China Tracker - Details for China Agritech (CAGC)

 China Agritech
Shares Outstanding (MRQ): 20.77 mill
New Shares / Dilution (TTM): 6.67 mill47.33%
Cash (MRQ): 45.82 mill0.00%
Account Receivables (MRQ): 62.20 mill0.00%
Account Receivables (Q/Q): + 11.00 mill  
Long-Term Debt (MRQ): NO DEBT
Revenue Growth (Q/Q): -30.29% 
Revenue Growth (Y/Y): -11.66%
Net Income Growth (Q/Q): -75.65% 
Net Income Growth (Y/Y): -65.38%
EPS Growth (Y/Y): -76.50%
Net Margin (Q/Q): 8.3% (23.7%)-15.40% 
Net Margin (Y/Y): 8.3% (21.1%)-12.80% 
EPS | P/E (2 MRQ Projection): $0.970.00 
CFPS | P/CF (2 MRQ Projection): -$1.270.00 
Price/Sales (2 MRQ Projection): 0.00
Price/Book (MRQ): 0.00 
Auditor: Simon & Edward
 
 Forward Projections (Fiscal Year)
EPS | P/E (Estimates updated 2010-11-10): $0.950.00 
 Basic Facts and History (show more)
Reporting Type: U.S. Company (10-K Filings) 
Going Public: Reverse Merger on 2005-02-03 
Uplisting to Senior Exchange: on 2009-09-21 at $6.13 (-100.00% since Uplisting)

 Business Outlook

COVERAGE TERMINATED (Going Dark)
Recent Chain of Events:
2012-06-27 -- Last SEC Filing
2012-01-16 -- CFO Resignation
2011-05-20 -- Delisting from NASDAQ
2011-04-06 -- Auditor Engagement
2011-03-14 -- Trading halted by NASDAQ
2011-03-14 -- Auditor Resignation
2010-11-13 -- Auditor Change
2010-11-10 -- Last Quarterly/Annual Report: Q3/FY2010 ended September 30, 2010

(Source: Trading China, 2012-09-30)

China Agritech today announced that the Nasdaq Hearings Panel has denied the request of the Company for continued listing and has determined to delist and suspend trading of the shares on The Nasdaq Stock Market effective at the open of business on Friday, May 20, 2011. The Company's shares are expected to subsequently trade on the OTC Market.

The Company remains committed to dispelling the allegations made against our Company. The independent investigation is proceeding under the supervision of the Special Committee. The Company expects the investigation will be completed within the next couple of months. The Company is dedicated to providing accurate and complete information to our shareholders and is focused on completing the investigation and audit process so that concerns about the Company can be properly addressed. The Company expects to be able to file the 2010 10-K within a reasonable time period after the completion of the investigation and audit process.

(Source: PR Newswire, 2011-05-20)

On March 13, 2011, the Company announced that it formed a special committee of its board in order to investigate certain allegations made by third parties with respect to the Company and certain related issues and that the Company would not be able to meet the its Form 10-K filing deadline. E&Y informed the Company that, in its view, there was a material omission of fact from the Company's press release relating to the formation of the special committee, as the press release did not specifically disclose that the independent investigation was related to issues which were identified during the performance of the Company's year end audit. E&Y further advised the Company's representatives that E&Y may resign as the Company's auditors if a revised press release was not issued. The Company, however, believed that the specific disclosure in the press release about the investigation combined with the disclosure of the indefinite delay in the 10-K filing, was a clear indication to the market that issues had arisen in connection with the annual audit which would have to be addressed.

E&Y informed the Company that the issues identified in performing their audit may, if further investigated, have adverse implications for the financial statements covering the three quarterly reports filed by the Company on Form 10-Q during 2010, and advised the Audit Committee to inform the predecessor auditors of the issues identified, so that they can assess the impact on prior financial reports.

