Q4 2024 Origin Agritech Ltd Earnings and Business Update Call
Operator 3: Thank you for standing by, and welcome to the Origin Agritech Fiscal Year 2024 Conference Call. Please note that today's call is being recorded. It is now my pleasure to introduce Matthew Abenante of Strategic Investor Relations.
Speaker Change: Thank you for standing by and welcome to the Origin Agritech Fiscal Year 2024 conference call.
Please note that today's call is being recorded.
Speaker Change: It is now my pleasure to introduce Matthew Abinanti of Strategic Investor Relations.
Matthew Abenante: Thank you, operator, and thanks to all of you for joining us today on the Origin Agritech Fiscal Year 2024 Earnings Conference Call. Joining us on the call today are Mr. Weibin Yan, Chief Executive Officer, and Mr. Patrick Cheng, Chief Financial Officer. The format of our call will consist of a company update provided by Mr. Yan and Mr. Cheng, followed by a question and answer session addressing the questions submitted by investors. We thank everyone for submitting these questions. Before we begin, I would like to remind our listeners that any statements on this call that are not historical facts are forward-looking statements. Today's call includes forward-looking statements that address expected future business and financial performance and financial conditions and contain words like expect, anticipate, intend, plan, believe, seek, will, would, target, and similar expressions, and variations. Forward-looking statements address matters that are uncertain.
Matthew Abinanti: Thank you operator and thanks to all of you for joining us today on the Origin Agritech fiscal year 2024 earnings conference call.
Speaker Change: Joining us on the call today are Mr. Wei Bin Yan, Chief Executive Officer, and Mr. Patrick Cheng, Chief Financial Officer.
Speaker Change: The format of our call will consist of a company update provided by Mr. Yan and Mr. Chang followed by a question and answer session addressing the questions submitted by investors.
We thank everyone for submitting these questions.
Speaker Change: Before we begin, I would like to remind our listeners that any statements on this call that are not historical facts are forward-looking statements.
Speaker Change: Today's call includes forward-looking statements that address expected future business and financial performance and financial conditions.
Speaker Change: and contain words like expect, anticipate, intend, plan, believe, seek, will, would, target, and similar expressions and variations.
Speaker Change: Forward-looking statements address matters that are uncertain. Forward-looking statements are not guarantees of future performance and are based on assumptions and expectations which may not be realized.
Matthew Abenante: Forward-looking statements are not guarantees of future performance and are based on assumptions and expectations which may not be realized. They are based on management's current expectations, assumptions, estimates, and projections about the company and the industry in which the company operates, but involve a number of risks and uncertainties, many of which are beyond the company's control.
Speaker Change: They are based on management's current expectations, assumptions, estimates, and projections about the company and the industry in which the company operates, but involve a number of risks and uncertainties, many of which are beyond the company's control.
Matthew Abenante: Some of the important factors that could cause the company's actual results to differ materially from those discussed in forward-looking statements are failure to develop and market new products and optimally manage product life cycles, ability to respond to market acceptance, rules, regulations, and policies affecting our products, failure to appropriately manage process safety and product stewardship issues, changes in laws and regulations or political conditions, global economic and capital markets conditions such as inflation, interest, and currency exchange rates, business or supply disruptions, natural disasters and weather events and patterns, ability to protect and enforce the company's intellectual property rights, and separation of underperforming or non-strategic assets or businesses. The company undertakes no duty or obligation to publicly revise or update any forward-looking statements as a result of future developments or new information or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.
Speaker Change: Some of the important factors that could cause the company's actual results to differ materially from those discussed in forward-looking statements are failure to develop and market new products and optimally manage product life cycles.
Speaker Change: Ability to respond to market acceptance, rules, regulations, and policies affecting our products.
Speaker Change: Failure to appropriately manage process safety and product stewardship issues, changes in laws and regulations or political conditions.
Speaker Change: Global economic and capital markets conditions, such as inflation, interest, and currency exchange rates.
business or supply disruptions,
natural disasters, and weather events and patterns.
Speaker Change: ability to protect and enforce the company's intellectual property rights, and separation of underperforming or non-strategic assets or businesses.
