Origin Agritech reports strong financial results for the first half of FY2024 and highlights significant advancements in GMO corn approval

Date:05-16-2024

Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), a leading Chinese agricultural technology company, 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."