Origin Agritech Limited (NASDAQ:SEED)

WEB NEWS

Thursday, March 25, 2021

Research

Agritech Limited (NASDAQ:SEED) (Agricultural Technology) ($22.43; $127.5 M market cap) announced it has entered into a collaboration agreement with Beijing Dabeinong Technology for the development of commercial GMO corn hybrids. 

“DBN is a Chinese agriculture conglomerate with over 14,000 employees and has over $2 billion in annual sales. Beijing Dabeinong Biotechnology Co., Ltd. (DBNBC), which is DBN's holding subsidiary, is the leading biotechnology research entity in China.” 

We view this as a significant development as DBN is the leader in the Ag space in China. 


Monday, September 21, 2020

Research

Agritech Limited (NASDAQ:SEED) (Agricultural Technology) is an agriculture technology company we have been highlighting as an opportunity to benefit from China’s stated goal to become GMO “positive” by the end of 2020.  We came across this link published on August 4, 2020 on a Chinese government site, The Ministry of Agriculture and Rural Affairs. 

The posting lists 29 gene traits that have been tested and “approved.” The site lists:

“29 standards including the "Qualitative PCR Method for Papaya Internal Standard Genes for Component Testing of Genetically Modified Plants and Their Products" have been reviewed and approved by experts and are now approved for publication as the National Standards of the People's Republic of China, which will be implemented on November 1, 2020.

If you click on the PDF attachment, you will see the list of the 29 different “standards.” After some research we found that standards “12” and “16” are referring to two corn traits that are owned by SEED. 

If you crosscheck the gene codes from the images above,  “G1105E-823C” and “GH5112E-117C,” with google patent, you will notice that both of these gene patents were applications were filed and thus owned by SEED:

[1] Gene Trait/Source: G1105E-823c

[2] Gene Trait/Source: GH5112E-117C

We are still trying to make sense of all the information, but it seems that SEED is in line to receive two bio-safety certificates for two Corn GMO traits by November 1, 2020. So far, our preliminary research indicates that companies on similar lists over the past two years have received regulatory certificates prior to or up to a month after the implementation/effective dates disclosed in related postings. Obviously, we are very excited about this development, but we still need to gain additional clarity on what this all means for SEED. One thing we still need to keep in mind is that in order for investors to get really excited, China has to officially announce that they have gone GMO positive.

29 corn? If not all corn, how many corn total?

Wednesday, August 26, 2020

Research

Agritech Limited (NASDAQ:SEED) (Agricultural Technology) ($8.99; $45.0M market cap) an agriculture technology company, announced that the Company has entered a commercialization agreement with Institute of Plant Protection (IPP) of the Chinese Academy of Agricultural Sciences (CAAS) for a new generation insect-resistant GMO corn gene. A key takeaway from this release is that SEED is finally giving us some clues into what its revenue participation will look like when it enters into licensing agreements with companies it has worked with to develop GMO intellectual property:

Under the terms of the agreement, the parties will continue to work together and intend to jointly file for patents on the transgenic corn and other crops created from this gene. Origin will be responsible for obtaining a bio-safety certificate, a key step needed before commercialization in China. Origin will retain exclusive worldwide rights to commercialize all crop seed containing this gene and in return will pay a single-digit percentage of sales royalty to IPP.


Wednesday, August 5, 2020

Research

Agritech Limited (NASDAQ:SEED) (Agricultural Technology) ($11.78; $59.0M market cap) announced it has regained NASDAQ compliance. 

“On March 6, 2020, the Company was notified by NASDAQ that it did not comply with the minimum $2.5 million stockholders' equity, $35 million market value of listed securities, or $500,000 of net income from continuing operations requirements for The Nasdaq Capital Market. Since then, NASDAQ officials determined that for the 20 consecutive business days, from July 2 through July 30, 2020, the Company's market value of listed securities has been $35,000,000 or greater and accordingly, the Company has regained compliance with NASDAQ listing requirements.”


Friday, July 31, 2020

Research

Agritech Limited (NASDAQ:SEED) (Agricultural Technology) ($11.65; $58.0M market cap) announced that the Company has entered into a collaboration agreement with National Maize Improvement Center of China (NMICC), a leading agricultural research institute, to develop and commercialize new GMO corn traits.

"We are pleased to be working with Origin Agritech, as we have followed their progress over the years and have been extremely impressed," said Director of NMICC Jingsheng Lai. "They are one of only a couple of GMO seed companies in China that is vertically integrated, making them the ideal partner, with all the capabilities necessary to take new seed traits to market."


Wednesday, April 15, 2020

Research

Origin Agritech Limited (NASDAQ:SEED) ($3.16; $15.1M market cap) announced it has received the RMB137.6 million from Beijing Changping Technology Innodevelop Group. 

“Origin has entered a definitive framework agreement with Beijing Changping Technology Innodevelop Group (BC-TID) as announced earlier. Under this agreement, Origin and BC-TID will use Beijing Origin Seed Limited (Beijing Origin) as the target joint venture entity, The Company will contribute the Origin Life Science Center building in Beijing and two biotech corn traits to the joint venture and BC-TID will fund the joint venture with a total of RMB204 million. The Company will restructure Beijing Origin and transfer the unrelated assets to Beijing Origin State Harvest Biotechnology Limited, the wholly owned subsidy of the Company. BC-TID will then inject its cash investment into Beijing Origin to hold 51% of equity in Beijing Origin.”

The Company believes the cash infusion to bring the company back to compliance with NASDAQ:

“The cash of RMB137.66 million received is currently in the form of loan, which will be converted to equity according to the definitive framework agreement. Such equity investment will significantly increase the Company's shareholder's equity and bring the company to compliance with NASDAQ's listing rules regarding the capital deficiency we announced previously.”

We continue to hold our long position based on optimism surrounding its potential receipt of a coveted GMO license from the Chinese government. 


Wednesday, March 11, 2020

Comments & Business Outlook

Tuesday, March 3, 2020

Joint Venture

BEIJING, March 3, 2020 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced it has entered a definitive framework agreement with Beijing Changping Technology Innodevelop Group (BC-TID).  

Under this agreement, Origin and BC-TID will use Beijing Origin Seed Limited (Beijing Origin) as the target joint venture entity, The Company will contribute the Origin Life Science Center building in Beijing and two biotech corn traits to the joint venture and BC-TID will fund the joint venture with a total of RMB204 million. The Company will restructure Beijing Origin and transfer the unrelated assets to Beijing Origin State Harvest Biotechnology Limited, the wholly owned subsidy of the Company. BC-TID will then inject its cash investment into Beijing Origin to hold 51% of equity in Beijing Origin. Before the investment is finalized, BC-TID will provide a loan of RMB137.66 million to Beijing Origin. 

BC-TID is wholly owned by the local government of Changping District in Beijing and was setup as an industrial investment platform. With over RMB10 billion asset, BC-TID mainly invests in the companies in the industrial parks of Changping District, where Origin Life Science Center building is located.


Tuesday, October 29, 2019

Research

Origin Agritech Limited (NASDAQ:SEED) ($5.97; $18.8M market cap), an agricultural technology and rural e-commerce company, updated its progress of Biotech Commercialization joint venture with Beijing Changping Technology Innodevelop Group. 

On June 5, 2019, the Company announced that the Company entered into a Cooperation Framework Agreement with BC-TID to form a new joint venture to focus on the commercialization of genetically modified (GM) corn seed technologies.

Under the agreement, Origin and BC-TID will establish a new entity with approximately equal partnership. The Company will contribute the Origin Life Science Center building in Beijing and two biotech corn traits to the new joint venture, and BC-TID will fund the joint venture with a total of RMB204 million. The two biotech traits are the glyphosate tolerance (Gt) trait and the double stacked traits of insect resistance (Bt) and Gt genes. These two traits have completed multi-year production tests, and we have submitted the application for the final stage of biosafety approval in April to China's Ministry of Agriculture.

Since the Cooperation Framework Agreement was signed, both parties are actively involved to complete the formation of joint venture. However, the process took longer than we originally expected mainly due to the complicated tax related issues with the Origin Life Science Center building in Beijing. Both parties now agreed to use Beijing Origin Seed Limited (Beijing Origin) as the joint venture entity in order to expediate the process. The original term remains the same and both parties are cooperating to complete the process as soon as possible. Due diligence has been completed and BC-TID has deposited RMB15 million (US$2.1 million) in an escrow account.

Beijing Origin has been the operating company for the Company's Chinese seed business and is controlled by the Company through a series of stock consignment agreements. The Company will transfer the seed business from Beijing Origin to Beijing Origin State Harvest Biotechnology Limited (State Harvest), which is the Company's wholly owned entity in China. After the changes and investment from BC-TID, Beijing Origin will become a joint venture of the Company and BC-TID, and will have the assets of the Origin Life Science Center building and two biotech corn traits discussed above.


Tuesday, September 17, 2019

Research

Origin Agritech Limited (NASDAQ:SEED) ($6.77; $21.6M market cap), an agricultural technology and rural e-commerce company, announced that the Company entered into a collaboration agreement with Inova Genética Ltda (INOVA), a member of the Wehrmann Group, from Cristalina-GO, Brazil.

“The agreement will involve cooperation in field testing of hybrids of both Origin and INOVA in each other's geographic regions. INOVA will also cooperate with Origin to evaluate corn seed biotechnology traits for application in South American markets. In addition, Origin and INOVA will explore commercial opportunities between the two companies, especially in corn seed breeding, production and distribution in South America.”

See our recent coverage on SEED including our research on the potential GMO license catalyst in China we are betting on, which could be a significant revenue generator for the company. 


Tuesday, September 17, 2019

Joint Venture

BEIJING, Sept. 17, 2019 /d/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced that the Company has entered into a collaboration agreement with Inova Genética Ltda (INOVA), a member of the Wehrmann Group, from Cristalina-GO, Brazil.

The agreement will involve cooperation in field testing of hybrids of both Origin and INOVA in each other's geographic regions. INOVA will also cooperate with Origin to evaluate corn seed biotechnology traits for application in South American markets. In addition, Origin and INOVA will explore commercial opportunities between the two companies, especially in corn seed breeding, production and distribution in South America.

INOVA is headquartered in Cristalina-GO, Brazil, and focuses on the plant breeding business. INOVA is a member of the Wehrmann Group, which is an active participant of the seed industry and a leading company in vegetable production in Brazil. The company has Dr. Anderson Dona as research head and Dr. Roberto de Rissi as a special consultant. The group website is: www.wehrmann.com.br.

"Wehrmann, which also owns Dois Marcos seed company, is an important seed industry player in Brazil and has many years of experience in both the soybean and corn seed businesses in Brazil," said Dr. Gengchen Han, Origin's Chairman and Chief Executive Officer, "our cooperation with INOVA will expand our geographic access for both our breeding technologies and our biotech traits."

"It's a great pleasure to visit Origin's facilities in Beijing, and we are impressed by Origin's biotech research and their breeding programs. We look forward to an in depth cooperation with Origin both on the biotech front and in conventional corn seed breeding programs," said Dr. Verni Wehrmann, Chairman of the Wehrmann Group. 


Wednesday, August 21, 2019

Research

Origin Agritech Limited (NASDAQ:SEED) ($5.04; $16.1M market cap) an agricultural technology and rural e-commerce, announced that it has regained full compliance with the NASDAQ. 

On June 5, 2019, the Company was notified by the NASDAQ Stock Market ("NASDAQ") that it was not in compliance with the NASDAQ listing rules regarding the minimal requirements for stockholders' equity. The non-compliance was determined based on the balance sheet of September 30, 2018, in the Annual Report on Form 20-F for fiscal year 2018 filed on June 3, 2019. Since September 30, 2018, the Company increased its stockholder's equity mainly through an equity financing in January 2019. The Company also applied to change from the NASDAQ Global Select Market to the NASDAQ Capital Market, the application for which was approved and trading on NASDAQ Capital Market for the ordinary shares of the Company commenced August 19, 2019. The Company regained full compliance with the listing standards of NASDAQ.

We have been monitoring SEED for several months now based on hype surrounding its potential of receival of a GMO license from Chinese government. See our past coverage on SEED here


Wednesday, June 12, 2019

Comments & Business Outlook
BEIJING, June 11, 2019 /PRNewswire/ -- Origin Agritech Ltd. (SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced that on June 5, 2019 (the "Notice Date"), the Company received a letter from the NASDAQ Stock Market ("NASDAQ") notifying the Company that the Company is not in compliance with the NASDAQ listing rules. The Company's Form 20-F for the fiscal year ended September 30, 2019 reported stockholders' equity of $(3,396,000) and therefore, the Company is not in compliance with NASDAQ Listing Rule 5450(b)(1)(A) which requires the Company to maintain a minimum of $10,000,000 in stockholders' equity.  The Company has 45 calendar days to submit a plan to NASDAQ to regain compliance and if such plan is accepted, the Company can be granted an extension of up to 180 calendar days from the Notice Date to evidence compliance. If NASDAQ does not accept the Company's plan, the Company will have the opportunity to appeal that decision to a hearings panel. The Company's management is pursuing options to address the noncompliance and intends to submit a compliance plan on or before the deadline set by NASDAQ.

Tuesday, February 26, 2019

Comments & Business Outlook

BEIJING, Feb. 25, 2019 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced that the Company has  received a letter from the NASDAQ Stock Market ("NASDAQ") notifying the Company that the Company is delinquent with respect to the filing of the Annual Report on Form 20-F for the fiscal year ended September 30, 2018 and therefore not in compliance with the requirements for continued listing set forth in NASDAQ Listing Rule 5250(c)(1). The Company has 60 calendar days to submit a plan to NASDAQ to regain compliance and if such plan is accepted, the Company can be granted an exception until August 14, 2019 to regain compliance. If NASDAQ does not accept the Company's plan, the Company will have the opportunity to appeal that decision to a hearings panel. The Company's management is pursuing options to address the deficiency. The Company plans to file Form 20-F as soon as possible or submit a compliance plan on or before the deadline set by NASAQ.


Friday, December 21, 2018

Joint Venture

BEIJING, Dec. 19, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("the Company" or "Origin")an agriculture technology and rural e-commerce company, today announced the establishment of two more new joint ventures: Shandong Aoyu Zhongye Limited (Shandong Aoyu) in Shandong province and Henan Aoyu Zhongye Limited (Henan Aoyu) in Henan province. Origin holds 51% of equity in both of the JVs.

The establishment of these two joint ventures, along with the Hubei Aoyu Agricultural Technology Limited (Hubei Aoyu) in Hubei province, Anhui Aoyu Zhongye Technology Ltd. (Anhui Aoyu) in Anhui province and Xuzhou Aoyu Agricultural Technology Ltd. (Xuzhou Aoyu) in Jiangsu province announced previouslycompletes the first stage of the Origin e-Commune Network development. These five JVs will be the cornerstone of Origin's SEED+ rural e-commerce business. The successful development of these five joint ventures demonstrated the acceptance of the major distributors toward revolutionary e-commune network philosophy in providing integrated and customized technology solution to the farmers across China.

The Origin e-Commune Network business has the target of RMB1 billion (~US$145 million) revenue during the fiscal year 2019.


Thursday, December 6, 2018

CFO Trail

BEIJING, Dec. 3, 2018 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced key management changes. Dr. Gengchen Han, the Executive Chairman of the Company, and the Chief Executive Officer of the Company between 1997 and 2009 and between 2011 and 2016, has returned to become Chief Executive Officer of the Company, and Dr. James Chen, the former Chief Executive Officer of the Company, is now the Chief Financial Officer of the Company. The Company also announced that Mr. Shuangcheng Zhou will become the President of the Company upon the closing of the Share Subscription Agreement signed on October 16, 2018 between the Company and Longhan Investment Co., Ltd. ("Longhan").

Mr. Zhou is currently the Chairman and Chief Executive Officer of Longhan, the company he started in 2010. Mr. Zhou has served as the Chairman of China National Travel Industry Corporation previously. He has also been the Vice President of the National Research Institute of Policy Science and Vice-Chairman and Secretary-General of the Silk Road Special Fund Committee, among other positions in various government entities.

