Originally Posted by investment STRAITS ASIA RESOURCES, csfb upgraded to OUTPERFORM from Neutral with target price $2.60 (from $1.40) - We are increasing our TP for SAR to S$2.60 based on 08E P/E of 15x on proforma consolidated earnings of the company including proposed mine acquisition (Figure 2). Our valuation methodology is consistent with our approach for Indonesian coal companies. - We have conservatively estimated the likely financial performance of the new mine. As these estimates are preliminary, we have not fully incorporated these in our earnings model for SAR. We have also revised our estimates for Sebuku mine lower based on management feedback. - Possible positive catalysts include stronger coal price and better than expected financial performance of the proposed acquisition. Some risk remains on acquisition completion, integration as wel as reserve life extension of Sebuku mine site. - We believe that SAR.s risk-reward profile has improved post acquisition based on likely reserve life extension and our scenarios on coal pricing and valuation (Figure 3). Raising our rating from Neutral to OUTPERFORM.

 Jul 23 2007
NOTICE OF A SUBSTANTIAL SHAREHOLDER'S INTEREST

Jul 23 2007
NOTICE OF A DIRECTOR'S (INCLUDING A DIRECTOR WHO IS A SUBSTANTIAL SHAREHOLDER) INTEREST AND CHANGE IN INTEREST


confirm fidelity fund buying in .....they must have seen something in this company....let's hope there will be more buying up these coming few days

Business Times
Published July 21, 2007

Brokers' Take

Straits Asia Resources
July 20 close: S$1.52
UBS, July 19

STRUCTURALLY positive on coal price outlook: The UBS commodity team recently upgraded its 2008 and 2009 benchmark coal price projections to US$70/t and US$75/t, respectively, from US$58/t previously, on three structural themes: 1) strong China imports; 2) slowing exports from Indonesia; and 3) resilient demand from India, Japan and Korea. Our bottom-up analysis supports this view.

Upgrade 2008-09E earnings: We increase our coal price assumptions to US$51/t in 2008 and US$55/t in 2009 (both from US$46.3/t) for Straits Asia. The rising coal price and the termination of copper marketing contract should enhance profit margin. We lift 2008/09E EPS from US$0.09/US$0.11 to US$0.11/US$0.15, which represent 94 per cent and 40 per cent year-on- year growth, respectively.

Looking to acquire coal mines: The company raised its 2009 coal production target to 10mt with 6mt from the Sebuku mine and the remaining from acquisition. In our recent meeting, the senior management has re-emphasised its commitment to focus on the coal industry, including an acquisition plan to further boost volume and reserve growth outlook.

Raising price target to S$1.72, reiterate 'buy': We stress the strong earnings growth in 2008-09 despite lowering coal output in 2007 due to severe rainfall in H1. Our rising coal price assumption led us to increase our price target from S$1.55 to S$1.72 (at WACC of 10.1 per cent), which implies 10.6 times 2008E PE.
BUY

target price 1.55 - 1.72 ....