SinoCoking Coal and Coke Chemical Industries Announces Fiscal 2014 Second Quarter Financial Results

  SinoCoking Coal and Coke Chemical Industries Announces Fiscal 2014 Second
                          Quarter Financial Results

Gained Access to 650,000 Metric Tons Coking Capacity Through Entrustment
Arrangement

PR Newswire

PINGDINGSHAN, China, Feb. 19, 2014

PINGDINGSHAN, China, Feb. 19, 2014 /PRNewswire-FirstCall/ -- SinoCoking Coal
and Coke Chemical Industries, Inc. (Nasdaq: SCOK) (the "Company" or
"SinoCoking"),  a vertically-integrated coal and coke processor, today
announced its financial results for the fiscal 2014 second quarter ended
December 31, 2013.

Fiscal 2014 Second Quarter vs. Fiscal 2013 Second Quarter

  oTotal revenue decreased to $13.2 million, as compared to $21.2 million.
  oGross margin improved to 15.6%, as compared to 13.8%.
  oIncome from operations decreased to $1.5 million, as compared to $2.3
    million.
  oNet loss was $0.1 million or $(0.01) per diluted share, as compared to net
    income of $0.8 million or $0.04 per diluted share.

Fiscal 2014 First Half vs. Fiscal 2013 First Half

  oTotal revenue decreased to $30.7 million, as compared to $38.8 million.
  oGross margin improved to 16.8%, as compared to 12.5%.
  oIncome from operations increased to $4.0 million, as compared to $3.6
    million.
  oNet income decreased to $1.1 million or $0.05 per diluted share, as
    compared to $1.5 million or $0.07 per diluted share.

SinoCoking's Chairman and CEO, Mr. Jianhua Lv, commented, "Our fiscal 2014
second quarter performance was mainly due to a significant decrease in sales
of coal products, which reflected ongoing weak market demand, despite winter
generally being a high coal consumption season."

Mr. Lv added, "Approximately 95% of our revenue came from coke products and
only 5% from coal products, as compared to approximately 51% and 49%,
respectively, in the same period of fiscal 2013. This reflects changes to our
operating strategy in order to adapt to market conditions, as current coal
demand remains very weak due to over capacity of crude steel. Thus, we
temporarily stopped raw coal and washed coal trading. On the other hand, we
have begun selling coke and coke powder to Fangda Special Steel Technology
Co., Ltd. ("Fangda Steel"), one of China's best-known special steel
manufacturers, and we expect sales to Fangda Steel to steadily rise."

Mr. Lv continued. "Although gross profit as compared to the same period of
fiscal 2013 decreased by 30% to $2.1 million, gross margin increased to 15.6%
as we stopped coal trading, which tends to be a low margin business."

Recent Business Developments

On December 18, 2013, we signed a 5-year entrusting agreement with Jiyuan
Tianlong Coking Co., Ltd ("Tianlong") to manage Tianlong's coking equipment.
Founded in 2003, Tianlong is a joint-venture private enterprise engaged in the
production of metallurgical coke.

As per the terms of the agreement, Hongli will utilize Tianlong's equipment,
which has an annual coking capacity of 650,000 metric tons, to produce high
quality metallurgical coke for sales to steel manufacturers such as Fangda
Steel.

Including Tianlong's equipment, the Company has more than doubled its coking
capacity to over 1.1 million metric tons annually as follows:

  oOver 250,000 metric tons through Hongli's Baofeng plant;
  o200,000 metric tons through the Pingdingshan Hongfeng Coal Processing and
    Coking, Ltd. ("Hongfeng"), a plant which the Company leased in early 2013
    and plans to renew once the current lease expires in March 2014; and
  o650,000 metric tons from Tianlong's equipment.

In November 2013, we signed an agreement to supply Fangda Steel with 6,000
metric tons of grade II coke and 3,000 metric tons of clean coke per month,
and 36,000 metric tons of grade II coke and coke powder have been delivered as
of December 31, 2013. Our added coking capacity will enable us meet Fangda
Steel's coke requirements even should they increase significantly.

Mr. Lv noted, "Since current market demand for coke products remains soft and
timing of full recovery remains unknown, we have put the construction of our
new coking plant on hold and have revised our business strategy as follows:

  oExpanded our access to raw coal by signing an agreement with a coal
    producer;
  oIncreased our coke production capacity and product offering by leasing
    third party facilities and equipment with little upfront capital; and
  oIncreased revenue stream by signing the agreement with Fangda Steel.

As a result of these initiatives, we have minimized the risks in and optimized
our use of working capital by proactively using our assets."

