Midas

Midas: Is acquiring remaining 45% stake in Jilin Midas Light Alloy Co. The consideration is Rmb306m, 9% above the vendor’s initial investment of Rmb280m. The plant is currently under construction and is expected to commence production by 2H15. It has an annual capacity of 200,000 tons, and this plant will mainly manufacture aluminium alloy plates for the automobile, shipbuilding and aviation industries. There should be no funding issue for the purchase, given Midas’ cash pile of Rmb1b, but net gearing would rise to 0.7x from 0.6x. The plant is expected to be an important growth driver going forward. Maintains Buy with TP of $0.75