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CHINA GREEN AGRICULTURE, INC.
September 2012 Customized Fertilizer Solutions Diversified Products to Diversified Markets
NYSE: CGA
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Safe Harbor Statement
This presentation contains forward-looking statements concerning the Company’s
business, products and financial results. The Company’s actual results may differ
materially from those anticipated in the forward-looking statements depending on a
number of risk factors including, but not limited to, the following: general economic
and business conditions, development, shipment, market acceptance, additional
competition from existing and new competitors, changes in technology, and various
other factors beyond the Company’s control. All forward-looking statements are
expressly qualified in their entirety by this Cautionary Statement and the risk factors
detailed in the Company's reports filed with the Securities and Exchange Commission.
China Green Agricultural undertakes no duty to revise or update any
forward-looking statements to reflect events or circumstances after the date of this
material except to the extent required by applicable law.
China Green Agriculture (NYSE: CGA)
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Company Overview
China Green Agriculture (NYSE: CGA)
BUSINESS Engaged in research, development, production and sale of specialty
fertilizers, compound fertilizers and agricultural products
LOCATION Headquartered in Xi’an, Shaanxi with production facilities in Xi’an and
Beijing
PRODUCT Over 443 diversified products (as of Q4FY2012)
FACILITIES Two automated production facilities and two R&D centers
CAPACITY Production capacity of 555,000 metric tons
Jinong: 55,000 metric tons
Gufeng: 500,000 metric tons
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Equity
Equity Snapshot as of Sep 18, 2012
Prev Close 3.65
52wk Range 2.61 – 5.52
Avg Vol (3m) 61,466
Market Cap 100.21M
P/E (ttm) 2.34
Shs Outstand 26.94M
Float 17.07M Resources: Yahoo Finance
China Green Agriculture (NYSE: CGA)
FINANCING The Company has raised $65.8 million in net from the U.S. market:
Dec 2007, PIPE $18.6M
Jul 2009, Public Offering $27.2M
Nov 2009, Public Offering $20.0M
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Investment Highlights
China Green Agriculture (NYSE: CGA)
Strategic
Geographic
Positions Established nationwide distribution network
Strategic distribution of production facilities in Northwest China, North
China, and potential acquiring target in Southwest China
Cross-selling of different categories of products made by the facilities
Healthy
Development
Strong research and development capacity
Regular new product introductions
Well-branded product portfolio
Market
Potential
Current fragmented and substantial addressable market
Increasing need for compound fertilizers, especially organic fertilizers
Primary focused industry in China’s “12th Five Year Plan”
The U.S. NYSE listed public company
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Corporate History
China Green Agriculture (NYSE: CGA)
1998 2007 Jul, 2009 Dec, 2009 2010
On January 19, 2007,
Jinong incorporated
Jintai as its direct,
wholly-owned
subsidiary
Jinong was
incorporated in the
Xian on July 1998
On July 23, 2009,
Yuxing became a
direct, wholly-owned
subsidiary
CGA transferred its
listing to the New
York Stock Exchange
on December 7, 2009
On July 2, 2010, the Company
acquired all of the equity
interests of Gufeng and its
subsidiary Tianjuyuan
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Corporate Structure
China Green Agriculture (NYSE: CGA)
2007 Jul, 2009 Dec, 2009 2010
China Green Agriculture, Inc.
Green Agriculture Holding
Corp.
Shaanxi Tech Team Jinong
Humic Acid Product Co., Ltd.
Jintai Agriculture Technology
Development Company
Beijing Gufeng Chemical
Products Co., Ltd.
Beijing Tianjuyuan Fertilizer
Co., Ltd.
Yuxing Agriculture Tech
Development Co., Ltd.
100%
100%
100% 100% 100%
100%
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Production Facilities
China Green Agriculture (NYSE: CGA)
Shaanxi Tech Team Jinong Humic Acid Product Co., Ltd.
A 6,495 square meter (69,911 square feet) production
facility that manufactures liquid fertilizer products
A 13,803 square meter (148,576 square feet) production
facility that produces liquid and highly concentrated
(powdered) fertilizers
Utilizes one of the most advanced automated humic acid
production lines in China
Total annual production capacity of these facilities is
55,000 metric tons
Beijing Gufeng Chemical Products Co., Ltd.
