Fabrication contracts now amount to Rmb121.8m. Midas Holdings announced that its subsidiary Jilin Midas Aluminium Industries secured its third downstream fabrication contract (worth Rmb48m) for the provision of fabrication and welding services for large component panels used in metro train trains. The contract is being awarded by repeat customer Changchun Railway Vehicles and is expected to be earnings accretive in 2H09 and 2010.

No changes to earnings forecasts. This new contract is relatively small and amounts to around 3.4% of Midas’ total order book at c. Rmb1.4b. Given that we have already factored in additional contract wins for Midas’ downstream business up till 2010 in our previous report, there will be no changes to our top and bottomline forecasts.

Recommendation. Maintain BUY with price target of S$1.04 assuming it trades up to 18.8x FY09/10 blended P/E. Our target P/E is being derived from applying a 35% discount to its Shanghai listed peers on the basis that the P/E of the Singapore market is presently trading at a similar discount to the Shanghai Composite Index.