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Midas

I was also confuse initially. As last year freburary news come out, SMRT award Thales for resignalling contract. Resignalling is  an upgrade of the system, it should be the responsibility of the LTA.

" For an amount of €142 million, Thales will enhance efficiency of 100 km of Singapore’s metro lines.

Thales has been selected by Singapore’s largest rail operator SMRT Corporation Ltd to supply its world-leading SelTrac Communications-Based Train Control (CBTC) re-signalling solution for the North-South and East-West lines, for an amount of €118 million. The two lines combined are more than 100 km long and serve 54 stations. The Land Transport Authority of Singapore (LTA) has also awarded a €24 million contract for the signalling of the Tuas West Extension comprising 4 stations for the future East-West line extension. The entire new signaling system is expected to be operational by 2018."

I was even supprise last year December when news come out.

" Hollysys Automation Technologies, Ltd., a leading provider of automation and control technologies and applications in China, announced today that its wholly owned subsidiary Concord Corporation Pte. Ltd. (" Concord" ) signed a significant contract with Thales Solutions Asia Pte Ltd (" Thales" ) to provide design, installation, testing & commission for replacement of existing signaling systems of North-South and East-West lines (" NSEWL" ) and new signaling systems of Tuas West Extension line (TWEL) in Singapore, the contract is valued at approximately USD $19.14 million. "

Getting from SMRT & LTA at 142million Euro and award to China Company at 19.14million USD.

This is what I feel from the various event that  Singapore is now experiencing, the government sector unwilling to take up the responsibility. The upgrading are actually annouce by the government, so that they can claim credibility, but when something happen they will blame the operator. So they can fine the operator. But will the operator pay for the bill? It will be the taxpayer that forge out the payment, as operator will get subsidy for their operation. I don't think this type of cycle will take Singapore to better living, it will become worst. Government don't care, operator don't care, contractor don't care, who suffer? Singaporean.

shareflux      ( Date: 10-Apr-2013 14:09) Posted: Cheong Actually i am confused why the government is announcing how SMRT is going to spend ITS shareholders' money. Just not seems logical, unless shareholders and G is the same entity. Not logical also as investors of SMRT which is not G is also shareholder. So you see where my confusion come from. As far as i understand, the model of operation for SMRT is G will pay for capex and SMRT will pay for train maintenance. They (LTA & SMRT) CAN'T even decide who pay for the repair of the spalling concrete on the tunnel ceiling! I think this is a relevant question that we need to ask in SMRT next AGM, who is paying for what...

 

Since the gov wants to keep the fare low, then gov has to pay for the infrastructure such as ceiling of the tunnel. It is only resonable for SMRT to pay for the maintenance of trains. But with the increase in frequency of the use of the trains, again the gov must pay for the extra maintenance. If the gov wants SMRT to pay, then it must allow SMRT to increase fare.

In short term, gov has to pay, in long term, gov may allow SMRT to have more shops around the stations to get revenue from rents in order to subsidise the fare.

It is also high time that foreigners should pay the market fare, while citizens pay subsidised fare and PR in between.

 

Cheong

Actually i am confused why the government is announcing how SMRT is going to spend ITS shareholders' money. Just not seems logical, unless shareholders and G is the same entity. Not logical also as investors of SMRT which is not G is also shareholder. So you see where my confusion come from.

As far as i understand, the model of operation for SMRT is G will pay for capex and SMRT will pay for train maintenance. They (LTA & SMRT) CAN'T even decide who pay for the repair of the spalling concrete on the tunnel ceiling! I think this is a relevant question that we need to ask in SMRT next AGM, who is paying for what...

 

Is it LTA or SMRT?

" In February 2013, Singapore’s Transport Minister announced that transport operator, SMRT Corporation Ltd, will spend about S$1.75 billion from 2013 to 2019 to upgrade and purchase assets for its rail network."

shareflux      ( Date: 10-Apr-2013 07:49) Posted: Two clarificaions, the 1.2 billion from G is for buses and not train cars capex right? In the same notes, the train cars contract that Midas got recently is paid for by LTA and not SMRT, right? So in fact it is tax payer money. Capex is reflected in balance sheet and not income statement. Hence, to pay for the cars (if SMRT and not LTA pays for it) will need to draw down its assets or reserve which will affect the NAV negatively. Nevertheless, if the capex for last year equal income then there will be short term impact on its bottom line, balance sheet and maybe dividend payout. cheongsl      ( Date: 10-Apr-2013 07:36) Posted: Please note the capital expenditure total on train is 305million, not 350million for FY 2012, but for FY 2013 they have reduce the capital expenditure from initial 500m to 350~400m

 

Thanks for highlighting.