(Source: 8-K Filing, 2011-03-18)

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 Analyst Coverage (show less)
2011-05-16ChardanDowngradeTerminatedn/a
2011-03-14ChardanReiterationSelln/a
2011-02-08ChardanReiterationSell$5.00
2011-02-07Brean MurrayDowngradeHoldn/a
 

Natural Disasters in China. We discussed the impact of floods in Northern China on CAGC's 3Q earnings in our November 5, 2010 note (Natural Disasters in China Might Cause Worse-Than-Expected 3Q Results). Unfortunately, following the floods in the summer, major agricultural provinces in Northern China started to experience historical droughts. For example, Shandong province's precipitation, with only 12mm since September last year, is 85% less than a regular year. 29 million Mu wheat crops, about 53% of the total in Shandong, are affected. Although CAGC pre-announced better-than-expected Q4 results, we are concerned about potential weakness in quarters beyond Q4.

Insider Trading. Since May 12, 2010 to last month, a number of key executive officers and board directors of CAGC have sold a total of 235k shares, at prices as low as $11.38. It's hard to convince investors that management has great confidence in CAGC's growth potential when management is reducing their own stake in the company.

Move to the Sidelines. We believe China agriculture is an exciting space with great opportunities. However, given the above two reasons, we have decided that the near-term risk/reward of this stock is no longer attractive and therefore downgrade CAGC from Buy to Hold. The stock is trading at 13x and 10x our downward-revised 2010 and 2011 non-GAAP adjusted diluted EPS estimates of $0.78 and $0.99.

2011-02-07Rodman & RenshawDowngradeUnder Reviewn/a
 

Rating Under Review: We are taking China Agritech's rating under review from Market Outperform. The company was attacked last week by an internet report from "LM Research." While it was obvious that this "LM Research" represented significant short interest, and some of the allegations in the report could be either inaccurate or exaggerated, the attack did bring up some issues that, in our opinion, would warrant more detailed clarification. China Agritech issued a press release responding to the attack shortly after. While we applaud the company's quick response, especially during the Chinese New Year holiday, we believe the response was more or less high-level and generic, and there is still a long way to go for the company to completely rebut the allegations.

We have also noticed that there have been more active insider selling activities recently. While the number of shares sold was relatively small compared to insiders' total share ownership, the selling did not represent a show of confidence that investors would look for in a management, especially at the current levels of valuation.

In light of the current uncertainties surrounding the company, we believe it is prudent to take the rating under review pending greater clarification. China Agritech announced on November 15 last year that it appointed Ernst & Young Hua Ming as its auditor. While a successful audit by a Big 4 auditing firm does not necessarily guarantee everything, it could go a long way in rebuilding investor confidence.

Preliminary FY10 results: On January 21, China Agritech announced preliminary unaudited FY10 revenue of $119 million and Q4 revenue of $41 million, beating our respective estimates of $100.1 million and $26.6 million. The annual revenue result also surpassed the company's guidance of $114 million. In addition, China Agritech reported that as of December 31, 2010, it had established 21 regional distribution centers located in Henan and Jiangsu provinces, exceeding its 2010 target of 10.

CAGC is currently followed by 2 analysts. 0 give the stock a positive rating, 1 rate it neutral and 1 give it a negative rating.


    see all Analyst Ratings

 Recent Financings
2010-04-28Priced$21.28 mill1.24 mill shares$17.12
CAGC
Agriculture
SCORE
-4
UNDER REVIEW
READ: Score Cards Explained
SAFETY/RISK SCORE
EXTREME RISK
DETAILS: Safety/Risk Model for CAGC
Current Price:  n/a
F10k Day (2006-01-27): -100.00%$8.00
2009 Close: -100.00%$13.98
2010 Close: -100.00%$12.27
2011 Close: -100.00%$1.75
High (2012-02-06): -100.00%$2.15
Low (2012-07-30): -100.00%$0.11
Exchange:
Market Capitalization: n/a
Total Shares: 20.77 mill
Float: n/a
Avg Volume: n/a
Last Quarter: 2010-09-30
Revenue (MRQ): 23.89 mill
Net Income (MRQ): 1.97 mill
Op. Cash Flow (MRQ): -5.86 mill
all financial data provided without warranty