Westports Holdings: Briefing & Results Review 2QFY25

Westports Holdings

Within expectations

Westports reported another strong performance for 2QFY25 with core PATMI of RM232.2m, lifting 1HFY25 to RM454.7m, which was within HLIB/consensus expectations at 49.5%/48.4% of full-year forecast. The growth was mainly driven by higher container VAS revenue and rental rate. At current juncture, management is retaining its guidance of mid-single digit growth for container throughput in 2025, post achieving +3.1% in 1HFY25. Maintain BUY rating with an unchanged DCFE-derived TP of RM6.08. We anticipate continued earnings expansion, on the back of sustained continued volume growth and container tariff hike in 2HFY25.

Within expectations.

Westports reported 2QFY25 core PATMI of RM232.2m (+4.4% QoQ, +13.9% YoY), which brought 1HFY25 sum to RM454.7m (+11.3% YoY). The results were within our and consensus expectations, forming 49.5% and 48.4% of full-year forecasts respectively. 1HFY25 core PATAMI was arrived at after excluding Els amounting to -RM0.6m, mainly on impairments on trade receivables.

Dividend.

Declared an interim dividend of 9.93 sen (details to be announced on later date), which consist of cash payment 7.94 sen and electable portion/DRP 1.99 sen (a discount of not more than 10% to the 5-day weighted average market price).

QoQ.

Core PATMI improved +4.4% to RM232.2m, mainly driven by higher container volume (+7.1%), partially offset by higher administrative and other direct expenses, while operating expenses stayed relatively flattish.

YoY/YTD.

Core PATMI improved +13.9% YoY and +11.3% YTD (to RM454.7m), mainly driven by higher container VAS revenue with higher rental income (on higher sublease renewal rate and the effect of MRFS 16 adjustments), alongside lower fuel cost (decline in MOPS price and RM appreciation against USD) and depreciation charges (extended concession period). These were partially offset by higher manpower expenses, net finance costs and tax expenses.

Outlook.

Despite on-going uncertainties on global trade and economies, Westports maintains its guidance of mid-single digit growth for container throughput in 2025, after achieving +3.1% growth in 1HFY25 (driven by transhipment volume +6.0%, partially offset by lower gateway -0.4%). Average port utilization remains high at 80% in 1HFY25. Management has not seen any meaningful change in on-going volume and future volume as major liners have not change their port calling. The approved tariff hike effective 15th Jul 2025, 1st Jan 2026 and 1st Jul 2027 will improve the group’s cash flow and partly fund WP2 expansion plan. Furthermore, the approved 5-year Dividend Reinvestment Plan (DRP) will be used to partly finance WP2 as well. Management is committed to continue its 75% dividend payout policy. WP2 is progressing well with dredging and land reclamation (achieved 20% completion rate), with construction to start in 1QFY27 and commence operation by 2QFY28 for 1st wharf and 4QFY28 for 2nd wharf.

ESG.

We have include a new ESG Snapshot for Westports. Overall we are positive with the group’s ESG policy and achieve. The group aims to achieve net zero emission by 2050.

Forecast.

Unchanged.

Maintain BUY, TP: RM6.08.

Maintain BUY with an unchanged DCF-derived TP of RM6.08. We expect earnings sustainability, underpinned by tariff hikes and resilient volume movements, despite concerns over global trade slowdown. Also, the DRP is poised to enhance shareholder value, while supporting medium-term capex requirements.

Daniel Wong

kkwong@hlib.hongleong.com.my
(603) 2083 1720

BUY (Maintain)

Target Price:

RM6.08

Previously:

RM6.08

Current Price:

RM5.59

Capital upside

8.8%

Dividend yield

3.6%

Expected total return

12.4%

Sector coverage: Logistics

Company description: Westports primarily manages port operations dealing with container and conventional cargo at Port Klang.

