Origin Agritech Reports Strong Financial Results for the First Half of FY2024 and Highlights Significant Advancements in GMO Corn Approval

Rhea-AI Summary

Origin Agritech (NASDAQ: SEED) reported strong financial results for the first half of FY2024, ending March 31, 2024. The company saw a 39.1% increase in net revenues, reaching RMB 92 million (US$13 million), and decreased operating expenses by 10% to RMB 13.4 million (US$1.9 million). This led to a net profit of RMB 1.4 million (US$0.2 million), compared to a net loss of RMB 1.1 million in the same period last year. Earnings per share were RMB 0.21 (US$0.03).

Operationally, Origin Agritech received a GMO safety certificate for its transgenic maize, BBL2-2. Additionally, two new hybrids are expected to receive regulatory approval by summer 2024, with commercial availability in 2025. The company also announced a breakthrough in high-yield corn, showing a 50% yield increase. Origin Agritech remains focused on securing regulatory approvals and preparing for the commercial launch of new products.

Positive

• Revenue increased by 39.1% to RMB 92 million (US$13 million).
• Operating expenses decreased by 10% to RMB 13.4 million (US$1.9 million).
• Net profit of RMB 1.4 million (US$0.2 million) achieved, compared to a net loss of RMB 1.1 million last year.
• Earnings per share were RMB 0.21 (US$0.03) versus a loss per share of RMB 0.17 last year.
• Received GMO safety certificate for transgenic maize, BBL2-2.
• Two new hybrids expected to receive regulatory approval by summer 2024.
• Breakthrough in high-yield corn, with a 50% increase in trial yields.

Negative

• Total current liabilities are high at RMB 293.7 million (US$41.4 million).
• Advances from customers are substantial at RMB 84.7 million (US$11.9 million), indicating potential future obligations.

BEIJING, May 15, 2024 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), a leading Chinese agricultural technology company, today announced its unaudited financial results for the six months ended March 31, 2024. The Company also provided updates on its key product developments and strategic initiatives.

Financial Results Overview:

Revenue Growth: Origin Agritech reported net revenues of RMB 92 million (US$13 million) for the first half of FY2024, marking a substantial increase of 39.1% compared to RMB 66.1 million in the first half of FY2023. This growth reflects the strong demand for the Company's innovative crop solutions.

Operating Expenses and Income: Total operating expenses decreased by 10% to RMB 13.4 million (US$1.9 million), down from RMB 15 million a year ago. This reduction is primarily attributed to efficiencies gained in general and administrative expenses, which decreased by 19% to RMB 6.7 million (US$1million). Consequently, total operating income for the first half of FY2024 was RMB 4.3 million (US$0.6 million), an improvement from an operating loss of RMB 0.2 million reported in the prior year.

Net Profit: The Company achieved a net profit of RMB 1.4 million (US$0.2 million), compared to a net loss of RMB 1.1 million during the same period last year. Earnings per share were RMB 0.21 (US$0.03), compared to a loss per share of RMB 0.17 a year ago.

Balance Sheet Highlights:

Liquidity Position: As of March 31, 2024, cash and cash equivalents totaled RMB 10.4 million (US$1.5 million).

Customer Advances and Liabilities: Advances from customers stood at RMB 84.7 million (US$11.9 million), while total current liabilities were RMB 293.7 million (US$41.4 million)

Operational Highlights:

GMO Developments: Origin Agritech received a GMO safety certificate for its transgenic maize, BBL2-2, marking a significant milestone for the company. The newly certified BBL2-2 maize contains two insect-resistant genes, Cry1Ab and Cry3Bb, and one herbicide-tolerance gene, Cp4-epsps. This genetic composition makes the maize resistant to various lepidopteran pests such as corn borer, cotton bollworm, armyworm. BBL2-2 is a product with substantial commercial value and extensive application potential.

New Hybrid Developments: Two new hybrids have completed three years of national trials and are expected to receive regulatory approval this summer, with commercial availability projected for 2025. Additionally, 15 new hybrids have entered national official registration trials.

NEC Hybrid Expansion: The successful performance of our new NEC hybrid has initiated preparations for large-scale planting in Xinjiang, aimed at enhancing regional agricultural productivity and sustainability.

