Midas Holdings clinches 13 supply contracts worth $105.18m

The contracts are slated for delivery between 2017 and 2019.

OCBC Investment Research reports that Midas Holdings has been awarded 13 international and PRC supply contracts worth a total of RMB520.9m ($105.18m) – three from Europe worth RMB203m ($40.99m) , three from North America worth RMB99m ($19.99m), one from the Middle East worth RMB28m ($5.65m) and six in China worth RMB191m ($38.57m). These contracts, which are positive for Midas’ growth, are slated for delivery progressively between 2017 and 2019.

“All said, we believe Midas’ growth outlook still largely hinges on the ramp up and execution of its
new business,” said OCBC.

In addition, Midas Holdings’ 1Q17 revenue grew 31.3% YoY to RMB398.4m ($80.44m). OCBC analysts say that this is mainly due to the consolidation of results of its recently acquired Aluminium Alloy Stretched Plates (AASP) business, whilst its main Aluminium Alloy Extruded Products (AEP) segment revenue grew 6.0% YoY to RMB320.8m ($64.78m).

“Looking ahead, we expect core business (i.e. AEP segment) revenue to pick up but we expect overall GPM to fall to ~26-27% with contributions from AASP and the targeted start of commercial production at its new start-up aluminium light alloy plant (JMLA) from 3Q/4Q17,” OCBC said.