WanSiTong      ( Date: 10-Apr-2013 09:20) Posted: " Capex is reflected in balance sheet and not income statement. Hence, to pay for the cars (if SMRT and not LTA pays for it) will need to draw down its assets or reserve which will affect the NAV negatively. " Just to clarify the above statement: Even thought Cash/ bank balances will decrease or bank borrowing will increase, not to forget that Capital Expenditure will increase! Hence NAV remains the same if no depreciation are provided. shareflux      ( Date: 10-Apr-2013 07:49) Posted: Two clarificaions, the 1.2 billion from G is for buses and not train cars capex right? In the same notes, the train cars contract that Midas got recently is paid for by LTA and not SMRT, right? So in fact it is tax payer money. Capex is reflected in balance sheet and not income statement. Hence, to pay for the cars (if SMRT and not LTA pays for it) will need to draw down its assets or reserve which will affect the NAV negatively. Nevertheless, if the capex for last year equal income then there will be short term impact on its bottom line, balance sheet and maybe dividend payout.

 

yup! government don't promises, they only say the 1.1 billion is to cover the operation expense and capital expenditure for 10 years so that the fare will not go up(this is 2012 budget). I think later they will turn their words and mention that 1.1billion is not enough to cover expense and expenditure more money need, fare go up, more subsidy from government will seen. Don't forget Mr Lui already hind many times of the fare increasing....

oldflyingfox      ( Date: 10-Apr-2013 09:30) Posted: 10 years no increase on fare? r u sure the gov promise that? lol cheongsl      ( Date: 09-Apr-2013 23:02) Posted: SMRT Net equity is only around S$0.7billion, all this spending will come from the taxpayer money lah! Don't forget last year the government pay SMRT and SBS 1.1billion for bus upgrade and promiss 10 years will not have fare increase.

 

10 years no increase on fare? r u sure the gov promise that? lol

cheongsl      ( Date: 09-Apr-2013 23:02) Posted: SMRT Net equity is only around S$0.7billion, all this spending will come from the taxpayer money lah! Don't forget last year the government pay SMRT and SBS 1.1billion for bus upgrade and promiss 10 years will not have fare increase.   juzwonder      ( Date: 09-Apr-2013 18:34) Posted: SMRT will spend S$1.75 billion from 2013 to 2019... more to come??

 

" Capex is reflected in balance sheet and not income statement. Hence, to pay for the cars (if SMRT and not LTA pays for it) will need to draw down its assets or reserve which will affect the NAV negatively. "


Just to clarify the above statement:

Even thought Cash/ bank balances will decrease or bank borrowing will increase, not to forget that Capital Expenditure will increase! Hence NAV remains the same if no depreciation are provided.

shareflux      ( Date: 10-Apr-2013 07:49) Posted: Two clarificaions, the 1.2 billion from G is for buses and not train cars capex right? In the same notes, the train cars contract that Midas got recently is paid for by LTA and not SMRT, right? So in fact it is tax payer money. Capex is reflected in balance sheet and not income statement. Hence, to pay for the cars (if SMRT and not LTA pays for it) will need to draw down its assets or reserve which will affect the NAV negatively. Nevertheless, if the capex for last year equal income then there will be short term impact on its bottom line, balance sheet and maybe dividend payout. cheongsl      ( Date: 10-Apr-2013 07:36) Posted: Please note the capital expenditure total on train is 305million, not 350million for FY 2012, but for FY 2013 they have reduce the capital expenditure from initial 500m to 350~400m

 

Two clarificaions, the 1.2 billion from G is for buses and not train cars capex right? In the same notes, the train cars contract that Midas got recently is paid for by LTA and not SMRT, right? So in fact it is tax payer money.
Capex is reflected in balance sheet and not income statement. Hence, to pay for the cars (if SMRT and not LTA pays for it) will need to draw down its assets or reserve which will affect the NAV negatively.
Nevertheless, if the capex for last year equal income then there will be short term impact on its bottom line, balance sheet and maybe dividend payout.

cheongsl      ( Date: 10-Apr-2013 07:36) Posted: Please note the capital expenditure total on train is 305million, not 350million for FY 2012, but for FY 2013 they have reduce the capital expenditure from initial 500m to 350~400m. cheongsl      ( Date: 10-Apr-2013 07:29) Posted: Please note that the capital expenditure does not shown in the income statement, which yearly net income from SMRT is only ~0.1billion for the last few years. The last few years capital expenditure is only around 60~70% of their net income, thus within their limit, but last year the net income is ~120million, but the capital expenditure is 496million. This capital expenditure will come from it existing asset, or they can increase they debt by borrowing more, otherwise dilute the share, the easiest way will be from LTA. As the station, train was originally from LTA, they are just on lease for certain year. And the require of more frequent train is from LTA, which the existing train fleet can't support, the purchase will definitely result in government spending that is my view. Their equity is currently only 0.7billion, thus more will be seen in future for government subsidising the Train and buses operator...

