Yesterday Agria Corp. (GRO) announced that they would be unable to complete their 20-F annual report for the period ending December 31, 2009 by the required June 30, 2009 filing date.

Agria attributed the delay to their inability to complete their financial statements due to two ongoing investigations being conducted by independent firms. The investigations surround the valuation of sheep and date tree assets, the authenticity of certain sales contracts, bank statements and tax invoices of P3A, and the verification of titles of farm land which were leased by P3A in 2008.

Agria Corp's (GRO) financial performance through its first three quarters has been hampered by significantly lower seed prices and a disruption in production of sheep-breeding products. We would not categorize the cause of either to be inherent fundamental issues that would be expected to affect sales for the long-term.

Sheep-breeding revenue should continue to rebound in the fourth quarter and into 2009. While corn seed prices will likely remain depressed until the excess inventory in the market is consumed, we do not expect this to be a protracted event.

Q2 2008 Earnings Call Transcript

August 12, 2008 8:00 am ET

July was a volatile month for the U.S. markets. The Dow Jones Industrial Average started the month with some big losses, even closing below 11,000 for the first time in two years on July 15th. But since then, the index has reclaimed some of the losses after a pair of strong rallies, fueled by declining oil price. For the month, the Dow rose a meager 0.25%, the NASDAQ rose 1.42% and the broader S&P 500 index declined just about 1%.

During the month, the Shanghai Composite Index (^SSEC) showed some signs of life, briefly going over the 2,900-point mark early in the month before settling at 2,775.72. That’s a gain of 1.45%. The Hang Seng Index (^HSI) also recovered from the deep drop in June, gaining 2.84% in July.

Q1 2008 Earnings Call

June 26, 2008 8:00 am ET

Comparing to what happened to Chinese stocks listed on U. S. stock exchanges, the drop in major U. S. equity indexes is minor, though the Dow Jones Industrial Average did lose more than 10% in just one month (10.19%). During the same time period, the NASDAQ dropped 9.12% and the S&P declined 8.57% as jitters in the financial sector continued and there was no sign that the housing market has bottomed. In fact, the loss in June was the severest monthly loss since the Great Depression.

However,  if you are investing heavily in Chinese ADRs (like me), then I am sure you feel even more depressed when looking at your stocks’ performances last month. Of the 82 Chinese ADRs I track regularly, only 6 of them ended the month in the positive territory. All other 76 stocks dropped, and they dropped like a rock: 30 stocks lost more than 20% and 10 more than 30%.

Agria (GRO) could be an ideal setup for anyone wanting to try and make a quick and substantial profit on an undervalued company. To explain why, I want to get into the philosophy behind the trade. One of the safest and most profitable ways to make double digit percentage gains in a short period of time is to use what I call 'the Bogeyman Trade.' When a company is sold off in a panic to levels drastically off from what it is traditionally priced at, then you can profit immensely if the catalyst for the selloff is suddenly removed. This also applies if the catalyst never existed except in the imaginations of shorts and easily excitable longs.

I had learned this during the panic of last march. When Bear Stearns (BSC) went under suddenly, every broker was priced for Armageddon. Lehman Brothers (LEH) was called the next Bear Stearns. It suddenly became priced as if it could go under at any moment. The fear was already priced in so I decided to buy Lehman ahead of earnings. The next day the stock rallied 45% because earnings basically had to show bankruptcy to be worse then expected. A CNBC commentator, referring to Lehman's earnings report, said that it could just be the "bogeyman under the bed." What he meant was the fear was there, it was priced in, and once you look under the bed you realize there is nothing to be afraid of anymore.

After rebounding sharply in April, major U.S. stock indices ended May mixed. The Dow lost 181.81 points, or 1.42%, the NASDAQ rose 109.86 points, or 4.55%, and the broader S&P 500 added 14.79 points, about 1.07%.

Chinese stocks listed on U.S. exchanges also had a mixed month. Among the 82 stocks that make up the Chinese ADRs, 32 issues declined for the month, while the other 50 advanced.  Biggest winners of May are alternative energy companies such as Solarfun Power (SOLF) which jumped nearly 70% and LDK Solar (LDK) which gained almost 63%. Other gainers include China Architectural Engineering (RCH) and Renesola (SOL). At the other end of the spectrum, XinHua Finance Media (XFML) led the decliners with a drop of 28.67%, followed by ChinaEdu (CEDU) -21.29% and China Mobile (CHL) -14.52%.

While several of the factors behind the recent runup in the prices of most agricultural commodities may be transitory, more permanent trends indicate prices are likely to remain high.

Agricultural commodity prices should ease from their recent record peaks, but over the next 10 years they are expected to average well above the mean of the past decade, according to the latest Agricultural Outlook from OECD and the UN Food and Agriculture Organization.