Speaker Change: The company undertakes no duty or obligation to publicly revise or update any forward-looking statements as a result of future developments or new information or otherwise should circumstances change except as otherwise required by securities and other applicable laws.
Matthew Abenante: Although the company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. With that, I would like to turn over the call to our first speaker, Mr. Weibin Yan, Chief Executive Officer of Origin Agritech. Hello, Mr. Yan.
Speaker Change: Although the company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results.
Speaker Change: You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.
Speaker Change: And with that, I would like to turn over the call to our first speaker, Mr. Wei-Bin Yan, Chief Executive Officer of Origin Agritech. Hello, Mr. Yan.
Weibin Yan: Thank you, Matthew, and thank you all for joining us. As the new CEO of Origin Agritech, I'm excited to share our vision and strategic direction. Let me start by acknowledging where we are today. Origin Agritech has achieved several significant milestones in 2024. We saw revenue growing 24.6% to $16.2 million. This growth was primarily driven by the high volume of the corn seed sales as a result of improving our market competitiveness. In May 2024, we received a GMO safety certificate for our BBL2-2 transgenic maize, which contains at once the insect resistance and the herbicide-tolerant traits. This technology stack provides robust protection against major pests like corn borers and leaf beetles, which offer 4 times glyphosate tolerance. We already have 35 varieties successfully back crossed with this trait.
Thank you. Yep.
Speaker Change: So, thank you, Matthew, and thank you all for joining us. As the new CEO of Origin AgriTech, I'm excited to share our vision and strategic direction.
Let me start by acknowledging where we are today.
Speaker Change: Origin Agrotech has achieved several significant milestones in 2024, with our revenue growing 24.6% to $16.2 million.
Speaker Change: This growth was primarily driven by the high volume of the colon seed cells, as a result of improving...
Bye, love you too.
Comfort you too
Speaker Change: In May 2024, we received a GMO safety certificate for our BBL2-2 transgenic mates.
which contains advanced insect-resistant and hypocyte-tolerant traits.
Speaker Change: This technology stack provides robust protection against major pests like corn borers and leaf beetles, which offer 4 times chinese faucet tolerance.
We already have 35 spiroides successfully by-crossed with this trait.
Weibin Yan: Another major achievement was our publication in Nature, which described our breakthrough in maize induction line using editing technology. Maybe you already know that we've established the world's first efficient genetic transformation system for maize induction line Hi3. This isn't just an academic achievement. It has real commercial implications, allowing us to develop improved traits like better leaf angles, enhanced drought resistance, and stronger lodging resistance in a fraction of the time compared to traditional breeding. To accelerate the commercialization of these technologies, we established the Origin Marker Biological Breeding Service Consortium in October 2024. We are already working with thousands of our breeding companies across China to improve over 100 corn varieties. This consortium approach allows us to maximize the impact of our innovations while creating new revenue streams. Looking ahead, we have a clear three-phase strategy for fiscal years 2024 to 2026.
Speaker Change: Another major achievement was our publication in Later, which described our breakthrough in MITE's induction line.
Speaker Change: gene editing technology. Maybe you already know that. We've established the world's first efficient genetic transformation system for mite introduction line type three.
This isn't just an academic.
achievement. It has a real commercial implication.
Allowing us to develop and improve.
Speaker Change: Plates, like petal leaf angles, enhance the draw resistance and strong low-chain resistance in a fraction.
of the time compared to traditional braiding.
Speaker Change: To accelerate the commercialization of these technologies, we established the OriginMarker Biological Breeding Service Consulting in October 2024.
Speaker Change: We are already working with thousands of breeding companies across China to improve our one country's convalescence.
Speaker Change: This consulting approach allows us to maximize the impact of our innovations while creating new revenue streams.
Looking ahead, we have a clear three-fight strategy.
Speaker Change: For fiscal years 2024 to 2026, our immediate focus is on stabilization, achieving cash flow breakeven for our operations.
