KSS Maintains ‘Buy’ Rating for BTS Group with Positive Cash Flow Outlook from Bangkok Debt Payment

Bangkok Metropolitan Administration (BMA) has initiated a plan to pay BTS Group Holdings between 500-600 million baht per month, amounting to approximately 8 billion baht per year, for the extended operation of the BTS Green Line. This initiative, starting in January, aims to curb the rising interest on overdue payments.

Additionally, the outstanding debt for Operations and Maintenance (O&M) services, totaling 11 billion baht, which is currently under consideration in the Administrative Court, is set to be settled. The BMA plans to utilize its accumulated funds to clear this debt to BTS by February, or at the latest, March of this year.

Krungsri Securities reiterated a Buy rating with the same SOTP-derived TP to Bt6.49. The firm stated that the turnaround story is going on especially on the cash flow side. BMA indicated that it is ready to pay BTS for operating green line extensions both north and south on O&M agreement. This includes unpaid O&M during June 2021-October 2022 and current operations. If this proves to be the case, BTS can use this proceeds to pay down debts and net debt to equity will go down to 2.3x from 2.8x.