The research house said based on Westports
KUALA LUMPUR: Kenanga Research has cut FY18-19E on Westports Holdings Bhd
by 22-19% on a decrease in bottomline earnings due to higher taxes and finance costs.
"Our current core net profit forecasts of RM500.6m/RM539.4m for FY18E/FY19E imply earnings growth of -23%/8%."
It added that FY18 will see the full compliance of MFRS 15, which would result in significant changes towards revenue and cost of sales although it will have a neutral impact on bottomline earnings.
The research house said it believes container throughput will see low single-digit growth in FY18 with the nine million TEUs in FY17 serving as a new low base.
"As for the upcoming 1Q18 results (tentative release next week), we expect numbers to come in poorer on a YoY basis as the reshuffling of shipping alliances only came into effect April 2017."
With regards to the expansions of CT10-19, Kenanga Research believes there will not be further developments in the next two to three years following the completion of CT9 Phase 1 last year.
The research house maintained its market perform call on the stock with a lower target price of RM3.60 from RM3.70 as it believes the current level is fairly valued after a 12% drop over the past 12 months.
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