Share price

[Share price chart data from Aug-24 to Jul-25 showing WPRTS (LHS) and KLCI (RHS)]

Historical return (%)	1M	3M	12M
Absolute	2.9	29.7	28.2
Relative	4.1	30.5	34.7

Stock information

Bloomberg ticker	WPRTS MK
Bursa code	5246
Issued shares (m)	3,410
Market capitalisation (RM m)	19,062
3-mth average volume (‘000)	4,445
SC Shariah compliant	Yes
F4GBM Index member	Yes
ESG rating	★★★★

Major shareholders

Pembinaan Redzai	42.4%
South Port Invest	23.6%
EPF	7.3%

Earnings summary

FYE (Dec)	FY24	FY25f	FY26f
PATMI – core (RM m)	892	918	1,074
EPS – core (sen)	26.1	26.9	31.5
P/E (x)	21.4	20.8	17.7

Financial Forecast

All items in (RM m) unless otherwise stated

Balance Sheet

FYE Dec	FY23	FY24	FY25f	FY26f	FY27f
Cash	578	781	789	892	995
Receivables	281	316	325	358	378
Inventories	5	7	7	7	7
PPE	1,739	1,687	1,648	1,613	1,580
Concession	2,478	4,733	5,054	5,376	5,699
Others	259	255	278	300	321
Assets	5,339	7,778	8,101	8,546	8,980
Payables	281	316	325	358	378
Debt	850	1,080	1,205	1,305	1,405
Concession liabilities	61	1,812	1,799	1,786	1,772
Others	627	752	717	709	711
Liabilities	1,819	3,960	4,046	4,158	4,267
Shareholder’s equity	1,038	1,038	1,038	1,038	1,038
Retained Profits	2,482	2,780	3,017	3,350	3,675
Equity	3,520	3,818	4,055	4,388	4,713

Income Statement

FYE Dec	FY23	FY24	FY25f	FY26f	FY27f
Revenue	2,152	2,344	2,407	2,651	2,798
EBITDA	1,294	1,443	1,470	1,672	1,781
EBIT	1,035	1,188	1,216	1,414	1,521
Net finance	-42	-56	-59	-59	-58
Associates & JV	10	0	5	5	5
Exceptionals	2	6	0	0	0
Profit before tax	1,006	1,139	1,162	1,359	1,467
Tax	-227	-241	-244	-285	-308
PAT	779	898	918	1,074	1,159
Core PAT	777	892	918	1,074	1,159
Consensus core PATMI		932	1,067	1,153
HLIB/Consensus		98.4%	100.7%	100.5%

Cash Flow Statement

FYE Dec	FY23	FY24	FY25f	FY26f	FY27f
EBIT	1,035	1,188	1,216	1,414	1,521
D&A	259	255	254	258	261
Net finance	-42	-56	-59	-59	-58
Working capital	-107	17	-55	-26	-14
Taxation	-227	-241	-244	-285	-308
Others	76	128	0	0	0
CFO	995	1,291	1,112	1,301	1,401
Capex PPE	-120	-510	-400	-400	-400
Capex Concession	-107	-100	-100	-100	-100
Others	3	8	0	0	0
CFI	-224	-601	-500	-500	-500
Changes in debt	-125	230	125	100	100
Shares issued	0	0	0	0	0
Dividends	-534	-601	-680	-741	-834
Lease payments	-61	-95	-13	-13	-13
Others	-32	-44	-35	-43	-51
CFF	-752	-509	-603	-698	-798
Net cash flow	18	182	8	103	103
Others	49	21	0	0	0
Beginning cash	511	578	781	789	892
Ending cash	578	781	789	892	995

Valuation & Ratios

FYE Dec	FY23	FY24	FY25f	FY26f	FY27f
Rep. EPS (Sen)	22.9	26.3	26.9	31.5	34.0
Core EPS (sen)	22.8	26.1	26.9	31.5	34.0
P/E (x)	24.5	21.4	20.8	17.7	16.4
EV/EBITDA (x)	14.9	13.4	13.2	11.7	10.9
DPS (sen)	16.9	19.8	20.2	23.6	25.5
Dividend yield	3.0	3.5	3.6	4.2	4.6
BVPS (RM)	1.03	1.12	1.19	1.29	1.38
P/B (x)	5.42	4.99	4.70	4.34	4.04
EBITDA margin	60.1%	61.5%	61.1%	63.0%	63.7%
EBIT margin	48.1%	50.7%	50.5%	53.3%	54.3%
Net margin	36.1%	38.0%	38.1%	40.5%	41.4%
ROE	22.1%	23.4%	22.6%	24.5%	24.6%
ROA	14.6%	11.5%	11.3%	12.6%	12.9%
Net gearing	7.7%	7.8%	10.3%	9.4%	8.7%

