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 Tracking 1243 U.S. listed China Stocks and Counting...
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 China Green Agriculture (NYSE:CGA)

Monday, May 12, 2014
Comments & Business Outlook

Third Quarter of FY2014 Results

Total net sales were $70,295,981, an increase of $4,423,448, or 6.7%, from $65,872,533 for the three months ended March 31, 2013.

"We are very pleased with our performance of business operation, generating $7.2 million net income in the third quarter ended March 31, 2014," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture." Looking ahead to the fourth quarter of fiscal year 2014, we expect net sales of $60 to $70 million, net income of $6 to $7 million, and EPS of $0.19 to $0.22 based on 31.8 million fully diluted weighted average shares outstanding for the fourth quarter ended June 30, 2014. We are confident in achieving our target for the fourth quarter of fiscal year 2014. "

Fourth Quarter Fiscal Year 2014 and Updated Fiscal Year 2014 Guidance

"For the fourth quarter ending June 30, 2014, management expects net sales of $60 to $70million, net income of $6 to $7 million, and EPS of $0.19 to $0.22 based on 31.8 million fully diluted shares. For the fiscal year ended June 30, 2014, management expects net sales of $220 million to $230 million, net income of $27 million to $28 million, and an EPS of $0.85 to $0.88 based on 31.8 million fully diluted shares.


Friday, May 9, 2014
Joint Venture

XI'AN, China, May 9, 2014 /PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "China Green Agriculture", "we" or the "Company"), a company that mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its wholly-owned subsidiaries in China, today announced that the Company  entered a cooperation agreement (the "Agreement") with Nestle (China) Co., Ltd. ("Nestle China"), to jointly develop a direct sales program (the "Direct Program"), as a mutual effort to supply the Company's fertilizer products to coffee bean farmers in China.

Pursuant to the Agreement, the Company will provide fertilizer products to certified coffee bean farmers in Yunnan province, who sell beans to Nestle (China). In the Direct Program, coffee bean farmers can purchase fertilizer at a better price directly from the Company than an average retail price from the distributors in the fertilizer market. To qualify for the Direct Program, the farmers, who sell coffee bean to Nestle (China), shall be certified by 4C association, the Common Code for the Coffee Community, a certification initiative in the coffee industry.

To purchase fertilizer in the Direct Program, participating farmers will make down payment toward the purchase price, and Nestle (China) will endorse the qualification of the participants for the Company. Pursuant to the Agreement, the Company will roll out the direct sales of its fertilizers to all certified farmers for Nestle (China) throughout China.

In addition to selling fertilizer, in the Direct Program, the Company will also offer training sessions to the farmers to improve their use of fertilizer with best practice, and provide customer support to the farmers during the crop's growth.

"We are excited to work with Nestle (China) under the framework of this agreement," stated Mr. Tao Li, Chairman and Chief Executive Office of China Green Agriculture. "This may provide new engine to the Company's business growth. We are confident that our quality fertilizer will attract more customers and drive our business to new progress in the future."


Monday, February 10, 2014
Comments & Business Outlook

Second Quarter 2014 Results

  • Second Quarter of FY 2014 net sales decreased 2.6% to $40.6 million from $41.7 in the prior year.
  • Second Quarter of FY2014 EPS of $0.12 vs $0.30 in the prior year period.

"While the second quarter of current fiscal year had passed," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture, "looking ahead to the third quarter of fiscal year 2014, we expect net sales of $65 to $70 million, net income of $9 to $10 million, and EPS of $0.28 to $0.31 based on 31.8 million fully diluted shares outstanding for the new quarter. As the sales of fertilizer is expected to ramp up after the spring festival holidays, we are confident in achieving our target in the updated guidance."

Third Quarter Fiscal Year 2014 and Updated Fiscal Year 2014 Guidance

"For the third quarter ending March 31, 2014, management expects net sales of $65 to $70 million, net income of $9 to $10 million, and EPS of $0.28 to $0.31 based on 31.8 million fully diluted shares. For the fiscal year ended June 30, 2014, management expects net sales of $220 million to $250 million, net income of $34 million to $36million, and an EPS of $1.07to $1.13 based on 31.8 million fully diluted shares.


Tuesday, November 12, 2013
Comments & Business Outlook

First Quarter 2014 Financial  Results

  • Total net sales for the three months ended September 30, 2013 were $50,303,347, an increase of $10,790,607, or 27.3%, from$39,512,740 for the three months ended September 30, 2012.
  • EPS (Diluted) was $0.35 vs. last years first quarter of $0.32.

"We are very pleased with our performance of business operation, generating $10.4 million net income in the first quarter endedSeptember 30, 2013," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture. "Looking ahead to the second fiscal quarter ending December 31, 2013, we expect net sales of $43.0 to $47.0 million, net income of $4.0 to $5.0 million, and EPS of $0.13 to $0.16 based on 31.8 million fully diluted shares. For the fiscal year ended June 30, 2014, management expects net sales of $220 million to $250 million, net income of $36 million to $38 million, and an EPS of $1.13 to $1.19 based on 31.8 million fully diluted shares. I believe that with our track-record history and great efforts in our fertilizer business, we are confident in achieving our target for the second quarter of fiscal year 2014, and bring more benefit to our shareholders."

Second Quarter Fiscal Year 2014 and Updated Fiscal Year 2014 Guidance

"For the second quarter ending December 31, 2013, management expects net sales of $43 to $47million, net income of $4 to $5 million, and EPS of $0.13 to $0.16 based on 31.8 million fully diluted shares. For the fiscal year ended June 30, 2014, management expects net sales of $220 million to $250 million, net income of $36 million to $38 million, and an EPS of $1.13 to $1.19 based on 31.8 million fully diluted shares.


Monday, November 4, 2013
Comments & Business Outlook

XI'AN, China, Nov. 3, 2013 /PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "CGA" or the "Company"), a company mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its operating subsidiaries in China, today announced that it launched three new fertilizer products and added 37 new distributors in the first quarter ended September 30, 2013.

Out of the three new fertilizer products, one new product was launched by Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd, the Company's fertilizer operating subsidiary in Shaanxi province ("Jinong") during the first quarter ended September 30, 2013. The total number of Jinong's fertilizer products in use was 122. During the quarter, Jinong added 31 new distributors (total 857 distributors). The other two new fertilizer products were launched by Beijing Gufeng Chemical Products Co., Ltd., the Company's fertilizer operating subsidiary in Beijing ("Gufeng") during the first quarter ended September 30, 2013. The total number of Gufeng's fertilizer products in use was increased to 322. Gufeng added 6 new distributors (total 214 distributors) during the quarter." With the rollout of new products last quarter, we are now offering 444 fertilizer products to farmers via a network of 1071 distributors nationwide," stated Mr. Tao Li, Chairman, President and Chief Executive Officer of the Company. "We look forward to further expanding our distribution footprints with more product choices for clients in the future."


Thursday, September 12, 2013
Comments & Business Outlook

Fourth Quarter 2013 Financial Results

  • FY2013 sales decreased 0.3% to $216.9 million, net income increased 6.7% to $44.8 million with EPS of $1.61
  • EPS (Diluted) was $0.51 vs last years fourth quarter of $0.41 an increase of +23.9%.

"We are very pleased with our consistent performance in fiscal year 2013 where we continued to build shareholder value through focusing on prudent revenue growth, building the long term durability of our business model, sustained net profits and balance sheet discipline. Our performance in 2012 was noteworthy also due to the period during which a special tariff tax is applied as a result of the absence of an "export window" and lower export demand on Nitrogen-Phosphorous elemented compound fertilizer that traditionally supports our Gufeng business segment.

As we exit our recently concluded fiscal year, we look forward to a year without distractions and expense from the recently to-be-resolved shareholder litigation and start our new fiscal year with a particular focus on building our domestic Jinong and Gufeng fertilizer franchise as well as consolidate our Yuxing operations to position our agriculture product revenue for future growth.  Finally, as we enter the new fiscal year, China Green Agriculture is well on its way to achieving the early benchmarks of our ten-year plan," said Mr. Tao Li, Chairman and Chief Executive Officer of China Green Agriculture.

First Quarter Fiscal Year 2014 and Fiscal Year 2014 Guidance

"For the first quarter ending September 30, 2014, management expects net sales of $41.3 to $43.2 million, net income of $10.2 to $10.6 million, and EPS of $0.31 to $0.35 based on 30 million  fully diluted shares. For the fiscal year ended June 30, 2014, management expects net sales of $223.5 million to $231.2 million, net income of $43.5 million to $46.6 million, and an EPS of $1.45 to $1.56 based on 30 million fully diluted shares. Embedded in the forecast for the first quarter 2014 guidance and fiscal year 2014 guidance is an expectation for negligible Gufeng export revenue and challenging planting conditions due to adverse weather affecting the seasonality of our fertilizer business will impact revenue for the first half year," said Mr. Ken Ren, Chief Financial Officer of China Green Agriculture.


Monday, August 5, 2013
Joint Venture

XI'AN, China, Aug. 5, 2013 /PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "China Green Agriculture", "we" or the "Company"), a company that mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its wholly-owned subsidiaries in China, today announced that, one of the Company's wholly-owned subsidiaries organized under the laws of the PRC, Beijing Gufeng Chemical Products Co., Ltd. ("Gufeng"), has signed a cooperation agreement with Anhui Diyuan Biological Technology Co., LTD ("Anhui Diyuan") to produce a new advanced high efficiency fertilizer -- "Tianjuyuan" control release compound fertilizer.

Affiliated with the Chinese Academy of Sciences ("CAS")'s Material Science Research Institute, Anhui Diyuan is committed to developing innovative bioengineering products. Its mainstream products include a fertilizer nutrient control release agent (the "Fertilizer Agent"). Anhui Diyuan owns a number of patents of the Fertilizer Agent.

The objective of this cooperation agreement is to have Gufeng produce the control release compound fertilizer by using the Fertilizer Agent supplied by Anhui Diyuan to improve the control release effectiveness of Gufeng's compound fertilizer. In the agreement, CAS and Anhui Diyuan authorized Gufeng to reference CAS and Anhui Diyuan's name and brand in marketing related to fertilizer products.

"We are happy that Gufeng has entered this cooperation agreement with Anhui Diyuan Biological Technology Co., Ltd," stated Mr. Tao Li, Chairman, President and Chief Executive Officer of the Company. "We expect that the new cooperation will help Gufeng's control release compound fertilizer become more competitive in the control release market."


Tuesday, July 30, 2013
Comments & Business Outlook

XI'AN, China, July 30, 2013 /PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "CGA" or the "Company"), a company mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its wholly-owned subsidiaries in China, today announced that it launched five new fertilizer products and added 32 new distributors in the fourth quarter ended June 30, 2013.

Out of the five new fertilizer products, two new products were launched by Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd, the Company's fertilizer operating subsidiary in Shaanxi province ("Jinong") during the fourth quarter ended June 30, 2013. The total number of Jinong's fertilizer products in use was raised to 134. During the quarter, Jinong added 29 new distributors (total 826 distributors) spreading over 17 provinces in China.

The other three new fertilizer products were launched by Beijing Gufeng Chemical Products Co., Ltd., the Company's fertilizer operating subsidiary in Beijing ("Gufeng") during the fourth quarter ended June 30, 2013. The total number of Gufeng's fertilizer products in use was increased to 320. Gufeng added 10 new distributors (total 208 distributors) during the quarter, with a rough sale volume 1.2 thousand metric tons of the new products.

"With the rollout of new products last quarter, we are now offering 454 fertilizer products to farmers via a network of 1034 distributors nationwide," stated Mr. Tao Li, Chairman, President and Chief Executive Officer of the Company. "We look forward to further expanding our distribution footprints with more product choices for clients in fiscal 2014."


Tuesday, July 9, 2013
Contract Awards

XI'AN, China, July 8, 2013 /PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "China Green Agriculture" or the "Company"), a company that mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its wholly-owned subsidiaries in China, today announced that one of the Company's wholly-owned subsidiaries organized under the laws of the PRC, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. ("Jinong"), signed a five-year cooperation agreement with an agricultural material coop in Zhejiang province, which has been a major distributor with the Company on the sale of Jinong's roots boost product.

Jinong will continuously provide roots boost products such as foliar liquid fertilizer etc. to the Zhejiang dealer in the following five years. The sales of Jinong's roots boost product to the dealer is expected to grow thirty times per annum by the fiscal year of 2017 comparing to that in the fiscal year of 2013 per this agreement.

"We are excited to work with our client under the framework of this new agreement," stated Mr. Tao Li, Chairman and Chief Executive Office of China Green Agriculture. "We are happy our roots boost fertilizers will attract more farming customers inZhejiang province."


Friday, June 21, 2013
Comments & Business Outlook

XI'AN, China, June 21, 2013 /PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "China Green Agriculture" or the "Company"), a company that mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its wholly-owned subsidiaries in China, today announced that one of the Company's wholly-owned subsidiaries organized under the laws of the PRC, Beijing Gufeng Chemical Products Co., Ltd. ("Gufeng"), was engaged by the Ministry of Agriculture ("Ministry") as a corporate participant in the Ministry-administered fertilizer promotion program.

The objective of this program is to promote the use of customized formula fertilizer for farming lands of various nutritional conditions nationwide, and targets to increase the farmers' awareness of opting for eco-friendly fertilizer products.

To be qualified for the program, corporate participants are required to assess if they can meet a number of criteria set by the Ministry in their application. These criteria range from the applicant's capacity of production to their capability to produce certain qualified formula products. In the application process, Gufeng was able to meet the criteria and the Ministry engaged Gufeng for the program.

"We are grateful for being able to participate in the Ministry's fertilizer promotion program," stated Mr. Tao Li, Chairman and Chief Executive Officer of the Company. "The work with the program will increase the use of Gufeng's products among the program's farmer participants."


