8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 21, 2008

Sinoenergy Corporation

(Exact name of registrant as specified in its charter)

Nevada	0-30017	84-1491682
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1603-1604, Tower B Fortune Centre Ao City, Beiyuan Road, Chaoyang District,

Beijing China, 100107

(Address of principal executive offices)

Registrant’s telephone number, including area code: 86-10-84928149

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On May 21, 2008, Sinoenergy Corporation (the "Company") announced its financial results for the three and six month periods ended March 31, 2008 and certain other information. A copy of the Company’s press release announcing these financial results and certain other information is attached hereto as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

Exhibits
99.1	Press Release, dated May 21, 2008

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SINOENERGY CORPORATION
	(Registrant)
Date: May 21, 2008	/s/	Qiong (Laby) Wu
		Qiong (Laby) Wu, Chief Financial Officer

EX-99.1

EXHIBIT 99.1

Sinoenergy Corporation Reports Record Second Quarter 2008 Results

Wednesday May 21, 8:00 am ET

QINGDAO, China, May 21 /Xinhua-PRNewswire-FirstCall/ -- Sinoenergy Corporation (OTC Bulletin Board: SNEN - News), (''Sinoenergy'' or the ''Company''), a manufacturer of compressed natural gas (CNG) vehicle and gas station equipment and a designer, developer and operator of retail CNG filling stations in the People's Republic of China (PRC), today announced its financial results for its second fiscal quarter ended March 31, 2008.

Second Quarter Highlights

·   Net revenue was $7.7 million, an increase of 194.5% year over year

·   Gross profit was $3.7 million, an increase of 259.7% year over year

·   Operating income grew to $2.6 million, an increase of 533.9% year over year

·   Leased out the Company’s current facility in the center of the city of Qingdao

·   Net income increased to $2.8 million, an increase of 712.3%, or $0.07 per diluted share

·   Adjusted net income was $3.6 million, or $0.09 per diluted share

·   Acquired Giant Power International Limited for $8.9 million

·   Acquired Qingdao Shan Yang Tai Chemistry Resources Development Co., Ltd. for $5.33 million

·   Updated planning for the construction and operation of its retail CNG filling stations

·   Opened three new retail CNG filling stations

"In the second fiscal quarter of 2008, we achieved noteworthy financial results highlighted by record revenue and net income. Strong growth was attributed primarily to the continuing expansion of our CNG equipment, vehicle conversion kits, and non-standard pressure container business,” said Mr. Bo Huang, CEO of Sinoenergy Corporation. “We updated our CNG station network development plan and successfully opened three new CNG stations in the city of Wuhan in this quarter. By leasing our current facilities, we earned a significant amount of rental income and completed preparations for relocating our manufacturing business, which will be a significant benefit to Sinoenergy’s long-term development.”

“While we showed strong growth in our reported revenue and operating income compared to the quarter ended March 31, 2007, both were below our expectations,” continued Mr. Huang. “This was due mainly to reporting revenue from rental income as other income versus operating income. We have decided to account for $1.2 million rental income from our facility located in the center of the city of Qingdao as other income, which decreased our reported revenue and operating income and wasn’t considered in our original guidance as we then considered this income as operating for purposes of communicating with our shareholders on our expected activities”

Second Quarter 2008 Results

Total revenue was $7.7 million in the quarter ended March 31, 2008, a 194.5% increase from $2.6 million in the quarter ended March 31, 2007. This increase in revenue was due mainly to an increase in sales of CNG station facilities, which generated revenue of $3.8 million, or 48.5% of revenue in the quarter. Revenue from the vehicle conversion kits business and non-standard pressure container business was approximately $1.9 million and $1.8 million respectively in the three months ended March 31, 2008. The Company’s newly established retail CNG filling station operations generated $0.3 million in revenue in the quarter.

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Gross profit was $3.7 million in the quarter ended March 31, 2008, a 259.7% increase from $1.0 million in the quarter ended March 31, 2007.

