Summary · why it matters
An analyst at Dao Securities (Thailand) Public Company Limited revealed that the Mass Rapid Transit Authority of Thailand, or MRTA, is preparing details of the investment model for the southern Purple Line project, the Tao Poon-Rat Burana section (Kanchanaphisek Ring Road), to submit to the MRTA board for consideration, and expects to present it to the cabinet meeting by the end of this year. The plan uses a non-tender selection of a private partner under the Public-Private Partnership Act of 2019, negotiating with the existing contractor of the northern Purple Line, Tao Poon-Klong Bang Phai, which is currently in service, with BEM as the contractor, to ensure continuity of operations. Currently, for the northern Purple Line, the MRTA hires BEM under a public-private partnership, or PPP, of the gross cost type, in which the state invests in infrastructure and collects fares, while the private partner invests in the system and train cars and operates the service, with the state paying a fixed-price fee. The southern Purple Line will use the same model, making negotiations with the existing contractor straightforward. The analyst views this as positive, expecting negotiations for the southern Purple Line operating concession with BEM to begin in the first half of 2027. Preliminary forecasts assume BEM wins the operations and maintenance concession for the southern Purple Line for 30 years, and may also see the northern Purple Line operating concession extended from its original expiry in 2043, potentially ending together with the new southern Purple Line concession, which is estimated to add about 1 baht per share of upside to BEM's target price. In addition, CK is expected to benefit from the same issue, with a chance to win the mechanical and electrical systems construction work for the southern Purple Line worth 30 billion baht, with a construction period of about 3 years, helping replenish the company's backlog from the end of 2026, which is expected to be around 120 billion baht. For BEM, the recommendation is maintained at Buy with a target price of 9 baht. Beyond progress on the southern Purple Line operating concession, there are additional catalysts from progress on the Double Deck project, which may also reach a conclusion in the second half of 2026 to the first half of 2027. For CK, the recommendation is maintained at Buy with a target price of 23.00 baht, and it remains a top pick in the construction contractor group, supported by attractive valuation, currently trading at only 12 times 2026 core P/E, with a backlog stronger than peers and helping secure continuous revenue for at least the next 3 years.
Bangkok Expressway and Metro Public Company Limited
CH. Karnchang PCL