Weibin Yan: Our immediate focus is on stabilization, achieving cash flow breakeven from operations, improving our industrial systems, and resolving historical challenges while maintaining strong operations. From 2027, we aim to establish ourselves as one of China's 6 leading corn companies, with leading research capabilities and the highest seed quality and operational compliance reputations. Compliances are becoming more and more important today. By 2030 to 2032, which is the third stage, our goal is to become one of China's top 5 corn seed companies and a leading global biotech seed company, with 20% of our revenue coming from overseas markets. We are strengthening our core infrastructures, expanding our technology platform capabilities, and exploring new opportunities in nutritional foods and related areas. With our 4,000 hectare seed plantation areas and advanced processing equipment, our Xinjiang production facility gives us the scale to support our growth. I'm particularly excited about our new product pipelines.
Speaker Change: improving our industrial systems, and resolving historical challenges while maintaining strong operations.
Speaker Change: From 2027, we aim to establish ourselves as one of China's
Speaker Change: Six leading companies with leading research capabilities under the highest seat quality and operational compliance reputation. Now compliance is becoming more and more important today.
Speaker Change: By 2032, which is the third stage, our goal is to become one of China's
Speaker Change: top five corn seed companies and a leading global biotech seed company with 20% of our revenue coming from our seed market
Speaker Change: We are strengthening our core infrastructures, expanding our technology platform capabilities, and exploring new opportunities in nutritional foods and related areas.
Speaker Change: With over 4,000 hectares of seed plantation areas and advanced processing equipment, our Xinjiang production facility gives us the scale to support our growth.
Speaker Change: I'm particularly excited about our new product pipeline. We have eight new varieties launching in 2025, targeting different regions.
Weibin Yan: We have eight new varieties launching in 2025, targeting different regions, and several more in advanced trials. This diverse portfolio addresses various market needs, from high-density planting to specific regional adaptations. Perhaps most importantly, we'll assist an outstanding leadership team. Dr. Gengchen Han remains to be the Chairman of the Board, and I'm personally taking the CEO role. This brings continuity and deep industrial expertise with and new knowledge. We will add experienced executives across research and development, production, quality control, and corporate development. Origin Agritech began as a pioneer in China's corn seed industry. Today, we are transforming into a global agriculture technology leader, combining biotechnology innovation with conventional breeding expertise. We are not just developing better seeds, but advancing sustainability, agriculture, and food security. Our vision is to become the most trusted, high-tech seed and agriculture company for farmers and the society.
Speaker Change: and several more in advanced trials. This diverse portfolio addresses various marketing needs, from high-density planting to specific regional adaptations.
Speaker Change: but perhaps most importantly will assist an outstanding leadership team. Dr. Gengchang Han remains to be the chairman of the board.
Answer, I'm personally taking the CEO role.
This three continuality.
On the deep industrial expertise.
Speaker Change: With new knowledges, we will add experienced executives across research and development, production, quality control, and corporate development.
Speaker Change: OriginAgrotech began as a pioneer in China's corn seed industry. Today, we are transforming into a global agriculture technology leader.
Combining biotechnology innovation with conventional operating expertise.
Speaker Change: We are not just developing better seeds, but advancing sustainability, agriculture, and food security.
Speaker Change: Our vision is to become the most trusted high-success agricultural company for farmers and the society.
Weibin Yan: With our strengthened team, advanced technology platform, and a clear strategic roadmap, I'm confident we can achieve this goal while delivering substantial value to our shareholders. Speaking of our strengthened team, I will pass the call over to our new Chief Financial Officer, Patrick Cheung, to give our financial results. Please, Patrick.
Speaker Change: With our strengthening advanced technology platform and a clear strategic roadmap, I am confident we can achieve this goal while delivering substantial value to our shareholders.
Speaking of our strength in the team,
Speaker Change: I will pass the call over to our new Chief Financial Officer Patrick Cheung to give our financial results. Please, Patrick.
Patrick Cheng: Thank you, Mr. Yan. As the new CFO of Origin Agritech, I'm pleased to present our financial results for fiscal year 2024, which demonstrate both our progress and the investment we are making in our future growth. Let me start with our top-line performance. For fiscal year 2024, we achieved a revenue of $16.2 million, representing a 24.6% increase from $30 million in fiscal year 2023. This growth was primarily driven by the higher volumes for corn seeds as a result of the improvement of market competitiveness of ourselves. Our general and administrative expenses increased to $5.1 million from $1.99 million, primarily due to necessary investment in talent, systems, and professional services to support our growth initiatives. We have also increased our R&D investment to $1.5 million, up from $1 million as we continue to advance our biotechnology platforms and develop new seed varieties.
