Third Quarter 2009 Results:

Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (Techteam), a wholly owned subsidiary of China Green, said that its sales of humic acid based liquid compound fertilizers contributed to 77.6% of the company’s total net sales. For the third quarter of fiscal year 2009, Techteam’ sales increased $3.3 million, or 95.0%, to $6.9 million from $3.5 million for the same quarter of fiscal year 2008. The increase was due primarily to 17 new products introduced to the market during the last 12 months and recent upgrades to the current production facility which increased annual capacity from 10,000 metric tons to 15,000 metric tons. Sales volume increased 60.8% to 3,364 tons in the third quarter of fiscal year 2009, versus 2,091 tons in the same period of 2008. Sales of agricultural products from Jintai, namely top-grade fruits, vegetables, flowers and colored seedlings increased 116.2% and accounted for $ 2.0 million, or 22.4% of total net sales. The increase in revenue growth from Jintai when compared with previous quarters was primarily due to the strong sales of the company’s various decorative flowers, mainly butterfly orchids, big orchids and red leaf flowers during this year’s holiday.

Gross profit for the third quarter of fiscal year 2009 totaled $5.1 million, an increase of 106.5% from $2.5 million in the same quarter of 2008. Gross profit margin was 57.3% for the third quarter of fiscal year 2009, up from 55.3% in the third quarter of fiscal year 2008.

Operating expenses for the third quarter of fiscal year 2009 were $0.6 million, up from $0.4 million in the same quarter of fiscal year 2008, with the increase mainly being derived from incremental public company expenses. Operating expenses were 6.9% of net sales in the third quarter of fiscal year 2009, down from 9.0% of net sales in the corresponding quarter of fiscal year 2008.

Operating income for the third quarter of fiscal year 2009 was $4.5 million, up 116.9% from $2.1 million in the third quarter of fiscal year 2008. Operating margin was 50.4%, compared to 46.3% in the same quarter of fiscal year 2008.

In the third quarter of 2009, the average weighted shares outstanding were 18.6 million shares versus 18.3 million shares in the year ago period.

We are pleased with our financial results which exceeded both our revenue and EPS guidance for the third quarter of fiscal year 2009, said Tao Li, chairman, president and chief executive officer of China Green. We continue to deliver year-over-year growth in each of our fertilizer product categories, which is driven by a broader number of distributors across a larger geographic footprint, while maintaining industry leading margins. We are confident that the drivers in place, including increasing demand for green fertilizers supported by consumer food safety and environmental concerns, along with the desire for higher crop yields, will enable us to deliver further revenue and earnings growth for our company during 2009.

Nine Months Results:

For the nine months of fiscal year 2009, net sales increased 60.7% to $24.7 million, up from $15.4 million in the corresponding year ago period. For the nine months of fiscal year 2009, Techteam’s net sales, which accounted for 78.6% of total net sales, increased $7.5 million, or 64.0%, to $19.4 million from $ 11.9 million for the same period of 2008. This increase was benefited from new product introductions and improved production capacity. Sales volume increased 54.4% to 10,799 tons in the nine months of fiscal 2009, versus 6,992 tons in the same period of 2008. Gross profit increased 56.7% to $14.1 million in the nine months of fiscal 2009, versus $9.0 million in the same period a year ago. Gross margin was 57.1% in the nine months of fiscal 2009 compared to 58.5% during the same period of fiscal year 2008. Operating income for the first nine months of fiscal 2009 rose 70.9% to $11.9 million compared to $7.0 million in the same period of fiscal 2008. Net income, was $10.0 million, or $0.54 per basic and fully diluted share, based on 18.6 million weighted average shares. Net income in the year ago period was $6.4 million, or $0.48 per basic and fully diluted share, based on 13.5 million weighted average shares.

Financial Condition:

As of March 31, 2009, the company had $13.6 million in cash and cash equivalents with working capital of $21.8 million. The company maintained short term loans of $3.7 million and shareholders’ equity of $28.2 million. The company had no long term debt as of March 31, 2009. Accounts receivable stood at $6.9 million as of March 31, 2009 with trailing twelve month days sales outstanding of 59.7 compared to $3.6 million as of June 30, 2008 and corresponding days sales outstanding of 77.8. Inventories totaled $8.3 million as of March 31, 2009. For the nine months of fiscal 2009, the company had $1.0 million in cash flows from operating activities, while capital expenditures amounted to about $3.1 million due to the building construction and equipment purchase for its new facility.

2009 Guidance:

China Green’s third quarter revenue of $8.8 million and EPS of $ 0.21 exceeds previously announced guidance for the third quarter of fiscal year 2009 of $7.7 million to $8.2 million and $0.14 to $0.17, respectively.

Management is increasing its guidance upward for fiscal year 2009 and now expects revenues of $32.8 million to $33.3 million and EPS of $0.71 to $0.74 per fully diluted share, respectively. Previous revenue and EPS guidance was $31.6 million to $32.8 million and $0.61 to $0.66 per fully diluted share, respectively. The company’s upward guidance reflects the anticipated strong sales from its green fertilizer products in the fourth quarter of 2009.

We are well positioned to capitalize on the market opportunities within China’s fertilizer and agriculture industry. With a national distribution network, state-of-the-art research and development, automated production, and superior after-sales support, we have successfully built one of the premier organic compound fertilizer producers in China today, stated Li. We believe CGA will continue to benefit by offering high yielding and environmentally sustainable fertilizers which are paramount to China’s agricultural production capabilities in the face of shrinking arable land, ongoing consumer food safety concerns and growing population. Supported by a vertically integrated platform that utilizes 511 distributors to sell our 131 branded products through 27 provinces in China, we have built an organization with multiple competitive advantages and superior operating metrics, as evidenced by our third quarter 2009 gross and operating profit margins of 57.3% and 50.4%, respectively. By leveraging our new facility, which will be on line in August of 2009, we feel China Green Agriculture is well positioned to gain further market share in China’s green fertilizer market, which will translate into long term revenue and net income growth, concluded Li.