Midas

Midas: In-line with recent weeks upgrades and positive industry newsflows, Maybank-KE joins the band wagon and upgrades counter to Buy from Hold with $0.48 TP. Note that the approval of 25 rail projects in a single-day is unprecedented. In house opinion this signifies: 1) The PRC government is determined to ensure its economy does not falter and may consider more stimulus options 2) Improving rail transport infrastructure is still one of the more viable investment considerations. House note that although baseline assumption is still for high-speed contracts to resume by mid-2013, the probability of it happening even before the leadership transition end of this year has increased. This will be a major catalyst for the stock and will support a very strong earnings recovery in 2H2013/ 2014. Given these circumstances, believe Midas should re-rate at least to its book-value of $0.48, which will represent an attractive 20% return from current levels.