SINGAPORE (Aug 16): DBS Vickers Securities is maintaining its “buy” recommendation on Midas Holdings, the manufacturer of aluminium alloy extrusion products for railways in China, with an unchanged target price of 36 cents.

See: Midas reports near trebling of 2Q earnings to $11.3 mil

This comes on the belief that the group’s strong set of 2Q17 numbers point towards sustained earnings recovery ahead, with gross profit having risen 49% on-year to RMB159 million ($32.5 million) on improved gross margin.

In a flash note on Wednesday, analyst Paul Yong says the results were in line with DBS’ expectations at 48% of the research house’s full-year forecast, and this indicates the group is on track to see a sustained rebound in its earnings as efforts to diversify its business pays off.

He thus expects Midas to see an even better set of results in the second half of the year.

“Midas also announced that it had won high speed railway contracts worth RMB184 million for delivery in 2017, indicating that demand for its products remain firm,” notes Yong.

As at 3.02pm, shares of Midas were trading 1 cent lower at 21 cents.