Monday, May 13, 2013
Comments & Business Outlook

Third Quarter 2013 Financial Results

  • Q3 FY2013 net sales decreased 9.8% to $65.9 million, net income increased 8.4% to $13.4 million with EPS of $0.48, beating previously provided guidance
  • Company Provides the Fourth Quarter Fiscal Year 2013 Guidance: Revenue, Net Income and EPS of at least $57.9 million,$12.5 million and $0.45, respectively
  • Company reaffirms Fiscal Year 2013 Guidance: Revenue, Net Income and EPS of at least $205.2 million, $43.2 million, and $1.57, respectively Basic EPSand Diluted EPS was $0.48 vs last years $$0.46 an increase of 4.6%

"We are very pleased with our outstanding performance of business, generating $13.4 million net income in the third quarter ended March 31, 2013," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture." Looking ahead to the Fourth fiscal quarter of 2013, we expect net sales of $57.9 to $72.9 million, net income of $12.5 to $14.5 million, and EPS of $0.45 to$0.52 based on 27.7 million fully diluted weighted average shares outstanding for the fourth quarter ended June 30, 2013. With our track-record history in our fertilizer business, we are confident in achieving our target for the fourth quarter fiscal year 2013 and actively working on our 10-year growth plan released last year. We believe our growth plan will well serve the interests of our shareholders."

The Fourth Quarter and Fiscal Year 2013 Guidance:

For the fourth quarter ended June 30, 2013, management expects net sales of $57.9 to $72.9 million, net income of $12.5 to $14.5 million, and EPS of $0.45 to $0.52 based on 27.7 million fully diluted weighted average shares outstanding. For the fiscal year ended June 30, 2013, management expects net sales of $205.2 million to $220.7 million, net income of $43.0 million to $45.0 million, and an EPS of $1.55 to $1.62 based on 27.7 million weighted average shares.


Friday, February 8, 2013
Comments & Business Outlook

Second Quarter 2013 Results

  • Total net sales for the three months ended December 31, 2012 were $41.7 million, a decrease of $5.4 million, or 11.4%, from $47.1 million for the three months ended December 31, 2011.
  • Diluted EPS for the three months ended December 31, 2012 were $0.30 vs $0.29 in the prior year.

"We are pleased with our performance of business, generating $11.0 million net income in the second quarter ended December 31, 2012," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture." Looking ahead to the third fiscal quarter of 2013, we expect net sales of $60.0 to $65.0 million, net income of $12.0 to $13.0 million, and EPS of $0.43 to $0.47 based on 27.7 million fully diluted weighted average shares outstanding for the third quarter ended March 31, 2013. With our track-record history and incredible momentum in our fertilizer business, we are confident in achieving our target for the third quarter fiscal year 2013. "

The Third Quarter and Fiscal Year 2013 Guidance:

For the third quarter ended March 31, 2013, management expects net sales of $60.0 to $65.0 million, net income of $12.0 to $13.0 million, and EPS of $0.43 to $0.47 based on 27.7 million fully diluted weighted average shares outstanding. For the fiscal year ended June 30, 2013, management now expects net sales of $205.0 million to $220.0 million, net income of $43.0 million to $45.0 million, and an EPS of $1.55 to $1.62 based on 27.7 million weighted average shares.


Tuesday, November 20, 2012
Comments & Business Outlook

First Quarter 2013 Results

  • Total net sales for the three months ended September 30, 2012 were $ 39.5 million, a decrease of $13.6 million, or 25.6%, from $53.1 million for the three months ended September 30, 2011.
  • For the three month period ended September 30, 2012 diluted net income per share was $0.32 as compared to $0.40 for the same period in 2011.

"Compared to the first fiscal quarter of 2012, we saw a decrease in the sales and net income in the first quarter of 2013, which was largely due to the decrease in Gufeng's net sales and gross profit. For the three months ended September 30, 2012, our revenue exceeded the high end of the previously announced revenue guidance and net income fell short of the corresponding guidance. However, we had approximately $6.4 million in operating cash flow as of September 30, 2012," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture. "We believe that we are well-positioned to generate substantial returns on our investment and are confident in our track towards achieving our ten-year growth plan, enhancing our strong position in the fertilizer industry and finally maximizing our shareholders' and employees' benefits. With the termination of SEC investigation and an aggregate amount of $500,000 stock purchase by the executive, we are committed to grow the company's business and thrive to increase the enterprise value for the shareholders."

Fiscal Year 2013 and the Second Quarter Guidance

For the fiscal year ended June 30, 2013, management expects net sales of $238.0 million to $255.9 million, net income of $46.2 million to $49.2 million, and an EPS of $1.68 to $1.79 based on 27.5 million weighted average shares. For the second quarter ended December 31, 2012, management expects net sales of $47.2 to $50.8 million, net income of $8.0 to $9.0 million, and EPS of $0.29 to $0.33 based on 27.5 million weighted average shares.


Thursday, September 13, 2012
Comments & Business Outlook

Fourth Quarter 2012 Results

  • Net sales for the three months ended June 30, 2012 were $57.3 million, a decrease of $3.0 million, or 4.9%, from $60.3 million for the three months ended June 30, 2011.
  • Net income was $11.1 million, an increase of $1.7 million or 17.9% for the three months ended June 30, 2012, as compared to $9.4 million in the same period last year.
  • EPS for the three months ended June 30, 2012 were $0.41 vs $0.38 in prior year period.

"We are extremely pleased with our strong performance in fiscal year 2012 where we far exceeded our net income guidance with the net income of $42.0 million," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture. "Looking ahead to the first fiscal quarter 2013, we expect net sales of $35.6 to $38.2 million, net income of $9.5 to $10.1 million, and EPS of $0.35 to $0.37 based on 27.5 million weighted average shares. For the fiscal year 2013, we expect net sales of $238.0 million to $255.9 million, net income of $46.2 million to $49.2 million, and an EPS of$1.68 to $1.79 based on 27.5 million weighted average shares. With our track-record history and incredible momentum in our fertilizer business, we are confident in achieving our target for the first fiscal quarter 2013 and actively working on our 10-year growth plan released last year. We believe our growth plan will well serve the interests of our shareholders."

Fiscal Year 2013 Guidance

For the fiscal year ended June 30, 2013, management expects net sales of $238.0 million to $255.9 million, net income of $46.2 million to $49.2 million, and an EPS of $1.68 to $1.79 based on 27.5 million weighted average shares. For the first quarter ending September 30, 2012, management expects net sales of $35.6 to $38.2 million, net income of $9.5 to $10.1 million, and EPS of $0.35 to $0.37 based on 27.5 million weighted average shares.


Monday, July 30, 2012
Comments & Business Outlook

XI'AN, China, July 30, 2012 /PRNewswire-Asia-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "CGA" or the "Company"), mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its wholly-owned subsidiaries in China, today announced that it launched seven new fertilizer products and added 49 new distributors in the fourth quarter ended June 30, 2012.

The seven new fertilizer products, including five broad-spectrum and two powder fertilizer products, were launched by Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd, the Company's fertilizer operating subsidiary in Shaanxi province ("Jinong") during the fourth quarter ended June 30, 2012. During the quarter, Jinong retired 35 fertilizer products because the fertilizer products were either outdated or upgraded fertilizer products had been rolled out. The launch and retirement of fertilizer products brought the total number of Jinong's fertilizer products in use to 126.

The management estimated the seven new products contributed approximately RMB733,180 (approximately $115,256) to Jinong's fertilizer revenues during the quarter. Jinong also added 46 new distributors during the quarter, which brought the total number of Jinong's distributors to 758. These new distributors contributed approximately RMB10,852,450 (approximately $1,706,005) to Jinong's fertilizer revenues during the quarter. During the three months ended June 30, 2012, Jinong's revenue attributable to the new products distributed by its new distributors was RMB 280,600(approximately $44,110).

Beijing Gufeng Chemical Products Co., Ltd., the Company's fertilizer operating subsidiary in Beijing ("Gufeng") added three new distributors during the quarter, which brought the total number of Gufeng's distributors to 185. These three new distributors contributed approximately RMB3,024,235 (approximately $475,410) to Gufeng's fertilizer revenues for the quarter ended June 30, 2012. During the quarter ended June 30, 2012, no revenue of Gufeng was attributable to the new products distributed by its new distributors.

"I am very pleased that these new products reached the market during the quarter ended June 30, 2012. They further demonstrated our long-term commitment to faster product development process and market roll-out of new products. Our R&D capacity and new business development capability constituted the main drivers of the company's growth and will be continuously strengthened in the future to realize our 10-year growth plan. The long-term commitment, based on our market insight, is to secure a leading position for the Company in the fertilizer industry," said Mr. Tao Li, the Company's Chairman and CEO.


Monday, May 7, 2012
Comments & Business Outlook

Third Quarter 2012 Results

  • Our net sales for the three months ended March 31, 2012 were $60.0 million, an increase of $15.4 million, or 34.4%, from $44.7 million for the three months ended March 31, 2011
  • Net income for the three months ended March 31, 2012 was $12.4 million, an increase of $2.9 million, or 30.6%, as compared to $9.5 million for the three months ended March 31, 2011.
  • For the three month period ended March 31, 2012, diluted net income per share was $0.46as compared to $0.35for the same period in 2011, weighted average shares outstanding of 27.0 million and 26.7 million, respectively.

Capital Expenditure

For the third quarter ended March 31, 2012, the capital expenditure stood at approximately $1.9 million.

The Fourth Quarter and Fiscal Year 2012 Guidance:

For the fourth quarter ended June 30, 2012, management expects net sales of $52.5 million to $68.2 million, net income of $7.2 million to $9.8 million, and EPS of $0.27 to $0.36 based on 27.0 million fully diluted weighted average shares outstanding. For the fiscal year ended June 30, 2012, the Company raises the guidance: net sales of $212.7 million to $228.4 million, net income of $38.0 million to $40.6 million and an EPS of $1.41 to $1.50 based on 27.0 million fully diluted weighted average shares outstanding in view of the strong performance of the third fiscal quarter.


Tuesday, May 1, 2012
Comments & Business Outlook

XI'AN, China, May 1, 2012 /PRNewswire-Asia-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "CGA" or the "Company"), a producer and distributor of humic-acid based compound fertilizers, blended fertilizers, organic compound fertilizers, mixed organic-inorganic compound fertilizers, slow-release fertilizers, highly-concentrated water soluble fertilizers and agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings through its wholly-owned subsidiaries in China, today announced that it launched six new fertilizer products and added 18 new distributors in the third quarter ended March 31, 2012.

The six new fertilizer products, including two broad-spectrum fertilizer products launched by Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd, the Company's fertilizer operating subsidiary in Shaanxi province ("Jinong"), one humic-acid based organic-inorganic compound fertilizer product and three compound fertilizer products with different NPK contents launched by Beijing Gufeng Chemical Products Co., Ltd., the Company's fertilizer operating subsidiary in Beijing ("Gufeng") during the third quarter ended March 31, 2012.

Jinong's two new products contributed RMB561, 600 (approximately $88,284) to Jinong's fertilizer revenues during the quarter. Jinong also added 13 new distributors during the quarter, which brought the total number of Jinong's distributors to 712. These new distributors contributed RMB3, 169,860 (approximately $498,302) to Jinong's fertilizer revenues during the quarter.

Gufeng's four new products contributed no revenue to Gufeng's fertilizer revenues as of the end of the third quarter because the fertilizer certificates for these four new fertilizer products were issued beyond the quarter end. Gufeng added five new distributors during the quarter. These five new distributors contributed RMB1,088,839 (approximately $171,165) to Gufeng's fertilizer revenues during the quarter.

"Thanks to our R&D team, we successfully launched these six new fertilizer products during the quarter. These six new fertilizer products had brought our total number of fertilizer products to 471. Meanwhile, we appreciate our marketing team's effort to the ongoing business expansion, a result of which our total number of distributors amounted to 894 during the quarter," said Mr. Tao Li, the Company's Chairman and CEO.


Monday, April 16, 2012
Resolution of Legal Issues

XI'AN, China, April 16, 2012 /PRNewswire-Asia-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "CGA" or the "Company"), a producer and distributor of humic acid-based compound fertilizers, blended fertilizers, organic compound fertilizers, mixed organic-inorganic compound fertilizers, slow-release fertilizers, highly-concentrated water soluble fertilizers and agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings through its wholly-owned subsidiaries in China, today announced that all of the shareholder derivative actions pending against certain of the Company's current and former officers and directors and its auditor have been resolved and dismissed.

On March 30, 2012, the judge of the First Judicial District Court of the State of Nevada in and for Carson City (the "State Court") issued an Order of Final Approval of the Settlement in the three consolidated shareholder derivative actions pending before the State Court and dismissed those actions. The dismissal and judgment was entered on April 5, 2012. As a result of this settlement, all the derivative claims are released. The plaintiffs' legal fees and expenses of $650,000 have been paid by the defendants' insurers.

In connection with the settlement of the derivative claims, on April 5, 2012, the Judge in the United States District Court of Nevada (the "Nevada Federal Court") dismissed the federal derivative action.

The dismissal of the four derivative actions does not involve the class action lawsuit filed in the Nevada Federal Court on October 15, 2010.

"We are pleased with the resolution of the derivative actions and the approval of the settlement. The settlement achieved is a recognition of the continued strengthening of our corporate governance," said Mr. Tao Li, Chairman and Chief Executive Officer of the Company. "The conclusion of the derivative actions is a significant step forward in our efforts to focus on moving the Company forward and maximizing shareholders' value."


Thursday, March 8, 2012
Notable Share Transactions

XI'AN, China, March 8, 2012 /PRNewswire-Asia-FirstCall/ --China Green Agriculture, Inc. (NYSE: CGA) ("CGA" or the "Company"), a producer and distributor of humic acid based compound fertilizers, blended fertilizers, organic compound fertilizers, slow-release fertilizers, highly-concentrated water-soluble fertilizers and mixed organic-inorganic compound fertilizers and agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings through its wholly-owned subsidiaries in China, today announced that Mr. Tao Li, the Company's Chairman and Chief Executive Officer completed the purchase of 63,158 shares of the Company's common stock, par value $0.001 per share, in a private placement, at a purchase price of $4.75 per share, a price at the highest closing price of the Company's common stock over the last 90 trading days, for an aggregate purchase price of $300,000.50, pursuant to and in accordance with the terms and provisions of a Securities Purchase Agreement in a form previously presented to the Board of Directors.