Thank you, Mr. Yen.
Speaker Change: As the new CFO of Origin Architects, I'm pleased to present our financial results for fiscal year 2024.
Speaker Change: which demonstrate both our progress and the investment we are making in our future growth.
Speaker Change: Let me start with our top-line performance for fiscal year 2024.
We achieved a revenue of $16.2 billion USD.
Speaker Change: Representing a 24.6% increase from $30 million in fiscal year 2023.
Speaker Change: This growth was probably driven by the higher volumes for corn seeds.
Speaker Change: as a result of the improvement of market competitiveness of ourselves.
Thank you.
Speaker Change: Our general and administrative expenses increased to $5.1 million from $1.99 million.
Speaker Change: primarily due to necessary investment in talent systems and professional services to support our growth initiatives.
Speaker Change: We have also increased our R&D investment to $1.5 million, up from $1 million.
Speaker Change: As we continue to advance our biotechnology platforms and develop new seed varieties.
Patrick Cheng: In terms of bottom line performance, our net income from continuing operation was $2.7 million. While this is lower than the $8.7 million reported in fiscal year 2023, it's important to note that the prior year's figure included a greater contribution from the one-time gains from subsidiary disposals. We had a net income attributable to Origin of $3 million, compared with $7.7 million in the prior year, for the same reasons as I just mentioned. Turning to our liquidity position, we ended the year with cash and cash equivalents of $1.2 million compared to $3.3 million at the same period a year ago. Our cash flow metrics reflect the investment we're making in the business. Operating cash flow usage increased to $2.1 million, primarily due to working capital investments to support our growth.
Speaker Change: In terms of bottom line performance, our net income from continuing operation was $2.7 million.
Speaker Change: while this is lower than the 8.7 million dollars reported in fiscal year 2023.
Speaker Change: It's important to note that the prior year's figure included a greater contribution from the one-time games.
from subsidiary disposals.
Speaker Change: We had a net income attributable to origin of $3 million compared with $7.7 million in the prior year, for the same reasons as I just mentioned.
Speaker Change: Turning to our liquidity positions, we ended the year with cash and cash equivalents of $1.2 million compared to $3.3 million at the same period a year ago.
Speaker Change: Our cash flow metrics reflect the investment we're making in business.
Operating cash flow usage increased to $2.1 million.
primarily due to working capital investments to support our growth.
Patrick Cheng: On our financing activities provided $0.6 million in cash flow compared to $3.2 million in the prior year. The company did not issue or sell ordinary shares during the fiscal year ended 30 September 2024. Looking ahead, we have a clear financial strategy aligned with our three-phase business plan. In the near term, our focus is on achieving cash flow breakeven while maintaining necessary investment in R&D and operational improvements. We are implementing enhanced cost control and working capital management practices while ensuring we maintain investment in critical growth initiatives. For the medium term, we are focused on driving profitable growth through commercialization of our biotechnology innovation and expansion of our seed business. We expect to see improving margin as we scale these operations. In long term, our goal is to build a sustainable, profitable business model that combines stable seed revenues with high-margin biotechnology licensing and service fees.
Speaker Change: And on our financing activities, provided $0.6 million in cash flow compared to $3.2 million in the prior year.
Speaker Change: The company did not issue or sell ordinary shares during the fiscal year ended September 30, 2024.
Speaker Change: Looking ahead, we have a clear financial strategies aligned with our three phase business plan. In the near term, our focus is on achieving cash flow break event while maintaining necessary investment in R&D and operational improvements.
Speaker Change: We are implementing enhanced cost control and working capital management practices while ensuring we maintain investment in critical growth initiatives.
Speaker Change: For the medium term, we are focused on driving profitable growth through commercialization of our biotechnology, innovation and expansion of our seed business.
Speaker Change: We expect to see improving margin as we scale these operations.
in long term.
Speaker Change: Our goal is to build a sustainable, profitable business model that combines stable seed revenues with high margin biotechnology licensing and service fees.
