The stock is too cheap, given its recovery outlook. Thailand’s COVID-19 outbreak obscures BEM’s strong 2H21 profile, opening a bottom-fishing opportunity. Looking ahead to 2022-23, we expect swift ridership growth and fare increases (both to expressways and the MRT) to make for a double-digit core profit CAGR, 2021-23.
Rock-bottom in May
Renewed work-from-home policies among many companies and the soft lockdown are hitting BEM’s expressway traffic and MRT ridership in 2Q21. In Apr, its mean daily expressway traffic dived 25% MoM to 838k trips/day, while MRT ridership plunged 46% MoM to 147k trips/day. We anticipate that both expressway usage and MRT ridership will weaken further MoM in May, which we expect to be the nadir of 2021 (full-month effects of Thailand’s third COVID19 outbreak). That said, the numbers for May should still be better than for Apr 2020 (the bottom of 2020).