Monday, 12 May, 2014 6:57 AM
Posted by Kevin Scully
Midas reported a good set of Q1-2014 results with revenue rising 46% and a net profit of RMB11.8mn compared to a loss of RMB5.7mn. The key change was the contribution from associates which reported a profit of RMB13.1mn compared to a loss of RMB4mn in Q1-2013.
Midas only started benefitting from the release of new high speed contracts in late 2013. We expect this trend to continue as China increases its high speed train budget by 10-15%. This should benefit Midas which has so far only announced two high speed contracts so far.
No major change in the my recommendation – I still like the stock but as PER valuations are already high, the share price is likely to hold current levels until more high speed contracts are announced.
Midas annual revenue crossed RMB1bn in 2013 but profit …