Midas

Midas: Was awarded contracts worth Rmb167.5m from CNR Changchun Railway Vehicle and CNR Tangshan Railway Vehicle, to supply aluminium alloy extrusion profiles and fabricated parts for the manufacture of high speed trains. The contracts are expected to contribute positively to Midas' FY13-14 financials. Midas’ key customers - CNR and CSR – are China’s two largest train manufacturers, and have recently announced a slew of order wins. It is a positive that the orders are finally flowing down to Midas after a long dry spell, as this is Midas’ first high speed rail contract win since orders were suspended in China in 2011. CIMB view this news as a strong re-rating catalyst for the stock. In fact, just yesterday CSR announced several major contracts valued at Rmb25.6b after the market close. Industry players are also confident that a second batch of China Railway Corp rail equipment tender with an estimated value of ~Rmb50b should happen before the end of 2013. Midas is well positioned to capture the subsequent aluminium train extrusion profile orders from the train manufacturers. The majority of the street is bullish on the counter, with consensus TP between $0.60 - $0.75. CIMB reiterates Outperform, lifts TP to $0.74 (from $0.70). OCBC maintains Buy with TP $0.65.