Midas

Midas: 3Q13 net profit turned around to Rmb16.4m from a loss of Rmb6.1m in 3Q12. This came on the back of a 49% leap in revenue to Rmb301m and a sustained turnaround of 32.5% associate, Nanjing SR Puzhen Rail Transport, which came from a loss of Rmb7m, to a profit of Rmb10.9m due to increased train car deliveries. This brings 9M13 earnings to Rmb24.7m, 36% of consensus FY13 estimates. We note that Midas typically backloads its earnings to the last quarter, but there may be a possibility that consensus might revise down full-year earnings following this set of results. The strong top line was mainly driven by its aluminium alloy extruded products division (96% of overall revenue), while gross profit margin shrank to 20.8% from 31.5% due to higher production cost and a change in product mix. Group sees the return of high-speed train tenders an encouraging development for the industry. Latest broker ratings as follows: CIMB maintains its Outperform rating and $0.74 TP OCBC maintains its Buy rating and $0.65 TP