It noted that the second half of 2023 (H2 FY2023) had a high base for gateway containers due to competitive local currency and foreign direct investment (FDI), which boosted containerised exports.

“As of H1 FY2024, container volume recorded a 3.1% y-o-y increase (gateway: 11.2% y-o-y, transshipment: -2.6%).

“At least for the remainder of the year, the contribution of gateway volume to overall volume could stay in the 40% range (an increase from the historical 30%), benefiting Westports as gateway operations involve higher container handling charges,” it said in a research note.

However, it also anticipates Westports’ management to achieve low single-digit growth in container volume for FY2024.

Meanwhile, MIDF also expects Asia-Europe transshipment to continue to be weak due to irregular vessel calls and blank sailings resulting from the Red Sea crisis.

This trade lane has witnessed a 10% y-o-y decline in overall container volume in H1 FY2024.

“We anticipate that the intra-Asia trade lane (historically accounting for over 60% of total volume) will remain the volume driver, with it showing a 6.5% y-o-y growth during the same period, largely driven by gateway volume.

“Some carriers have also reportedly restructured services and redirected vessels to prioritise the Asian region, driven by their overall strategy rather than in direct response to the disruption,” it stated.

In terms of outlook, the stock’s fair value is maintained at RM4.30, with a neutral recommendation, as the stock has risen by 16.3% year-to-date and is trading at 15.6 times FY2025 forecasted earnings per share, near its five-year historical average.

“Key upside for the stock includes a larger-than-expected tariff increase and stronger-than-expected container volume,” it added.