Andatee China Marine Fuel Services Corporation (NasdaqGM: AMCF)

Oil & Gas Equipment & Services

alue Proposition

AMCF trades at 6.7 P/E (ttm) in an industry that trades on average at a 33.9 P/E (ttm). With fresh capital from the successful IPO in January 2010, the Company can now implement its growth strategy (see page 3) and achieve much higher revenue and earnings growth in 2010. Applying a peer average forward P/E of 14 to the Company’s estimated 2010 earnings, AMCF would trade between $14 and $15.

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).

Get the Andatee company Power Point Presentation Here

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

• Revenues increased 57% to $124.3 million in 2009 as a result of an 89% increase in volume sales coupled with increased sales of higher margin fuels.
• Gross margin more than doubled from 5.3% in 2008 to 11.3% in 2009.
• Earnings of $6.4 million or $1.11 per share in 2009 represent a nearly 334%increase from 2008.
• The Company completed an Initial Public Offering of 3,605,159 shares in January 2010 listing on the NASDAQ Global Market. raising approximately $22.7 million in gross proceeds.