"I'm excited to return as the CEO of the Company and to welcome Mr. Zhou to our management team as we're moving into new strategic directions of an Origin e-Commune Network and the ISALR cooperation programs with Longhan," said Dr. Gengchen Han. He continued, "Our board and I thank Dr. Chen for his excellent service as CEO during this challenging period of time and we trust that his continuing service as CFO will serve well for the Company."

"I'm thrilled to join Origin's management team and very happy to work with Dr. Han, Origin's board and its management team," said Mr. Zhou, "I believe our cooperation program in ISALR technologies could create a major new business that will take Origin to a much higher level. Our teams have already been working together and are identifying business opportunities to implement in 2019 and beyond."

"I have been a strong believer for Origin and Dr. Han's leadership. I'm grateful that I have the opportunity to help the Company moving into the new strategic directions. The return of Dr. Han back as the CEO, the ISALR cooperation program with Longhan, and Mr. Zhou's agreement to join Origin's management team will set a strong basis for the business growth going forward," said Dr. Chen.

The ISALR (Integrated Saline-Alkaline Land Reclamation) cooperation programs with Longhan is the technology cooperation between Origin and Longhan. Origin and Longhan agreed to commercialize the ISALR technologies and target to plant on 1 million mu (~165,000 acres) of saline-alkaline land in 2019.


Tuesday, December 4, 2018

CFO Trail

BEIJING, Dec. 3, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced key management changes. Dr. Gengchen Han, the Executive Chairman of the Company, and the Chief Executive Officer of the Company between 1997 and 2009 and between 2011 and 2016, has returned to become Chief Executive Officer of the Company, and Dr. James Chen, the former Chief Executive Officer of the Company, is now the Chief Financial Officer of the Company. The Company also announced that Mr. Shuangcheng Zhou will become the President of the Company upon the closing of the Share Subscription Agreement signed on October 16, 2018 between the Company and Longhan Investment Co., Ltd. ("Longhan").

Mr. Zhou is currently the Chairman and Chief Executive Officer of Longhan, the company he started in 2010. Mr. Zhou has served as the Chairman of China National Travel Industry Corporation previously. He has also been the Vice President of the National Research Institute of Policy Science and Vice-Chairman and Secretary-General of the Silk Road Special Fund Committee, among other positions in various government entities.

"I'm excited to return as the CEO of the Company and to welcome Mr. Zhou to our management team as we're moving into new strategic directions of an Origin e-Commune Network and the ISALR cooperation programs with Longhan," said Dr. Gengchen Han. He continued, "Our board and I thank Dr. Chen for his excellent service as CEO during this challenging period of time and we trust that his continuing service as CFO will serve well for the Company."

"I'm thrilled to join Origin's management team and very happy to work with Dr. Han, Origin's board and its management team," said Mr. Zhou, "I believe our cooperation program in ISALR technologies could create a major new business that will take Origin to a much higher level. Our teams have already been working together and are identifying business opportunities to implement in 2019 and beyond."

"I have been a strong believer for Origin and Dr. Han's leadership. I'm grateful that I have the opportunity to help the Company moving into the new strategic directions. The return of Dr. Han back as the CEO, the ISALR cooperation program with Longhan, and Mr. Zhou's agreement to join Origin's management team will set a strong basis for the business growth going forward," said Dr. Chen.

The ISALR (Integrated Saline-Alkaline Land Reclamation) cooperation programs with Longhan is the technology cooperation between Origin and Longhan. Origin and Longhan agreed to commercialize the ISALR technologies and target to plant on 1 million mu (~165,000 acres) of saline-alkaline land in 2019.


Tuesday, November 20, 2018

Joint Venture

BEIJING, Nov. 19, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced that the Company and Balin Youqi Enze Agricultural and Forest Development Co, Ltd (Enze) have entered into a long-term strategic agreement to develop and cultivate 1 million mu (~165,000 acres) of saline-alkaline land in Balin Youqi, Inner Mongolia.

Enze, based in Balin Youqi, Inner Mongolia, has been promoting the prevention and control of desertification and saline-alkali soil. Enze is devoted to the construction of demonstration bases of ecological industry, which are based on scientific and technological research on desertification and saline-alkali soil. Enze has been working with the local government to achieve the objectives of reclaiming and cultivating 1 million mu of desertified and saline-alkaline land in three years. Origin and Enze plan to apply the Integrated Saline-Alkaline Land Reclamation ("ISALR") technology that Origin and Longhan are currently working on and was announced previously.

Longhan and Enze have been working toward the cooperation project for several months and Enze has finally chosen the ISALR technology. With this strategic cooperation, the ISALR team from Origin and Longhan has already started to work with the team from Enze to develop the detailed plans for the first stage of land reclamation project and identified over 100,000 mu (~16,500acres) of the desertified and saline-alkaline land to cultivate in the 2019 season.  


Monday, October 22, 2018

Comments & Business Outlook

BEIJING, Oct. 22, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced that the Company entered into a Share Subscription Agreement with Longhan Investment Management, Co., Ltd ("Longhan"). Under this agreement, Longhan will purchase 1,397,680 Shares of the Company's common stock for an aggregate purchase price of US$7,743,147.20.

As previously announced, Origin has entered a strategic cooperation agreement with Longhan, under which Origin and Longhan will work together to start the commercialization of Integrated Saline-Alkaline Land Reclamation ("ISALR") technology in 2019, both in China and globally. Origin and Longhan will integrate seed treatment, soil treatment technologies and seed breeding & biotechnology, as well as Origin's agricultural business platform. With Longhan's investment into the Company's stock, both Origin and Longhan plan to speed up the strategic cooperation and the commercialization process for the ISALR technology.


Wednesday, October 17, 2018

Joint Venture

BEIJING, Oct. 17, 2018 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, today announced that the Company has entered into a strategic cooperation agreement with Longhan Investment Management Co., Ltd. ("Longhan") pursuant to which both companies will work together to start the commercialization of Integrated Saline-Alkaline Land Reclamation ("ISALR") technology in 2019, both in China and globally, and will integrate Longhan's technologies with Origin's seed technologies and agricultural business platform.

Longhan is an investment management company and operating platform that focuses on government-supported major projects in agricultural development and food security. With the Belt and Road initiative of the Chinese government, Longhan has developed and demonstrated its molecular biology technologies for seed treatment and soil treatment. Longhan has successfully tested its technologies on cotton in The Republic of Uzbekistan and on various crops, including corn, soybean, cotton, rice and vegetables, across several Chinese provinces with different degrees of saline-alkaline soil. The yield improvement for different crops ranges from 10-15% in medium level saline-alkaline land and over 15% for heavy saline-alkaline soil.

China has about 1.5 billion mu (100 million hectare) of saline-alkaline lands, while globally there is about 15 billion mu (1 billion hectare). Reclamation of these lands has become more and more critical to address the growing food demand in China and around the world. The escalation of the current U.S.-China trade dispute has intensified the Chinese government's attention towards food security. The technologies for expanding plantable acreage through the reclamation of saline-alkaline lands are now well supported by the Chinese government. China currently imports overs 80% of the nation's soybean demands. The ISALR technology will significantly increase the plantable acreage for corn and soybean and could thus dramatically alleviate China's dependence on imported soybeans.   

"We are impressed by Longhan's technologies for seed and soil treatment and their initiative to work with the Chinese government to develop large reclamation projects for saline and alkaline soil. The strategic direction set out by Longhan complements well with Origin's seed biotechnology and seed breading technology," said Dr. Gengchen Han, Executive Chairman of Origin Agritech. Furthermore, large land reclamation projects will generate significant agricultural input demands, including seeds, fertilizer and agricultural chemicals, which could be better served with Origin's supply chain established by the Origin e-Commune Network announced previously.

"We're very pleased to work with Origin Agritech, one of the premier brands for the agricultural industry in China. Origin's strong seed technologies and its commercial experience could jump start our commercialization initiative for our state-of-art molecular biology technologies. We look forward to our joint program and believe that we could see financial returns even at the onset of this cooperation in 2019, especially with the support of the Chinese government," said Mr. Shuangcheng Zhou, Chairman and Chief Executive Officer of Longhan.


Wednesday, October 3, 2018

Joint Venture

BEIJING, Oct. 2, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED), ("the Company" or "Origin") an agriculture technology and rural e-commerce company, today announced that the Company has started Origin e-Commune Network and entered a new joint venture in Hubei Province with five major agricultural product distributors in the province. Origin holds 51% of equity in this new joint venture. This joint venture, Hubei Aoyu Agricultural Technology Limited (Hubei Aoyu), will provide broad agricultural products and services in addition to the corn seed products from Origin Agritech in Hubei province. This JV will be the first of several similar joint ventures Origin is in the process to form in the central China agricultural provinces.

The establishment of Hubei Aoyu marks a major milestone for the Origin's rural e-commerce strategy. With Hubei Aoyu and other similar JVs, Origin is now creating an Origin e-Commune Network based on e-commerce technologies and Origin's strong brand equity across rural China. Origin e-Commune Network is founded in the backdrop of the changing rural business environment as the result of new directions for Chinese rural development, fast growing technologies in e-commerce, expansion of 4G communication network, and modernization of rural logistics system recently.

This e-commune network philosophy is expected to revolutionize the Chinese agricultural industry as the new e-commune network could provide integrated and customized technology solution to the farmers to increase the total economic value per acre of land. Such e-commune network will not only offer farmers with the agricultural input products, but also provide much broader pre- and post-harvest services. Furthermore, the Origin e-Commune Network creates a system where distributors and farmers will participate as partnership rather than middle level distributorship and end-users in the current distribution system.

The celebration of the joint venture formation was held in Xiangyang, Hubei, a historical and major agricultural city. Dr. Gengchen Han, Executive Chairman of Origin Agritech, attended the celebration and has outlined Origin e-Commune Network philosophy to create a strong agricultural cooperative entity. "The agricultural market in China is experiencing a new growth directions and we believe that Origin e-Commune Network will enable a new form of cooperation between products and service providers and farmers. With its strong brand name and over 20 years of serving the farmers, Origin is in a great position to initiate such innovative business model as we're entering a new technology era for the Ag industry in China," said Dr. Han. More than 40 major distributors in Hubei province have attended this event.


Friday, August 24, 2018

Comments & Business Outlook

BEIJING, Aug. 23, 2018 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ : SEED ), ("the Company" or "Origin") an agriculture technology and rural e-commerce company, today announced thatthe Company has started new cooperation programs with other seed suppliers in China to integrate the company's GMO traits with the seed varieties from other suppliers.

"This is a significant step forward for the commercialization of our GMO technologies. As more and more corn seed suppliers are realizing the value of GMO technology, they start to work with us in order to get ready to license our GMO technologies," said Dr. James Chen, Origin's Chief Executive Officer.

Origin is the leading technology provider for corn seed GMO technologies in China. According to the "Thirteenth Five Year State Science and Technology Innovative Plan" published by the Chinese government in 2016, the Chinese government set to target the commercialization of corn seed GMO technologies during the central government's Thirteenth Five-Year Plan, which ends in 2020. Additionally, the recent crackdowns of illegal GMO seeds of several high profiled corn seed providers by the Chinese government help the government to pave the way for full commercialization of the corn seed GMO technology. 

Origin has prepared to be ready for the commercialization of its GMO technologies and is working with other seed suppliers to integrate its GMO traits into the seed varieties of these suppliers in order to license its technologies upon the commercialization approval from the Chinese government. China has the corn planting acreage similar to the United States and the market value for the corn seed GMO technology could reach over multi billion dollars in China.


Friday, August 3, 2018

Comments & Business Outlook

BEIJING, Aug. 1, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED), ("the Company" or "Origin") an agriculture technology and rural e-commerce company, today announced that the Company's new rural e-commerce subsidiary Beijing State Harvest Zhongying Network Technology Limited, Co. (ZhongyingNetwork) has been established and the new on-line application HUIYING has been launched to provide a rural e-commerce platform for merchandise across agricultural inputs to consumptions products.

The new e-commerce subsidiary Zhongying Network and its mobile app follow the strategy SEED+ Rural E-commerce with Blockchain Technologies, previously disclosed in March of this year (SEC 6-K filing dated as March 15, 2018). As described in March, the seed business is the core of all rural e-commerce business within an overall rural consumer market of over RMB 5 trillion. With twenty years of business experience and broad geographic exposure across China, along with a customer base of over 30,000 distributors/retailers and over 10 million farmers, Origin believes it is uniquely positioned in the rural e-commerce business to serve hundreds of millions of potential customers.

Through its new rural e-commerce business, Origin will significantly expand its business scope from its original corn seed to a wide range of products. The products to be offered on Origin's rural e-commerce platform will include, but will not be limited to, agricultural seed products (e.g., corn seeds, rice seeds, and vegetable seeds), other agricultural inputs (e.g., fertilizers and agricultural chemicals), foods, household products, and other consumer products.

"With the launch of our rural e-commerce business, we're ready to utilize the brand equity Origin has built in the rural regions of China and the strong trend of growing rural consumption," said Dr. James Chen, Origin's Chief Executive Officer. "We're excited with our new rural e-commerce business model, which we believe has many superior aspects and offers an innovative new e-commerce alternative to the consumers in thefast growing rural regions in China."

"The new rural e-commerce business presents a great growth opportunity for Origin, and more importantly it combines our current seed business in the rural regions with the technologies we have been developing, including the Blockchain technology in cooperation with the Elastos Foundation," said Dr. Gengchen Han, Chairman of the Board of Directors. "We believe the launch of our rural e-commerce business will provide significant value to Origin and our shareholders."


Thursday, August 2, 2018

Comments & Business Outlook

BEIJING, Aug. 1, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED), ("the Company" or "Origin") an agriculture technology and rural e-commerce company, today announced that the Company's new rural e-commerce subsidiary Beijing State Harvest Zhongying Network Technology Limited, Co. (ZhongyingNetwork) has been established and the new on-line application HUIYING has been launched to provide a rural e-commerce platform for merchandise across agricultural inputs to consumptions products.

The new e-commerce subsidiary Zhongying Network and its mobile app follow the strategy SEED+ Rural E-commerce with Blockchain Technologies, previously disclosed in March of this year (SEC 6-K filing dated as March 15, 2018). As described in March, the seed business is the core of all rural e-commerce business within an overall rural consumer market of over RMB 5 trillion. With twenty years of business experience and broad geographic exposure across China, along with a customer base of over 30,000 distributors/retailers and over 10 million farmers, Origin believes it is uniquely positioned in the rural e-commerce business to serve hundreds of millions of potential customers.

Through its new rural e-commerce business, Origin will significantly expand its business scope from its original corn seed to a wide range of products. The products to be offered on Origin's rural e-commerce platform will include, but will not be limited to, agricultural seed products (e.g., corn seeds, rice seeds, and vegetable seeds), other agricultural inputs (e.g., fertilizers and agricultural chemicals), foods, household products, and other consumer products.

"With the launch of our rural e-commerce business, we're ready to utilize the brand equity Origin has built in the rural regions of China and the strong trend of growing rural consumption," said Dr. James Chen, Origin's Chief Executive Officer. "We're excited with our new rural e-commerce business model, which we believe has many superior aspects and offers an innovative new e-commerce alternative to the consumers in thefast growing rural regions in China."

"The new rural e-commerce business presents a great growth opportunity for Origin, and more importantly it combines our current seed business in the rural regions with the technologies we have been developing, including the Blockchain technology in cooperation with the Elastos Foundation," said Dr. Gengchen Han, Chairman of the Board of Directors. "We believe the launch of our rural e-commerce business will provide significant value to Origin and our shareholders."


Thursday, July 26, 2018

Comments & Business Outlook

BEIJING, July 25, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("the Company" or "Origin") an agricultural biotechnology trait and corn seed provider, today announced that the Company received the asset sale proceeds of RMB 24.14 million from the first closing of the asset sale transaction (First Closing) from Beijing Shihui Agricultural Development Co., Limited (Beijing Shihui or the Buyer), with this payment, the first phase of sale is completed. The Company will work with Beijing Shihui to cancel the second phase for the sale of its commercial seed business.


