Midas

Midas: China has outlined a stimulus package designed to boost spending on railways and encourage other construction investment after signs its economy is slowing below target of 7.5%. The State Council released plans on Wednesday to sell US$24b of bonds to build railways in the less developed central and western regions. IT also plans a US35b fund dedicated to rail financing and low cost housing. Construction of approved railways will see total length of lines increasing by 18% compared to 2013. Midas, the only proxy to the China railway growth on SGX would stand to benefit from this. Maybank KE likes the stock for its strong order win momentum and estimates Rmb 2b worth of HSR orders in FY14e and 15e. That said, Midas could see its market share of aluminum extrusion profiles supply to Chinese high speed train manufacturers fall to 55% from a historical 65% as competition heats up in this space. Maybank KE has a Buy call on Midas with a TP $0.75