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Dun forget, its a ching co - remember the selling 1 can a coke story in China? There is too much leakages in doing business in China. Anyway, the big money has already been made via corruption in the rail industry in China, going forward it will be more difficult to corrupt and to make supernormal profits.
On top of it, there is the usual trust issue - no need to try too hard - its all in the fallen Chew brothers' hands (was previous darlings alongside with Raffle Edu)
Vested
Odd Lots
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15-05-2013, 02:05 PM
(This post was last modified: 15-05-2013, 02:06 PM by felixleong.)
"The outlook for the PRC rail transportation industry is expected to remain positive in 2013, backed by the PRC Government’s support to grow China’s transportation network. The former Ministry of Railway had in January 2013 announced the Government’s plans to invest approximately RMB650 billion into the railway sector for this calendar year, of which approximately RMB520 billion is planned for the development of railway infrastructure. However the lingering impacts of the sector slowdown in 2011 and 2012 are expected to impact the Group’s operating performance in the near-term. In addition, the ongoing restructuring of the Ministry of Railways into administrative and commercial arms may influence industry developments.
In view of the above, the Group remains prudent and will continue to closely monitor developments in the PRC railway sector closely.
Nonetheless, the Group remains cautiously optimistic on the outlook of China’s railway industry over the mid to long-term as the development of the PRC railway network remains an integral component of the country’s economic growth strategy. Rail transport is the most efficient, affordable and commonly used mode of long-distance transportation in the People's Republic of China.
The Group also continues to make good progress in its strategy to grow its businesses in the export market, securing additional projects for the Russian and Singapore markets in early 2013. Moving forward, the Group will continue to actively identify and secure opportunities in other product segments as well as in export markets."
From DBSV 15 May.
Midas reported a small loss in 1Q of Rmb 4.9m vs. profit of Rmb 15.2m last year due to lack of contract wins in the last 18 months. We expect a turnaround in 2H13 as the group’s order book has now grown to c. Rmb800m from just Rmb400m in January. The magnitude of turnaround for Midas would depend on the timing of the high speed rail contracts. Maintain BUY with S$0.60 TP based on 1.2x P/BV.
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its still trading like over 50 times earnings?
I think its overvalued and its pretty heavily geared, over 40% i think
good for punting but not really that good for value investing ^^
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Revenue up profit down.. What's e the point? Remember there was supposedly a capacity increase..
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Lim&Tan seems to take the resignation of the CFO pretty seriously:
Midas’ CFO (Mr Tan KT) who has been with the
company for 10 years and 5 months has quit
abruptly with his last day effective on 21 Aug’13.
He holds 498,000 shares in Midas and has been
responsible for the financial management and
reporting functions of the group.
Midas is currently seeking a suitable replacement
for Mr Tan KT and Mr Liaw KF, the company’s
financial controller will assume the responsibilities
until a new CFO comes on board.
Mr Tan KT has been our key point of contact since
our initial coverage of the company in 2005 and
having been with the company for 10 years and 5
months, his abrupt resignation is not good.
Historically, abrupt resignations of CFOs has not
been good for companies in general and could signal
problems ahead.
In Midas’ case, the high profile accident 1+ year ago
and as well as high profile corruption case of the
railway minister is still fresh in investors memory.
And Midas is trading at 37x 2013 consensus forecast
against its key customers such as China CNR’s 12x
2013 PE and China CSR’s 15x 2013 PE means the
stock is not cheap.
Due to the abrupt resignation of Mr Tan KT, we
are ceasing coverage on the company henceforth
and our last HOLD recommendation would no
longer be relevant.
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Wow. Resignation with a revenge.
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