SG: MARKET PULSE: Midas, Astro (13 Jun 2013)

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.54

MARKET PULSE: Midas, Astro

13 Jun 2013

KEY IDEA Midas Holdings: Metro industry gaining momentum Summary: Midas Holdings' JV company NPRT recently secured three metro contracts amounting to ~CNY2.45b (assuming a 70% stake for one of the contracts won together with its consortium partners) within a span of two weeks. We believe this highlights the fast growing momentum of China's metro industry. As Midas is also a key supplier to NPRT, we expect it to benefit positively from this. Despite the share of loss of NPRT to Midas' FY12 and 1Q13 financials, we believe that the situation would improve from 2H13. Meanwhile, Midas' management has also set its sights on growing its exports business, such as to the Russian railway market. We maintain our BUY rating and S$0.54 fair value estimate on Midas as we are still sanguine on its long-term outlook, but believe that the major re-rating catalyst would have to come from the resumption of new high-speed train car tenders from China. (Wong Teck Ching Andy) MORE REPORTS Astro - Higher dividend for 1QFY14 Summary: Astro Malaysia Holdings Berhad (Astro) reported 1QFY14 revenue of MYR1125.8m, +14.2% YoY, and met 23.2% of our full-year forecast. However, due to higher depreciation, net profit fell 6.7% to MYR114.1m, but still met around 24.7% of our FY14 forecast. It is also declaring a quarterly dividend of 2.0 sen per share (versus 1.5 sen in the previous two quarters). Going forward, management remains relatively upbeat about its prospects, where it should be able to sustain the first quarter revenue growth for the rest of the year, encouraged by the strong demand for its comprehensive suite of value-added products and services. As 1QFY14 results were mostly in line, we opt to keep our full-year estimates unchanged. But we are raising free cashflow estimates slightly and it results in our DCF-based fair value improving from MYR3.00 to MYR3.26. Coupled with a higher expected dividend forecast for this year, we maintain our BUY rating. (Carey Wong)

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