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China
Organic Agriculture, Inc. (OTCBB: CNOA)
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Dear Reader,
The extraordinary demand created by China and its impact on the world
economy is well-documented with soaring prices for crude oil and other
vital resources. Behind that industrial growth are burgeoning middle
and upper classes, the fastest-growing segments of China’s population.
This expanding group of consumers demands ever-higher standards of foods
and services – perhaps none more so than rice, the most important source
of energy for the nation’s 1.3 billion citizens.
Today's featured company, China Organic Agriculture,
Inc. (OTCBB: CNOA) is ahead of the curve and has already established
significant brand loyalty among the nation’s affluent with high-quality,
fully-certified organic rice products that are already generating revenues
and net profits from China’s estimated $13 billion green foods market.
Building shareholder value is the driving force behind China Organic
Agriculture. Its senior management team continues to deliver on this
mission by consistently increasing margins – currently over 40% – and by
continuing to build upon its 100% yearly revenue growth for the trailing
four years.
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About China Organic Agriculture, Inc. |
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China Organic Agriculture
Inc. (OTCBB: CNOA) is among the largest producers of green and organic
rice in China. Unlike other more rural competitors, COA controls all aspects
of the process from seeds to planting and processing, R&D and sales.
China Organic has already established significant brand loyalty among the
nation’s affluent with high-quality, fully certified organic rice products
that are already generating revenues and net profits from China’s estimated
$13 billion green foods market. |
China Organic Agriculture has experienced significant growth
since its inception in 2002, and has put solid plans in place to markedly
expand revenues and increase shareholder value. The Company is among the
largest producers of green and organic rice in China with a combined output
of 88,600 tons, commanding a 7.1% share of the green rice market and a
3.6% share of the organic rice market. China Organic's proprietary, 20,000
square meter processing factory has an annual production capacity of 30,000
tons. The Company also has an extensive sales network located in China's
major cities.
While China Organic certainly plans to expand its markets within China,
the experienced management team also intends to increase exports at a rate
of 2:1 domestic versus international, to significantly increase sales and
reduce market risk. Plans are currently underway to increase production
capacity, supporting projected revenues for FY2007 exceeding $18 million
with a net income of approximately $6.7 million.
China Organics has the business plan, the depth of management and the
capital to realize its mandated goal of becoming the leading organic agriculture
company within this explosive sector in China as well as globally within
the next five years.
You may watch a video introduction
to China Organic Agriculture, Inc. HERE
You may view a white paper by
Murphy Analytics HERE
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Today China Organic Commands 40% of The Chinese Organic Rice Market |
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INDUSTRY DRIVERS
Demand for rice, particularly organic, is far outstripping
supply for the foreseeable future
Demographics in China shows a rapidly-growing, health
conscious affluent upper class
Rice is priced within global free market forces (no
government pricing controls)
Since 2002, China has moved from 45th to second in
the world with respect to the number of hectares under organic management
No tax policy exists for agriculture in China
More land under organic horticulture than any other
country
Leaders in the Agribusiness Marketplace Include:
Agria Corporation (NYSE: GRO), Bunge Ltd (NYSE:
BG), Syngenta (NYSE: SYT), CHS, Inc. (NasdaqGS:CHSCP),
Archer-Daniels-Midland Co. (NYSE: ADM), Corn
Products International, Inc. (NYSE: CPO), Cal-Maine Foods, Inc. (Nasdaq:
CALM)
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China Organic Agriculture Products |
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China Organic’s flagship product is the “ErMaPao” brand of organic and green rice that is natural, healthy, tastes great
and is irrigated by the Nen River, one of the last unpolluted rivers in
China. No chemicals or fertilizers are used in the process. ErMaPao has
also won several quality awards, holds the highest organic certification
and is the most popular rice brand in the country.
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The ErMaPao
brand has been recognized as "AA status" products
by the China Green Food Development Center. In 2005, ErMaPao won the title
of “Consumer Recognized Famous Brand in the Chinese Market” from the China
Association for Quality Inspection, and in August 2006, ErMaPao was referred
to as a “Famous Brand Product” at the 6th China Changchun International
Agriculture and Food Fair. |
ErMaPao brand organic agricultural products are
available in gift packaging and supermarket packaging. It is also available
in a full rage of sizes, including 1KG, 2KG, 2.5KG, 5KG, 7.5KG and 10KG.
The company only employs environmentally-friendly production methods with
no harmful materials used during the shipping, selection, production, cleaning,
storage, and packaging of products.
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Recent News From CNOA |
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Press
Release Source: China Organic Agriculture, Inc.
