Sinoenergy: As Frustrated as Its Investors

When we last heard from Sinoenergy (SNEN.OB), the company had three CNG filling stations completed. The last of these was in Xuancheng City, which began operations in mid-November.

Today, three months later, we learn that the company still has three such stations. It appears that the recent bad weather has seriously affected the roll-out, with ZERO stations completed over the period. And there is more disturbing news. Even though the company's press release indicates that the current three stations are "operational", two of them are in fact NOT YET APPROVED to sell CNG. So SNEN really only has one CNG filling station that is dispensing gas, while the other two await the okay from the authorities.

So do we have to take the company's forward roll-out plan with a grain of salt? This is what they are currently projecting:

By end of Feb: 6 more stations completed (is this really possible?)
Mar: 10 stations completed
Apr: 11 stations completed
May/Jun: 10 stations completed

If you add these up, the company expects to open 19 stations by Q2, and 40 by Q3. But, according to management, only 50% of them will receive approval by Q3. I'm sure the company is as frustrated as its investors: demand is there, supply is available, and the government is backing clean energy, but it all boils down to the harsh reality of putting bricks and mortar together to form this network, and then tussling with bureaucracy. It is really too slow by half.

My Position: None.