Hot Stock Westports up on 3Q results, analysts upgrades

by **Cals** Fri 07 Nov 2014, 16:39

Hot Stock
Westports up on 3Q results, analysts upgrades

KUALA LUMPUR (Nov 7): Shares of Westports Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) rose on Frieday on the back of its improved third quarter results as well as target price upgrades by analysts.
At 9.25am, Westports rose 2.41% or seven sen to RM2.97 with 1.37 million shares done.
MIDF Research has maintained its Neutral rating on Westports Holdings Bhd at RM2.90 with a higher target price of RM3.11 (from RM2.95) and said the port operator’s results were above expectations.
In a note Friday, the reserach house said the improved result was due to higher throughput and lower effective tax rate.
“3Q14 container throughput grew robustly by 11.3% y-o-y to 2.16 million TEUs.
“CT8 expansion plan to cater for future demand.
“Maintain Neutral with revised target price of RM3.11 after rolling forward valuation to FY15,” it said.
Menwhile, AmResearch had upgraded Westports to a Buy at RM2.93, with a higher fair value of RM3.40 (from RM2.91) and said the fair value implied a PE of 22x FY15F EPS.
In a note Thursday, the research house said the risk was skewed to the upside in view of the following: (1) Potential hike in container tariffs, the rates of which have been unchanged for the past decade and still lags behind those of the Port of Singapore by about half. A 1% increase in gateway (import/export) container tariffs will result in a 0.8% rise in earnings. A potential 20%-25% increase could lead to a 17%-21% rise in earnings.
The research house said gateway traffic accounted for 31% of container volume, and 42%-43% of terminal handling revenue.