Origin and its subsidiaries entered a Master Transaction Agreement with Beijing Shihui on September 26, 2016, to sell portions of its commercial seed business. Under the agreement, the sale was to be in two separate phases. The first part of the transaction (First Closing) called for the sale of the assets under the subsidiaries Denong Zhengcheng Seed Limited (Denong), Changchun Origin Seed Technology Development Limited (Changchun Origin), and Linze Origin Seed Limited (Linze Origin) for an aggregate purchase price of RMB200 million (including debt assumption), which was later modified to RMB221 million. The second phase of the transaction (Second Closing) was to include the assets under the newly created entity Zhengzhou Origin including a seed processing plant in Zhengzhou, China, the seed distribution business of Beijing Origin Seed Limited (Beijing Origin), and the Company headquarters building in Beijing. The Second Closing called for the Buyer to deliver to the Company an aggregate of RMB190 million (including debt assumption). The Buyer prepaid RMB10 million of the consideration to the Company at the signing of the Master Agreement.
With the current payment of RMB24.14 million from the Buyer, the First Closing now is completed. The Company has reviewed the Second Closing and believes that it is in the best interest of the Company, at this time, to cancel the Second Closing. With the cancellation of the Second Closing, the Company will continue to own the seed processing plant in Zhengzhou, the distribution business of Beijing Origin and the Beijing headquarters building. The distribution business of Beijing Origin represented over 70% of total corn seed revenue during 2017 planting season.

The Company believes that the assets to be retained are more valuable to the Company at this time partly because they can generate significant cash flow and potentially can result in meaningful earnings for the Company. More importantly, the Company believes that the potential for the GMO technologies to be commercialized in China has increased recently. If the GMO technologies can be commercialized by 2020, as suggested by an announced plan from the Chinese government, the combined assets of the Company's GMO technologies and distribution business could prove of significant value to the shareholders.

"At this point, it's important for us to focus on the new strategic directions we have announced previously and pursue cancellation of the Second Closing so that the Company is able to move ahead with its plans," commented Dr. James Chen, Chief Executive Officer of Origin.  Dr. Chen stated further, "the increasingly positive attitude from the Chinese government toward corn seed GMO technologies could allow us to realize a better value if we keep portions of our Chinese commercial corn seed business."

The value of GMO technologies is beginning to be recognized by the Chinese government and public, especially after the recent heightened visibility in the media of trade negotiations between the United States and China. The cracking down of the illegal GMO corn seed production in China also demonstrates action by the Chinese government to better control the commercialization process of GMO technologies. A recent publication from the Chinese Ministry of Agriculture and Rural Affairs has placed GMO technologies as a key agricultural green technology. Even though past slow government and public acceptance of GMO corn seed technologies in China has delayed the realization of the Company's technology investments, management believes the Company's leading position and readiness in corn seed GMO technologies could eventually result in a significant value to its shareholders.


Wednesday, June 27, 2018

Research

Origin Agritech Limited (NASDAQ:SEED) ($0.78; $17.8M market cap), an agricultural biotechnology company, announced a 1 for 10 reverse stock split.  The reverse stock split will reduce the number of outstanding shares to 2,787,273.  The effective date will be July 10, 2018. We will keep a close eye on SEED as it could attract speculative momentum investors.  We have seen many examples of stocks pumping after reverse splits.


Tuesday, March 27, 2018

Comments & Business Outlook

BEIJING, March 26, 2018 /PRNewswire/ -- Origin Agritech Limited (SEED) ("the Company" or "Origin") today announced that Ms. Yaya Young will join Origin's senior management team to start and manage the Company's rural e-commerce business that was announced earlier this month.

"We're very pleased that Yaya would join our team to launch and lead our e-commerce business. She has impressive experience in the e-commerce business and various businesses related to rural China, which fits very well into our strategy of developing a Blockchain technology based rural e-commerce platform," commented Dr. James Chen, Origin's Chief Executive Officer. Mr. Chen continued saying that her joining Origin's management team represents an important milestone in the Company's new strategic direction and the Company would move fast to establish our rural e-commerce platform.

Ms. Young has been a successful entrepreneur in China with experience in e-commerce, rural internet-based P2P financing platform, and agricultural commodities exchange businesses. During her tenure as the vice president at Beijing Nongxintong Technology Group from January 2013 to January 2016, Ms. Young led a project under the Ministry of Agriculture to introduce rural leisure business to the urban population and cooperated with China UnionPay to develop 1.5 million rural leisure business clients. As the president of Hunan Tianxia Phoenix Cultural Tourism Investment Co, Ms. Young managed the tourism projects for Phoenix city in Hunan province between January 2012 and February 2013. Ms. Young was the vice president at Imperial State Agricultural Commodities Exchange from March 2009 to July 2012 and was one of the key persons who founded and operated the first pork trading platform in China. The total pork trading volume reached RMB40 billion during the first three years of its operation.

"I'm very excited to join Origin Agritech and become part of the great management team for business in rural China. Origin has established an excellent reputation after serving the farmers in China for 20 years," said Ms. Young, "I believe the consumption growth in rural China is a key growth engine for the Chinese economy in the next decade and a new e-commerce business model could help the rural China to benefit from the new lifestyles that have already been adopted by people in major Chinese cities."

"The joining of Yaya to our management team is a significant step as our management team launches the e-commerce platform," said Dr. Gengchen Han, Chairman of the Board for Origin. "I'm confident that with the credentials of both James and Yaya in building social network e-commerce businesses, and the market network Origin has accumulated over the last twenty years, we would jump start Origin's new strategy in rural e-commerce."

Ms. Young received her bachelor degree in International Trading from Hunan University and completed her Master's program for Regional Economics at Renmin University of China. She was a news reporter in Los Angeles for International Daily News during 2002 to 2004 and for Phoenix TV American from 2006 to 2009. During the period between 2004 and 2006, she worked at the investment banking division of Citigroup.


Friday, March 16, 2018

Comments & Business Outlook

BEIJING, March 16, 2018 /PRNewswire/ -- Dr. James Chen, the Chief Executive Officer of Origin Agritech Limited (SEED) ("the Company" or "Origin"), an agricultural biotechnology trait and corn seed technology provider, presented the Company's strategy for SEED+ Rural E-Commerce with Blockchain Technologies at the "Elastos x BITMAIN Meetup: Blockchain for Scaling Large, Enterprise DApps" on March 15, 2018.

During the Meetup, Dr. Chen discussed Origin's history of embracing information technologies and the growing opportunities for rural e-commerce business in China. "Origin has 20 years of operation in rural China and has established strong brand name across vast farmland in China", said Dr. Chen during the meetup, "we're extending our competitive advantages for rural customer bases, management experience and business understanding in rural regions, and supply source tracking for agricultural products, and we plan to startup social network e-commerce platform with products including but not limited to agricultural inputs."


Friday, March 9, 2018

Comments & Business Outlook

BEIJING, March 8, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("the Company" or "Origin") an agricultural biotechnology trait and corn seed provider, today announced the newly appointed Chief Executive Officer Dr. Z. James Chen has set and discussed new strategic directions for the Company.

"With over 20 years of serving the agricultural industry in China, Origin has always been exploring the technology and market frontiers and has accumulated various leading technologies for the agricultural farmland in China. Although the delay in GMO technology commercialization as well as the weak corn seed market have delayed the financial realization of our key agribiotech and germplasm technologies, we are confident that our efforts over the last 20 years have already built the foundation for future growth despite the weak market conditions," discussed Dr. James Chen, "while we will continue to develop the agribiotech technologies as we wait for the final commercialization approval from the Chinese government, we will focus our effort on the e-commerce for the vast farmland in China applying blockchain technologies and foundation seed technologies, we believe our strategic advantages and past technology development will give us opportunities to be successful in these business areas."

Below are three key strategic directions Dr. James Chen and new management team has set and discussed:

1. E-commerce development for the vast farmland in China

As a leading agriculture seed supplier over the last 20 years, Origin Agritech has built a strong brand name in the vast farmland across China and has involved in the e-commerce to provide seed products and services to the farmers. In addition to the typical advantages e-commerce can provide compared to the traditional distribution system, one of the key advantage e-commerce has for the seed business is the better ability to track the source of seed supply. With the new blockchain technologies, there is a potential that the detail original source of seed products can be tracked and documented. This could resolve the intellectual property pirating problems the Chinese farmers and seed providers face over the years. Under the new strategic cooperation with Elastos Foundation announced earlier, we will start our e-commerce business development facing the vast Chinese farmland with the products including but not limited to the agricultural inputs.

2. Foundation corn seed technology business development

Since the beginning, Origin has been working on the development of germplasm and hybrid corn seed varieties. The company has built a large collection of diverse corn seed germplasm, which we believe is the largest among the Chinese corn seed companies. Also, we have established a database system with the characterization of these germplasms in our collection. We believe our unique elite lines will enable us to create competitive hybrid corn seed products for the Chinese seed market and possibly for the global corn seed market.

Since most local seed companies have no or limited R&D capability, they will rely on the seed technology developed by a company with foundation seed technologies. Origin is in the unique position to become a foundation corn seed company, similar to the success of foundation seed companies in the U.S., since Origin is one of very few companies in China with not only large diverse germplasm collection but also the most advanced breeding technologies, including the largest Doubled Haploid program in China. As the new strategic direction, we will increase our business development effort for our foundation corn seed technologies and become the first and only foundation seed company in China.

3. Further development of our biotech and genome editing seed technologies

Origin has been the leading biotech seed technology company in China and has successfully developed three leading GM traits. While we are waiting for the final commercialization approval from the Chinese government, we cooperate with the government agencies in implementing the previously announced commercialization plan for GM corn seed technologies outlined in the 13th Five-Year Plan, which ends in 2020. In addition, recent advancement in genome editing technology opens up tremendous new opportunities in the seed industry. We are uniquely positioned to capture this opportunity to expand our scope of technology offerings. Our leading technology platform established for biotech development, including DNA and protein engineering, efficient commercial scale plant transformation and versatile trait-efficacy testing capabilities, can be seamlessly utilized for genome editing, and has already enabled us to jump start the project.

"We believe the new strategic directions set by the new management team represents the key technology and market advantages built over the last two decades and we trust we can build new businesses while waiting for the final commercialization approval of agribiotech technology in China," said Dr. Gengchen Han, Chairman of Origin Agritech, "the new management team's new strategic directions have full support from our board and we look forward to new Origin post commercial seed business divestiture"


Friday, February 16, 2018

Comments & Business Outlook

BEIJING, Feb. 15, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("the Company" or "Origin") an agricultural biotechnology trait and corn seed provider, and Elastos Foundation today announced their plan to develop a global strategic partnership for mutually beneficial joint activities fostering smart economic solutions to establish platforms to serve global agribusiness transactions, data services, and rural e-commerce activities.

The Elastos Project was initially conceived by Mr. Rong Chen in 2000, as he sought to develop the world's first internet operating system. Elastos Foundation was founded in 2016 by Rong Chen and Sunny Feng Han, aiming to create a new Internet system powered by blockchain technologies. Elastos turns an open-source software platform into decentralized applications (Dapps) that runs on a peer-to-peer network without centralized control. Users can access these Dapps via their mobile phones, without changing their operating system. The current Internet provides a web of information as users would receive data and information by clicking a URL. The new Elastos Dapps is creating a web of apps where a user gets codes when clicking a URL. Elastos utilizes blockchain technologies to issue IDs for digital content, making it possible to know who owns which digital assets. The Elastos Web will be a special economic zone where Elastos tokens (ELA) function as the base currency.

Origin, focusing on biotechnology traits and corn seed business, has been developing a system for seed tracking and e-commerce technologies in order to provide the best seed technologies to Chinese farmers. With several years' trial experience and assistant from Elastos Foundation during the development of Origin's e-commerce platform, both Origin and Elastos believe formal cooperation in developing a comprehensive platform based on Elastos' Smart Web technologies would provide a great service to global agribusiness transactions, data services, and rural e-commerce activities.

The development of such platform based on Elastos' Smart Web powered by blockchain technologies is expected to solve seed piracy problems and protect agricultural seed intellectual properties. Elastos' blockchain can utilize digital ID system so that seed suppliers and farmers can easily track a seed's original source. In addition, the operating system of Elastos has a great advantage to process large transaction volumes to meet the need of surging e-commerce activities.

"I always have had a great respect for Rong and his team since we both started our separated but unique technology businesses in Zhongguancun, and I'm very excited that our cooperation over the last several years have led to a new level of cooperation with much clearer and higher objectives," said Dr. Gengchen Han.  He continued saying that "we believe that the new platform would allow us to provide much more advanced services to the global agribusiness and rural e-commerce services in China."

"I'm delighted to see that our service to Origin has been well recognized; we believe together we can develop a unique, a much more comprehensive technology platform with our decentralized applications (Dapps) powered by blockchain technologies. We warmly welcome Origin to become a key member in our Elastos community," said Mr. Chen.

Both Origin and Elastos agreed to initiate the cooperation immediately. In addition, both companies agreed that Mr. Rong Chen, founder of Elastos will join Origin's board and Dr. Gengchen Han, chairman of Origin, will serve Elastos as an advisor. Both companies also agreed to mutually invest into each other.


Thursday, January 4, 2018

Comments & Business Outlook
BEIJING, Jan. 4, 2018 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("the Company" or "Origin") an agricultural biotechnology trait and corn seed provider, today announced that it received an installment of the purchase price for the seed and production and distribution business sold to Beijing Shihui Agricultural Development Co. Ltd. ("Shihui").The amount received was RMB18.64 million (approximately US$2.79 million). The Company and Shihui continue to work together to set the payment schedule for the assets sold at the September 2017 closing and the second closing of the additional assets that Shihui has agreed to purchase.

Tuesday, December 19, 2017

Comments & Business Outlook

BEIJING, Dec.18, 2017 /PRNewswire/ -- Origin Agritech Ltd. (SEED)("the Company" or "Origin"), an agricultural biotechnology trait and corn seed provider, today released a progress update on growth platforms which are focused on the development and commercialization of superior corn seed products and high value biotechnology traits.

"We are happy to share the exciting news on key milestone achievements for our seed product pipeline and biotechnology trait development programs," said Dr. Gengchen Han, Origin Executive Chairman.

- After 2 years of production trials as required by the government regulations in China, comprehensive data packages of the leading biotechnology traits, insect resistance and herbicide tolerance, have been submitted to China's regulatory agency for Biosafety Certificate (Phase 5) issuance. These traits have also been incorporated into Origin's leading inbred parental lines and commercial partner's elite lines in preparation for variety approval and commercial product launch.

- Origin's corn seed product portfolio has had another year of outstanding performance. Analysis of field trial data from more than 100 test locations indicated that 7 of the 7 hybrid varieties in the Green Pass production trials meet or exceed the criteria of new product registration. Data packages of these varieties will be submitted to the Ministry Of Agriculture (MOA) in December for national registration approval.

- In late 2017 Origin successfully fulfilled the Excellence Through Stewardship (ETS) Program audit requirements and became a formal member of this global organization of the AG biotechnology industry. This achievement demonstrates Origin's commitment to best practices and quality management systems and highlights its pledge to continuous improvement.  

 "I am pleased to report to stakeholders that our corn breeding pipeline and seed product portfolio are getting stronger year after year in both quantity and quality. Our biotech trait development program remains one of the industry leaders in China and we are ready to commercialize the technology once the government approvals are issued" said Dr. Jihong Liang, Origin Chief Technology Officer.

