Straits Asia

Straits Asia: Nomura starts at Buy with $2.80 target. Says strong coal prices, pick-up in coal volumes should lead to earnings upturn, possible stock re-rating for Indonesia-based miner; expects Straits Asia's coal sales volumes to almost double over the next five years, driven by production increases at Jembayan mines and a strong ramp-up at Northern leases…

Notes SAR generates strong operating cashflow that can be used to fund acquisitions. Says even if there is no acquisition, dividend yield still attractive at est 5.8% for FY11, 8.3% for FY12, based on 60% dividend payout ratio.