Eight manufacturing facilities comprising 17,930 square
meters (approximately 192,997 thousand square feet)
that produce various kinds of fertilizers
Total annual production capacity of 500,000 metric tons
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R & D Facilities
China Green Agriculture (NYSE: CGA)
Jintai Agriculture Technology Development Company
Covers 137,000 square meters, and consists of six
intelligent greenhouses
Produces top-grade flowers and multi-colored seedlings
Yuxing Agriculture Tech Development Co., Ltd.
Covers 353,000 square meters with 100 sun-light green
houses and 6 intelligent green houses
Is equipped with an advanced drip irrigation system and
water purification equipment
60%-70% of the experimental work can be done in the
greenhouses
Cultivates and agricultural products by applying fertilizers
produced by Jinong for testing aim
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Diversified Products
China Green Agriculture (NYSE: CGA)
Fertilizer
Products
Fertilizer Business contributes 90% of the main business
Products include liquid, granular and powdered fertilizers developed
to increase crop yields and quality without the harmful effects of
chemical fertilizers
The Company currently manufactures and sells 443 fertilizer products
from humic acid-based fertilizers to mixed organic-inorganic
compound fertilizers
Agricultural
Products
Top-grade flowers, including principally, faber cymbidium and
phalaenopsis
Green vegetables and fruits, including, principally, Holland cucumbers,
sweet and colored pimientos, eggplant and Japanese watermelons
Multicolored seedlings, including, principally, photinia serrulata
(Chinese Photinia)
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Nationwide Distribution Network
China Green Agriculture (NYSE: CGA)
Distributors Top 5 distributors
on Revenue (%)
Jinong 758 (80.4%) 2.1%
Gufeng 185 (19.6%) 47.0%
Geographic diversification
943 distributors covering all regions in China
Strict distributor requirements on criteria
Cash transaction
Warehouse ability New Provinces (Post-Gufeng Acquisition)
Top 10 Provinces (Pre-Gufeng Acquisition)
Beijing
Liaoning
Jilin
Hebei
Minimum retail store coverage
Minimum fleet size
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Fertilizer Market
China Green Agriculture (NYSE: CGA)
Demands for fertilizer
Arable land is shrinking. 21% of the world’s population
with 9% of the world’s arable land. And farmers
averagely spend 20% of annual income on fertilizer
China is currently the world’s largest consumer and
producer of fertilizers, who has 1/3 of total production
and consumption around the world
Popularity of organic fertilizer
Agricultural self-sufficiency calls for increasing use of
eco-friendly fertilizer products
Decades of overuse of chemical fertilizers have
impoverished arable land
Growing awareness of population about food safety
Government support for organic produce, for both export
and domestic consumption
Organic compound fertilizers
represent about 27% of total
PRC fertilizer consumption
versus 50% in the developed
countries. And an over 30%
CAGR is projected.