April has turned out to be a pretty good month for equity investors. After all three major indices dropped to 52-week low in early March, stocks rebounded last month after financial firms indicated that the worst part of the current crisis may be over. The Dow ended April with a gain of 4.54%, the S&P added 4.75%, and the NASDAQ climbed 5.87%.

Chinese stocks traded on U.S. exchanges also had a solid month in April, rising along with U.S. stocks. Chinese ADRs also got support from favorable policies adopted by Chinese security regulators aimed to stabilize the market after the Shanghai Composite Index (^SSEC) lost half of its value in less than half a year. For the month, SSEC jumped 6.35% and the Hong Kong’s Hang Seng Index (^HSI) surged 12.72%. Among Chinese ADRs, VanceInfo Technologies (VIT) led the way with a gain of 142.60%, followed by Sohu.com (SOHU)’s 53.18%. Chinese search engine Baidu.com (BIDU) also recorded a 52.57% gain in share price. The month’s biggest loser was Agria (GRO), China’s agriculture products, such as seeds and feeding products, provider, which saw its share tumbled nearly 50%, despite record food price.

Agriculture has been one of the hottest industries for an investor to be in. However, a majority of the market has already had significant gains. And although I do have positions in the large agriculture companies; as a value investor, I feel somewhat uncomfortable buying into companies that have already had tremendous returns.

I’m still very bullish on agriculture, and I’ve been trying to find value plays, particularly in China’s emerging market. In this article, I will introduce a few of the companies that I’m interested in and high-level rationale behind why they might be good investments in the coming months. But first, let us explore the agricultural landscape in China.

Another month has passed and there was still no sign of a bottom for Chinese stocks traded on US exchanges. In fact, March was a pretty bad month for Chinese ADRs, with 60 of the 87 stocks I tracked ending the month in the red.

Among the losers, China Finance Online (JRJC), which is a component of PowerShares Gloden Dragon Halter USX China (PGJ), saw the steepest decline of 34.50%, followed by Xinyuan Real Estate (XIN)’s 31.79% drop. The biggest winner in March was JA Solar (JASO) which recovered most of its 38% loss in February. Other gainers include China Nepstar (NPD), Gushan Environmental Energy (GU), and Global Sources (GSOL). The picture is even gloomier if you look at these stocks’ YTD returns. Of the 87 stocks, only 5 (GU, VISN, UTSI, LONG, and NTES) are in the positive territory at the end of March.

On October 29, Bill Simpson wrote an analysis of Agria Corporation (GRO). The company priced its initial public offering of 17,150,000 American Depositary Shares (ADSs) at $16.50 per ADS. November 7 the stock fell 26.9 percent in its market debut. It closed November 9 at $12.70.

The text of Mr. Simpson's original writeup follows:

Agria Corp. (NYSE: GRO) a Beijing-based provider of agricultural products, fell over 26% on its NYSE debut yesterday. Agria shares priced at US$16.50 Tuesday night. After hitting a high of US$17, shares fell steadily throughout the session to close near their low at US$12.06, down nearly 27% on the day.

Agria's primary products are corn seed, seedlings, and sheep breeding. The company's corn seed products are grown in seven provinces in China through contractual arrangements with village collectives and seed production companies. The sheep breeding products including sheep semen, sheep embryos, and live sheep are developed in five breeding bases located in Shanxi province. The seedlings business consists of a variety of seedlings including raspberry, blackberry, date and white bark pine sold to various customers including municipal governments and commercial nurseries.

Agria Corporation is a China based agri-solutions provider engaged in research and development, production and sale of upstream agricultural products. The company currently provides corn seeds, sheep breeding and seedling products. Company generates all its revenues from China, which not only is the fastest growing economy in world but also is the world's second largest corn producer and houses the most sheep and goats in the world.

Company's products:

There are three Chinese companies set to go public in the U.S. this week: Agria Corporation (GRO), a provider of agricultural upstream products such as corn seeds, sheep breeding products and seedling productions; AirMedia Group (AMCN), a company that operates the largest digital media network in China dedicated to air travel advertising; and China Nepstar Chain Drugstore (NPD) the largest retail drugstore chain in China.

All quotations are from the companies' most recent S-1 filings with links provided.

Agria Corporation (GRO), a Beijing-based agricultural biotechnology firm, filed Friday with the SEC for an initial public offering on the NYSE. Led by Credit Suisse Securities, the offering is expected to bring in US$175 million. The company intends to trade under the symbol "GRO".

The company's F-1 filing reports that Agria was formed in Jan. 2004 by acquiring control of mainland China based agricultural firm Primalights III Agriculture Development Co., Ltd. (P3A). The company states that due to restrictions on foreign ownership of seed development and production businesses, Agria Corp. exercises effective control of P3A through contractual agreements between P3A, P3A's primary shareholders, and Aero-Biotech Science & Technology Co., Ltd. (Agria China).