GRO China Stock on NYSE Owns 1/2 of $1 Billion Revenue Agriculture Company
Agria (GRO) started to breakout yesterday rising $0.22 to $1.64, but this is nothing! GRO's China seeds business is one of the fastest growing Chinese businesses out of all publicly traded China stocks, with fiscal 2013 revenues up 98% to $17 million, yet it's currently receiving no value at all! This is because GRO's 80.81% owned Agria Asia subsidiary owns 50.22% of PGG Wrightson (PGW.NZ), New Zealand's largest publicly traded agricultural services company with over NZ$1 billion in revenues.
PGW.NZ just finished overseas trading at a six month closing high of NZ$0.39 on its highest volume of October. Agria Asia's 379.1 million PGW.NZ shares are currently worth NZ$147.85 million and GRO's 80.81% stake is worth NZ$119.48 million (USD$101.13 million). New Hope, China's largest agribusiness company with USD$8.8 billion in annual revenue owns a minority 11.95% stake in GRO's Agria Asia, while Ngai Tahu owns the remaining 7.24%.
GRO has only 55.38 million shares outstanding and a market cap at $1.64 of USD$90.82 million. Just GRO's 80.81% interest in Agria Asia, which owns 50.22% of PGW.NZ, is worth $101.13 million or $1.83 per share. With GRO's wholly owned China seeds business growing fiscal 2013 revenues by 98% to $17 million, a modest multiple of 2-3X sales will value it at $34-$51 million, which would add $0.61-$0.92 to GRO's share price and value GRO at $2.44-$2.75 per share!
3 of PGW.NZ's 7 Board members are from GRO's management, with a 4th Board member from the management of Ngai Tahu (one of Agria Asia's minority shareholders). This most likely gives GRO total control of PGW.NZ's Board of Directors. With PGW.NZ's Chairman retiring and their annual meeting on Tuesday, GRO could potentially capture the Chairmanship of PGW.NZ next week! Google this: "Seeds deal could grow enormous" and read this recent New Zealand Herald article about how huge GRO is about to become. Disclaimer: We own 550,000 shares of GRO and intend to sell them, and can do so at any time.