Company Name: MIDAS HLDGS LIMITED
| Research House: DBS Vickers | Price Call: BUY | Target Price: 0.50 |
While orders have been slow in coming through to Midas, it has been enhancing both its production capacity and capabilities, in addition to diversifying its product range, says DBS Vickers. Jilin Midas now has an aluminium extrusion production capacity of 50,000 tonnes per annum and can fabricate a complete range of train parts, including for export.
DBS Vickers expects Midas to comfortably win orders of about RMB1b ($196 million) from metro, export and the non-rail segments (power and other extrusion products) over the next 12 months, while high-speed train orders will depend on how soon the Ministry of Railway (MoR) makes its purchases.
If the MoR does order 400 train sets, as people in the industry expect, DBS Vickers projects that Midas could win around RMB1b worth of high-speed train orders for delivery over the next 2-3 years. Meanwhile, associate Nanjing Puzhen should also see an earnings turnaround on its strong RMB8.5b order book.
DBS Vickers has Buy on Midas for 2013 turnaround story, with target price of $0.50. Midas is currently trading at 0.7x FY13 P/B, which the research house sees as attractive for a turnaround story.
“We believe the stock should re-rate as contracts start to flow in once again for the Group. Our TP is based on 1x FY13 P/B,” says DBS Vickers.
Midas is up 1.4% to $0.37.
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