Stock Name: StraitsAsia
Company Name: STRAITS ASIA RESOURCES LIMITED
Research House: Golman Sachs
It lowers its 2011-2013 net profit estimates by 16%-17% on high costs, driven by stronger inflation and higher strip ratio for Jembayan mine (11.3X vs 10X previously).
Company Name: STRAITS ASIA RESOURCES LIMITED
Research House: Golman Sachs
Goldman Sachs downgrades Straits Asia Resources (AJ1.SG) to Sell from Neutral, cuts its target to $2.00 from $2.30, citing rich valuations, while market expectations appear too high.
“Our 2011E-2012E net profit estimates are 31%-37% below Bloomberg consensus driven by lower ASPs (in line with company guidance) and higher costs. Even if we assume a higher ASP of US$90 ($114.8)/ton (guidance is US$80-US$85), our analysis implies consensus downside risk to EBITDA of 7.0%.”
“Our 2011E-2012E net profit estimates are 31%-37% below Bloomberg consensus driven by lower ASPs (in line with company guidance) and higher costs. Even if we assume a higher ASP of US$90 ($114.8)/ton (guidance is US$80-US$85), our analysis implies consensus downside risk to EBITDA of 7.0%.”
It lowers its 2011-2013 net profit estimates by 16%-17% on high costs, driven by stronger inflation and higher strip ratio for Jembayan mine (11.3X vs 10X previously).
“With lower earnings, SAR screens as one of the most expensive stocks globally on EV/EBITDA and overvalued versus cash returns.” It notes the new loader in Jembayan is expected to commission soon but ramp up to full capacity may take time (expected 4Q11), so costs in 2011 may remain high as a large part of volumes may be supported by temporary loading facilities.
Shares are flat at $2.46.
No comments:
Post a Comment