Lim & Tan

MIDAS
S$0.42-MIDS.SI
 As part of Midas’ ongoing good corporate governance
initiatives, the company is proposing to change their
current auditors BDO LLP (served as their auditors
since 2005) to Mazars LLP.
 BDO has confirmed that there are no matters in
connection with its resignation that need to be
brought to the attention of shareholders and there is
no disagreement between the board and them
regarding its resignation.
 Midas said that the above would also enable the
company to benefit from fresh perspectives and views
of another professional firm and also enhance the value
of the audit process.
 The above while notable would have boosted the
market’s confidence if Midas changed to one of the big
4 audit firms. S-Chips like China Minzhong is in
the process of trying to regain market confidence by
winning over one of the big 4 audit firms from their
current auditor Horwath First Trust.
 Midas’ share price has risen about 17% (to 42 cents
currently) since our upgrade to BUY on 7 Sept ’12,
helped by positive announcements from the Chinese
government to further boost investments in the
railway industry.
 The stock is currently retesting the upped end of the
trading band established since mid-2011.
 However, to break above this key resistance level, we
believe the company has to announce new contract
wins soon.