Overall gross margin was 48.1% in the quarter, compared to 39.4% in the quarter ended March 31, 2007. This increase was due mainly to the CNG station facilities and construction segment earning a gross margin of 58.0%, mostly from its CNG truck trailer manufacturing, in the quarter ended March 31, 2008 compared to gross margin of 47.0% for this segment in the quarter ended March 31, 2007. Gross margin in the conversion kit business and retail CNG filling station operation was 37.0% for both segments, and gross margin for the non-standard pressure container business was 42.0% in the quarter ended March 31, 2008.

Operating expenses in the second fiscal quarter of 2008 were $1.1 million, up 77.7% from $622,000 in the same period in 2007. This increase was due primarily to general and administrative expenses associated with the vehicle conversion kits segment, which started operations in April 2007.

Operating income was $2.6 million in the quarter ended March 31, 2008, a 533.9% increase from $413,000 in the quarter ended March 31, 2007. Operating margin was 33.9%, compared to 15.7% in the three months ended March 31 2007.

During the quarter ended March 31, 2008, the Company earned $1.2 million in rental income, net of amortized land-use rights, from leasing its facility located in the center of the city of Qingdao. This rental income is classified under other income in the Company’s condensed consolidated financial statement of operations. The Company did not earn any rental income a year earlier.

Interest expense was approximately $0.9 million, up from $55,000 in the first quarter of 2007. This increase was due primarily to interest expenses related to the Company’s senior notes and guaranteed convertible notes, and includes a $756,000 long term non-cash accrual expense related to the Company’s convertible notes.

Net income increased to $2.8 million in the quarter ended March 31, 2008, or $0.09 per basic and $0.07 per diluted share, compared to net income of approximately $350,000 or $0.02 per basic and fully diluted share in the quarter ended March 31, 2007. Net income that is adjusted for the $0.8 million in non-cash interest expenses leads to non-GAAP net income of $3.6 million, or $0.09 per fully diluted share.

Six Months Fiscal Year 2008 Results

Net revenue was $16.5 million in the six months ended March 31, 2008, up 214.8% from $5.3 million in the six months ended March 31, 2007. Gross profit was $7.6 million, 46.2% gross margin, up 179.3% from $2.7 million, 52.0% gross margin, in the six months ended March 31, 2007. Operating income was $5.4 million, 32.4% operating margin, up 281.0% from $1.4 million, 26.8% operating margin, in the six months ended March 31, 2007. Net income was $5.2 million, or $0.14 per diluted share, up 252.1% from $1.47 million, or $0.06 per diluted share, in the six months ended March 31, 2007. Non-GAAP net income, adjusted for non-cash interest expenses, was $6.4 million, or $0.17 per fully diluted share, in the six months ended March 31, 2008.

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Financial Condition

As of March 31, 2008, cash was $4.2 million, up from $3.3 million as of September 30, 2007. The Company had working capital of $1.1 million. Total liabilities, including short term bank loans and other short term credit instruments, were $57.3 million. Stockholders’ equity totaled $41.9 million as of March 31, 2008, compared to $32.7 million as of September 30, 2007. Net cash provided by operating activities was $5.0 million in the six months ended March 31 2008.

Recent Events

In March 2008, the Company engaged Los Angeles-based Grobstein, Horwath & Company, LLP to be the Company’s independent registered public accounting firm.

On March 19 2008, the Company reported that it had three CNG retail filling stations open and operating. 16 stations had completed construction and were waiting for final government approvals and 32 stations were in the planning or construction phase. All of the stations that were not yet open and operating were expected to be operating, subject to government approvals, by the end of calendar 2008.

On March 27 2008, Sinoenergy announced the opening of three new retail CNG filling stations that were selling CNG. This brought the total number of stations opened by the Company to six stations in Central and East China.

On March 31 2008, the Company announced that it had leased its current facility in the center of the city of Qingdao and planned to move its operations to a Sinoenergy-owned facility in an industrial development zone in the city of Qingdao.

