Midas

Midas: Grp’s JV Co Nanjing Puzhen Rail Transport (NPRT) announced a big contract, at Rmb 710m , to supply 104 train cars for the Ningtian Intercity Line Phase . Value of ytd contract wins by NPRT valued at over RMB 1b. Midas note that it is encouraged by these positive developments and remain optimistic of continued opportunities from the PRC rail transportation industry in the yrs ahead. We note that news gels well with news yesterday that China Railway construction has won contracts worth abt Rmb 4.5b. Recall that China announced in Jan13 an increased budget for railways in 2013 to RMB630b from RMB400b in 2012. This is to meet a railway rollout of 9300km now to 20400km in 2015. Midas has been surviving on municipal rail contracts since the Shanghai accident and is one of two manufacturers of the train carriages so the grp should be a major beneficiary when rail contracts resume. (Especially at the subsidiary level) A major high speed contract could see the share rerate to their old highs. Ratings as follow: OCBC maintains Buy with $0.60 TP.