KUALA LUMPUR (July 20): CIMB Securities expects Westports Holdings Bhd (KL:WPRTS) to see record earnings in 2026, supported by container volumes growth, normalised yard utilisation and tariff hikes.
The research house projects container volumes to grow 4.5% year-on-year this year, with congestion resolved and yard utilisation normalised at around 75%.
"Tariff hikes and throughput growth should support record earnings in 2026, helping offset higher fuel costs and strengthen profit visibility," said CIMB Securities in a note on Monday.
The research house concluded that Westports will see record growth within the second half ending Dec 31, 2026 (2HFY2026), driven by increasing global container growth forecasts and sustained demand.
CIMB Securities noted that Maersk upgraded its 2026 global container market volume growth forecast to 4% at end-June 2026 from 2%-4% particularly in Asia.
"Similarly, Drewry now expects global container throughput to grow 3% in 2026, up from 1.8% earlier in the year, partly owing to a tighter supply-demand balance."
Earlier this year, Westports reported severe yard congestion which has now been resolved through tighter controls, including shorter free storage periods, higher overstaying charges, selective cargo acceptance, and additional yard capacity coming onstream in 3QFY2026.
Meanwhile, the company implemented a government-approved tariff hike, which raised terminal handling charges for a 20-foot container from RM345 to RM375 in January this year, and is set to raise it further to RM390 by FY2026.
The house maintains its confidence towards Westports despite rising fuel costs due to continuing global tensions and occasional operational disruptions, citing accelerating cost optimisation initiatives, including investments in solar energy, gradual fleet electrification, and the aforementioned tariff revisions as reassuring factors.
The group expects fuel expenses to rise to 22%-24% of total operating costs in FY2026 (versus 17% in FY2025), driven by the recent spike in fuel prices following the US-Iran war.
"To mitigate the impact, Westports is accelerating cost optimisation initiatives, including investments in solar energy and gradual fleet electrification. Despite these challenges, we believe the second round of port tariff revisions, effective January 2026, will partially cushion the impact in 2HFY2026," said the house.
CIMB Securities maintained its 'buy' rating on Westports with a target price of RM6.70, as the company expects near-term tariff-driven earnings uplift and medium-term capacity expansion.
Steady long-term growth is forecasted as Malaysia’s position strengthens within regional supply chains, and Westports is expecting to increase investment in meaningful capacity expansion within the next two to six years.