The key earnings driver for Midas is operating leverage, as we expect HSR orders to bump up utilisation rate to 70% from around 50% currently.
We also expect ROE to improve to 3.8%/5.7%/7.1% in FY14E/15E/16E from 1.5% in FY13.
We believe Midas deserves a re-rating in view of the positive order win outlook and ROE expansion over the next three years.
Maintain BUY and TP of SGD0.75, pegged to 1.5x FY14E P/BV, which is at the lower end of its P/BV trading range in the last HSR cycle.
After reading the overnight news about what China did, I actually made a bid yesterday morning for 15 lots at 44 cents and would have got it, but chickened out before trading started! To me, the financials still look awful with such huge CAPEX versus net earnings. Maybe I'm stupid for not taking the ride and making some quick money out of the frothy exuberance, but I extend my best wishes to all who do.
sykn wrote: After reading the overnight news about what China did, I actually made a bid yesterday morning for 15 lots at 44 cents and would have got it, but chickened out before trading started! To me, the financials still look awful with such huge CAPEX versus net earnings. Maybe I'm stupid for not taking the ride and making some quick money out of the frothy exuberance, but I extend my best wishes to all who do.
Me got in below 30 cents a long time back and sold out at 50 cents. I don't feel inspired to get in at 45 cents because the valuation is jst not compelling. Just my view. I hope those who are vested will make good $.
