The Zhitong Finance App learned that South Gobi (01878) plummeted by nearly 30% after the results. As of press release, it fell 26.69% to HK$4.32, with a turnover of HK$62.4063 million.

According to the news, South Gobi announced that for the three months ended March 31, 2024, revenue was US$82.69 million, an increase of 33% over the previous year; net profit attributable to the company's equity holders was US$12.252 million, an increase of 55.98% over the previous year. According to the announcement, the company recorded sales volume of 1.1 million tons in the first quarter, compared to 600,000 tons in the same period last year; during the quarter, the average sales price was 79.5 US dollars per ton, a decrease of 24.6 US dollars.

Notably, South Gobi stated in its quarterly results report that the working capital deficit reached US$240.8 million on March 31, 2024, which included a number of major liabilities, which meant payment of US$87.2 million in trade and other payables and US$83.5 million in additional taxes and tax fines. The company may fail to repay all trade and other payables due on time, and as a result, continued delays in payment of certain trade payables and other payables due to suppliers and creditors may result in potential legal action and/or bankruptcy proceedings against the company. Furthermore, there is no guarantee that the company's negotiations with the Mongolian Tax Administration or any appeal against the audit will be successful. If a company cannot continue to operate, it may be forced to seek relief under applicable bankruptcy and insolvency laws.