Origin Agritech Limited (NASDAQ:SEED)

Origin Agritech Limited  (NASDAQ:SEED) (Agricultural Technology) ($14.73; $79.0 M market cap) -  The Centaline Securities Research Institute released an industry analysis  report  taking a deep dive into the GMO industry in China and related growth prospects. 

The report analyzes the competitive position and prospects of the leading companies in the GMO industry.

Please see section 7, for an in depth analysis of Origin Agritech

Here are some notable quotes from the report that highlight SEED’s competitive strengths:

“After nearly two decades of development, the company has become one of the few domestic three-dimensional commercial platforms with independent breeding capabilities and integrated production and sales networks.”

“Is a pioneer in the research of genetically modified crops in China.” 

“The company has been deeply involved in the field of biological breeding for more than ten years, and has established long-term cooperative relationships with many domestic and foreign genetically modified seed research and development institutions such as DuPont Pioneer and the Chinese Academy of Agricultural Sciences.”

“The company's production center in Xinjiang now has a seed drying processing capacity of 20 million kg/year, and can be put into production at any time to create revenue for the company.”

“After the company obtains the production certificate, the commercial production of genetically modified seeds can be realized immediately.”

“Origen Seed Industry has established the richest and only enterprise-level corn germplasm resource bank in China in 20 years.”

“From the perspective of the company's business, the company has the richest and only enterprise-level corn germplasm bank in China. The seed bank has more than 200,000 different germplasm resources, and its acquisition value is high.”

“From the perspective of the biological breeding industry, currently only Dabeinong, Longping Hi-Tech, and Origen Seed Industry have the ability to commercialize biological breeding in my country, but Dabeinong and Longping Hi-Tech’s biological breeding income accounted for a relatively low proportion of the company’s revenue. Origen Bio-breeding income accounts for a relatively high proportion. The main operating income of Origen Seed Company in the future will come from biological breeding. Therefore, biological breeding is more flexible. From the perspective of valuation flexibility and purity of the target, Origen Seed will have higher premiums and excess returns in the future. In addition, the company may also be one of the first companies to obtain a commercial license. The first-mover advantage is obvious, which is worthy of attention.”

It seems that the analyst favors SEED amongst the companies discussed, but a further dissection of the report is certainly needed: 

“Generally speaking, Dabeinong has certain advantages in industrialization and technological maturity; O.R.G Seed has obvious advantages in independent intellectual property rights and  is one of the first companies most likely to obtain commercial licenses . It has advanced layout in terms of production capacity reserve, sales network layout, professional authorization, etc. Longping Hi-Tech has strong R&D capabilities and certain technical advantages, but lags behind Dabeinong and Origen Seed in preparation for industrialization. Therefore, in terms of the degree of benefit, Dabeinong and O.R.G Seed are the most likely to have long-term benefits. In addition, Origen currently has a lower valuation than leading domestic seed companies. After the commercialization of my country’s biological breeding market, the company will rely on its innovative advantages in biological breeding technology and good channel relationships in major planting regions across the country. The company's performance brings greater opportunities for improvement.”