Corn seed product breeding, development and commercialization: 
Progress Update

In early 2017 Origin received 5 national approvals for corn seed product registration that are suited to the major corn production areas in China. Summer field trials of the Green Pass program generated better than expected results. Seven new seed product registrations are being submitted to MOA for approval in early 2018. A total of 24 new products will enter the Green Pass trials in the summer of 2018.
Origin opened a Green Pass program in the South West of China that tests corn products suited to the diverse ecological conditions in that region. This effort will enable Origin to expand its corn product portfolio to meet the needs of the farmers in that market segment of about 13 million acres
Origin entered into collaboration agreements with 5 leading corn seed companies to evaluate Origin's new seed products in their trailing systems. The test results are being summarized and will provide support in discussions of commercial license agreements
Biotech trait development and biosafety certification
Progress Update

In 2017, Origin completed the second year of regulatory production trials of its first generation PEST/WEED trait as required by the government regulations. In addition to the trials conducted in 2016 that thoroughly evaluated molecular characteristics, field efficacy, environmental safety and food safety, all of which met critical biosafety regulation standards, the 2017 tests further examined effect of the traits on expanded spectrum of non-target organisms. The results confirm that the biotech traits have no negative impact on the tested non-target organisms.
Dossiers summarizing the combined 2016 and 2017 laboratory and field-test studies internal to Origin and in collaboration with third party research labs were submitted in November to request Phase 5 Biosafety Certificate approval.
In 2017, Origin's first generation WEED and PEST/WEED traits are incorporated into the elite corn inbred lines of Origin and into the products of Origin's seed commercial partners preparing for future regulatory approval and commercialization. The use of winter nursery in Hainan Island combined with cutting-edge molecular marker technology enabled Origin to expedite the trait conversion timeline.
In collaboration with Arcadia in early 2017, Origin produced corn seeds carrying insect resistance and herbicide tolerance technologies developed in China in a USDA designated greenhouse in California state and passed quarantine tests. Collaborative field experiments were successfully conducted in Iowa State in the summer of 2017 that confirmed efficacy of the traits and produced larger quantity of seeds for use in the required regulatory trials.
"We are extremely pleased with the latest progress in our seed product development and biotech trait programs. These advancements have provided strong supports to our goal to become the preferred technology partner in China," said Dr. Han. "Investments in technology and innovation is the key to success in this rapidly changing and consolidating industry. We are confident that we are in the right track to win."


Monday, December 18, 2017

Comments & Business Outlook
BEIJING, Dec. 15, 2017 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) ("the Company" or "Origin") an agricultural biotechnology trait and corn seed provider, today announced that it had been informed by Beijing Shihui Agricultural Development Co. Ltd. ("Shihui"), to which Origin Agritech Limited ("Company") has sold its seed production and distribution business, that it has obtained approval from a bank lender for a revolving credit agreement.  Because of bank processing practices and year end practicalities, Shihui has requested, and the Company has granted, an extension for payment of the unpaid portion of the purchase price for the assets acquired in September 2017 until end of December 2017. Additionally, the second closing on assets that Shihui has agreed to purchase, which includes the headquarters building of the Company in Beijing, will be delayed until the end of January 2018.

Monday, December 4, 2017

Comments & Business Outlook

DES MOINES, Iowa, Dec. 1, 2017 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("the Company" or "Origin") an agricultural biotechnology trait and corn seed provider, today announced that Mr. William S. Niebur, who served the Company since April of 2016, resigned from his positions of Chief Executive Officer and director as of the end of business on November 30, 2017, to pursue new opportunities. Dr. Niebur will continue to assist the Company as a strategic consultant during a transition period. The Company thanks Dr. Niebur for his significant contributions during his tenure with the Company and will soon announce the appointment of a new Chief Executive Officer.

The Company, while continuing to seek seed trait and germplasm commercial opportunities in the United States, will be suspending its Iowa representative office and will operate its United States activities from its headquarters in Beijing, Peoples Republic of China.


Wednesday, November 29, 2017

Comments & Business Outlook

DES MOINES, Iowa and EINBECK, Germany, Nov. 29, 2017 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("Origin" or the "Company"), an agricultural biotechnology trait and seed provider, announced today that the company has entered into a commercial biotechnology trait and corn germplasm license agreement with KWS SAAT SE (KWS), one of the world's leading plant breeding and seed companies. This agreement facilitates KWS' entry into China's corn biotechnology trait and expanded seed market.

Under the agreement, Origin will combine insect resistance and herbicide tolerance traits co-developed by the Chinese Academy of Agriculture Sciences and Origin Agritech into KWS corn inbred lines. Biotech-enhanced corn is planned to be deployed upon Chinese commercial and regulatory approval. Future biotech enhanced versions of these products will also be made available to KWS to serve Chinese farmers.

"KWS has been a strong strategic partner in the development of Origin's new insect resistant and herbicide tolerant traits, and this agreement is a key milestone for our company," said Bill Niebur, CEO, Origin Agritech. "This collaboration enables Origin to deliver the value of the new traits when integrated into the strong genetics of KWS. We believe that the deployment envisaged by this and previous agreements could provide Origin's technology greater access to the future biotech corn market, which we estimate could become a $1 billion market opportunity."

KWS has 160 years of plant breeding history, a 70-country footprint and a strong reputation in China.

"We are happy about the opportunity to combine Origin's traits with KWS genetics to develop highly performing insect resistant and herbicide tolerant seed varieties which would be of high value for the Chinese farmer," said Gyula Szelle, head of East-SE Asia Corn and Oilcrops at KWS. "It will continue to be our ambition to offer our high-quality corn seed to the Chinese market through our affiliates and licensees there and with regard to future policies."

Aligned with the goals of the China Ministry of Agriculture, Origin will continue to support the advancement of agricultural biotechnology. The recent 13th Five Year Plan released by the Chinese government pushes for accelerated development of biotech crops, emphasizing insect control for maize and herbicide tolerance for soybeans.

"We are committed to modernizing China's agriculture system and improving the country's food security," Niebur said. "Our partnership and commercial agreement with KWS will advance Origin's mission of providing agricultural solutions for today's growing world through being the preferred partner for and from China in biotechnology."


Thursday, August 24, 2017

Comments & Business Outlook

DES MOINES, Iowa, Aug. 24, 2017 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("the Company" or "Origin"), an agricultural biotechnology trait and corn seed provider, today announced that it has received the first payment from the Company's RMB 421 million sale of its proprietary China-based commercial corn seed production and distribution business, originally announced on September 27, 2016. 

The consideration for the first part of the asset sale will be paid by Beijing Shihui Agricultural Development Co, Ltd ("Beijing Shihui")  in several tranches aggregating RMB 221 million, including RMB 152 million paid today from the buyer in a combination of cash and assumption of debt. Beijing Shihui will make two additional payments totaling RMB 69 million to be paid prior to November 15, 2017. A second and final payment of up to RMB 200 million, including the initial RMB 10 million down payment, subject to certain set offs is expected no later than December 15, 2017. 

"This marks a critical milestone achievement in our journey to becoming a leading international corn seed technology company," said Dr. Bill Niebur, Origin CEO. "The proceeds significantly accelerate and expand our capabilities to develop and deliver corn biotechnology traits and corn product licensing business within China and around the globe.  All current indicators point to a near-term commercial launch for the projected USD 5-6 billion GM-traited corn seed market in China. Origin's leading corn germplasm collection and biotech trait platform are well positioned to monetize the novel business opportunity and strong customer demand for superior products."

"China remains the primary focus for Origin near term. Our portfolio of collaborations with leading agricultural multinationals, Chinese domestic seed companies and leading academic institutions uniquely positions us to realize the near and long term commercial potential of our 20-years' investment in serving farmers through biotechnology and genetics."

"We see very exciting opportunities in the coming months and years with this new business model and we look forward to sharing more news on our growth story with investors," concluded Niebur.

Under the terms of the Beijing Shihui agreement, Origin will retain its corn breeding and biotech research programs; all intellectual properties, which include an industry-leading corn germplasm collection, GM trait portfolio and modern laboratories; extensive field testing networks; and off-season winter nursery in Hainan, with which Origin plans to expand and pursue germplasm and trait licensing opportunities. Origin will also maintain its "Green Pass" status, allowing the competitive advantage of introducing new hybrid varieties to the Chinese market through an expedited and more predictable government approval process.


Tuesday, August 8, 2017

Notable Share Transactions

DES MOINES, Iowa, August 8, 2017 /PRNewswire/ -- Origin Agritech Ltd. (SEED) ("the Company" or "Origin"), an agricultural biotechnology trait and corn seed provider, today announced that Origin CEO Dr. Bill Niebur has reported the purchase of 73,530 treasury shares from the Company for a total value of $100,000.

The purchase transaction by Dr. Niebur was made on a private placement basis, and consummated on August 7, 2017, at a price of $1.36 per share. The purchase price reflected the market price as of the close of the market on August 4, 2017. The shares are "restricted" securities and do not have registration rights.


Thursday, March 2, 2017

Comments & Business Outlook

DES MOINES, Iowa, March 2, 2017 /PRNewswire/ -- Origin (Origin Agritech Ltd., NASDAQ: SEED), an agricultural biotechnology trait and seed provider, announced that it will hold a special meeting of stockholders in connection with the sale of both the production and distribution segments of Origin's commercial corn seed assets on April 13, 2017 at 11:00 a.m., United States Central Time, at the Company's office located at The Financial Center, 666 Walnut Street, Suite #1554, Des Moines, IA 50309.

The Company stockholders of record at the close of business on February 28, 2017 will be entitled to receive notice of the special meeting and to vote their shares, either in person or by proxy, at the shareholder meeting. The proxy materials will be distributed to stockholders commencing March 2, 2017.

The transaction is intended to orient the Company as a multi-national seed development company capitalizing on its biotechnology assets and employee skills in research and development. This will allow the Company to focus on strategic partnerships and licensing opportunities both within China and around the globe to drive future revenue and profit growth.

As previously announced on September 26, 2016, Origin announced the sale of its proprietary China-based commercial seed business for RMB 400 million (approximately USD$60 million) to Beijing Shihui Agricultural Development Co, Ltd. ("Beijing Shihui").  The sale includes both the production and distribution segments of Origin's commercial corn seed assets. The Company intends to shift to a licensing model for its biotech traits and germplasm which will serve as a new revenue growth opportunity for Origin.  Future company revenue is expected to be generated by charging royalties and license fees for its superior corn seed inbreds and hybrids as well as for the commercial use of its biotech seed traits.  As part of the transaction, the Company will retain its corn breeding and biotech research and development capabilities, which include modern laboratories, extensive field testing networks and off-season winter nursery in Hainan Province, to expand and pursue germplasm and trait licensing opportunities. Through Xinjiang Originbo Seed Limited, Origin also will maintain its "Green Pass" status, allowing it the competitive advantage of introducing new hybrid varieties to the Chinese market through an expedited government approval process. Origin will also retain its start-up operations in the United States.


Wednesday, February 22, 2017

Comments & Business Outlook

DES MOINES, Iowa, Feb. 22, 2017 /PRNewswire/ -- Origin (Origin Agritech, LLC, a subsidiary of Origin Agritech Ltd.) (NASDAQ: SEED), an agricultural biotechnology trait and seed provider, and Arcadia (Arcadia Biosciences, Inc., NASDAQ: RKDA), a California-based company that develops and commercializes agricultural productivity traits and nutritional products, today announced their collaboration to achieve the first-ever export of a key corn biotechnology product developed in China to the United States for completion of global regulatory trials.

The successful movement of this corn seed, containing an insect resistance/herbicide tolerance trait discovered and developed in China, to the Arcadia greenhouse represents a key milestone in Origin's strategic business plan to achieve global regulatory approvals for cultivation and international grain movement.

"This first-of-its-kind export validates Origin's leading position in China biotech and its close alignment with Chinese ministries leading the transformation of the domestic seed industry. Combining Origin's robust pipeline of value-added Chinese traits and elite corn germplasm with Arcadia's research and development infrastructure demonstrates our plan to capture a sizeable piece of China's estimated billion-dollar corn seed trait market," said Bill Niebur, Origin chief executive officer. "As a leader in agtech focused on modernizing the traditional corn seed market, our international team remains focused on accelerating research and development to improve the lives of Chinese farmers."

Arcadia and Origin signed an agreement under which Arcadia will assist Origin in developing information for submission to regulatory authorities in the U.S., China and other countries for the approval of their traits in corn. This project involves production of inbred and hybrid seed lines under quarantine conditions in Arcadia greenhouses.

"Arcadia has the proven expertise to bring traits through the regulatory process successfully and efficiently," said Raj Ketkar, Arcadia's president and CEO. "We have conducted hundreds of studies in the laboratory, greenhouse and field to gain regulatory approvals for various traits in major crops, and we have a strong regulatory team that has developed complete regulatory dossiers in multiple countries. This collaboration with Origin is an example of how our partners can leverage these capabilities to accelerate the commercialization of novel ag biotech traits."

"Ultimately, this milestone achievement will create more choices and opportunities for farmers," said Jihong Liang, Origin chief technology officer. "This is an important achievement, showcasing Origin's competitive advantage in science and global reach through collaborations inside China and beyond its borders. Origin is leading the way in gaining regulatory approvals for this critical advanced technology globally to drive future business growth."

Origin's investment and focus aligns tightly with China's 13th Five Year Plan, which calls for the modernization of agriculture as the foundation for building a prosperous society. The Chinese government, including the Ministry of Agriculture (MOA) and Chinese Academy of Agricultural Sciences (CAAS), has advanced a policy vision to facilitate seed industry innovation, improve the competitiveness of the Chinese ag tech industry and cultivate new seed varieties for farmers around the world. Through these actions, China has shown strong commitment to advancing its ag industry through new advances in biotechnology. Origin anticipates China commercialization of corn biotechnology at the end of this decade.


Tuesday, January 3, 2017

Comments & Business Outlook

DES MOINES, Iowa, Jan. 3, 2017 /PRNewswire/ --

Significant Progress in FY16 as Origin Continues Transition to a Global Agricultural Technology Provider

FY16 Business Realignment Positions Origin for Exciting Opportunities Ahead

  • Total revenues for the fiscal year ended September 30, 2016 were RMB335.3 million (US$50.2 million), a decrease of 11.0% from RMB376.6 million during the fiscal year ended September 30, 2015.
  • Net loss per share was RMB2.87 (US$0.43) for the fiscal year 2016, compared with net loss per share of RMB0.61 in fiscal year 2015.

"We have delivered a 2016 fiscal year of significant change and milestone achievements that reflect our new strategic operating direction," said Dr. Bill Niebur, Origin's Chief Executive Officer. "We have diversified our business model, refreshed our product portfolio and are working to improve our financial position to enable Origin to capitalize on a consolidating global agricultural market environment. Based on China's 13th Five-Year Plan, we continue to believe that the Chinese government is committed to the commercialization of agricultural biotechnology as part of the larger effort to modernize agriculture. We have crafted a strategic plan specifically to position Origin as a leader in the global agricultural transformation."


Tuesday, January 3, 2017

Notable Share Transactions

DES MOINES, Iowa, Jan. 3, 2017 /PRNewswire/ --

Origin Gains Access to non-GM Corn Seed Products for the U.S. from DuPont Pioneer

Origin Agritech Ltd. (SEED) ('the Company" or "Origin"), an agricultural biotechnology trait and seed provider, recently signed a definitive agreement with DuPont Pioneer, the advanced seed and genetics business of DuPont (DD). Under the terms of the agreement, Origin will gain access to non-GM corn seed products from DuPont Pioneer. Origin anticipates having commercial seed products available for sale in the U.S. market for spring 2017 planting. Additional terms and financial details of the agreement were not disclosed.

"This agreement with DuPont Pioneer is a critical first step toward launching Origin's North America strategic Pillar III, focused on serving the non-GM/Organic markets," said Bill Niebur, Origin CEO. "We look forward to offering these products to U.S. farmers through a novel, digitally-enabled route to market while building a platform from which Origin can continue to grow."

This is Origin's second business agreement with DuPont. The companies announced in April a commercial agreement to jointly develop new seed technologies in China for Chinese farmers.

"We are pleased with the opportunity to continue to do business with Origin," said Bart Baudler, Commercial Unit Lead, PROaccess. "Through this agreement, Origin is strengthening its ability to diversify its genetic and product choices for farmers."

Origin recently released advances in its Pillar I and II growth platforms. Today's announcement supports progress in the launch of its Pillar III: North America non-GM/Organic growth platform.

"Today's announcement helps advance our business model of creating value by connecting growers and end users—while providing services along the value chain," said Christine Bobst, Origin North America Business Director. "We are looking forward to serving the non-GM/Organic markets in new and different ways as we pursue a full slate of agricultural products, technology and service offerings."


Wednesday, December 14, 2016

Comments & Business Outlook

DES MOINES, Iowa, Dec. 14, 2016 /PRNewswire/ -- Origin Agritech Ltd. (SEED)("the Company" or "Origin"), an agricultural biotechnology trait and corn seed provider, today released a progress update on long-term growth platforms (Strategic Pillars I and II) which are focused on the development and future launch of high value biotechnology traits and products in corn.

