Midas

Midas: According to China Railway Corporation, total railway infrastructure capex in 7M13 was Rmb228b, up 21% y/y (vs. +26% y/y in 1H13) and accounting for 43% of CRC’s latest 2013 budget of Rmb530b (vs. the 2005-10 average of 38% ). However, DB notes that railway equipment investment in 7M13 is still behind schedule and expect a pick-up in railway equipment investment in the rest of this year. As a beneficiary to railway equipment manufacturing, Midas builds aluminium frames and other body parts or locomotives and multiple units for high speed railway. The company is the main equipment provider for the two state owned railway equipment companies, CSR and CNR. Latest broker recommendations: Maybank KE has a BUY rating with TP $0.75 OCBC maintains BUY with TP $0.65 OSK DMG keeps at BUY with TP $0.75 CIMB maintains OUTPERFORM with TP of $0.70