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.
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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."