 

Please note the capital expenditure total on train is 305million, not 350million for FY 2012, but for FY 2013 they have reduce the capital expenditure from initial 500m to 350~400m.

cheongsl      ( Date: 10-Apr-2013 07:29) Posted: Please note that the capital expenditure does not shown in the income statement, which yearly net income from SMRT is only ~0.1billion for the last few years. The last few years capital expenditure is only around 60~70% of their net income, thus within their limit, but last year the net income is ~120million, but the capital expenditure is 496million. This capital expenditure will come from it existing asset, or they can increase they debt by borrowing more, otherwise dilute the share, the easiest way will be from LTA. As the station, train was originally from LTA, they are just on lease for certain year. And the require of more frequent train is from LTA, which the existing train fleet can't support, the purchase will definitely result in government spending that is my view. Their equity is currently only 0.7billion, thus more will be seen in future for government subsidising the Train and buses operator.... juzwonder      ( Date: 09-Apr-2013 23:38) Posted: last year capital expenditure for SMRT had increased from $101mil to $496mil. out of this, 40.8% or $350mil was for train biz due to additional trains purchase. by extrapolating this yearly amount by 7, it is not difficult to see why SMRT has a budget of $1.75bil. don't forget new train transit projects are already in the pipeline.

 

Please note that the capital expenditure does not shown in the income statement, which yearly net income from SMRT is only ~0.1billion for the last few years. The last few years capital expenditure is only around 60~70% of their net income, thus within their limit, but last year the net income is ~120million, but the capital expenditure is 496million. This capital expenditure will come from it existing asset, or they can increase they debt by borrowing more, otherwise dilute the share, the easiest way will be from LTA. As the station, train was originally from LTA, they are just on lease for certain year. And the require of more frequent train is from LTA, which the existing train fleet can't support, the purchase will definitely result in government spending that is my view. Their equity is currently only 0.7billion, thus more will be seen in future for government subsidising the Train and buses operator....

juzwonder      ( Date: 09-Apr-2013 23:38) Posted: last year capital expenditure for SMRT had increased from $101mil to $496mil. out of this, 40.8% or $350mil was for train biz due to additional trains purchase. by extrapolating this yearly amount by 7, it is not difficult to see why SMRT has a budget of $1.75bil. don't forget new train transit projects are already in the pipeline.  cheongsl      ( Date: 09-Apr-2013 23:02) Posted: SMRT Net equity is only around S$0.7billion, all this spending will come from the taxpayer money lah! Don't forget last year the government pay SMRT and SBS 1.1billion for bus upgrade and promiss 10 years will not have fare increase.

 

last year capital expenditure for SMRT had increased from $101mil to $496mil. out of this, 40.8% or $350mil was for train biz due to additional trains purchase. by extrapolating this yearly amount by 7, it is not difficult to see why SMRT has a budget of $1.75bil. don't forget new train transit projects are already in the pipeline. 

cheongsl      ( Date: 09-Apr-2013 23:02) Posted: SMRT Net equity is only around S$0.7billion, all this spending will come from the taxpayer money lah! Don't forget last year the government pay SMRT and SBS 1.1billion for bus upgrade and promiss 10 years will not have fare increase.   juzwonder      ( Date: 09-Apr-2013 18:34) Posted: SMRT will spend S$1.75 billion from 2013 to 2019... more to come??

 

This contract is a good one, should have good profit margin, per car price is around 480k RMB. But unfortunately, the contract total sum is not significant compare to the last two announcement. This new contract will deliver from 2013 to 2015, thus order book that will be realise in this year might still be far from last year revenue, thus midas should work harder to secure such contract to make them worth the pricing.

juzwonder      ( Date: 09-Apr-2013 18:32) Posted: MIDAS AWARDED S$17.3 MILLION SINGAPORE MRT TRAIN CAR BODY ORDERS - For the supply of train car body module components for the NEL and CCL Singapore & Hong Kong, April 9, 2013 - Midas Holdings Limited (麥 達 斯 控 股 有 限 公 司 ) (“Midas” or the “Company”, together with its subsidiaries, the “Group” SGX-ST stock code: 5EN SEHK stock code: 1021) is pleased to announce that its subsidiary, Jilin Midas Aluminium Industries Co., Ltd (“Jilin Midas”) has been awarded orders totalling S$17.3 million (approximately RMB86.5 million1) from Alstom Transport S.A. (“Alstom”) to supply train car body module components for new trains on the Singapore North East Line (“NEL”) and Circle Line (“CCL”). Mr Patrick Chew (周 華 光 ), Chief Executive Officer of Midas, said, “Since 2004, we have successfully secured contracts to supply large section aluminium alloy profiles to manufacture body frames for the Singapore Downtown Line Project and Circle Line Project amongst others. We are pleased to have been awarded these orders from our long-standing major customer Alstom, testament to Jilin Midas’ technical capabilities both at home and abroad.” In February 2013, Singapore’s Transport Minister announced that transport operator, SMRT Corporation Ltd, will spend about S$1.75 billion from 2013 to 2019 to upgrade and purchase assets for its rail network. As part of this upgrade, SMRT will spend S$750 million to purchase additional trains for its Mass Railway Transit and Light Rail Transit lines, including 24 new trains for the Circle line. Pursuant to these orders, Midas will supply train car body module components for 18 train sets (1 train set = 6 train cars), or 108 train cars for the NEL, and 24 train sets (1 train set = 3 train cars), or 72 train cars for the CCL. Delivery is slated to take place progressively from 2013 to 2015. These orders are expected to contribute positively to the Group’s financial performance for the financial years ending 2013 to 2015.

