Half Year 2022 Origin Agritech Ltd Earnings Call

Speaker 1: [music]

Speaker 1: Ch.

Speaker 1: Ion.

Operator: Hello and welcome to the Origin Agritech's first half 2022 earnings conference call.  All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the * key followed by zero. After today’s presentation there will be an opportunity to ask questions. To ask a question you may press * then one on your touchtone phone. To withdraw your question please press * then two. Please note, today’s event is being recorded. I would now like to turn the call over to Kieran Smith from VCG Advisory. Mr. Smith, please go ahead.

Speaker 2: That time.

Speaker 1: I.

Operator: Hello and welcome to the Origin Agritech First Half 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance please signal the conference specialist by pressing the star key follow by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question press star than one on your touchtone phone. To withdraw your question please press star then two. Please note today's event is being recorded. And I would like to turn the conference over to Kirin Smith from PCG Advisory. Mr. Smith, please go ahead.

Speaker 3: All participants will be a listen only mode. Should you need assistance, Please. No, a conference special pressing the starkey, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask the question, you have first star than one on your touch on phone.

Speaker 3: Should you need assistance, Please. No, a conference special pressing the starkey, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask the question, you have first star than one on your touch on phone.

Speaker 3: After today's presentation, there will be an opportunity to ask questions. To ask the question, you have first star than one on your touch on phone.

Speaker 3: To ask the question, you have first star than one on your touch on phone.

Speaker 3: To enjoy your question. Please P a star' too. Please note: today's event is being recorded. I now would like to turn the conference over to here in Smith from pcg advisory. mr Smith, Please go ahead.

Speaker 3: Please note: today's event is being recorded. I now would like to turn the conference over to here in Smith from pcg advisory. mr Smith, Please go ahead.

Speaker 3: I now would like to turn the conference over to here in Smith from pcg advisory. mr Smith, Please go ahead.

Speaker 4: Thank you, Keith. Welcome to argin agortetech's first half 2022 earnings conference call. With me today, or Dr kenjen hm, our Chairman in CEO , and weighhon, or VP, of business development.

Speaker 4: With me today, or Dr kenjen hm, our Chairman in CEO , and weighhon, or VP, of business development.

Kirin Smith: Please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities and Litigation Reform Act of 1995.

Kirin Smith: Such forward-looking statements are subject to risks, uncertainties and other factors that could cause the actual results for Origin Agritech's to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release, and our filings with the SEC, all of which are available on our website.

Speaker 2: Thank you, Keith. Welcome to Origin Agritech's first half 2022 earnings conference call. With me today are Dr. Gengchen Han, our Chairman and CEO, and Wei Yan, our VP of Business Development.  Please note that certain statements during this call will be forward looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward looking statements are subject to   risks, uncertainties and other factors that could cause the actual results for Origin Agritech's to differ materially from those express or implied on this call for additional information, Please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. I would now like to turn the call over to Joe relli, origin Director of Investor Relations. Joe, Please go ahead.

Kirin Smith: I would now like to turn the call over to Joe Ramelli Origin's Director of Investor Relations. Joe, please go ahead.

Joe Ramelli: Thanks, Kirin. And thank you to everyone joining us on the call today we really appreciate your support. So Origin's mission of bringing Agritech innovation to China has never been more on point given the geopolitical events affecting the global food supply chain and rising food  inflation.

Speaker 3: Thanks kan, and thank you to everyone joining us on the call today. We really appreciate your support.so origin's mission of bring aggrec innovation to China has never beenid more on point, given the geopolitical events affecting the global food supply chain and rising food inflation.

Joe Ramelli:  And I know for investors, right now, it's a little bit of an uncertain or very uncertain time with rising interest rates, inflation, geopolitical wars in the world. And so, we'd like to think that we're a place that maybe I wouldn't like to say benefits from all those things, but maybe could be a good hedge in your portfolio. As you can see, we're thriving during these difficult times.

Speaker 3: And I know for investors right now it's a little bit of an uncertain, very uncertain time, with rising interest rates inflation, geopolitical wars in the world, and so we like to think that we're a place that maybe I wouldn't like to say benefits from all of those things, but maybe it can be a good hedge in your portfolio. As you can see, we're thriving during these difficult times.

Joe Ramelli: So food security is a very top priority for the Chinese government, as you can imagine. And as such, they're investing heavily into the agriculture sector and embracing Agritech innovation

Speaker 3: sofood security is a very top priority for the Chinese government, as you can imagine, and as such, they are investing heavily into the agriculture sector and embracing agricq innovation.

Joe Ramelli: S uch as with the recent published approval procedures for gene-edited crops.

Joe Ramelli: And we're very excited to be playing a role in solving this food security problem, as we have the technology to not only dramatically improve corn yields but also increase the nutritional value of that corn, resulting in a multiplier effect.

Speaker 3: Such as with the recent published approval procedures for geneted crops, and we're very excited to be playing a role in solving this food security problem, as we have the technology to not only dramatically improve corn yields but also increase the nutritional value of that corn, resulting in a multiplier effect.

Joe Ramelli: Of nutritional yield per area.

Joe Ramelli: As you can see from the first half of 2022 results.

Speaker 3: Of nutritional yield per areaas you can see from the first half of 2022 results.

Joe Ramelli: our business is benefiting from these tailwinds. Sales grew in an impressive 300% from RMB11.6 million to RMB46.4 million or USD7.3 million.

Speaker 3: Our business is benefiting from these tailwinds. seales grew, and an impressive 300%, from 11.6 to 46.4 million rmv, or seven point three million U's dollars.

Joe Ramelli: Gross margin grew from RMB4.3 million to RMB12.9 million

Joe Ramelli: And importantly, despite our rapid growth, we had a lot of leverage to our business model and operating expenses only grew and muted 14%, which of course dropped down a lot of benefit to the bottom line.

Speaker 3: This margin grew from four point three to 12.9 million RMB.

Speaker 3: And importantly, despite our rapid growth, we had a lot of leverage to our business model and operating expenses only grew at immuted 14%, which of course dropped down a lot of benefit to the bottom line.

Joe Ramelli: The resulting loss from operations decreased from RMB7.8 million to RMB1.3 million or USD200,000.

