We expect BTS’s decision not to participate the tender for the Orange Line to generate negative market sentiment toward its stock. However, we hadn’t factored the value of the line into our target price, so the decision not to bid doesn’t affect our model. The company’s long-term growth stories (both organic and inorganic) remain salient, so we maintain a BUY call.
Missed the consensus and our estimates
BTS reported a 1Q22 (Apr-Jun 2022) net profit of Bt536m, down by 61% YoY and 34% QoQ. The bottom-line was 21% short of our estimate (deeper extra losses and lower revenue than we had expected) and 40% below the consensus. Stripping out extra items, the core number would be Bt595m, down by 37% YoY and 4% QoQ. Core profit missed our estimate by 13% (lower revenue than assumed) and the street by 33%.