WPRTS: Strong Earnings Performance Driven by Cost Efficiencies, Target Price Upgraded
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
TA Securities reports a robust financial performance, with the company’s 9M25 core profit of RM722 million aligning with market expectations, representing 76% of the full-year forecast. This strong showing was largely attributed to effective cost management and higher port tariffs.
Performance Review
The company’s core profit for the first nine months of 2025 surged by 13.5% year-on-year to RM722.2 million. This growth was primarily fueled by a 4.2% increase in total throughput, particularly a 7.8% rise in transhipment volume, alongside a 15% increase in port tariffs implemented in June 2025.
On a quarter-on-quarter basis, 3Q25 saw a 15.2% jump in core profit to RM267.4 million. This improvement, however, was solely driven by the port tariff hikes, as total throughput remained largely unchanged. Transhipment volume specifically contracted by 3.6% quarter-on-quarter, as the company opted to turn down services for metal waste containers.
Challenges Faced
Despite the overall positive performance, the company faced some headwinds, including softer utilization reflected in the quarter-on-quarter dip in transhipment volumes. Additionally, the report highlighted that elevated tariffs on imports from India could pose a concern for regional ports.
Future Outlook
A recent trade truce following the Trump-Xi meeting, which includes a 10% cut in fentanyl tariffs and China’s suspension of additional export controls on rare earth, is viewed as a positive development for global trade, potentially benefiting the company. Management maintains its throughput growth guidance at 0-5% for 2025 and 2026.
The Westports 2.0 expansion project is progressing as scheduled, with dredging and land reclamation activities 35% complete. Construction works are slated to commence in 1Q27, with phase I and II of CT10 expected to be completed by June 2028 and end-2028, respectively. The dividend reinvestment plan (DRIP) has seen significant interest, with a 91.06% reinvestment rate, providing funds to partially finance this expansion.
Investment Recommendation
Based on these factors, TA Securities has reiterated a BUY recommendation for the stock, raising its target price to RM0.25, implying a potential upside of 25.0% from its last traded price of RM0.20.