Speaker 3: The resulting loss from operations decreased from seven point eight to one point three million RMB, or two thousand U's dollars.

Joe Ramelli: We also generated five point five million RMB from subletting a portion of our corporate headquarters in Beijing, which pushed us into the Black for the period, with earnings of one point three million RMB or three SENS of share.

Speaker 3: We also generated five point five million RMB from sumenting a portion of our corporate headquarters in Beijing, which pushed us into the Black for the period, with earnings of one point three million RMB or three senss of share.

Joe Ramelli: The main factor driving our rapid growth was the launch of a disease-tolerant corn variety that can adapt to stressful environments. 

Speaker 4: sothe main factor driving our rapid growth was the launch of the used tolerant corn variety that can adapt to stressful environments.

Joe Ramelli: And the background story is really interesting. We had.

Joe Ramelli: This corn plant in test fields planted in test fields in the main growing region in China.

Speaker 3: And the background story is really interesting. We had.

Joe Ramelli: And some of you might have seen on the news, there was terrible drought and then followed by really horrific flooding. And it was really interesting our corn plant really thrived under those conditions. I don't know if thrives right, but did perform very well and versus competing corn products they were decimated and you can see that in some pictures that we have in our investment deck. Our corn is very green and thriving and there's a kind of brown and looks dead

Speaker 3: This corn plant in test fields planted in test fields in the main growing region in China.

Speaker 3: And some of you might have seen on the news, there was terrible drought and then followed by really horrific flooding and was really interesting. Our corn plant really thrived under those conditions. I don't know thrives right, but did perform very welland versus competing corn products. They were decimated and you can see that in some pictures that we have in our investment deck. Our corn' very green and thriving and there's a kind of brown and looks, look dead.

Joe Ramelli: So this created a great deal of goodwill for Origin Agritech's brand and demand for our seeds. In addition, this newly launched hybrid has significant yield increase over traditional corn.

Speaker 3: So this created a great deal of good will, forge and agriatetech brand and demand for our seeds. In addition, this newly launched hybrid has a significant yield increase over traditional corn.

Joe Ramelli: We could have actually sold a lot more corn, but we ran out of inventory. So for the coming season we're ramping up seed production to meet this anticipated demand.

Speaker 3: We could have actually sold a lot more corn, but we ran out of inventory. So for the coming season we're ramping up key production to meet this anticipated demand.

Joe Ramelli: Over the last several years we put significant effort into our breeding program to develop nutritionally enhanced corn to meet the needs of the feedstock industry.

Speaker 3: Over the last several years we put significant effort into our breeding program to develop nutitionally enhanced corn to meet the needs of the feedstock industry.

Joe Ramelli: In 2021, we tested our nutritionally enhanced corn with our partners in the feed industry at multiple locations. Our partners in the feed industry are very excited and see just how impactful this product is for them and for their profit margins, and they are demanding immediate supply.

Speaker 3: In 2021, we tested our nutritionally enhanced corn with our partners in the feed industry at multiple locations.

Speaker 3: Our partners in the feed industry are very excited and see just how impactful this product is for them and for their profit margins, and they are demanding immediate supply.

Joe Ramelli: And as we mentioned in our press release, this nutritionally enhanced corner or NEC alleviates the need for additives such as soybean meal that traditionally or in every other type of corn are needed to make the feedstock sufficient for hogs.

Speaker 4: And as we mentioned in our press release, this nutritionally enhanced corner nec alleviates the need for additives such as soybean neal that traditionally are in every other type corner are needed to make the feedstock sufficient for hogs and.

Joe Ramelli: This is not needed with our.

Joe Ramelli: Our newcorn variety. So that's why we dramatically improve the profit margins and why these feedstock companies are coming to us and so excited.

Speaker 4: This is not needed with our new corn variety, So that's why we dramatically improve the profit margins and why these feedstock companies are coming to us and so excited.

Joe Ramelli: It's almost hard to fathom the size of the feedstock market in China. It's over 1.9 million metric tons, which is approximate market value of about RMB500 billion or USD75 billion I think approximately.

Speaker 4: It's almost hard to fathom the size of the feedstock market in China. It's over one point nine million metric tons, which is approximate market value of about five billion R and B or 75 billion U's dollars, I think, approximately.

Joe Ramelli: We project that our new contract growing NEC business model will grow rapidly and NEC will play a significant role in the feedstock industry in the next few years.

Speaker 3: We project that our new contract growing NC business model will grow rapidly and NC will play a significant role in the feedstock industry in the next few years.

Joe Ramelli: And it's.

Joe Ramelli: Doesn't take very high percentage of capturing this market to have.

Speaker 5: And it's.

Joe Ramelli: Pretty incredible. Financial results or of financial impact for origin is even a few percentage gain in this market would be huge revenues in EPS for the company and we don't see why our feedstock company partners wouldn't want to do more business with us. Is it such an impactful product.

Speaker 3: Doesn't take very high percentage of capturing this market to have.

Speaker 3: Pretty incredible. Financial results or of financial impact for origin is even a few percentage gain in this market would be huge revenues in EPS for the company and we don't see why our feedthoughtck company partners wouldn't want to do more business with us. Is it such an impactful product?

Joe Ramelli:  It is important to note that sales recognized in the first half of 2022 had zero contribution from this NEC

Speaker 4: It is important to note that sales recognizede in the first half of 2020 t- had zero contribution from this NC.

Joe Ramelli: And was just our traditional seed business.

Joe Ramelli: As the new corn variety has yet to be harvested. The sales will hit in the second half of the year and this, of course, is given us a high degree of confidence that we will exceed the full year sales guidance of 300% for fiscal 2022. by the way, the period ends in the end of September . We not on the standard calendar year.

Speaker 3: And was just our traditional seed business. As the new coin variety has yet to be harvested, the sales will hit in the second half of the year and this, of course, is given us a high degree of confidence that we will exceed the full year sales guidance of 300% for fiscal 2022. by the way, the period ends in the end of September . We not on the standard calendar yearwith regard to technological development. We have integrated our GMO traits into our hybrid con varieties and are prepared for when the country moves to GMO positive, which we think will be.

