Midas

Midas: OCBC lowers r FY12 and FY13 net profit estimates for Midas by 14.9% and 6.8% respectively, on lower margin assumptions. Expect Midas to report a set of lackadaisical 2Q12 results (PATMI: -58% YoY). But improvement in 2H12 on a YoY basis remains a possibility, due largely to a low-base effect. Add that Midas’ 32.5%-owned JV company NPRT recently clinched a RMB860m metro contract, thus boosting its order book to Rmb7.4b, according to estimates. Notwithstanding its strong order book, contribution to Midas’ earnings has been lumpy. In addition, high-speed railway contracts remain an integral element to Midas’ recovery, but there is still an impasse on this front currently. House cut fair value estimate from $0.33 to $0.30 (11x blended FY12/13F EPS) on account of our reduced projections. Maintain HOLD and would turn buyers at S$0.28 or lower.