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Murphy Analytics Issues Research Report on China Organic Agriculture, Projecting 12-Month Share Price of $1.45 to $2.90

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  Published in House and Home on Monday, December 1st 2008 at 14:36 GMT by Market Wire

LOS ANGELES & LIAONING, China--([ BUSINESS WIRE ])--China Organic Agriculture, Inc. (OTCBB: CNOA), an international diversified premium food products company capitalizing on China's burgeoning domestic consumer demand, today announced that Murphy Analytics, a fee-based equity research firm, has issued a research report that includes a 12-month target share price of $1.45 to $2.90 following the Company's recently announced revenue and earnings guidance.

"I consider this report a ‘must read' for existing shareholders and anyone contemplating an investment in our company," said Jinsong Li, Chief Executive Officer of China Organic Agriculture. "Not only does the report examine the potential of China Organic Agriculture, it also provides timely analysis of the Asian premium food markets as well."

The Report was written by Patrick Murphy, CFA, the principal of Murphy Analytics. In his report, Mr. Murphy states:

While the capital markets are experiencing relentless volatility and uncertainty, the long-term growth story for China's real economy endures, as does the opportunity before CNOA.With a strategic shift to focus on product distribution, CNOA has positioned itself to leverage not only the growth in domestic demand for organic and green rice, but also for a range of other premium food and wine products.

The Report discusses the recent guidance released by CNOA, the prospects for the Company, and the outlook for growth in the demographics positively impacting demand in China's agricultural and premium goods sectors. Mr. Murphy notes:

CNOA's highly scalable business model presents an opportunity for the Company to participate more fully in the historic growth driven by the development and urbanization of the Chinese economy.

CNOA recently released guidance for our current Q4 as well as FY 2008:

• Q4 2008 revenue $54 million versus $15.7 million Q4 2007
• Full year 2008 revenue $113 million versus $44.5 million FY 2007
• Q4 2008 net income $11 million versus $3.9 million Q4 2007
• Full year 2008 net income $20 million versus $13.5 million FY 2007
• Q4 2008 EPS $0.15. Full year 2008 EPS $0.29

The above figures include the recent $8.7 million sale of the ErMaPao rice division as well as the October 2008 acquisition of Dalian Huiming, a major agricultural trading company with fiscal 2007 revenues and earnings of $40.2 million and $2.7 million respectively.

The complete report is available in Acrobat format, free of charge: [ http:\\www.murphyanalytics.com\uploads\CNOA_Update ]

About China Organic Agriculture

China Organic Agriculture is a high growth international food products company capitalizing on China's burgeoning domestic demand for premium products due to an expanding class of consumers with the ability to acquire premium food products.

The Company has developed an extensive distribution network throughout China including Beijing, Shanghai and Nanjing. The Company is positioned to leverage this network to increase market penetration with broad distribution of agricultural, food and related premium products. The Company has experienced significant growth since its inception in 2002 and continues to implement a number of strategic initiatives to further expand revenues and earnings. For more information, please visit: [ www.chinaorganicagriculture.com ].

FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning future acquisitions, estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of China Organic Agriculture's products and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," and similar expressions denote forward-looking statements. Although China Organic Agriculture Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include, but are not limited to, those set forth in our reports filed with the Securities and Exchange Commission, together with the risks discussed in our press releases and other communications to shareholders issued by us from time to time, such as our ability to raise capital as and when required, the availability of raw products and other supplies, competition, the costs of goods, government regulations, and political and economic factors in the People's Republic of China in which our subsidiaries operate.