Sakari

Sakari: AmFraser initiates at Sell with TP $1.65, based on 12x FY12e P/E. Expects share px to dip in the near term. Says FY12 is the yr when Sakari bears the brunt of high cash costs from 2 new pit devts at Jembayan. Forecasts FY12e EPS to be US$0.11, nearly 40% below consensus. Expects profit margins to be squeezed from softening coal px, lower total pdtn volumes and a higher cash cost per ton from Jembayan. Nevertheless the house believes FY13e earnings outlook will be better and continues to like the underlying business at Sakari.