Here are some statistics to “chew over”.  Currently, 19.63% of the World’s population resides in The People’s Republic of China which works out to roughly 1,336,500,000 people.  That is a lot of mouths to feed and today’s focus company is dedicated to that task.  They are doing very well at it, as their financials suggest.

Here is a description of CNOA (from their own site):

China Organic Agriculture Inc. (CNOA), engages in the acquisition and distribution of agricultural products in the People’s Republic of China. The Company offers green rice, organic rice, soybeans, corn, cereal crops, ice wine and other agricultural products.

CNOA has developed extensive networks throughout many of China’s major cities, including Beijing, Shanghai and Nanjing, and is positioned to leverage those networks to establish broad distribution of a number of natural and premium food and related products.

CNOA’s niche is to offer upscale, higher quality foodstuffs (including wine) to consumers in China.  That strategy seems to be working.  The company is on a strong growth curve with organic growth and a number of acquisitions.

To the Chart!

CNOA continues to impress (as my title indicates) with some very strong revenue growth and incredible profitability.  They have strong cash-in-the-bank and large receivables.  The only negative thing I see from their balance sheet is debt.  They have high debt levels  and much of it has been classified as current.  I have not seen their 10-K for 2009 yet, and will be interested to see how they are dealing with that.

CNOA is impressive.  I believe that the markets reward GROWTH and CNOA is on a strong growth track.  As previously stated, they have a lot of hungry mouths to feed in China and their adherence to safe and organic foods could stand them in good stead….after all of the food quality crises that China has experienced in recent years.

Any break below the support line and the stock should be avoided, but if this level proves durable then I would expect to  see a strong bounce.  Again, I will be interested to read their latest 10-K to see how they finished the year.

Good luck and good trading,

Jeffrey Dean, Editor

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