Midas

Midas: Recent spate of orderwin continues, as grp announced that it has secured new orders worth Rmb 139.3m (US$22.04m) from China and international customers. One of the contract, worth Rmb 74.6m yuan, was awarded by grp’s JV, Nanjing SR Puzhen Rail Transport. Delivery for this contract is expected to take place from 2012 to 2014 and is expected to contribute positively to grp's financial performance for FY12-FY14. Recall last week that grp’s JV similarly secured a Rmb 860m (US$135.7m) contract from Dongguan Rail Transit (assume 32.5% stake, orderwin worth approx. Rmb 280m) and latest contract win could bring Ytd orderwins to approx. Rmb400m, near mgt forecast of at least Rmb500m of orderwins for the yr bringing orderbook to approx. Rmb 700-750m. Recall yesterday, grp’s CEO said in an interview that the Chinese Ministry of Railway and state-owned rail enterprises CSR Corp (China Southern Rail) and China CNR (Northern Rail) have started pushing ahead with the Rmb 2.5 tr railway construction and upgrading programme under China's 2010-15 Five Year Plan targeting 120,000 km of intercity rail track construction. Add that banks are committing to finance Rmb 2tr, while the govt is underwriting bonds and offering a 50% tax break on yield to bondholders; almost Rmb 90b has already been raised and about 90% of the stalled projects have restarted. CIMB maintains Buy with $0.41 TP, noting that awards indicate Midas’s ability to weather the high-speed railway contract drought with metro and international contract. DBSV maintains Buy with $0.49 TP.