The share price of BTS extended gains on Monday as the company is expecting to receive huge compensation following the latest government measures to reduce PM2.5 pollution.
BTS surged 1.63% to THB 6.25 per share in the morning session. The lowest price during the session was THB 6.10 and the highest was THB 6.35, with a total trading value of THB 384.68 million.
Suriya Juangroongruangkit, Deputy Prime Minister and Minister of Transportation revealed that Prime Minister Paetongtarn Shinawatra, who shown sympathy toward Thai people who suffered from the PM2.5 pollution that plagued present Thailand, has ordered the Minister of Transport to manage the pollution within the transportation sector.
The Minister and its related departments, which continue to closely monitor the situation to seek a solution, have ordered its agencies to take all necessary measures to quickly resolve the crisis.
Recently, the Ministry has discussed with mass transit operators, including BTS Holdings Public Company Limited (SET: BTS) and Bangkok Expressway and Metro Public Company Limited (SET: BEM), to offer free travel for Thai citizens for seven days from 25-31 January 2025. The revenue lost during the period would be compensated, based on average losses during the period, with around THB 140 million from the national treasury.
Furthermore, to promote the use of public transport and reduce personal car usage, the government also ordered the Bangkok Mass Transit Authority (BMTA) to open all of its bus lines for free during the same seven-day period.
Suriya said that he also ordered the Department of Land Transport (DLT) to measure the buses and trucks’ black exhaust to solve the issue of PM2.5 particulate in Bangkok. The checkpoint will be set up in eight locations including 1. The front of Future Park Rangsit, 2. The Bangkok Port, 3. The front of Chatuchak Park, Phahonyothin Rd., 4. Bangna-Trad Rd., Kor Mor. 1, 5. Suwinthawong Rd., in front of Minburi MWA, 6. Rama II Rd., exit point, in front of Bang Khun Thian Highway Authority, 7. Rangsit-Nakhon Nayok Rd., Kor Mor 4 in front of Lotus., and 8. Borommaratchachonnani Rd., entry-exit point. The officers would then be spread across the checkpoints to control vehicular pollution as much as possible.
Meanwhile, the Ministry also prepared to develop the main public transport network to cover all of Bangkok and its surrounding area, investing in the development of feeder systems to connect travel, to increase citizens’ ease and access to public transport with utmost efficiency, and improving Thailand’s opportunity and its citizens’ well being.
Moreover, the Department of Highway (DOT), the Department of Rural Road (DRR), the Expressway Authority of Thailand (EXAT), the State Railway of Thailand (SRT), and other departments with transportation infrastructure projects were also ordered to implement measures to reduce the pollution. Preliminary measures include the project contractors cleaning the wheels of vehicles going in and out of the construction site with water, clearing dirt from the site that has been left on the road, covering the construction materials during storage or transport, and properly disposing of garbage, with trash burning strictly prohibited.
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.
