China Green Agriculture (CGA) research, news, and more from GeoInvesting

Company description

Wed, 15 Apr 2009 04:00:00 GMT

China Green Agriculture, Inc. produces and distributes humic acid ('HA') based liquid compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., ('TechTeam'). TechTeam produces and sells approximately 15,000 metric tons of over 100 different kinds of fertilizer products per year. All of TechTeam's fertilizer products are certified by the PRC government as green products and suitable for growing Grade AA 'green' foods, also known as green products that contain little or no chemical materials, as stated by the China Green Food Research Center. TechTeam's fertilizers are highly concentrated liquids which require an application of approximately 120 ml per mu per application. Its average end user has approximately four mu of land (one mu = .165 acres).

The leading five provinces by revenue for the three months ended
December 31, 2008 are:

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Shaanxi   (21.6%)
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Shandong  (7.1%) 
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Xinjiang  (5.0%) 
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Fujian    (5.0%)
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Guangdong (4.7%)
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Comments & Business Outlook

Wed, 16 Sep 2009 04:00:00 GMT

FULL YEAR 2009 Guidance Ending June^a

	Full Year 2010 Guidance	Full Year 2009 Reported	Period Change
GAAP Revenue	$46.8 to $49.4 million	$35.2 million	33.0% to 40.3%
GAAP EPS	$0.83 to $0.88	$0.78	6.4% to 12.8%
Fully Diluted Shares	22.7 million	18.5 million	22.7%

Source: PR Newswire (September 15, 2009)

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

GeoBargain Notes

Wed, 16 Sep 2009 04:00:00 GMT

We have removed China Green Agriculture (NYSE Amex:CGA) from the GeoBargain list. It had a nice run from our initial article on April 2, 2009 at $3.38. The Fiscal 2010 EPS growth rate guidance is below the GeoBargain 30% requirement.

Why is EPS growth slowing down in 2010?

Using the funds from its recent fund raising activities, it will take some time for CGA to complete its (R&D) green house facility expansion . This arm of China Green's business (agricultural products) develops products resulting from the testing of its liquid fertilizer. The green house expansion is expected to have its desired financial impact beginning in fiscal 2011. Thus, in the short-term we may see little growth in this portion of the business. China Green's fertilizer business is expected to continue to grow at a healthy pace.
Dilution from recent fund raising activities.

We will continue to track the CGA story due to the tendency of the company to exceed its guidance. Also, investors that can look beyond the upcoming year will notice that estimates indicate EPS growing over 50% in Fiscal 2011 to $1.33. The stock is still selling at discount to its long-term growth rate, which may attract long-term investors.

Research

Tue, 04 Aug 2009 04:00:00 GMT

New article available for China Green Agriculture

Potential Valuation Scenarios

Mon, 03 Aug 2009 04:00:00 GMT

Valuation Scenarios:

Coded as a GeoBargain on April 2, 2009 at a price of $3.38

Data Inputs:

Fiscal Year Ends in June

Date	4/13/09	5/12/09	8/03/09
Price	$4.26	$7.35	$13.19
12 Months Trailing EPS	$0.39	$0.48	$0.57 ^b
Published 2010 Analyst EPS Estimates ^a	$0.71	$0.71	$0.71
Future EPS Growth Rate Based on 2010 Estimates ^a	43%	23%	25.0% ^b
Trailing P/E Ratio	10.92	15.21	23.14
PEG Ratio (P/E divided by growth rate) ^a	0.25	0.66	0.93

^a CGA is not paying a full U.S. tax rate. Therefore, All EPS numbers have been adjusted by the GeoTeam® to reflect an U.S. tax rate of 36%.

^b Growth rate calculated assuming that China Green meets its 2009 earnings per share objectives.

Short-Term Valuation Scenarios

Date	4/13/09	5/12/09	8/03/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$9.75	$12.00	$14.25
Price Based on P/E of 20 on Four Quarters Trailing EPS	$7.80	$9.60	$11.4
Price Based on P/E of 15 on 2010 Analyst EPS Estimates ^b	$10.65	$10.65	$10.65

Long-Term (12 Months Forward) Valuation Scenarios

Date	4/13/09	5/12/09	8/03/09
Price Based on P/E of 25 on 2010 Analyst EPS Estimates ^b	$17.75	$17.75	$17.75
Price Based on P/E of 20 on 2010 Analyst EPS Estimates ^b	$14.20	$14.20	$14.20

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

^b 2010 Analyst estimates and the future EPS growth rate may prove to be conservative in light of the company's third quarter report. The GeoTeam® will provide an update if warranted.

