Midas

Midas: HSBC believes the proposed railway industry reform presented at the National People’s Congress is positive for rail operators and equipment makes. Notes the Ministry of Railway will be separated into admin and commercial arms. This will result in focus on better rail schedules, an emphasis on profitability, and better track build out. The house expects the govt to complete up to 20,000 km of new tracks btwn now and 2015, and future rail operators will have incentive to increase services on existing lines to improve profitability. This could bode well for new train orders, which may lead to more orders for Midas’ aluminum train extrusion profiles. Daiwa also likes the railway eqpt sector for a play on China’s market up turn this year. Maybank KE reiterates its Buy call, lifts TP from $0.48 to $0.75 (pegged to 1.5x FY13 P/B), on the back of positive order win outlook.