Facing Sluggish Sale, Sino Clean Energy Inc. Halted by NASDAQ

By Pucong Han (People’s Daily Online USA)

Sino Clean Energy, Inc. (NYSE: SCEI), a China-based commercial producer and distributor of coal-water slurry fuel, launched NASDAQ in early June 2010.

On May 21, 2012, trading in Sino Clean Energy on the NASDAQ Capital Market was halted and had not resumed. According to NASDAQ, trading will remain halted until Sino Clean Energy, Inc. has fully satisfied NASDAQ’s request for additional information. The last price of Sino Clean Energy in the market was $1.02.

According to the First Quarter of 2012 Financial Results, revenues of Sino Clean Energy decreased 17.6% from $33.8 million in 2011 to $27.8 million in 2012. Net income of Sino Clean Energy in the first quarter of 2012 was $2.8 million, a decrease of 77.0% from $12.1 million in the same quarter of 2011.

Disclosed by the newsroom of Sino Clean Energy, the negative result in the first quarter of 2012 was primarily due to a year-on-year decrease in sales to the Company’s major customer, Haizhong Heating, in Shenyang. Sales to Haizhong Heating decreased by $4.4 million. In addition, the Company’s subsidiary Shaanxi Suo’ang New Energy lost nine customers in 2011. According to the newsroom, the reduction in sales due to this loss of customers was approximately $5.0 million.

“The past quarter was a challenging period for Sino Clean Energy,” said Baowen Ren, chairman and chief executive officer of Sino Clean Energy. “Although we had expected a slowdown in order volume from our largest customer, which is based in Shenyang, our Shenyang facility sales were more sluggish than anticipated.”

“We are encouraged, however, that order volume at Dongguan continued to expand and partly offset the revenue reductions from our other two facilities,” said Ren. As disclosed in the 8-K filing with the SEC on May 18, its Dongguan facility was forced to suspend operations pending the outcome of a lawsuit filed against Yongchang Paper Industry Co Ltd.

Sino Clean Energy is in the process of appealing the court order and intends to defend its contractual rights. In the meantime, Sino Clean Energy is actively seeking alternative production options and may lease additional facilities to serve its customers in the region.

The management team of Sino Clean Energy is actively looking for solutions to stop the sluggish sales. “Our management team and I are carefully reviewing both the successes and shortcomings of the year’s first quarter to find ways to recapture the growth that our experience has shown this company is fully capable of achieving,” said Ren.

(Pucong Han is an intern reporter at People’s Daily Online. He is from Columbia Journalism School. Pucong can be reached at: puconghan@gmail.com)