"We have very exciting news on key milestone achievements for our biotechnology research program," said Dr. Bill Niebur, Origin Chief Executive Officer.

- Comprehensive data packages have been submitted for our leading biotechnology traits, insect resistance and herbicide tolerance, as required for China regulatory Safety Certificate (Phase 5) issuance.   

- Origin's first generation biotechnology trait for insect resistance and herbicide tolerance (PEST/WEED) has been successfully exported from China to the U.S. with permits from the Chinese and U.S. governments. This initiates the global regulatory approval process and represents the first export of such technology by a Chinese company to a strategic partner based in the U.S.

"These approval steps underscore the Ministry of Agriculture (MOA), Chinese Academy of Agricultural Science (CAAS) and Origin's commitment to contributing to strong technology relationships, seed industry innovation, global compliance, improved competitiveness of the Chinese ag tech industry and the critical effort on food security," Dr. Niebur said.

"I am pleased to announce to stakeholders our recent achievements in the strategic pillars of our business," said Dr. Jihong Liang, Origin Chief Technology Officer.

Pillar I: China-based biotech traits & seed products

Progress Update

In 2016, Origin completed the laboratory and field production trials for its first generation PEST/WEED trait. In these trials, molecular characteristics, field efficacy, environmental safety and food safety were thoroughly evaluated and the results met critical biosafety regulation standards.
Dossiers summarizing the laboratory and field-test studies internal to Origin and in collaboration with third party research labs were submitted in November to request Phase 5 Safety Certificate approval.
In 2017, Origin's first generation WEED and PEST/WEED traits will be incorporated into the elite corn inbred lines of Origin and into the products of leading Chinese seed industry partners preparing for future regulatory approval and commercialization.
Pillar II: Global biotech trait development

Progress Update

Parallel to the milestones achieved in Pillar I, Origin has made strong progress in seeking global approval for our lead biotechnology trait event (PEST/WEED).
Origin has successfully requested and received the first transgenic corn seed export permit from China's Government agencies, following required protocols.  Our U.S. collaborator has secured an importation permit for these seeds from the United States Department of Agriculture ("USDA"). In late 2016 corn seeds containing our lead trait event and a back-up were successfully shipped from China to the US and planted in a USDA designated greenhouse.
Corn seeds carrying Origin's insect resistance and herbicide tolerance technologies developed in China will enter collaborative field experiments next summer to conduct testing required by the USDA, Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA).
"We are extremely pleased with the latest advances in our Pillar I and II growth platforms. Our goal to become the preferred technology partner for and from China has been enhanced through the science and collaboration described today," said Dr. Niebur. "In addition to today's announcement, we look forward to providing future updates on Origin's Pillar III North American non-GM/Organic business launch, as well as review of our full year 2016 financial results."


Wednesday, November 23, 2016

Notable Share Transactions
DES MOINES, Iowa, Nov. 22, 2016 /PRNewswire/ -- Origin (Origin Agritech Ltd., NASDAQ: SEED), a biotechnology-focused and superior corn seed products provider, today announced that company management will be conducting a non-deal road show meeting with investors in New York on Nov. 28 and 29, Boston on Nov. 30 and Chicago on Dec. 8. For those investors interested in meeting with management, please inquire with the contact listed below.

Thursday, August 11, 2016

Comments & Business Outlook

Third Quarter 2016 Financial Results 

  • Total net revenue for the third fiscal quarter of 2016 increased by 12.1% to RMB82.6 million (US$12.5 million) from RMB73.7 million in the prior year period.
  • Net loss attributable to the Company was RMB18.2 million (US$2.7 million), or net loss per diluted share of RMB0.8 (US$0.12) in the third quarter of fiscal year 2016, compared to a net loss of RMB11.9 million, or net loss per diluted share of RMB0.52 in the same quarter of fiscal year 2015. Excluding the impact of the aforementioned one-time items, the net loss attributable to the Company decreased to RMB13.3 million, or net loss per diluted share of RMB0.58, from RMB16.9 million, or net loss per diluted share of RMB0.74 in the same quarter of fiscal year 2015, respectively.

Mr. Shashank Aurora, Chief Financial Officer of Origin, commented, "The sum of recognized revenue and deferred revenue as of June 30, 2016 was RMB473.9 million, or US$71.5 million, an increase of 6.0% compared to RMB447.1 million for the same period one year ago, driven by ongoing development and strong interest in our corn seed products and biotechnologies. The majority of deferred revenue will be recognized in the fourth fiscal quarter of 2016. Excluding one-time items, we narrowed both our loss from operations and net loss compared to last quarter as well as to the prior year. In our Seed Production & Distribution segment, we managed our inventory downward in the quarter as we improved our forecasting capabilities and better aligned seed production with demand. This helped generate healthy cash flow from operations, freed up working capital and reduced our debt. We continue to optimize our cost structure based on the exciting market opportunities that lie ahead."

Dr. William S. Niebur, Chief Executive Officer of Origin, commented, "We are making steady progress with our efforts to become a more globally focused seed and biotechnology company that bases its development in China and provides solutions to farmers around the world. We have recently added several important executive team members, including a new Chief Financial Officer and a new Chief Technology Officer who will drive the evolution of our current business model to enable expansion globally. Additionally, as a part of our strategic partnership approach, we announced a collaboration and commercial licensing agreement with a major multinational seed company in the third fiscal quarter to develop new GM crops for farmers in China. This agreement has great potential to modernize China's agricultural system and enhance food security, both major priorities for the government. We have a healthy pipeline of new seed products and traits for future release and are committed to pursuing new domestic and international partnership opportunities to maximize revenue and profit growth in the years ahead."


Tuesday, April 26, 2016

Comments & Business Outlook

BEIJING, April 25, 2016 /PRNewswire/ -- The Board of Directors of Origin Agritech Ltd., a technology-focused crop seed provider, today announced Dr. William S. Niebur as the company's new president and CEO. Dr. Niebur assumes the title from current CEO Dr. Gengchen Han, who will retain his position as Chairman of the Board.

Dr. Niebur takes the reins of the company at a time when Origin is strategically positioning itself as a global participant in the biotechnology and seed market. Origin will continue to enhance and expand its core seed business, while pursuing new opportunities and markets.

"This announcement is the next step in our strategic plan to grow our worldwide presence in the biotechnology and seed industries," Dr. Han said. "Dr. Niebur's extensive experience, strategic vision, industry relationships and reputation – in Asia, North and South America and Europe – will help to further accelerate Origin's emergence on the global stage."

"I am honored to be selected as the next president and CEO of Origin," Dr. Niebur said. "This is a bold and innovative company that is redefining its future. Origin is well-positioned with its established core seed business and proprietary germplasm development program, as well as its emerging seed-traits business. Origin will continue to focus on growth while driving stronger execution in the Asia seed business. The recruitment of stronger talent, development and out-licensing of novel value-added traits, and deepening of current and new strategic partnerships to grow our business globally will become a significant part of Origin's future."

Dr. Niebur most recently served with DuPont Pioneer as Vice President and General Manager with strategic oversight responsibility for China, East Asia and Oceania. Dr. Niebur has been in the seed business for more than three decades, beginning his career as a corn geneticist in Princeton, Ill. He went on to gain extensive global experience, first overseeing research and development while living in Europe, then returning to North America as the company's global Vice President for R&D, and finally moving into business operations managing seed businesses in East and North Asia. In 2015, Dr. Niebur was named as one of 50 people "Shaping the Future of the U.S.-China Relationship" in the Pacific Power Index, publicized by Foreign Policy Group. Dr. Niebur was instrumental in integrating technologies into plant genetics programs and was granted several patents which led to the commercialization of more than 30 branded products during his scientific career. Dr. Niebur holds both his Bachelor of Science and Master of Science degrees from Iowa State University. He earned his doctorate in plant breeding and cytogenetics from the University of Minnesota.

"I am proud of the work that has been accomplished by the research and business teams over the past 33 years, and humbled by the learning opportunities that were afforded to me in my career," Dr. Niebur said. "After my retirement earlier this year, now seemed the right time for a new direction and challenge. I couldn't be more excited about the opportunity to become the leader of a proven and established seed and technology company, which is strategically positioned for growth under the Chairmanship and future vision of Dr. Han, the Board of Directors and a new senior management team."

Today's announcement comes a little more than two weeks after Origin announced a major commercial collaboration agreement to develop new seed technologies for Chinese farmers in partnership with a leading multinational company. These combined efforts will contribute to the modernization and stabilization of China's dynamic agriculture system, leading to improved food and environmental security, closely aligned with published government priorities and initiatives.

Origin has also applied for patents and regulatory approval in other countries, including the United States, to advance its global strategy to meet the needs of farmers around the world.


Friday, January 29, 2016

CFO Trail

MANAGEMENT CHANGE

Effective as of today, the Company appointed Mr. Song Xu as its Chief Financial Officer, replacing Mr. James Chen, who has resigned to pursue other opportunities.


Friday, January 15, 2016

Comments & Business Outlook

BEIJING, January 15, 2016 /PRNewswire/ -- Origin Agritech Limited (NASDAQ: SEED) ("Origin" or the "Company"), a technology-focused supplier of crop seeds in China, today announced unaudited financial results for the fiscal year ended September 30, 2015. These unaudited year end results reflect the Company's consolidated financial statements during the period from October 1, 2014 to September 30, 2015. Origin prepares its consolidated financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

FY2015 Highlights

Financial Highlights

  • Operating income for the fiscal year 2015 was RMB1.3 million (US$0.2 million), a significant turnaround from the operating loss of RMB24.5 million in fiscal year 2014.
  • Net cash provided by operating activities was RMB52.2 million (US$8.2 million) in FY2015, representing a significant turnaround from the negative cash flow from operating activities of RMB85.6 million and RMB146.1 million in FY2014 and FY2013, respectively.

Seed Biotech Advances

  • After several years of testing, our biotech corn seeds with stacked transgenic traits of Bt and glyphosate tolerance genes have shown promising results in both our northern testing site (for summer testing) and southern testing site (for winter testing and with heavy natural insect pressure). We believe that we are now ready to proceed to the production test in 2016.
  • Backcrossing of glyphosate tolerance traits into corn seed lines from major multinational seed companies has been completed successfully. We are now ready to proceed to the backcrossing activities of our stacked traits of Bt and glyphosate genes. We believe that we also are ready to enter commercial licenses with these multinational companies for our seed biotechnologies.

Corporate Strategies

  • As the Company has successfully developed several biotech traits that could be valuable in the global seed market, we have announced our strategies to operate the company under two business lines: Biotech & Product Development under State Harvest and Seed Production & Distribution under Beijing Origin. Under the new strategies, we plan to enter the U.S. market in 2016 and introduce our seed biotechnologies to the global seed market.

Operating Activities and Results

Corporate Strategies Origin started as a hybrid corn seed company in 1997 as the first private seed company in China. With the success in and strong cash flow from the hybrid corn seed business, Origin started its seed biotechnology research in early 2000's and established Origin Life Science Center in 2005. The Company has since focused on the seed biotech product development and funded the biotech R&D with its free cash flow from the traditional hybrid seed business.

After more than 10 years of seed biotech development, the Company is now essentially becoming a biotech company focused on its GMO (Genetically Modified Organism) technologies and has developed biotech corn seed products that are waiting to be commercialized. At the same time, the Company has already built up state-of-the-art seed production bases and solid distribution channels in China and continues to generate cash flow from the hybrid seed business.

With the success in biotech product development, especially the successful field trials of the stacked traits of insect resistance Bt genes and glyphosate tolerance genes, the Company announced in June, 2015 its strategies going forward. Under the announced strategy, the Company plans to reorganize into two business units: Biotech & Product Development under State Harvest and Seed Production & Distribution under Beijing Origin.

Under the new corporate structure, the Company plans to enter the seeds and traits market in North America with its GMO product pipelines under State Harvest represented by its first generation phytase transgenic corn, second generation glyphosate tolerance corn seed, and its new technology of stacked traits of Bt and glyphosate tolerance genes. While waiting for the approval for commercial planting in China, State Harvest plans to introduce these agri-biotech products into the United States seed market. In addition, State Harvest has also built a solid capacity for breeding technologies, including marker-assisted breeding and doubled haploids technologies, which along with its germplasm resources, will allow State Harvest to become a global seed technology company.


Wednesday, August 5, 2015

Comments & Business Outlook

Third Quarter 2015 Financial Results

For the third quarter of fiscal 2015, the Company reported revenues of RMB73.7 million (US$12.0 million) compared with RMB92.9 million for the three months ended June 30, 2014.

Net loss attributable to Origin Agritech for the third quarter of fiscal 2015 was RMB11.9 million (US$1.9 million), or net loss per basic and diluted share of RMB0.52 (US$0.09), compared to a net loss attributable to Origin Agritech of RMB14.7 million or net loss per basic and diluted share of RMB0.65 in the same period one year ago.


Wednesday, June 17, 2015

Comments & Business Outlook

BEIJING, June 16, 2015 /PRNewswire/ -- Origin Agritech Limited (NASDAQ GS: SEED) ("Origin", or the "Company"), a technology-focused supplier of crop seeds in China, today announced that Dr. Gengchen Han, Chairman and CEO of Origin, met with investors at a meeting organized by Wells Fargo Securities and discussed the strategic directions of new Origin Agritech on June 16th, 2015. During his presentation, Dr. Han announced that Origin has successfully transitioned from a traditional seed company to a biotechnology seed company after more than 10 years of agri-biotech developments. This is marked by the successful development of our biotech seed product pipelines, especially the new technology of stacked traits of glyphosate tolerance (GT) and insect resistance (Bt)

With the transformation to new Origin Agritech, the Company is now organized into a simple structure of two fundamental business lines: agri-biotech and product develop under State Harvest and seed production and distribution under Beijing Origin. State Harvest is now in the position to introduce to the seed market its first generation phytase transgenic corn, second generation glyphosate tolerance corn seed, and its new technology of stacked traits of GT and Bt genes. While waiting for the approval for commercial planting in China, State Harvest is ready to introduce these agri-biotech products into the global seed market. In addition, State Harvest has also built a solid capacity for breeding technologies, including marker-assisted breeding and doubled haploids technologies, which along with its rich germplasm resources, will allow State Harvest to become an important global seed technology company. 

Beijing Origin will focus on our seed production and distribution business in China. After recent restructurings, Beijing Origin's corn seed business now represents over 85% of the revenues in Beijing Origin, and we believe it has a strong potential to generate EBITDA of over RMB100 million. Beijing Origin's broad product lines across all major planting regions in China and innovative distribution network are the cornerstones for its leadership position in China. Its state-of-the-art corn seed production and conditioning facilities in Gansu and Xinjiang provinces provide superior quality products to the farmers in China and they are the growth engine for Beijing Origin.

During the meeting today, Dr. Han also discussed the Company's current business performance and financial conditions. Dr. Han pointed out that we should see a significant year-over-year improvement in the income from operations during the fiscal year 2015, despite continuous challenges due to industry oversupply. On the balance sheet, Dr. Han discussed the inventory adjustment during both 2014 and 2015 planting seasons, which could improve our operating cash flow significantly this and next year. In addition, the company is expected to have minimal needs in CAPEX during the next couple of years as our new state-of-the-art facility in Xinjiang province allows us to double our corn seed revenues. 

"As Origin Agritech is celebrating its eighteenth anniversary, we are excited to launch our new strategies and move to the new stage for Origin Agritech", said Dr. Han in the meeting, "we believe the earnings potential of Beijing Origin could demonstrate the value of Origin's fundamental seed production and distribution businesses while our new global strategy for State Harvest's agri-biotech and product development businesses could move Origin to the global market and allows Origin to become a global player in the biotech seed business."

The presentation materials used in today's meeting have been filed with SEC on June 15, 2015.