Joe Ramelli: With regard to technological development, we have integrated our GMO traits into our hybrid corn varieties and are prepared for when the country moves to GMO positive.

Joe Ramelli: Which we think will be.

Joe Ramelli: Soon given all the new laws that are being passed to establish a legal framework for commercialization of GMO crops are really coming in at a faster and faster pace.

Speaker 4: Soon given all the new laws that are being passed to establish a legal framework for commercialization of GMO crops are really comingting at a faster and faster pace.

Joe Ramelli: Late last year we successfully completed production trials of drought tolerant GMO corn in China.

Joe Ramelli: And subsequently filed for biosafety licenses, which is, some of you might know, is the last step of the approval process before the actual GMO approval.

Speaker 3: Late last year, we successfully completed production trials of drought tolerant GMO corn in China and subsequently filed for biosafety licenses, which is, some of you might know, is the last step of the approval process before the actual GMO approval.

Joe Ramelli: So with the addition of that trait, we now have every trait that's sold by the big companies like Bayer outside of China.

Speaker 3: So with the addition of that tradeit, we now have every trade that's sold by the big companies like bayger outside of China.

Joe Ramelli: We have all those big traits, So we've got a complete portfolio on that side.

Joe Ramelli: Of course GMO corn is projected to be a multibillion dollar market opportunity and origin has plans to be a major player in the space.

Speaker 3: We have all those big trades, So we've got a complete portfolio on that side.

Speaker 4: Of course, GMO corn is projected to be a multibillion dollar market opportunity, and origin has plans to be a major player in the space.

Joe Ramelli: An outside of GMO there's.

Joe Ramelli:  And outside of GMO, there's really fascinating developments with CRISPR

Speaker 6: An outside of GMO there's.

Joe Ramelli: Is I worked for a prior company. We had a license deal. I worked for a biotech company. We had a license deal with Monsanto, and the scientists there told me at the time that crispr was the biggest development ever for plant breeding. But they also said those damn cell walls, because they're So difficult to get past.

Speaker 3: Newly fascinating developments with crisprg gene editing.

Speaker 3: Is I worked for a prior company. We had a license deal, worked for a biotech company. We had a license deal with Monsanto and the scientists there told me at the time that crispr was the biggest development ever for plant breeding. But they also said those DAM cell walls because they're So difficult to get past.

Joe Ramelli: So it's interesting Origin has made some innovations with new processes for getting CRISPR, past the plant walls in corn, and that we've been working on it since 2017, which were the very early days of CRISPR. And we believe that we're not only the leader in China, we talked about, you know, the China GMO market and the Chinese Agritech market. We think that we're the leader in the world on using CRISPR for corn breeding. And you can see that and - we've come up with over a dozen new traits

Speaker 3: So it's an interesting origin, has made some innovations with new processes for getting crisper passed the plant walls and corn, and we've been working on it since 2017, which were the very early days a crispr, and we believe that we're not only the leader in China. We taltalk about the China GMO market in the Chinese aggrect market. We think that we're the leader in the world on using crispr per corn bleeding and you can see that in we've come up with over a dozen new traits, and one of them that we announced recently is really interesting. We changed the lead angle of our corn or corn in order So that it can be planted in closer proximity to other corn plants, some denser, and which, of course, would increase the yield.

Joe Ramelli: And one of them that we announced recently is really interesting. We've changed the leaf angle of.

Joe Ramelli: Our corn or corn in order, So that it can be planted in closer proximity to other corn plants and denser, and which, of course, would increase the yield.

Joe Ramelli: So we're doing a lot of amazing things with this technology, and I think that the pace of innovation is only going to accelerate.

Speaker 3: So we're doing a lot of amazing things with this technology, and I think that the pace of innovation is only going to accelerate. And of course.

Joe Ramelli: And of course.

Joe Ramelli: When I look at the whole.

Joe Ramelli: Portfolio of assets.

Joe Ramelli: that Origin has, they work in tandem, it's not like GMO it's a corn in of itself, you need a really healthy thriving hybrid corn or as we - call it germplasm. That takes on the GMO traits, and also the gene-edited traits. And we think that that's a huge differentiating factor. Some of our competitors have GMO traits,

Speaker 3: When I look at the whole portfolio of assets.

Speaker 4: That origit has. They work in tandem. It's not like g MO is a corn in it of itself. You need a really healthy, thriving hybrid corn or, as we like, as we call it germplasm, that takes on the GMO traits and also the ge edited traits, and we think that that's a huge differentiating factor. Some of our competitors have g MO traits but they don't have the thriving corn hyids to put it into. And if you have a g MO corn with without, if you have that tra say, for instance for army onem resistance, but you don't have a thriving corn to put it and you'll put it into a corn variety that's subpart, it'll still be a subpar corn, that it will be army onem resistance, which isn't really a successful endpoint. So anyway, stay tuned is we have many new traits and development on the ge editing inside and it's truly amazing what this technology can do.

Joe Ramelli: but they don't have the thriving corn hybrids to put it into. And if you have a GMO corn - without, if you have that trait, say for instance for armyworm resistance, but you don't have a thriving corn to put it in, you'll put it into a corn variety that subpar, it will still be a subpar corn, but it will be armyworm resistance, which isn't really a successful endpoint. So anyway, stay tuned as we have many new traits and development on the gene editing side and it's truly amazing what this technology can do.

Joe Ramelli:  In summary, we're very excited about the opportunity before us and we're really confident that we're going to generate an attractive rate of return for shareholders.

Speaker 4: In summary, we're very excited about the opportunity before us and we're really confident that we're going to generate an attractive rate of return for shareholdersand with that.

Joe Ramelli: And with that.

Joe Ramelli: Chairman, Gengchen Han is going to answer some Q&A. So operator Keith, would you please open up the call for Q&A?

Speaker 4: Chairman gangshing Hong is going to answer some qas O operator. Keith, would you please open up the call for QA? Yes certainly, Thank you. As mentioned at this time, we will be on the question answer session.

Operator: Yes, certainly thank you as mentioned at this time we will begin the Question and Answer session. To ask a question you may first start than one high your touchstone. If you're using a speaker phone, please pick up your hands out before pressing the Keys.

Speaker 3: If you're using a speaker phone, please pick up your hands out before pressing the Keys.