"Given the Company's impressive growth in the compound fertilizer business, diversified product portfolio, nationwide distribution network and increasing demand for our compound fertilizer products, I believe the current stock price does not fully reflect the Company's present business performance and future growth targets. This executive share purchase demonstrates my confidence in the Company's ongoing business growth," said Tao Li.


Thursday, February 9, 2012
Resolution of Legal Issues

XI'AN, China, February 10, 2012 /PRNewswire-Asia-FirstCall/ -- China Green Agriculture, Inc. (NYSE: CGA; "China Green Agriculture" or the "Company"), a producer and distributor of humic acid based compound fertilizers, blended fertilizers, organic compound fertilizers, mixed organic-inorganic compound fertilizers, slow-release fertilizers, highly-concentrated water soluble fertilizers and agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings through its wholly-owned subsidiaries in China, today announced that, on February 1, 2012, the First Judicial District Court of the State of Nevada in and for Carson City (the "Court") preliminarily approved the proposed settlement of all of the four pending derivative actions brought on behalf of China Green Agriculture, Inc.

Subject to the Court's final approval, the proposed settlement will result in a release of all claims and does not provide for the payment of monetary compensation to shareholders. Instead, it provides for the adoption by the Company certain significant corporate governance reforms designed to strengthen the Company's internal controls and for the payment of plaintiffs' attorneys' fees and expenses of $650,000, all to be contributed by the insurers.

The hearing for the final approval of the proposed settlement has been set on March 30, 2012 at 1:30 p.m., pacific time.

The proposed settlement does not involve the pending class action lawsuit filed against the Company and certain of its current and former officers in the United States District Court for the District of Nevada on October 15, 2010.


Wednesday, February 8, 2012
Comments & Business Outlook

Second Quarter 2012 Results

  • Our net sales for the quarter ended December 31, 2011 were $47.1million, an increase of $11.8 million, or 33.4%, from $35.3 million for the three months ended December 31, 2010, largely due to the strong sales of fertilizer products for each subsidiary during this period.
  • Net income for the three months ended December 31, 2011 was $7.7 million, an increase of $1.5 million, or 24.3%, compared to $6.2 million for the three months ended December 31, 2010. The increase was attributable to the increase in gross profit.

"We are very pleased with our outstanding performance of business, generating $7.7 million net income in the second quarter ended December 31, 2011," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture." Looking ahead to the third fiscal quarter of 2012, we expect net sales of $53.0 to $56.4 million, net income of $ 9.7 to $10.7 million, and EPS of $0.36 to $0.40 based on 26.9 million fully diluted weighted average shares outstanding for the third quarter ended March 31, 2012. With our track-record history and incredible momentum in our fertilizer business, we are confident in achieving our target for the third quarter fiscal year 2012 and actively working on our 10-year growth plan released last year. We believe our growth plan will well serve the interests of our shareholders."

The Third Quarter and Fiscal Year 2012 Guidance:

For the third quarter ended March 31, 2012, management expects net sales of $53.0 to $56.4 million, net income of $9.7 to $10.7 million, and EPS of $0.36 to $0.40 based on 26.9 million fully diluted weighted average shares outstanding. For the fiscal year ended June 30, 2012, the Company raises the revenue guidance: net sales of $212.3 to $228.0 million, reaffirms the net income guidance of $37.9 to $40.5 million and an EPS of $1.41 to $1.51 based on 26.9 million fully diluted weighted average shares outstanding in view of the strong performance of the second fiscal quarter.  


Thursday, November 10, 2011
Comments & Business Outlook

First Quarter 2012 Results

Our net sales for the quarter ended September 30, 2011 were $53.1million, an increase of $13.6 million, or 34.5%, from $39.5 million for the three months ended September 30, 2010

For the three month period ended September 30, 2011 diluted net income per share was $0.40 as compared to $0.30 for the same period in 2010, based on diluted weighted average shares outstanding of 26.9 million and 26.0 million, respectively.

"We are pleased with our strong performance in the first quarter where we far exceeded the high end of our previously announced revenue and EPS guidance for the first quarter of fiscal year 2012 " said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture. " With the increasing demand in the fertilizer products and our ongoing commitment on the capacity expansion, we expect the net sales of $40.9 to $44.8 million, net income of $6.9 to $7.5 million, and EPS of $0.26 to $0.28 based on 26.9 million weighted average shares for the second quarter ended December 31, 2011. Our ten-year grown plan, executed by our people in a moderate manner and supported by our patient investors, will enable us to meet farmers' increasing demands in our organic compound fertilizer products, enhance our strong position in the fertilizer industry and finally maximize our shareholders' and employees' profits."

The Second Quarter and Fiscal Year 2012 Guidance:

For the second quarter ended December 31, 2011, management expects net sales of $40.9 to $44.8 million, net income of $6.9 to $7.5 million, and EPS of $0.26 to $0.28 based on 26.9 million weighted average shares. For the fiscal year ended June 30, 2012, the Company raises the guidance: the management estimates the Company could achieve net sales of $211.8 million to $226.7 million, net income of $37.9 million to $40.5 million, and an EPS of $1.41 to $1.51 based on 26.8 million weighted average shares in view of the strong performance of the first fiscal quarter. The 2012 fiscal year guidance provided previously included net sales of $209.6 million to $224.6 million, net income of $37.1 million to $38.0 million, and an EPS of $1.38 to $1.48 based on 26.8 million weighted average shares.


Friday, September 9, 2011
Comments & Business Outlook

Fourth Quarter and Year End 2011 Results

Financial Summary

Fourth Quarter 2011 Results (USD)

 

(three months ended June 30, 2011)

 




 

Q4 FY2011

Q4 FY2010

CHANGE (%)*

 

Net Sales

$60.3 million

$16.2 million

+ 272.0%

 

Gross Profit

$21.1 million

$9.1 million

+131.6%

 

Net Income

$9.4 million

$6.0 million

+57.4%

 

EPS (Diluted)

$0.38

$0.25

+ 52.0%

 

Weighted Average Shares Outstanding(Diluted)

26.8 million

24.6 million

+14.4%

 

* The Company's results for the fourth quarter of Fiscal Year 2010 is not inclusive of the operating results of Beijing Gufeng Chemical Products Co., Ltd. and its wholly-owned subsidiary, Beijing Tianjuyuan Fertilizer Co., Ltd. a company incorporated under the laws of the People's Republic of China, which the Company acquired during July 2010.

 
       


FY 2011 Results (USD)

 

(fiscal year ended June 30, 2011)

 




 

FY2011

FY2010

CHANGE (%)*

 

Net Sales

$179.7 million

$52.1 million

+ 245.0%

 

Gross Profit

$63.6million

$31.0 million

+105.5%

 

Net Income

$32.9million

$21.3 million

+54.6%

 

EPS (Diluted)

$1.27

$0.91

+ 39.9%

 

Weighted Average Shares Outstanding(Basic and Diluted)

25.9 million

23.5 million

+10.5%

 

* The Company's results for the Fiscal Year 2010 is not inclusive of the operating results of Beijing Gufeng Chemical Products Co., Ltd. and its wholly-owned subsidiary, Beijing Tianjuyuan Fertilizer Co., Ltd. a company incorporated under the laws of the People's Republic of China, which the Company acquired during July 2010.

 
       


"We are extremely pleased with our strong performance in fiscal year 2011where we far exceeded the high end of our revenue guidance," said Mr. Li Tao, Chairman and Chief Executive Officer of China Green Agriculture. "We are particularly happy with our progress in integrating and expanding Gufeng which we acquired in July 2010. I believe that we have established a solid track record that we can replicate in the future. Our performance at Gufeng validates our initial vision behind the acquisition and supports our ambitious growth plan which calls for $750 million in net sales by fiscal year 2015. Record sales at Jinong further fuel our growing momentum as we push into 2012. While demand for fertilizer products continues to grow, our strong working capital positions us well to increase market share in an industry that will continue to consolidate."

Fiscal Year 2012 Guidance

For the fiscal year ended June 30, 2012, management expects net sales of $209.6 million to $224.6 million, net income of $37.1 million to $39.8 million, and an EPS of $1.38 to $1.48 based on 26.8 million weighted average shares. For the first quarter ending September 30, 2011, management expects net sales of $46.8 to $50.0 million, net income of $7.1 to $7.9 million, and EPS of $0.26 to $0.29 based on 26.8 million weighted average shares.


Friday, May 13, 2011
Analyst Reports

Rodman and Renshaw on CGA                                  5/13/2011

F3Q11 Results Slightly Above Expectations; Maintain Market Perform

F3Q11 Results

China Green Agriculture (“China Green”, Ticker: CGA, Market Perform) reported F3Q11 results that were mostly above our expectations. Net revenue increased 232.2% YoY and reached $44.7 million, slightly above our estimate of $41.8 million. Gufeng subsidiary continued to be the company’s largest revenue contributor, providing $26.1 million, or 58.5% of the total sales. Jinong sales reached $16.2 million. Gross profit in the quarter came in at $17.0 million, up 110.1% YoY and above our estimate of $14.8 million. Gross margin was 38.2%%, higher than our expectation of 35.5%. G&A expenses were 3.3 million, above our estimate of $3.0 million. Management cited some Gufeng related G&A expenses, additional investor relations fees, and litigation related expenses as the major reasons for this higher than expected expense item. Selling expenses were $1.7 million, in-line with our estimate. Operating income in the quarter was $12.1 million, up 95.3% YoY and above our estimate of $10.1 million. Net income was $9.5 million, up 77.6% YoY, translating to $0.35 per diluted share, above our estimate of $8.1 million or $0.30 per diluted share. Net margin in the quarter was 21.2%, compared to our estimate of 19.3%. The company also reported that, as of March 31, 2011, it had $66.9 million of cash and cash equivalents.

Adjusting estimates and maintaining Market Perform rating

We have tweaked our financial model to reflect the F3Q11 performance. For F4Q11, we now expect the company will realize $43.0 million of revenue, $8.7 million of net income, and $0.32 of EPS. For full year F2011, we estimate total revenue of $162.5 million, net income of $32.2 million, and $1.21 EPS. Despite the stronger than expected F3Q11 results, we continue to take a conservative approach with regard to our view on the share price outlook. In light of the current market sentiment towards small Chinese RTO companies, we believe financial fundamentals are almost taking a backseat to investor sentiment and companies’ perceived corporate governance quality. In this regard, we believe China Green is still facing a number of uncertainties such as its pending litigation and auditor change. Thus we continue to take a wait and see approach and maintain our Market Perform/Speculative Risk rating on the shares of China Green.

Risks

Major risks include: 1) The seasonal variations and adverse weather conditions could impact agricultural production, which in turn could result in reduced demand for fertilizer products; 2) Delay or halt in the launch of new products or addition of new distributors could lead to stagnation or decline in revenue growth; 3) Highly competitive industry with numerous national and local players; 4) Decline in margins as the company ventures into more product areas; 5) Litigation risk; and 6) Political, regulatory, and economical risks related to operating in China.


Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Wednesday, May 11, 2011
Comments & Business Outlook

Third Quarter Results:

  • Q3 FY 2011 sales increased 232.2% to $44.7 million, net income increased 77.6% to $9.5 million with EPS of $0.37*.
  • Q3 FY 2011 gross margin decreased to 38.2% from 60.3% Y-O-Y; operating margin decreased to 27.2% from 46.2% Y-O-Y*.
  • Q3 net income totaled $9.5 million, up 77.6% from $5.3 million in Q3 FY2010.
  • Company reaffirms the revised FY 2011 guidance: revenue, net income and EPS of at least $155.0 million, $31.5 million, and $1.17, respectively.
  • Management to host earnings conference call at 8:30am ET, Wednesday, May 11, 2011

GeoTeam® Note: 2011 First quarter analyst EPS estimates were $0.30.

China Green Agriculture's revenue of $44.7 million for its third quarter of fiscal year 2011 exceeded the high end of its previously announced revenue guidance for the quarter of $41.8 million to $43.6 million. Net income of $9.5 million or $0.37 per share also exceeded the Company's net income guidance for the quarter of $8.2 million to $8.6 million, or $0.31 to $0.32 per share.

For the fiscal year ending June 30, 2011, management reaffirmed its revised

  • revenue guidance of a range of $155.0 million to $165.0 million
  • net income guidance to a range of $31.5 million to $33.2 million
  • EPS guidance to a range of $1.17 to $1.24 based on 26.9 million weighted average shares.

Friday, April 15, 2011
Comments & Business Outlook

XI'AN, China, April 15, 2011 /PRNewswire-Asia/ -- China Green Agriculture, Inc. (NYSE: CGA; "China Green Agriculture" or the "Company"), a producer and distributor of humic acid ("HA") based compound fertilizers, blended fertilizers, organic compound fertilizers, slow-release fertilizers, concentrated water-soluble fertilizers and mixed organic-inorganic compound fertilizers through its wholly owned subsidiaries in China, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. ("Jinong") and Beijing Gufeng Chemical Products Co., Ltd. ("Gufeng"), today announced that Gufeng signed a fertilizer export contract (the "Agreement") with Beijing Baofengnian Agricultural Material Co. Ltd ("Baofengnian") on April 11, 2011.

According to the Agreement, Gufeng will export 30,000 Metric Tons of compound fertilizer products through Baofengnian, representing 6% of Gufeng's recently expanded annual fertilizer production capacity. Gufeng will ship all the compound fertilizers required by the Agreement from its Beijing factory by June 15, 2011.

Baofengnian is a Beijing-based wholesaler and distributor of agricultural basic materials including fertilizers, pesticides and crop seeds. Baofengnian has been a distributor of various Gufeng compound fertilizers over years in the domestic market, particularly in northern China. The Agreement is the first export contract between the two parties.

