Westports Holdings Berhad - Slight Earnings Beat on Strong Transhipment Traffic
Wed, 05-Nov-2025 07:57 am
by Steven Chong • Apex Research

Counter

WPRTS (5246)

Target Price (RM)

5.36

Recommendation

Hold

  • 9MFY25 CNP of RM725.2m came in slightly above our expectations at 78.1% but was within consensus full-year forecast at 76.3%. The variance was mainly driven by stronger-than-expected transhipment volumes due to restow activities from the repositioning of empty containers back to the Far East.

  • Keep our earnings forecasts unchanged for now after taking into account the uncertainty in trade flows and the normalisation of storage income.

  • Reiterate our HOLD call on Westports with an unchanged target price of RM5.36, based on a DCF methodology applying a 6.2% discount rate.

Results slightly higher than expectations. 9MFY25 CNP of RM725.2m came in slightly above our expectations at 78.1% but was within consensus full-year forecast at 76.3%. The variance was mainly driven by stronger-than-expected transhipment volumes as restow activities surged from the repositioning of empty containers back to the Far East.

YoY. CNP rose 16.3% YoY in tandem with a 31.3% YoY increase in revenue. The solid performance was underpinned by higher container throughput (+6.2%), the 15% port tariff hike, and better storage income from longer-staying metal-laden containers following government’s crackdown on e-waste. As backlogged e-waste-related cargoes are being cleared and no new inflows are expected, storage income is anticipated to normalise in the coming quarters.  Meanwhile, the conventional segment also benefited from the tariff adjustment and stronger demand for liquid bulk (marine fuel oil) and dry bulk cargoes.

QoQ. Both revenue and CNP grew by 8.8% QoQ and 17.0% QoQ respectively, supported by strong growth across all segments (Container +8% QoQ, Conventional +33% QoQ, Marine +12% QoQ, Rental +9% QoQ and Construction +1% QoQ). The improvement in container revenue, despite flattish throughput, was mainly attributed to the port tariff hike which took effect in 3QFY25.

Outlook. The recent US–China trade talks concluded with a temporary truce, easing near-term tensions. Nonetheless, management maintained a neutral stance on this development, noting no material impact on volumes thus far. Regarding the WP2 expansion, dredging and land reclamation works are c.35% completed. Earthworks for CT10 are expected to be completed by 4QFY26, enabling wharf construction to commence in 1QFY27. The first 300-meter wharf at CT10 is targeted for completion by 2QFY28, followed by the second 300-meter wharf by 4QFY28.

Earnings Revision. We maintain our earnings forecast for now, taking into account the uncertainty in trade flows and the normalisation of storage income.

Valuation. We reiterate our HOLD call on Westports with an unchanged target price of RM5.36, based on a DCF methodology applying a 6.2% discount rate. 

Risk. Key risks include uncertainties surrounding Trump’s trade policies, stiff regional competition, and potential delays in the Westport 2 expansion.

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