Stock Name: StraitsAsia
Company Name: STRAITS ASIA RESOURCES LIMITED
Research House: Nomura
Adds, even if Indonesia-based coal miner gets regulatory approval for work on Sebuku mine over next 2-3 months, it won’t be able to mine significant volumes from Northern leases area in FY11.
Company Name: STRAITS ASIA RESOURCES LIMITED
Research House: Nomura
Nomura downgrades Straits Asia Resources (AJ1.SG) to Reduce from Buy, cuts target to $2.21 from $2.80 after lowering FY11, FY12 earnings estimates by 27%, 10% respectively to reflect lower volumes from Sebuku mine, higher costs next year.
“We believe the market is ignoring operational risks - both on volumes and margins (cost increase on oil) - and there exists significant downside risks to street estimates and valuations,” says house.
“We believe the market is ignoring operational risks - both on volumes and margins (cost increase on oil) - and there exists significant downside risks to street estimates and valuations,” says house.
Adds, even if Indonesia-based coal miner gets regulatory approval for work on Sebuku mine over next 2-3 months, it won’t be able to mine significant volumes from Northern leases area in FY11.
Says recent price rally driven more by optimism than fundamentals; “Northern leases permits remain a moving target, and we’re building in another few months delay.”
Shares flat at $2.75.
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