Speaker 7: To ask a question, you may first start than one on your touchtone phone. If you're using a speaker phone, please pick up your hands out before pressing the Keys.

Operator: To withdraw your question, Please must star then two.

Operator: At this time. We will pause momentarily, just assemble the roster.

Speaker 7: The dry Quest'm pleaseed miss star than two at this time. We will pause momentaily to asseumble the roster.

Operator: And once again.

Speaker 1: And once again, Please press star, then one if you would like to ask a questionone more time. As a reminder, pressing star then one will allow you to speak.

Operator: Please press star then 1, if you would like to ask a question.

Operator: one more time as a reminder.

Operator: Pressing star, then one will allow you to speak.

Operator: Hey  We do have a question from Bill Stein with Celadon Financial.

Speaker 1: We do have a question from Bill stein with sell ad on financial.

Bill Stein: Hi Dr. Han, congratulations on starting to finally achieve some of the success you've been looking for all these years. My question has to do with different patents that you're possibly filing about your gene editing. And the question is, are you and if so, would the patents be for China, for the United States for worldwide maybe you could elaborate on that? Thank you.

Speaker 8: Hi Dr HANA, good Congratulations on starting to finally achieve some of the success you've been looking for all these years. But my question has.

Speaker 17: My question has to do with different patents that you're possi ly firiling about your gene editing, and the question is: are you and if So, would the patents be for China, for the United States, for worldwide? Maybe you could elaborate on that. Thank you.

Speaker 8: My question has to do with different patents that you're possibly firing about your gene editing, and the question is: are you and, if So, would the patents Bee for China, for the United States, for worldwide? Maybe you could elaborate on that. Thank you.

Gengchen Han: Yes, thanks Bill. Nice to talk to you again.  and we have basically for the gene editing at this moment, what I said - for our patents, you know in worldwide not only for China. Since we think

Speaker 8: Yes St beyond the most of Gard and we have basically for the key edian at this moment, the where I said to tried for our Ps.

Gengchen Han: You know, we have.

Speaker 8: The worldwide mother only for chinnea, since we thinkwe have.

Gengchen Han: some kind of technology break us through in the gene editing, especially for corn. We're much more efficient than other people doing the same things - as we're confident. . But you know this, this.

Speaker 8: Some kind of technology breakers through in the generedity and's per call. We are much more efficient by other people. Same ions where this way were conftident, but you this this.

Gengchen Han:   technology is new and [inaudible] .

Gengchen Han: products you know the [inaudible] is in China now gene editing already created proof of the procedure - he is already this way it seems like, more like U.S. you know, if you are internally just 

Speaker 8: Technology a new, and the imposing of how we PO your products, the imposing in China. No, can already betterater approve for the procedure. So it's already similar, like more at U's, if you are internally just.

Gengchen Han: genes, not putting outside the genes well basically trait as a normal corn. So that gave us you know, big advantage and maybe the - a pooling process will be much faster  and even for example, but sometimes they even US

Speaker 8: Deals not bring outside the genes or basically trat D as a normal cost. So that's giave us the advantage and maybe the a proing process or much faster and the human, for example. But sometimes the give you customers are all.

Gengchen Han: Customers are all.

Gengchen Han: or even do know this really breeding from gene editing, or from trait operating, but basically no much difference, but gene editing is much, much, much faster, much more efficient, and much it's very - well very exciting about this technology.

Speaker 8: Even though now this really preum from omeogenic ebitum, all from tring operate. But basic is no much peopleven ness, But everything is a much, much faster, much more efficient. A that's worried, while very exciting, about this technology.

Bill Stein: Okay, can I just put a few questions for you? One is, is DuPont still a licensee of Origin and also do we expect. Do you expect to have more contracts to land with your, I guess the NEC - the new corn versus GMO since it isn't approved yet. And also maybe you can just comment, I'm sorry, comment on how strong today is Origin versus any other time in history? Thank you.

Speaker 9: Okay can I just put a few questions for you. one is: is due pronant still licensee of origin? And also, do we expect, do you expect, to have more contracts to land with your, with your, I guess the the NC? Well, does this moth the new corn versus GMO, since it isn't approved yetand also maybe you can just comment- I'm sorry comment- on how strong today is origin versus any other time in history. Thank you.

Speaker 19: The anyseek. Well, this mooth, the new corn versus GMO, since it isn't approved yet. And also maybe you can just comment, I'm sorry comment on how strong today is origin versus any other time in history. Thank you.

Speaker 19: And also maybe you can just comment, I'm sorry comment on how strong today is origin versus any other time in history. Thank you.

Gengchen Han: Okay, that's the - first actually we still look you know, all kinds of possible collaboration with multinational. But I think we also more focused since multinational has some kind of, you know restrictions - limit operation in China. So we more you know in China we have the dependence on more and sell our collaborating with the local seed company. As in another one area as you mentioned what's the difference no, from last Origin 10 years ago.   As you know last 10 or 20 years Origin is building the focus on the technology on the seed business that we are really put a lot of effort on GMO corn, which is you know, recent get just most profit and but we didn't touch other things. But at this moment, I think we have much more advanced the technology number one. Number two is, we have a breeding process in the last 20 years when we build out excellent GMO product pool which was as a result as showing bitter like noise.

Speaker 21: First we still look all kind of part about corporation with modernational. But I assu. We also more focus since modernational has some kind of.

Speaker 8: Okay that's first we still look. You know all kind of important about corporation and with modernational, but I assume a we also more focus, since modernational has some kind of, you know uh, restrictions.

Speaker 22: rit ens. uh Lim ited opos in China. So where we more, you know, in China we have a depends on more unwer of our pollabbrating reway low proit company. uh, I you another one earlier estimation what the difference know from a last origin 20 years ago. I you know, in last or 20 years origin forecourt on the technology on the on. They see, the basiness is that we are really quite a lot of ef on GM O call which is, you know, reason.cent, you know get most positive and uh, but we did the part other things. But I, this moment, I you know we have much more at the ones the technology number why and we poor. So we have a breathing process in last of 20 years. We have, after you know I ve that M priy pool which waspri results as show you know better no, is.

