Preannounces Approximately 70% Increase in
Revenues for Fiscal Year 2023
BEIJING, Nov. 21,
2023 /PRNewswire/ -- Origin Agritech Ltd.
(NASDAQ: SEED) (the "Company" or "Origin"), a leading Chinese
agricultural technology company, provided investors with a business
update and provided preliminary financial results for fiscal year
2023.
Preannounced Financial Results
- The Company expects fiscal year 2023 revenue to be between
$12 to $13
million, representing an increase of 60% to 70% from fiscal
year 2022 revenue of $7.4
million.
- The Company expects fiscal year 2023 net income to be between
$16 to $17
million, which includes a one-time gain from the sale of a
former office building of $19
million.
- The Company expects fiscal year 2023 operating profit of
approximately $2 million.
Dr. Gengchen Han, Chairman and CEO of Origin Agritech,
commented, "I would like to provide an overview of Origin
Agritech's recent accomplishments and our ambitious plans for the
future. As we navigate the dynamic landscape of agricultural
biotechnology, we remain steadfast in our commitment to
revolutionizing the industry and addressing the world's growing
food security challenges. The past year has been marked by a series
of significant milestones for Origin Agritech. We have made
remarkable progress in advancing our innovative technologies,
expanding our market reach, and solidifying our position as a
leading player in the agricultural biotechnology sector."
"Earlier this year, our triple-stack trait corn, featuring
BFL4-2, was selected for inclusion in the national demo plot. This
recognition underscores the exceptional quality and potential of
our corn varieties. I am confident that our GMO corn hybrids will
be approved in 2024. As a reminder, we are one of just four
companies with access to this new China GMO market that has just
begun to materialize and that we anticipate will grow substantially
in the coming years. Our team has diligently conducted pilot seed
production, laying the groundwork for full-scale
commercialization."
"Our majority-owned joint venture in Shihezi, Xinjiang, secured
200,000 mu of farmland for growing nutrition-enhanced corn (NEC).
We are also near completion of our state-of-the-art 100,000-ton
corn drying base in Shihezi, Xinjiang. This facility will play a
pivotal role in enhancing the efficiency and resilience of our
supply chain while expanding our production capacity, enabling us
to meet the growing demand, and ensuring the timely delivery of
high-quality NEC corn to our customers. Our large-scale pilot
production of nutrition-enhanced corn harvested in September and
October 2023 has set the stage for
revenue recognition of approximately RMB
50 to 100 million in fiscal year 2024, or $7 to $14 million
U.S. dollars. We have produced enough NEC seed for next year's
planting and expansion plans. Our NEC corn features are
groundbreaking: 8.4% oil content, which is double that of normal
corn, 0.31% lysine, a 50% increase, and 102 IU/KG of Vitamin E,
significantly higher than average."
"Our team has developed a novel gene editing method that
significantly reduces the backcross procedure from 4-5 years to
just one year. This breakthrough enables us to convert edited
traits into elite commercial lines rapidly. We have also developed
nitrogen-efficient corn through gene editing and are conducting
extensive testing to validate this trait. We have also established
a comprehensive gene editing breeding system encompassing seven
traits, including drought resistance, nitrogen efficiency, and
plant type. This system allows us to convert any commercial line
into an edited line within one year."
Highlights of Questions Submitted from Investors:
- Where are GH5112E-117C and G1105E-823 in the approval
process? We are cooperating with a local research
institute to continue the experiments.
- How is Zhong Huang 6106 and AOYU 728
progressing? AOYU 728 has performed excellently in the
last two years and has become a major competitive product. We
expect significant sales growth in the next few years. Zhong Huang 6106 has also performed well and has
become our main soybean variety in the Jiangsu area.
- Can you discuss your advancements with nitrogen-enhanced
corn? Why is it a huge advantage, and how can we benefit?
Nitrogen efficiency corn is a breakthrough in this area. We have
worked on this trait since 2004 through GMO methods. We finally
made significant progress in 2022. The major advantage of
nitrogen-efficient corn is that it increases the corn yield with
less nitrogen usage. It will reduce the farms' production costs and
environmental nitrogen pollution. Our preliminary result shows a
more than 50% yield increase for the inbred line under the same
nitrogen usage in the field.
- Can you discuss the approval process for planting all
across China? What regions are our
crops primarily being planted in? How far along are our
competitors? There are four major corn planting areas
in China. Northeast and Huanghai
are the two main corn-growing areas we focus on.
- Can you provide an update on the Muyuan Foods
agreement? Muyuan has tested our NEC hybrids in more
than 15 locations in 2023. Potential collaborations are currently
under discussion.
- What is the status of approval of variety application of
BFL4-2 GMO seeds? Have these seeds been selected for use in
the national pilot crop growing program next year? We
expect approval to happen in 2024; our hybrids with BFL4-2 are in
the national demo plots.
- How many acres of NEC corn will be grown in the next
year? We will have confirmed figures in the
March/April planting season.
- What is the status of approving the safety certificate
application of drought-resistant GMO seed? We
have finished the field test and applied for safety certificate
approval.
- Could you explain how the NEC corn performed
regarding nutritional content and overall yield? NEC
yielded comparable yields to its normal corn varieties in more than
50 locations and three years of testing. Oil content is over 8%
compared to 3.5-3.8% normal corn, 0.31% lysine, a 50% increase, and
102 IU/KG of Vitamin E, significantly higher than
average.
- Are you confident in your original assessment of
increasing NEC corn land in Xingjiang province from the 30,000
Mu planted this year to 200,000 Mu? Yes, we are very
confident that we can achieve this.
- Does the company intend to expand the NEC contract
or joint venture, growing to further provinces before the 2024
planting season? Yes, we intend to expand to further
provinces before the 2024 planting season.
- Does the company plan to formally change its fiscal year
to align with harvest season? We are discussing the
possibility with our auditors and legal counsel and will have
further updates when something more definitive is ready to
announce.
"Looking ahead, I am very optimistic and excited about the
future of Origin Agritech. We have made remarkable strides in
advancing our groundbreaking agricultural technologies in the past
year. Our achievements in gene editing and the development of our
nutrition-enhanced corn are testaments to the dedication and
expertise of our team. The recognition of our triple-stack trait
corn and the successful pilot production of our nutrition-enhanced
corn are just the beginning of what promises to be a transformative
journey for Origin Agritech. As we look to the future, our focus
remains to revolutionize agricultural biotechnology and contribute
meaningfully to global food security. The potential approval of our
GMO corn hybrids in 2024, our advancements in gene editing, and the
expansion of our production capabilities are pivotal steps in this
direction."
"I am not satisfied with our stock price and believe that the
market is severely discounting our company's upside potential. We
are taking steps to ensure that we achieve a fair and realistic
market valuation, and we look forward to conveying new developments
and delivering value to our shareholders," concluded Dr. Han.
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 which 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, or
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
you that such expectations will turn out to be correct, and actual
results may differ materially from the anticipated results. You are
urged to consider these factors carefully in evaluating the
forward-looking statements contained herein and 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