look for potential breakout of the greenline , support at 1.66 . Below i extract a report from DBS vickers .... ...
· Global coal price starts to pick up
· Strong FY09 outlook with promising FY10
· On track expansion execution
· BUY with TP of S$2.26
Coal price trends upward. Underpin by recent roundup in oil price, we believe that coal price is set to follow suit as demand for coal remains strong. Our channel checks with major coal producers in Indonesia suggest that demand for coal is still robust, as the increase in output so far in 2009 has been absorbed by the market. Latest coal price at US$71.9/ton is 15% higher than its lows back in March 2009. Main beneficiary of strengthening coal price. SAR’s FY09 earnings will remain strong, driven by improvement in sales volume (+17% y-o-y) and sales price (+13% y-o-y). SAR has sold and priced 6.5mn tons of its FY09 coal deliveries at US$114/ton, thus cementing our optimism that it will achieve a blended average sales price of US$78/ton for FY09.On track expansion plan. SAR management is continuing its effort to boost production by enhancing its infrastructure capacity. The company aims to achieve a capacity of 20mn tons p.a. and currently the installed infrastructure can attain production of 19mn tons p.a. BUY with TP of S$2.26. Our target price was derived using the DCF methodology with WACC assumption of 11.1%, risk premium 5% and risk freerate of 9.5%. Reiterate BUY.
No comments:
Post a Comment