At 0119 GMT, Straits Asia shares were up 6.4% at S$2.81, with over 9.1 million shares changing hands.
OCBC lowers Straits Asia Resources (AJ1.SG) fair value estimate to $2.89 from $3.13; it says while SAR is a beneficiary of strengthening coal prices, “we caution against over exuberance as oil prices have also been climbing, and this could crimp the group’s profit margins given that fuel costs account for 30%-35% of its production costs.”
Straits Asia Resources (AJ1.SG) is off 1.6% at $2.48, extending decline from $2.80 December high, down 11.4% since then, hurt by investors’ concern over delays to obtaining permit for Northern Leases area of its Sebuku mine.
Straits Asia Resources (AJ1.SG) flat at $2.55, after last week’s run-up to a $2.80 52-week high. The recent weakness was triggered partly by concerns the Indonesia-based coal miner may again face delays in getting regulatory approval to work on a new area in its Sebuku mine.
Shares of Singapore-listed coal miner Straits Asia Resources <STRL.SI> rose as much as 3% on Tuesday after Credit Suisse upgraded the stock to "outperform", traders said.
At 9:31 a.m., Straits Asia shares were up 1.6% and trading at $2.57 with over 2.9 million shares changing hands.
Credit Suisse upgraded Straits Asia to "outperform" from "neutral" and raised its target price to S$3.10 from S$2.20, citing potential upside versus its peers if it is granted a permit for its "Northern Lease" coal mine in Indonesia in the next three months.
"If Straits Asia can start to mine in the Northern Lease, we expect its volume growth over 2010-13 to surpass its peers at annual (average growth rate) of 19%," said Credit Suisse in a report.
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At 0154 GMT, Straits Asia shares were up 3.3% at $2.50 with over 2.6 million shares changing hands.
OCBC in technical note, says break of key resistance suggests further upside, uptrend channel intact; “Straits Asia could see more upside ahead after rebounding off the 50-DMA and lower boundary of its 2-year uptrend channel recently; this was later followed by a strong bullish break above the $2.37 key resistance on heavy volume yesterday.”
DMG & Partners Securities in a Nov 3 research report says: “Straits Asia Resources (SAR) reported 3Q10 net profit of US$23.2 million (flat q-o-q), which was 15% below our expectations. This was due mainly to higher-than-expected costs from both Jembayan and Sebuku.
Tips around US$80 million ($103.1 million)PAT for FY10; says stock attractively valued, laggard play, has underperformed peers by 30% year-to-date; notes strong volumes at Jembayan mine, while costs, tax have come down.
Straits Asia Resources (AJ1.SG) last flat at $2.13, off $2.16 earlier high, failing to build on initial momentum fuelled by news of Indonesia-based coal miner’s increased coal reserves at its Jembayan mine, says Dow Jones.
While latest coal reserves +21% from end December, Goldman Sachs, which has Sell call with $1.90 target, says increase smaller than expected given substantial rise in drilling activity.
OCBC Investment Research lifts Straits Asia Resources (AJ1.SG) target price to $2.08 from $1.85 to assume higher average selling prices from FY11 on strong demand, says Dow Jones.
But keeps Hold call: “While SAR’s outlook is gradually improving, lingering risks including wet weather as well as potential delays in obtaining the Sebuku permits remain.”
Notes, Indonesia-based coal miner expects to receive permits by end-2010 to carry out work in Sebuku region. Shares +1.0% at $2.06.
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Straits Asia Resources (AJ1.SG) off 0.5% at $2.07 but selling not widespread with volume thin, as prospect of higher output supportive, says Dow Jones.
Indonesia-based coal miner expects to receive regulatory clearance before year end to carry out mining work at new area next to its Sebuku mine.
Shares expected to hold above last week’s $2.00 low.
“We will look to re-rate SAR when clearer signs of improved cost management emerge or a reserves upgrade exceeds our current forecasts,” says CIMB; has Underperform call with $1.95 target. 2Q10 net profit +8.0% on-year at US$23.2 million ($31.7 million) on higher selling prices, lower costs.
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Credit Suisse has upgraded Straits Asia Resources (AJ1.SG) to Neutral from Underperform, says Dow Jones.
“We see Straits Asia Resources offering similar upside to that of its Indonesian coal peers,” says Credit Suisse but adds there’ll be more downside risks to share price, earnings estimates if regulatory approval of permits to carry out work in Northern Leases region of coal miner’s Sebuku mine gets delayed again.
Straits Asia Resources (AJ1.SG) has rebounded after early fall driven by weak 1Q10 earnings; last +0.5% at $2.05 vs $2.01 earlier (-1.5%), as investors nibble on hopes profits in coming quarters will be better, says Dow Jones.
Coal miner Straits Asia Resources has posted a 68% fall in net profit for the first quarter ended March 31, 2010 (1QFY2010) to US$11.2 million ($15.4 million), compared to US$35.5 million in 1QFY2009.
Straits Asia Resources (AJ1.SG) is off 2.8% at $2.05 as investors lie low ahead of 1Q10 results due after market close today, according to Dow Jones.
Straits Asia Resources (AJ1.SG) is up 2.5% at five-session high of $2.09 as company unveils higher-than-expected estimates of coal resources from its two Indonesian mines following latest drilling exercise, reports Dow Jones.
Goldman Sachs has cut Straits Asia Resources’ (AJ1.SG) target price to $1.70 from $1.85 on lower earnings estimates but maintains “sell” rating with stock on conviction sell list, reported Dow Jones Newswires.
The brokerage is cutting FY11, FY12 earnings estimates by 10%, 4% respectively, on lower production assumptions for thermal coal miner’s Sebuku mine and higher costs due to expensive temporary measures for loading coal in Jembayan mine.
Supply chain managers such as Noble (N21.SG) and Olam (O32.SG) look to be better bets than pure miners such as Straits Asia Resources (AJ1.SG) for those seeking exposure to Singapore commodities sector says OCBC Investment Research, according to Dow Jones Newswires.
The broker says commodity markets have stabilised over last two quarters amid improving demand and supply fundamentals, loosening credit markets; “this bodes well for commodity supply chain managers such as Noble and Olam whose earnings are volume driven.”