 

SMRT Net equity is only around S$0.7billion, all this spending will come from the taxpayer money lah! Don't forget last year the government pay SMRT and SBS 1.1billion for bus upgrade and promiss 10 years will not have fare increase.  

juzwonder      ( Date: 09-Apr-2013 18:34) Posted: SMRT will spend S$1.75 billion from 2013 to 2019... more to come??

 

You're very observant.

Maybe the same  operators for Raffles Education when many of us were sent to the cleaners.

shareflux      ( Date: 09-Apr-2013 14:58) Posted: I observed something strange about Midas buy/sell queue.  On too many occasions, no one it taking out the small  size of  sellers numbering in double digit. Hence, the buyers numbers in thousands are not real and are there just to create a wall to prevent sellers from selling and create a buzz of a lot of buyers for this counter.   For example, today I see 1500 buyers Q at 495 and 30 sellers at 50. And when the wall breakdown to the 49/495, the  same thing happen. Midas buy/sell queue could be manipulated and controlled. I don't know but I smell conspiracy here.

 

Yes, only the actual done volume but not the q volume...

ruggerking      ( Date: 09-Apr-2013 15:58) Posted: I think volume is fine to look at with other factors and  analysis. And that is how shareflux, by watching the volume, notice the  unusual  movement.    oldflyingfox      ( Date: 09-Apr-2013 15:52) Posted: that why we have to learn not to look at the q volume too much... >

 

SMRT will spend S$1.75 billion from 2013 to 2019... more to come??

 

MIDAS AWARDED S$17.3 MILLION SINGAPORE MRT TRAIN CAR BODY ORDERS - For the supply of train car body module components for the NEL and CCL Singapore & Hong Kong, April 9, 2013 - Midas Holdings Limited (麥 達 斯 控 股 有 限 公 司 ) (“Midas” or the “Company”, together with its subsidiaries, the “Group” SGX-ST stock code: 5EN SEHK stock code: 1021) is pleased to announce that its subsidiary, Jilin Midas Aluminium Industries Co., Ltd (“Jilin Midas”) has been awarded orders totalling S$17.3 million (approximately RMB86.5 million1) from Alstom Transport S.A. (“Alstom”) to supply train car body module components for new trains on the Singapore North East Line (“NEL”) and Circle Line (“CCL”). Mr Patrick Chew (周 華 光 ), Chief Executive Officer of Midas, said, “Since 2004, we have successfully secured contracts to supply large section aluminium alloy profiles to manufacture body frames for the Singapore Downtown Line Project and Circle Line Project amongst others. We are pleased to have been awarded these orders from our long-standing major customer Alstom, testament to Jilin Midas’ technical capabilities both at home and abroad.” In February 2013, Singapore’s Transport Minister announced that transport operator, SMRT Corporation Ltd, will spend about S$1.75 billion from 2013 to 2019 to upgrade and purchase assets for its rail network. As part of this upgrade, SMRT will spend S$750 million to purchase additional trains for its Mass Railway Transit and Light Rail Transit lines, including 24 new trains for the Circle line. Pursuant to these orders, Midas will supply train car body module components for 18 train sets (1 train set = 6 train cars), or 108 train cars for the NEL, and 24 train sets (1 train set = 3 train cars), or 72 train cars for the CCL. Delivery is slated to take place progressively from 2013 to 2015. These orders are expected to contribute positively to the Group’s financial performance for the financial years ending 2013 to 2015.

 

Furthermore, this news will help to strengthen the Buy Call justifications...

 

Cant really evaluate how this contract will affect the bottom in term of quantum and margin. Details like car numbers, sizes and the type of accessories included is important to evaluate the profitability of a contract. Furthermore, there is no time frame to set for the delivery.

As an investor, would like to have more information on the earning  impact before commenting. But then, Mr Market would like this news and push up the price tomorrow. Who knows?