink Line operations as still needing time to reach breakeven, with expenses from the Visionary Park building also weighing on performance.

The Bangkok Metropolitan Administration has set a balanced expenditure budget for fiscal year 2027 at 93 billion baht. A major burden is the 6 billion baht operating cost for the BTS Green Line, along with a risk of losing nearly 5 billion baht in revenue from the government's property transfer fee reduction measure. Governor Chadchart Sittipunt revealed that the BMA's own budget of 93 billion baht, when combined with approximately 29 billion baht in government subsidies, will result in a total management budget of about 122 billion baht. However, after deducting the 6 billion baht BTS Green Line operating cost, the actual management budget will be around 87 billion baht. This includes an investment budget of approximately 18 billion baht, down about 6 billion baht from the previous year, and a district-level capillary development budget of about 6.6 billion baht, similar to last year. Meanwhile, the BMA is accelerating the transfer of both assets and liabilities of the Green Line back to the government in line with the cabinet resolution, in order to reduce future burdens and free up the budget for full-scale city development.

Krungsri Securities says BEM will be the main beneficiary of the 17 to 45 baht electric train fare policy starting 1 January 2027, with no concession buyback because the cost is as high as 400 billion baht. The deputy transport minister confirms that the Mass Rapid Transit Authority will manage all electric train lines, including transferring the Green Line and Gold Line from the Bangkok Metropolitan Administration, and will allocate a compensation budget for the private sector of 4.6 billion baht per year, based only on current ridership. BEM will keep its profitable Blue Line and Orange Line, and increased ridership could boost 2027 profit by as much as 19 percent if it rises 20 percent from the base case. Meanwhile, BTS will benefit less as it continues to book losses from the Pink Line and Yellow Line, although a 40 percent rise in ridership could reduce the loss to 1.2 billion baht from 1.6 billion baht. BEM remains a top pick with a target price of 8.2 baht.