Midas reveals depressing profit warning

It jabs on its recent loss share.

According to OCBC, Midas Holdings has issued a negative profit guidance prior to its upcoming 3Q12 results release, saying that it expects to report an unaudited net loss.

Here's more from OCBC:

This is below our expectations. Reasons cited were lower revenue, higher operating expenses and finance cost and a share of loss from its associated company, Nanjing SR Puzhen Rail Transport (NPRT).

However, Midas still expects to remain profitable for its 9M12 results (1H12 PATMI: CNY16.9m). We had previously highlighted our expectations of weakness in Midas’ financial results over the next 2-3 quarters, and our ‘buy’ rating was positioned on a recovery in its business in FY13.

We maintain our BUY rating but our S$0.51 fair value estimate, which is based on 1x FY13F P/B, is under review. Midas will report its 3Q12 results on 14 Nov after trading hours.