Wednesday, March 21, 2012

Sakari Resources - On the cusp of a transformation

Stock Name: Sakari
Company Name: SAKARI RESOURCES LIMITED
Research House: CIMBPrice Call: BUYTarget Price: 2.73



Target S$2.73

4Q11 revealed the power of Sebuku's operating leverage. This was just the start of is structural transformation. Margins will be elevated as the group ramps up  production at the Northern Leases. Ongoing reviews at Jembayan will further boost long-term profitability. Recent changes to Indonesia's mining rules do not affect SAR. We adjust our FY12-14 EPS (-19% to +7%) on revised volume assumptions and lift our target price on higher forex assumptions, still based on 9.6x FY13 P/E (FY08-09 downturn mean). Maintain Outperform.

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