Krungsri Securities (KSS) has reiterated its ‘Buy’ rating on BTS Group Holdings Public Company Limited (SET: BTS) but has trimmed the target price to THB 4.42 per share from the previous THB 6.49.
This move comes after the analyst attended a recent conference call with BTS, which revealed a more cautious outlook for the remainder of the fiscal year 2025/26 and beyond, mainly due to weak subsidiary performance.
BTS downgraded its revenue forecast by THB 2 billion to THB 27.5 billion, reflecting weaker contributions from VGI. Interest income guidance was also reduced by THB 1.5 billion to THB 3 billion for the fiscal year 2025/26, amidst the Bangkok Metropolitan Administration’s (BMA) settlement of outstanding O&M debts in October 2025.
Despite receiving these payments, BTS plans to use only THB 15 billion to reduce debt, retaining THB 21 billion for working capital and future investments.
BTS noted that the loss-making Pink and Yellow mass transit lines contribute losses of approximately THB 400 million per quarter or THB 1.6 billion per year. The management emphasized that resolving the issues with these lines is key to achieving a turnaround from loss to profit. For O&M services, BTS has already invoiced BMA for October 2025, but payment has yet to be received.
In light of poor results from subsidiaries VGI and RABBIT, Krungsri has revised down BTS earnings forecasts, expecting a core loss of THB 1.89 billion for the fiscal year 2025/26 and a narrower loss of THB 1.33 billion for the fiscal year 2026/27 as cost savings begin to materialize.
The brokerage firm stated that the persistently high SG&A expenses amid declining revenue exacerbate profitability concerns, particularly at VGI.
Meanwhile, despite the reduced earnings outlook and target price, Krungsri believes BTS remains undervalued, trading at a significant discount to book value. The broker expects that improved cash flow from BMA’s repayment may enable BTS to resume dividend payouts, which have been skipped for two years.
