Thursday, June 28, 2012
Midas: CIMB note that share price is hovering near its all-time low of 26c. With recent positive developments in China’s railway industry, smell new contracts in the wind. A high-speed rail contract award could free Midas from the shackles of its year-long nightmare. When orders return, expect margin expansion on higher utilisation and inventory rundown. Also expect the share price to react positively once new contracts are secured. Maintain Outperform with unchanged target price, still based on 11.7x CY13 P/E, (0.5 sd below historical five-yr average).