SCS – New Major Customer to Drive Strong Growth In 2024
- We revise 2024 forecasts for revenue and net profit upward by 21% and 14%, respectively, compared to the previous forecast, to VND 911 billion (+29% YoY) and VND 609 billion (+22% YoY).
- The main reason for this adjustment is the addition of a new major customer, Qatar Airways, since February 2024. We anticipate that this development, coupled with the recovery trend in international trade activities, will drive a 30% YoY growth in SCS's international air cargo volume in 2024.
- The gross profit margin is projected to improve by approximately 2.4 ppts compared to 2023, reaching 78.3%. This improvement is attributed to the increased share of international cargo to 75%, up from 72% in 2023, and additional revenue from concession fees charged to airlines.
- Based on the P/E and FCFE valuation methods, we estimate the fair value of SCS to be VND 90,300 per share. Considering a 50% cash dividend, the total expected return is 20%. We recommend a BUY rating for SCS.
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