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

GeoBargain Notes

Wed, 27 May 2009 04:00:00 GMT

China Green Agriculture recently attains the 52-week high requirement.

Potential Valuation Scenarios

Tue, 12 May 2009 04:00:00 GMT

Valuation Scenarios:

Data Inputs:

Fiscal Year Ends in June

Date	4/13/09	5/12/09
Price	$4.26	$7.35
12 Months Trailing EPS	$0.39	$0.48
Published 2010 Analyst EPS Estimates ^a	$0.71	$0.71
Future EPS Growth Rate Based on 2010 Estimates ^a	43%	23%
Trailing P/E Ratio	10.92	15.21
PEG Ratio (P/E divided by growth rate) ^a	0.25	0.66

^a CGA is not paying a full U.S. tax rate. Therefore, All EPS numbers have been adjusted by the GeoTeam® to reflect an U.S. tax rate of 36%.

Short-Term Valuation Scenarios

Date	4/13/09	5/12/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$9.75	$12.00
Price Based on P/E of 20 on Four Quarters Trailing EPS	$7.80	$9.60
Price Based on P/E of 15 on 2010 Analyst EPS Estimates ^b	$10.65	$10.65

Long-Term (12 Months Forward) Valuation Scenarios

Date	4/13/09	5/12/09
Price Based on P/E of 25 on 2010 Analyst EPS Estimates ^b	$17.75	$17.75
Price Based on P/E of 20 on 2010 Analyst EPS Estimates ^b	$14.20	$14.20

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

Comments & Business Outlook

Tue, 12 May 2009 04:00:00 GMT

Guidance Report:

"We are well positioned to capitalize on the market opportunities within China's fertilizer and agriculture industry. With a national distribution network, state-of-the-art research and development, automated production, and superior after-sales support, we have successfully built one of the premier organic compound fertilizer producers in China today,' stated Mr. Li. By leveraging our new facility, which will be on line in August of 2009, we feel China Green Agriculture is well positioned to gain further market share in China's green fertilizer market, which will translate into long term revenue and net income growth."

Full Year 2009 Guidance Ending June

	2009 Guidance	2008 Reported	Period Change
Revenue	$31.6 to $32.8 million	$22.6 million	39.82% to 45.13%
*EPS	$0.71 to $0.74	$0.53	33.96% to 39.62%

* CGA does not pay a standard United States tax rate.

Full Year 2009 EPS Guidance Ending June Adjusted for a Standard Tax Rate

	2009 Guidance	2008 Reported	Period Change
*EPS	$0.56 to $0.59	$0.38	47.37% to 55.26%

Financials

Tue, 12 May 2009 04:00:00 GMT

THIRD QUARTER 2009 vs. 2008 FINANCIAL SNAPSHOT ENDED MARCH

	3rd Quarter 2009	3rd Quarter 2008	Period Change
GAAP Revenue	$8.8 million	$4.4 million	99.4%
GAAP EPS	$0.21	$0.09	129.6%
Tax Rate	13.62%	$15.29	-10.92%
Fully Tax-Adjusted EPS	$0.16	$0.07	128.6%
Fully Diluted Shares	18,440,958	13,482,590	36.78%

Source: See Release

FULL YEAR 2008 vs. 2007 FINANCIAL SNAPSHOT ENDED JUNE

	Full Year 2008	Full Year 2007	Period Change
GAAP Revenue	$22.6 million	$15.18 million	48.9%
GAAP EPS	$0.53	$0.64	-17.2%
Tax Rate	8.17%	4.09%	99.8%
Fully Tax-Adjusted EPS	$0.38	$0.44	-13.64%
Fully Diluted Shares	14,596,626	10,770,669	36.4%

Source: See Filing for the period ended June 2008

GeoBargain Notes

Tue, 12 May 2009 04:00:00 GMT

China Green Agriculture Reported outstanding financial results for its 2009 first quarter, easily exceeding company guidance and analyst estimates. As a result the GeoTeam® will be updating China Green Agriculture potential valuation scenarios after the market close.

Research

Tue, 14 Apr 2009 04:00:00 GMT

CGA is the newest addition to the GeoBargain® List and meets Nine of the Ten GeoBargain® requirements. After reviewing the company's press releases and SEC filings it appears that the company is participating in the right industry at the right time.

Understanding CGA:

CGA is a ''green" company with Two principal product lines motivated by a complex natural, organic ingredient called humic acid, an essential constituent for fertile soil, . "When plant or animal matter decomposes, it naturally turns into a form of humic acid-rich material, such as peat, lignite or weathered coal." In plain English the company, through its manufacturing process, extracts humic acid to be used as a fertilizer.