Mr. Lv concluded, "We will continue our efforts to seek opportunities and
innovative ways to support our business. We expect the foregoing initiatives
to begin to yield positive results in fiscal 2014, and we look forward to
report our progress in the coming months."

Conference Call

Mr. Lv and Mr. Sam Wu, CFO, will host a conference call on Friday, February
21, 2014 at 9:30 am ET to discuss these results as well as recent corporate
developments.

Interested parties may participate in the call by dialing: (201) 493-6744.
Please call in 10 minutes before the conference is scheduled to begin and ask
for the SinoCoking call. After opening remarks, there will be a question and
answer period. Questions may be asked during the live call, or alternatively,
you may e-mail questions in advance to lcati@equityny.com.

The conference call will also be broadcast live over the Internet. To listen
to the webcast, please go to
http://www.investorcalendar.com/IC/CEPage.asp?ID=172312 or visit the Company's
website www.scokchina.com and then go to Presentations/Events page where the
conference call is posted. Please go to the website at least 15 minutes early
to register, and download and install any necessary audio software. If you
are unable to listen live, the conference call will be archived and can be
accessed for approximately 90 days. We suggest listeners use Microsoft
Internet Explorer as their web browser.

About SinoCoking

SinoCoking and Coke Chemical Industries, Inc., a Florida corporation, is a
vertically-integrated coal and coke processor that uses coal from both its own
mines and that of third-party mines to produce basic and value-added coal
products for steel manufacturers, power generators, and various industrial
users. SinoCoking has been producing metallurgical coke since 2002, and acts
as a key supplier to regional steel producers in central China. SinoCoking
also produces and supplies thermal coal to its customers in central China.
SinoCoking currently owns its assets and conducts its operations through its
subsidiaries, Top Favour Limited and Pingdingshan Hongyuan Energy Science and
Technology Development Co., Ltd., and its affiliated companies, Henan Province
Pingdingshan Hongli Coal & Coke Co., Ltd., Baofeng Coking Factory, Baofeng
Hongchang Coal Co., Ltd., Baofeng Hongguang Environment Protection Electricity
Generating Co., Ltd., Zhonghong Energy Investment Company, Henan Hongyuan Coal
Seam Gas Engineering Technology Co., Ltd., Baofeng Shuangri Coal Mining Co.,
Ltd., and Baofeng Xingsheng Coal Mining Co., Ltd.

For further information about SinoCoking, please refer to our periodic reports
filed with the Securities and Exchange Commission.

Forward Looking Statement

This press release contains forward-looking statements, particularly as
related to, among other things, the business plans of the Company, statements
relating to goals, plans and projections regarding the Company's financial
position and business strategy. The words or phrases "plans", "would be,"
"will allow," "intends to," "may result," "are expected to," "will continue,"
"anticipates," "expects," "estimate," "project," "indicate," "could,"
"potentially," "should," "believe," "think", "considers" or similar
expressions are intended to identify "forward-looking statements." These
forward-looking statements fall within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are
subject to the safe harbor created by these sections. Actual results could
differ materially from those projected in the forward-looking statements as a
result of a number of risks and uncertainties. Such forward-looking statements
are based on current expectations, involve known and unknown risks, a reliance
on third parties for information, transactions or orders that may be
cancelled, and other factors that may cause our actual results, performance or
achievements, or developments in our industry, to differ materially from the
anticipated results, performance or achievements expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially from anticipated results include risks and uncertainties related to
the fluctuation of local, regional, and global economic conditions, the
performance of management and our employees, our ability to obtain financing,
competition, general economic conditions and other factors that are detailed
in our periodic reports and on documents we file from time to time with the
Securities and Exchange Commission. Statements made herein are as of the date
of this press release and should not be relied upon as of any subsequent date.
The Company cautions readers not to place undue reliance on such statements.
The Company does not undertake, and the Company specifically disclaims any
obligation, to update any forward-looking statements to reflect occurrences,
developments, unanticipated events or circumstances after the date of such
statement. Actual results may differ materially from the Company's
expectations and estimates. The Company provides no assurances that any
potential acquisitions will actually be consummated, or if consummated that
such acquisitions will be on terms and conditions anticipated on the date of
this press release, and the Company makes no assurances with regard to any
results of any such acquisitions.

