Straits Asia Resources

Straits Asia Resources: IIFL initiate at Buy with $3.55 TP. Note that Co. is good proxy to underlying benchmark coal prices. Expect Co. to deliver 66% earnings CAGR during FY11-13, driven by, a 16% CAGR in coal production, 8% CAGR in ASP and a 700bps expansion in net margin between FY11-13 driven by strong cost control. Valuations remain demanding, with grp trading at 6.4x FY11 and 4.2x FY12 EV/EBITDA.