CGSCIMB said the reclamation exercise, that will be in three phases, will first need to undergo technical discussions with the Port Klang Authority and the Transport Ministry.
KUALA LUMPUR: RHB research maintained its buy call on Westports Bhd, its top transport pick, with a higher target price of RM4.32.
"Westports is our Top Pick for the transportation sector as we believe that the company’s earnings growth should outperform that of other transportation stocks under our coverage in
1Q19," it said.
Looking ahead, the research house said earnings should be stronger from 2QFY19 onwards due to the 15% container tariff hike.
"Management expects container throughput volume to grow at single-digit rates in FY19, in line with our conservative 3% growth estimate.
"Coupled with the 15% container tariff hike which took effect on 1 Mar, we expect FY19 earnings to grow by 22% YoY to MYR652m," it said in a research note.
Westports recently announced 1QFY19 throughput volume growing 12% year-on-year (y-o-y) to 2.53mil TEU due to its successful transition to a new baseline and transhipment volume last year.
"Transhipment volume enjoyed stronger growth of 15% YoY to 1.71m TEUs, while gateway volume increased 7% YoY to 0.82m TEUs," it said.
"Intra-Asia segment volume of 1.61m TEUs implied robust growth of 15% YoY – this segment is still the company’s largest, as it accounted for 64% of total volume in 1QFY19."
RHB said Westports' latest net gearing as at end 1Q19 was 0.48x, an increase from 0.44x as at end 4Q18 but remains the 0.50x threshold.
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