Income tax declined 43.5%.
Midas Holdings Limited's (Midas) profits increased 197.1% YoY to 11.3m (RMB55.5m), coupled with a 43.5% decline in income tax.
According to OCBC Investment Research, company revenue rose 32.1% YoY to $103.4m (RMB505.6m). This was a result of a 3.5% growth in its Aluminium Alloy Extruded Products (AEP) revenue to $78m (RMB381.4m), and the consolidation of results of its recently acquired Aluminium Alloy Stretched Plates (AASP) segment.
Midas' overall gross margin went up 3.6ppt to 31.4%, pulled up by a 3.6ppt improvement in AEP’s gross margin at 31.6%.
Operating expenses grew 14.4% to $14m (RMB68.3m), alongside a 52.1% increase in finance costs from higher interest rates and higher outstanding borrowings.
According to OCBC analyst Eugene Chua, "Looking ahead, we expect core business (i.e. AEP segment) revenue to pick up on higher orders but forecast overall GPM to fall to ~28-29% with full year contributions from AASP."
Midas also has been awarded three AEP contracts amounting to $37.7m (RMB184.4m). Two from CRRC Tangshan were worth $23.5m (RMB114.7m), whilst one from CRRC Changchun Railway Vehicles was worth $14.3m (RMB69.7m).
The contracts are used for the supply of aluminium alloy extrusion profiles and fabricated parts for high speed trains. They are expected to be fulfilled within the fiscal year.
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