SouthGobi Resources Ltd. 1878.HK

Mongolia coal prices (both thermal and coking), and Mongolian exporters such as SGQ are structurally well placed to capture the beginning phenomenal growth path!
Especially Coal price respond positively to global conflict.
Historical precedent is clear. The 2022 Russia-Ukraine war drove sharp spikes in thermal coal prices (gas-to-coal switching in Europe, EU ban on Russian coal, supply disruptions). More recent Middle East tensions have also lifted thermal coal as a gas alternative, though less dramatically. A full-scale European conflict involving Russia would add further pressure via disrupted Russian exports, higher European demand for substitutes, logistics risks (Black Sea etc.), and broader energy-security buying. Coking coal would also benefit from steel-sector demand and any seaborne supply interruptions. China, as the world’s largest coal consumer and importer, would feel the global price lift even if its own production volumes continue. 
Mongolia’s role for China.
In H1 2026 Mongolia supplied 26.5% of China’s total coal imports (second place) and a much larger share of coking coal imports (often 50%+ in recent periods). August 2026 data showed Mongolia overtaking Russia as the largest monthly supplier (9.81 Mt vs 9.20 Mt). January–August 2026 Mongolian exports reached ~77.8 Mt, all to China and up ~47% year-on-year; full-year 2025 was already ~90 Mt. China is deliberately shifting toward more land-based, nearby supply for cost, blending quality, and security reasons, especially amid domestic production curbs . Official discussions and bilateral talks have repeatedly targeted higher Mongolian volumes, with rail capacity expansions (including Shivee Khuren–Ceke) and longer-term goals exceeding 100 Mt+. 
SGQ 1878.HK specifically.
SouthGobi is a direct beneficiary of this channel. Its Ovoot Tolgoi mine sits 40km to the Shivee Khuren–Ceke border crossing. In H1 2026 Sgq sold 6.6 Mt (up from 5.0 Mt) at higher average realized prices ($57.7/t vs $55.4/t), producing a clear operating-profit turnaround ($18.7 million vs a prior-year loss). Q2 alone was 3.5 Mt at $60.6/t. Full-year 2025 had already reached 11.2 Mt and ~$600 million revenue. A sustained rise in Chinese coking and thermal coal prices will flow straight into higher realized prices and EPS for a producer whose product mix includes premium semi-soft coking coal. Volume is also supported by China’s policy tilt toward Mongolia. Q3 exact figures for SGQ will be published Nov. 15th it appears volume for Q3 will approach 4 Million tonnes prices and margins increased in general by over 15 % over Q2.
Overall, the combination of a conflict-driven coal price lift and China’s documented push for more Mongolian supply is further constructive for Mongolian exporters’ earnings.

https://youtu.be/x7HkwwCD9pw

We can expect some dramatically positive developments in SGQ earnings beginning the next 2 quarters setting a solid growth foundation for the future! I just keep adding!

SGQ earnings Q2 2026!

Detailed Comparison: Official Filings vs. Prior Assumptions
Comparing the official Q2 2026 financial release against earlier assumptions:

1. Realized Price (ASP)
   Prior Assumption: Expectation of a slight single-digit sequential decrease in Average Realized Price (ASP) driven by broader Chinese steel mill margin compression and general thermal coal price pullbacks across Mongolian border ports.
   Official Release Reality: Realized ASP rose 15.2% YoY to US$60.6 per tonne (up from US$52.6/t in Q2 2025).
   Key Driver: The expansion of coal processing facilities (screening, wet washing, and dry coal processing) allowed SGQ to sell higher-value semi-soft coking coal blends, effectively insulating realized unit prices from raw coal benchmark declines.
2. Revenue Scale & Shipping Volume
   Prior Assumption: Model tracked a conservative volume curve of ~3.0M to 3.2M tonnes for the quarter.
   Official Release Reality: Quarterly export volumes reached 3.5 Million Tonnes (up 16.7% YoY from 3.0M tonnes in Q2 2025), driving total quarterly revenue to US$211.7 Million.
   Key Driver: High operational throughput across mine pits and efficient trucking clearance across Ceke enabled SGQ to set strong quarterly shipping run rates even before rail commissioning.
3. Mine Profitability vs. Bottom-Line EPS Gap
   Prior Assumption: Operating profits were projected near flat to slightly positive recovery.
   Official Release Reality:
   Operating Profit: Swung from an operating loss of (US$14.3 Million) in Q2 2025 to a positive +US$14.1 Million Operating Profit in Q2 2026.
   Net Income: Reported a net loss of (US$5.3 Million) [-(US$0.02)/share].
   Key Driver: Core mining operations generated strong operational profit (US$14.1M). The variance down to net profit was driven by legacy non-cash financing charges and deferral fee accruals. This gap demonstrates why the subsequent July 13, 2026 conversion of US$17.0M in PIK debt into 73.5M shares was vital to reducing interest overhead.
   Summary Matrix.

