Thursday, May 13, 2010

China Organic Agriculture (CNOAE) pure value

I don't like uncertainty and I don't like delayments in filings. Despite that I think China Organic Agriculture, Inc. (CNOA), a company headquartered in the Liaoning Province in China engaged in the trading and distribution of agricultural products has still my vote.

The company through its subsidiaries, is engaged in the distribution of agricultural products in China, including green rice, organic rice, soybeans, ice wine and other agricultural products. It distributes its products mainly through large agricultural distributors, including Shen Zhen Shen Jin Da Agricultural By-product Trading Co. Ltd., Beijing Jingu Hengfa Trading Co. Ltd., Shanghai Liang You Group Co. Ltd., Jinyunda Industry Development Co. Ltd. and Guang Dong Guangliang Industry Co. Ltd.

In March they completed the acquisition of 60% of the stock of Changbai Eco-Beverage Co. Ltd. ("Changbai") for RMB70 million ($10.25 million). Changbai is mainly engaged in the research, production and sale of various natural products including blueberry drinks, blueberry health care products and bee products to meet the increasingly market demands in China for these goods. As a result of becoming a part of the China Organic Agriculture’s family, Changbai will be able to more quickly expand both its distribution and its product mix in China’s expanding blueberry market. By utilizing the Company’s existing distribution network, Changbai will be able to do this while benefiting its distribution efficiencies and overall profitability.

The Chinese economy’s dramatic rise in the disposable income has increased the demand for "green foods" such as those provided by China Organic Agriculture with a book value of $ 0.77, cash per share of $ 0.27 and EPS first nine months of $ 0.14 I have the patience to wait until the annual report is filed. Buying at prices between $ 0.50 and $ 0.60 can be a profitable move for the nearby future.


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