Citi gave South Gobi (01878-HK) a purchase investment rating. The target price was raised from 130 yuan to 150 yuan, and the company's net profit for 2011-2012 is expected to be 21 million US dollars and 171 million US dollars.

According to Citi, the company has three customer contracts and sold a total of 4.1 million tons of coal in 2011, providing greater visibility into production capacity. The bank believes it can improve bargaining power. The bank continues to believe that based on expansion potential, South Gobi is one of the attractive coking coal stocks.

South Gobi fell 3.45% yesterday to close at 91.05 yuan.