Migao Corp and Hanfeng Evergreen

Hanfeng is a leading developer and producer of slow and controlled release (S&CR) fertilizer in China and South East Asia. Hanfeng derives its revenues from the sale of these fertilizers products. Its main expenses are linked to the acquisition of raw materials, labour and ongoing operations. Hanfeng’s key assets include its production plants, inventories and cash. Its liabilities include loans, as well as unearned revenues. Migao operates fertilizer production plants across China to produce specialty potash fertilizers, namely potassium nitrate and potassium sulphate. Migao derives its revenues from the sale of these fertilizers. Its main expenses include the acquisition of raw materials, labour, maintenance and SG&A. Migao’s key assets include inventory, accounts receivable, prepaid deposits, and production plants. Its liabilities include bank loans and accounts payable. Both Hanfeng and Migao operate fertilizer businesses in China and their business models are comparable. The growth of both the companies is tied to the growth of agriculture in China. With 20% of the world’s population and only 7% of the world’s arable lands, the use of fertilizers to increase crop yields is on the rise in China.