KUALA LUMPUR (Nov 24): BIMB Securities Research has initiated coverage on Westports Holdings Bhd with a Neutral rating at RM3.17 and a target price of RM3.12 and said Westports handles container and conventional cargo and provides a wide range of port services.
In a note Monday, the research hopuse said Westports currently dominates the port activities in Port Klang with a 76% market share of all volume.
“We can expect a good FY14 and FY15 as Container Terminal 7 (CT7) will be fully operational and CMA CGM has proposed to form a route- sharing alliance which can boost TEU’s by more than 11m. We initiate coverage on Westports with a target price of RM3.12 based on regional peers weighted average PER of 20x,” it said.
BIMB Securities said there were expectations that the long overdue tariff revision may be approved, there would be increase in earnings of Westports by around 8% to 10% assuming the tariff adjustment is around 10%.
“We expect Westports to register medium growth moving forward on the absence of tariff hike of RM495.3 million for FY14 and RM532.2 million for FY15.
“We estimate a dividend totalling 11 sen or a yield of 3.6% for FY14,” it said.