Patrick Cheng: We have also identified several operational efficiency opportunities, particularly in our Xinjiang facilities, which should help improve our margin over time. Our new variety launching in 2025 are expected to contribute positively to our revenue growth and profitability. In conclusion, while we're making necessary investment for future growth, we are doing so with financial discipline and a clear path to improve the profitability. Our balance sheet is improved, our cost structure is become more efficient, and we have the financial flexibility to execute our financial plans. Thank you for your attention. Matthew, we can start the question and answer session, please.
Speaker Change: We have also identified several operation efficiency opportunities, particularly in our Xinjiang facilities, which should help improve our margin over time.
Additionally, our new variety launching in 2025, I expect it
to contribute positively to our revenue growth and profitability.
Speaker Change: In conclusion, while we are making necessary investments for future growth, we are doing so with financial discipline and a clear path to improve the profitability.
Speaker Change: Our balance sheet is improved, our cost structure has become more efficient, and we have the financial flexibility to execute our financial plans.
Thank you for your attention.
Matthew, we can start the question and answer session, please.
Matthew Abenante: Thank you. Our first question that were submitted by investors. Again, thank you to investors for submitting your questions. Why has the gross margin in the past 2 years been significantly lower than in the early 2000s, in particular between 2004 and 2005?
Speaker Change: Thank you. Our first question from that were submitted by investors and again thank you to investors for submitting your questions.
Speaker Change: Why has the gross margin in the past two years been significantly lower than in the early 2000s, in particular between 2004 and 2005?
Weibin Yan: Thank you for this insightful questions about our historical margin trends. Difference in gross margins between this period reflects both industrial evolution and our strategic positioning for future growth. You see, in the early 2000s, the Chinese seed industry was in a different phase, with fewer competitors and a lower market saturation. Today's environment is more competitive, but we're executing a deliberate strategy that we believe will return us to and potentially exceed this historical margin through three key initiatives. First, our BBL2-2 GMO corn varieties, which received safety certificate in May 2024, command premium pricing, with 35 varieties already incorporating this trait and more in development. We expect to see margin expansion as this product enter the market. Second, our gene editing breakthrough published in Nature enables to improve the varieties much faster and at a lower cost than traditional breeding.
Thank you.
Speaker Change: Thank you for these insightful questions about our historical modern trends.
Speaker Change: The difference in growth margins between these periods reflects both industrial evolution and our strategic positioning for future growth.
Speaker Change: You see, in the early 2000s, the Chinese seed industry was in a different phase, with fewer competitors and a lower market saturation.
Speaker Change: Today's environment is more competitive, but we are executing a deliberate strategy that
We believe
Speaker Change: will retain us to and potentially exceed the historical margin through three key initiatives.
Speaker Change: Third, our BBL2-2 GMO corn varieties, which received safety certificate in May 2024, command premium pricing.
Speaker Change: With 35 varieties already incorporating this trait and more in development, we expect to see margin expansion as this product enters the market.
Second, our chain additive breakthrough, published in Nature, enables
Speaker Change: to develop improved varieties much faster and at a lower cost than traditional breeding.
Weibin Yan: This technology advantage, combined with our Origin Marker Biological Breeding Service Consortium, is creating high-margin revenue streams through licensing and services that were not available in the 2000s. Third, we invested significantly in modernizing our Xinjiang facility, which can process 75,000 tons annually. While this investment impacted gross margins, they give us economies of scale that will improve profitability as the volume increases. Looking ahead, we expect our margins to improve substantially as these initiatives become more mature. Unlike the 2000s, when margins were purely from seed sales, our future margin profile will benefit from a mix of premium seed products and the high-margin biotechnology services and licensing fees. This will diversify our revenue stream, which not only helps us recover historical margin levels, but establishes a more sustainable and profitable business model for the long term.
Speaker Change: This technology advantage, combined with our OriginMarker Biological Breeding Service Consulting,
is creating high-margin revenue streams through licensing and services.
that were not available in the 2000s.
Third, we will invest significantly in modernizing our Xinjiang facility.
Speaker Change: which can process 75,000 tons annually. All of this investment impacted the growth in the margins that give us economic of scale that will improve profitability as the volume increase.
Speaker Change: Looking ahead, we expect our margins to improve substantially as these initiatives become more mature.
Unlike the 2000s.
Speaker Change: When margins were purely from seed sales, our future margin profile will benefit from a mix of premium seed products and high margin biotechnology services.
and licensing fees.
