Essay Presentation: Sweden and Local Governments

Submitted By yogurtyou
Words: 371
Pages: 2

There have been several similar and famous cases in China’s A share market history, including lantian aquaculture development Co, wanfu Biotechnology company, Yinguangxia Comanpany etc. More recently Yunan Greenland biological Co, and now Zhangzidao, All the companies above belong to agricultural sector and suffer almost the same experience. this let us ponder why it always happen in agriculture stock, here are some reasons:
First, Local governments provide extra support on agricultural listed companies.
In China, whether central or local governments attach great importance to Industrialization of agriculture, but lots of agricultural industrialization enterprises is not making money on the main business. Subsidies and support funds get from central to local governments become the main profit of companies. And the companies will help local governments to solve the problem of farmers' income and employment. So the local government tends to maintain this company's continuing operations.
Second, The features of the agribusiness offers agricultural listed companies convenience of covering real situations.
Infrastructure, raw material purchase and sales, mainly related to individuals and small farmer cooperative organizations. This determines the kind of business transaction object is extremely fragmented and requires a lot of cash transactions. Unlike other businesses to have a very clear strict transaction documents, agricultural business is hard to track cash flow.
Third, The unknowable natural disasters often provide Agricultural Company a natural barrier. Agricultural companies prefer to use…