Midas has broken up above the 0.475 resistance today finally on TOP 10 Volume after trading below it for more than 2 months. This resistance also coincides with the LONG Term 200 DAY MA (Dotted blue line) which can also signal a trend change upwards. Short term target to 0.50 then 0.52 first before some consolidation.
Stop loss at 0.45
OCBC – 4TH April 2014
Midas Holdings: Beneficiary of China’s stimulus measures
We believe Midas Holdings' weak share price performance YTD (-10.8%) has been driven by its dearth of order wins thus far. Nevertheless, Midas’ order wins can be lumpy in nature. More importantly, we believe the rail transport industry outlook remains buoyant, and this has been reinforced by recent positive measures highlighted by China’s Premier Li Keqianq during a State Council meeting. Looking ahead, we understand that Midas is targeting to win ~CNY400-500m and ~CNY500m of metro and international rail contracts this year, respectively. We are also expecting Midas to clinch CNY325-380m of high-speed railway contracts within the next two months. Reiterate BUY on Midas, with an unchanged fair value estimate of S$0.66.
We believe Midas Holdings' weak share price performance YTD (-10.8%) has been driven by its dearth of order wins thus far. Nevertheless, Midas’ order wins can be lumpy in nature. More importantly, we believe the rail transport industry outlook remains buoyant, and this has been reinforced by recent positive measures highlighted by China’s Premier Li Keqianq during a State Council meeting. Looking ahead, we understand that Midas is targeting to win ~CNY400-500m and ~CNY500m of metro and international rail contracts this year, respectively. We are also expecting Midas to clinch CNY325-380m of high-speed railway contracts within the next two months. Reiterate BUY on Midas, with an unchanged fair value estimate of S$0.66.
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