Midas

Midas: Weak set of results, which was in-line with grp’s profit warning issued earlier this mth. FY12 rev at Rmb 869.5m, -19.5%, while net profit at Rmb 27.8m, -85.1%. Gross margins at 28.9% vs 33.5% yoy. Grp’s core Aluminium Alloy Extruded Products Div, which accounted for 95.4% of rev, registered a 20.2% decrease in contributions to Rmb829.6m. Within this division, the Transport Industry remained the largest rev contributor, accounting for 57.1% of its rev, whilst the Power Industry took up 7.4%. The “Others” segment, comprising mainly the supply of aluminium alloy rods and other specialised profiles for industrial machinery, contributed the remaining 35.5%. Going forward, grp note that The PRC rail transportation industry is expected to grow in 2013, underpinned by the Govt’s support to grow China’s transportation network. The Ministry of Railway had in January 2013 announced the Government’s plans to invest approximately RMB650b into the railway sector, of which approximately RMB520b is planned for the development of railway infrastructure. The PRC metro train sector is also expected to see increased activities in 2013, with the National Development and Reform Commission (NDRC) approving an additional two metro projects worth a combined RMB49b in Nov12. The latest project approvals comes on top of an earlier announcement by the NDRC in Sept that it has approved project plans and feasibility studies for 25 metro projects with estimated investments valued at over RMB700b, which represents a strong pipeline of opportunities for industry players.