Kenanga Raises Bintulu Port Profit Forecast for FY2025 on 'Stronger Prospects' for Tariff Hike

Kenanga Investment Bank Bhd (Kenanga IB) has raised its financial year 2025 (FY2025) net profit forecast for Bintulu Port Holdings Bhd by 14 per cent on "stronger prospects" of a hike in tariffs for the port.

It also lifted the port operator's target price by 6 per cent to RM5.90 from RM5.55 and maintained its "market perform" call.

The research firm said the increase in FY2025 net profit was made based on the assumption of a 10 per cent hike in Bintulu Port's tariff but noted that it might increase up to 40 per cent in total "to be staggered over a 30-year concession period."

Kenanga noted that Bintulu Port appeared "more upbeat on the prospects of tariff hikes," which followed Sarawak state's plan to take over the Bintulu Port Authority (BPA) which could be completed as soon as June 2024.

"Currently, Bintulu Port's container tariff is 38 per cent lower than that of Samalaju Industrial Port at RM207.50 per twenty-foot equivalent unit (TEU) for local containers, versus RM335 per TEU charged by Samalaju Industrial Port. 

We expect a potential step-up in earnings if Bintulu Port is granted a significant hike in its port tariffs," it said in a research note today.

Kenanga IB also noted that upon commissioning in 2028, two large-scale hydrogen plants in Bintulu will generate green energy cargoes for Bintulu Port. The plants namely, H2biscus and H2ornbill, will produce green energy cargoes for Bintulu Port.

On the port's outlook, Kenanga said the LNG cargo throughput at Bintulu Port would remain stable as sustained demand from Japan and South Korea would more than cushion the slowdown in demand from China. - Bernama