CIMB: Westports' container throughput projected to rise by 2.5pct
CIMB Securities said this growth is also driven by the normalisation after Zim Integrated Shipping Services Ltd (ZIM) exited in 2024, along with possible frontloading activities during the 90-day tariff suspension period.
"For example, Westports' Asia-Europe trade volume rose 21 per cent year-on-year (YoY) in the first quarter of 2025 (1Q25) following additional new services from Ocean Alliance, and Asia-America trade volume also grew 16 per cent YoY in 1Q25 partially owing to front-loading activities and underlying demand growth.
"Meanwhile, its intra-Asia trade volume declined 7 per cent YoY owing to increasing competition following shipping alliance realignments," it said.
Westports has revised its 2025 container throughput volume forecast to remain flat YoY, aligning with 2024 levels and lowering its earlier projection of modest single-digit growth.
This adjustment reflects growing global trade protectionism and concerns over a potential broader economic slowdown.
CIMB Securities expressed a positive view on the port's Dividend Reinvestment Plan (DRP), seeing it as a sustainable and shareholder-friendly way to raise funds.
The plan enables Westports to limit its dependence on external borrowings while preserving a strong balance sheet to ensure timely delivery of key infrastructure upgrades.
Meanwhile, HLIB Research made slight revisions to Westports' earnings following its annual report updates, adjusting financial year 2025 and FY26 earnings by +0.6 per cent and -7.4 per cent, respectively.
It also introduced a financial year 2027 earnings estimate of RM938 million.
The firm stated that the tariff increase will enhance the group's cash flow and help partially finance the Westports 2 (WP2) expansion project.
HLIB noted that Westports remains optimistic the government will approve a port tariff increase, primarily for the gateway segment, sometime in 2025.
It also highlighted that the 5-year DRP will help fund the Westports 2 (WP2) expansion, with management reaffirming its commitment to the 75 per cent dividend payout policy.
"WP2 is progressing well with dredging and land reclamation, with construction to start in the first quarter of 2027 and commence operation by the second quarter of 2028," it said.
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