Westports expects a record year for containers
This comes after the group handled 5.57 million 20-foot equivalent units (TEUs) in the first half of this year (1H25), up 3.1% from 5.40 million TEUs in the same period last year.
Last year, the main operator of Port Klang recorded its highest-ever annual volume at 10.98 million TEUs.
CIMB Research has upgraded its call on Westports from a 'hold' to 'buy' and raised its target price to RM6.20 a share from RM5.10 previously, citing renewed investor interest on the back of some easing in geopolitical risks, port-tariff catalysts and improved operating leverage.
Effective July 15, Port Klang tariffs rose by 15% as part of a staggered 30% hike through to January 2027.
The terminal handling charge per TEU will increase to RM345 (from RM300), followed by RM375 effective Jan 1, 2026, and RM390 on Jan 1, 2027.
CIMB Research said earnings visibility for Westports is strong in 2H25, supported by tariff implementations and stable transshipment flows.
'The completion of maintenance dredging by this month will also restore wharf capacity,' it added.
The research house maintained its container throughput growth forecast for this year at 2.5%, backed by new services from shipping alliances and a normalisation of volume after the exit of ZIM Integrated Shipping Services Ltd, one of the leading carriers in the global container shipping industry, last year.
However, the research house said gateway volume could soften due to weaker imports of metal and e-waste.
'Additionally, Westports flagged that uncertainty surrounding tariff implementation could pose further downside risk to gateway demand,' the research house said.
CGS International Research (CGSI Research) lifted its container volume growth forecast for this year to 1%, citing stronger-than-expected transshipment.
The research house also raised its value-added services (VAS) revenue projections, as e-waste containers remained longer at the yard, boosting storage income.
'We believe that yard occupancy will decline half-on-half in 2H25, but we expect the drop to be gradual. We have now spread out the decline to 2026 rather than assume a sharp drop this year,' the research house said.
CGSI Research said good 1H25 results set the base for an even better performance in 2H25, with the July tariff hike likely to lift 3Q25 earnings.
'We expect the delivery of strong 3Q25 results to be a potential re-rating catalyst. Investors should also be relieved that the United States has imposed a 19% tariff on Malaysia, broadly the same as other South-East Asian nations,' it said.
The research house reiterated an 'add' call on the stock with a two-sen higher target price of RM6.43.
Maybank Investment Bank Research (Maybank IB) said container volume could ease in 2H25 as early buying to get ahead of tariffs fades, but earnings remain underpinned by the first phase of the tariff hike.
'The mid-term throughput outlook is underpinned by the recent foreign direct investments and potential spillovers from the reshuffle of shipping alliances since February,' the research house said.
'Additional earnings upside may come from storage charges rising by over three times after the grace period effective 2H25, which is not yet reflected in our forecasts.'
Maybank IB has maintained its 'buy' rating, raising its target price to RM6.76 a share from RM5.85, citing stabilising geopolitics.
In contrast, TA Research reiterated a 'sell' rating with a target price of RM5.57 a share, despite 1H25 core net profit meeting expectations, accounting for 48% of the market's full-year forecast.
The research house made no changes to its earnings projections for this year to 2027.
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