This will diversify our revenue stream.
which not only help us recover historical margin levels,
Speaker Change: but it establishes a more sustainable and profitable business model for the long term.
Matthew Abenante: Thank you. Our next question: is the company on track to meet revenue forecasts that were shared back in June 2024?
Thank you.
Speaker Change: Thank you. Our next question is the company on track to meet revenue forecast that were shared back in June 2024? Thank you for your question.
Weibin Yan: Thank you for your question. Under our new management team, we have developed a comprehensive 8-year strategy roadmap that supersedes previous guidance. We believe this 3-phase strategy provides a clear and more actionable framework for investors to understand our path forward. In phase 1, covering 2024 to 2026, we are focused on fundamental strengthening of our business, achieving cash flow breakeven, and optimize our operations. The 24.6% revenue growth we achieved in fiscal year 2024 demonstrates early progress, we are more focused on building a sustainable foundation than meeting short-term targets. Looking further ahead, phase 2 and 3 outline our path to becoming first top 6 and ultimately top 5 corn seed companies in China. These ambitious but achievable goals are supported by concrete assets and the capabilities.
Speaker Change: Under our new management team, we have developed a comprehensive 8-year strategy roadmap that supersedes previous guidance. We believe this 3-phase strategy
Speaker Change: provides a clear and more actionable framework for investors to understand our path forward.
In Phase 1, covering 2024 to 2026.
We are focused on fundamental strengthening of our business.
achieving cash flow breakeven and optimize our operations.
Speaker Change: The 24.6% revenue growth we achieved in fiscal year 2024 demonstrates early progress, but we are more focused on building a sustainable foundation than meeting short-term targets.
Bye.
Speaker Change: Looking further ahead, Phase II and III ultimate our path to becoming a
Speaker Change: First, a top six and ultimately a top five corn seed companies in China.
It's ambitious.
but achievable goals are supported by concrete assets.
Weibin Yan: Our newly upgraded Xinjiang facility, our breakthrough gene editing technology published in "Nature", our BBL2-2 GMO corn varieties, and other varieties and GMOs on the pipeline. Rather than focusing on profit projections, we invite investors to evaluate us on our execution of this strategic roadmap. We believe this provides a more meaningful framework for measuring our progress and potential. Each quarter, we'll update you on our advancements through this phase and the specific milestones we are achieving along the way. Thank you.
Speaker Change: capabilities. Our newly upgraded thin-gel facility, our breakthrough gene editing technology published in Nature, our
Speaker Change: BBL222 gmode home varieties and other varieties and gmodes on the pipeline.
Speaker Change: Rather than focusing on past projections, we are inviting Vestas to evaluate us on our execution of this strategic roadmap.
Speaker Change: We believe this provides a more meaningful framework for measuring our progress and potential.
It's called a...
Speaker Change: We will update you on our advancement through this phase and the specific milestones we are achieving along the way.
Matthew Abenante: Thank you. Our next question: will you please consider changing the fiscal year to a calendar year to show annual results to investors better? The planting and harvesting season and when results are reported do not make much sense currently.
Speaker Change: Thank you. Our next question, will you please consider changing the fiscal year to a calendar year to show annual results to investors better? The planting and harvesting season and when results are reported do not make much sense currently.
Patrick Cheng: Thanks, Matthew. You raise a valid point about better matching our reporting to natural agricultural cycles. We agree that this could provide more clarity to investors about our seasonal business patterns. As part of our broader corporate governance improvements under the new management team, we are continually evaluating several reporting optimizations, including this potential change. However, such a transition requires careful planning to ensure smooth financial reporting and compliance with both US and Chinese regulations. We will update investors if we decide to move forward with this change. Thank you.
Bye-bye.
Speaker Change: Thank you, Matthew. You raised a valid point about better matching our reporting to natural agricultural cycles.
Speaker Change: We agree that this could provide more clarity to investors about our seasonal business patterns.
Speaker Change: as part of our broader corporate governance improvements under the new management team.
Speaker Change: We are continually evaluating several reporting optimizations, including this potential change.
Speaker Change: However, such a transition requires careful planning to ensure smooth financial reporting and compliance with both U.S. and Chinese regulations.