In April 2008, the Company received a $17.87 million (RMB 124.76 million) strategic investment from a group of Chinese investors. Strategic investors acquired 24.95% of the Company’s subsidiary Qingdao Sinogas General Machinery, which, after the Company went through reorganization, controls the Company’s manufacturing business segments.

In April 2008, Sinoenergy Corporation reorganized its group structure to separate the Company’s manufacturing business segments from the development and operation of retail CNG natural gas stations.

On May 5 2008, the Company announced that it opened a new retail CNG filling station and completed the construction of another new retail CNG filling station.

Business Outlook

“We feel confident that our CNG station equipment business, conversion kits business, and non-standard pressure container businesses will continue their robust growth in 2008. Our working capital, together with cash flow generated from our operations, will provide us with the funds necessary to continue developing our retail CNG filling station business. Our recent receipt of $17.87 million strategic investment from a group of Chinese investors will further strengthen our capability to cost-effectively enlarge our container business scale as well as develop our CNG filling stations.” said Mr. Huang. “Through the end of April, development of our retail CNG filling station network was in line with the working agenda we published in March 2008. We will continue to expand our retail CNG filling station business and open new stations according to plan throughout the rest of 2008.”

Guidance

Given that the land lease income received from the facility located in the center of the city of Qingdao is being classified as other income, Sinoenergy expects its net revenues in the third quarter ending June 30 of fiscal year 2008 to be from $8 million to $9 million. The Company expects net income in the third quarter ending June 30 of fiscal year 2008 to be from $2.8 million to $3.2 million.

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Use of Non-GAAP Financial Information

GAAP results for the three months and six month periods ended March 31, 2008 include a charge of $756,000 non-cash interest expense related to the Company's 3% guaranteed convertible notes. To supplement the Company's condensed consolidated financial statements presented on a GAAP basis, the Company is providing non-GAAP financial information, adjusted net income and adjusted earnings per share, that excludes the impact of this item on net income. The Company's management believes that these non-GAAP measures will provide investors with a better understanding of how current financial results relate to the Company's historical performance. A reconciliation of adjustments to GAAP results appears in the financial tables at the end of this press release. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP financial information provided by the Company also may differ from non-GAAP information provided by other companies.

About Sinoenergy

Sinoenergy is a manufacturer of compressed natural gas (CNG) vehicle and gas station equipment as well as a designer, developer and operator of retail CNG stations in China. In addition to its CNG related products, the Company also manufactures a wide variety of pressure containers for use in different industries, including the design and manufacture of various types of pressure containers in the petroleum and chemical industries, the metallurgy and electricity generation industries and the food and brewery industries.

Forward-Looking Statements

Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward- looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statements reflect our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

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—FINANCIAL TABLES FOLLOW—

Sinoenergy Corporation and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(In thousands of US Dollars, except per share data)
	Three Months Ended March 31,						Six Months Ended March 31,
	2008			2007			2008			2007
NET REVENUE	$	7,734		$	2,626		$	16,541		$	5,255
COST OF REVENUE		(4,011	)		(1,591	)		(8,907	)		(2,522	)
GROSS PROFIT		3,723			1,035			7,634			2,733
OPERATING EXPENSES
Selling expenses		138			40			294			78
General and administrative expenses		967			582			1,975			1,247
TOTAL OPERATING EXPENSES		1,105			622			2,269			1,325
INCOME (LOSS) FROM OPERATIONS		2,618			413			5,365			1,408
OTHER INCOME (EXPENSES)
Rental income, net of land right amortization of $58		1,185			-			1,185			-
Investment Gain		123			-			103			-
Other, net		3			(3	)		147			35
Interest expense		(720	)		(55	)		(1,280	)		(118	)
Estimated liquidated damages payable under registration rights agreement		(140	)		-			(140	)		-
Other Income (expenses) net		451			(58	)		15			(83	)
INCOME (LOSS) BEFORE INCOME TAXES		3,069			355			5,380			1,325
Income tax		165			-			(45	)		109
INCOME BEFORE MINORITY INTEREST		2,904			355			5,335			1,434
Minority interest		(61	)		(5	)		(173	)		32
NET INCOME		2,843			350			5,162			1,466
Other comprehensive income
Foreign currency translation adjustments		2,768			20			3,733			197
COMPREHENSIVE INCOME	$	5,611		$	370		$	8,895		$	1,663
Earnings Per Share - Basic	$	0.09		$	0.02		$	0.16		$	0.06
Earnings Per Share - Diluted	$	0.07		$	0.02		$	0.14		$	0.06
Weighted Average Shares Outstanding - Basic		31,418,065			17,561,733			31,418,065			22,670,835
Weighted Average Shares Outstanding - Diluted		37,651,980			23,155,165			37,750,441			23,917,039

