Maybank IB Research said it sees Malaysian ports as structurally better placed than third-party logistics operators to absorb shocks and capture growth.
PETALING JAYA: Malaysia’s ports and logistics sector is expected to remain resilient through this year as shifting global trade patterns, tariff dynamics and infrastructure-led strategies create a supportive medium-term operating backdrop, analysts say.
The outlook is shaped by evolving supply chains, volatile freight markets and the ability of ports to monetise capacity while managing congestion risks.
Maybank Investment Bank Research (Maybank IB Research) said, against this backdrop, it sees Malaysian ports as structurally better placed than third-party logistics operators to absorb shocks and capture growth.
“We maintain a positive view on the ports and logistics sector,” Maybank IB Research said, highlighting that intra-Asia trade has emerged as a key beneficiary of shifting trade flows, supporting resilience at key regional transshipment hubs, including Westports in Selangor and Port of Tanjung Pelepas (PTP) in Johor.
This intra-regional momentum is viewed as a counterbalance to the uncertainty arising from trade policies in major economies, the research house noted.
A key theme identified by Maybank IB Research is the continued influence of US tariffs and supply chain reconfiguration.
“We believe US tariffs, inventory cycles, and supply chain reconfiguration will continue to shape demand patterns,” it said.
According to the research house, companies affected by tariffs are recalibrating sourcing, production and inventory strategies, a process that potentially affects container volumes, transshipment activity, and port congestion risks throughout this year.
While ports are seen as beneficiaries of trade diversion, it cautioned that third-party logistics players may face operational challenges navigating the volatility.
Freight rates remain a swing factor for the broader logistics ecosystem.
“Container freight rates are expected to remain volatile in our view, posing challenges for third-party logistics,” the research house said, adding that possible upsides include US inventory restocking and geopolitical tension pushing up freight rates.
Conversely, it warned that the potential reopening of Suez Canal transits could expand effective carrier capacity and reduce global demand, causing freight rates to drop.
Another central driver is the earnings tailwind from port-tariff revisions and strategic expansion.
Maybank IB Research said: “We expect Westports Holdings Bhd
’s earnings this year to be supported by tariff revisions, providing resilience amid supply chain and freight rate volatility.
“The revisions, alongside capacity expansion and infrastructure initiatives, underpin the view that the port operator can sustain margins even in a fluctuating market.”
Maybank IB Research emphasised that earnings growth for Westports is expected to be driven primarily by container yield rather than volumes, with moderate container volume growth projected at about 2% a year between 2025 and 2027.
The research house highlighted that the implementation of staggered tariff hikes enhance revenue visibility and margin resilience, noting that the second phase of 10% tariff adjustments is scheduled for this month .
It also pointed out that higher value-added service charges “discourage prolonged cargo dwell time” while compensating for congestion-related inefficiencies.
“To support its long-term growth ambitions, Westports had introduced a dividend reinvestment plan from the second half of last year, primarily to fund its expansion,” the research house added.
Beyond this, Westports is exploring port acquisition opportunities, which could offer faster earnings contribution than new projects, it said.
Maybank IB Research has a “buy” rating on Westports with a discounted cash flow-derived target price of RM6.73, based on a weighted average cost of capital of 7.1%.
It forecasts earnings growth of 9%, 23% and 9% for last year, this year, and next year, respectively.
The research house has a “hold” rating on Swift Haulage Bhd with a target price of 41 sen, reflecting a more challenging operating environment and limited exposure to the fastest-growing segments.
Meanwhile, another analyst noted that higher tariffs could weigh on trade volume.
He said, as such, investors might remain cautious about the prospects of the ports and logistics sector.
Besides tariff uncertainty, cross-border trade flows could also be affected by geopolitical risks, said the analyst with a bank-backed research house.
“Beyond tariffs, the growing push for tighter carbon-emission regulations adds another layer of friction to global trade, potentially constraining volumes even as supply chains adjust,” he added.
Nevertheless, he pointed out that robust eCommerce growth and trade diversion stemming from prolonged US-China tensions could support the resilience of Malaysian ports and logistics players such as Westports and Swift Haulage.
