ACV to put on sale hefty stake in airport services company

Buying a stake in Southern Airports Services JSC (Sasco) from Airports Corporation of Vietnam (ACV) is considered an opportunity for investors to benefit from Sasco’s potential business activities.

ACV has released plans to sell 3.95 million shares, equalling a 3 per cent stake, in its subsidiary Sasco, aiming to reduce its holding from 51 to 48 per cent.
 
Sasco shares are now trading at a price of VND26,000 ($1.17) apiece. At this price, ACV is expected to gross VND100 billion ($4.4 million) 

It is not the first time that ACV carries out a divestment from one of its subsidiaries. In early November, the corporation also divested a part of its capital at Saigon Ground Services JSC (SAGS) before trading on the Unlisted Public Company Market  (UPCoM). ACV sold 132 million SAGS shares, reducing its ownership from 54.62 to 48.02 per cent, equivalent to 9.6 million shares.  

After the transaction, SAGS share prices increased by VND24,000 ($1.06) to VND130,000 ($5.73) within a month. It goes to show that state-owned enterprises’ divestment will make the subsidiaries’ shares increase in value.

Regarding Sasco, experts advised that investors should study Sasco’s trading activities as well as its potential for development.

Sasco specialises in operating in the field of airport commercial services and owns the largest market share in this field in Tan Son Nhat International Airport—Vietnam’s largest airport in terms of serving passengers. In 2015, Tan Son Nhat served 26 million passengers, exceeding its designed capacity. In the first nine months of this year, the figure stood at 24 million passengers, up 24 per cent on-year.

According to Sasco’s financial report, its major business sectors are trading duty free products, business lounge services, souvenirs and confectionery, as well as operating restaurants and coffee. In 2015, it earned a total of VND240 billion ($10.58 million) in profit from trading duty free products and providing business lounge services, with VND120 billion ($5.29 million) each.

Sasco has an advantage in duty free products and business lounges due to the backing from its strategic partner IPP Group, which owns 80 per cent of the high-end fashion sector in Vietnam. Sasco is managing almost all business lounges at Tan Son Nhat International Airport. The passenger volume using business lounges has been increasing by more than 15 per cent per year.   

In the nine months of this year, Sasco earned VND1.54 trillion ($68.87 million) in revenue and VND169 billion ($7.56 million) in profit, signifying increases of 4 and 12 per cent, respectively, and reaching 94 per cent of its annual target.

In the manufacturing and business sector, the company’s gross profit margin increased by 6 per cent, to 41 per cent.

In the mid-term, the Prime Minister approved to expand Tan Son Nhat Airport, which is expected to be completed in 2018, increasing the capacity by 60 per cent, to 40 million passengers a year. The expansion is expected to promote Sasco’s trading in duty free products, restaurants and coffee, and business lounges.

In the long term, after Long Thanh Airport is expanded by a capacity of 50 million passengers per year, Sasco will have more opportunities to expand its operations.      

Sasco was established in 1993 with an initial governmental capital of VND9.3 billion ($410,089). After more than 20 years, from an enterprise established during the subsidy period, Sasco has made several impressive changes in accordance with market mechanisms to keep up with international trends in the field of airport commercial services.

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By Mai Chi