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Sinoenergy Corporation and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(In thousands of US Dollars, except per share data)
	March 31, 2008		September 30, 2007
	Unaudited		Audited
ASSETS
CURRENT ASSETS
Cash	$	4,203	$	3,322
Restricted cash		-		1,225
Note receivable		132		-
Accounts receivable (net)
-Related party				169
-Third party		12,142		5,827
Other receivables
-Related party		8		332
-Third party		4,307		3,754
-Note subscription receivable (received October 2007)		-		29,840
Deposits and prepayments		2,487		2,795
Deferred expenses		166		58
Inventories		4,631		2,901
TOTAL CURRENT ASSETS	$	28,076	$	50,223
LONG TERM ASSETS
Long term investments		10,979		1,592
Property, plant and equipment (net)		21,681		8,388
Intangible assets		29,901		18,531
Other long-term assets		8,827		9,599
Goodwill		1,172		729
Deferred tax asset		6		4
TOTAL ASSETS	$	100,642	$	89,066
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Short term bank loan		14,247		14,843
Accounts payable
- Related party		-		-
- Third party		2,282		3,166
Notes payable		85		799
Other payables
- Related party		214		3,679
- Third party		7,031		1,502
Accrued expenses		157		319
Warranty accrual		118		76
Advances from customers		2,552		1,035
Estimated liquidated damages payable under
registration rights agreement		140		-
Income taxes payable		171		119
TOTAL CURRENT LIABILITIES	$	26,997	$	25,538
LONGTERM LIABILITIES
12% guaranteed senior notes		15,660		15,622
3% guaranteed senior convertible notes		14,597		13,823
TOTAL LIABILITIES	$	57,254	$	54,983
Minority interests		1,536		1,363
Commitments
STOCKHOLDERS’ EQUITY
Common stock - par value $.001 per share; Issued and Outstanding - 31,418,065 shares at March 31, 2008, 31,418,065 shares at September 30, 2007		31		31
Series A convertible preferred stock - $0.001 Par Value - none at March 31, 2008, none at September 30, 2007		-		-
Additional paid-in capital		22,237		22,000
Capital surplus		20		20
Statutory surplus reserve fund		1,140		1,140
Retained earnings		13,379		8,217
Accumulated other comprehensive income		5,045		1,312
Total stockholders’ equity		41,852		32,720
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	100,642	$	89,066

