Resources (01878) to HK$103 from HK$130, and maintained its "buy" call.
The house believes SouthGobi offers substantial growth potential from a tripling of its
output to 12Mt in 2015 from 4Mt in 2011, and strong upside potential to improve pricing
power through diversifying its customer base and processed products.
Citi estimated Sunrise to start operation in 3Q. Coal produced from Sunrise has lower
ash and sulphur than the high-ash coal produced from Sunset. SouthGobi expects to obtain
Soumber mining rights by 4Q. Citi forecast the 5Mtpa HCC project to start box-cut in 2013
and reach full capacity in 2016, bringing further volume growth opportunities, higher
margin product, and blending options. (KL)