Speaker 23: uh Lim ited opos in China. So where we more, you know, in China we have a depends on more unwer of our pollabbrating reway low proit company. uh, I you another one earlier estimation what the difference know from a last origin 20 years ago. I you know, in last or 20 years origin forecourt on the technology on the on. They see, the basiness is that we are really quite a lot of ef on GM O call which is, you know, reason.cent, you know get most positive and uh, but we did the part other things. But I, this moment, I you know we have much more at the ones the technology number why and we poor. So we have a breathing process in last of 20 years. We have, after you know I ve that M priy pool which waspri results as show you know better no, is.

Speaker 10: Lim me olig in China. So we more know in China. We have a depends on more unser, our pollabating, recently low costed company, I think another, what earlier estimation of what the difference know from a life origin twent years ago I, you know, in last 20 years orig focus on the technology, on the on. They see, the basiness is that we are really quite a lot of our on GM Co, which is know reasoncent, know get most positive and but we in the P other things, but this moment I we have much more at the ones the technology number why and we poor. So we have a breathing process. In last 20 years we have vie our, you know I the M priorty pool which was have results showing better noiseis.

Gengchen Han: Like largely as Joe mentioned we had - China had very bad weather for the corn growing.

Speaker 10: americ. Lastly, as you mentioned that we heard China had a worried by the worker for the comon co.but you know it's a good year, I haveybrultoical Co. but the ulcurate of good hybrid, the roural human good, it is in the better years, that's all. hybridresworks sho up, show up, So in from.

Gengchen Han: but you know it's a good year hybrid growing good. But actually of good hybrid is really showing good it's in better years that's all hybrids - should have. So in

Gengchen Han: terms of product competition in terms of GMO product development in 

Gengchen Han: Origin for us at this moment we are much stronger than before product of new technology. I think we are moving we - will help you - that we still have a very strong technology basis that's one

Speaker 10: Product competating in terms gemplus development in origin for exy moment aw much stronger than before, plus with new technology. As you know, we are moving in the. We help build our build up wor strong technology basis.

Gengchen Han: Number two is, you can see through the last few years we said we have one option as you mentioned we are seem like nutrition enhanced corn.

Speaker 10: That one number twowis you can see through last few years. three said you got 1, not a mation of all we are doing like a new treating and had to call this. one was to learnch. Your last year was just ty of voice of a farmer with A. you know, see the popers to see the enough two people we ty of the Co on ways she just worry. You know who decide you.

Gengchen Han: This one was launched last year was just tight we saw farmer - with you know see the partners see the amount of people.

Gengchen Han: It has the corn we feel that's very too emphatic since this was not [inaudible] you know, supply issue this would also save there.

Speaker 24: Since this was a not harid prm suplay issue, this is also seen for there.

Gengchen Han: You can see that in that 60% of the cost base corn that cost. So with all nutrition enhanced corn, actually you can save a lot of money they have [inaudible] before that RMB200 million money can be saved from the, our corn. So they are so excited they have actually formed the partner with us tried for the growing contract growing with farmers to supply their seed - their demands.  So this was really a new growing area for us as 

Speaker 10: Since this was the not how many supply issue, this would also see for there. You see there.

Speaker 24: indry's percent of the cost basase core.

Speaker 25: That cost So with all your treat the encouras. Co actually kindes of stv. A very. lo of money. You know if I would come meber like a one B doance before that. lo of money. You know if I would come meber like a one B doance before that.

Speaker 10: In that city. Percent that the cost, they core their cost. So with all you treat the encouragement Co actuallycur, kindes of stay very.

Speaker 24: lo of money. You know if I would come meber like a one B doance before that.

Speaker 24: 200 on B. Money can be saived from the oco. So they have so excited ly. We have actuallycur from the partner with us tryed to poit. T. He grow contract growan with farmers for suppliers that are Fe veryirty much. So this was l Ally a new growan area for us is.

Speaker 10: lo of of money. You know they have a come mber like a one vitroto, ants before that 200 and D money con ID can be saived from the alco. So they have. So excactly we have actuallycur from the partner with us. tri topoittory know contract growan with farmers to suppliers that feed 30 monands. So this was l really a new growan area for us is.

Speaker 24: Money can be saived from the oco. So they have so excited ly. We have actuallycur from the partner with us tryed to poit. T. He grow contract growan with farmers for suppliers that are Fe veryirty much. So this was l Ally a new growan area for us is.

Gengchen Han: you know, as you mentioned you know corn seed market in China right now is around at RMB300 million and if you cover for the GMO maybe double like RMB600 million to RMB1 billion that's the total world of corn seed. But for the seed corn crop that's the annual very support here RMB500 billion. People like - we talk like just one person [inaudible] I think very exciting very and our side there is no much competition.

Speaker 24: As me mention that you know Co and see the market in channel right now is all alaround the 300 millia. On the youngest. And you could cover for the GM MO, maybe bubbles, that's the six kind of me to one perithat that's, that's be. You may put the water coln seed, but the for the see the coln rope. Most of the annual verteraries ppabout her F behind the pedia.

Speaker 10: You know, as you mentionure that, you know Cohen, see the market in channel that no, is around the 300 media on the UN and you would covers on the Gamble like the bubbles. That's six kind of media to one periia. That's that's you know. Put the water for coln sebut, for the see the colhn rope. That's the anual verter. Support her 500 of media.

Speaker 23: On the youngest.

Speaker 24: And you could cover for the GM MO, maybe bubbles, that's the six kind of me to one perithat that's, that's be. You may put the water coln seed, but the for the see the coln rope.

Speaker 24: Most of the annual verteraries ppabout her F behind the pedia.

Gengchen Han: We're the only one hedge products. We are the only one decide to growing with the seed. So we have lots of contracts, you know, to request some kind of collaboration with us I think is much - very exciting I think for this area that - we can see next I mean, not only see them in next coming few years, we'll be you know, we just can't meet the demand for the request for these kind of products. As I think it will be very exciting for Origin definitely for investors.

Speaker 25: You're not, or? People like a weat.

Speaker 19: People like a weat.

Speaker 24: We're talking to just one person, but that's fa be. I mean, I said the you know worry. You say wherery you know there's, and we on the outside that there's no much competition, where the only one such products, where the only one to try to grow in, which is, we know, see them. So we have a lot ofmore contactxt, you know, to do Quest. They know some kind of collaboration with us. I it's much worried, wor. You sayited. I think for this area though you, you can' we kind T see it makes- and I mean not the only see that it makes the com.