"We are very happy to expand our standing relationship with Baofengnian to the export segment" commented Mr. Tao Li, Chairman and CEO of China Green Agriculture. "This contract is important on several fronts. Firstly, it will further utilize Gufeng's recently expanded production capacity; secondly, it will contribute to our fiscal year 2011 results; and finally, it builds on our recently announced export contract with SinoAgri for 165,000 Metric Tons and reinforces the growing importance of exports in our revenues. We will continue to work with our business partners to grow exports which are an integral part of the Company's comprehensive development strategy to achieve the $3 billion annual revenue goal under our recently announced ten-year growth plan."


Wednesday, April 13, 2011
Comments & Business Outlook

XI'AN, China, April 13, 2011 /PRNewswire-Asia-FirstCall/ -- China Green Agriculture, Inc. today announced that Gufeng began shipping the first 20,000 Metric Ton ("MT") batch of finished compound fertilizers to India under the 165,000 MT export contract (the "Agreement") it signed in December 2010 with SinoAgri Holding Company Limited ("SinoAgri"). As one of the largest domestic fertilizer traders in China, SinoAgri has been Gufeng's long-term business partner for fertilizer exports.

According to the Agreement, Gufeng will export 165,000 MTs of binary acid compound fertilizer products to India during calendar year 2011. This represents 29.7% of the Company's recently expanded annual fertilizer production capacity. StartingApril 1, 2011, Gufeng has been shipping 20,000 MTs of finished compound fertilizer from its Beijing factory for container loading in Port Qinhuangdao and Tianjin, respectively 150 miles and 100 miles away.

"With the launch of Gufeng's new 200,000 MT production line last week which brought Gufeng's annual production capacity to 500,000 MTs, we have the ability to produce the 165,000 MTs under this Agreement and expect that 50,000 MTs will be shipped by June 30th, the end of our 2011 fiscal year," commented Mr. Tao Li, Chairman and CEO of China Green Agriculture. "While we will continue to work with our long-term export partners, we will also pursue opportunities to develop new export clients in the future," added Chairman Li, "Export growth is critical to our ability to achieve our $3 billion annual revenue goal under our recently announced ten-year growth plan."


Wednesday, March 2, 2011
Comments & Business Outlook

XI'AN, China, March 2, 2011 /PRNewswire-Asia-FirstCall/ -- China Green Agriculture, Inc. today announced that on February 28, the Company's Board of Directors approved the Company's ten-year corporate growth plan (the "Plan") for the period from 2011 to 2020.

The Plan underpins the Company's goal of becoming a leader in the overall fertilizer industry in China by 2020.  It is the result of one year of intensive research and analysis covering market research, peer analysis, government information and projections, and evolved over many internal review meetings involving all managers responsible for key parts of the business.

After careful review, management and the Board of Directors concluded that the Company should work towards the following revenue targets over the next ten years:

1. at least $150 million for fiscal year 2011;

2. at least $750 million for fiscal year 2015; and

3. at least $3 billion for fiscal year 2020.


Tuesday, February 15, 2011
Liquidity Requirements
We intend to use some remaining net proceeds from the Public Offerings (approximately $8.5 million) to acquire new businesses, upgrade production lines and complete the greenhouse facilities for agriculture products of Yuxing located on 88-acres of land in Hu County, 18 kilometers southeast of Xi’an city. We believe that we have sufficient cash on hand and positive projected cash flow from operations to support our business growth for the next twelve months to the extent we do not have further significant acquisitions or expansions. Notwithstanding the foregoing, we may seek additional financing for expansion purposes, which may include additional equity financings. There can be no assurance that any additional financing will be available on acceptable terms, if at all. Any equity financing may result in dilution to existing stockholders.

Thursday, February 10, 2011
Analyst Reports

Rodman & Rodman on CGA                                   2/10/2011

Mixed F2Q11 Results; Maintain Market Perform 

Mixed F2Q11 results 

China Green Agriculture (“China Green”, Ticker: CGA, Market Perform) reported mixed F2Q11 results. Net revenue for the quarter reached $35.3 million, above the company’s previous guidance of $33.1-33.3 million as well as both Street consensus and our estimates of $33.3 million. The company’s Gufeng subsidiary was once again a major revenue contributor with $18.9 million, or 53.5% of the total sales. The Jinong unit contributed $14.3 million to the overall top line. Gross margin for the quarter was 34.9%. While it represented a significant drop from a year ago, largely due to a higher sales component of lower-margined granular fertilizer products, mostly from Gufeng, it was actually slightly better than our previous estimate of 33.2%. G&A expenses were 2.9 million, significantly above our estimate of $1.8 million. Management cited escalating litigation related expenses and higher stock based compensation as the major reasons for this higher than expected expense item. Selling expenses were $1.6 million, higher than our estimate of $1.2 million. F2Q11 operating income was $7.9 million, slightly below our estimate of $8.1 million. Net income was $6.2 million, translating to EPS of $0.24, below both respective Street consensus of $7.4 million and $0.28 and our Street-low estimates of $6.8 million and $0.26. They were also below the company’s own guidance of $7.76-7.86 million net income and $0.29 EPS.

Updated FY2011 guidance 

The company updated its FY2011 guidance, with total revenue between $155.0 and $165.0 million, net income between $31.5 and $33.2 million, and EPS between $1.17 and $1.24 (based on 26.9 million weighted average shares). For F3Q11, the company now expects to realize $41.8-43.6 million of revenue, $8.2-8.6 million of net income, and $0.31-0.32 of EPS (based on 26.9 million weighted average shares).

Adjusting estimates and maintain Market Perform rating 

In light of the F2Q11 performance and the company’s updated guidance, we have tweaked our financial model. For F3Q11, we now expect the company will realize $41.8 million of revenue, $8.1 million of net income, and $0.30 of EPS. For full year F2011, we estimate total revenue of $159.6 million, net income of $30.8 million, and $1.16 EPS. We are maintaining our Market Perform/Speculative Risk rating on the shares of China Green. We believe while the company could be a long term growth story, in the short term there are a number of uncertainties, such as its continued integration of the Gufeng unit and its potential engagement of a Big 4 auditor, that are keeping us on the sideline.

Risks 

Major risks include: 1) The seasonal variations and adverse weather conditions could impact agricultural production, which in turn could result in reduced demand for fertilizer products; 2) Delay or halt in the launch of new products or addition of new distributors could lead to stagnation or decline in revenue growth; 3) Highly competitive industry with numerous national and local players; 4) Decline in margins as the company ventures into more product areas; 5) Litigation risk; and 6) Political, regulatory, and economical risks related to operating in China.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Wednesday, February 9, 2011
Comments & Business Outlook
CONSOLIDATED STATEMENTS OF  INCOME AND COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009
(UNAUDITED)

   
For the Three Months Ended December 31,
   
For the Six Months Ended December 31,
 
   
2010
   
2009
   
2010
   
2009
 
Sales
                       
Jinong
  $ 14,251,229     $ 9,110,797     $ 30,822,522     $ 19,289,446  
Gufeng
    18,875,897       -       40,676,931       -  
Jintai
    2,184,612       2,061,319       3,295,206       3,159,490  
Net sales
    35,311,738     $ 11,172,116       74,794,659       22,448,936  
Cost of goods sold
                               
Jinong
    6,791,183       3,267,122       13,644,970       7,002,486  
Gufeng
    14,998,764       -       33,899,277       -  
Jintai
    1,188,965       1,135,221       1,778,259       1,717,718  
Cost of goods sold
    22,978,912       4,402,343       49,322,506       8,720,204  
Gross profit
    12,332,826       6,769,773       25,472,153       13,728,732  
Operating expenses
                               
Selling expenses
    1,589,006       520,096       3,004,991       735,767  
General and administrative expenses
    2,871,064       814,551       4,969,251       1,348,730  
Total operating expenses
    4,460,070       1,334,647       7,974,242       2,084,497  
Income from operations
    7,872,756       5,435,126       17,497,911       11,644,235  
Other income (expense)
                               
Other income (expense)
    2,084       (413 )     (9,859 )     553  
Interest income
    87,925       52,656       152,916       81,922  
Interest expense
    (117,852 )     (44,335 )     (294,527 )     (105,644 )
Total other income (expense)
    (27,843 )     7,908       (151,470 )     (23,169 )
Income before income taxes
    7,844,913       5,443,034       17,346,441       11,621,066  
Provision for income taxes
    1,615,421       722,041       3,329,164       1,652,798  
Net income
    6,229,492       4,720,993       14,017,277       9,968,268  
Other comprehensive income
                               
Foreign currency translation gain/(loss)
   
2,458,260
      31,284      
3,752,307
      6,354  
Comprehensive income
  $
8,687,752
    $ 4,752,277     $
17,769,584
    $ 9,974,622  
                                 
Basic weighted average shares outstanding
    25,937,866       23,266,097       25,930,424       22,450,562  
Basic net earnings per share
  $ 0.24     $ 0.20     $ 0.54     $ 0.44  
Diluted weighted average shares outstanding
    26,393,072       23,286,653       26,383,123       22,471,118  
Diluted net earnings per share
    0.24       0.20       0.53       0.44  

   
2010
   
2009
 
Cash flows from operating activities
           
Net income
  $ 14,017,277     $ 9,968,268  
Adjustments to reconcile net income to net cash provided by operating activities
               
                 
Issuance of equity for compensation
    1,542,337       -  
Depreciation
    1,715,800       986,663  
Amortization
    480,953       150,318  
                 
Decrease / (Increase) in current assets, net of effects from acquisitions:
               
Accounts receivable
    1,721,402       (2,797,999 )
Other receivables
    (662,984 )     (321 )
Inventories
    (85,162 )     (2,719,957 )
Advances to suppliers
    (19,956,392 )     (142,513 )
Other assets
    45,480       (35,952 )
(Decrease) / Increase in current liabilities, net of effects from acquisitions:
               
Accounts payable
    (3,263,212 )     (395,573 )
Unearned revenue
    (244,631 )     141,422  
Tax payables
    3,029,953       391,854  
Other payables and accrued expenses
    2,862,260       436,338  
Net cash provided by operating activities
    1,203,081       5,982,548

GeoTeam® Note: Analyst estimate for the 2010 quarter was $0.28. Non-GAAP 2010 secod qurarter EPS was $0.29.
 

"We are pleased with our strong performance in the second quarter and with the continuing development, integration and expansion of the company as a whole.  Gufeng added $18.9 million to our net sales while Jinong continued to turn in a solid performance with a 56.4% sales increase compared to the second quarter of fiscal 2010, allowing us to exceed our revenue guidance.  While we fell short of our guidance on net income and EPS, this was mostly due to litigation related expenses and stock compensation charge triggered by our strong performance in fiscal 2010. Without these expenses, we almost would have met our net income range provided in the guidance," stated Mr. Tao Li, Chairman, President and Chief Executive Officer of China Green Agriculture.

"During this quarter we made substantial progress in many key areas of our business. With the integration process solidly on track, Gufeng's sales doubled from a year ago and they launched two new humic acid-based fertilizers as part of our strategic shift towards higher-margin products. Our new product development roll-out was complemented by the launch of four new humic-acid based liquid and powder fertilizer products by Jinong.  Our nationwide distribution network continued its solid expansion into new provinces to reach a total of 755 distributors as Jinong added 10 new distributors while Gufeng added five. The construction of Yuxing [defined below] is also progressing well. In addition to the completion of the 100 sunlight greenhouses during the first quarter, which are now operational, six of the 12 intelligent greenhouses had been completed as of December 31, 2010."

Fiscal Year 2011 and the Third Quarter Guidance

For the fiscal year ending June 30, 2011, management has

  • raised revenue guidance to a range of $155.0 million to $165.0 million due to the large export contract signed by Gufeng in this fiscal year.
  • lowered the net income guidance to a range of $31.5 million to $33.2 million due to additional legal and investor relations fees related to certain pending litigations.
  • reduced EPS guidance to a range of $1.17 to $1.24 based on 26.9 million weighted average shares.

For the third quarter ending March 31, 2011, management

  • expects revenues from in a range of $41.8 million to $43.6 million
  • net income in a range of $8.2 million to $8.6 million
  • EPS in a range of $0.31 to $0.32 based on 26.9 million weighted average shares.

This guidance reflects the anticipated strong sales resulting from the Company's incoming peak sales season as well as the larger sales force and better marketing efforts on the high-end fertilizer products.

Outlook

Chairman Li commented: "We continue to see great benefits ahead from the acquisition and integration of Gufeng, capacity expansion and product mix rebalancing. We expect further gains in efficiency, continued expansion of our sales network and additional roll-outs of more potent products both at Jinong and at Gufeng. Although unexpected litigation caused additional expenses for the Company in this past quarter, we will strive hard to earn better financial results to offset these litigation costs with additional revenues.  We believe our enlarged portfolio of diversified and branded products combined with continued solid financial performance will position us well to capitalize on the inevitable consolidation in the highly fragmented Chinese fertilizer industry and to create value for our shareholders."


Tuesday, February 1, 2011
Financial Target Agreements


CGA acquired Beijing Gufeng Chemical Products Co. for a fair market price of $8.8 million in cash plus 2,275,931 shares of CGA common stock, as it reported to the SEC. 

 CGA’s management constructed the terms for the deal specifying 40% of the shares to be placed in escrow pending satisfaction of certain conditions such as ”make good” targets of

  •  $88.4 million in revenue
  • $10.6 million in net profit for Gufeng for the fiscal year ended June 30, 2011.

Shareholder Letters

Dear Shareholders:

You may have seen news reports about a “research report” published on January 5, 2011, that accused China Green Agriculture of misrepresenting information relevant to our market and our sales. We have carefully analyzed that report and found that it is largely inaccurate, as it contains numerous factual misstatements and also presents other information in ways that are seriously misleading.