Tuesday, May 5, 2015

Comments & Business Outlook

Second Quarter 2015 Financial Results

  • The Company reported a net loss per share of RMB1.14, representing a significant improvement from the net loss per share of RMB1.95 in the same period last year.
  • Net loss attributable to the Company for the second quarter of fiscal 2015 was RMB25.9 million (US$4.2 million), or net loss per basic and diluted share of RMB1.14 (US$0.19), compared to a net loss of RMB44.3 million, or net loss per basic and diluted share of RMB1.95 in the same period one year ago.

Thursday, February 5, 2015

Comments & Business Outlook

First Quarter 2015 Financial Results

  • Revenues of RMB15.6 million (US$2.5 million), compared with revenues of RMB20.4 million in the three months ended December 31, 2013.
  • Net loss attributable to Origin Agritech Limited for the first quarter of fiscal 2014 was RMB29.5 million (US$4.8 million), or net loss per basic and diluted share of RMB1.30 (US$0.21), compared with net loss of RMB31.0 million, or net loss per basic and diluted share of RMB1.36 in the same period one year ago.

Monday, January 12, 2015

Comments & Business Outlook

ORIGIN AGRITECH LIMITED

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except number of share and per share data)

 

    Year ended September 30,  
    2012     2013     2014     2014  
    RMB     RMB     RMB     US$  
Revenues     552,111       481,694       414,891       67,521  
Cost of revenues     (387,783 )     (315,082 )     (301,148 )     (49,010 )
Gross profit     164,328       166,612       113,743       18,511  
Operating expenses                                
Selling and marketing     (56,437 )     (55,375 )     (58,972 )     (9,597 )
General and administrative     (77,585 )     (66,153 )     (46,428 )     (7,556 )
Research and development     (37,629 )     (42,162 )     (40,377 )     (6,571 )
Other income, net     3,852       15,241       7,555       1,229  
Total operating expenses, net     (167,799 )     (148,449 )     (138,222 )     (22,495 )
                                 
Income(loss) from operations     (3,471 )     18,163       (24,479 )     (3,984 )
                                 
Interest expense     (4,029 )     (11,326 )     (19,743 )     (3,213 )
Share of net income (loss) of equity investments     4,030       5,161       (776 )     (126 )
Loss on disposal of an equity method investment     -       -       (1,498 )     (244 )
Loss on disposal of a subsidiary     -       -       (2,623 )     (427 )
Interest income     2,547       1,776       596       97  
Income (loss) before income taxes     (923 )     13,774       (48,523 )     (7,897 )
                                 
Income tax (expense)benefits(note 18)                                
Current     (589 )     (2,707 )     (677 )     (110 )
Deferred     (1273 )     (1,755 )     -       -  
Reversal of contingent tax liability     -       -       39,060       6,357  
Income tax (expense) benefits     (1,862 )     (4,462 )     38,383       6,247  
                                 
Net income (loss)     (2,785 )     9,312       (10,140 )     (1,650 )
Less: Net income (loss) attributable to non-controlling interests     (1,351 )     1,818       (613 )     (100 )
                                 
Net income (loss) attributable to Origin Agritech Limited     (1,434 )     7,494       (9,527 )     (1,550 )
Other comprehensive income (loss)                                
Net income (loss)     (2,785 )     9,312       (10,140 )     (1,650 )
Foreign currency translation difference     117       1,890       (56 )     (9 )
Comprehensive income (loss)     (2,668 )     11,202       (10,196 )     (1,659 )
Less: Comprehensive income (loss) attributable to non-controlling interests     (1,351 )     1,818       (613 )     (100 )
Comprehensive income (loss) attributable to Origin Agritech Limited     (1,317 )     9,384       (9,583 )     (1,559 )
                                 
Net income (loss) attributable to Origin Agritech Limited per share - basic (note 19)     (0.06 )     0.32       (0.42 )     (0.07 )
                                 
Net income (loss) attributable to Origin Agritech Limited per share - diluted (note 19)     (0.06 )     0.32       (0.42 )     (0.07 )
                                 
Shares used in calculating basic net income (loss) per share     23,382,812       23,259,127       22,743,853       22,743,853  
                                 
Shares used in calculating diluted net income (loss) per share     23,382,812       23,278,443       22,743,853       22,743,853  

Management Discussion and Analysis

Revenues and Gross Margin

Total revenues for the fiscal year ended September 30, 2014 were RMB414.89 million (US$67.52 million), a decrease of 14% from RMB481.69 million during the fiscal year ended September 30, 2013. Overall, the year-over-year decrease in revenues was mainly due to the lower sales in the Company’s rice seed business and a decline in the corn seed contract production business. Contract production business is when we produce seeds for other seed companies. Although contract production a common practice in China, this is not our main business. In fiscal year 2013, we had some large one-time contract production businesses as we started our Xinjiang production facility. The total revenues from our corn seed contract production businesses were RMB27.98 million.

Exclusive of scrap sales, revenues from our hybrid corn seeds decreased by 6.9% to RMB355.44million (US$57.85million) in fiscal year 2014 from RMB381.82million in fiscal year 2013, this year-over-year decrease was mainly due to the decline of corn seed contract production business in this year. Excluding scrap sales and contract production businesses, revenues from our key strategic corn seed business in fiscal year 2014 was RMB351.65 million (US$57.14 million), almost flat with that RMB353.84 million in fiscal year 2013.Gross margin of our corn products decreased by 5.4% in fiscal year 2014 compared with fiscal year 2013, which was mainly due to higher average unit purchase cost of seed as a result of lower seed production yield for one of our key production centers this year.

Non-scrap revenues from our hybrid rice seeds decreased by 50.3% to RMB36.15million (US$5.88 million) in fiscal year 2014 from RMB72.71million in fiscal year 2013, which was mainly due to increasing competition in the rice seed market. Gross margin of our rice products decreased by 27.7% in fiscal year 2014 compared with fiscal year 2013 due to fierce competition in the seed market. Non-scrap revenues from our canola seeds decreased by 5.3% to RMB20.62 million (US$3.35 million) in fiscal year 2014 compared with RMB21.77 million in fiscal year 2013.

Net income

Net loss for the fiscal year ended September 30, 2014 were RMB9.53 million (US$1.55million), compared with the net income of RMB7.49 million during the fiscal year ended September 30, 2013. The year-over-year decline was mainly due to the revenue decline and increase in average unit cost of sales.


Thursday, January 8, 2015

Comments & Business Outlook

BEIJING, January 8, 2015 /PRNewswire/ -- Origin Agritech Limited (NASDAQ: SEED) ("Origin" or the "Company"), a technology-focused supplier of crop seeds in China, today announced unaudited financial results for the fiscal year ended September 30, 2014. These unaudited year end results reflect the Company's consolidated financial statements during the period from October 1, 2013 to September 30, 2014. Origin prepares its consolidated financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

Operating Activities and Results

Fiscal 2014 was a transition year for both the agricultural biotechnology and conventional seed industries in China. For the genetically modified technologies, there are indications that the Chinese government is starting to promote GM technologies and is trying to educate the public about the safety of these technologies. In reaction, however, the public debate about GM technologies in China heated up significantly in the media, mostly on the Chinese Internet, as some celebrities joined the debate. For the conventional seed industry, fiscal year 2014 represented a very challenging year as the industry wide inventory levels reached historic highs at the beginning of the selling season. However, a resulting inventory destocking, which we believe is occurring, is expected to improve the supply/demand ratio for the 2015 planting season.

More importantly, Origin has made significant progress on the biotechnology front and has made operational improvements as we faced the challenges in the seed industry during fiscal year 2014. Our GM corn product pipelines now include not only the phytase transgenic corn seed, but we now have glyphosate tolerance corn seed, next generation corn seed products of stacked glyphosate tolerance and insect resistance traits and other GM products in different stages of government safety approval. For our conventional seed business, we have weathered through the challenging market, and we were able to increase our core corn seed sales volume by 10% year over year in fiscal year 2014 (excluding scrap sales and our contract production business). Looking forward, we believe that we have prepared Origin for the expected market recovery in 2015 with improved operating efficiency and promising new seed product pipelines.

Biotechnology Progress. In fiscal year 2014, Origin further advanced its GM corn seed pipeline with several generations of GM technologies. In addition to our progress with the regulatory approvals, we have made significant progress in the backcrossing of our GM traits into our hybrid corn varieties. Since we started licensing programs of our GM technologies to large multinational companies several years ago, we have achieved desirable results in the backcrossing programs to incorporate our GM traits into the corn varieties of the multinational companies. Backcrossing is a necessary step to commercialize GM corn seed products and it often takes several years to achieve the optimal results. We believe that our backcrossing programs are progressing well, and we are now much closer to the commercialization of GM technologies of our first generation GM product phytase corn and our second generation product glyphosate tolerance transgenic corn seed. Our new technologies, including insect resistance (Bacillus Thuringiensis, or Bt) and stacked traits of glyphosate tolerance and insect resistance, are in various stages of regulatory approval. The attached chart is a simplified summary of the current stages of our key GM pipelines.

Furthermore, we have made significant achievement in our biotechnologies intellectual property protections. We were awarded three domestic patents in fiscal year 2014: 1) Method for Developing Glyphosate-Resistant Maize (ZL201210107400.1); 2) A Glyphosate-Resistant Protein G2-aorA Monoclonal Antibody and the Use Thereof (ZL201210107179.1), and 3) Method for Detecting Glyphosate-Resistant Protein G2-aorA and Dedicated ELISA Kit (ZL201210107406.0). We now have a total of 6 domestic patents and one PCT patent, as listed in the table below. During the fiscal year 2014, we applied for three additional patents in China: 1) Method and the Primer Pairs for Detecting Glyphosate-Resistant Maize G1105E-823C Expressing G2-aroA Gene (201410267596.1); 2) The Primer Pairs to Detect Glyphosate-Resistant Maize G1105E-823C Expressing G2-aroA Gene (201410268436.9); and 3) The Primer Pairs Used for Detecting Glyphosate-Resistant Maize G1105E-823C Expressing G2-aroA Gene (201410268258.X). We believe these patents will strengthen further our leading position in the GM seed technologies in ChinaFollowing the corporate restructuring in fiscal year 2012 and operational improvements in fiscal year 2013, we achieved further significant improvement in operating efficiency and cost reduction in fiscal year 2014. We were able to further reduce the number of employees and operating costs, especially the general & administrative expenses in fiscal year 2014. As of September 30, 2014, Origin has 531 employees, compared with 856, 713, and 678 employees as of September 30, 2011, 2012, and 2013, respectively. The G&A costs in fiscal year 2014 was RMB46.43 million, compared to RMB86.75 million, 77.59 million, and 66.15 million in FY2011, FY2012, and FY2013, respectively. The G&A expenses as the percentage of sales declined from 15.3% in FY2011 to 11.2% in FY2014. We believe our cost reduction efforts were important to the improvements in our financial performance during the challenging Year.

On the marketing and inventory fronts, we have faced many more challenges than we originally anticipated when entering the fiscal year 2014 selling season and, by the end of fiscal second quarter of 2014, our inventory had reached a historical high as the competition escalated with many seed suppliers dumping seeds on the market. The imposition of more strict seed business license requirements also amplified inventory dumping as some small companies exited the market. In response to the market competition, we took swift action in our selling and marketing efforts and improved our sales dramatically during the last three months of the season. By the end of the fiscal year 2014 selling season, our sales organization recorded a 10% year over year volume increase for the corn seeds sales (excluding scrap sales and our contract production business). We think this is remarkable considering the tough market conditions and on-going reorganization efforts and it helped to improve our inventory position.

Overall Analysis

Total revenues for the fiscal year ended September 30, 2014 were RMB414.89 million (US$67.52 million), a decrease of 14% from RMB481.69 million during the fiscal year ended September 30, 2013. Overall, the year-over-year decrease in revenues was mainly due to the lower sales for the Company's rice seed business and a decline in the corn seed contract production businesses.

Corn seeds remained our strongest product line, accounting for 86% of our overall sales. Total revenues from corn seeds were RMB357.44 million (US$58.11 million) in fiscal year 2014, compared with RMB387.22 million in fiscal year 2013. Excluding scrap sales and our contract production business, revenues from our key strategic corn seed business in fiscal year 2014 was RMB351.65 million (US$57.14 million), which was almost flat when compared with that revenue of RMB353.84 million in fiscal year 2013. The sales volume of the corn seeds, excluding the scrap and our contract production business, was up 10% year over year. Revenues from the rice product line for the year ended September 30, 2014 decreased by approximately 49% to RMB36.84 million (US$6.0 million) from RMB72.71 million in fiscal year 2013, due mainly to the increasing competition. Sales of canola seeds decreased by 5% to RMB20.62 million (US$3.35 million) in fiscal year 2014 compared to RMB21.77 million in fiscal year 2013.

Operating expenses for the fiscal year ended September 30, 2014 were RMB138.22 million (US$ 22.50 million), representing a decrease of 7% from RMB148.45 million in the fiscal year 2013, which was mainly because of our expense control efforts, notwithstanding an increase in marketing expenses. General and Administrative expenses for the fiscal year ended September 30, 2014 were RMB 46.43 million, a significant decrease of 30% year-over-year.

Operating loss for the fiscal year ended September 30, 2014 was RMB24.48 million (US$4.0 million), compared to the operating profit of RMB18.16 million for the fiscal year ended September 30, 2013. The decrease in operating results was mainly due to the decline in revenue and a relative increase in production cost.

Net loss for the fiscal year ended September 30, 2014 was RMB9.53 million (US$1.55 million) compared to the net income of RMB7.49 million for the fiscal year ended September 30, 2013. The year-over-year decline was mainly due to the decline in revenue and increase in production costs.

Net loss per share was RMB (0.42) or US$ (0.07) for the fiscal year 2014, compared with net income of RMB 0.32 in fiscal year 2013.

As of September 30, 2013 and 2014, we had approximately RMB131.98 million and RMB46.27 million (US$7.52 million), respectively, in cash and cash equivalents. Total borrowings as of September 30, 2013 and 2014 were RMB 286.32 million and RMB 289.83 million (US$47.11 million), respectively. During fiscal year 2014, Net cash used in operating activities was RMB85.64 million (US$13.92 million), down from a cash outflow of RMB146.11 million for the fiscal year ended September 30, 2013. Net cash used in investing activities was RMB0.56 million (US$0.09 million) for the fiscal year ended September 30, 2014, compared with RMB68.28 million for the fiscal year ended September 30, 2013. Net cash provided by financing activities was RMB0.39 million (US$0.06 million) for the fiscal year ended September 30,2014 compared with RMB191.69 million for the fiscal year ended September 30, 2013. The borrowing was mainly related to the operations of Beijing Origin and Linze Origin, which had RMB225.00 million (US$36.57 million) bank loan for settlement of seed purchases, and RMB52.52 (US$8.54 million) for the new corn seed processing plant construction in Xinjiang.

Research and Development Activities

Origin was built on its strong R&D platform and we strongly believe a commitment to R&D is essential to the growth of the company. During fiscal year 2014, we continue to make significant progress both in our conventional hybrid crop seed development programs and biotechnology R&D activities.

Key developments for Origin's GM corn seeds:

Phytase: Four commercial hybrids with phytase traits have completed the variety production test. These varieties with phytase traits have been submitted to the Chinese government (the Ministry of Agriculture) for variety safety certificate and final approval.

Glyphosate Tolerance: One GM glyphosate tolerance event (the unique DNA recombination event that took place in one plant cell) passed Phase 4 - Production Test and is waiting for the Phase 5 - Safety Certificate. Two more glyphosate tolerance events are being submitted for Phase 3 - Environment Release Test. In addition, more than one thousand events are undergoing Phase 1 - Laboratory Research;

Glyphosate + Bacillus Thuringiensis (Bt): Three events of the Company's glyphosate tolerance and insect resistance traits have advanced into Phase 3 - Environment Release Test. More than 4,500 events of the stacked traits (inserting more than one gene in a seed via biotechnology) are being screened in Phase 1 - Laboratory Research.

Backcrossing Programs: Multiyear programs of backcrossing of phytase and glyphosate tolerance traits into corn varieties from our own product lines as well as several product lines of multinational companies are progressing well. Successful backcrossing products of phytase and glyphosate tolerance traits into our own varieties are and will be submitted for government approvals.

