Midas: Disappointing net profit due to costs and fall in associate contributions. 3Q rev at $259.3m +4.6% yoy -17.4% qoq with net profit at $27.4m -59.8% yoy -56.6% qoq. Loss from associate Nanjing SR Puzhen Rail Transport was due to fewer train cars delivered and finance costs rose 3 fold to Rmb15.2m on more borrowings and higher interest paid.
Co continue to caution on challenging railway industry outlook due to past incidents and major customers have been negatively impacted. Midas derives approx 70-80% of revenue from the industry and expects trade receivables turnover days to increase. Remains confident in customers as they are state enterprises.
Midas trades at annualized P/E of 10.9x currently vs hist avg of 23.8x
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