Midas: announced that its JV co, Nanjing SR Puzhen Rail Transport (32.5% owned by Midas) was awarded 2 contracts by Nanjing Metro Co. worth a total of RMB 3.13b.
i) The Nanjing Metro Line 3 contract is worth RMB 2.15b for the supply of 276 train cars and delivery is expected from 2013 – 2015.
ii) The Nanjing Metro Line 10 contract is worth RMB 0.98b for the supply 126 train cars and delivery is from 2013 – 2014.
Note that these contract wins are for Metro trains (orders given at the City level), and are different from High-Speed Rail contracts (orders given at the State or Country level).
Hence concerns regarding a potential slow down in HSR contracts are still valid. Nevertheless sentiment in the stock should get a bit of a boost today in view of the size of the new order.
Midas share price has sold off significantly since the railway tragedy in China last week.
Stock currently trades at 12X P/E.
Technically, the stock closed down 5.9% yday at $0.565 on exceptionally high volume (66.7m), with RSI, Stochastics and CCI all in oversold territory. This could indicate capitulation and a technical bounce to follow.
Stock now +5.4% at $0.59, at top volume.