Hybrid Corn Seed Development Program:

In addition to GM crop seeds, Origin has a large R&D program developing conventional hybrid crop seeds. In China, new hybrid seed varieties need to go through an official approval process prior to sales. This approval process typically involves three to four years of registration trials and normally proceeds according to the following sequential steps:

Pre-Registration > Registration Trial 1 > Registration Trial 2 > Field Demo > Approval

Each step leading up to approval takes approximately one year unless it needs to be repeated. In some localities the Registration Trial 2 and Field Demo steps are treated as one and the same step.

During fiscal year 2014, we had more than 35 tests going through different stages of the approval process. As the results of multiyear testing, we received registration approval for 8 of our new varieties. For both fiscal years 2013 and 2014, we received a total of 15 approvals for our corn seed hybrid products. This is a significant improvement over the previous three years, during which we only received a total of 5 approvals.

Outlook

Looking forward, we expect the market condition to recover in fiscal year 2015 as the industry corn seed inventory is expected to decline. With our new product introductions, increasing sales efforts, and operational improvements, we expect both revenues and operating income to improve meaningfully in fiscal year 2015. More importantly, we believe that our cash flow from operating activities will have a significant recovery as we manage our inventory and sales efforts product by product.


Tuesday, January 6, 2015

Comments & Business Outlook

BEIJING, January 6, 2015 /PRNewswire/ -- Origin Agritech Limited (NASDAQ GS: SEED) ("Origin", or the "Company"), a technology-focused supplier of crop seeds in China, today announced that the Company has received the renewed Bio-safety Certificate from the Ministry of Agriculture for its genetically modified phytase corn.

The Bio-safety Certificate was originally received in 2009 for our genetically modified phytase corn for a period of five years and it expired in August, 2014. Genetically modified (GM) seed products in China must undergo five separate stages of approval beginning with a phase one laboratory approval to the final receipt of the Bio-safety Certificate in phase five. Bio-safety Certificate has an effective period of five years and the Ministry of Agriculture may review additional data for safety evaluations during the renewal application process.

In addition to the original phytase corn seed, we now have four commercial hybrids with phytase traits in the Phase 5 - Bio-safety Certificate stage. More importantly, our next generation GM product glyphosate tolerance corn seed has passed Phase 4 - Production Test and is waiting for the Phase 5 - Bio-safety Certificate and our GM corn products with stacked traits of glyphosate tolerance and insect resistance (Bt) have progressed to the Phase 3-Environment Release Test.


Monday, November 3, 2014

Going Private News

BEIJING, November 3, 2014 /PRNewswire/ -- Origin Agritech Limited (NASDAQ GS: SEED) ("Origin", or the "Company"), a technology-focused supplier of crop seeds in China, today announced that its Board of Directors (the "Board") has determined that Hunan Xindaxin Company Limited's ("Xindaxin") unsolicited non-binding proposal (the "Proposal") to acquire the Company for US$2.50 in cash per ordinary share of the Company, as set forth in Xindaxin's preliminary non-binding proposal letter dated May 12, 2014 and as previously announced on May 13, 2014, is not in the best interests of the Company and its shareholders. Accordingly, the Board has determined not to pursue further discussions with Xindaxin regarding the Proposal at this time.

The Board will continue to review periodically the Company's long-term strategic plan with the goal of maximizing shareholder value, and as part of this ongoing process, the Board and senior management of the Company will continue to review periodically strategic alternatives that may be available to the Company. The Company does not undertake any obligation to provide any updates with respect to such review, except as required under applicable law.


Monday, August 4, 2014

Comments & Business Outlook

Third Quarter 2014 Financial Results

  • Revenues of RMB92.9 million (US$15.1 million) compared with RMB128.3 million
  • Net loss for the third quarter of fiscal 2014 was RMB14.7 million (US$2.4 million), or net loss per basic and diluted share of RMB0.65 (US$0.11), compared to a net profit of RMB6.1 million, or net profit per basic and diluted share of RMB0.26 in the same period one year ago.

Friday, May 9, 2014

Comments & Business Outlook

Second Quarter 2014 Financial Results

  • Revenues of RMB4.7 million (US$0.8 million) compared with RMB27.5 million for the three months ended March 31, 2013.
  • Net loss for the second quarter of fiscal 2014 was RMB44.3 million (US$7.2 million), or net loss per basic and diluted share of RMB1.95 (US$0.32), compared to a net loss of RMB27.8 million, or net loss per basic and diluted share of RMB1.19 in the same period one year ago.

Monday, February 24, 2014

Comments & Business Outlook

Fourth Quarter 2014 Financial Results

  •  Revenues of RMB 20.4 million (US$3.3 million) compared withRMB 22.7 million in the three months ended December 31, 2012.
  • Net loss for the first quarter of fiscal 2014 was RMB31 million (US$5.1 million), or net loss per share of RMB1.36 (US$0.22), compared with net loss of RMB23 million, or net loss per share of RMB0.98 in the same period one year ago.

Thursday, January 23, 2014

Comments & Business Outlook

                                                                                  20-F

Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.
 
 
 
For the year ended
 
 
 
September 30,
 
 
 
(in thousands, except share data)
 
 
 
2009
 
2010
 
2011
 
2012
 
2013
 
 
 
RMB
 
RMB
 
RMB
 
RMB
 
RMB
 
USD(1)
 
Consolidated statement of income and comprehensive income data:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenues
 
592,492
 
584,860
 
567,434
 
552,111
 
481,694
 
77,297
 
Cost of revenues
 
(392,842)
 
(353,587)
 
(371,591)
 
(387,783)
 
(315,082)
 
(50,561)
 
Gross profit
 
199,650
 
231,273
 
195,843
 
164,328
 
166,612
 
26,736
 
Selling and marketing
 
(55,648)
 
(52,227)
 
(56,831)
 
(56,437)
 
(55,375)
 
(8,886)
 
General and administrative
 
(64,833)
 
(78,708)
 
(86,748)
 
(77,585)
 
(66,153)
 
(10,615)
 
Research and development
 
(33,473)
 
(38,356)
 
(44,771)
 
(37,629)
 
(42,162)
 
(6,766)
 
Other income, net
 
1,991
 
2,340
 
5,120
 
3,852
 
15,241
 
2,446
 
Total operating expenses
 
(151,963)
 
(166,951)
 
(183,230)
 
(167,799)
 
(148,449)
 
(23,821)
 
Income (loss) from operations
 
47,687
 
64,322
 
12,613
 
(3,471)
 
18,163
 
2,915
 
Interest income
 
2,036
 
1,634
 
1,771
 
2,547
 
1,776
 
285
 
Interest expenses
 
(16,784)
 
(8,539)
 
(1,469)
 
(4,029)
 
(11,326)
 
(1,818)
 
Loss on repurchase of convertible notes
 
(51,101)
 
-
 
-
 
-
 
-
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in earnings / Gain on disposal of associated company
 
4,669
 
18,253
 
1,616
 
4,030
 
5,161
 
828
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on liquidation of subsidiary
 
-
 
-
 
(13,582)
 
-
 
-
 
-
 
Changes in the fair value of embedded derivatives
 
3,300
 
-
 
-
 
-
 
-
 
-
 
Income (loss) before income taxes
 
(10,193)
 
75,670
 
949
 
(923)
 
13,774
 
2,210
 
Income tax expense
 
(11,732)
 
(9,319)
 
(13,730)
 
(1,862)
 
(4,462)
 
(716)
 
Net income (loss) before non-controlling interests
 
(21,925)
 
66,351
 
(12,781)
 
(2,785)
 
9,312
 
1,494
 
Non-controlling interests
 
18,892
 
17,298
 
10,298
 
(1,351)
 
1,818
 
292
 
Net income (loss) attributable to Origin Agritech Limited
 
(40,817)
 
49,053
 
(23,079)
 
(1,434)
 
7,494
 
1,202
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
(1.77)
 
2.12
 
(1.00)
 
(0.06)
 
0.32
 
0.05
 
Diluted
 
(1.77)
 
2.10
 
(1.00)
 
(0.06)
 
0.32
 
0.05
 
Shares used in computation:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
23,013,692
 
23,189,464
 
23,351,615
 
23,382,812
 
23,259,127
 
23,259,127
 
Diluted
 
23,013,692
 
23,337,265
 
23,351,615
 
23,382,812
 
23,278,443
 
23,278,443
 
 
 

  5  

 
 
 
Sept 30
 
Sept 30
 
Sept 30
 
 
Sept 30
 
 
Sept 30
 
 
 
2009
 
2010
 
2011
 
 
2012
 
 
2013
 
 
 
 
 
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
RMB
 
RMB
 
RMB
 
 
RMB
 
 
RMB
 
USD(1)
 
Consolidated balance sheet data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
121,255
 
 
299,672
 
 
129,942
 
 
152,789
 
 
131,978
 
21,467
 
Current working capital (2)
 
 
(33,533)
 
 
67,650
 
 
(21,753)
 
 
(46,153)
 
 
(67,436)
 
(10,969)
 
Total assets
 
 
824,544
 
 
935,011
 
 
818,382
 
 
975,437
 
 
1,158,072
 
188,366
 
Deferred revenues
 
 
18,280
 
 
23,111
 
 
19,812
 
 
23,243
 
 
22,069
 
3,590
 
Total current liabilities
 
 
546,822
 
 
596,611
 
 
532,571
 
 
605,195
 
 
751,978
 
122,314
 
Total liabilities
 
 
546,822
 
 
606,037
 
 
532,571
 
 
662,005
 
 
837,827
 
136,277
 
Non-controlling interests
 
 
51,389
 
 
57,089
 
 
26,774
 
 
52,385
 
 
54,203
 
8,816
 
Total Origin Agritech Limited shareholders’ equity
 
 
226,333
 
 
271,885
 
 
259,037
 
 
261,047
 
 
266,042
 
43,273
 

Wednesday, January 8, 2014

Comments & Business Outlook

Fiscal year 2013

  • Revenues was RMB481,694 vs. last years RMB552,111
  • Net income (loss) attributable to Origin Agritech Limited per share � basic and diluted was RMB 0.32 vs last years RMB (0.06)

Outlook

With the industry inventory for seeds, especially corn seed, at historically high levels, we expect the market to continue with increasing competition in fiscal year 2014. However, we will continue our disciplined management approach and deepen our restructuring effort in different levels to improve our operational efficiency. We expect our earnings performance to improve again and revenue growth to turnaround in the FY2014.


Wednesday, August 7, 2013

Comments & Business Outlook
Third Quarter Financial Results 
  • Revenues of RMB128.3 million (US$20.8 million) compared with RMB269.3 million for the three months ended June 30, 2012
  • Gross profit for the third quarter of fiscal 2013 was RMB36.9 million (US$6.0 million) compared to RMB54.2 million in the third quarter of fiscal 2012. Gross margin for the third quarter of fiscal 2013 increased to 28.7% from 20.1% for the same period of fiscal 2012. The increase in the gross margin was mainly due to improved cost control adopted since last year.
  • Net income attributable to Origin for the third quarter of fiscal 2013 was RMB6.1 million (US$1.0 million), orRMB0.26 (US$0.04) per basic and diluted share, compared with a net income of RMB25.4 million, or RMB1.1 per basic and diluted share during the same quarter one year ago.

Wednesday, May 8, 2013

Comments & Business Outlook

Second Quarter 2012 Financial Results

Revenues of RMB27.5 million (US$4.4 million) compared with RMB14.7 million for the three months ended March 31, 2012.

Gross profit for the second quarter of fiscal 2013 was RMB6.7 million (US$1.1 million) compared with a gross loss of RMB2.9 million in the second quarter of fiscal 2012.

Net loss for the second quarter of fiscal 2013 was RMB27.8 million (US$4.4 million), or net loss per diluted share of RMB1.19 (US$0.19), compared to a net loss of RMB37.1 million, or net loss per diluted share ofRMB1.58 in the same period one year ago.


Tuesday, August 7, 2012

Research

Third Quarter 2012 Results

  • During the third quarter of fiscal 2012, revenues increased by 10.1% year-over-year to RMB269.3 million (US$42.7 million) from RMB244.7 million one year ago.
  • Net income attributable to Origin for the third quarter of fiscal 2012 was RMB25.4 million (US$4.0 million), or RMB1.09 (US$0.17) per share - both basic and diluted, compared with a net income of RMB13.9 million, or RMB0.60 per share - both basic and diluted during the same period one year ago.

Comments & Business Outlook

Third Quarter Results

During the third quarter of fiscal 2012, revenues increased by 10.1% year-over-year to RMB269.3 million (US$42.7 million) from RMB244.7 million one year ago. Higher revenues this quarter were mainly due to earlier sales settlement with the distributors for the 2012 selling season.

Gross profit for the third quarter of fiscal 2012 was RMB54.2 million (US$8.6 million) compared to RMB85.8 million in the third quarter of fiscal 2011.


Tuesday, July 10, 2012

Comments & Business Outlook

BEIJING--()--Origin Agritech Limited (NASDAQ: SEED) (“Origin” or the “Company”), a technology-focused supplier of hybrid and genetically modified crop seeds in China, today provided update on its Genetically Modified (“GM”) corn seed pipeline and hybrid corn seed development program.

GM Corn Seed Pipeline

Genetically modified seed products in China must initially undergo a five-stage approval process consisting of Phase 1 - Laboratory Research, Phase 2 - Intermediate Test, Phase 3 - Environment Release Test, Phase 4 - Production Test, leading to the receipt of the Bio-Safety Certificate from Ministry of Agriculture (“MOA”) in Phase 5. Currently, only domestic seed producers such as Origin Agritech are allowed to proceed through all five phases, while international companies are restricted to Phase 1 only and forbidden to proceed to Phases 2 through Phase 5.

Origin’s genetically modified phytase corn was the first GM corn seed which passed all five phases of the GM approval process and received notification of Bio-Safety Certificate. Origin has further incorporated phytase traits into two of its best-selling commercial corn hybrids. Commercialization of these two corn hybrids is pending approval from the Chinese government. Two additional corn hybrids with GM phytase traits are undergoing variety production test.

Phytase is an essential element for the growth and development of all animals by increasing phosphorous absorption. Phytase transgenic corn inputs the phytase trait directly into corn, thus reducing costs for animal feed producers by eliminating the need to mix phytase and corn ingredients together. Origin’s GM phytase-producing corn is expected to reduce the need for inorganic phosphate supplements as animals will directly absorb more phosphate from their feed, reducing animal feed’s high cost. Full release.


Tuesday, May 8, 2012

Comments & Business Outlook

Second Quarter 2012 Results

During the second quarter of fiscal 2012, the Company generated revenues of RMB14.74 million (US$2.34 million), compared with RMB1.09 million for the three months ended March 31, 2011. Revenues generated in the second quarter were mainly a result of scrap sales. As a reminder, the majority of Origin’s revenues are recorded in the fiscal third quarter as a result of our revenue recognition policy.

Net loss for the second quarter of 2012 was RMB37.07 million (US$5.89 million), or RMB-1.58 (US$-0.25) per diluted share, as compared to a net loss of RMB35.13 million, or RMB-1.36 (US$-0.21) per diluted share in the same period one year ago.


Thursday, January 19, 2012

Research

Fiscal 2011 Results

  • Revenues of RMB567.43 million (US$89.29 million), a slight decrease of 2.98% from September 30, 2010 with RMB584.86 million (US$87.28 million).
  • Income from operations for the year ended September 30, 2011 were RMB12.61 million (US$1.99 million), compared with the income from operations from September 30, 2010 of RMB64.32 million (US$9.60 million).
  • Net loss attributable to Origin for the fiscal year of 2011 was RMB 23.08 million (US$3.63 million) compared with a net profit attributable to Origin of RMB49.05 million (US$7.32 million) in the year ended September 30, 2010. Of note, this amount included the net loss from the liquidation of our investment of Jilin Changrong of RMB13.58 million (US$2.14 million).
  • EPS per ADS for 2011 was a loss of (0.16) vs earings of $0.32 last year

Dr. Gengchen Han, Chairman, President and Chief Executive Officer of Origin Agritech, commented, “The Chinese seed industry is entering the next growth phase, in which we believe the prospective demand for high quality products will continue to rise. Fundamentals such as the rising food consumption and stabilizing planting area continue to bode very positive for the seed industry in general while individual crop segments also demonstrate promising growth prospects. Diversifying use for corns such as manufacturing animal feed continues to provide robust support in driving up corn price. Rising exports is expected to further boost the growth of rice seed industry.”