The report was issued by a small, “independent” company called J Capital Research, which
disclosed that it has clients with short positions in CGA stock and that it may also short our
Company’s stock. That means, of course, the clients of J Capital and J Capital itself, the
organization that published this report, will benefit financially if the price of our stock declines.

In keeping with our policy of communicating with our shareholders, we wanted to take you through the allegations made in this report and provide you with the facts.

1. The J Capital report alleges that CGA’s tax reports in China suggest that we have somehow inflated sales and revenue reports to the U.S. Securities and Exchange Commission (“SEC”).

This is untrue.

CGA has and will continue to fully and accurately report its sales and revenue figures to the SEC. As anyone familiar with business in China knows, there are sharply different reporting schedules, procedures and practices in China and the U.S., and that it is misleading to compare taxable revenue and tax payments in partial form. We are not aware of any company in China that reports revenue the same way to the State Administration for Industry and Commerce (“SAIC”) as it does to the SEC. It is a widely-known and well-documented fact that reports filed with the SAIC, which is a general registry of companies in China, do not reflect the comprehensive income and financial condition of a company. SAIC is the designated government registrar for official corporate documents — such as articles of incorporation, business licenses, ownership, legal persons, and registered capital. In its review of these financial reports, the SAIC’s focus is on payment and authenticity of the Company's registered capital. Given this focus, Chinese companies, particularly small or middle size companies, do not file all of their financial information in order to avoid disclosing their operating metrics to competitors, suppliers and customers. To suggest, as the J Capital report does, that a discrepancy here reflects any wrongdoing or misinformation is both false and misleading.

2. The J Capital report expressed “surprise” that they could not find any CGA sales offices or online sales. Either J Capital is being intentionally misleading or they do not understand our business.

CGA uses a network of distributors to sell most of its products. We do not rely on sales offices. CGA has found it more cost effective to use distributors instead of sales offices because humic acid based fertilizers are sold mainly in liquid or powdered form that are far more expensive and compact than traditional NPK fertilizers. Our distributors need to be able to explain the
advantages of humic acid and educate farmers about its benefits and applications. This is the reason we don’t simply sell online.

3. The J Capital report citing anonymous sources, states that the market for humic acid is “collapsing.”

Again, this is not true.

The market for humic acid products is growing, and is reflected by published sales figures at CGA, where fertilizer sales rose 58.6 per cent in FY2010, and also at CGA’s peers. Humic acid is, in the farming world, a relatively high-end product that requires professional education about its benefits and special training for proper application. It is currently used by a relatively
small percentage of farmers in China’s vast countryside, which means there is a tremendous opportunity for growth. Anyone who has smelled a rose, or tasted an apple, grown in a properly-tended garden using humic acid can tell you about the noticeable advantages of premium fertilizer. In addition to its improvement of crop yields and quality, it helps balance the soil and enhance sustainability. This is critical in China, which must feed 22 per cent of the world’s population with only 7 per cent of global arable land. A survey released by China’s Ministry of Land and Resources revealed that the country has lost 8 million hectares, or 6.6 percent, of its arable land in the past decade due to urbanization, pollution and soil degradation. With a rising food crisis, China’s government is actively supporting smarter farming techniques, likely to further fuel the market for humic acid fertilizer. A “Humic Acid Green Fertilizer System” was approved by experts in a China Humic Acid Association conference, establishing the First Preparation Project in Rural Areas as part of the government’s ‘Twelfth Five-Year Plan.’ There are many independent research reports and articles that confirm the growing market in China for humic acid fertilizer. We will mention two recent reports here, for those interested in more information: “Market Research Report of Humic Acid Based Organic Liquid Fertilizer, 2008-2010,” by the Huajing Zongheng Economic Information Center of Beijing; and “Report on Market Investigation of Humid Acid Based Fertilizer in 2010” by S& P Consulting.

4. The suggestion by J Capital that CGA did not fully pay its VAT taxes, and was hiding money that had been accrued,

is alsowrong.

CGA has fully paid its local taxes, as evidenced by the Company’s financial statements filed with the SEC. These filings with the SEC correctly and accurately report corporate income tax payments made in China to the State Administration of Taxation. CGA’s fertilizers were not granted a VAT exemption in 2008, as alleged in the J Capital report. What happened was this:

In Aril, 2008, China’s State Administration of Taxation (“SAT”), together with the Ministry of Finance, issued a Notice of Value Added Tax Exemption on Organic Fertilizer Products. However, there was confusion at the local SAT over exactly which type of fertilizers were entitled to the VAT exemption. The local SAT for Shaanxi Province did not allow applicants to apply for an exemption until it received clarification from the SAT in Spring 2009 on what kind of fertilizers were exempt. After such clarification was given, CGA promptly filed its formal application to the local authorities. The exemption was granted in September 2009. So CGA was required to accrue VAT (and pay VAT) on almost all of its products until the exemption took effect in September 2009.

CGA also paid its corporate income taxes. During the course of the year, CGA subsidiaries record deferred tax liabilities and/or assets, just as many U.S. companies do, but do not make payments until year-end. From a GAAP standpoint, that looks like a delayed payment. But in the Chinese system it is common practice. The fact is that CGA did pay its corporate income taxes in full. And it did so on an annual basis, with the full knowledge of the SAT. Again, the filings submitted to SEC are consistent with the filings to SAT.

5. The J Capital report insinuates that because we did not name the seller with respect to a property transaction in Xi’an, we may be “self dealing.”

Again, this is not true.

CGA fully reported all aspects of the property transaction in Xi’an Hu County in its 2010 SEC filings, including the total cost of approximately $10.8 million. The previous tenant was also clearly named in real estate documents that were publicized in a 2010 report by an organization called “IFRA” (which does not have any business registration in China, Hong Kong or the U.S.), and which was widely quoted by J Capital. As anyone who is familiar with the way and sales occur in China knows, land is owned by the government in China and land-use rights are transferable for a price. In the case of CGA’s Xi’an property purchase, there are three distinct elements: (1) Payment of a land transfer fee to the previous owner, a state-owned enterprise, of approximately $8.1 million for giving up its current land-use rights; (2) Payment to the local government (including deed tax and registration fees) of approximately $2.7 million for land use rights, a standard fee assessed to compensate the government to obtain approval for the land use rights; and (3) Appraisal and survey fees of about $10,000. The land in question was independently appraised at $11.2 million, or approximately 3.6% more than CGA paid. Comparable transactions in the same area attest to a relatively consistent market.

6. The J Capital report alleged that CGA overpaid for its Gufeng subsidiary. It erroneously reported that CGA paid $48 million for the Gufeng acquisition.

The facts show these statements are not true.

CGA acquired Beijing Gufeng Chemical Products Co. for a fair market price of $8.8 million in cash plus 2,275,931 shares of CGA common stock, as it reported to the SEC. The only way we can figure that J Capital came up with their $48 million price for the Gufeng subsidiary acquisition was to multiply the 2.275 million shares by $17 (which was close to the all-time high price of CGA), rather than using the price determined on the transaction date, roughly half of that. In addition, CGA’s management constructed the terms for the deal specifying 40% of the shares to be placed in escrow pending satisfaction of certain conditions such as ”make good” targets of $88.4 million in revenue and $10.6 million in net profit for Gufeng for the fiscal year ended June 30, 2011. As a result, if the earn-out conditions are not met, and the escrowed shares are forfeited, the total consideration would be significantly less. J Capital alleged we paid a “huge” multiple for Gufeng. The multiple was actually well under 3x.

J Capital’s mathematical error aside, CGA did not, in our view, overpay for this acquisition. There were several compelling reasons for our acquiring this company: Gufeng provides a complimentary product line, which greatly expands CGA’s sales abilities; Gufeng has good production facilities; Gufeng has a strong management team; Gufeng’s headquarters in Beijing offers increased penetration into markets in northern China. In fact, on Jan. 6, 2011, Gufeng finalized a contract to export 165,000 metric tons of fertilizer with Sino-Agri, to buyers in India, reflecting a sharp increase in CGA’s export capacity.

CGA did not, as the J Capital report alleged, pay working capital to Gufeng as purchase price payments. A Supplementary Agreement on July 1, 2010, specified that CGA would lend RMB 100 million (approximately $14.7 million) of working capital to Gufeng after the acquisition in order to facilitate its expansion by helping to reach full utilization of production capacity,
purchase more raw materials and enhance marketing activities. To date, CGA has loaned Gufeng RMB 50 million, which was expected to be paid back in the future. That amount is separate from the purchase price.

7. J Capital suggested the CGA’s margins were “improbable.”

Once again, the only way we can figure they came to this conclusion was that they don’t understand our Company. We assume they looked at our financials as though we were a conventional compound fertilizer manufacturer.

In fact, humic acid fertilizers come in a variety of concentrated forms and are not a plain commodity like traditional fertilizers, which have standard content specifications and require negligible education before application. As a result, gross margins for humic acid fertilizer suppliers are far higher than those for traditional fertilizer suppliers, which are typically 5-15%. It is misleading to compare an old-fashioned commodity business model that needs little explanation or education for its users with a more modern business model based on quality, brand-name awareness and customer service. CGA’s gross margins are higher still, above those of its peers in the humic acid business, largely because of CGA’s value-added, higher-margin liquid based humic acid fertilizers and its fully-automated production line. In addition, CGA’s more efficient business model, with central control of cash, inventory and operations, contributes to the higher net margin that CGA has over its peers who generally operate
in multiple locations with smaller capacity at each plant. Here is yet another example of how the J Capital report demonstrates it doesn’t understand CGA or the industry in which CGA operates. We don’t understand how J Capital came up with a net margin of 30% for Gufeng. It was certainly not from Gufeng’s historical financials in our SEC filings, nor from the “make good” targets of $88.4 million in revenue and $10.6 million in net profit as expected for fiscal 2011, which would convert to a net margin of less than 12%.

8. The J Capital report states that CGA engages in dubious related-party transactions.

This is not true.

There have been no “dubious” transactions between CGA and Kingtone Wireless Information Inc. One is an agriculture products company, while the other is a technology company. One of Kingtone’s specialties is automation technology for offices as well as factories. The two companies have co-existed in an office building in Xi’an for 10 years; there have been only three material transactions between them during that time, and they were conducted at market prices: (1) Kingtone technology was used in the system integration of
high-efficiency, high-capacity agriculture facilities; (2) It was used to create automated fertilizer production lines; and (3) It is being used for the development of new electronic control systems for “smart greenhouses.”

9. The J Capital Report states that CGA executives receive excessive stock-based compensation.

This statement is not true.

As the founder of CGA, I was issued 3,156,808 “make good” shares and 6,535,675 call option shares in December 2007, which were recorded properly as part of the purchase price under the reverse merger but not a compensation expense at the time of its issuance. All these shares, according to the “make good” escrow agreement and call option agreement, represent a return of shares in compliance with China’s laws and regulations. I gave up my controlling equity interest in Shaanxi TechTeam Jinong, which is now a wholly-owned subsidiary of CGA, without receiving any compensation. These shares formed my only consideration in the disposal of my controlling entity which had revenue and net income of $15.1 million and $6.9 million, respectively, in the year ended June 30, 2007. These shares were issued in December 2007 and were then considered as part of the outstanding shares in the earnings per share (“EPS”) calculation. Anyone who knows basic accounting would understand that there is no future dilution to shareholders when shares were returned, much less the 30% dilution that J Capital alleged.

Other incentive shares issued to other directors, staffs and service providers were within the normal compensation arrangement based on the compensation study provided by an independent compensation consulting firm engaged by the compensation committee.

10. Despite assertions in the J Capital report to the contrary, CGA did not misrepresent who our suppliers are, or misreport the technology we use.

CGA holds two significant technology patents, which give it an edge over competitors. One patent is related to the method for preparing water-soluble fertilizer containing humic acid; the other is related to the apparatus that produces it. J Capital accuses CGA of purchasing humic acid from another Chinese company, Taiyuan Meibang Biotech Development Company. This is true. We bought fertilizer products not only from Meibang, but also from other fertilizer rivals. As a leading humic acid fertilizer manufacturer, we monitor the development of products by other companies in the market and constantly procure sample quantities for comparative analysis and experimental testing with our own products. In the Meibang case, CGA started to purchase humic acid potassium from Meibang in August 2009, and CGA only used it in fertilizer research and development of humic acid potassium for comparative field testing and experimental design of a new fertilizer formula. We have not bought any products from Meibang since June 2010.

11. J Capital also alleged that Shanghai Luyeyuan said it was not selling CGA-branded products.

In fact, Shanghai Luyeyuan’s branch in Henan Province has been selling CGA’s products for over seven years and is one of the prime distributors in CGA’s distribution network. After the J Capital report came out, at least one U.S. analyst asked to interview senior management at
Shanghai Luyeyuan, and executives at Shanghai Luyeyuan agreed to speak with the analyst directly to confirm their working relationship with CGA.

12. J Capital also said it was “perplexed” that CGA’s annual report in FY2010 cited that weathered coals constituted only 0.37 per cent of the Company’s raw material costs.

That figure is accurate, and it represents the particularly low price of weathered coal, which is a waste product of coal mining companies. While it is a valuable source of humic acid for CGA, coal miners are happy to get rid of it, hence the low price. Furthermore, the author of the J Capital report apparently confused the percentage of weathered coal costs with the percentage of humic acid concentration in finished products. All of CGA’s humic acid based fertilizers have clear specifications about the humic acid concentration along with other ingredients on the packaging label. It is the same with common multi-vitamin supplements, where a tiny percentage of raw material costs do not correlate to the percentage of nutrients listed in the table on a vitamin bottle.

13. J Capital alleges that they were blocked from obtaining information.

This is not true.

CGA has consistently welcomed inquiries and visitors to our headquarters and transparently provides information about all relevant aspects of our production, management and sales. Any number of shareholders, analysts and potential investors can attest to that. The author of the report in fact attended meetings with Company executives. She did not call ahead, but showed up unannounced, refusing to identify herself and surreptitiously and disruptively tried to interview Company employees, and to obtain proprietary customer information. Just prior to releasing her report, she emailed the Company during a holiday period and then reported that “repeated requests” for information were rebuffed. It is interesting to note that when Rene Vanguestaine, CEO of CGA’s investor relations firm, referred to the IFRA allegations and the company’s rebuttal in press releases during the meeting with her in Beijing a few hours before
she published the report, the author denied knowing about the IFRA report. Yet her report relies on and cites the IFRA report repeatedly.