Thursday
December 6, 8:30 am ET
China Organic
Announces Agreement With Major Songyuan City Retail Distribution System
Agreement
Targeting Fast-Growing Middle Class Market Segment to Generate
$4 Million
Within Calendar Year 2007
JILIN,
China--(BUSINESS WIRE)--China Organic Agriculture, Inc. (OTCBB:CNOA - News),
a growth-driven agricultural and products company leading China's organic
foods revolution, today announced that the Company has reached a milestone
3-year retail distribution agreement with Shunda Grain and Oil Company
of Songyuan City, one of the largest cities in the northeastern province
of Jilin.
The
agreement with Shunda Grain and Oil is the latest validation of CNOA’s
stated strategic initiatives to expand market share by gaining new partnerships
with major retail distribution system partners in China and other emerging
economies in Asia.
The
agreement is expected to contribute revenues of 30 million Yuan, equivalent
to approximately USD $4 million within calendar year 2007. The agreement
states that Shunda Grain and Oil will become one of CNOA’s authorized retailers
in the supermarket chain store industry, selling “ErMaPao” award-winning
series of products to the Fuyu region with more than 2.8 million consumers. MORE
Press Release Source:
China Organic Agriculture, Inc.
Wednesday December
5, 8:30 am ET
China Organic Agriculture Expands
on Guidance for Revenues and Profits Going Forward
Company to Pursue Senior Exchange
Listing; Continued Corporate Initiatives
Increasing Productivity at a Rapid
Pace
JILIN, China--(BUSINESS
WIRE)--China Organic Agriculture, Inc. (OTCBB:CNOA - News),
a growth-driven agricultural and products company leading China's organic
foods revolution, today announced that its new business model would continue
to produce strong growth through 2008 and beyond. Recently China Organic
Agriculture announced a 500% increase in forecast revenues and an over
400% increase in forecasted net income. Several key sales agreements signed
by the Company have led to the sharp increase in forecast income. This
has allowed the Company to significantly increase production and get more
of its flagship product, green and organic rice, to market quickly. The
Company is firmly committed to expanding operations and increasing earnings
and has already set in motion several initiatives to expand capacity and
extend its reach into other fast-growing economies in Asia. Given the progress
the Company has made, the Company has determined to seek a listing on a
more senior exchange.
“We are very comfortable
and confident that our forecasted revenue and profit growth are right on
target. At this time we are looking at several more initiatives that will
allow our Company to continue a pattern of strong growth for several years
to come. And, we expect to announce more positive developments in the coming
weeks,” said Huizhi Xiao, Chairman of China Organic Agriculture. ”We are
sure that our shareholders will be pleased with our current and future
developments. It is our firm intention to move to a senior exchange such
as AMEX or the NASDAQ. Our Company and its loyal shareholders will benefit
even more once this occurs,” Mr. Xiao concluded. MORE
Press Release Source:
China Organic Agriculture, Inc.
Monday December
3, 8:30 am ET
China Organic Agriculture Forecasts
Record Revenue and Earnings for 2007
Company Forecasts Revenues and Earnings
of Approximately $45 Million and $14 Million; Validates High Growth Business
Model
JILIN, China--(BUSINESS
WIRE)--China Organic Agriculture, Inc. (OTCBB:CNOA),
today increased revenue and earnings forecasts for 2007. The upwardly revised
guidance projects revenues to increase to approximately $45 million for
calendar year 2007, a 500% increase over the $9 million for the comparable
period the previous year. The Company has also raised projected earnings
to more than $14 million, an estimated $0.29 in earnings per share, for
calendar year 2007, an increase of approximately 408% over the $3.43 million
for the comparable period the previous year. MORE
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Management
Team |
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Chairman of the
Board: Xiao Huizhi
Xiao Huizhi currently serves as
Board Chairman of Ermapao Green Rice Co. Ltd. As a Senior Agronomist, he
has extensive experience in industrial operations management, integrating
rice planting, processing and sales. An adept and dynamic leader, he possesses
proven enterprise management leadership skills. While engaged in agricultural
production management from 1985 to 1995, Xiao introduced superior rice
varieties that enabled double-digit increases in grain output, resulting
in the honor of being chosen as a "county-level model worker". From 1995
to 2001 he served as General Manager of Guangsha Construction Co., driving
100% profit growth with multiple projects chosen as "superior projects
of city and county". In 2002, he founded Songyuan Ermapao Green Rice Co.