“In addition, recently implemented key industry policies will raise the barrier of entry and considerably favor industry leaders with established, high-yielding seed product portfolio and vertically integrated research and development capabilities. In response, we have proactively started strategic initiatives such as expanding our hybrid seed conditioning and production capabilities, establishing new marketing channels in the Northwest, proceeding with our GMO applications, and most recently have completed our strategic leadership transition. We are confident that our recent initiatives would pay off in capturing new growth opportunities in the short run and further strengthening our competitive position.”


Wednesday, September 14, 2011

Comments & Business Outlook

Third Quarter Results

  • During the third quarter of fiscal 2011, the Company generated revenues of RMB244.7 million (US$37.4 million), compared with RMB462.2 million (US$68.1 million) generated in the three months ended June 30, 2010.
  • Income from operations for the third quarter of 2011 amounted to RMB34.0 million (US$5.2 million) compared with an operating income of RMB153.4 million (US$22.6 million) for the same period in 2010.
  • Net income attributable to Origin for the third quarter of 2011 was RMB13.9 million (US$2.1 million), or RMB 0.60 (US$0.09) per share - both basic and diluted, as compared to a net income of RMB105.2 million (US$15.5 million), or RMB 4.57 (US$0.67) per share - both basic and diluted in the same period one year ago.

FISCAL 2011 GUIDANCE

Based on its current outlook, and existing and anticipated business conditions, Origin lowers the revenue guidance for FY 2011 in the range of RMB 530 million to RMB 550 million.


Friday, May 20, 2011

Analyst Reports

Rodman and Renshaw on  SEED                               5/20/2011

F2Q11 Earnings Update

F2Q11 Results

Origin Agritech Limited (“Origin,” Ticker: SEED, Market Outperform) announced its fiscal 2Q11 financial results that were below our expectations as well as Street consensus. For this seasonally light quarter, the company reported revenue of $0.2 million, slightly below our Street-low expectation of $0.3 million as well as Street consensus of $0.9 million. Gross loss came in at $1.1 million, more than our estimate of a loss of $0.8 million. The company incurred $4.9 million operating expenses in the quarter, slightly less than our estimate of $5.1 million. As a result, actual operating loss was $6.0 million, more or less in-line with our estimate. Net loss in the quarter was $4.8 million, or $0.21 per diluted share, slightly larger than our respective estimates of $4.0 million and a $0.17 per diluted share.

As of March 31, the company had cash and cash equivalents equating to $35.2 million, shareholders’ equity of $33.8 million, as well as short-term borrowings of $3.1 million.

All Eyes on FQ3

As the seed industry is heavily seasonal with the June quarter being the single most important quarter of the year, the March quarter is typically viewed with a passing glance, unless there is something extraordinarily wrong or unusually good. Sales in the quarter are mostly scrap seeds. We believe F2Q11 was no exception, despite the somewhat below-expectation results. We do have some preliminary indications for FQ3 performance, however, as the company’s $67.7 million deferred revenue and $45.9 million advances from customers in the F2Q11 balance sheet were either in-line or higher than their respective figures a year ago. These data points lead us to continue to believe that Origin’s F3Q11 revenue will be moderately higher than last year.

Adjusting Estimates while Maintaining Rating and Price Target

We have slightly tweaked our financial model to reflect the recent results. We now expect the company will report $76.9 million of revenue, $17.2 million of net income, or $0.74 per diluted share for F3Q11. For fiscal 2011, our respective updated estimates are $94.5 million, $8.8 million, and $0.38. We are maintaining our Market Outperform rating and $14 price target on the shares of Origin. We derive our $14 price target by discounting FCF through FY2020 by 9.7% of WACC and applying a 2% of terminal growth rate.

Major Risks

Major risks to the company and our rating include: 1) strong seasonality of the business, 2) dependence on corn seed market and licensed hybrid seed portfolio, 3) significant government influence, 4) technological changes in creating seed hybrids, 5) uncertainty of time over the government’s acceptance of genetically modified seeds into the market, 6) difficulty of building forward-looking estimates due to relatively poor reporting standards, and 7) country risks related to operating and investing in China.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Thursday, May 19, 2011

Comments & Business Outlook

Second Quarter Results:

  • During the second quarter of fiscal 2011, the Company generated revenues of RMB1.09 million (US$0.17 million), a decrease of 32.31% from RMB 1.60 million (US$0.24 million) generated in the three months ended March 31, 2010
  • Net loss for the second quarter of 2011 was RMB35.13 million (US$5.36 million), or RMB -1.36 (US$-0.21) per diluted share, as compared to a net loss of RMB30.98 million (US$4.54 million), or RMB -1.23 (US$-0.18) per diluted share in the same period one year ago.

Based on its current outlook, and existing and anticipated business conditions, Origin reiterates the revenue guidance for FY 2011 in the range of RMB 600 million to RMB 650 million.


Thursday, May 5, 2011

Analyst Reports

Rodman and Renshaw on SEED                          5/05/2011

New Licensing Agreement a Step in Right Direction

Origin Agritech (“Origin”, Ticker: SEED, Market Outperform) today announced that it has reached a licensing agreement with a multinational corporation to develop high-yielding corn varieties incorporating Origin’s glyphosate-resistant and Bt- traits. These traits are novel to the Chinese market and are protected by separate patents both in China and the U.S. Origin will license the traits to this unnamed multinational partner while taking the lead in the development and testing activities. Please note that Origin possesses comprehensive worldwide rights to the Chinese Academy of Agricultural Sciences (CAAS) developed glyphosate- resistant and Bt- genes.

We certainly view this as a positive step for Origin’s effort to commercialize its GM technology and capability. While no details of this licensing agreement are available at this time, we believe the unnamed partner is a Europe-based multinational company with markets covering almost 100 different countries. And based on our communication with management, we expect the agreement will involve an upfront payment to Origin as well as a percentage of profit after the commercialization. Origin will have a leading role during the development process. In our opinion, while the eventual commercial launch of these traits might not happen until several years down the road, the development is certainly a step in the right direction. Perhaps most significantly, we believe this announced collaboration with a world class multinational corporation further validates Origin’s technology and capability, and suggests its GM products do possess significant commercial merit.

We are maintaining our Market Outperform rating on the shares of Origin and $14 price target. Our $14 price target is based on a DCF model discounting FCF through FY2020 by 9.8% of WACC and applying a 2% terminal growth rate. We expect the company will announce its F2Q11 results in mid-May, and we estimate Origin will report $0.3 million of revenue, $4.0 million of net loss, and a loss of $0.17 per diluted share for this seasonally light quarter.

Major risks to the company and our rating include: 1) strong seasonality of the business, 2) dependence on corn seed market and licensed hybrid seed portfolio, 3) significant government influence, 4) technological changes in creating seed hybrids, 5) uncertainty of time over the government’s acceptance of genetically modified seeds into the market, 6) difficulty of building forward-looking estimates due to relatively poor reporting standards, and 7) country risks related to operating in China.


Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Monday, February 28, 2011

Liquidity Requirements

Due to the cyclical nature of the cash flow inherent in our business, the majority of cash flow from operations is received during the second half of the calendar year, which corresponds to the fourth quarter and the subsequent first quarter of our fiscal year. We use bridge loan financings and bank credit facilities to cover operating expenses during low-revenue portions of the year, which generally include July through December. We believe we can generate sufficient cash flows from operating activities and can access sufficient borrowing capacity from local banks to satisfy our seasonal liquidity needs.

The nature of our business involves cycles in expenses and revenues that are not always in phase. Most often in the third calendar quarter of each year, we may face costs that are in excess of our cash flow sources during that period. Whether that occurs, and to what extent it occurs, depends on the amount of deposits received from customers compared with the advanced payments made by us to our seed producing farmers and the final payment for seed procurement. The exact timing of these payments is determined by the Chinese lunar calendar, which varies from one calendar year to the next. As a result, in some years our working capital needs are greater than in others. This aspect of the business is the reason we have customarily relied upon short term bridge loans to cover our expenses pending receipt of cash payment from farmers at the time of seed purchases. We, on a consolidated basis, have had access to sufficient financing in the past to manage these cash flow cycles.


Wednesday, February 23, 2011

Analyst Reports

Rodman and Renshaw on  SEED                                                2/23/2011

F1Q11: Below Expectation Results from a Seasonally Light Quarter

 

A month after announcing its F2010 results, Origin Agritech Limited (“Origin,” Ticker: SEED, Market Outperform) reported its fiscal 1Q11 results that largely missed our and Street’s expectations. Revenue slid 54.1% YoY to $2.6 million, noticeably below our estimate of $5.9 million and Street consensus of $6.4 million. Gross margin came in at 50.1%, below the 53.3% in the same period of last year and our estimate of 51.0%. Net income was a loss of $3.3 million, or $0.14 per diluted share, below our respective estimates of a loss of $2.0 million and a loss of $0.08 per diluted share, as well as Street consensus of a loss of $2.8 million and a loss of $0.12 per diluted share. 

F1Q11 Highlights and Discussions 

Revenue decrease due to changing planting schedules of farmers: Sales of canola seeds contributed 97.9% of total sales in the quarter. However the volume sold was much lower than last year due to changing planting schedules of farmers. On the pricing side, prices of canola seeds were higher than last year, which contributed to more than 540bps of gross margin expansion for the canola seed products. 

Higher operating expenses owing to increased R&D expenditure: Total operating expenses rose 15.6% YoY to $6.6 million. The hike was primarily attributed to increased R&D expenses which reached $1.9 million in the quarter vs. $1.2 million in F1Q10, translating to 56.6% YoY increase. SG&A, on the other hand, were $4.7 million, representing only a small increase from $4.5 million last year. The higher R&D expenses reflected the company’s stepped up R&D investments, which we believe are essential for sustaining the company’s competitive position and maximizing long term shareholder value. 

Balance sheet condition continued to improve: Origin had cash and cash equivalents of $28.8 million as of the end of F1Q11. Short-term loan decreased to $3.0 million from $12.8 million in F4Q10 and $30.6 million in F1Q10. Deferred revenue was $31.9 million, roughly flat with $32.3 million in the same period of last year, while advanced payment from customers increased considerably to $58.2 million from $43.3 million last year, suggesting stronger demand for Origin’s products for the upcoming selling season. 

F2011 guidance reiterated: The company reaffirmed its revenue guidance for FY2011 to be between RMB600 million and RMB650 million.

Notice Regarding Privacy and Confidentiality: 

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Tuesday, February 22, 2011

Comments & Business Outlook

During the first quarter of fiscal 2011, the Company reported:

  • Revenues of RMB 17.19 million (US$2.60 million), a decrease of 55.47% from RMB 38.60 million (US$5.65 million) generated in the three months ended December 31, 2009.

RMB 16.83 million of the revenues this quarter were a result of the sales of canola seed products, 241,309 kg, for the three months ended December 31, 2010. The small remainder was a result of scrap sales. Across the industry, canola seeds, amongst other seed groups, sold lower volumes as a result of the changing planting schedules of farmers. The majority of Origin’s revenues are recorded in the fiscal third quarter as a result of our revenue recognition policy. The goods already sold and shipped to customers can be seen as Deferred Revenue line on the balance sheet and the Advances from Customers records the advance cash receipts from customers this selling season.

  • Gross profit for the three-months ended December 31, 2010 was RMB 8.61 million (US$1.3 million) compared to RMB 20.58 million (US$3.01 million) in the same period of the prior year. Gross margins for canola seeds for this quarter (exclusive of scrap sales) were 58.67% versus 53.3% for the canola seed sales for the same quarter in last year. This is a result of the higher pricing structure of our canola seed products this year.
  • Total operating expenses for the three-months ended December 31, 2010 were RMB 39.02 million (US$5.89 million) compared with RMB 38.96 million (US$5.71 million) reported for the same period in 2009.
  • Operating loss for the first quarter of fiscal 2011 year amounted to RMB 30.41 million (US$4.59 million) compared with an operating loss of RMB 18.38 million (US$2.69 million) for the same period in fiscal 2010 year.
  • Net loss for the first quarter of fiscal 2011 year was RMB 25.15 million (US$3.80 million), or RMB 0.94 (US$0.14) per basic and diluted share, as compared to a net loss of RMB 16.39 million (US$2.40 million), or RMB 0.59 (US$0.09) per basic and diluted share in the same period one year ago.

2011 GUIDANCE

Based on its current outlook, and existing and anticipated business conditions, Origin reiterates the revenue guidance for FY 2011 in the range of RMB 600 million to RMB 650 million.


Wednesday, January 19, 2011

Analyst Reports

Rodman and Renshaw on SEED                 01/19/2011

FY2010 Review 

Origin Agritech Limited (‘Origin”, Ticker: SEED) reported mixed FY10 results today. Total revenue grew 0.6% YoY to $87.3 million, beating our estimate of $86.3 million but slightly lower than the Street consensus of $87.6 million. Gross profit increased 18.1% YoY to $34.5 million, with a gross margin of 39.5%, less than our estimate of $36.4 million and 42.2% gross margin. Net income significantly improved to $7.3 million or $0.31 per diluted share, compared to a loss of $6.0 million or a loss of $0.26 per diluted share a year ago. The EPS result was in-line with the Street consensus but below our expectation of $0.35.

FY10 Overview and Discussions 

Revenue growth dragged by rice and canola seeds: The tepid revenue growth was mainly due to diminished sales of hybrid rice seeds which plummeted 34.2% YoY, affected by weather related issues. The 10.9% YoY decline in the sales of hybrid canola seeds also contributed to the lackluster top line performance. Sales of hybrid corn seeds, the company’s biggest revenue driver, grew 2.4% YoY and partially offset the slides in revenue from rice and canola seeds. The company expects FY11 revenue will be between RMB600 million and 650 million, suggesting YoY growth between 2.6% and 11.1% (excluding changes in FX).

Gross margin expanded 580bps YoY: Gross margin improved in almost every product segment except hybrid cotton seeds. The gross margin of corn seeds expanded to 49.7% from 40.6% last year. Rice seeds gross margin improved by more than 2000bps YoY to 37.0%. Canola seeds gross margin also increased by more than 2100bps YoY to 63.1%. The remarkable gross margin improvement was primarily attributable to the company’s elimination of the bottom 15% non-performing products as well as pricing increase of corn seeds. Looking forward to 2011, the company expects the gross margin of pesticides will improve from the current 13% to more than 20%, and the overall gross margin will continue to expand from the current level.

Operating expenses on the rise: Operating expenses in FY2010 reached $25.3 million, or 28.9% of revenue, compared to $22.5 million or 26.0% of revenue in FY09. The increase was mainly due to more hiring and new stock options associated with the equity incentive plan as well as increases in R&D investment. The increase in operating expenses was tempered somewhat by the decrease in selling and marketing expenses, which recorded $7.8 million in FY10 and represented a 6.15% decline from last year. Looking ahead, we expect the increased R&D investment, which is essential for Origin’s further development of its GM product pipeline, and overall operating expenses as percentages of revenue will maintain at similar levels.


Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Tuesday, August 31, 2010

Comments & Business Outlook

During the third quarter of fiscal 2010 the Company generated:

  • Revenues of RMB 462.23 million (US$68.07 million), a decrease of 3.13% from RMB 477.17 million (US$69.84 million) generated in the three months ended June 30, 2009.
  • Operating profit for the third quarter of 2010 amounted to RMB153.36million (US$22.58 million) compared with an operating profit of RMB118.95 million (US$17.41 million) for the same period in 2009.
  • Net income attributable to Origin Agritech Limited for the third quarter of 2010 was RMB105.16 million (US$15.49million), or RMB 4.52 (US$0.67) per diluted share, as compared to a net income attributable to Origin Agritech Limited of RMB74.97 million (US$10.98million), or RMB3.26 (US$0.48)per diluted share in the same period one year ago.

Based on its current outlook, and existing and anticipated business conditions, Origin believes the revenue guidance for FY 2010 to be in the range of RMB 580 million to RMB 600 million.