Straits Asia: CS d/g to Neutral from OutPerform with TP $3.20. House note that TP reached and expectations have been raised. Believe the valuation gap between SAR and its peers has closed and with the likely slow ramping up of output from the Northern Lease, see limited chance for its operation to continue to beat expectations that have been raised significantly over the past few mths…..
SAR expects first coal from the Northern Lease in 4Q11 with a total output of less than 0.5 mnt, and costs might be on the uptrend due to rising oil price.
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