Wednesday, January 8, 2014

Midas Holdings - Speeding ahead (DBSV)

Midas Holdings
BUY S$0.51
STI : 3,167.43
Price Target : 12-Month S$ 0.64
Speeding ahead

•Beneficiary of China’s high speed railway (HSR) program
• Earnings to rebound in FY14F as HSR contracts roll in, plus more metro and overseas projects
• Potential huge HSR order for Midas from recent second rolling stock tender for 314 sets
• BUY with S$0.64 TP, based on 1.2x FY14 P/BV


Riding on China’s acceleration of its high speed railway program.
With over 60% of market share for aluminium alloy profiles for high speed passenger trains in China historically, Midas is well positioned to benefit from the country re-starting its high speed railway equipment program. This was evident by the two large tenders from the reformed China Railway Corporation in 4Q13.

More contracts from multiple sources to drive earnings recovery.
In addition to more high speed railway contracts, we also expect Midas to continue winning metro and overseas railway supply contracts to boost its recovery, and to add on to its RMB900m order book. In total, Midas is looking at a potential market of over 1,000 HSR train sets over the next 2 years, of which it could win at least half. Meanwhile, its associate Nanjing Puzhen has an order book of c. Rmb8.5bn, and should improve its contribution to the Group’s bottom line in the years ahead.

Undemanding valuation for a turnaround play.
Trading at just 1x FY13 P/BV, we believe current valuations are attractive for a stock with earnings that are poised to rebound strongly in FY14F and FY15F. Our TP of S$0.64 is based on 1.2x FY14 P/BV.




Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 03/01/13

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