Midas

Midas: 3Q14 results were way below OCBC's expectations, led by higher start-up and finance costs arising from its new plants. OCBC downgraded the counter to Hold with TP of $0.30, with a view that the higher expenses will continue to be a drag to its performance in the next 12-18 months. Being the supplier of basic materials, OCBC expects the business model to be low margin and high volume. The outlook remains uncertain on Midas' ability to gain market share in this competitive market. Hence, OCBC expects revenue contribution to be slow in 2015 and will not be able to offset its operating expenses meaningfully.