RESEARCH ALERT-Kim Eng cuts Midas to sell from hold

SINGAPORE Dec 5 (Reuters) - Kim Eng Securities has downgraded its rating for Singapore-listed Midas Holdings Ltd , which makes aluminium components for trains, to sell from hold and cut its target price to S$0.30 from S$0.44.

STATEMENT:

Kim Eng said it expects Midas' quarterly earnings to remain poor for the next few quarters, hurt by uncertainty in China's rail industry following the dismissal of the former head of the Ministry of Railways and recent accident investigations.

Midas reported has month its third-quarter net profit fell 59.8 percent to 27.4 million yuan, hurt by rising production costs.

The brokerage has cut its 2011-2012 earnings estimates by 30 percent to account for slower execution on its orders.

With no new orders in sight, Midas will also be affected for at least the next three quarters as its main customer, Chinese state-owned train manufacturer CNR, delivers fewer trains to the Ministry of Railways, Kim Eng said.

At 0212 GMT, shares of Midas were 1.4 percent lower at S$0.345, and have plunged about 63 percent since the start of the year. (Reporting by Charmian Kok; Editing by Matt Driskill)