Speaker 10: And the you know or people like go we, we talking like just a one person, that that's So be. I mean, I the you know where excited, where you know there's and we on the outside there's no much competition. We re the only one CCH products where the only one to try to grow in with you know, see them. So we have a lot of contteacts you know to do Quest, they know some kind of collaboration with us. I think's much wor where exciting as POS this area that you, you kind, we kind of see it makes- and I mean not the only see, that it makes the coming.

Speaker 26: Few years will be we just can the meet. The demanding for the required for these kind products as. I should know what we wor. Exciting for origin, definitely for inves.

Speaker 8: Few years will be we just cant the meet the demanding for the requestred for these kind products as.

Speaker 23: I should know what we wor. Exciting for origin, definitely for inves.

Speaker 10: I should know what we wor exciting for origin, definitely for invess.

Bill Stein: Thank you very much. Are you going to be available for - to speak to investors more in groups more than in the past I guess would be the question for me?

Speaker 11: Thank you very much again. Are you going to be available or to speak to investors more and groups more than you've been in the past? I guess with be a good question for body.

Gengchen Han: Yes, I think so I would likely you know, due to the pandemic issues in a way in the last three years, basically you can't travel freely sometimes with so much disruption for you know, really daily work. But we'll this is - you can notice, you know, this is the first time I've make the conference call in so many years. Of course I couldn't remember last time was at least five years. So I was likely to communicate with our investors try to get more - any new development and some exciting news to pass throughout the United States as soon as possible.

Speaker 10: Yes I ve seen, So I where I would like to, due to the pandemic issues way in the last of Co three years, basicallyyou.

Gengchen Han: Yes, I think so I would likely you know, due to the pandemic issues in a way in the last three years, basically you can't travel freely sometimes with so much disruption for you know, really daily work. But we'll this is - you can notice, you know, this is the first time I've make the conference call in so many years. Of course I couldn't remember last time was at least five years. So I was likely to communicate with our investors try to get more - any new development and some exciting news to pass throughout the United States as soon as possible.

Speaker 10: No you CAn't. You CAn't travel or free. You know sometimes was just so much. You know disrupion for you know really your. You know tell ily work. You know, but we are, this is a know you CAn't noticejust. You know this is the first time I ll believe at the comfort call you coming. Yes, I could. I couldn't remem a lot time but I be the third years So I work great to. You know, to communicate with, without mostice that as try, you know, to get them more. You know any new development at some, you know.

Speaker 26: You play meals for Po blockket your ice stresss. As soon as possible.

Speaker 26: As soon as possible.

Joe Ramelli: Bill I think, this is Joe. I think thanks for the support and good to hear from you again. I think that we - as Chairman Han said this is the first call and maybe five years, we've got a really exciting story to tell. And we have a new VP of Business Development that actually works out of the New York area Wei Han. And so, we're going to be on the road more. And I think I would anticipate an accelerated pace of news and developments from the company as there's just a lot of great things going on here.

Speaker 10: neals possible blockas soon much possibleyes. Bill I think this show I think thanks for the support we get to hear from me again. I think that we Chairman on said this is the first call and maybe five years we've got a really exciting story to tell and we have a new VP business development that actually works out of new York area weighon. And so we're going to be on on the road more and I think.

Speaker 7: I would anticipate an accelerated pace of news and developments. When the company is, there's just a lot of great things going on here.

Speaker 4: I would anticipate an accelerated pace of news and developments. When the company is, there's just a lot of great things going on herethank you very much. Thank you very much.

Bill Stein: Thank you very much. Thank you very much.

Speaker 27: Thank you very much.

Operator: Thank you and once again, Please press star, then 1, if you would like to ask a question.

Speaker 7: Thank you and once again, Please press star, then 1, if you would like to ask a question.

Operator: All right and we have a question from Howard Yeager with Newbridge Securities

Speaker 1: All right and we all question from the Howard giger with newbrid Securities.

Howard Yeager: Hey guys, hey Joe, hey, Dr. Han. So Joe, I wanted to just ask a couple of questions, you sort of alluded to it when you were closing out on the last question before. But can you comment on any new developments or any new contracts throughout the rest of this year. You think that we can maybe see some insider buying and things of that nature to show the conviction from the company itself into the company. But again, I really wanted to know if you could comment on any new developments or any future contracts if you can or where we are for - the rest of this year?

Speaker 12: yguys, Joe Dr h. So I wanted to just ask a couple of questions. You sort of alluded to it when you were closing out on the last question before, But can you comment on any new developments or any new contracts throughout the rest of this year? You think that we can maybe see some insideror buying and things in that nature to show the conviction from the company itself into the company? But again, I really wanted to know if we could comment on any new developments or any future contracts. If you CAn't, or where we are rest of this year, I'll make a real quick comment and then turn it over to Chairman h. and I think that obviously if you can double the profit margins for an industry, someone would have to be pretty- I want to say stup, but that's not really make the right economic decision to pass on that.

Joe Ramelli: Yes, I'll make a real quick comment and then turn it over to Chairman Han. And I think that obviously if you can double the profit margins for an industry, someone would have to be pretty I don't want to say stupid, but does not really make the right economic decision to pass on that. So as you can imagine, that's a hugely impactful thing to do. And it's a huge, huge - low and low margin business to. So we do have a lot more people coming to us, but and then also - and you mentioned insider buying. I'm not an officer in the company so I don't file, but when you know several months back I was able to buy stock and actually I've had my friends and family buying stock. And so - I'm kind of all in on this if not all in, but you know very excited - about the future here. So I'll turn it over to Chairman Han.

Speaker 11: Obviously if you can double the profit margins for an industry, someone would have to be pretty and it's say stupid, but that's not really make the right economic decision to pass on that. So, as you can imagine, that's a hugely impactful thing to do and it's a huge, huge low and low margin business too. So we do have a lot more people coming to us. But, and then also on the, you mentioned inside your buyingi'm not an Officer in the company So I don't file, But when you, several months back, I I was was able to buy stock and actually have had my friends and family buying stock, and so I'm I'm kind of all in on this- not all in, but you a very, very excited about this, the future here. So I'll turn it over to us.