Contact:
SinoCoking                      Investor Relations Counsel:
Sam Wu, Chief Financial Officer The Equity Group Inc.
+ 86-375-2882-999               Lena Cati
sinocoking@sina.com             lcati@equityny.com / (212) 836-9611
www.scokchina.com               www.theequitygroup.com

SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES
CONDESED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
                        For the Three Months Ended   For the Six Months Ended
                        December 31,                 December 31,
                        2013            2012         2013          2012
REVENUE               $ 13,208,253   $  21,238,642 $ 30,684,223  $ 38,800,836
COST OF REVENUE         11,152,697      18,302,685   25,531,366    33,955,623
GROSS PROFIT        2,055,556       2,935,957    5,152,857     4,845,213
OPERATING EXPENSES:
 Selling                39,754          42,176       80,628        85,757
 General and            475,246         581,345      1,078,827     1,208,173
 administrative
     Total operating    515,000         623,521      1,159,455     1,293,930
     expenses
INCOME FROM             1,540,556       2,312,436    3,993,402     3,551,283
OPERATIONS
OTHER INCOME
(EXPENSE)
 Interest income        184,247         208,461      367,340       431,101
 Interest expense       (1,311,812)     (997,461)    (2,090,579)   (2,019,065)
 Other finance          (87,717)        (91,123)     (150,260)     (163,367)
 expense
 Other income, net      -               8,333        -             8,333
 Change in fair value   -               41,317       12            714,847
 of warrants
     Total other        (1,215,282)     (830,473)    (1,873,487)   (1,028,151)
     expense, net
INCOME BEFORE INCOME    325,274         1,481,963    2,119,915     2,523,132
TAXES
PROVISION FOR INCOME    431,932         650,238      1,065,689     1,031,494
TAXES
NET INCOME (LOSS)       (106,658)       831,725      1,054,226     1,491,638
OTHER COMPREHENSIVE
INCOME (LOSS)
 Foreign currency
 translation            756,310         280,321      1,601,757     (8,374)

 adjustment
COMPREHENSIVE INCOME  $ 649,652      $  1,112,046  $ 2,655,983   $ 1,483,264
WEIGHTED AVERAGE
NUMBER

OF COMMON SHARES
 Basic and diluted      21,121,372      21,121,372   21,121,372    21,121,372
EARNINGS (LOSS) PER
SHARE
 Basic and diluted    $ (0.01)       $  0.04       $ 0.05        $ 0.07



SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
                                                    December 31,   June 30,
                                                    2013           2013
CURRENT ASSETS
 Cash                                             $ 87,328       $ 782,018
 Restricted cash                                    -              9,708,000
 Accounts receivable, trade                         13,561,596     9,474,197
 Other receivables and deposits                     5,790,761      4,334,370
 Loans receivable                                   8,032,037      8,032,037
 Inventories                                        3,601,486      3,018,909
 Advances to suppliers                              6,893,705      8,791,837
 Prepaid expenses                                   194,530        -
   Total current assets                             38,161,443     44,141,368
PLANT AND EQUIPMENT, net                            14,867,527     15,269,766
CONSTRUCTION IN PROGRESS                            40,697,177     40,224,821
OTHER ASSETS
 Refundable deposit                                 4,911,000      4,854,000
 Prepayments                                        62,285,817     61,562,890
 Intangible assets, net                             32,587,066     32,244,071
 Long-term investments                              2,920,278      2,886,383
 Other assets                                       114,590        113,260
   Total other assets                               102,818,751    101,660,604
           Total assets                           $ 196,544,898  $ 201,296,559
LIABILITIES AND EQUITY
CURRENT LIABILITIES
 Current maturity of long term loan               $ -            $ 50,158,000
 Accounts payable, trade                            1,658,892      183,504
 Notes payable                                      -              9,708,000
 Other payables and accrued liabilities             2,250,705      2,229,362
 Other payables - related parties                   304,513        140,465
 Acquisition payable                                4,747,300      4,692,200
 Customer deposits                                  129,417        208,815
 Taxes payable                                      1,208,325      1,133,450
   Total current liabilities                        10,299,152     68,453,796
LONG TERM LIABILITIES
 Long term loan                                     50,747,000     -
   Total long term liabilities                      50,747,000     -
           Total liabilities                        61,046,152     68,453,796
COMMITMENTS AND CONTINGENCIES
EQUITY
 Common stock, $0.001 par value, 100,000,000
 shares

 authorized,
   21,121,372 shares issued and outstanding         21,121         21,121
 Additional paid-in capital                         3,592,053      3,592,053
 Statutory reserves                                 3,689,941      3,689,941
 Retained earnings                                  112,359,051    111,304,825
 Accumulated other comprehensive income             11,504,980     9,903,223
   Total SinoCoking Coal and Coke Chemicals
   Industries,                                      131,167,146    128,511,163

   Inc.'s equity
 NONCONTROLLING INTERESTS                           4,331,600      4,331,600
           Total equity                             135,498,746    132,842,763
           Total liabilities and equity           $ 196,544,898  $ 201,296,559



SOURCE SinoCoking Coal and Coke Chemical Industries, Inc.

Website: http://www.scokchina.com
 
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