Midas

Midas: issued profit warning for its upcoming 1Q12 results. Recall Midas also issued an earlier profit warning before its 3Q11 results. The group expects to record a significant YoY drop in its revenue and net profit. Reasons attributed to the expected fall in net profit are largely similar as before, which includes lower revenue, higher operating expenses and finance costs and a share of loss from its associated co, Nanjing SR Puzhen Rail Transport (NPRT). Nevertheless, Midas guided that it would remain profitable for 1Q12. The industry conditions have been challenging, given mounting debt concerns at China’s Ministry of Railway, and mkt talk about delayed inter-city rail construction projects. Strangely, NPRT which has largely secured intra-city metro line train body orders, appears to be facing headwinds as well. 1Q12 results to be released next Monday, 14 May, after market close. OCBC maintains Hold and TP $0.375. Forecasts 1Q12 topline and bottomline to decline by 31% and 47% YoY, respectively.