Westports Holdings Berhad

KUALA LUMPUR: Westports Holdings Bhd has announced the commencement of the expansion of the Westports 2 container terminal by an additional eight container terminals (CT10 to CT17), which serves as a key project in the country's preparation for additional foreign direct investments (FDI).

8 Stocks in the Logistics Sector!

The Logistics Sector, which includes land, sea, and air transportation, is crucial to the global supply chain and is often said to be the lifeblood of the economy. When logistics are disrupted, inflation tends to follow as importers and exporters tend to pass through the costs to their customers. Today, we've highlighted eight companies who are key players in the logistics sector. Interestingly, one is currently undergoing a privatization exercise highlighting corporate interest in this area.

Did any of these companies catch your interest? Let's discuss in the comment section below!

$MISC / 3816 (MISC BERHAD) $AIRPORT / 5014 (MALAYSIA AIRPORTS HOLDINGS BERHAD) $TASCO / 5140 (TASCO BERHAD) $WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD) $BIPORT / 5032 (BINTULU PORT HOLDINGS BERHAD)

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by RHB
Neutral – TP RM 4.52

" Limited Upside Potential; D/G To NEUTRAL”

2Q24 results met our and consensus’ expectations. Regional congestion continues to affect Westports, hence, yard utilisation is not expected to reach the optimal c.65%level anytime https://cutt.ly/aelOafSv its share price has risen >25% YTD, we believe it is now time for profit-taking due to limited upside potential while the counter now trades at +1SD above the historical mean. This report marks the transfer of coverage to Syahril Hanafiah.

Analyst:
Syahril Hanafiah
syahril.hanafiah@rhbgroup.com

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by TA
Hold – TP RM4.86

“The Looming Threat of Trump Tariffs"

WeraiseWestports’DDMvaluationtoRM4.86/share(fromRM4.72)after factoring in the ESG premium of +3%. We continue to like Westports for its sustainable earnings, which would translate to stable future dividends. However, the risk is looming ahead of US presidential election and the upside is limited now after the recent price rally. As such, we downgrade Westports to Hold from buy.

Analyst:
Tan Kam Meng, CFA
kmtan@ta.com.my

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by CGS
Reduce – TP RM4.01

“A lot of optimism already in the share price"

■ 1H24 core net profit of RM408m was broadly in line at 49% of our full-year forecast; 2H24F could be slightly stronger as volumes could pick up hoh.
■ Downgrade from Hold to Reduce with an unchanged DCF-based TP of RM4.01; the share price may be subject to profit taking after a strong run.
■ Investors need to contend with elevated market expectations of an imminent container tariff hike announcement, increasing the risks of holding the shares.

Analyst:
Raymond YAP, CFA
raymond.yap@cgsi.com

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by Apex
Buy – TP RM5.08

“Supported by the resilience of gateway volumes"

• Westports’s 1HFY24 core net profit at RM408.3m meet our expectations.
• Looking ahead, we expect a low single digit growth, pending tariff hike approval and expansion of Westports 2.
• We maintain our BUY recommendation with unchanged target price of RM5.08 based on the DCF-TP method, assuming a discount rate of 5.9%.

Analyst:
Jayden Tan
kdtan@apexsecurities.com.my

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by HLIB
BUY – TP RM4.89

" Results within expectations”

Westports reported 2Q24 core PATAMI of RM203.8m, which brought 1H24 sum to RM408.4m (+9.3% YoY). The results were within our and consensus expectations, forming 51.0% and 49.5% of full-year forecasts respectively. The group experienced yard congestion in 2Q24 resulting in higher VAS revenue during the quarter. Nonetheless, this has started easing from July onwards. Maintain forecasts and BUY rating with a higher DCF-derived TP of RM4.89 (from RM4.30) as we impute a lower risk premium. We anticipate a brighter outlook ahead on the back of sustained strong gateway volume due to strong FDIs flows while there should be a gradual recovery in transhipment volume as global trade picks up once central banks start to cut rates

Analyst:
Tan Kai Shuen, CFA
kstan@hlib.hongleong.com.my

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by Maybank
BUY – TP RM5.38
"2Q24: Robust gateway volume unaffected by congestion”

