RHB Research has maintained its OVERWEIGHT call on Malaysia’s transport and logistics sector after the latest reporting quarter came in ahead of expectations, supported by resilient port operations and stronger freight volumes.
Of the three companies under its coverage, Westports Holdings Bhd (WPRTS) and FM Global Logistics Holdings Bhd (FM) delivered results above expectations, while TASCO Bhd’s performance was in line.
RHB retained Westports as its sole sector Top Pick, citing expectations for stronger container throughput in the second half of 2026, manageable fuel costs and its defensive earnings profile.
Westports’ first-half results exceeded expectations despite the impact of the Middle East conflict, as stronger-than-anticipated tariffs more than offset higher fuel expenses and softer throughput caused by geopolitical disruptions.
Management guided for a strong recovery in July, with throughput growth of 7% to 8%. Yard density remained healthy at around 80%, while two new container yards are expected to add another 500,000 twenty-foot equivalent units (TEUs) of annual capacity.
Fuel costs surged 39% year-on-year during 1H2026, but RHB said they remained manageable at below 23% of Westports’ total operating expenditure.
Following the results, the research house raised its FY2026-FY2028 earnings forecasts by 7% for each year, after increasing its FY2026 tariff assumption to RM220 from RM210. The average tariff stood at RM240 in the first half.
RHB expects fuel costs to ease by about 10% in 4Q2026 following the deployment of 60 electric trucks by the third quarter.
It also expects Westports to benefit from its sequential tariff increases while offering a consistent dividend payout, translating into a yield of about 5%.
Freight Volumes Supported By Export Growth
FM Global Logistics also delivered stronger-than-expected FY2026 results, driven mainly by better sea freight margins and higher volumes.
Management indicated that the volume uptrend continued into July and August, supported primarily by underlying macroeconomic growth. RHB subsequently raised its FY2027 earnings forecast for FM by 4% after increasing its sea freight volume assumption.
The research house expects freight forwarders to continue recording volume growth, supported by Malaysia’s export outlook.
RHB Economics forecasts Malaysia’s exports to grow 21.7% in 2026, underpinned by resilient manufactured exports, particularly electrical and electronics products, as well as continued strength in commodity-related exports such as natural gas.
However, RHB cautioned that potential vessel-space constraints among global shipping carriers arising from the Middle East conflict could pose a risk to freight volumes.
Despite Westports’ recent share-price rally, RHB remains constructive on the stock, expecting stronger throughput in 2H2026 while its growth catalysts from higher tariffs and capacity expansion remain intact.
