NEW YORK (TheStreet) -- SinoCoking Coal and Coke Chemical (SCOK) was gaining 42.8% to $7.71 Tuesday after announcing that a local Chinese government will supply the company with an extensive gas pipeline distribution network.
The mineral mining company said the Pingdingshan local government will give the company an extensive gas pipeline distribution network and gas storage system. The government will also give SinoCoking more than 7.5 square miles of high-quality coal that will be used to refine the company's coal-to-syngas technology before it starts selling syngas in February 2015.
The new gas pipeline network will connect SinoCoking's four mines in Henan Province to major population and industrial centers. The company will sell the gas to local power, chemical, and transportation companies.
Must Read: Warren Buffett's 25 Favorite Stocks
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 increase in net income, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins."