Midas

Midas: As expected, Grp posted a lower group rev of RMB202.7m, -21.8%yoy on lower contributions from its core Aluminium Alloy Extruded Products Division, while grp registered a net loss of -Rmb1.6m vs 40.4m yoy. Bottom-line was dragged by Grp’s share of loss from its associated company Nanjing SR Puzhen Rail Transport, which amounted to approximately RMB7m in 3Q12. This was largely due to fewer train cars delivered to its customers during the qtr. Grp’s gross profit margin remained at a healthy 31.5% vs 33.5% in 3Q11. Going forward, grp remains cautiously optimistic on the outlook of China’s railway industry over the medium to long-term, given that railways projects are strategic to the country’s infrastructure and are expected to continue progressing. Add that the Ministry of Railway recently announced a welcomed upward revision for railway infrastructure investment to Rmb516b, and these planned investments are part of the Govt’s “Twelfth Five-Year Plan” (2011-2015) to further develop China’s infrastructure network which is expected to buoy the railway sector’s performance. In addition, 25 metro projects around the country have received approval for planning and feasibility studies, with estimated investments to reach RMB700b. Ratings as follow: OCBC maintains Buy with $0.505 TP under review.