Straits Asia: IIFL reiterates Buy with TP $3.50. Note that grp remains leveraged to capture potential seaborne coal price strength and believe that rising Chinese coal imports and potential supply disruption due to heavy rains in Australia could push coal price above f/cast of US$120/t. Upgraded infrastructure capacity and receipt of final mining permit for Northern Leases should enable SAR to raise coal output 15% annually to 15.9mt in FY13…..
At 8.6x, SAR continues to trade below its historical one-year forward EV/EBITDA of 10.5x.
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