SouthGobi Resources (01878) with an "outperform" rating and price target of HK$101.15.
The bank said Ovoot Tolgoi mine is located 45km north of the Chinese border and
customers' trucks can pick up coal directly from the mine site. Connecting railways
to China are complete (Ceke to Linhe) and StanChart expects a significant improvement in
SouthGobi's customer profile and selling price when these begin operations.
Inaddition, it noted that SouthGobi is the most leveraged play, attributable to its
lower margin and higher expenses. Its earnings sensitivity to unit cost and coal output is
twice that of its peers. Sensitivity to the benchmark price is 28% (for every 10% price
change), far ahead of the Chinese peers at 15-19%. (KL)
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01878 SOUTHGOBI
Nominal 
1.990 +0.050 (+2.577%) Others
10/11/2010 14:12
[I-bank focus] StanChart rates SouthGobi (01878) HK$101.15
| Remark: | Real time quote last updated: 17/09/2024 17:59 |
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