Speaker 4: So as you can imagine, that's a hugely impactful thing to do and it's a huge, huge low and low margin business too. So we do have a lot more people coming to us. But, and then also on the you mentioned inside or buying, I'm not an Officer in the company So I don't file, But when you, several months back, I I was was able to buy stock and actually have had my friends and family buying stock, and so I'm I'm kind of all in on this- not all in, but you know a very, very excited about this future here. So I'll turn it over to to Chairman hunt.

Speaker 7: To Chairman hunt.

Gengchen Han: Hello yes - as you raised two questions one is the counter corn something like that its right. Now we have actually this for our field - like nutrition enhanced corn as you know NEC corn. Our strategy is not to sell the seeds to the farmers let them produce corn. What our strategy we're not selling seeds we are trying to produce the corn for the seed mills. So that's why we have set up the JV with the seed - new plant company.

Speaker 10: No that's a thisically very true question, why the the counter creroom comes like that say.

Speaker 25: The counter. Cre sound smart like right. Now we have curly this, So see them make a new rking Head of the callin you know and a she callin. Our strategies are not to sayll the seas, put the farmers 11 the produce for the grow, or what? Our strategies? We are not the fanency the word, try to produ CE of the poll for the feed M. So that is why we have set up the ways of the feed, feed the their plant company.

Speaker 19: Now we have curly this, So see them make a new rking Head of the callin you know and a she callin. Our strategies are not to sayll the seas, put the farmers 11 the produce for the grow, or what? Our strategies? We are not the fanency the word, try to produ CE of the poll for the feed M. So that is why we have set up the ways of the feed, feed the their plant company.

Speaker 13: Now we have a curly this, So see them make a new treking ahead of the callin that', S you know, and a she callin.

Speaker 19: Our strategies are not to sayll the seas, put the farmers 11 the produce for the grow, or what? Our strategies? We are not the fanency the word, try to produ CE of the poll for the feed M. So that is why we have set up the ways of the feed, feed the their plant company.

Speaker 13: Our strategies are not to sell the feas. Put the farmers 11 produce for the grou, th or what our strategies? That we are not the fency the were? Try to put you to the poh for the fereedom mills.

Speaker 13: So that's where we've Co sped up with the yearv. We sort the feed, feed that in the plned company.

Gengchen Han: So right this year from it has we had of - let see have made 50,000 more contract already, we got also lot orders, but we can't make the supply yet. So but this year for us is the main challenge is how to increase the seed to meet next year's growing need that's a big thing. I think next year, we'll have lot of seed to grow a lot of the corn to grow no we are not. So we are selling the seeds for the corn hybrid seeds.

Speaker 25: But we have made six thousand the more counter already we got also lot of orders but we CAn't make some supply yet. So but what is this year for for us is the main challenges: how to the increase the seed to meet next year? You know, grow meet, that's the I. over next year we'll have a lot of seed to go, a lot of count go no, not so.

Speaker 13: So well this year from omwhat. It has weak, you know, but she have like of five thousand, the more counter that go. Already we got also a lot of otherers, but we CAn't need some supply yet. So but but this year for for us is the main challenges: how to increase the seed to meet next year. You know, grow meet, that's the I. over next year we'll have a lot of seed, a lot of coun't. No, we're not so.

Gengchen Han: Our GMO seeds are the one note sell seed who the farmers for the NEC corn, because we want to sell nutrition enhanced corn value and different products rather than the seed. The reason is if I sell seed for more details is stake on this GMO probably reach probably one RMB100 million or more this means, you know, for this will produce the NEC corn for the season, but we targeted the product better will be at least a RMB3,000 per mu.

Speaker 13: We are having with see for the mon hybridgen se M O, se what? But the 1, not Sal see to the farmers for the, for the EC con, because we want Sal, the ility as a cohn value add product rather than se the remains for sales, see fromomo attitudes of it. If we judgement, speak fiffely on the peromote. If we have g M, all proly reich power, that 1, one hundred on the peromote, you know this as means, you know. But if we produce?

Speaker 32: Speak fiffely on the peromote. If you have again all properly rich, Bubble that 1, one hundred on the peromote, this as means. But if we produce?

Speaker 25: Where are you cheap?

Speaker 24: Corn for the fieldmma way targeted. The product barrier will be at least three thousand.

Speaker 8: The eassee corn, put the freed way. producted the the product better will be at least a 3000 in the on the problement. So if we can pther, you knowi mean next year, which is for the one hundred.

Gengchen Han: So if we can put you know I mean next year, we just brought 100. As you know we can produce 100,000 mu as you can imagine, easier can calculate or we can have much, much bigger revenue numbers and what we can sell for seeds. I'm not sure that - I answered your question.

Speaker 31: So.

Speaker 24: If we can puther you know.

Speaker 1: I mean next yearu PE, which is for the one hundred.

Speaker 24: I should always end putge of the one thousand more.

Speaker 25: Yes.

Speaker 24: Because you merg, but a.

Speaker 24: easither can coulate our. We can have mar much bigcur Val number on what we can sell for season.

Speaker 13: I Don' know we put it to the 1, So them morethat because you ud, but either cover marking much big number what we kind selves to see, unless you know this know no, that did and and and Dr H and Joe. I had just two more quick questions. Number 1: I guess some of the frustration from my investors and enjoe. You know I've been in this thing for close to six to eight years has been and and I'm very happy with the way everything's going. So I guess one of the other frustrations is everyone seeing the price of corn going through the roof every day and and the stock has been performing. Is you know you would think that the stock would be higher based on what the price of corn is. And then one other quick question. Or after that, if you could ask: now that you guys are really starting to ramp up with the revenue- hopefully we see more contracts and things like that- do you expect to see some coverage from some of these major banks or some banks, or where do you think we are with that?

