KUALA LUMPUR, March 10 (Bernama) -- RHB Investment Bank Bhd (RHB IB) maintained a “neutral” call on the transportation sector, with the ongoing West Asia conflict expected to have a limited impact on Westports Holdings Bhd, while logistics companies could benefit from higher freight rates.
RHB IB said that as Westports is a container port operator, conventional cargo accounts for only 6.2 per cent of its financial year 2025 (FY2025) operational revenue, and based on the bank’s sensitivity test, a 10 per cent increase in fuel costs could reduce Westports’ FY2026 earnings forecast by one per cent.
“However, this could be largely mitigated if cargo flows are rerouted or consolidated through alternative Asian hubs following the closure of the Strait of Hormuz, potentially lifting transhipment volumes.
“Hence, we believe Westports’ earnings growth remains intact, premised on the back of the sequential tariff increases and a forecasted container growth of 4.5 per cent,” it said.
As for logistics, RHB IB said fuel cost increases are typically passed through to end-customers via fuel surcharges, and based on the bank’s observation, freight rates were flat across most routes last week, except for Shanghai-New York and Shanghai-Los Angeles.
“In addition, both logistics players under our coverage have limited direct exposure to the Middle East, with shipment volumes to the region accounting for less than two per cent of total volumes,” it said.
-- BERNAMA
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