Midas Holdings wins 5 metro contracts in China

Its pockets are now RMB109.6m fatter.

According to OCBC Investment Research, Midas Holdings announced last evening that it has secured a total of CNY109.6m worth of contracts to supply aluminium alloy extrusion and fabricated parts to five metro projects in China.

Here's more:

The value of each contract ranges from CNY10.6-31.7m, with four of these awarded by Midas’ 32.5% owned JV company Nanjing SR Puzhen Rail Transport (NPRT).

Management had previously highlighted that NPRT had seven projects which it has yet to award contracts to aluminium alloy extrusion suppliers.

Hence we see potential for more contract wins by Midas from NPRT in the near future. We had also stated in our previous note that Midas has been actively negotiating for metro/subway and international railway contracts to buffer the current standstill from the high-speed railway side.

We retain our forecasts as we have already assumed such contract wins in our assumptions. Maintain BUY and S$0.595 fair value estimate on Midas, based on 1.2x FY13F P/B.

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