---

U.S. financial services firm The Street, Inc. has downgraded shares of Andatee China Marine Fuel Services - a company engaged in the production, storage, distribution, trading of blended marine fuel oil for cargo and fishing vessels in China - from a 'hold' to a 'sell' rating in a research report sent to investors on Monday October 21.

In a statement, The Street said: "We rate Andatee China Marine Fuel (AMCF) a Sell. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins."

Highlights from the analysis by The Street are as follows:

- The debt-to-equity ratio is very high at 2.95 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.38, which clearly demonstrates the inability to cover short-term cash needs.

- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the oil, gas & consumable fuels industry and the overall market, Andatee China Marine Fuel's return on equity significantly trails that of both the industry average and the S&P 500.

- The gross profit margin for Andatee China Marine Fuel is currently extremely low, coming in at 5.64%. Regardless of AMCF's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.65% trails the industry average.

- Andatee China Marine Fuel reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, Andatee China Marine Fuel swung to a loss, reporting -$0.11 versus $0.17 in the prior year.

- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 3786.1% when compared to the same quarter one year prior, rising from -$0.08 million to $2.91 million.

Previous financial results

Andatee China Marine Fuel Ser Corp last posted its quarterly earnings results on August 15. The company announced a $3.0 million rise in second quarter net income, from a net loss of $79,414 for the three months ended June 30, 2013 to a net income of $2.9 million for the corresponding period this year.

The increase in net income was mainly attributed to an increase in revenues and a decrease in selling and general and administrative expenses.

For the first six months of this year, Andatee posted a decline in net income of $0.8 million, from a net income of $255,556 for the first half of 2013 to a net loss of $509,596 in 2014. The decrease was mainly the result of a rise in interest expenses, Andatee said.

Revenue increased by $99.8 million, or 131.7%, from $75.8 million in the second quarter of 2013 to $175.5 million in 2014.

For the six months of 2014, revenue was up by $88 million or 68.1%, to $217.5 million, up from $129.4 million during the prior year period. Andatee said the increase was mainly due to higher sales volumes.

Sales volume was up by 148,598 tons, or 177.1%, from 83,896 tonnes in the second quarter of 2013 to 232,494 tonnes this year.

For the first half of 2014, overall sales volume rose by 129,793 tonnes, or 82.7%, to 286,700 tonnes, up from from 156,907 tonnes in 2013.

Share trading

Andatee China Marine Fuel opened at $2.21 per share on Monday. The company has a 52-week low of $0.98 and a 52- week high of $3.65. The stock's 50-day moving average is $2.75 and its 200-day moving average is $2.16. The company's market capitalization is $22.5 million.