KUALA LUMPUR, Feb 3 — CGS-CIMB expects Westports Holdings Bhd’s container volume to moderate in the first quarter (Q1) of this year, falling to an estimated 2.57 million twenty-foot equivalent units (TEUs) against 2.77 million TEUs registered in the fourth quarter (Q4) of 2020.
In a note today, the research house said the sequential moderation of volume growth appeared to have continued into January 2021, with Westports guiding for one per cent to two per cent year-on-year (y-o-y) volume growth in the first month of the year.
“Assuming a two per cent y-o-y growth for the whole of Q1 2021, quarterly volumes may total 2.57 million TEUs, which would be lower than Q4 2020’s. For the full year, Westports guides for ‘a small single-digit container throughput growth’ which is between zero per cent and five per cent y-o-y growth,” it said.
While noting that Westports had a history of under-guiding and over-delivering, CGS-CIMB decided to lower its volume growth assumption for the financial year ending Dec 31, 2021 (FY21) to five per cent from eight per cent in the interest of caution.
It reiterated its “reduce” call on the stock as Q4 2020 volumes appeared to have weakened from previous highs, but the discounted cash flow-based target price (TP) was raised to RM4.16 from RM3.63 previously.
Meanwhile, Kenanga Investment Bank Bhd maintained a “market perform” call on Westports with a TP of RM4.20, saying that Westports’ FY20 core net profit of RM654.5 million came in within expectations of its consensus full-year forecast.
“Empty containers, which comprised 25 per cent of FY20 transshipment volume, have already been mostly sent back to China with the recycle-time likely being pushed back. Delay in shipping line arrival time schedule coupled with pandemic-induced supply chain disruption could potentially limit container volume this year,” it added.
At 10.37am, Westports was down two sen to RM4.55, with 146,700 shares traded.
— Bernama
