Andatee China Marine Fuel Services
Corporation
(NasdaqGM: AMCF)
Oil & Gas Equipment & Services
Investment Highlights
- Huge Demand from the World’s Largest Fishing Fleet China has amassed the world’s largest fishing fleet with over 300,000 motorized fishing vessels requiring vast amounts of fuel. China’s marine fuel market is expected to more than double from 2008 to 2013 reaching 12 million tonnes or 214,000 barrels per day. AMCF’s proprietary blended fuels are 20% cheaper than regular diesel while maintaining the same fuel efficiency.
- Highly Fragmented Market with Significant Potential for Consolidation AMCF focuses on the marine fuel market for fishing vessels and vessels smaller than 3,000 tons which is highly fragmented with no discernible market leader. This market is characterized by intense price competition, uneven product and service quality, and is served by small fuel trading companies. Being the largest marine fuel supplier to small and medium sized vessels in Northern China, AMCF is well positioned to consolidate the market through strategic acquisitions.
- Strong Competitive Position Driven by Rapidly Expanding Sales Network and Brand Recognition AMCF’s superior product quality over the years has made the Company’s marine blended oil brand “Xing Yuan” well known throughout the industry and has enabled the Company to rapidly expand its sales network and customer base. The Company has proposed expanding with an additional 23 new outlets across the eastern and southern coasts of China.
- Experienced Management Team to Expand Company’s Leadership RoleAMCF’s President and CEO, Mr. An Fengbin, founded Xing Yuan in 2001 as a joint venture with China’s second largest oil & gas producer China Petroleum and Chemical Corporation (known today as Sinopec Corp.) Other members of management are experienced leaders of public companies in the oil & gas sector and maintain close ties to the petrochemical industry.
Financial Highlights
- Revenue grew 18% year-over-year to $29.8 million in 1Q10, up from $25.2 million in the same period last year.
- Gross profit grew 19.3% year-over-year to $3.6 million in 1Q10, up from $3.0 million in the same period last year.
- Income from operations grew 11.7% to $2.2 million in 1Q10, up from $2.0 million in the same period last year.
- Net working capital of $25.4 million with a current ratio of 2.0x.
Value Proposition
Andatee China Marine Fuel Services is the only U.S.-listed company in China’s marine fuel industry, which is expected to double by 2013. Management is executing an aggressive roll-up acquisition strategy in the fragmented market. Fiscal 2009 revenues were $124.2 million, up 57% from the previous year. Net income in 2009 was $6.4 million, a YoY increase of 334%. AMCF’s peers in the marine fuel industry trade at a P/E of 30x, while the stock is trading at 4.5x. If AMCF were valued at the peer average P/E, its stock would trade at $31, a potential return of over 600% from the current price.Overview
Andatee China Marine Fuel (“AMCF” or the “Company”) is engaged in the production, storage, distribution and wholesale sales of alternative blended marine fuel oil for fishing and small cargo vessels. Headquartered in Northern China, the Company operates in Liaoning, Shandong, and Zhejiang provinces including two of the top ports in China (Zhousan and Dalian).
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| Andatee China Marine Fuel Services Corporation (NasdaqGM: AMCF) Oil & Gas Equipment & Services |
- Huge Demand from the World’s Largest Fishing Fleet China has amassed the world’s largest fishing fleet with over 300,000 motorized fishing vessels requiring vast amounts of fuel. China’s marine fuel market is expected to more than double from 2008 to 2013 reaching 12 million tonnes or 214,000 barrels per day. AMCF’s proprietary blended fuels are 20% cheaper than regular diesel while maintaining the same fuel efficiency.
- Highly Fragmented Market with Significant Potential for Consolidation AMCF focuses on the marine fuel market for fishing vessels and vessels smaller than 3,000 tons which is highly fragmented with no discernible market leader. This market is characterized by intense price competition, uneven product and service quality, and is served by small fuel trading companies. Being the largest marine fuel supplier to small and medium sized vessels in Northern China, AMCF is well positioned to consolidate the market through strategic acquisitions.
- Strong Competitive Position Driven by Rapidly Expanding Sales Network and Brand Recognition AMCF’s superior product quality over the years has made the Company’s marine blended oil brand “Xing Yuan” well known throughout the industry and has enabled the Company to rapidly expand its sales network and customer base. The Company has proposed expanding with an additional 23 new outlets across the eastern and southern coasts of China.
- Experienced Management Team to Expand Company’s Leadership RoleAMCF’s President and CEO, Mr. An Fengbin, founded Xing Yuan in 2001 as a joint venture with China’s second largest oil & gas producer China Petroleum and Chemical Corporation (known today as Sinopec Corp.) Other members of management are experienced leaders of public companies in the oil & gas sector and maintain close ties to the petrochemical industry.
- Revenue grew 18% year-over-year to $29.8 million in 1Q10, up from $25.2 million in the same period last year.
- Gross profit grew 19.3% year-over-year to $3.6 million in 1Q10, up from $3.0 million in the same period last year.
- Income from operations grew 11.7% to $2.2 million in 1Q10, up from $2.0 million in the same period last year.
- Net working capital of $25.4 million with a current ratio of 2.0x.
Andatee China Marine Fuel Services is the only U.S.-listed company in China’s marine fuel industry, which is expected to double by 2013. Management is executing an aggressive roll-up acquisition strategy in the fragmented market. Fiscal 2009 revenues were $124.2 million, up 57% from the previous year. Net income in 2009 was $6.4 million, a YoY increase of 334%. AMCF’s peers in the marine fuel industry trade at a P/E of 30x, while the stock is trading at 4.5x. If AMCF were valued at the peer average P/E, its stock would trade at $31, a potential return of over 600% from the current price.
Andatee China Marine Fuel (“AMCF” or the “Company”) is engaged in the production, storage, distribution and wholesale sales of alternative blended marine fuel oil for fishing and small cargo vessels. Headquartered in Northern China, the Company operates in Liaoning, Shandong, and Zhejiang provinces including two of the top ports in China (Zhousan and Dalian).
Get the Andatee company Power Point Presentation Here
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