Kiatnakin Phatra Securities (KKPS) wrote that the Thai government’s proposed THB 17-45 fare policy, which would cap Bangkok rail network journeys at THB 45 per trip regardless of the number of lines used, is increasingly likely to be implemented by 1 January 2027.
The policy is intended to reduce commuting costs and will require additional steps, such as Cabinet approval of a THB 5.8 billion subsidy, the transfer of the BTS Green Line to the Mass Rapid Transit Authority (MRTA), and the finalization of the payment and reimbursement mechanisms. However, the suggested subsidy approach bolsters the chances of eventual rollout.
Bangkok Expressway and Metro Public Company Limited (SET: BEM) is expected to benefit mostly through higher ridership driven by lower commuting costs, especially for passengers making transfers between lines.
Since the MRT Blue Line’s current fare structure already falls within the proposed cap, the average fare per trip is unlikely to rise, and any extra revenue from increased ridership may be partly shared with the government. As a result, KKPS has increased its 2027 daily ridership forecast for BEM by 10%, translating into an expected 10% growth in rail revenue for the year.
Following the revised assumptions, including a 16% and 20% reduction in financing costs for 2026 and 2027 attributable to BEM’s improved credit rating, KKPS has decreased its 2026 pre-exceptional earnings forecast by 1% and raised its 2027 forecast by 2%.
As a result, the brokerage continues to use DCF valuation and raises its target price for BEM from THB 8.10 to THB 8.30 per share, reiterating a ‘Buy’ recommendation owing to ridership prospects under the new fare regime and lower financing costs.
