SCS [BUY +22.9%] - Weak trade activity delays new client acquisition

- We maintain our BUY rating for SCS despite cutting our target price (TP) by 5% due to weaker-than-expected international trade activity.

- We cut our 2023F/24F/25F NPAT-MI forecasts by 19%/22%/9% as we assume a major potential client will delay its relocation to SCS from mid-2023 to mid-2024.

- We revise our 2026F and 2027F NPAT-MI up by 29% and down by 1%, respectively, as we expect Long Thanh International Airport (LTA) will be put into operation in 2027 vs previously 2026. Meanwhile, we maintain our conservative assumption that SCS will not enter LTA and thus will lose 25% of its cargo throughput in 2027.