Assumptions

FYE Dec	FY23	FY24	FY25f	FY26f	FY27f
Container (TEU m)	10.88	10.98	11.30	11.60	11.93
Transhipment	6.35	6.07	6.19	6.32	6.44
Gateway	4.53	4.91	5.11	5.29	5.49
Conventional (mt)	11.60	12.20	12.32	12.45	12.57
Revenue Breakdown (RM m)
Container Cargo	1,805	1,950	2,064	2,273	2,400
Conventional Cargo	139	156	158	172	181
Marine	91	86	92	104	109
Rental	54	88	93	102	108
Construction	63	64	0	0	0
Total	2,152	2,344	2,407	2,651	2,798

Quarterly results comparison

FYE Dec (RM m)	2QFY24	1QFY25	2QFY25	QoQ	YoY	1HFY24	1HFY25	YoY
Revenue	554.0	591.0	608.0	2.9%	9.7%	1,095.0	1,199.0	9.5%
Container	482.0	493.0	511.0	3.7%	6.0%	952.0	1,004.0	5.5%
Conventional	37.0	37.0	36.0	-2.7%	-2.7%	72.0	73.0	1.4%
Marine	21.0	23.0	22.0	-4.3%	4.8%	43.0	45.0	4.7%
Rental	14.0	38.0	39.0	2.6%	178.6%	28.0	77.0	175.0%
Operational Cost	(165.0)	(163.0)	(164.0)	0.6%	-0.6%	(331.0)	(327.0)	-1.2%
Manpower	(72.0)	(78.0)	(78.0)	0.0%	8.3%	(145.0)	(156.0)	7.6%
Fuel	(41.0)	(36.0)	(35.0)	-2.8%	-14.6%	(81.0)	(71.0)	-12.3%
Maintenance & Repair	(22.0)	(22.0)	(23.0)	4.5%	4.5%	(45.0)	(45.0)	0.0%
Electricity	(15.0)	(13.0)	(14.0)	7.7%	-6.7%	(29.0)	(27.0)	-6.9%
Others	(15.0)	(14.0)	(14.0)	0.0%	-6.7%	(31.0)	(28.0)	-9.7%
Gross Profit	336.7	380.9	395.8	3.9%	17.6%	660.8	776.8	17.6%
EBITDA	325.7	361.8	369.6	2.2%	13.5%	647.0	731.4	13.0%
EBIT	274.7	314.8	321.6	2.2%	17.1%	545.0	636.4	16.8%
Finance cost	(9.4)	(23.1)	(23.1)	-0.1%	145.8%	(17.9)	(46.2)	158.2%
Associates	0.5	0.8	2.0	143.4%	264.9%	4.2	2.8	-33.0%
PBT	265.9	292.5	300.5	2.8%	13.0%	531.3	593.0	11.6%
Tax expense	(62.1)	(70.0)	(68.9)	-1.6%	10.9%	(123.1)	(138.9)	12.9%
Reported PATMI	203.7	222.5	231.6	4.1%	13.7%	408.3	454.1	11.2%
EI	(0.1)	(0.0)	(0.6)	N.M.	N.M.	(0.1)	(0.6)	N.M.
Core PATMI	203.8	222.5	232.2	4.4%	13.9%	408.4	454.7	11.3%
Core EPS (sen)	6.0	6.5	6.8	4.4%	13.9%	12.0	13.3	11.3%
				ppts chg	ppts chg			ppts chg
EBITDA margin	58.8%	61.2%	60.8%	-0.42	1.99	59.1%	61.0%	1.91
EBIT margin	49.6%	53.3%	52.9%	-0.36	3.31	49.8%	53.1%	3.30
Core PATAMI margin	36.8%	37.6%	38.2%	0.55	1.41	37.3%	37.9%	0.63

Volumes

	2QFY24	1QFY25	2QFY25	QoQ	YoY	1HFY24	1HFY25	YoY
Container (TEU m)	2.72	2.69	2.88	7.1%	5.9%	5.40	5.57	3.1%
Transhipment	1.53	1.51	1.68	11.3%	9.8%	3.01	3.19	6.0%
Gateway	1.19	1.18	1.20	1.7%	0.8%	2.39	2.38	-0.4%
Conventional (mt)	2.92	2.95	2.75	-6.8%	-5.8%	5.68	5.70	0.4%

Bursa, HLIB Research

ESG Snapshot

The goal of this section is to provide an overview of Westports’ ESG trends and developments. Information presented here are from financial year FY24 and will only be updated when new data are available. Overall, we find the port operator group has no glaring ESG issues as most indicators met expectations.