Detailed Comparison: Official Filings vs. Prior Assumptions
Comparing the official Q2 2026 financial release against earlier models and baseline assumptions reveals key operational shifts that explain performance drivers:

1. Realized Price (ASP)
   Prior Assumption: Expectation of a slight single-digit sequential decrease in Average Realized Price (ASP) driven by broader Chinese steel mill margin compression and general thermal coal price pullbacks across Mongolian border ports.
   Official Release Reality: Realized ASP rose 15.2% YoY to US$60.6 per tonne (up from US$52.6/t in Q2 2025).
   Key Driver: The expansion of coal processing facilities (screening, wet washing, and dry coal processing) allowed SGQ to sell higher-value semi-soft coking coal blends, effectively insulating realized unit prices from raw coal benchmark declines.
2. Revenue Scale & Shipping Volume
   Prior Assumption: Model tracked a conservative volume curve of ~3.0M to 3.2M tonnes for the quarter.
   Official Release Reality: Quarterly export volumes reached 3.5 Million Tonnes (up 16.7% YoY from 3.0M tonnes in Q2 2025), driving total quarterly revenue to US$211.7 Million.
   Key Driver: High operational throughput across mine pits and efficient trucking clearance across Ceke enabled SGQ to set strong quarterly shipping run rates even before rail commissioning.
3. Mine Profitability vs. Bottom-Line EPS Gap
   Prior Assumption: Operating profits were projected near flat to slightly positive recovery.
   Official Release Reality:
   Operating Profit: Swung from an operating loss of (US$14.3 Million) in Q2 2025 to a positive +US$14.1 Million Operating Profit in Q2 2026.
   Net Income: Reported a net loss of (US$5.3 Million) [-(US$0.02)/share].
   Key Driver: Core mining operations generated strong operational profit (US$14.1M). The variance down to net profit was driven by legacy non-cash financing charges and deferral fee accruals. This gap demonstrates why the subsequent July 13, 2026 conversion of US$17.0M in PIK debt into 73.5M shares was vital to reducing interest overhead.
   Summary Matrix (iPhone Format)

Earnings report Aug. 14. 2026: https://money.tmx.com/en/quote/SGQ/news/7786037263468498

This June 2026 data from Sxcoal presents exceptionally strong macro tailwinds for SouthGobi Resources (SGQ). Because SGQ's entire business model relies on selling coal directly across the border into China, these specific figures provide a clear look at the current demand and pricing environment.
Here is an analysis of the data and its direct implications for SGQ’s upcoming financial quarters:

1. Surging Volume Demand (MoM & YoY)
   Looking at the first table, China's imports of Coal & Lignite reached 42.78 Million tonnes (Mt) in June 2026.
   Month-over-Month (MoM): This represents a massive 28.6% spike from May 2026 (33.26 Mt).
   Year-over-Year (YoY): This is a 29.5% increase compared to June 2025 (33.04 Mt).
   SGQ Implication: China is aggressively importing coal right now. The first half of the year (Jan–Jun) is up 1.7% overall, but the sudden acceleration in June indicates a sharp tightening of the domestic Chinese coal market. SGQ is operating in an environment of high demand, meaning they should have no trouble clearing their inventory at the Ceke border.
2. Rising Realized Prices
   Volume is only half the story; pricing is where the margin expansion happens. The third table shows the average import price for Coal & Lignite reached US$90.29 per tonne in June 2026.
   MoM Trend: Prices rose 4.6% from last month (US$86.28).
   YoY Trend: Prices are up a staggering 24.1% compared to June of last year (US$72.76).
   SGQ Implication: Higher market prices mean SGQ is capturing better margins on every tonne hauled. Because their semi-soft coking coal prices are generally correlated with broader Chinese import benchmarks, this multi-month upward price trend (visible on the "China's coal import by month" chart) will directly boost their top-line revenue and gross margins in the next quarterly report.
3. Explosive Import Value Growth
   The second table tracks total import value, showing that China spent US$3.86 billion on coal imports in June 2026 alone—a 60.7% increase YoY from June 2025 (US$2.40 billion).
   The fact that value growth (+60.7%) is heavily outpacing volume growth (+29.5%) proves that the price per tonne is doing the heavy lifting.
   The Big Picture for SGQ
   When you look at this data alongside the entry of their new logistics-focused cornerstone shareholder, Od Sar Trading, the timing is highly beneficial.
   China's appetite for imported coal is spiking dramatically, and prices are hitting high levels relative to last year (averaging US\bm{80.35 for the first half of 2026 vs. US}76.94 last year). With macro demand booming and a logistics specialist now heavily incentivized to maximize SGQ's border throughput, the runway is clear for solid operational earnings performance—provided their ongoing negotiations with the Mongolian Plenipotentiary proceed smoothly.

SGQ 2026 coal exports may very likely increase for total of Q2 to 4.5 m/t to total for H1 over 7m/T and total for full year 2026 to OVER 13 Million tonnes of coal! Q2 price per ton increased 6-8% over Q1, actual margins per ton have been increasing! 2-3 Major positive catalysts are still in the pipeline before early October! At 2-3 times earnings I see a ten fold increase in current share price!

🛎 The latest daily CCI index for China's thermal coal import prices in the week ending Jul 3, 2026. > Northern transshipment port thermal coal prices for 5,500 kcal/kg NAR coal transactions were reported at 795 yuan/t, US$ 117 per ton, incl. VAT. highlighting strength in sellers' asking prices and utilities' acceptable bids.