Midas Holdings

[Nick]

MIDAS’ JV COMPANY NANJING SR PUZHEN RAIL TRANSPORT SECURES TWO METRO CONTRACTS TOTALLING RMB3.13 BILLION

- First contract worth RMB2.15 billion to supply 276 train cars for the Nanjing Metro Line 3 Project

- Second contract worth RMB0.98 billion to supply 126 train cars for the Nanjing Metro Line 10 Project

http://info.sgx.com/webcoranncatth.nsf/V...B003A4DCA/$file/NPRTNanjingR-FinalJul2811-SG.pdf?openelement [Press Release]

This former market darling has seen its share price plunging this year after the dual listing hype. How do you view its prospects going forward in light of China's aggressive push towards rail transportation (and the recent accidents and corruption scandals) ?

(Not Vested)

[iff]

Need to see the Q2 results,

I'm watching this counter too

[mrEngineer]

the institutions will know it better for such a sharp drop in price

[sgd]

Bought some at 33 cts today,

People seems to forget that PRC government going to spend up to 244 billion on developing china rail system by 2020

This singaporean owned company in china that manufactures train cars/aluminium extrustions, has 70% of market share in china. At this price its lows from feb 2009, the stock got irrationally hammered all the way down from $1+

looking at the charts not much potential downside to go but a lot of room for potential upside.


Link to Financial Ratios

vested.

[mrEngineer]

May I know where did you obtain the information that Midas has 70% market share for aluminium extrusions? The recent fall was mainly due to review of the high speed rails and expected reduction in order books which they need to switch to metros with lower margins. Capacity figures are not pleasing to the eyes as well with 50-60% utilization and new plant upcoming..

Have not done research in full yet.

[sgd]

read it off a blog, souce is from DMG.
http://stockpicksingapore.blogspot.com/2...midas.html

the current spate of bad news has got nothing to do with MIDAS.

ex-transport minister in china sacked for skimming 156million while at the same time having 18 mistresses all over china .. what has that to do with midas?

train accidents mishaps due to signalling system or operator error .. what has that to do with midas?

All had nothing to do with midas used as an excuse to unload the position

[mrEngineer]

You are right. I found an elaborate report from JP Morgan that states 66% market share. But I still dont understand how the 32.5% JV NPRT with 32% market share provides Midas market share of 66%. The link is here.

https://mm.jpmorgan.com/stp/t/c.do?i=2B0...908d%0D%0A

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[yeokiwi]

ex-transport minister in china sacked for skimming 156million while at the same time having 18 mistresses all over china .. what has that to do with midas?

Sometimes, people are also worried that the company may be entangled with the corrupted officials due to one reason or another both directly or indirectly.

The following case involves the major shareholder of Midas. If you look at the 2011 AR, his name is still listed - Chen Weiping.

http://finance.sina.com.cn/g/20070718/23533798264.shtml
曾登上2006年“福布斯中国富豪榜的陈维平”，已身陷吉林省金融系统的一起商业贿赂大案。检方通报特别注明，现年48岁的陈维平已被另案处理，目前羁押于吉林市公安局看守所

　　提及“麦达斯”三字，吉林辽源城区可谓妇孺皆知，麦达斯铝业的实际控制人就是陈维平，已被辽源各界神秘化。“他一出场，都是书记和市长陪同，是个大人物。”辽源市财政局一官员说

　　【网络版专稿 /《财经》杂志记者 罗昌平】曾以人民币19.9亿元身价荣登2006年“福布斯中国富豪榜”的陈维平，正身陷吉林省金融系统的一起商业贿赂大案。

　　根据吉林省检察院最新通报，过去一年共查处商业贿赂案320件，涉案326人。典型案件之一，是以原辽源市城市信用社董事长王凯扬为代表的银行信贷领域商业贿赂系列案。

　　今年5月11日，吉林省信托投资有限责任公司原董事长张兴波的省人大代表资格，已被吉林省人大常委会终止。当日，吉林省检察院以涉嫌受贿罪对张实施逮捕。

　　《财经》记者从检方获知，王凯扬、张兴波所涉贿款来源，均指向同一个人——吉林省知名富豪陈维平。吉林检方一份情况通报显示，自2002年至今，由陈维平控制的麦达斯控股有限公司(Midas Holdings，INC)、莱克森控股有限公司(Luxon Holdings，INC)相继在境外上市，王凯扬、张兴波所主政的金融机构，则沦为这两公司的资金“输血管”，致使案发时已形成巨额贷款黑洞。

　　检方通报特别注明，现年48岁的陈维平已被另案处理，目前羁押于吉林市公安局看守所。


In another case, the following article alleged that Midas had offered bribe
http://www.wmxa.cn/a/201104/908.html
同时，记者了解到，在郭京毅案中，向其行贿的企业更是包括河北廊坊新奥燃气集团、首创集团、国美电器、新飞电器、苏泊尔、宁波LG化工、莱佛士2000集团、上海百事可乐有限公司、江苏双良空调设备公司、东北轻合金公司&新加坡麦达斯控股有限公司等10家企业，受贿数额总计价值人民币845万余元。

[mrEngineer]

There is a 2010 IPO document which gives a good overview of the industry.
http://midas.listedcompany.com/newsroom/...6E66.2.pdf

Basically, the barriers of entry are not strong enough in my opinion as it only takes 2 year for other players to break into the industry. The problem with Midas is that it does not have large funds to vertically integrate and thus see the market share being eroded for the past 3 years. Chalcom, largest alumnium marker, has indicated interest in the AEP market for trains and should be a major competitor by 2013. The decision to expand horizontally is a risky move in my opinion as Midas is betting on overseas market to export its train which makes pricing the only negotition tool (meaning reduction in margins)

The possibility of Midas re-rating maybe due to consolidation or takeover from other companies which has larger pool of funds, influence and vertically integrated. So i think it might be a long wait.

[sgd]

all things come at a price and this is how business in china is conducted thru guanxi and connections,

this kind of practice is frown upon in singapore but very common everywhere else. Those in power and authority will try to line their own pockets, try playing clean and nice will never get you anything. I'm glad the management of Midas is flexible and street smart.

To spend 244 billion to develop a robust rail system is more than Midas can handle alone, it will take many many players and it's more than enough to around, I read the CCP government wants to build mega cities, mega cities are useless if they don't have solid infrastructure and transportation system air sea landto move people and goods around.

We are not investing in a company that makes a product that re-exports to usa or europe which is a dead market for the next few years, we are investing in a company that builds a product that is going to be greatly needed and used by the general public in China to move people and goods around and this will be hot for several years.