Krungsri Securities (KSS) forecasts that Bangkok Expressway and Metro Public Company Limited (SET: BEM) will report first-quarter 2026 earnings of THB 891 million, representing a year-on-year increase of 2.4% and a quarter-on-quarter rise of 6.5%, based on several key assumptions.
First, total revenue for the quarter is projected to rise slightly by 0.6% year-on-year to THB 4.28 billion, though this figure marks a 1.3% decrease from the previous quarter. This overall number is supported by expected growth in revenues from both road and rail segments, reflecting ongoing traffic recovery. Road revenue is anticipated to grow by 1% year-on-year and 0.2% quarter-on-quarter, while rail revenue should increase by 1.7% year-on-year and 0.9% quarter-on-quarter.
Offsetting this, the commercial unit remains under pressure, with revenue likely to fall sharply by 10% year-on-year and 24.7% quarter-on-quarter. The main reason for this decline is lower advertising income amid a subdued economic environment.
Despite this setback, gross margin is expected to remain stable at 45.1%, consistent with the first quarter of 2025. Cost controls, especially regarding selling, general, and administrative (SG&A) expenses, are forecast to continue to pay off, with the figures expected to drop by 0.7% year-on-year and 15.4% quarter-on-quarter.
Looking at the full-year outlook, Krungsri reiterates its 2026 earnings growth forecast of 3.4% year-on-year, targeting annual earnings of THB 3.91 billion—a record high for the company. If first-quarter earnings come in as expected, they would account for 23% of Krungsri’s full-year estimate, sending support into the second quarter.
This momentum should receive an additional boost from anticipated higher dividend income from BEM’s associates, CKP and TTW. BEM is expected to receive THB 341 million in dividend income from these associates in 2Q26, compared to THB 337 million in the same period last year, supported by increased payouts from CKP.
Krungsri maintains a ‘Buy’ recommendation on BEM, with a target price of THB 8.20 per share, highlighting the stock as an attractive value play, with the current price still trading roughly 33% below pre-COVID-19 levels in 2022, even though the company’s earnings have tripled since then.
The brokerage does not expect BEM to be adversely affected by the upcoming concession repurchase, as the company is not obliged to sell unless the repurchase price is satisfactory. A favorable price could even translate to higher dividends per share, benefiting shareholders. Notably, BEM remains undervalued relative to its solid earnings trajectory.
