Westports shares surge over 4% after CIMB report cites catalysts
The kickers are start of key customer alliance, renewal of Investment Tax Allowance, govt nod to raise port tariffs
Kuala Lumpur
THE shares of Westports Holdings leapt over 4 per cent to RM3.42 apiece on Tuesday, after CIMB released a report on the same day predicting that the stock was due for a re-rating on the back of three "explosive" catalysts.
The three kickers cited by the investment bank: the start of the Ocean Three alliance; a renewal of the port operator's Investment Tax Allowance (ITA), and government approval to raise port tariffs.
Indeed, such was CIMB's enthusiasm that it recommended investors to accumulate the stock, valuing its shares at RM4.57 each on a discounted cash flow basis. "We expect the core earnings before interest and taxation 3-year compounded annual growth rate of 10 per cent to rise to 17 per cent if port tariffs are raised 30 per cent on 1 January 2016," the bank said. In fairness,…
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