KUALA LUMPUR (June 16) — Westports Holdings Bhd (KL:WPRTS) is expected to benefit from the newly approved tariff adjustments at Port Klang, though analysts caution that broader trade and shipping uncertainties may influence future performance.
The Malaysian government recently approved a staggered 30% tariff increase for Port Klang, to be rolled out in three phases: an initial 15% rise from RM300 to RM345 per twenty-foot equivalent unit (TEU) effective June 15, followed by a 10% increase to RM375 on January 1, 2026, and a final 5% adjustment to RM390 on January 1, 2027. This cumulative increase mirrors a similar round of tariff hikes last implemented between 2015 and 2018.
According to a research note by RHB Investment Bank Bhd, the tariff revision is poised to enhance Westports’ revenue outlook. The bank revised its earnings forecast for the port operator upwards by 11% for FY2025 and FY2026, and 13% for FY2027. Its revised target price (TP) stands at RM4.90, factoring in a 2% ESG premium. While the financial outlook has improved, RHB also highlighted that uncertainties in international trade—stemming from tariff developments and shifting shipping patterns—could lead to short-term disruptions in seaborne commerce.
These disruptions may include changes to shipping routes and port activities in the region. Despite these factors, Westports maintains a conservative container throughput growth forecast of 0% to 5%. CIMB Securities echoed a positive outlook, noting that the container segment represents approximately 85.5% of Westports’ FY2024 revenue.
The brokerage expects the new tariff structure to support the Westports 2 expansion initiative and raised its earnings forecast by 8% to 22% for FY2025 to FY2027. CIMB also increased its TP to RM5.10, estimating revenue growth of 7% to 15% as a result of the tariff adjustments.
However, it also flagged that gateway volumes may experience near-term pressure as shipping lines adapt to new cost structures. Additionally, with only around 25% of transshipment contracts renewed annually, the full benefits of the tariff adjustment are expected to materialize gradually, with limited earnings impact anticipated in the latter half of 2025.
According to Bloomberg data, among 19 research houses tracking Westports, 10 have issued “buy” recommendations while nine suggest “hold.” The 12-month average target price for the stock is RM5.09.
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