SCS [OUTPERFORM +15.9%] - Long-term outlook to be more visible as LTA progresses

- We maintain our OUTPERFORM rating for SCS despite cutting our target price (TP) by 3.1% to VND99,500/share. Our lower TP is mainly due to our 0.5-ppt higher risk-free rate assumption. Meanwhile, we broadly maintain our 2022-2026F NPAT-MI forecasts.

- For 2022F, we forecast revenue to rise 16% YoY to VND975bn (USD42mn) — mainly driven by 8.9% YoY growth in cargo volume and a 7.0% YoY increase in average service price (ASP) — and NPAT-MI to increase 24% YoY to VND700bn (USD30mn).

- In 2021-2025F, we forecast CAGRs of 16% and 18% for revenue and NPAT-MI, respectively, which we expect will be driven by continuing solid cargo volume and ASP growth over the period thanks to rising manufacturing and consumption activities in southern provinces, in addition to SCS’s sustainable duopoly market position at Tan Son Nhat International Airport (SGN).