73%
27%
55% 45%
Organic vs. Chemical in Y2011
Organic vs. Chemical in Y2015E
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Fragmented Market
China Green Agriculture (NYSE: CGA)
Crowded market players
There are approximate 3000 chemical fertilizers
manufacturers and Over 1,000 organic fertilizers
manufacturers in the market
Most of the manufacturers are facing issues of:
Focus on standard products; limited innovation
Vulnerable in an increasingly sophisticated
marketplace
Limited access to market intelligence
Modest service platform
Capital constrained
CGA’s strategies
Building and maintaining nationwide distribution
channels
Establishing regional production facility centre and
increase production capacity through M&As
Spending on R&D and regularly introduce
innovated products
Competitor Segmentation for Organic Fertilizer Market
80%
9%
3% 8%
local small enterprise
large regional enterprise
nation level enterprise
multi-national enterprise
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Short-term Growth Strategies
China Green Agriculture (NYSE: CGA)
Rapid
Increase on
Market Share
Capacity Increase
Integrate, diversify and
expand Gufeng
Optimize expanded
sales network
Cross-sell expanded
product range
New R&D center and
higher sales of
agricultural products
Acquisition
Targeting high quality
production facilities with
selective geographical
and strategic locations,
for sector consolidation
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Long-term Growth Strategies
China Green Agriculture (NYSE: CGA)
Establish “Crops for Fertilizers” program
Through the direct trading program to gain extra profit from sales of crops
Farmers can save time cost and transportation cost of selling crops and purchasing
fertilizers
Help establish a National Engineering Research Center of Humic Acid-based Fertilizers
Work with China Humic Acid Industry Association (CHAIA) to seek government approval
to establish the Engineering Center
Participate in design of the Humic Acid-based Fertilizer Protocols
Work with CHAIA to regulate and standardize production and distribution of humic acid
granular fertilizers
Broaden market penetration and brand recognition
Specially designed marketing campaign to increase brand awareness and further
penetrate existing market
Cut manufacturing costs by controlling cost of raw materials
Secure long-term raw material supply by acquiring potassium or phosphorus mines
Further utilize extensive research and development platform
Accelerate rollout of new products to acquire additional market share
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Long-term Growth Targets & Vision
China Green Agriculture (NYSE: CGA)
Growth Plan
At least $238 million in revenue by FY 2013
At least $750 million in revenue by FY 2015
At least $3 billion in revenue by FY 2020
$212
$750
$3000
FY 2012 FY 2015 FY 2020
Revenue (millions)
Our Vision
Become a leader in the overall fertilizer industry in China by 2020.
Increase market share for all fertilizers sold in China to 3-5% from historical
2% of liquid fertilizers by leveraging strengths in R&D and distribution and
expansion of compound granular fertilizer.
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Management
China Green Agriculture (NYSE: CGA)
Experienced
Management Tao Li – Chairman, CEO and President
Holds Masters Degree from Northwest Polytechnic University
Vice Chairman of China Green Food Association and other trade
organizations
Ken Ren – CFO
Joined CGA in May 2010
5 years experience in capital market and asset liability
management.
Holds Ph.D. in engineering, M.S. in finance, both from Purdue
Uni., West Lafayette.
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Financial Performance
China Green Agriculture (NYSE: CGA)
$15.2 $22.6 $35.2 $52.1
$179.7
$217.50
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012
$2.7$6.9 $7.8
$14.5
$21.3
$32.9
$42.0
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
FY2006FY2007FY2008FY2009FY2010FY2011FY2012
$3.1$8.0
$10.4
$18.7
$27.5
$47.9
$59.9
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
FY2006FY2007FY2008FY2009FY2010FY2011FY2012
$0.73 $0.64
$0.53
$0.78 $0.91
$1.27
$1.56
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012
CAGR 73.8%
CAGR 58.0%
Revenues EBITDA
Net Income Diluted EPS
CAGR 63.8%
In Millions In Millions
In Millions In Millions
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Financial Position
China Green Agriculture (NYSE: CGA)
$ in millions June 30, 2012 June 30, 2011
Cash and Cash Equivalents 72.0 65.6
Accounts Receivable, net 62.0 17.5
Inventory 28.6 23.7
Total Current Assets 175.1 118.9
Total Assets 288.0 223.4
Total Current Liabilities 45.8 31.5
Total Liabilities 45.8 31.5
Total Shareholders’ Equity 242.3 191.9
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Contact Information
China Green Agriculture (NYSE: CGA)
Company – China Green Agriculture, Inc.
Mr. Ken Ren – CFO
Tel: +86 29 88266437
Email: [email protected]
3/F, Borough A, Block A
No. 181 South Taibai Road
Xi’an, 710065, PRC
Company – China Green Agriculture, Inc.
Ms. Jane Zuo – Secretary of the Board
Tel: +86 13520622512
Email: [email protected]
3/F, Borough A, Block A
No. 181 South Taibai Road
Xi’an, 710065, PRC
Company – China Green Agriculture, Inc.
Ms. Amy Deng – IR Manager
Tel: +86 29 88266503
Email: [email protected]
3/F, Borough A, Block A
No. 181 South Taibai Road
Xi’an, 710065, PRC