F4GBM Index member	:	Yes
FTSE Russell ESG rating	:	★★★★
MSCI ESG rating	:	N.A.

Environmental (E) indicators

Established Glide Path 2050: Westports’ Decarbonisation Strategy, a pathway to Westports to achieve net zero emission by 2050.
Westports targets 30% reduction in net CO2e (Scope 1) per TEU emission intensity by 2035 (base year 2021) and commits to achieving Scope 1 operatoinal net-zero carbon emissions by 2050, in line with the nation’s commitment to achieving net-zero greenhouse gas emissions by 2050.
The intermittent targets are overall net CO2e/TEU of 14.4kg by 2030, 12.8kg by 2035, and subsequently below 6.0kg by 2050 (base year 2021 was 18.33kg).
GHG emission intensity per revenue stood at 116.5 tCO2e/RMm (vs FY23: 128.1 tCO2e/RMm).
Electricity consumption intensity per revenue stood at 25.6 MWh/RMm (vs FY23: 26.1 MWh/RMm).
Diesel consumption intensity per revenue stood at 22.3 kL /RMm (vs FY23: 24.0 kL/RMm).
Water consumption intensity per revenue of 682.6 L/RMm (vs FY23: 706.3 L/RMm).
Waste generation intensity per revenue was 0.30 tonnes/RMm (vs. FY23: 0.32 tonnes/RMm).
Planted 10,000 mangrove trees as of end-2024, comprising six diverse species since 2015.
Installed solar capacity: 7,864 kWp, generating 3,880,729 kWh in 2024. For 2025, targeting an additional 6.3 MWp, expects to generate 8,000 MWh annually.
Terminal trucks: Full electrification by 2050, with gradual adoption starting in 2040.
Rubber-tyred gantry cranes: Diesel units phased out by 2043; 90% of fleet electrified by 2050.
Tug and pilot boats: Diesel use aligns with container growth; full electrification by 2050.
RECs & Carbon Offsets: RECs adoption starts in 2031, increasing 5% annually to reach 100% by 2050.

Comments: Westports has already established a clear strategy to achieve the group’s targeted net zero emissions by 2050, which is in line with Malaysia’s government commitment towards net zero GHG emission by 2050. Major parts of the strategy is to go through electrification, solar installation and acquiring REC.

Social (S) indicators

Has a talent retention rate of 88.3% (vs FY23: 89.3%).
Composition of female Board of Directors stood at 54.5% (vs FY23: 50.0%).
Females accounted for 19.4% of senior management level (vs FY23: 14.3%).
Females accounted for 14.9% of middle management level (vs FY23: 13.3%).
Females accounted for 5.6% of total employee (vs FY23: 5.0%).
The average training hours per employee was at 25.2 hours (vs FY23: 24.4 hours).
Total incidents and accidents occurred in FY24 was 697 cases (vs FY23: 791 cases).
Total contribution to community development programmes was RM3.1m in FY24 (vs FY23: RM1.6m).
In 2024, Westports also pledged continued dedication to community investment. The group will allocate a minimum of RM1.0m annually to Pulau Indah.
Westports will commit at least an hour of all its management, office staff and senior operational staff’s time to the port operator’s CSR initiatives during working hours.
In the coming years, the company will replant almost 100 hectares of mangrove. To this effect, WMSB has entered into a Memorandum Of Collaboration with the Yayasan Hijau Malaysia And Menteri Besar Selangor (Pemerbadanan) on the Selangor Environmental Conservation and Cultural Alliances (SECCA), which will nurture an inclusive ecosystem for mangroves and marine wildlife.

Comments: Westports has a naturally high male composition under its employment, mainly due to its nature of business. However, the group has relatively high percentage of female composition in BOD. The group is also committed to contribute back to the community of Pulau Indah, where the port operation is located.

Governance (G) indicators

Board size of 11 directors (vs FY23: 10 directors) where 63.6% were independent (vs FY23: 60.0%) with an average tenure of 5.5 years (vs FY23: 5.1 years). Meeting attendance was 97.4% (vs FY23: 100.0%).
Independent directors form 100% / 66.7% / 100% / 100% of audit / risk / nomination & remuneration/ sustainability committee (vs FY23: 100% / 66.7% / 75.0% / 100%).
Has a Executive Director pay ratio of 91.6x (vs FY23: 114.6x).
The percentage of executive & non-executive directors pay to the group’s revenue stood at 0.10% (vs FY23: 0.11%).
Strict zero-tolerance policy against all forms of corruption and bribery, as outlined in the Group’s comprehensive Anti-Corruption and Bribery Policy.
Whistleblowing Policy, allows employees to report suspicions of irregularities openly or anonymously, ensuring confidentiality and protection from retaliation.

