"Vietnam's leading airport non-aviation services provider — international passenger recovery, lounge expansion, and the upcoming Long Thanh Airport create a multi-year compounding opportunity, trading at a discount to peers."
Business Summary
Southern Airports Services JSC (SASCO, ticker: SAS) is Vietnam's leading provider of non-aviation commercial services at major airports. Operating primarily at Tan Son Nhat International Airport (TSN, Ho Chi Minh City), Phu Quoc Airport (PQ), and Cam Ranh Airport (CR), SASCO manages an integrated ecosystem of revenue-generating businesses that capture spending from departing, arriving, and transit passengers.
The company's major shareholders include ACV (Airport Corporation of Vietnam, 49% stake) — the state entity that owns and operates Vietnam's airports — and IPPG (the luxury retail and travel services conglomerate led by Johnathan Hanh Nguyen). This ownership structure provides SASCO with privileged access to airport concession space and a competitive edge in concession bidding processes.
Business Lines
Industry Context
SASCO's revenue is directly correlated with passenger volume at its operational airports — making Vietnam's aviation recovery the most important macro variable. The key dynamics:
International Passenger Recovery Gap (Upside Opportunity): International passengers at TSN and Cam Ranh airports have not yet fully recovered to 2019 pre-COVID levels (only Phu Quoc has recovered and is growing). International passenger volumes showed strong YoY growth in 1H 2025 (+20% at TSN, +200% at PQ), but the recovery ceiling — measured against 2019 — remains meaningfully above current levels.
Vietnam Visa Policy Liberalization: Vietnam's government has aggressively expanded tourism access. The number of countries with visa exemptions expanded from 22 (2019) to 29 (2025), and countries eligible for e-visas went from 80 to 257. E-visa validity extended from 15–30 days to 30–90 days. These policy changes structurally increase international visitor inflows over the medium term.
Long Thanh International Airport (Major Catalyst): Phase 1 of Long Thanh International Airport (designed for 25 million passengers annually) is targeted for Q1 2026. SASCO's ACV ownership stake and established airport services track record position it as a frontrunner for lucrative concessions at this major new facility.
Revenue Per Passenger (RPP) Growth: SASCO's RPP remains low compared to international peers. As international passenger share increases — international passengers spend significantly more on duty-free and lounge services than domestic passengers — RPP is projected to grow at ~10% annually, creating an additional multiplier on top of volume growth.
Competitive Advantages & Moat
Concession Moat (First-Mover & Regulatory Access): SASCO's ACV ownership (49%) provides a structural advantage in airport concession bidding. ACV controls all of Vietnam's major airports, and SASCO's institutional relationship ensures access to prime concession space that independent operators cannot easily replicate. This is a classic concession-based moat: once established, operations are very difficult to displace mid-term.
Dominant Lounge Position — TSN T3: SASCO secured the largest total concession space at the new TSN T3 terminal lounge bidding (3 lots: T3-DD401 at 543m², T3-DD402 at 355m², T3-DD403 at 442m² — all at 16–16.5% revenue sharing). Competitors AST and NAS each won 2 smaller lots. SASCO also generates the highest average revenue per lounge among all operators.
Airport Dimensions Partnership: In November 2024, SASCO partnered with Airport Dimensions — a global airport lounge specialist — to enhance lounge service quality, attract premium passengers, and gain access to the Priority Pass network (the world's largest airport lounge access program). This partnership upgrades the product and opens access to a global pool of premium travelers.
IPPG & Luxury Retail Network: SASCO's link to Jonathan Hanh Nguyen and IPPG (a leading luxury retail and airport services group) provides access to premium brand relationships, retail know-how, and supply chain advantages in the duty-free segment that standalone operators cannot match.
High-Margin Lounge Economics: Lounge segment gross profit margins reached an all-time high of 83% in Q2 2025, and are projected to reach 85% as higher guest volumes improve cost absorption. As lounges grow as a share of revenue mix, blended margins expand structurally.
Investment Thesis
Our BUY recommendation is driven by five compounding growth catalysts:
1. International Passenger Volume Recovery (Volume Driver): International travelers — who spend 3–5x more than domestic passengers on duty-free and lounge services — have not yet fully returned to 2019 levels at TSN and Cam Ranh. As recovery closes this gap, SASCO's highest-margin revenue streams (duty-free, lounges) grow disproportionately. Revenue 1H 2025 was already up 15% YoY with lounge revenue up 25% YoY.
