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China Stock #2 - China Green Agriculture (CGA)

China Green Agriculture (CGA) develops, manufactures and distributes humic acid-based, liquid compound fertilizer throughout China. The company has one of the most recognizable brand names in Chinese green fertilizers today, and it operates on a national scale covering 27 provinces in China.

Because China Green Agriculture’s strong prospects piqued my interest, I decided to go to Beijing and visit with senior management. What I discovered was the company has a big competitive advantage via its strong R&D facilities. The company spent millions building a greenhouse research facility, which gives CGA an edge in product development.

China Green Agriculture recently announced a new sales strategy for fiscal years 2010 through 2012 that is expected to increase sales volume by around 40% per year. The new strategy is intended to heighten brand awareness of millions of farmers throughout China to CGA's fertilizers. To do so, CGA will open retail stores in various rural locations that sell directly to farmers, helping promote China Green Agriculture's name. While the plan is indeed ambitious, I suspect it will be fully achievable given the company's tremendous growth record.

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