External demand to support local logistics firms

PETALING JAYA: The outlook for the transport and logistics industry is expected to be supported by resilient global container and external demand despite global uncertainties, says RHB Research.

It has maintained a “neutral” call on the transport and logistics stocks following their quarter ended Sept 30 results that met expectations and earnings that remained in line, after taking into consideration heavyweight Westports Holdings Bhd’s stable performance.

The research house said Malaysia’s external outlook had become more encouraging despite the US tariff uncertainties.

“Meanwhile, Asia’s economic dynamism, regional trade diversification and the operating model of major liner alliances continue to underpin steady transhipment activity,” it pointed out.

It has Tasco Bhd as the top pick with a “buy” call and target price (TP) of 70 sen because of the company’s diversified client base and business segments keeping earnings stable.

As for Westports, it said the TP of RM5.14 reflected the Port Klang tariff adjustments.

It had a TP of 59 sen for FM Global Logistics Holdings Bhd.

It expected the tariff adjustments at Port Klang, which saw a 15% hike in July and another 10% hike next month, to continue underpinning Westports’ earnings trajectory, providing a clear uplift to revenue visibility moving into its financial year ending Dec 31, 2026.

It noted that the MMC Ports initial public offering, which might be shelved on the excessive valuation of over US$7bil, would have enhanced the breadth of the transport and logistics industry stocks while attracting greater institutional participation given the market capitalisation, resulting in one of the largest listings in Malaysia in over a decade.