Midas Holdings - OCBC Investment 2016-06-24: JV unit NPRT won four contracts worth RMB3.3b

Midas Holdings - OCBC Investment 2016-06-24: JV unit NPRT won four contracts worth RMB3.3b MIDAS HOLDINGS LIMITED 5EN.SI 

Midas Holdings: JV unit NPRT won four contracts worth RMB3.3b

  • Midas Holdings (Midas) yesterday announced that its JV company, Nanjing SR Puzhen Rail Transport Co., Ltd (NPRT), which is 32.5% owned by Midas, has secured four rail-related contracts totaling RMB3.3m. 
  • Out of the four contracts, two are metro contracts worth a total of RMB2.5b with delivery scheduled between FY16 and FY19, and the other two are tramway contracts worth a total of RMB0.8b with delivery scheduled between FY16 and FY17. 
  • While the contract win is positive for Midas, we note that Midas is still in the midst of starting up its new aluminium light alloy business. Hence, if it takes longer than expected to ramp up its lower- margin new business, costs may continue to erode its earnings as a result. 
  • All said, we think its upcoming 2Q16 earnings will provide better clarity over its ability to execute and ramp up this new business segment. 
  • We currently have a HOLD rating and FV estimate of S$0.295.




Eugene Chua OCBC Securities | http://www.ocbcresearch.com/ 2016-06-24
OCBC Securities SGX Stock Analyst Report HOLD Maintain HOLD 0.295 Same 0.295


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