We upgrade our rating for SCS to BUY from OUTPERFORM despite cutting our target price (TP) by 6.4% to VND93,100/share. SCS’s share price has declined 18% over the past three months.

Our lower TP is mainly due to our 0.8-ppt higher WACC assumption, which is partially offset by rolling our TP horizon to end-2023 vs previously mid-2023. Moreover, we cut our 2022/23/24F NPAT-MI forecasts by 6.9%/11%/13% as we expect SCS’s cargo volume to be weaker in 2022-2024F due to a slowdown of global trade activities.

For 2022F, we forecast revenue to rise 8.7% YoY to VND912bn (USD37mn), which will mainly be driven by 2.4% YoY growth in cargo volume and a 5.5% YoY increase in average service price (ASP). Additionally, we forecast NPAT-MI to increase 15% YoY to VND652bn (USD30mn).