Comments: Overall, BOD complies with the recommendations set by Bursa Malaysia. While two founding family members serve on the Board, both possess relevant experience and industry knowledge to effectively lead the group. Their presence is balanced by other independent directors, providing appropriate checks and balances. The Board comprises a mix of long-serving members, who offer continuity and institutional knowledge, and newer members, who contribute fresh perspectives and ideas.

Disclaimer

The information contained in this report is based on data obtained from sources believed to be reliable. However, the data and/or sources have not been independently verified and as such, no representation, express or implied, are made as to the accuracy, adequacy, completeness or reliability of the info or opinions in the report.

Accordingly, neither Hong Leong Investment Bank Berhad nor any of its related companies and associates nor person connected to it accept any liability whatsoever for any direct, indirect or consequential losses (including loss of profits) or damages that may arise from the use or reliance on the info or opinions in this publication.

Any information, opinions or recommendations contained herein are subject to change at any time without prior notice. Hong Leong Investment Bank Berhad has no obligation to update its opinion or the information in this report.

Investors are advised to make their own independent evaluation of the info contained in this report and seek independent financial, legal or other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. Nothing in this report constitutes investment, legal, accounting or tax advice or a representation that any investment or strategy is suitable or appropriate to your individual circumstances or otherwise represents a personal recommendation to you.

Under no circumstances should this report be considered as an offer to sell or a solicitation of any offer to buy any securities referred to herein.

Hong Leong Investment Bank Berhad and its related companies, their associates, directors, connected parties and/or employees may, from time to time, own, have positions or be materially interested in any securities mentioned herein or any securities related thereto, and may further act as market maker or have assumed underwriting commitment or deal with such securities and provide advisory, investment or other services for or do business with any companies or entities mentioned in this report. In reviewing the report, investors should be aware that any or all of the foregoing among other things, may give rise to real or potential conflict of interests.

This research report is being supplied to you on a strictly confidential basis solely for your information and is made strictly on the basis that it will remain confidential. All materials presented in this report, unless specifically indicated otherwise, are under copyright to Hong Leong Investment Bank Berhad. This research report and its contents may not be reproduced, stored in a retrieval system, redistributed, transmitted or passed on, directly or indirectly, to any person or published in whole or in part, or altered in any way, for any purpose.

This report may provide the addresses of, or contain hyperlinks to websites. Hong Leong Investment Bank Berhad takes no responsibility for the content contained therein. Such addresses or hyperlinks (including addresses or hyperlinks to Hong Leong Investment Bank Berhad own website material) are provided solely for your convenience. The information and the content of the linked site do not in any way form part of this report. Accessing such website or following such link through the report or Hong Leong Investment Bank Berhad website shall be at your own risk.

As of 03 August 2025, Hong Leong Investment Bank Berhad has proprietary interest in the following securities covered in this report:
(a) -.
As of 03 August 2025, the analyst(s) whose name(s) appears on the front page, who prepared this report, has interest in the following securities covered in this report:
(a) -.

Published & printed by:

Hong Leong Investment Bank Berhad (10209-W)
Level 28, Menara Hong Leong,
No. 6, Jalan Damanlela,
Bukit Damansara,
50490 Kuala Lumpur
Tel: (603) 2083 1800
Fax: (603) 2083 1766

Stock rating guide

BUY: Expected absolute return of +10% or more over the next 12 months.
HOLD: Expected absolute return of -10% to +10% over the next 12 months.
SELL: Expected absolute return of -10% or less over the next 12 months.
UNDER REVIEW: Rating on the stock is temporarily under review which may or may not result in a change from the previous rating.
NOT RATED: Stock is not or no longer within regular coverage.

Sector rating guide

OVERWEIGHT: Sector expected to outperform the market over the next 12 months.
NEUTRAL: Sector expected to perform in-line with the market over the next 12 months.
UNDERWEIGHT: Sector expected to underperform the market over the next 12 months.

The stock rating guide as stipulated above serves as a guiding principle to stock ratings. However, apart from the abovementioned quantitative definitions, other qualitative measures and situational aspects will also be considered when arriving at the final stock rating. Stock rating may also be affected by the market capitalisation of the individual stock under review.