The foregoing are the main issues raised in the report, but there are other factual errors littered throughout. Whether from a lack of accounting knowledge, a poor understanding of Chinese business practices, or an intent to mislead, the author makes countless errors, including on information which is readily available in public filings or press releases.

On September 13, 2010, CGA received a letter from the SEC requesting that it voluntarily provide information in connection with an informal inquiry. Since being contacted by the SEC, CGA has provided the SEC with all the information it has requested. The Company’s U.S.-based lawyers have also made a voluntary presentation to the SEC. CGA is fully cooperating with the SEC in its informal inquiry. CGA has not received any subpoenas.

I hope you find this letter helpful. We remain open to any questions you may have, and are happy to hear from you at any time. We want to thank you for your continued interest in and support of our Company. Please be assured that we are working very
hard to maximize shareholder value.

Sincerely,
Tao Li
Chairman, President and Chief Executive Officer
China Green Agriculture, Inc.


Thursday, December 30, 2010
Investor Alert

China Green Agriculture, Inc. is filing this Amendment No. 1 on Form 10-K/A to supplement the disclosure regarding certain relationships and related transactions in Item 13 of Part III of its Annual Report on Form 10-K for the year ended June 30, 2009 filed with the Securities and Exchange Commission on September 17, 2009.

Certain Relationships and Related Transactions


On June 19, 2008, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., our wholly-owned subsidiary (“Jinong”), signed an agreement with Xi’an Kingtone Information Technology Co., Ltd., a PRC company (“Kingtone Information”), pursuant to which Kingtone Information produced certain fertilizer processing equipment for Jinong.  Mr. Tao Li, our Chairman, President and Chief Executive Officer, is a principal shareholder and the Chairman of Kingtone Information.  Kintone Information is now an indirect contractually-controlled subsidiary of Kingtone Wirelessinfo Solution Holding, Ltd (KONE), a publicly traded company (“Kingtone”).  Mr. Li beneficially owns a controlling interest in Kingtone and serves as Kingtone’s Chairman.  The total contracted value of this agreement, including value-added taxes and other taxes, was RMB 4 million, or approximately $586,000. The project was performed from May 2009 to June 2009. Pursuant to the agreement, Kingtone Information provided certain services including designing, manufacturing, installing and adjusting the production facilities for Jinong’s compound fertilizer for drip irrigation. Kingtone Information was also responsible for debugging the system and training Jinong employees to operate the production line. The agreement required Kingtone Information to complete the project within 25 days unless there were causes for delay beyond its control. The agreement sets forth an eighteen month warranty period during which Jinong is entitled to receive certain spare parts for the facilities and to receive maintenance and repair services at no cost.


On October 20, 2008, we entered into an agreement with Kingtone Information with respect to the construction of the phase II expansion of an integrated pipeline control project for Jinong. The total contracted value, including VAT and other taxes, was RMB 5.2 million, or approximately $760,000. The project was performed from December 2008 to June 2009. The term of the agreement is from the date of its signing until one year after the operation of the subject project. Pursuant to the agreement, Kingtone Information provided services in order to develop and install the automation system solution for Jinong’s phase II production line and to upgrade the automation system solution for its phase I production line. Work related to the phase II production line included the development of automation system software, setup of integrated automation management and control computer network to realize relevant data collection, and automatic management and control of the production process. Work related to the phase I production line included upgrading the existing automation system so that phase I and phase II automation systems become integrated into the same management and control system. In addition to the wired automation system, Kingtone Information also developed and installed a wireless system solution for Jinong. This wireless system solution integrates into Jinong’s production automation system and the plant video surveillance system.


Friday, November 19, 2010
Analyst Reports

Rodman & Renshaw on CGA

F1Q10 results: Maintain Market Perform Rating 

China Green Agriculture (“China Green”, Ticker: CGA, Market Perform) reported its F1Q11 results that were more or less in-line with expectations. Net revenue grew 250% YoY to $39.5 million, beating both Street consensus and our estimate of $38.4 million. The newly acquired Gufeng subsidiary was the major revenue contributor with $21.8 million, or 55.2% of the total revenue. The Jinong subsidiary contributed $16.6 million, or 42% of the total revenue. The Jintai unit, which produced agricultural products, registered a flat YoY sales performance, generating $1.1 million of revenue. The Yuxing unit had no revenue for the past quarter. Gross margin for F1Q10 declined YoY to 33.3%, below our estimate of 37.3%. A higher sales component of lower-margined granular fertilizer products, mostly from Gufeng, was a major reason for the decline in gross margin. Operating income for the quarter was $9.6 million, up 55% YoY and higher than our expectation of $9.1 million. Net income was $7.8 million, up 48% YoY and in-line with our estimate, but a touch shy of the $7.9 million Street consensus. Diluted EPS for F1Q10 was $0.30, a shade above our estimate of $0.29 but in-line with the Street consensus. At the end of September, the company had $53.9 million of cash and cash equivalent.

FY2011 guidance maintained 

The company maintained its FY2011 guidance, with total revenue of $150.5-$152.8 million, net income of $36.2-$36.8 million, and EPS of $1.35-$1.37 (based on 26.8 million weighted average shares). For the next quarter (F2Q11), the company expects to realize $33.1-33.3 million of revenue, $7.76-7.86 million of net income, and $0.29 of EPS (based on 26.9 million weighted average shares).

Adjusting estimates and maintain Market Perform rating 

We have tweaked our financial model in accordance with the F1Q11 performance. For F2Q11, we now expect the company will realize $33.3 million of revenue, $6.8 million of net income, and $0.26 of EPS. For full year F2011, we estimate total revenue of $151.8 million, net income of $32.8 million, and $1.25 of EPS. We are maintaining our Market Perform/Speculative Risk rating on the shares of China Green. While the past quarter's financial performance was overall in-line with expectations, we believe uncertainties remain with regard to the company's integration of Gufeng and slower organic growth. In addition, while we had anticipated significant margin compression due to increased sales of lower-margin granular fertilizers, the actual F1Q11 gross margin figure was 400bps below our already lowered estimate. Thus we will keep a close eye on the company's margin trend during the upcoming quarters. We continue to like the company's long term growth potential; however in the short term we are taking a more conservative approach, both in our financial projections and our rating.


Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Monday, November 15, 2010
Liquidity Requirements
We intend to use some remaining net proceeds from the Public Offerings (approximately $15.0 million) to acquire new businesses, upgrade production lines and complete the greenhouse facilities for agriculture products of Yuxing located on 88-acres of land in Hu County, 18 kilometers southeast of Xi’an city. We believe that we have sufficient cash on hand and positive projected cash flow from operations to support our business growth for the next twelve months to the extent we do not have further significant acquisitions or expansions. Notwithstanding the foregoing, we may seek additional financing for expansion purposes, which may include additional equity financings.

Wednesday, November 10, 2010
Comments & Business Outlook

Third Quarter 2010 Results

Financial Summary

First Quarter FY 2011 Results (USD)

 

(Three months ended September 30, 2010)

 




 

Q1 FY2011

Q1 FY2010

CHANGE*

 




 

Net Sales

$39.5 million

$11.3 million

+250.1%

 

Gross Profit

$13.1 million

$7.0 million

+88.8%

 

Net Income

$7.8 million

$5.2 million    

+48.4%

 

EPS (Basic and Fully Diluted)

$0.30

$0.24

+ 23.9%

 

Basic Weighted Average Shares Outstanding

25.9 million

21.6 million

+19.8%

 

Fully Diluted Weighted Average Shares Outstanding

26.0 million

21.7 million

+20.3%

Fiscal Year 2011 and the Second Quarter Guidance

  • Revenues from $150.5 million to $152.8 million
  • Net income from $36.2 million to $36.8 million
  • EPS from$1.35 to $1.37based on 26.8 million weighted average shares vs. analyst estimates of $1.36.

Fiscal 2011 Second Quarter Guidance:

  • Revenues from $33.1 million to $33.3 million
  • Net income from $7.76 million to $7.86 million
  • EPS of $0.29 based on 26.9 million weighted average shares vs analyst estimates of $0.29. This guidance reaffirms the previously disclosed guidance for the full fiscal year of 2011.

Outlook

Chairman Li commented: "Our strong organic sales growth augmented by the Gufeng acquisition gives us a solid platform for continuous growth. With the integration of Gufeng underway, we will continue to enhance our product portfolio and distribution channels, fully utilize and expand capacity, and optimize operational efficiency. We believe our enlarged portfolio of diversified and branded products combined with continued solid financial performance will position us well to capitalize on the inevitable consolidation in the highly fragmented Chinese fertilizer industry and to create value for our shareholders."


Monday, September 20, 2010
Research

On July 2, 2010, China Green Agriculture, Inc. closed an acquisition with Beijing Gufeng Chemical Products Co., Ltd and its direct, wholly-owned subsidiary Beijing Tianjuyuan Fertilizer Co., Ltd to purchase all of Gufeng’s outstanding equity interests.

Price Paid: $31.8 million

  • $8,849,558 in cash
  • 2,275,931 shares of common stock

CGA has prepared the unaudited fiscal 2010 year ended pro forma condensed combined financial information using the acquisition method of accounting.

    
China Green Agriculture Inc.
   
Beijing Gufeng Chemical Products Co., Ltd.
   
Pro Forma Adjustments
   
Notes
   
Pro Forma Combined
 
Net sales
  $ 52,091     $ 59,860     $             $ 111,951  
Cost of goods sold
    21,139       54,072                   75,211  
Gross profit
    30,952       5,788                   36,740  
Operating expenses
                                   
Selling expenses
    2,203       975                   3,178  
General and administrative expenses
    3,822       1,107       225    
(a)
      5,154  
Total operating expenses
    6,026       2,082       225             8,332  
Income from operations
    24,927       3,706       (225 )           28,408  
Other income (expense)
                                     
Other income (expense)
    (5 )     14                     9  
Interest income
    275       -                     275  
Interest expense
    (112 )     (31 )                   (144 )
Total other income (expense)
    158       (17 )     -             141  
Income before income taxes
    25,084       3,689       (225 )           28,548  
Provision for income taxes
    3,795       -       76    
(b)
      3,871  
Income before minority interests
    21,290       3,689       (148 )           24,830  
Net income
    21,290       3,689       (148 )           24,830  
                                        
Basic weighted average shares outstanding
    23,468       2,276                     25,744  
Basic net earnings per share
  $ 0.91             $             $ 0.96  
Diluted weighted average shares outstanding
    23,468       2,276                     25,744  
Diluted net earnings per share
    0.91                             0.96  

___________________________________________________________________________

    
China Green Agriculture Inc.
   
Beijing Gufeng Chemical Products Co., Ltd.
   
Pro Forma Adjustments (Note 3)
 
Notes(see filing)
 
Pro Forma Combined
 
                             
Current Assets
                          
Cash and cash equivalents
  $ 62,335       2,213     $ (8,850 )
(c)
  $ 55,698  
Accounts receivable, net
    15,572       307       (31 )
(d)
    15,848  
Inventories
    11,263       17,890       (1,789 )
(d)
    27,364  
Other assets
    87       -       -  
  
    87  
Related party receivables
    -       66       (13 )
(d)
    53  
Advances to suppliers
    221       421       (42 )
(d)
    601  
Total Current Assets
    89,478       20,898       (10,725 )        99,651  
                                     
Plant, Property and Equipment, Net
    29,369       13,858       322  
(d)
    43,549  
                                     
Construction In Progress
    257       765       (77 )
(d)
    946  
                                     
Other Assets - Non Current
    1,099       -                  1,099  
                                     
Goodwill and Other Intangible Assets, Net
    11,586       115       21,689  
(e)
    33,390  
                                     
Total Assets
  $ 131,788       35,636     $ 11,210        $ 178,634  
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY
                            
                                     
Current Liabilities
                                  
Accounts payable
  $ 328       5,859     $ (586 )
(d)
  $ 5,601  
Unearned revenue
    42       19,162       (5,749 )
(d)
    13,455  
Other payables and accrued expenses
    508       1,552       (155 )
(d)
    1,905  
Amount due to related parties
    68       522       (52 )        538  
Taxes payable
    2,304       13       (1 )        2,316  
Short term loans
    -       3,908       (391 )
(d)
    3,517  
Total Current Liabilities
    3,250       31,016       (12,683 )        21,583  
                                     
Stockholders' Equity
                                  
Common stock, $.001 par value,   115,197,165 shares authorized,   24,572,328  and 12,281,569 shares issued and outstanding as of June 30, 2010 and 2009, respectively)
    25       4,068       (4,066 )
(f)
    27  
Additional paid-in capital
    75,756       -       22,987  
(f)
    98,743  
Statuary reserve
    5,865       629       (629 )
(f)
    5,865  
Retained earnings
    43,536       (66 )     (158 )
(f)
    43,312  
Accumulated other comprehensive income
    3,357       (11 )     11  
(f)
    3,357  
Total Stockholders' Equity
    128,538       4,621       18,144          151,302  
                                     
Total Liabilities and Stockholders' Equity
  $ 131,788       35,636     $ 5,461        $ 178,634  
                                   
The accompanying notes are an integral part of these consolidated financial statements.                  
                                   
See notes to unaudited pro forma condensed combined financial statements.
                     

GeoTeam® Note:

Upon our initial inspection a few things stand out

  • Although Gufeng sales approximate CGA levels, gross profit margins are significantly less.
  • Cash balance is virtually non-existent.
  • Inventory represents 85.6% of sales.
  • Very small account receivable position compared to inventory levels.
  • Net working capital deficit and thus current ratio of under 1 to 1. (Mainly due to a big unearned revenue balance).
  • shareholder equity of only $4.6 million compared to CGA of $129 million.

