Midas

Midas: Possible positive sentiment as grp announced that its, Nanjing SR Puzhen Rail Transport Co (NPRT, 32.5% owned by Midas), has secured a Rmb 860m (US$135.7m) contract from Dongguan Rail Transit, to supply metro train sets to the Dongguan Rapid Railway R2 Line Project. Under the contract, NPRT is expected to deliver 20 train sets, or 120 train cars, from 2013 to 2015. Contract is expected to contribute positively to the group's financial performance for the financial years ending 2013 to 2015. With only Rmb 62m of initial orders secured Ytd, orderwin is a boost to grp’s order wins momentum. Note that NPRT is at an associate level, and we are not privy as to how mgt would account the new order wins in its orderbook. However, assuming a 32.5% stake in JV orderwin, Orderwin could be worth approx Rmb 280m. (initial ytd orders only at Rmb 62.5m) Contract win gels nicely with MoR’s guidance, who recently raised railway FAI annual target by Rmb34b to Rmb550b. In addition, most devs have resumed on existing railway construction contracts, with potentially 9 new railway construction contracts worth Rmb162b up for bidding, after the MoR lifted the ban on high speed train car orders by opening the bid for 126 units of 7,200kW high-power locomotives; a positive sign that more orders could come in 2H12. CIMB had a very good report last wk, citing that Potential contract wins could act as price catalysts as margins should expand from the current lows on higher capacity utilisation when Midas starts moving pent up inventory. House maintains OutPerform with $0.41 TP. House similarly had a very (CIMB had a very interesting share price vs order book last wk)