Uptick in China's Agriculture Sector Could Lead to Share Rally for Yongye and GulfResources


Agriculture represents one of the most important sectors of China's economy, providing more than 12 percent of the country's total Gross Domestic Product and employing in excess of 300 million farmers. China's growing agricultural sector has not only boosted profits for farmers, but has also benefitted Chinese producers of agricultural chemicals. The Paragon Report examines the Chemical Manufacturing Industry and provides research reports on Yongye International, Inc. (NASDAQ: YONG) and Gulf Resources, Inc. (NASDAQ: GURE). Access to the full company reports can be found at:

 China's strengthening economy has led to a surge in industrial and agricultural activity. This has greatly benefitted specialty chemical makers in recent quarters, as demand for their products continues to surge. Yongye International said revenue in the third quarter of 2011 increased nearly 96 percent to $140.6 million from $71.8 million for the same period of 2010.

Yongye's principal product is a liquid crop nutrient. The Company's patented formula utilizes fulvic acid as the primary compound base and is combined with various micro and macro nutrients that are essential for the health of the crops.

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Shares of Gulf Resources were hammered earlier this week after the manufacturer of bromine, crude salt and specialty chemical products reported third quarter net income of $5.6 million or $0.16 a share, a decrease of 62% from $14.9 million or $0.43 a share for the same period last year. Revenue was $37.8 million for the third quarter of 2011, a decrease of 16% from $44.8 million for the third quarter of 2010.

China is currently the world's third largest bromine producer after the United States and Israel. While Bromine prices remain fairly high, the reduced demand for oil and gas exploration additives and paper manufacturing additives adversely affected Gulf Resources' chemical product segment.

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