Name: China Green Agriculture, Inc. Q2 2018 Earnings Call
Start: 2018-02-14T00:00:00.000Z

Executive Summary

Q2 FY2018 delivered stable top-line and a material bottom-line beat: net sales were $63.4M (within guidance $58–$65M) and net income of $7.8M exceeded guidance by ~30%; diluted EPS was $0.20 vs $0.12–$0.16 guidance .
Management raised full-year net income guidance to $23–$32M (from $21–$30M) and full-year EPS to $0.60–$0.83 (from $0.54–$0.77), while maintaining revenue guidance at $263–$301M .
Sequential earnings strength (EPS up to $0.20 from $0.13) contrasted with slight gross profit softness vs Q2 FY2017 ($18.5M vs $19.2M), consistent with a blended margin profile from wholesale expansion noted in earlier periods .
Near-term catalyst: guidance raise for FY2018 and Q3 FY2018 outlook (revenue $68–$78M; net income $6–$8M; EPS $0.15–$0.20) positions the stock for estimate revisions and sentiment improvement .

What Went Well and What Went Wrong

Revenue met Q2 guidance ($63.4M vs $58–$65M), and net income beat by ~30%, driving EPS to $0.20; management framed the quarter as “another solid” performance with strengthened fundamentals .
Full-year outlook improved: net income and EPS guidance raised, signaling confidence in execution across manufacturing and wholesale segments .
Strategic progress: CEO emphasized development of the wholesale segment as “key to the future of our company,” reinforcing the multi-channel distribution strategy .

Gross profit modestly declined year over year ($18.5M in Q2 FY2018 vs $19.2M in Q2 FY2017), echoing earlier commentary that product mix shifts and pricing at Gufeng can pressure margins .
Limited segment detail in the Q2 release constrains transparency on margin drivers by business unit versus prior disclosures that highlighted mix and cost dynamics .
Investor-relations concerns persist from prior call: shareholders pressed for dividends, buybacks, uplisting, and website updates—management committed to improvements but timelines (e.g., “within a year” for website) left investors seeking faster action .

Metric	Q2 FY2017	Q1 FY2018	Q2 FY2018
Revenue ($USD Millions)	$59.0	$62.8	$63.4
Gross Profit ($USD Millions)	$19.2	$19.1	$18.5
Net Income ($USD Millions)	$5.5	$5.1	$7.8
Diluted EPS ($USD)	$0.15	$0.13	$0.20
Fully Diluted Shares (Millions)	37.7	38.5	38.5

Notes:

Sequential change: revenue +0.9%, EPS +54% vs Q1 FY2018, supported by stronger net income performance .
Year-over-year: revenue +7.5%, EPS +33%; gross profit modestly lower, consistent with prior commentary on product mix and costs in earlier periods .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY2018	$263–$301	$263–$301	Maintained
Net Income ($USD Millions)	FY2018	$21–$30	$23–$32	Raised
EPS (Diluted) ($USD)	FY2018	$0.54–$0.77	$0.60–$0.83	Raised
Revenue ($USD Millions)	Q3 FY2018	N/A	$68–$78	New
Net Income ($USD Millions)	Q3 FY2018	N/A	$6–$8	New
EPS (Diluted) ($USD)	Q3 FY2018	N/A	$0.15–$0.20	New

Note: No Q2 FY2018 transcript was available; the company announced the call but a written transcript could not be located .

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 FY2018)	Trend
Wholesale segment expansion	Wholesale contributed meaningfully to FY2017; blended margins discussed by CFO; Q1 FY2018 highlighted strong engagement in manufacturing and wholesales	CEO reaffirmed wholesale development as “key to the future”	Continued focus
Guidance approach	FY2018 guidance set post-FY2017; Q1 FY2018 confirmed guidance	FY2018 net income/EPS guidance raised; Q3 FY2018 provided	Improved outlook
IR/website and communication	Q4 FY2017 Q&A: website overhaul “within a year”; desire for more frequent updates	No update in Q2 release	Ongoing
Shareholder value actions (dividends/buybacks/uplisting)	Pressed in Q4 FY2017 Q&A; management evaluating options amid FX controls	Not addressed in Q2 release	Awaiting actions
Product mix and margins	Prior period disclosed lower-margin mix at Gufeng and cost drivers affecting gross margins	No segment margin detail provided	Not disclosed

“We had finished another solid quarter. Our results continue to validate the strength of our market positions… The development of the wholesale segment… is key to the future of our company.” — Zhuoyu Li, Chairman & CEO (Q2 FY2018 press release) .
“With strong engagement in both manufacturing and wholesales business, our company’s fundamentals continue to improve.” — Tao Li, Chairman & CEO (Q1 FY2018 press release) .
FY2017 context: CFO detailed wholesale contribution and blended margins; operating income and net income trends underscored disciplined execution during transition year .

(From Q4 FY2017 call; no Q2 FY2018 transcript available)

Shareholder value actions: investors urged dividends, buybacks, uplisting; management emphasized exploring options and navigating FX controls; President committed to sharing strategy within two months .
Investor relations and transparency: website overhaul planned “within a year” and intent to improve communications cadence .
Acquisition financing and protections: detailed convertible note structures designed to cap dilution and protect the company if targets underperform .

S&P Global consensus data was not retrievable for CGA during this period; consequently, formal consensus comparisons are unavailable via S&P Global. As external context, public sources indicated Q2 FY2018 EPS consensus at $0.14, implying a ~$0.06 beat vs actual $0.20; revenue consensus was not found in public sources, while actual revenue was $63.4M .

Metric	Period	Consensus	Actual
EPS (Diluted) ($USD)	Q2 FY2018	$0.14	$0.20
Revenue ($USD Millions)	Q2 FY2018	N/A	$63.4

Q2 delivered a clean beat on net income and EPS with revenue in-range; this strengthens near-term confidence in execution across both manufacturing and wholesale channels .
FY2018 guidance raised for net income and EPS, suggesting potential for upward estimate revisions and improved sentiment; Q3 guidance provides additional visibility .
Sequential profitability inflected strongly (EPS $0.20 vs $0.13), while gross profit softening vs prior year warrants continued monitoring of mix and pricing dynamics highlighted previously .
Lack of segment detail in the Q2 release limits margin attribution; investors should watch subsequent filings for segment-level disclosure to assess sustainability of earnings power .
Ongoing shareholder-relations initiatives (website, capital return, listing strategy) remain an overhang from prior calls; concrete actions could be a secondary catalyst if executed .
Near-term trading setup: guidance raise plus EPS beat are positive signals; risk factors include margin mix evolution and the pace of IR improvements .
Medium-term thesis: multi-channel distribution platform (manufacturing + wholesale) offers scale and reach; balanced growth must translate into consistent margins and working capital discipline to support valuation .

Metric	Q2 FY2018 Guidance	Q2 FY2018 Actual	Outcome
Revenue ($USD Millions)	$58–$65	$63.4	Met
Net Income ($USD Millions)	$4.7–$6.0	$7.8	Beat (~30%)
EPS (Diluted) ($USD)	$0.12–$0.16	$0.20	Beat

Sources: