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Re: Straits Asia Resources

PostPosted: Fri Nov 19, 2010 10:16 am
by winston
Not vested

Singapore Hot Stocks-Straits Asia up on commodities rally

SINGAPORE, Nov 19 (Reuters) - Shares of Singapore-listed coal miner Straits Asia Resources rose as much as 4.5 percent on Friday, spurred by a rally in commodities prices and recent M&A activity in Indonesia's coal sector.

At 0154 GMT, Straits Asia shares were up 3.3 percent at S$2.50 with over 2.6 million shares changing hands.

Oil prices closed up 2 percent on Thursday in New York, breaking a four-day losing streak after a multibillion-dollar bailout plan for Ireland restored calm in commodity markets.

[ID:nLDE6AH18P] "The bulls out there are still very positive on the commodities. After the recent sell-off, they're taking the opportunity to do some buying," said a local trader.

The merger of Indonesia coal firms Berau Coal , PT Bumi Resources together with England's mining investment fund Vallar Plc , announced earlier this week, has spurred investor interest in the Southeast Asian country's coal industry, the trader said.

Source: Reuters

Re: Straits Asia Resources

PostPosted: Tue Nov 23, 2010 1:45 pm
by winston
Not vested

Singapore-listed coal miner Straits Asia Resources outperformed the index and rose as much as 1.2 percent to S42.56 after Credit Suisse upgraded the stock, traders said.

Credit Suisse upgraded Straits Asia to "outperform" from "neutral" and raised its target price to S$3.10 from S$2.20, citing potential upside versus its peers if it is granted a permit for its "Northern Lease" coal mine in Indonesia in the next three months.

Source: Reuters

Re: Straits Asia Resources

PostPosted: Tue Nov 30, 2010 9:04 am
by winston
Not vested

RESEARCH ALERT- OCBC ups Straits Asia to "buy"

SINGAPORE, Nov 30 (Reuters) - OCBC Investment Research has upgraded Singapore-listed Straits Asia Resources to "buy" from "hold" and raised its target price to S$3.13 from S$2.24.

STATEMENT: OCBC said it expects Straits Asia's fiscal 2011 earnings to jump 141 percent to $204 million, driven by a recovery in thermal coal prices and rising production volumes at its Jembayan and Sebuku mines.

"As China embarks on coal restocking in preparation for winter, demand looks set to increase. At the same time, supplies appear constricted owing to wet weather in Indonesia, a major exporter," said OCBC in a report.

But the brokerage noted that key risks to its expectations include prolonged wet weather, which may impede production.

Shares of Straits Asia Resources have gained 1.1 percent this year to close at S$2.64 on Monday.

Source: Reuters

Re: Straits Asia Resources

PostPosted: Tue Dec 07, 2010 1:52 pm
by winston
Not vested

Coal miner Straits Asia Resources fell 3.7 percent to S$2.59 after Nomura downgraded the stock, citing the risk of lower margins and coal production volumes.

The brokerage downgraded Straits Asia to "reduce" from "buy" and cut its target price to S$2.21 from S$2.80, as it expects the company's margins to come under pressure from higher oil prices

Source: Reuters

Re: Straits Asia Resources

PostPosted: Wed Dec 08, 2010 8:17 am
by winston
Not vested

STRAITS ASIA RESOURCES - DMG & Partners has raised its target price for coal miner Straits Asia Resources to S$2.49 from S$2.10, as it expects the price of coal to rise in the long term.

However, it noted that the firm looks fairly-valued at current prices, and has maintained its "neutral" rating for Straits Asia.

Source: Reuters

Re: Straits Asia Resources

PostPosted: Wed Dec 15, 2010 1:28 pm
by winston
Not vested. From OCBC:-

Ready for take-off.

Consensus projections imply a more than doubling of net profit in FY11 vs. FY10.

We expect SAR's FY11 earnings to improve over FY10, driven by
(i) a recovery of thermal coal prices,
(ii) increased production volumes at both Jembayan (the second load-out facility is on
track for commissioning in 1Q11) and Sebuku (Northern Leases mining permits expected by end-2010), and
(iii) easing cost pressure, mainly on account of cost efficiencies derived from Jembayan's second load-out facility.

We maintain our BUY rating and S$3.13 fair value estimate.