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Sinoenergy Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(In thousands of US Dollars)
	Three Months			Three Months			Six Months			Six Months
	Ended March 31,			Ended March 31,			Ended March 31,			Ended March 31,
	2008			2007			2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		2,843			350			5,162			1,466
Warrants for service		(28	)		10			18			10
Amortization of options		147			-			219			30
Amortization of notes discount		-			-			28			-
Interest expense for long term notes issued		199			-			784			-
Minority interest		61			5			173			(31	)
Depreciation of property, plant and equipment		179			100			319			202
Amortization of intangible assets		41			70			285			128
Provision for doubtful accounts		(198	)		125			(108	)		219
Changes in operating assets and liabilities:
(Increase) in accounts receivable		(3,611	)		1,275			(6,206	)		877
(Increase) decrease in other receivables, deposits and prepayments		7,332			(7,081	)		7			(4,601	)
Decrease in inventories		(1,968	)		108			(1,730	)		464
(Decrease) increase in accounts payable		(942	)		159			(1,598	)		199
(Decrease) increase in accrued expenses		38			68			(120	)		104
(Decrease) in advances from customers		1,528			1,121			1,517			938
Increase in other payables		(954	)		(288	)		2,066			660
Estimated liquidated damages payable under registration rights agreement		140			-			140			-
(Decrease) in income tax payable		169			-			50			(101	)
Net cash (used in ) provided by operating activities		4,976			(3,978	)		1,006			564
CASH FLOWS FROM INVESTING ACTIVITES
Payment for purchase of property, plant and equipment		(3,196	)		(173	)		(12,842	)		(2,609	)
Payment for purchase of land use right		(5,232	)		-			(11,655	)		(4,059	)
Purchase of minority interest in subsidiaries		(8,364	)		-			(9,387	)		-
Other payments / Receipts for investment activities		2,099			(517	)		(443	)		(383	)
Net cash used in investing activities		(14,693	)		(690	)		(34,327	)		(7,051	)
CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from capital contributions		-			6,235			-			6,235
Proceeds from bank loan		-			718			-			1,089
Cash received from irrurance of convertible notes		-			-			29,840			-
Cash Received for other financing activities		-			(399	)		-			-
Payment on Bank loan		(128	)		-			(596	)		-
Net cash received in financing activities		(128	)		6,554			29,244			7,324
Effect of changes in exchange rate		2,765			19			3,733			24
Net increase (decrease) in cash		(7,080	)		1,905			(344	)		861
Cash at beginning of the period		11,283			588			4,547			1,632
Cash at end of the period		4,203			2,493			4,203			2,493
Supplementary Cash flow disclosure:
Non- cash investing and financing activities:
Increase in additional paid in capital owning to beneficial conversion features recording								2,959
Decrease in 3% guaranteed senior convertible notes owing to beneficial conversion features recording								(2,959	)
Interest Paid		993			55			1,248			118
Income Taxes Paid		-			-			-			-

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SINOENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL DATA
	For the Three Months ended				For the Three Months ended
Adjusted Net income	March 31, 2008				March 31, 2008
($ in thousands except per share data)
Net Income (Loss) Diluted EPS	Net Income		Diluted EPS		Net Income		Diluted EPS
Adjusted Amount		3,563		0.09		350		0.02
Adjustments
Non cash interest expenses (1)		720		0.02		-		-
Amount per consolidated statement of operations		2,843		0.07		350		0.02
(1) Non cash interesting expenses includes non cash interest expense for long-term notes issued of $720,000.

SINOENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL DATA
	For the Six Months ended				For the Six Months ended
Adjusted Net income	March 31, 2008				March 31, 2008
($ in thousands except per share data)
Net Income (Loss) Diluted EPS	Net Income		Diluted EPS		Net Income		Diluted EPS
Adjusted Amount		6,442		0.17		1,466		0.06
Adjustments
Non cash interest expenses (1)		1,280		0.03		-		-
Amount per consolidated statement of operations		5,162		0.14		1,466		0.06
(1) Non cash interesting expenses includes amortization of debt issue costs of $128,000 and non cash interest expense for long-term notes issued of $1,280,000.

For more information, please contact:

Sinoenergy Corporation

  Mr. Anlin Xiong, Vice President

  Tel: +86-10-8493-2965 x860

  Email: anlinxiong@sinoenergycorporation.com

  Web: http://www.sinoenergycorporation.com

CCG Elite Investor Relations Inc.

  Mr. Crocker Coulson, President

  Tel: +1-646-213-1915 (New York)

  Email: crocker.coulson@ccgir.com

  Web: http://www.ccgelite.com

Source: Sinoenergy Corporation

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