not vested
RESEARCH ALERT-DMG upgrades Sakari to buy
SINGAPORE, Nov 1(Reuters) - DMG & Partners has upgraded Singapore-listed Indonesian coal mining firm Sakari Resources Ltd to buy from neutral, but lowered its target price to S$2.90 from S$3.08 previously.
STATEMENT: Sakari Resources said its third quarter net profit rose 46 percent to $33.8 million from a year ago, which came in below DMG's expectations.
DMG cut its net profit forecast for Sakari in 2011 and 2012 by 7 and 5 percent respectively to factor in higher costs.
However, the brokerage said that it sees resilient coal prices and expects a 23 percent increase in production output at Sakari's Jembayan mine to boost its share price in future.
DMG also said Sakari currently trades at 13.6 times its 2011 price-to-earnings ratio, which is attractive given its 70-90 percent earnings growth potential over the next two years.
At 0135 GMT, shares of Sakari Resources Ltd were down 3 percent at S$2.31, and have fallen about 6 percent since the start of the year.
Source: Reuters