Key risks include delays in obtaining the Pinjam Pakai permits, higher than expected
costs, prolonged wet weather, as well as continued USD/SGD weakness. (Lee Wen Ching) ... 14-OIR.pdf

Re: Straits Asia Resources

PostPosted: Wed Jan 12, 2011 9:13 am
by winston
Not vested. From OCBC:-

Straits Asia Resources: Moderating our expectations as mining permits face further delay

Summary: Shares of Straits Asia Resources (SAR) have been rising in tandem with escalating thermal coal prices, which increased 33% in 4Q CY10 to hit a fresh 52-week high.

While SAR is a beneficiary of strengthening coal prices, we caution against over exuberance as oil prices have also been climbing, and this could crimp the group’s profit margins given that fuel costs account for 30-35% of its production costs.

We have raised our cost estimates to allow for higher fuel costs. At the same time, we are trimming our production forecasts in the absence of updates regarding the group’s Pinjam Pakai mining permits, which were previously expected by end-2010.

Our fair value estimate falls to S$2.89 (previously S$3.13) as a result of these adjustments. Nevertheless, our BUY rating remains intact as we expect SAR’s FY11 earnings to improve over FY10.

In addition, structural shortages in physical coal supplies should boost sentiment surrounding coal producers whose operations are less affected by adverse weather conditions. (Lee Wen Ching)

Re: Straits Asia Resources

PostPosted: Wed Jan 12, 2011 10:26 am
by eauyong
Issue of Principle Licence for Mining Sebuku’s Northern Leases

Singapore – 11 January 2011. Straits Asia Resources Limited (“Straits Asia”, SGX: SAR) is pleased to announce that the Minister of Forestry has issued the Principle Licence (Izin Prinsip) for the Northern Leases at Sebuku.

The Izin Prinsip is the precursor to the Izin Pinjam Pakai (Borrow and Use Licence) and its main purpose is to confirm rights to conduct extraction of coal provided certain final conditions are met.

The Izin Prinsip sets out the conditions and, once they are fulfilled, mining and exploration may commence in the permitted area.

The Northern Leases are a key part of Straits Asia’s long-term strategy for mining its concessions at Sebuku. The area lies immediately to the North of the mine’s Tanah Putih pit and the same coal seams are continuous into the Northern Leases.

Straits Asia already holds a general body of information about the coal and geology in the Northern Leases and expects to commence work in the Northern Leases relatively quickly after the Borrow and Use Licence is issued, which will lead to the long-awaited ramp up of production from Sebuku mine.

By Order of the Board
Straits Asia Resources Limited
Graeme Tivey
Company Secretary

11 January 2011

For further information please contact:
Jeremy Figgins
Group Manager, Corporate Relations
Tel: +65 9616 7062
[email protected]

Re: Straits Asia Resources

PostPosted: Thu Feb 17, 2011 2:42 pm
by winston
Not vested. From Nomura:-


Coal prices have jumped 22% in the last 3 months on supply concerns while SAR has lagged coal prices by ~19%. Rising coal prices and better weather conditions should support earnings growth in the near/medium term.

At 13x FY11E P/E, SAR looks attractive and we believe is close to bottom, as probability of the Pinjam Pakai permit has risen.

We revise up our coal price forecasts and upgrade SAR to NEUTRAL, but we maintain that there are risks in terms of volumes/high cash costs and we prefer other players in the region (Adaro, ITMG) to play a coal price spike.


Newsflow regarding reserve upgrades at Jembayan and regulatory approvals for Sebuku Northern Leases stand as potential near-term catalysts.

Anchor themes

Our European metals and mining team is Bullish on coal prices in the near to medium term, as supply will remain impacted by infrastructure issues.

Re: Straits Asia Resources

PostPosted: Tue Feb 22, 2011 9:13 am
by winston
Not vested. From DMG:-

Upgrade to Neutral – small downside to coal prices; valuations appear fair.

Our target price of S$2.49 implies a FY11 P/E of 15.4x, which is 20% higher than
SAR’s FY11 peer average P/E of 12.7x.

Valuations appear fair and we prefer to await a better entry point, with final permits and/or higher than expected reserves for Northern Leases serving as catalysts.

Share price has a positive correlation coefficient of 0.7 to coal price. We do not expect much further sell down for the counter as coal futures indicate small declines in coal prices going forward.