Oct. 6 (Bloomberg) -- Midas Holdings Ltd., a maker of aluminum alloy profiles used in train carriages, plans to raise manufacturing capacity in China by an additional 40 percent as the nation boosts high-speed rail and subway spending.
Singapore-based Midas wants to be able to produce 70,000 tons annually by the first half of 2012, Chief Executive Officer Patrick Chew said in an interview today in Hong Kong. Annual capacity is already set to grow to 50,000 tons by the end of this year from 20,000 tons, he said.
China will spend more than 1 trillion yuan ($150 billion) to triple the size of its subway system over the next five years to help ease traffic congestion and improve connectivity for commuters. The nation is also lengthening its high-speed rail network as part of a 2 trillion yuan project.
“We’re very positive about the railway industry in China given the vast amount the government is spending in high-speed railway and the metro trains,” Chew said. “The momentum of China’s investment is still good.”
The Singapore-listed company started trading in Hong Kong today and closed at HK$5.83, an increase of 7.4 percent from its initial public offering price. The benchmark Hang Seng Index gained 1.1 percent. Midas fell 1 percent to S$1 at 4:44 p.m. in Singapore.
Midas sold 220 million shares at HK$5.43 apiece, raising net proceeds of about HK$1.1 billion ($142 million), the company said in a statement to Hong Kong’s stock exchange yesterday. The money raised in its secondary listing in Hong Kong will help fund Midas’s expansion through 2012, Chew said.
Net income in the second quarter rose 18 percent to S$11.1 million ($8.5 million) as sales gained 26 percent to S$47.6 million.
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