* Australia's Whitehaven beats profit forecasts
* Strategy to bypass China pays off
* Coal fetches premiums elsewhere in Asia (Recasts with company strategy, ceo, analyst comments, shares)
By James Regan
SYDNEY, Aug 18 (Reuters) - Australia's Whitehaven Coal Ltd WHC.AX returned to the black and beat profit forecasts on Thursday, buoyed in part by a strategy that sidesteps a reliance on China for its high-quality coal.
Shares in Whitehaven, the best performing stock in the benchmark ASX/S&P 200 index .AXJO this year, have soared six-fold from February lows as it ramps up production and coal prices have started to shake off years of decline. miner reported a net profit of A$20.5 million ($15.8 million) in fiscal 2016, beating forecasts around A$14.6 million, and up from a A$342.7 million loss last year as it wrote off exploration work and refinanced debt.
Unlike larger rivals such as Peabody Energy, Glencore GLEN.L and Anglo American AAL.L , which are curtailing production or getting out of coal completely as China looks to cut its reliance on coal, Whitehaven has focused outside of China.
It is boosting exports to customers in Japan, South Korea and Taiwan, where it charges premiums of up to 10 percent for its higher quality, or cleaner burning, coal.
"All our customers are striving to produce more energy with lower CO2 and our coal is an important ingredient to achieve that," Chief Executive Paul Flynn told Reuters.
The world supply of high energy, low ash and low sulphur coal is constrained, he said. And as markets return to supply and demand balance, Flynn is counting on the relative scarcity of this coal to continue to attract better pricing.
There are more than 700 high efficiency, low emission (HELE) stations operating in Asia that rely on the type of coal Whitehaven is increasingly mining in Australia's Gunnedah Basin, with another 1,150 planned or under construction, industry figures show.
HELE technology is being rolled in Southeast Asia, while North Asia has been on the path for some time, Flynn said.
"We are now seeing Malaysia, Vietnam and the Philippines in particular starting to install the technology and they need cleaner coal to fire that technology."
Whitehaven's coal production jumped 30 percent in the year ended June 30, and it improved sales margins despite average lower selling prices over the year.
The company said in its earnings release that coal prices now appear to have found a bottom and it remains "cautiously optimistic" about future prices.
($1 = 1.2990 Australian dollars)