NYSE: CGAedg1.precisionir.com/irwebsites/cgagri/pdf/CHINAGREENAGRICULTUREINC.pdfMarket Share...

CHINA GREEN AGRICULTURE, INC.

September 2012 Customized Fertilizer Solutions Diversified Products to Diversified Markets

NYSE: CGA

2

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)

3

Company Overview


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

4

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


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

5

Investment Highlights


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

6

Corporate History


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

7

Corporate Structure


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%

8

Production Facilities


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

9

R & D Facilities


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

10

Diversified Products


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)

11

Nationwide Distribution Network


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

12

Fertilizer Market


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

13

Fragmented Market


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

14

Short-term Growth Strategies


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

15

Long-term Growth Strategies


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

16

Long-term Growth Targets & Vision


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.

17

Management


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.

18

Financial Performance


$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

19

Financial Position


$ 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

20

Contact Information


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


Ms. Jane Zuo – Secretary of the Board

Tel: +86 13520622512




Xi’an, 710065, PRC


Ms. Amy Deng – IR Manager

Tel: +86 29 88266503




Xi’an, 710065, PRC

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