Update SCS Buy Oct 23, 2020

SCS UPDATE - Maintain BUY recommendation with TP: 26,194VND/share: Our view: We conservatively estimate a total tonnage of 211,421 tonnes for 2021, slightly lower than the 2019 level of 218,426 tonnes. We expect the apron leasing segment to generate revenue by 2Q21 onwards and the office leasing segment to remain stable. We estimate SCS to earn a 2021 revenue of VND731.2bn (+8.7% YoY) and a 2021 net profit of VND436.3bn (+4.9% YoY). The company’ gross margin in 2021 is expected to reach 77.7%, a slightly lower than the current as we expect SCS to continue to offer discount to its customers given 1) COVID-19 and 2) expansion into the North to attract new customers and to compete with other current players.  


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