Midas falls on Q1 profit warning

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.375

Shares of Midas Holdings, which supplies aluminium components to trains in China, shed as much as 8.5% after the company forecast a significant drop in quarterly net profit.

Midas shares fell to $0.325, the lowest since end-December.

The company said the expected profit fall in its first-quarter was mainly due to lower revenue, higher operating expenses and finance costs, as well as share of losses from an associated firm, Nanjing SR Puzhen Rail Transport Co.

OCBC Investment Research forecast Midas’ first-quarter revenue to fall 31% and net profit to drop 47% from a year ago, given the challenging conditions in China’s railway sector. It maintained its hold rating and a price target of $0.375.