In essence, CGA paid close to 9 times net income for a firm, that at first glance, has worse fundamentals than CGA or many ChinaHybrid firms we follow. This is even more eye opening as CGA had no problem offering their stock at ?? times earnings in its last two raises.

We asked CPA and GeoContributor, Dan France, to possibly shed some light on this topic.  We have speculated that maybe the large unearned revenue figure is somewhat related to inventory levels.

Dan's input:

According to Ken Ren in the fiscal 2010 first quarter conference call, Gufeng was operating with 10% gross margin . An explanation for Unearned Revenue, high inventory and low AR is customers prepaying for product in exchange of favorable (fire sale prices?) pricing.

The Company may have been in need for cash and possibly followed the practice of accepting prepayments from customers in exchange for selling at distressed prices. A risk is will CGA lose some of those customers when they raise the rent?

Net, property, plant & equipment tells me the assets were at least 50% depreciated. Cap ex plans include major upgrade of production lines.

CGA thinks they can eventually generate 30% gross margins from the Gufeng after upgrades and with improved management. If they can, the acquisition could prove to be a good deal provided they hang on to existing business and also sell liquid fertilizer to granular customers. Also, Gufeng is strong in Northern China where CGA has limited presence.


Tuesday, September 14, 2010
Investor Presentations
On Monday, September 13, 2010, at approximately 10:00 a.m. Eastern Time, the Company presented at the Rodman & Renshaw Annual Global Investment Conference in New York City.

Saturday, September 4, 2010
Conference Call Notes
Participants

Ted Haberfield – HC International
Tao Li – China Green Agriculture – Chairman, CEO, and President
Ken Ren – China Green Agriculture – Chief Financial Officer
 
Analysts

Ingrid Yen – Brean Murray
Tim Tiberio – Charting Capital Markets
John Hickey – Cohen Capital
Louis Fan – Rodman and Renshaw
Emma Zhao – Roth Capital Partners
Echo He – Maxim Group
 
Presentation

Moderator

Greetings and welcome to the China Green Agriculture, Inc. Fourth Quarter of Fiscal Year 2010 Earnings Call.  At this time all participants are in a listen-only mode.  A brief question and answer session will follow the formal presentation.  As a reminder, this conference is being recorded.
 
It is now my pleasure to introduce your host, Ted Haberfield from HC International.  Thank you, you may begin.
 
Ted Haberfield – HC International – Executive Vice President

Thank you and welcome everyone to China Green Agriculture's quarterly conference call, which will cover fourth quarter fiscal 2010 financial and operating results.  The earnings release accompanying this conference call went to the wire a moment ago before the close of the market or at the end of the market.  On our call today is Mr. Tao Li, Chairman, CEO, and President, and Mr. Ken Ren, the company's Chief Financial Officer.
 
(Skip the financial summary)
 
Tao Li – China Green Agriculture – Chairman, CEO, and President
 
Thank you, everyone, for joining us today. I am very pleased with the progress that we have made in the past 12 months and would like to share our major achievements on this call ... We are also aware of rumors about the company and will be addressing them on this call and will be available for questions after our prepared remarks. Thank you.

Ken Ren – China Green Agriculture – Chief Financial Officer

Let me spend a few minutes updating you on a few of our strategic initiatives. In the fiscal year 2010, we introduced 23 new products, including nine new high margin liquid fertilizer products in the fourth quarter alone. We added 43 new distributors during the past twelve months bringing our total number of distributors to 573 number of distributors. Having signed agreements with existing distributors to becoming authorized reseller of our products in 608 of their retail stores, we are aggressively expanding our distribution. Finally, we have opened 15 directly-owned stores since launching our pilot program in January 2010. The Company owned and operated stores enhanced China Green Agriculture brands in new markets where we do not compete our existing distributors. In June, we completed each one of our research and development centers, completing the construction of a hundred sunlight greenhouses on our 88 acre facility in Beijing. The land purchase prior subsidy reported in our SEC filing is accurate and truly reflects the total cost per U.S. debt. The transaction was constructed through a land transfer acquisition from a state owned entity. It was not conducted at a public auction from the Land and the Natural Resource Bureau. The purchase cost was reported at approximately $10.8 million, which included our land transfer fee, land compensation fee, land use rights transfer fee, state tax, registration fee, survey and mapping fee, and appraisal fee.

The land purchase prior subsidy reported in our SEC filing is accurate and truly reflects the total cost per U.S. debt. The transaction was constructed through a land transfer acquisition from a state owned entity. It was not conducted at a public auction from the Land and the Natural Resource Bureau. The purchase cost was reported at approximately $10.8 million, which included our land transfer fee, land compensation fee, land use rights transfer fee, state tax, registration fee, survey and mapping fee, and appraisal fee.

In July, we completed seedling conservation and expected seedling transportation, transplantation, for this a hundred greenhouses by October 2010.  We were also on schedule to complete Phase II of the project, which includes the construction of 12 intelligent greenhouses by the end of calendar year 2011.  Once completed, this new research and development opportunity will allow us to introduce more customized, higher margin fertilizer products and the conservation of more agriculture products.
 
We also launched nine new liquid-based fertilizer products, accounting for almost 4% of our fertilizer revenues in the fourth quarter.  We also added 21 new distributors during the quarter and selected over 300 stores as China Green Agriculture authorized retailers of our JiNong branded humic acid-based compound fertilizer products.  We need to first lay the foundation for sustained growth in our fully line product and revenues and profit margins.
 
In July, we closed our acquisition of Gufeng and its wholly-owned subsidiary Tianjuyuan for a total purchase price of approximately $31.8 million in cash and stock as we disclosed in our 8-K filed on July 7, 2010.  We also intend to provide up to $14.7 million to Gufeng for their working capital needs in the future as needed.
 
In the three months ended March 31, 2010 Gufeng’s revenue increased 22.4% to $17.1 million, and net income increased 46.8% to $1.1 million.  We continue to believe that Gufeng will contribute at least 88.4% in revenue and at least $10.6 million in net income for the fiscal 2011, which will end on June 30, 2011.  I will provide a detailed breakdown of our financial projections regarding Gufeng in a minute when I discuss our fiscal year 2011 guidance.
 
Let me review the strategic rationale for this acquisition.  Gufeng improves our competitive position in three ways.  It provides us with significantly greater capacity to 355k metric tons per year, it advances our distribution by 26.0% to over 700 distributors, and it broadens our portfolio of organic and non-organic fertilizer to serve a larger base of customers.  We have already discussed several images with Gufeng’s management team that we will implement over the next 3 to 12 months.

Now, our guidance, for the fiscal year ending June 30, 2011, we are forecasting revenues of $150.5 million to $152.8 million, net income of $36.2 million to $36.8 million, and earnings per share of $1.35 to $1.37 based on $26.8 million weighted average shares with presenting growth of 188%, 72.6%, and 49.5%, respectively.
 
For the first quarter ended September 30, 2010, we expect revenues of $38.2 million to $38.6 million, net income of $7.7 million to $8.0 million, and earnings per share of $0.29 to $0.30 based on $26.8 million weighted average shares.
 
This guidance reflects the anticipated strong sales resulting from the Company's increased production capacity from 55k metric tons to 355k metric tons, which reflect a full year contribution from Gufeng incorporating our consolidated fiscal year 2011, financial guidance is approximately $88.4 million of revenue and $10.6 million of net income from Gufeng.

Currently, one-third of Gufeng's 300k metric tons production facility is capable of producing organic compound fertilizers.  We plan to invest $7.7 million in capital expenditures for Gufeng, which include $1.3 million to convert existing 100k metric tons of production facility from chemical fertilizers to higher market humic acid-based organic compound fertilizers with full conversions to be completed by the end of the calendar year 2010.  In addition, we will also spend $6.3 million to build a new 200k metric ton production line, which will produce humic acid organic compound fertilizers with construction beginning this September and the production commencing by March 2011.  Upon completion Gufeng's production capacity will increase by 66.0% to 500k metric tons, out of which 400k metric tons will be producing humic acid-based organic compound fertilizers.
 
In addition, we will spend approximately $14.7 million on working capital to ramp up Gufeng's production utilization from the current 60.0% to 80.0% by annual fiscal 2012.  Once we are able to fully transition Gufeng's production and distribution to our target levels, we expect a $140 million in revenue contribution from Gufeng in fiscal 2012.  We also expect Gufeng's gross margin to improve from approximately 10.0% in the fiscal third quarter ended March 2010 to 20% by the fiscal fourth quarter ended June 30, 2011.
 
Finally, we expect Gufeng to introduce 15 new products and add over 30 new distributors in the fiscal year 2010, two months after closing acquisition.  Management remains very confident about the financial and strategic benefits that this acquisition will provide for our Company and to our shareholders.
 
Before I conclude my prepared remarks, I would like to discuss our strong operating model.  We ended fiscal year 2010 with over $62 million of cash and cash equivalents and no debt on our balance sheet, $86.2 million of working capital generated $12.2 million of cash flows from operation, and have minimal bad debt exposure.
 
We were able to sustain a healthy growth in profits and cash flows for several reasons.  Our value-added products increased our customers' yields; thereby, improving their sales and profits.  We have a significant opportunity to grow our market share in a highly risk fragmented fertilizer market in China by introducing new products and expanding in new territories.
 
The ongoing research and development efforts and significantly expanded manufacturing capacity and the product portfolio from Gufeng provides the foundation of future growth.  In September 2009, JiNong was granted with a value-added tax exemption from September 1, 2009 to December 31, 2015 by the Local Taxation Bureau.  We have ongoing productivity discussions with local and central government officials about ways we can help reduce pollution and improve the welfare of newer farmers.
 
On the corporate governance front, we are committed by abiding the high standards that comes with being a NYSE-listed Company.  As such, management is evaluating and looking to implement specific action items to help us accomplish this goal.  I, along with the rest of our management team and board of directors, remain extremely confident in our ability to execute and with the integrity of our financial controls to ensure accurate and complete reporting.  We look forward to providing you with current updates on improvements we make in this regard.

 This concludes our prepared remarks for the fourth quarter of fiscal year 2010. I would now like to invite listeners to ask any questions you may have with Chairman Mr. Li and myself.

Moderator
Thank you.  We will now be conducting a question and answer session.  (Operator Instructions)  Our first question is with Ingrid Yen with Brean Murray, please go ahead with your questions.
 
Ingrid Yen – Brean Murray
Hello, everyone.  Hello, can you hear me?
 
Moderator
Yes, we can hear you.
 
Ingrid Yen – Brean Murray
Great.  My first question is about the assumptions you made in your guidance for 2011.  How much of this will be coming from your existing operation and how much this will come from the Gufeng operation you acquired?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
For Gufeng, we expected that we will contribute revenue $88.4 million, and then for net income contribution, we will contribute $10.4 million.
 
Ingrid Yen – Brean Murray
Okay, $10.4 million or $10.6 million?  I remember in the press release, is it $10.6 million?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Specifically, we expected that the sales from JiNong is about 40.5% in the next year's guidance, and 4.1% from Jintai, and 50.5% from Gufeng.  And then for all our using the new research and development, the revenue contributions is still immaterial, less than 0.5%.
 
Ingrid Yen – Brean Murray
Okay, great, thank you.
 
Moderator
Our next question is from Tim Tiberio with Charting Capital Markets, please go ahead with your questions.
 
Tim Tiberio – Charting Capital Markets
My first question is, what is the current capacity utilization of your organic facilities?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
The current utilization of our organic facilities is around 40%.

Tim Tiberio – Charting Capital Markets
Okay.
 
Ken Ren – China Green Agriculture – Chief Financial Officer
That's like 37% to 40%.
 
Tim Tiberio – Charting Capital Markets
I guess at Gufeng, you probably haven't released this yet, but what was the capacity utilization rate at the end of June?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Around 60%.
 
Tim Tiberio – Charting Capital Markets
Okay.  And then one other question, I know there's been a lot of questions around tax returns for a lot of these Chinese companies.  There's been some issues raised between the VAT tax that appears to have been accrued and was being paid to the Chinese tax authorities.
 
I guess my first question is, can you walk us through that if there is a difference?  And then secondly, how can investors actually get tax returns from the Chinese Central Government?  We've heard that due to privacy laws actually getting consolidated tax form is very difficult.  So just hoping that maybe you could address that.
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Okay, with respect to that question, I will let Mr. Li address it, and I will translate for him, hold on for a second.
 
(Chinese Language)
 
Tao Li – China Green Agriculture – Chairman, CEO, and President
(Chinese Language)
 
Translator
I understand there are some rumors.  People are concerned about the taxes that we filed with the local government.  What I want to emphasize here is the value added taxes and the income taxes that we paid to the taxation bureaus are complete.  The information out there is showing partial data and we would be more than happy to share with you our information which matched exactly to what we filed to the SEC.
 
Tim Tiberio – Charting Capital Markets
OK.  Maybe I can take that off line.
 
My last question, obviously you have quite a bit of cash on your balance sheet outside of some of your R&D investment.  Is there any thought about how else you might look to deploy that cash over the next few quarters?

Ken Ren – China Green Agriculture – Chief Financial Officer
Yes, I can address that question.  For the fiscal year 2011, we have certain capital expenditure budgets, specifically we will allocate to our three subsidiaries.  With regard to Gufeng, like I already touched base in the prepared remarks, we will upgrade one existing production line, which has metric ton capacity of 100,000 by spending RMB 9 million, which is roughly equivalent to $1.5 million.  And we will also install a new production line for Gufeng to produce humic acid based organic compound fertilizer.  Under the new production line, we will have the production capacity of 200,000 metric tons.  So in total, after these capital expenditures plans, Gufeng’s capacity will increase by 66%, and the new production line is budgeted at RMB 43 million, which is roughly $7 million.
 
