CIMB Research, March 1
FY2013 net profit of 47.7 million yuan (S$9.8 million) was spot-on at 100 per cent of our forecast, but was slightly above consensus.
Q4 2013 was the first quarter that Midas recognised revenue from the first high-speed rail (HSR) contract that it has won since 2011, which lent a boost to its earnings.
Midas also seems to be on the recovery path, with inventory and receivable days falling for the third consecutive quarter.
We maintain our "add" recommendation, but cut FY2014-15 EPS by 4-12 per cent due to lower margins and higher debt assumptions.
Our target price slips to S$0.71, still based on 1.29 times CY2014 P/B (a 20 per cent discount to its average P/B from 2010-2011). The key catalyst is new HSR contract wins.
ADD
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