Midas

Midas: OCBC note that Midas Holdings’ JV company NPRT recently secured three metro contracts amounting to ~Rmb2.45b (assuming a 70% stake for one of the contracts won together with its consortium partners) within a span of two weeks. House believe this highlights the fast growing momentum of China’s metro industry. As Midas is also a key supplier to NPRT, we expect it to benefit positively from this. Despite the share of loss of NPRT to Midas’ FY12 and 1Q13 financials, believe that the situation would improve from 2H13. Meanwhile, Midas’ management has also set its sights on growing its exports business, such as to the Russian railway market. House maintain BUY rating and $0.54 fair value estimate on Midas as still sanguine on its long-term outlook, but believe that the major re-rating catalyst would have to come from the resumption of new high-speed train car tenders from China