2. Airport Lounge Expansion (Margin Expansion Driver): The Airport Dimensions partnership enhances lounge quality and brand recognition, attracting more premium customers and Priority Pass holders. New, enhanced lounges at Long Thanh Airport (Phase 1: Q4 2025) will capture a new stream of international departures. As the lounge segment grows as a share of the business mix, group-level margins expand.
3. Long Thanh Airport (New Capacity Catalyst): SASCO is well-positioned to win significant concessions at Long Thanh International Airport, Vietnam's future premier international hub designed for 25 million passengers annually. ACV's 49% ownership in SASCO creates a structural competitive advantage in the concession bidding process.
4. Valuation Discount vs. Peers (Mean Reversion Driver): At the time of the report, SAS was trading at 9.7x P/E TTM, compared to its closest listed competitor AST at 15.0x P/E TTM. Our DCF implies an intrinsic value of VND 63,767 per share — a significant discount to the buying price of VND 39,500.
5. Consistent Dividend Yield (Income Support): SASCO has maintained a consistent dividend payout since 2016, averaging approximately 6.5% annually. Over the 2–3 year time horizon, accumulated dividends of VND 4,200 provide a material cushion to total return even in downside scenarios.
Financial Performance
Historical Financial Summary (VNDbn)
| Metric | 2019A | 2020A | 2022A | 2023A | 2024A |
|---|---|---|---|---|---|
| Revenue | 2,895 | 918 | 1,400 | 2,581 | 2,906 |
| Gross Margin | 47.7% | 48.6% | 52.4% | 54.1% | 59.2% |
| Net Income | 373 | 149 | 210 | 286 | 422 |
| Net Margin | 12.9% | 16.2% | 15.0% | 11.1% | 14.5% |
| ROE | 23.8% | 9.7% | 14.3% | 19.0% | 27.0% |
Note: 2021 omitted (near-zero revenue due to COVID lockdowns). Source: Company Annual Report, ACV.
Valuation
Valuation is based on a DCF (Discounted Cash Flow) model that captures the predictable, recurring nature of SASCO's airport concession cash flows. The key assumption is that future revenue scales with international passenger volume recovery and RPP growth.
DCF Summary
Sensitivity Analysis — Implied Share Price (VND)
| WACC \ Growth | 2.0% | 3.0% | 4.0% (Base) | 5.0% | 6.0% |
|---|---|---|---|---|---|
| 11.46% | 58,834 | 64,822 | 72,416 | 82,362 | 95,955 |
| 12.46% (Base) | 53,128 | 57,885 | 63,767 | 71,227 | 80,997 |
| 13.46% | 48,430 | 52,288 | 56,961 | 62,740 | 70,068 |
Price Target Scenarios (Including 3 Years of Dividends)
Source: Company report, public research, KBAM estimates.
Key Risks
Passenger Volume Dependency: SASCO's revenue is highly correlated with air passenger volume — particularly international travelers. A renewed public health crisis, sharp economic downturn, or geopolitical event that suppresses international travel would directly reduce revenue from duty-free, lounge, and F&B segments.
Concession Renewal Risk: SASCO holds airport concessions under agreements with ACV. While the ACV ownership stake (49%) is a strong mitigant, any adverse change in concession terms, revenue-sharing rates, or location allocations at renewal could compress margins.
Long Thanh Airport Delay: The Long Thanh opportunity is material to the upside case. Construction delays — Vietnam has a history of infrastructure project slippage — could push this catalyst from 2026 to 2027 or later, delaying SASCO's revenue uplift from this new facility.
Competition Intensification: AST (SASCO's main listed competitor) and NAS are actively expanding lounge and duty-free operations at new terminals. If either competitor wins a disproportionate share of Long Thanh concessions, the expected market share split would be less favorable than modeled.
Macro Vietnam Risk: As a VND-denominated investment on UPCoM, foreign investors face currency risk, lower liquidity vs. HOSE-listed peers, and exposure to Vietnam's macroeconomic conditions (inflation, interest rates, credit policy).
Final Verdict
We recommend BUY on SAS with a buying price of VND 39,500, targeting a base case IRR of ~19.8% over 2–3 years. SASCO offers a rare combination: a structurally protected concession moat via the ACV relationship, a high-margin and rapidly growing lounge business (83% GPM), a material re-rating catalyst in Long Thanh Airport, and a consistent dividend yield of ~6.5% that pays you to wait. Trading at only 9.7x P/E vs. peer AST at 15x, the valuation discount is material and not justified by fundamentals. Even in the downside scenario, the IRR is ~10% — supported by dividends alone — making the risk/reward highly asymmetric.