Diversification, the Midas curse

TO understand China's Old Economy problems, one just needs to examine the S-chips in Singapore's backyard.

The latest company falling foul of investor patience is Midas Holdings, a train car body maker founded in 2000 by Patrick Chew, a Singaporean businessman with a rags-to-riches story, and a Chinese partner, Chen Wei Ping.

Shares have slumped a third in just a few weeks to S$0.14 a share, a historic low. The company is now trading at just one-third of book value, at a historical earnings multiple of under 10 times.