Banpu

Banpu Plc 

Banpu’s Q4 2011 results were stronger than expected due to wider margins and rising volume. The company is poised to benefit from a coal price uptrend in 2012 given coal volume growth in Indonesia and Australia while its improved product mix will drive earnings. The FY11 earnings account for 110% of consensus and 108% of our forecast. We expect the strong margins to sustain earnings growth. Meanwhile, its power business continues to flounder. We maintain our Outperform call, SOP-based target price and earnings forecasts.