Latest deals double order book to $248m as firm taps China's rail sector
 | Email this article |
 | Print article |
 | Feedback |
MIDAS Holdings' shares soared yesterday on news that it has won its single largest project order of 603 million yuan (S$128 million) since its listing and on hopes that more contracts could be coming its way.
The counter, in which trading was halted from mid-afternoon on Tuesday pending the contract announcement, surged as much as 10.7 per cent before closing the day 8.4 per cent higher at 71 cents.
The latest order for a high-speed train project - consisting of two supply contracts for two repeat customers - has more than doubled Midas' current order book from $120 million to $248 million.
The group expects the two contracts to have a positive impact on its 2009-2011 financial years.
Investors are also buying the stock on the likelihood of Midas winning more contracts, given China's pledge to build 7,000 km of dedicated high-speed rail lines over 10 years, a local analyst said.
Midas is increasingly shifting its business focus to aluminium alloy business to tap the booming Chinese rail infrastructure industry.
It is building a third production line for aluminium alloys, which will be ready by 2010.
This will increase its annual production capacity from 20,000 to 30,000 tonnes.
Midas chief executive Patrick Chew told BT yesterday that it will consider a fourth production line should the volume of incoming orders warrants the additional capacity.
'However, there are no concrete plans for a fourth production line at the moment,' he said.
But to facilitate further expansion in the longer term, the group is completing the final phase of its acquisition of a 240,000 sq m plot of land and related fixed assets located at the Liaoyuan City Economic Development Zone near its existing production facilities in Jilin Province.
Its 32.5 per cent associate company, Nanjing SR Puzhen Rail Transport Co Ltd (NPRT), currently has total backlog orders of 768 train cars for four metro train projects in China, which are expected to be delivered from the second half of fiscal 2009.
'Many cities in the PRC, such as Beijing, Shanghai, Hangzhou, Suzhou, Wuhan, Guangzhou, Shenzhen, Xi-an are expected to roll out new metro train projects,' Mr Chew added.
'NPRT is currently in the midst of expanding its capacity to meet market demand. We are therefore positive on the future outlook for NPRT.'
No comments:
Post a Comment