KUALA LUMPUR (Feb 12): CIMB Research has maintained its “Add” rating on Westports Holdings Bhd at RM3.50 with a lower target price of RM4.53 (from RM4.57) and said Westports’ full-year core net profit was 5% above expectations, on the back of slightly higher-than-expected freight rates and a lower-than-forecast effective tax rate during 4Q14, while container volumes were in line.

In a note today, the research house however said it was lowering its FY15-16 core EPS by 1-9% (due to upward revision in tax forecasts), and reduce probability-weighted DCF target price, as the MoF has turned down Westports’ application for an extension of its Investment Tax Allowance (ITA).

“We maintain our Add call as we are confident that the company will successfully secure an increase in container handling tariffs, and because the Ocean Three alliance started operations in January and may contribute a net 0.5 million TEU increase in transhipment (t/s) volumes to Westports this year,” it said.