SouthGobi Resources: Profit Alert Sparks Bullish Momentum!

Ladies and gentlemen, buckle up! SouthGobi Resources Ltd. just dropped a bombshell that’s got the market buzzing. The company announced a profit alert that’s sending shockwaves through the resource sector. Let’s dive in and see what’s driving this explosive growth and why you need to pay attention!



First things first, the numbers are staggering. SouthGobi is projecting a revenue of US$444.0 million to US$543.0 million for FY2024. That’s a whopping 34% to 64% increase from the previous year’s US$331.5 million. But that’s not all—we’re talking about a net profit attributable to equity holders of between US$83.6 million and US$102.2 million. Compare that to the measly US$0.9 million from the previous year, and you’ll see why investors are jumping for joy!

So, what’s fueling this rocket ship? Three key factors are driving this growth:

1. Increased Sales Volume: SouthGobi has ramped up its sales, and it’s paying off big time.
2. Expanded Product Portfolio: By diversifying its coal products, the company has opened up new revenue streams.
3. Tax Reversal: A US$48.5 million tax reversal following a favorable re-assessment result in the Mongolia tax audit has given the company a massive financial boost.

But hold on to your hats, folks, because there are risks and uncertainties lurking in the shadows. The Mongolian Tax Authority has filed a court proceeding challenging the re-assessment result. If the court rules against SouthGobi, that US$48.5 million could vanish, and the company’s financial outlook could take a nosedive. This legal battle is a wild card, and it’s keeping investors on the edge of their seats.

Now, let’s talk about the stock. With a current market cap of C$163.2 million and an average trading volume of 8,063, SouthGobi is a player you can’t ignore. The technical sentiment consensus rating is a “Sell,” but don’t let that fool you. This is a company on the move, and the profit alert is just the beginning.

So, what’s the bottom line? SouthGobi Resources Ltd. is a stock that’s on fire, and you need to be paying attention. The potential for growth is enormous, but so are the risks. Stay tuned for more updates as this story unfolds, and remember—this is a no-brainer!