The GeoTeam® was initially impressed that company utilizes its operations to create two product lines from one source, which we feel may be beneficial for branding, cross marketing and efficiency goals.

Fertilizer Products; approximately 80% of sales:

Techteam, the manufacturing division of CGA, produces the fertilizer: The ultimate end user for its fertilizer products are farmers dispersed across 27 of the 28 Chinese provinces. The company does not sell directly to the end user, but uses a network of approximately 500 distributors who place its products among private wholesalers and retailers. CGA currently has approximately 125 products in its fertilizer line and are used by roughly 20 million farmers.

Expansion goals:

Distributors: 540 by the end of 2009.
New Product Initiatives: An additional 21 planned for 2009.

Agricultural Products; approximately 20% of sales:

Jintai is the R&D/testing arm for the company: In the process of testing Techteam’s fertilizers, Jintai produces products for commercial sale: "We purchase the seeds of green vegetables and fruits from the agents who import and apply our fertilizers to those products."

Jintai product categories:

Top-grade flowers distributed through their fertilizer distribution network.
Green vegetables and fruits distributed to a variety of wholesale markets and supermarkets in Xi’an City.
Multicolored seedlings distributed to the seedling centers and planting companies in China.

Although the company will continue to maximize opportunities in both divisions, the driver of future growth will stem from its higher margin fertilizer division.

Reasons CGA has piqued the GeoTeam's interest:

1) Efficiency:

Two products from one source equates to the maximization of the manufacturing/R&D process.
The company extracts humic acid from weathered coal. In simple terms, weathered coal is coal that has lost properties due to environmental impacts such as exposure to sun light. Coal mining companies, who have little use for weathered coal, are eager to sell it. The result is a cheap source of raw material.
The company utilizes an efficient manufacturing process. "Our fully-automated production line is run by a central control system and only needs the input of control technicians."
Starting in August 2009, a new production facility will significantly increase capacity.
As of the its second quarter financials release the company has an enviable pre-tax margin of 43%.

2) Strategic management decision

In touch with end user: "We utilize a multi-tiered product strategy which allows us to tailor our products to different needs and preferences of the different geographic regions across China with different climate and soil conditions which grow different crops with varied needs for fertilizers."
Monitoring of distribution channels: "We developed approximately 80 new distributors during the fiscal year ended June 30, 2008 and terminated approximately 50 distributors based on our evaluation of their performance."
Attempts to diversify:
- Total revenues from exported products currently account for approximately 1% of TechTeam’s sales revenue. "We anticipate that this amount can increase significantly as we have recently contracted with foreign distributors to sell our products." (10K for the year ended June 2008)
- The company is carrying out some projects to develop derivatives from humic acid.
Improve margins: Entering new Geographical areas, with emphasis in the south regions, where the company can sell higher priced products. This will also help to reduce seasonality.

3) Favorable Industry Trends

The Chinese fertilizer market is forecast to grow by over 30% for the foreseeable future.
Plenty of opportunity to solidify and create a brand and gain market share.
- 80% of China's fertilizer manufacturers are small regional firms.
- Organic compound fertilizers in China represent only 27% of total fertilizer consumption.

Chinese government is pro green.

China is the world's largest consumers and producer of fertilizer.

4) Confidence

The company recently disclosed that it will exceed its 2008 make good EPS target of $0.61, issued in conjunction with its reverse merger transaction in December of 2007.

CGA has many of the characteristics that make this a company worth following. It is operating in an industry with above-average growth rates and has a management team that is keenly aware of its target market. To help maximize shareholder value, the company recently engaged HC International, Inc. to help them tell their story to the investment community. The GeoTeam® will provide updates on CGA as information becomes available.

Potential Valuation Scenarios

Wed, 08 Apr 2009 04:00:00 GMT

Valuation Scenarios:

Data Inputs:

Fiscal Year Ends in June

Date	4/13/09
Price	$4.26
12 Months Trailing EPS	$0.39
Published 2010 Analyst EPS Estimates ^a	$0.71
Future EPS Growth Rate Based on 2010 Estimates ^a	43%
Trailing P/E Ratio	10.92
PEG Ratio (P/E divided by growth rate) ^a	0.25

^a CGA is not paying a full U.S. tax rate. Therefore, All EPS numbers have been adjusted by the GeoTeam® to reflect a standard U.S. tax rate of 36%.

