Midas

Midas: Has secured Rmb146m worth of contracts for high-speed train car body components from CNR Changchun Railway Vehicle, which represents the third set of contract wins for high-speed train car body components in six months and brings the group’s year-to-date order wins to Rmb536.9m. Slated for delivery in 2014, the latest contracts will see Midas supply aluminium alloy extrusion profiles and certain fabricated parts for high-speed trains. These contracts are expected to contribute positively to Midas’ financial performance for FY14. To reiterate, Midas is well positioned to benefit from the favourable policy changes that are likely to translate into massive investment in the Chinese railway sector over the next few years. Midas offers a compelling earnings turnaround story, underpinned by a compounded average earnings growth of 73% over FY14-16. According to consensus data, valuations are expected to narrow significantly to 19.2x FY14 P/E, from the current 59.7x Latest broker ratings: CIMB maintains Add with TP $0.71 OCBC maintains Buy with TP $0.66