Midas Holdings (Midas) announced that its 32.5%-owned JV Nanjing SR Puzhen Rail Transport (NPRT) has clinched three metro train contracts with an aggregate value of CNY3.5b. This bumps up NPRT’s YTD contract wins to CNY4.6b. The first order is worth ~CNY1.5b for the Suzhou Rail Transit Line 4 and Branch Procurement Contract, with delivery slated between 2015 and 2017.

The second contract is worth ~CNY0.9b for the Hefei Rail Transit Line 1 Phases 1 and 2, with delivery scheduled from 2015 to 2016. The last contract is for the Hangzhou Metro Line 4 Phase 1 Stock Procurement contract and is worth ~CNY1.1b, with delivery slated from 2014 to 2017.

As Midas is also a key supplier of aluminium extrusion profiles for NPRT, we believe this may also lead to future contract wins for Midas. Maintain BUY on Midas, with an unchanged fair value estimate of S$0.61, pegged to 1.2x FY14F P/B.

Source: OCBC Research - 5 Jun 2014