Short-Term Valuation Scenarios

Date	4/13/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$9.75
Price Based on P/E of 20 on Four Quarters Trailing EPS	$7.80
Price Based on P/E of 15 on Four Quarters Trailing EPS ^b	$10.65

Long-Term (12 Months Forward) Valuation Scenarios

Date	4/13/09
Price Based on P/E of 25 on 2010 Analyst EPS Estimates ^b	$17.75
Price Based on P/E of 20 on 2010 Analyst EPS Estimates ^b	$14.20

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

Research

Mon, 06 Apr 2009 04:00:00 GMT

GeoNuggets®- Quick Check List Highlighting Undiscovered Opportunities.

China Green Agriculture Inc (AMEX:CGA)

Price: $3.31

Trailing P/E (tax adjusted): 8.49

Fiscal Year Ends In June

**12 Months trailing EPS (tax adjusted ): $0.39

**Published analyst estimates for 2010 (tax adjusted): $0.71

Description: Produces and distributes humic acid ('HA') based liquid compound fertilizer. All of company’s fertilizer products are certified by the PRC government as green products and suitable for growing Grade AA 'green' foods

Reasons for optimism:

1. The company meets nine out of ten GeoBargain categories

	Recent 52-week high The stock has recently attained a new 52-week high.
	30% EPS growth rate Earnings per share (EPS) growth rate should generally be a minimum of 30% and increasing year over year.
	10% revenue growth The company has the ability to grow revenues by at least 10% year over year.
	Strong balance sheet The company has strong a balance sheet.
	15% ROE Return on Equity (ROE) is at least 15%.
	8% pre-tax margins The company is seeking profit margin improvements to ultimately achieve minimum pretax operating margins of 8%.
	Under 50m shares The company should generally have fewer than 50 million shares outstanding, but exceptions to this rule are routinely made.
	High insider ownership There is high insider ownership of this stock.
	Limited institutional ownership There is limited institutional ownership of this stock.
	P/E at least 1/2 of EPS growth rate The company's price-to-earnings ratio (P/E) should be least half of its earnings per share (EPS) growth rate.

2. The company operates in a favorable Industry with favorable growth trends of over 30%.

3. The company has a diversified customer base.

4. Opportunities to capture market share are attractive, as the company holds less than a 5% market share position.

5. The company may be recession resistant. A significant amount of the company’s products are marketed to farmers whose end market is food products for the consumer

Potential valuation scenarios if the company can achieve its EPS growth goals.

Potential value based on fully taxed adjusted trailing EPS

o P/E 15* $0.39= $5.85

o P/E 20* $0.39= $7.80

o P/E 25* $0.39= $9.75

Potential value based on fully taxed adjusted 2010 EPS published analyst estimates

o P/E 10* $0.71 = $7.10

o P/E 15* $0.71 = $10.65

** All EPS numbers have been adjusted by the GeoTeam to reflect a United States standard tax rate.

The GeoTeam will provide a follow-up discussion in the near future.

These scenarios are not intended to be investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

GeoBulletin

Thu, 02 Apr 2009 04:00:00 GMT

CGA has been added to the "GeoBargain®" List.

Comments & Business Outlook

Thu, 12 Feb 2009 05:00:00 GMT

Guidance Report:

'Through our recent capacity upgrade to 15,000 metric tons per year, we expect to continue to grow. We anticipate continued strong performance from our greenhouse R&D center with strong growth toward the end of our fiscal year in fertilizer sales as we move into the peak growing season. With the completion of our new, 40,000 metric ton facility, which will come online in the first quarter of our 2010 fiscal year, we expect to maintain our expansion well into the future.'

Third Quarter 2009 Guidance Ending March

	March 2009 Guidance	March 2008 Reported	Period Change
Revenue	$7.7 to $8.2 million	$4.4 million	75% to 86.36%
*EPS	$0.14 to $0.17	$0.09	55.56% to 88.89%

Third Quarter 2009 EPS Guidance Ending March Adjusted for a Standard Tax Rate

	March 2009 Guidance	March 2008 Reported	Period Change
EPS	$0.11 to $0.13	$0.07	36.36% to 100%

Full Year 2009 Guidance Ending June

	2009 Guidance	2008 Reported	Period Change
Revenue	$31.6 to $32.8 million	$22.6 million	39.82% to 45.13%
*EPS	$0.61 to $0.66	$0.53	15.09% to 24.53%

Full Year 2009 EPS Guidance Ending June Adjusted for a Standard Tax Rate

	2009 Guidance	2008 Reported	Period Change
EPS	$0.47 to $0.51	$0.38	23.68% to 34.21%

* CGA does not pay a standard United States tax rate.

Source: PR Newswire (February 11, 2009)