According to a report released by J.P. Morgan Chase, coal companies in Mongolia lost 3 million US dollars last year (same below), mainly due to the weak coking coal market in the second half of last year and higher interest costs. The stock has fallen 29% since its high on January 13, thanks to improvements in the coking coal market and the company's strong leverage on coking coal prices.

Motong believes that the downside risk of this stock is limited, maintaining the “neutral” rating of Mongolian coking coal companies, and the target price of 4.5 yuan remains unchanged.

According to Motong, Mongolian coal companies expect to produce 12 million tons of raw coal this year, a substantial increase from 8.6 million tons last year. Management believes that coking coal prices have continued to recover this year. The company's sales volume has reached 1.19 million tons in the first two months. The average sales price has improved from 80 yuan per ton in the third quarter of last year to 107-108 yuan per ton.