Sarin

Sarin: Macquarie initiates with O/p, and TP $2.91 TP. House views Sarin as the market leader in diamond technology with 91% TSR. Like the stock as it shifts its business model from one-off capital equipment sales to recurring income. Likes the grp,as earnings set to grow 97% (or at a 25%, 3-year EPS CAGR) over the next 3 years (2013-16E), combined with the company's strong FCF generation, net cash balance sheet, 40% ROE, proven track record of increasing shareholder returns, and attractive valuation.