The news: A high-speed railway linking Beijing and Shanghai will officially start operation on June 30, China's Ministry of Railways said on Thursday. Tickets will go on sale on Friday at 9 am, the ministry said. According to the ministry's previous announcement, tickets for trips on trains running at 300 kp/h will be priced at RMB555 ($85.38) for second-class seats and RMB1,750 for business class. Prices for journeys on 250-kp/h trains will range from RMB410 for second-class seats to RMB650 for first-class. The 1,318-kilometer rail, which starts trial operations on May 11, is expected to significantly ease the transportation strain between the two metropolises and promote development and coordination between regional economies. There will be 63 pairs of trains with the speed of 300 kp/h every day, cutting travel time to 4 hours and 48 minutes. The additional 27 pairs of trains running 250 kp/h will complete the trip in about 8 hours, 2 hours shorter than the current high-speed trains, according to the ministry. China will spend RMB2.8t on expanding its railways over the next five years, which will boost the railway network's length to a total of 120,000 kilometers.
Our thoughts: With the commencement of the much anticipated Beijing-Shanghai high-speed railway service, we believe sentiments towards the sector might gradually improve. At trough valuation of 1.4x P/B, we believe Midas’ share price could see inflection point should its order win announcements gather momentum. Midas’ order book tallied at RMB1.2b (4Q10: RMB1.3b) as of 1Q11, with RMB228m new order wins announced year-to-date. Maintain BUY at TP of S$0.98, pegged to 18x FY11F P/E.
No comments:
Post a Comment