Innovation Milestones:

In March 2024, Origin Agritech announced a breakthrough with a high-yield corn inbred line developed through gene editing, showing a yield increase of over 50% in trials. This, together with our successful integration of a gene from wild corn into a commercial hybrid, underscores our leadership in crop innovation and our dedication to improving global food security.

Dr. Gengchen Han, Chairman and CEO of Origin Agritech, commented, "Our strong financial performance in the first half of FY2024, marked by a 39.1% growth in revenue and our transition from a loss to a profit, underscores the successful execution of our strategic initiatives and the increasing market demand for our innovative agricultural solutions. As we look ahead to the remainder of the fiscal year, we remain focused on advancing our pipeline of groundbreaking hybrids and GMO crops, securing regulatory approvals, and preparing for the commercial launch of our new products, positioning Origin Agritech to achieve continued growth and shareholder value."

About Origin Agritech Limited

Origin Agritech Limited, founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, is a leading Chinese agricultural technology company. In crop seed biotechnologies, Origin Agritech's phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture. Over the years, Origin has established a robust biotechnology seed pipeline, including products with glyphosate tolerance and pest resistance (Bt) traits. For further information, please visit the Company's website at www.originagritech.com. The Company also maintains a Twitter account for updating investors on Company and industry developments which is https://x.com/origin_agritech.

Forward-Looking Statements

This communication contains "forward-looking statements" as defined in the federal securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements address expected future business and financial performance and financial condition and contain words like "expect," "anticipate," "intend," "plan," "believe," "seek," "will," "would," "target," and similar expressions and variations. Forward-looking statements address matters that are uncertain. Forward-looking statements are not guarantees of future performance and are based on assumptions and expectations that may not be realized. They are based on management's current expectations, assumptions, estimates, and projections about the Company and the industry in which the Company operates but involve a number of risks and uncertainties, many of which are beyond the Company's control. Some of the important factors that could cause the Company's actual results to differ materially from those discussed in forward-looking statements are: failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance, rules, regulations and policies affecting our products; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; natural disasters and weather events and patterns; ability to protect and enforce the Company's intellectual property rights; and separation of underperforming or non-strategic assets or businesses. The Company undertakes no duty or obligation to publicly revise or update any forward-looking statements as a result of future developments, new information, or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure that such expectations will be correct. Actual results may differ materially from the anticipated results. You are urged to consider these factors carefully when evaluating the forward-looking statements contained herein. You are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.

For more information, please contact:

Origin Agritech Limited Contact:
Kate Lang (Mandarin/English)
Director of Investor Relations
Phone: +86 186-1839-3368
Email: bing.lang@originseed.com.cn

Investor Relations Contact:
Matthew Abenante, IRC
President
Strategic Investor Relations, LLC
Tel: 347-947-2093
Email: matthew@strategic-ir.com

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SOURCE Origin Agritech Limited

FAQ

What were Origin Agritech's net revenues for the first half of FY2024?

Origin Agritech reported net revenues of RMB 92 million (US$13 million) for the first half of FY2024, a 39.1% increase from the same period last year.

How much did Origin Agritech's operating expenses decrease in the first half of FY2024?

Operating expenses decreased by 10% to RMB 13.4 million (US$1.9 million) in the first half of FY2024.

What was Origin Agritech's net profit for the first half of FY2024?

The company achieved a net profit of RMB 1.4 million (US$0.2 million) for the first half of FY2024.

What is the significance of the GMO safety certificate for Origin Agritech?

The GMO safety certificate for the transgenic maize, BBL2-2, marks a significant milestone, enhancing the product's commercial value and application potential.

When are Origin Agritech's new hybrids expected to receive regulatory approval?

Two new hybrids are expected to receive regulatory approval by summer 2024, with commercial availability projected for 2025.

What was the breakthrough announced by Origin Agritech in March 2024?

Origin Agritech announced a high-yield corn inbred line, developed through gene editing, showing a yield increase of over 50% in trials.

What were the advancements in Origin Agritech's GMO corn approval?

Origin Agritech received a GMO safety certificate for its transgenic maize, BBL2-2, which is resistant to various pests and herbicides.