And then for our research and development center …, we budgeted 85 million in RMB.  That can be translated into $13 million U.S. dollars and specifically, we will continue to spend RMB 21 million for the sunlight greenhouses, that’s roughly $3 million.  And then we will spend RMB 35 million for the intelligent greenhouse that we already planned, and the budget for that piece is RMB 35 million.  So, RMB 35 million is roughly $6 million U.S. dollars.  We will also spend less than RMB 1 million in some dormitory building construction, and then we will spend another RMB 12 million, which is less than $2 million in related projects, such as weather pipelines and …well drilling.  Then we will also spend another RMB 12 million for some other infrastructure connection projects to get our facilities integrated with the network.
 
And then similarly with our JiNong, the liquid and organic fertilizer business, we will spend some additional less than $2 million U.S. dollars for cap ex to improve the existing production capacity and some other related small projects.  So, that’s a total RMB 12 million, less than $2 million U.S. dollars.  So that’s our cap ex plan for the next fiscal year.
 
Tim Tiberio – Charting Capital Markets
OK, thanks for taking the time to answer my questions.
 
Ken Ren – China Green Agriculture – Chief Financial Officer
You’re welcome.
 
Moderator
Our next question is from John Hickey with Cohen Capital.  Please go ahead with your question.
 
John Hickey, Cohen Capital
Yes, thanks for taking my questions.  The first question I have relates to your land purchase.  You had mentioned it earlier, but I may have missed something, it was $10.8 million as the reported purchase price, but the official records are $2.5 million.  Could you go over the reconciliation between those two amounts one more time?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Sure, we will be more than happy to give you certain details of our land acquisition.  Actually, we received inquiries on this land acquisition from investors and media.  There are some understandings of the land property market in China.  I would like to emphasize that.  This land acquisition was purchased from a state owned enterprise through a private transaction, not from the government.  So, in terms of reconciliation, we paid a total of $10.7 million U.S. dollars, which is the equivalent of $73.2 million.  The fee items we paid to the government constitute land granting fee of $5.2 million and land compensation fee of $12.1 million.  In addition to that, we paid the seller $54.8 million in terms of land use transfer fee and on top of all these fees, we also paid other miscellaneous charges, such as fee tax, land use rights, reservation fee, mapping fees, survey fee, appraisal fee.  So in total, that’s 73.2 million RMB, equivalent to $10.7 million U.S. dollars.
John Hickey, Cohen Capital
OK, so for this kind of transaction, this private acquisition from the state owned enterprise where the purchase price is $2.5 million, is it normal for the fees and the rights and everything that you just described to be four times the land purchase price?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Actually, I would like to reemphasize that.  The $2.8 million includes just the land granting fee and the land compensation fee.  That’s just a part of the total land purchase price.  And the majority of the land purchase price is paid to the seller in terms of land use  transfer fee.
 
John Hickey, Cohen Capital
OK.  Thanks.
 
 
Ken Ren – China Green Agriculture – Chief Financial Officer
I would like to also reemphasize that in China, the land transaction can either be conducted by the government through public auction or private transaction, and in our case, it was executed through private transaction.  Then lately, there have been similar land transactions in a neighboring area.  For instance, in July 2010 in the same city, same suburb and area, three land transactions auctioned by the government at roughly $120,000 per acre for project use purpose, for industrial project purpose use.  That’s through the auction transaction. The total cost we paid is close to prices by the local government through auction channel constituting land granting fee and land compensation fee, totaled at $120,000 U.S. dollars per acre.
 
For ours, the land price we paid is in the same ballpark, roughly $120,000 U.S. dollars per acre.  And then nearby, the closest facility area, the land price per acre is in the ballpark of $2-3 million U.S. dollars per acre.  And then if we rationale the purchase price of $2.8 million U.S. dollars of the total 88 acres of our transaction, it can be translated to an amount that our land per acre price is at $20,000-$30,000 U.S. dollars.  So that’s an unachievable price, in today’s China property market, that’s impossible price.  It’s just an impossible price that one can acquire at such a low level.  It’s physically a joke on local property market.
 
John Hickey, Cohen Capital
OK, thank you for shedding light on that issue.
 
Shifting gears for a second, you mentioned earlier Gufeng’s profitability at $1.1 million, what period was that for?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
That’s for – you mentioned in Gufeng, right?
 
John Hickey, Cohen Capital
Yes.
 
Ken Ren – China Green Agriculture – Chief Financial Officer
OK, that period is for January through March in calendar year 2010.
John Hickey, Cohen Capital
OK, what was the revenue last period?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Just a second.  I think we disclosed that in a related 8-K and then the revenue for that quarter period is $17 million.
 
John Hickey, Cohen Capital
OK.  That wraps up my questions.  Thanks very much for helping me understand.
 
Moderator
The next question is from Emma Zhao with Roth Capital Partners.  Please go ahead with your question.
 
Emma Zhao, Roth Capital Partners
Hi.  Can you hear me?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Yes, we can hear you clearly.
 
Emma Zhao, Roth Capital Partners
This is Emma from Roth Capital.  I’m filling in for Howard Zhou.  I know that you have talked about the land acquisition in detail, so I won’t bother you with that.  My question is that your stock is trading at a pretty low valuation right now, and you have a very strong cash balance and cash flow.  Would you consider any share buyback plan in the future?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
With respect to that question, I will ask Mr. Li to answer.
 
Tao Li – China Green Agriculture – Chairman, CEO, and President
[Chinese spoken]
 
Emma Zhao, Roth Capital Partners
[Chinese spoken]
 
Ken Ren – China Green Agriculture – Chief Financial Officer
We are considering a share buyback action.  However, I would like to remind everybody that this action item is subject to the approval of our board of directors.  As the board of directors has not discussed such action item yet, again, we will participate in such meeting and then such action items will be feasible or possible for the nearby future.
 
Emma Zhao, Roth Capital Partners
Is there a plan for the board meeting?  Have you submitted a proposal?
 
Tao Li – China Green Agriculture – Chairman, CEO, and President
 [Chinese spoken]
 
Emma Zhao, Roth Capital Partners
OK, thank you.

My next question is, I know that the Gufeng facility will contribute to your sales and earnings next quarter.  Could you shed any light on the gross margin expectations for the next quarter when Gufeng starts to contribute?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
We understand that Gufeng has limited earnings quality.  However, from the CGA standpoint, CGA has the capability to launch appropriate growth plan and has the ability to execute that plan and exceed investor expectations.  We believe that Gufeng will provide an excellent foundation for CGA’s specific growth expansion and this will help us to conduct a successful new horizontal integration, and we believe that the management from Gufeng is very capable for integration with our existing management.  In time, we believe that it will be proved to be a very successful acquisition.
 
In terms of margin, I can answer you that right now the Gufeng’s profit margin, the gross profit margin, is roughly 10%.  By our strategic initiative at Gufeng, such as upgrading their production line and installing a new production line with injecting our humic acid proprietary technology, the margin will improve from the current low level to about 20% by the fiscal year 2012.  So, we will prove that we have the ability to turn this acquisition into a very good one.
 
Emma Zhao, Roth Capital Partners
So it will increase to 20% in 2012?  What about next year?  Will it increase gradually or will it remain in the low 10 to teens margin?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
In our projection and our expansion plans with Gufeng, we will need three to nine months to fully turn the project plan into fully operable, so that by the fiscal year 2011, the margin will be ramped up.
 
Emma Zhao, Roth Capital Partners
So, roughly 20%?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Yes.
 
Emma Zhao, Roth Capital Partners
Is there a premium gross margin that you are targeting for that granular business, for Gufeng?  Is 20% a premium gross margin that you’re targeting or is there room to improve?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
This is our initial goal and we believe there is space to improve.
 
Emma Zhao, Roth Capital Partners
OK, so it will actually improve – just that we are targeting, like, 20% in fiscal year 2011 and 2012.  Am I right?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Can you repeat your question?
 
Emma Zhao, Roth Capital Partners
Is there room for improvement for margin going forward, but we are just targeting 20% for fiscal year 2011 and 2012?

Ken Ren – China Green Agriculture – Chief Financial Officer
That’s roughly a fair expectation of 20% in fiscal 2011 and fiscal 2012.
 
Emma Zhao, Roth Capital Partners
OK, that’s all the questions I have.  Thank you.
 
Moderator
The next question is from Louis Fan with Rodman and Renshaw.  Please go ahead.
 
Louis Fan, Rodman and Renshaw
Hi, thanks for taking my question.  Congratulations on a strong quarter, Chairman Li and Mr. Ren.
 
First of all, I just want to clarify something that I think I have heard from Ken during his earlier announcement.  Did you say that the company is building a new facility starting in September that when completed will increase the company’s annual production capacity from 355,000 metric tons to 500,000 metric tons.  Is that correct?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Yes, that is correct.  That’s for Gufeng.  We add, for Gufeng, only for Gufeng, we add additional 200,000 metric tons.
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Starting this September, and it will take at least 6 months to complete installation.
 
Louis Fan, Rodman and Renshaw
OK, because initially based on the company’s previous press release, and also actually in your current press release, you say the Gufeng facility can increase the company’s production capacity to 355,000 metric tons, so there’s an additional 145,000 metric tons.
 
Ken Ren – China Green Agriculture – Chief Financial Officer
There’s additional 200,000, so in total that will be 555,000 metric tons.
 
Louis Fan, Rodman and Renshaw
OK, 555,000, thank you.  So you expect the expansion will start in September and when can it get completed?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
It will take at least 6 months for the new production installation to continue.
 
Louis Fan, Rodman and Renshaw
OK, thank you.
 
Ken Ren – China Green Agriculture – Chief Financial Officer
After March 2011.

Louis Fan, Rodman and Renshaw
OK.  The next question is, you indicated that the company has this new distribution plus retail branding strategy, and in fact you have opened 15 direct-owned retail stores.  So, does that mean the company is switching its distribution strategy away from distributors, or is this going to be somewhat of a healthy balance between distributors and retailers, with emphasis on distributors?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
I think the real case is that we’re still focusing on our core marketing channel through distributors, not retailers.  The retail store program is somewhat complementary.  It is more like a balancing rather than a strategic shift in sales and distribution.
 
Louis Fan, Rodman and Renshaw
OK.  Next question, this will be a quick one.  What is the average selling price of JiNong products in the quarter?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
It’s roughly $2,100 U.S. dollars per metric ton.
 
Louis Fan, Rodman and Renshaw
OK.  One more question.  There appears to be some difference between the VAT tax accrued and what was paid to the Chinese tax authority.  Can you please help us understand what occurred there, and reconcile the difference?
 
Ken Ren – China Green Agriculture – Chief Financial Officer
I’ll let Mr. Li answer and I will translate.
 
Tao Li – China Green Agriculture – Chairman, CEO, and President
[Chinese spoken]
 
Ken Ren – China Green Agriculture – Chief Financial Officer
I would like to emphasize that the actual value added tax we submitted or we paid to the Chinese government is exactly consistent with the amount we have filed with the SEC.  So according to the government record, the tax payment exactly matches with each other.  So, in terms of the rumors and the anonymous report, we’re not sure where the report comes from and that information appeared to be incomplete and inaccurate.  Again, we were waived the value added tax from the majority of our humic acid based organic fertilizer product from September 2009.  It was since then that our product is not subject to accrual of value added tax, the majority of our organic fertilizer products.  However, there are still some other products, but the majority is waived from the value added tax.
 
Louis Fan, Rodman and Renshaw
OK, thank you very much.
 
Moderator
We have time for one last question.  The last question is from Echo He from Maxim Group.  Please go ahead.
 
Echo He, Maxim Group
Hi, Ken, thank you for taking my question.  Could you explain in more detail how you’re going to grow your sales, given that you are adding this big amount of capacity?  And also you’re converting Gufeng’s capacity mostly to organic fertilizer, so that probably will be different from Gufeng’s original distribution for customers.  So how are you going to deal with this situation and grow your sales through your own distribution network.

Ken Ren – China Green Agriculture – Chief Financial Officer
We will emphasize our growth through our core distribution network expansion by adding new distributors.  And concurrently, as we have illustrated and we have already achieved, by adding new product timely and effectively and proactively.  So, in the past two summer quarters you can see that both added new products contribute potentially for our net income…   That’s where we’re going to continue to focus by launching new products, setting up new distributors.  The original program will serve as supplementary.
 
And then with respect to Gufeng, we feel that our current need or focus is to replicate or articulate Gufeng’s production capacity into compatible or integral production facilities to our product offering plan.  So that’s why we budget … cap ex to upgrade their existing production facility and the new production facility.
 
And then by that time, the majority of Gufeng’s production capacity will be capable of delivering humic acid organic compound fertilizers and then organic humic acid based fertilizer will be our mainstream.  By delivering the humic acid asset compound fertilizer through our unique marketing and distribution channel work, we can actually improve on product margins.
 
Echo He, Maxim Group
Are you going to change your Gufeng current customers to a new customer base because they’re using chemical fertilizers - you’re converting to organic and chemical fertilizers, right?  Compound fertilizers?  [Chinese spoken]
 
Tao Li – China Green Agriculture – Chairman, CEO, and President
 [Chinese spoken]
 
Echo He, Maxim Group
OK, I understand.
 
Ken Ren – China Green Agriculture – Chief Financial Officer
Yes, with respect to Gufeng’s existing customer base, although currently these customers are more like inorganic chemical fertilizer users, by upgrading Gufeng’s production facility to become more organic fertilizer oriented, then those customers will be welcoming equivalent new products after our production line expansion and upgrading.  And then each customer base will gradually shift from inorganic fertilizer oriented base customer population to a compound organic fertilizer base customer population.  For those who are sticking to the chemical fertilizer, Gufeng will keep a small portion of their production capacity to focus on the chemical fertilizer production so that each chemical fertilizer customer’s need will still be met.  By integrating Gufeng’s sales force with JiNong’s sales and marketing force, we believe that the total marketing  strength will be enhanced by effective integration.
 
… Hee, Maxim Group
OK, great.  The receivables – since Gufeng has just so many customers and such high sales, would you expect the receivables will grow at the same December scale as the sales in the next fiscal year?
 
Ken Ren R