The first contract valued at RMB115mln is for the supply of aluminium alloy extrusion profiles for 320 train cars for the “CRH3-380” project and is expected to be fulfilled between 2H 2009 till 2011. This follows on the original 1,600 train cars that Midas won on 16 June’09 and brings the total number of train cars for that project to 1,920.
The 2 nd contract worth RMB57mln is to supply aluminium alloy extrusion profiles for 160 train cars for “CRH3-300” project and is expected to be fulfilled between 2H2009 till 1H2010.
Mr Patrick Chew, CEO of Midas said that the ability of the company to secure sizeable contracts for the latest projects demonstrates their strong market leadership position and authenticates their competitive advantage in the booming railway industry in China. The recurring contract wins from existing customers reflects their strong working relationships and will position them in good stead to capitalize on the booming industry (benefitting from the government’s RMB4trn stimulus package).
So far the 2 contract wins amount to only about half of management’s targeted contract wins for this year, implying potential for more wins going forward. This would provide fuel for even better share price performance despite having risen a strong 200% since hitting its all time low of 25 cents in Oct ’08.
And its undemanding valuations with 2010 PE at only 12x versus expected growth rate of 30% justifies maintaining our BUY recommendation.
Sponsored Links
No comments:
Post a Comment