Ltd. and vigorously promoted the planting of green rice, enabling a 30%
output increase and a 60% sales income increase. Xiao Huizhi is a graduate
of Jilin Agricultural University. |
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CEO: Lin Jian
Lin Jian has extensive experience
in financing, operations and enterprise administration. Additionally, he
has deep ties with China’s agriculture policy administration. He has proven
himself as a highly-strategic leader and is well known and highly-respected
in the industry. Lin Jian’s leadership has been a major component of China
Organic Agriculture’s quick development, with the Company growing at more
than 100% each year. |
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CFO: Hu Xian Hua
Hu Xianhua is a graduate of Jiangxi
Finance and Economy Management Institute with an emphasis on Finance Accounting.
With 10 years of experience as a C.P.A., he has a thorough knowledge of
China’s accounting and finance system, local and state taxation law, and
international accounting legislation. He is known for his advanced finance
management capabilities. |
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Secretary: Zhao
Ping
The executive secretary of COA
is Zhao Ping, a graduate of the China Communist Party School with a major
in economic management with an occupational title of economic engineer.
He is well-versed in secretariat work in China and has profound knowledge
in the standardization of the Company’s intra work flow. |
Independent Director: Jin Zhouzhe
Jin Zhouzhe, a graduate of Yanbian
Agriculture College, is an accredited senior agronomist in the Songyuan
Agricultural Specialist Group of Jilin Province and has been an independent
director and consultant to Songyuan Ermapao Green Rice Co. Ltd. since 2005.
With a career beginning in the mid-1960's, Jin Zhouzhe has been a pioneer
in the field of rice breeding with several acclaimed publications and awards
for his work in developing and popularizing new, high quality breeds. In
addition, he has received numerous awards and honors for his leadership
and outstanding achievments in science and technology |
Independent Director: Ma Jingyong
Mr. Ma Jingyong is a professor
and researcher at Jilin Agriculture University where he studies new rice
breeds with high quality, high yield and disease resistance. Since the
beginning of 2005 he has been a consultant to Ermapao Green Rice Co. Ltd
and more recently an independent director of China Organic Agriculture.
Ma Jingyong has long been engaged in the science of rice breeding and has
made adward-winning contributions in new, award-winning, high-quality,
high-yield rice breeds. |
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Financial Highlights |
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KEY INVESTMENT HIGHLIGHTS
First-half 2007 sales of $6.4 million, up 60% vs. the same period in 2006,
primarily due to increased production capacity and a growing customer base
First-half 2007 net income: $2.4 million, or 42% of sales
FY 2006 sales: $9 million, an increase of $2.4 million compared to FY 2005.
Projected FY2007 sales: $18 million
Doubling of sales projected by 2009
Profit margins exceed 40 percent and rising as a result of increased sales
consistently exceeding cost of sales
ErMaPao name is well established as the most popular organic rice brand
in China
Building shareholder value is the driving force behind for China Organic
Agriculture. Its senior management team continues to deliver on this
mission by consistently increasing margins – currently over 40% – and by
continuing to build upon its 100% yearly revenue growth for the trailing
four years.
For the first six months of 2007, the Company’s revenues were approximately
$6.4 million, a 60% increase over the same period in 2006. Six-month earnings
were approximately $2.4 million, a 58% increase over the first half of
2006. Gross profit margins for the first six months of 2007 grew to 43.9%. (Note: numbers above reflect the six-month period beginning
January 1, 2007 and ending June 30, 2007.)
China Organic feels confident that 2007 will continue to be a record
setting year. China Organic’s forecasted 2007 calendar-year revenues
are expected to reach approximately $18 million, a 100% increase over the
comparable period in 2006. The Company has also projected net income
of approximately $6.7 million, representing an approximate 95% increase over the $3.4 million reported for 2006. China Organic has set forth a
solid, high-growth business model to continue making a significant impact
in the growing market for green foods, which has grown to $13 billion,
equal to the U.S. market for organic foods.
Recent Price
$3.90
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52-Week Range
0.51 - 4.00
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Average Volume (3 mo)
99,020
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Estimated Market Cap
188,668,520.16 as of Dec 6, 2007
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Outstanding Shares
51,548,776 as of May 10, 2007
For
quotes, news, Investor Fact Sheets, videos and more, please visit CNOA's
Shareholder
Information Portal
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Company Contacts |
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Corporate Contact:
China Organic Agriculture
Steve Wan
Tel. 310-441-9777
stevewan@chinaorganicagriculture.com
Financial Communications Contact:
Trilogy Capital Partners
Ryon Harms
Tel. 800.592.6067
ryon@trilogy-capital.com
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