Westports Holdings Berhad
We maintain a neutral rating with a target price of MYR 3.5 (a downside of 5.5%). The company manages nine container terminals in Port Klang (the busiest container terminal in Malaysia). Although it enjoys a whopping 80% market share in Port Klang and its significantly longer maturity of its concession (2054) provides higher stability to its earning, the management’s unwillingness to diversify exposes the company to a substantial geographic concentration risk to Malaysia. Based on the EV/EBITDA multiple, the stock of Westports is already in the overvalued territory when compared with the industry average. Also, its current dividend yield of 3.5% (vs Malaysian government’s 10-year bond rate of 3.078%) does not pose a strong case for the dividend seeking investors to consider Westports as an investment avenue.
Drewry, since 1970, has been providing research and advisory services on the global Maritime and Shipping industries and has established itself as a firm with long history of credibility and expertise on various aspects of the maritime industry. Leveraging this in-depth market knowledge and understanding, we have extended our offering to deliver a unique, independent investment research service on globally listed companies operating in the maritime industry. Under the brand Drewry Maritime Equity Research and in accordance with the FCA, DMER led by Rahul Kapoor and his team, offers fundamental analysis on listed companies. DMER analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. By combining these market-leading resources with seasoned sector expertise and commercial awareness, we are able to offer a highly differentiated and comprehensive investment research service to prospective investors in listed maritime companies. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.
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