Sakari: UBS reiterate Buy Call with $3.70 TP. House note that results was way ahead of estimates. Note that Sakari Resources is house top pick and reiterate preference for miners with strong vol growth, based on view that coal prices from last year could roll over to 2012, resulting in earnings growth being driven by volumes rather than prices.
Like Sakari as 1) volume growth should exceed that of the sector, even though Management’s current 2012 Jembayan production guidance is lower than our initial estimate, and 2) production growth should be driven by the high-quality low-cost coal from Sebuku, which would increase average selling prices while bringing cash costs down further.
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