China Green Agriculture, Inc. 2024 10-K Review

Overview

China Green Agriculture, Inc. (CGA) is a Nevada-based company primarily engaged in the research, development, production, and sale of various types of fertilizers and agricultural products. The company operates through its subsidiaries in China and has recently ventured into Bitcoin mining through its subsidiary Antaeus Tech Inc. in Texas, USA.

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Business Description

CGA's core business revolves around fertilizer products, specifically humic acid-based compound fertilizers. The company operates through its subsidiaries, including Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. and Beijing Gufeng Chemical Products Co., Ltd., among others. CGA also produces agricultural products such as fruits, vegetables, and flowers through its subsidiary Yuxing.

In 2023, CGA expanded into the digital assets space by establishing Antaeus Tech Inc. to mine Bitcoin. This diversification marks a significant shift from its traditional agricultural focus.

Financial Performance

For the fiscal year ended June 30, 2024, CGA reported total revenues of $95.8 million, a decrease of 22.8% from the previous year. The company experienced a net loss of $28.4 million, a significant increase from the $13.3 million loss in 2023. The decline in revenue was primarily due to reduced sales in its fertilizer segment, particularly from Gufeng.

Fertilizer Segment

The fertilizer segment remains the largest revenue contributor, accounting for 88.8% of total revenues. However, sales decreased by 29.5% for Gufeng and 18.1% for Jinong. The company sold 139,070 metric tons of fertilizer, down from 175,519 metric tons in 2023.

Agricultural Products

Yuxing, the agricultural products segment, generated $9.4 million in revenue, a slight decrease from the previous year. This segment accounted for 9.8% of total revenues.

Bitcoin Mining

Antaeus Tech Inc. contributed $1.3 million to the total revenue, marking a 511% increase from the previous year. This segment is still in its nascent stage but shows potential for growth.

Cash Flow and Financial Position

CGA's cash and cash equivalents decreased by 17.4% to $58.8 million. The company used $9.9 million in operating activities, primarily due to the increased net loss. Investing activities used $6.1 million, mainly for long-term equity investments.

Risk Factors

CGA faces several risks, including:

• Regulatory Risks: The company's operations in China are subject to complex regulations, and any changes could adversely affect its business.
• Market Risks: The fertilizer market in China is highly competitive and fragmented, with fluctuating raw material costs.
• Bitcoin Volatility: The nascent Bitcoin mining segment is subject to high volatility and regulatory scrutiny.

Conclusion

China Green Agriculture, Inc. is navigating a challenging market environment with declining revenues in its core fertilizer business. The company's foray into Bitcoin mining presents a new growth avenue but also introduces additional risks. Investors should weigh these factors carefully.

Investment Score

Based on the analysis, CGA receives an investment score of 4.5 out of 10. The company faces significant challenges in its traditional business, and while the Bitcoin mining venture offers potential, it also carries substantial risk.