Howard Yeager: No, that did. And Dr. Han and Joe I had just two more quick questions. Number one, I guess some of the frustration from my investors and Joe, you know, I've been in this thing for close to six to eight years has been and I'm very happy with the way everything's going. So I guess one of the other frustrations is everyone seeing the price of corn going through the roof every day? And the stock has been performing is, you would think that the stock would be higher based on what the price of corn is. And then one other quick question or after that if you could ask - now that you guys are really starting to ramp up with revenue, hopefully we see more contracts and things like that. Do you expect to see some coverage from some of these major banks or some banks or where do you think we are with that. Those are my last two questions? Thank you.

Joe Ramelli: I can handle those Howard. We are talking to some banks about getting coverage. And so you know, it's a process and I don't think it's imminent, but we are working on that. So I look forward to something developing there. And then on the other side, you know, it's a little bit of a head scratcher I mean, if you look at our share price where it is now. It's - obviously as an insider in the company.

Speaker 12: Those on my last two questions. Thank you, can I think I can handle those, Howard. We are talking to some banks about getting coverage and so it's a process and I don't think it's imminent, but we are working on that, So I look forward to something developing there. And then on the other side it's a little bit of a head scratcher. I mean, if you look at our share price where it is now, it's.

Joe Ramelli: You don't want to comment about the valuation of the stock, but we - suffice to say we think it's dramatically undervalued if you just look at not only like. I think investors can do the math on what Chairman Han said ramping up to 100,000 mu, which is the Chinese equivalent of an acre it's smaller than acre, but if you if you look at 100,000 mu that we're going to be able to grow next year.

Speaker 4: Obviously as an insider in the company, you don't want to comment about the valuation of the stock, but we sufficeed it to say we think it's dramatically undervalued if you just look at not only like.

Speaker 8: Not only like.

Joe Ramelli: And just reiterating what Chairman Han said earlier that basically, we get a huge multiple of the market opportunity by not just sowing the seeds to the farmers and letting them kind of make all the profit margin. We saw this market as such a hugely impactful market doubling the profit margins for these feedstock companies, that we wanted to take a piece of that actual final corn product market.

Speaker 4: I think investors can do the math on what Chairman Han said: ramping up to one thousand new, which is the Chinese equivalent of an acre. It's smaller than acre But if you look at one thousand new that we're going to be able to growo next yearand just reiterating what Chairman Han said earlier, that basically we get a huge multiple of the market opportunity by not just selling the seed to the farmers and letting them kind of make all the profit margin. We saw this market as such a hugely impactful market, doubling the profit margins for these feedstock companies, that we wanted to take a piece of that actual final corn product marketand policies in China right now are very accommodating to to being able to do that in contract growing and with our, our JV, with BU Dow feedstock company for instance- the first one we've talked about.

Joe Ramelli: And policies in China right now are very accommodating to being able to do that in contract growing. And with our JV with BaoDao, feedstock company for instance, the first one we've talked about, they're actually supplying all the capital to grow the corn. So we're able to be a 51% owner in the JV and not have to put up capital at risk, really, what we supply is the corn seed, and the technical expertise to help them out in the process.

Joe Ramelli: So you know, if investors can do that math, where they look at 100,000 mu and we're kind of going to be half owners in that product and look at what the revenue potential is. And it's pretty staggering. If you start modeling that out where we could be a year - where we think we will be a year from now. And as Chairman Han said, we have zero competition for that there's nobody else that can do that. So did that Howard did I answer all your questions or did you want to know anything?

Speaker 8: They're actually supplying all the capital of the grow the corn.

Speaker 7: So we're able to be a 51% owner in the JV and not have to put up, put up capital or risk. Really, what we supply is the corn seed and the technical expertise to help them outt in the process.

Speaker 4: They're actually supplying all the capital to grow the cort, So we're able to be a 51% owner in the JV and not have to put up put up capital or risk. Really, what we supply is the corn, cyed and the technical expertise to help them outount in the process.

Speaker 8: So if investors could do that math where they look at one thousand mmu- and we're kind of going to be half owners in that product- and look at what the revenue potential is, and it's pretty staggering if you start modeling that out where we could be a year for to where we think we will be a year from now. As Chairman Han said, we have zero competition for that. There's nobody else that can do that.

Speaker 4: So if investors can do that math, really look at one thousand mmu and- and we're kind of going to be half owners in that product- and look at what the revenue potential is. And it's pretty staggering if you start modeling that out, where we could be a year from where we think we will be a year from now. As Chairman Hans said, we have zero competition for that. There's nobody else that can do thatso.

Speaker 4: So.

Howard Yeager: Yes you did, thank you. No, no, no you did. Thank you very much. Thank you, Dr. Han - excited about the future.

Speaker 3: Did that poard was? Did I answer all your questions or yester there? Thank no no no, you did. Thank you very much. Thank you, Dr lton.

Speaker 33: Thank you, drctor junson.

Speaker 6: Excited about the future.

Joe Ramelli: Great Howard, we really appreciate. It's great to hear somebody that's been with the company for five years and we really appreciate you know, your support and we know the next five years are going to be a lot better than the previous five to understate things.

Speaker 12: Cited about the futurecllas out. We really appreciate. It's great to hear somebody that's been with the company for five years and we really appreciate your support and the next five years are going to be a lot better than the previous five

Speaker 8: To state things.

Operator: Thank you and again, Please press star and then one if you would like to ask a question.

Speaker 3: To state thingsthank you and again. Please press star and then one if you would like to ask a question.

Operator: All right as there is nothing else at the present moment, I would like to return to floor to Chairman Han for any closing comments.

Speaker 1: Is there isn T nothing else at the present moment. I would like to return to Florida, Chairman Han, for any closing comments.

Gengchen Han: Hello, everyone. Yes, thanks very much for your support and attending the conference call. I really appreciate - you're supporting the last few years, and I'm sure you know we are in a very exciting period at this time, I think we'll definitely we'll deliver the results for the company to our investors. Have a good day. Thanks very much.

Speaker 9: yesso. Thanks So very much you for your support. Attended com the call. I really, really appreciate that. You know your supporting in the last couple of years and I'm sure you know well, you know very exciting peri at this time where youing Le will definitely will deliver thought for the company. Put all investors have a good go in sen. very much, Thank you. comference has not included.

Operator: Thank you. The conference has not concluded.

Operator: Thank you for attending today's presentation. You may now disconnect your lines.

Speaker 7: Thank you for attending today's presentation. May now disconnect your lines.