KUALA LUMPUR (May 3): Analysts anticipate continuous growth for Westports Holdings Bhd for the rest of the year on the back of sustained trade activities in the regional economies and multi-year high foreign direct investment (FDI).

In a note on Friday, Hong Leong Investment Bank (HLIB) said Wesports’ first quarterly results were within expectations, accounting for 25.8% of the research firm's and 25.4% of consensus full-year forecasts.

HLIB noted that during the quarter, the group recorded throughput volume from transshipment of 1.48 million 20-foot equivalent units (TEUs), which was down 10% quarter-on-quarter (q-o-q) and 3% lower year-on-year (y-o-y), and from gateway of 1.2 million TEUs, which was down 2% q-o-q but up 16% y-o-y.

“The decline in transshipment volume was due to initial adjustment for Asia-Europe trade lanes as liners take the longer route of Cape of Good Hope due to the Red Sea crisis. Gateway volume remains robust due to the realisation of FDIs,” it said while reiterating a 'buy' call on the counter with an unchanged target price of RM4.30.

The research firm, citing the group’s management, said the current composition where gateway volume made up 44.8% of the total throughput volume was the highest gateway volume percentage it has recorded since operations.

Meanwhile, in a separate note on Friday, TA Securities said the double-digit growth in gateway volume in the first quarter of 2024 would likely sustain the remainder of the year.  

Meanwhile, the research house expects Asia-Europe trade to remain sluggish.

“The Red Sea crisis has affected Asia-Europe trade, where the container volume contracted by 18% y-o-y on this specific trade lane. This was because shipping liners opted for a longer route to avoid Houthi’s attacks,” it added.