Thursday 28 Mar 2024
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KUALA LUMPUR (June 30): Kenanga IB Research maintained its Outperform rating on Westports Holdings Bhd at RM2.69 with a higher target price of RM3.13 (from RM2.91) after the port operator secured an extension to its concession period to Aug 31, 2054 from Sept 1, 2024.

Last week, the Li Ka-shing-backed Westports announced it received the notice from the Port Klang Authority (PKA) agreeing to the concession extension.

The concession extension is subject to the terms and conditions as set out in the privatisation agreement inked in July 25, 1994 and supplemental agreements executed thereafter.

In a note today, Kenanga’s research analyst Lim Sin Kiat said the announcement proves positive for Westports as it improves the earnings visibility of the group with assurance of operations over the next 40 years.

“This is definitely a positive announcement for Westports,” he said.

“We opine that the growth prospects for Westports remain robust with capacity expansion plans on track.”

Lim said the completion of CT6 and land reclamation works for CT7, CT8 and CT9 has fulfilled the necessary capacity expansions as per pre-conditions for the concession extension.

Following China’s disapproval of the P3 alliance, Lim said he maintained his forecasts and assumptions as he had earlier factored in a minimal adverse impact on container throughput by the P3 alliance.


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