Are the bosses too ambitious?
According to CIMB, during the 2-year drought for high speed train car orders, Midas was able to maintain its order book run-down through metro and international contracts. Year to date, it has clinched a total of Rmb379m of metro and international contracts. Midas’s current order book stands at Rmb750m, providing earnings visibility for two years.
CIMB said that for 2013, management is confident of bagging Rmb500m worth of metro contracts and Rmb500m worth of international contracts.
“We do not think that management’s target is ambitious,” noted CIMB.
Here’s more:
First of all, the outlook for metro contracts appears rosy. China’s National Development and Reform Commission (NDRC) has approved plans to invest Rmb840bn in 27 urban rail projects. These projects will rely partially on the local governments’ budgets, with the remainder from bank loans and private funds, which could suggest better cash flow from metro contracts.
In the metro aluminium extrusion profile space, Midas holds the pole position with 80% market share. We think that its target of Rmb500m metro projects is achievable.
This is also a major positive for its 32.5% associate, NPRT, a metro train manufacturer. NPRT’s current order book stands at Rmb7.5bn, with earnings visibility of four years. YTD, NPRT has bagged around Rmb1bn worth of orders.
Secondly, Midas has been able to leverage its major European clients (Siemens, Bombardier and Alstom) to win contracts internationally, in Europe and Asia.
In 2013, Midas has been able to clinch around Rmb260m worth of international contracts, supplying profiles to Ural Locomotive in Russia (through Siemens) and Singapore’s very own North East Line and Circle Line (through Alstom).
Management has already fulfilled more than half of its Rmb500m target and is already bidding for several overseas projects. We think that there could be orders from Brazil, the UK and Germany.
Midas Holdings eyes Rmb1 billion worth of deals in 2013
Không có nhận xét nào:
Đăng nhận xét