Individual Clients
Corporate Clients
SCS Update report – BUY
05/11/2024 - 7:22:03 CHSAIGON CARGO SERVICE CORPORATION (SCS)
SCS announced its Q3/2024 earnings, showing continued positive growth and achieving 86.9% of its annual pre-tax profit target. With these results, SCS is on track to surpass both the revenue and pre-tax profit forecasts as well as our projections for 2024, with the growth momentum expected to be sustained through 2025-2026. We continue to recommend buying SCS shares, though we have adjusted the 12-month target price down to VND 100,800 per share, mainly due to the incomplete assessment of the impact of the Long Thanh airport project on the overall industry.
Specifically, from 2027, when Long Thanh International Airport becomes operational, the air cargo market may undergo significant changes due to: (1) a potential shift in cargo volume, especially international cargo, from Tan Son Nhat to Long Thanh, (2) an increase in cargo terminal space, and (3) a likely increase in the number of cargo terminal operators in the South, adding to the current two, SCS and TCS. These factors could affect SCS’s revenue, profitability, and long-term growth potential at Tan Son Nhat.
For Q3/2024, SCS maintained robust growth with revenue reaching VND265.9 bn (+55% YoY), where cargo terminal operations accounted for VND249.2 bn (+58% YoY). Gross profit was VND212.8 bn (+59% YoY), with a gross margin of 80%, a 2% increase from Q3/2023. Pre-tax profit for the quarter was VND209.2 bn (+43.8% YoY). Cumulatively over the first nine months, revenue and pre-tax profit were VND742.8 bn and VND590.6 bn, marking increases of 46.8% and 36.6% YoY respectively, and achieving 76.7% and 86.9% of the 2024 plan.
SCS’s cargo handling for 9M2024 remained aligned with annual projections, with a growth rate of 30% YoY and an anticipated compound annual growth rate of 16.3% for the 2024-2026 period. Thanks to the global economic recovery in 2024, Vietnam’s air cargo transport regained momentum with total throughput reaching 1.128 million tons (+27.2% YoY), which included 788,000 tons of international cargo (+23.6% YoY) and 341,000 tons of domestic cargo (+36.3% YoY). SCS’s throughput for 9M2024 also showed positive results with 194,000 tons handled (+42.4% YoY), completing 78.7% of the projected plan . This included 147,000 tons of international cargo (+50.6% YoY) and 46,000 tons of domestic cargo (+21.6% YoY).
View details in the attachment below.