Westports’ 1H24 core net profit (CNP) of MYR408m met both ours and consensus projections at 49% of FY24E. We maintain our forecasts, but raised our DCF-TP by 21% to MYR5.38 (WACC: 5.8%) from MYR4.43 (WACC: 6.7%). Maintain BUY. Our new TP of MYR5.38 implies FY24E PER of 22x, which is inline with Westports' hist. PER mean. Westports achieved a +3% YoY increase in container volume growth in 1H24, aligning with guidance of +0-5% growth, and is slightly below our +4% YoY forecast.
Analyst:
Loh Yan Jin
lohyanjin.loh@maybank-ib.com

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by MIDF
NEUTRAL – TP RM4.30

" Higher Volumes Expected as Port Congestion Eases”

• 1HFY24 core PAT came in within expectation
• Container revenue boosted by VAS
• Yard occupancy eases off in Jul-24
• No changes to forward earnings estimates
• Maintain NEUTRAL with an unchanged TP of RM4.30

Analyst:
MIDF Research Team
research@midf.com.my

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by MIDF
Neutral – TP RM4.30

“Strong Intra-Asia Volumes Driving Growth"

• Reduced cargo volumes on the Asia-Europe route due to initial adjustment
• Strong intra-Asia volumes expected to sustain overall growth
• No changes to forward earnings estimates
• Maintain NEUTRAL with an unchanged TP of RM4.30

Analyst:
MIDF Research Team
research@midf.com.my

SEAPORT & LOGISTICS
$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by Kenanga
Neutral

“Shipping Diversion Weighs”

We maintain NEUTRAL rating on the sector. The shipping diversion from the Red Sea continues to weigh down on global trade, especially in the Asia-Europe sector. The World Trade Organisation (WTO) in Apr 2024, cut its projection for global merchandise trade volume growth in CY24 to 2.6% (from 3.3%), also quoting lower water levels in Panama Canal due to an extreme drought that is disrupting the movement of shipping liners. We also acknowledge that global trade will have to navigate stricter regulations on carbon emissions. However, we continue to see a bright spot in the domestic logistics sector, which is a beneficiary of the booming e-commerce. We downgrade WPRTS to UP from MP with an unchanged TP of RM3.80 after the recent run-up in its share price. We do not have any top pick for the sector.

Analyst(s):
Wan Mustaqim Bin Wan Ab Aziz
wanmustaqim@kenanga.com.my

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by CGS
Hold – TP of MYR 4.01

“Further upside depends on size of tariff hike”

We had downgraded our rating on Westports to Reduce on 13 Dec 2023 after it signed on 8 Dec 2023 a new concession agreement for the new ‘Westports 2’ (W2) expansion project that extended the concession period to 2070F, amid our concerns over whether future tariff hikes will be sufficient for a reasonable return on the W2 project. In contrast, the market largely held an opposing view, resulting in Westport’s share price gaining 17% since then.

Analyst(s):
Raymond YAP, CFA
raymond.yap@cgsi.com

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

$WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD)
Research by Apex
Buy – TP RM5.08

“Riding onto International Trade Growth"

• Westports manages Port Klang operations, handling container and conventional cargo. In addition, the Group offers a comprehensive array of port services, encompassing marine services, rental services, and various ancillary services.
• We project core net profit to grow by approximately 8% and 4% yoy in FY24F and FY25F, driven by (i) prospects of recovery in external and international trade, (ii) resilience of the domestic economy and (iii) influx of FDI supporting gateway volumes.
• Westports is valued at RM 5.08 (21.2% potential upside from the current price) with BUY recommendation. This valuation is based on the DCF-TP method, with key assumption of WACC at 5.8%.

Analyst:
Jayden Tan
kdtan@apexsecurities.com.my

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

OTHERSWESTPORTS HOLDINGS BERHAD ("WHB" OR "THE COMPANY") - FIRE INCIDENT AT WESTPORTS MALAYSIA SDN BHD'S CONTAINER YARD

PETALING JAYA: The lack of spare capacity could put Westports Holdings Bhd at a slight disadvantage amid the sporadic global port congestion.

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

KUALA LUMPUR: Westports Holdings Bhd said the source, cause and containers involved in a fire at its yard on June 8, has yet to be determined.

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