Skip to main content

NEW YORK (TheStreet) -- Shares of SinoCoking Coal and Coke Chemicals (SCOK) were gaining 9.6% to $3.31 Thursday after the company announced the construction of its second aboveground syngas facility.

The company will build the new syngas production facility near the site of its first facility in Pingdingshan, China. SinoCoking said the second facility is expected to double the company's total syngas output to 50,000 cubic meters an hour from its current rate of 25,000 cubic meters an hour.

SinoCoking expects to complete the construction of the new facility by the end of 2015.

Must Read:Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Recommends

In addition to doubling output, the new facility will "produce gas that can be stored in tanks and sold to customers as Compressed Natural Gas (CNG), thus giving us greater flexibility in terms of storage and delivery," SinoCoking chairman and CEO Jianhua Lv said in a statement.

TheStreet Ratings team rates SINOCOKING COAL & COKE CHEM as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SINOCOKING COAL & COKE CHEM (SCOK) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, SCOK's share price has jumped by 207.89%, exceeding the performance of the broader market during that same time frame. Although SCOK had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 11.0% when compared to the same quarter one year prior, going from -$0.95 million to -$0.84 million.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that SCOK's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has significantly decreased to $0.10 million or 92.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SINOCOKING COAL & COKE CHEM's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: SCOK Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.