· We maintain BUY on Westports, with an unchanged DCFderived fair value of RM4.79/share, representing 27x FY16F PE.

· Westports posted a 3QFY15 net profit of RM130mil (+6.5% QoQ, -7.7% YoY), bringing the 9MFY15 core earnings to RM372.3mil (-0.0% YoY) – meeting expectations.

· The 9MFY15 earnings account for 73% of our full-year forecast, and ~71% of consensus estimate. No dividend was declared, other than the first 5.32 sen/share for 1QFY15.

· There were no surprises. Note the effective tax is much higher than the previous year’s, given the expiry of its investment tax allowance. The company is appealing for another 5-year round of tax incentives.

· Total container throughput in 3Q15 grew 6% YoY to 2.29mil TEUs (transshipment +11%; gateway -5%) after a strong 10% growth in 1H15.

· For 9MFY15, total container volume was up 9% YoY (transshipment 11%; gateway 3%) at 6.7mil TEUs, accounting for 74% of our full-year estimate. Transshipment accounted for 72% of total throughput in 9MFY15.

· Westports expects continued positive growth momentum with the O3 alliance and maintains the projected container growth at between 5% and 10%.

· We maintain our transshipment and gateway container traffic growth at 8% each for FY15F. Potential upsides could be had from better-than-expected throughput growth in the last quarter.

· For 9MFY15, conventional cargo volume fell 1.3% YoY to 7.7mil tonnes. Westports expects the volume to be maintained at FY14’s numbers.

· Higher revenue is expected from next month given that a 15% container tariff hike will take effect by then.

· To be implemented in two phases, the first entails an average rise of ~15% on key tariff items, particularly terminal handling charges, from 1 Nov, and an another average increase of ~15% with effect from 1 Sept 2018.

· Reiterate BUY for earnings growth prospects from the expansion of the port and the rate hikes for both gateway and transshipment traffic – the full-year impact of which will be realised in FY16.

Source: AmeSecurities Research - 16 Nov 2015