KUALA LUMPUR: Shares of Westports Holdings Bhd rose in early trade Friday after it reported third-quarter results that beat expectations.
The counter rose 3.25%, or 11 sen to RM3.49 at 9.41 am. In the past month, it has risen almost 11%.
Westport’s net profit for the third quarter ended Sept 30, 2023, increased to RM195mil compared with RM150.39mil in the same period last year.
Revenue rose to RM542.31mil from RM520.54mil, while earnings per share stood at 5.72 sen versus 4.41 sen previously.
Hong Leong Investment Bank (HLIB) Research said Westport’s results were within the house and consensus projections, forming 76.6% and 78.9% of full-year forecasts respectively.
“Despite a slowing global economy, the group recorded a resilient showing in results due to stronger gateway and intra-Asia volume.
“Nonetheless, we are staying cautious on the outlook given the global economic uncertainty which could potentially hamper trade outlook,” it said.
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HLIB Research has maintained its forecasts and “hold” rating on Westports with a lower discounted cash flow (DCF)-derived target price of RM3.51 from RM3.71 previously.
Meanwhile, Kenanga Research said Westports’ 9MFY23 results beat expectations, coming in at 81% and 80% of the house full-year forecast and the full-year consensus estimate respectively.
“We raise our FY23F and 24F net profit by 6% and 7% respectively, as we lift our FY23F and 24F container volume growth rates to 6% and 4% respectively (from 1% and 3% previously).
“Consequentially, we upgrade our DCF-derived target price by 4% to RM3.80 from RM3.65 which is based on a discount rate equivalent to its WACC of 6.1% and a terminal growth rate of 2%,” it said.
“We continue to like Westports for (i) its resilient earnings underpinned by long-term contracts with key clients such as Ocean Alliance, (ii) its long-term growth prospect driven by the Westports 2 expansion project, and (iii) its price competitiveness, i.e. lower transshipment tariffs vs. peers such as Port of Tanjung Pelepas and Port of Singapore. Value has emerged after the recent weakness in its share price. Upgrade to outperform from market perform,” Kenanga said.