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International Cooperation Department
Tel.: (+86-21) 65853850-8034
Fax: (+86-21) 65373125
E-mail: ICDept@sisi-smu.org
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International Shipping |
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| Analysts bullish on tariff hike at Westports |
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Date:2025-06-19 Readers:
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THE recently revised port tariffs are expected to boost Westports Holdings, however geopolitical risks and trade uncertainties tied to the Israel-Iran conflict may weigh on regional shipping activities, said analysts.
The Malaysian government has recently approved a staggered 30 per cent tariff hike for Port Klang which came into effect on June 15 until January 2027.
In a research note, RHB Investment Bank highlighted that ongoing tensions in the Middle East could disrupt regional seaborne trade due to potential port congestion near conflict zones.
"Although Asia's economic resilience and regional trade shifts may dampen the impact, the extent remains unknown until the trade tariffs are in full swing," said the firm.
Despite these headwinds, research houses revised forecasts earnings upwards and noted that Westports is maintaining a conservative container growth forecast of 0 per cent to 5 per cent.
RHB Investment revised its earnings forecast for Westports upwards by 11 per cent for FY2025 and FY2026, and 13 per cent for FY2027.
Additionally, CIMB Securities said the tariff adjustment is a positive for Westports, as the container segment makes up 85.5 per cent of its financial year 2024 revenue and arrives at an opportune time for its Westports 2 expansion.
While the firm expects a gradual earnings uplift, it noted that only about 25 per cent of transshipment contracts are renewed annually, which means most of the benefit will materialise gradually, with limited earnings impact in the second half of 2025.
Out of 19 research houses looking at Westports' stocks, 10 are on "buy" calls while nine are on "hold" recommendations, according to Bloomberg.
https://www.shippingazette.com/news?news_id=9250600000543
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