BTS Plunges 9% over Concerns on Weak Operating Results and Lower Interest Income

On Tuesday at 10.52 AM (Bangkok Time), the share price of BTS Group Holdings Public Company Limited (SET: BTS) dropped as much as 9% to THB 6.05 per share.

CGS-CIMB Securities believed that the decline was due to the concerns on weak upcoming 3QFY/24 results, which is expected to be announced on 14 February 2024, pressured by operation losses from the Yellow Line, potential impairment of its investment in Singer Public Company Limited (SET: SINGER) and weak results from other associates like Kerry Express (Thailand) Public Company Limited (SET: KEX), as well as the THB 23 billion debt repayment from Bangkok Metro Administrative (BMA), which in CGS’ view, is not necessarily a positive catalyst. The brokerage company noted that while it may help to lighten BTS’ balance sheet, it will likely have a negative impact on BTS profit and loss in the immediate future.

Although BTS may save up to THB 900 million per annum (approx. 4% in cost of funds) in interest expense, it will also lose THB 1.15 billion per annum in interest income as BTS normally charges BMA 5% on its account receivables. Thus, there will be a net negative interest impact of approximately THB 200 million per year. 

The analyst recommends investors to stay on the sideline for BTS.