Speaker Change: We will update you if you decide to move forward with this change.
Matthew Abenante: Thank you. What plans do you have to scale up NEC to a level where you can meet the demand of purchasers like Muyuan in the past?
Speaker Change: Thank you. Thank you. What plans do you have to scale up NEC to a level where you can meet the demand of purchasers like Muyon in the past?
Weibin Yan: Thank you. Our Xinjiang facility actually gives us significant capacity to meet a large seed demand from our customers like Muyuan. Our facility has a seed plantation of 4,000 hectares and an annual processing capacity over 75,000 tons. We're able to take a systematic approach to scaling up our NEC production while keeping our limited resources at the moment on the breakthroughs of GMO and gene editing, which made us more valuable and competitive in the seed industry. I have talked to the board to suspend the NEC business of the company in order to all focus on the biotechnology commercialization and seed sales expansion. I thought our new prioritization of the business will enable the company to gain a better position in the biotechnology and the seed competition, which is more value added than NEC business, and bring better value to the society and our shareholders.
Speaker Change: Thank you. Our Xinjiang facility actually gave us a significant capacity to meet a large-scale demand from our customers like Muyuan.
Speaker Change: Our facility has a seed plantation of 4,000 hectares and an aerial processing capacity of 75,000 tons.
However, we're able to
Speaker Change: to take a systematic approach to scaling up our NEC production.
Speaker Change: Well, given our limited resources at the moment, aren't the breakthroughs of GMO-O and the gene editing
Speaker Change: which made us more valuable and competitive in the seeding industry.
Speaker Change: I have talked to the board to suspend the NEC business of the company in order to all focus on the biotechnology commercialization and seed sales expansion.
Speaker Change: As part of a new prioritization of the business, we will enable the company to gain a further position in the biotechnology undersea competition, which is more value-added than an NEC business.
and bring better value to the society and our shareholders.
Weibin Yan: This is the situation. Thank you, Matthew.
So this is the situation. Thank you, Matthew.
Matthew Abenante: Thank you. Our next question: Your gene editing breakthrough published in Nature seems significant. Can you explain how this translates to commercial value?
Speaker Change: Thank you. Our next question, your gene editing breakthrough published in Nature seems significant. Can you explain how this translates to commercial value?
Weibin Yan: Oh, good question. Thank you. Absolutely. Our gene editing system for corn induction line is a game-changing technology, where others typically need 3 to 4 years for trait improvement through traditional biocrossing. We can now achieve precise genetic modifications in just 1 year. This means we can bring improved varieties to market much faster and at a lower cost. We've already developed more than 10 maize lines with enhanced traits like better drought resistance and improved plant architecture. This technology is so valuable that we are now partnering with thousands of breeding companies across China to improve our 100 corn varieties. This is more effective. Thank you.
Oh, good question. Thank you.
Speaker Change: Absolutely, our gene editing system for corn introduction line is a game-changing technology, while others typically need it.
Speaker Change: three to four years for trade improvement through traditional bike crossing.
Speaker Change: We can now achieve precise genetic modifications in just one year. This means we can bring improved oral varieties to the market much faster and at a lower cost.
Speaker Change: We've already developed more than 10 mite lines with enhanced tweezers.
like better draw the resistance and improve the plant architecture.
Speaker Change: This technology is so valuable that we are now partnering with dozens of breeding companies across China to improve.
over 100 common varieties.
This is a more effect. Thank you.
Matthew Abenante: What differentiates Origin from other agricultural biotechnology companies in China?
Speaker Change: And what differentiates Origin from other agricultural biotechnology companies in China?
Weibin Yan: Yes, another good question. We have a unique triple advantage. First, we are the only Chinese seed company with both GMO and gene editing capabilities at this advanced level, demonstrated by our GMO safety certificate BBL2-2 and our later publication. Second, we have end-to-end capabilities from research through production, with our state-of-the-art Xinjiang facility of processing 75,000 tons annually capability. This will enable us to gain a stronger position than other seed biotechnology companies. Third, we have an extensive germplasm bank and breeding programs that have been developed in the past 25 years. This compilation allows us to develop breakthrough technologies and quickly incorporate them into commercial production. Yeah. Thank you.
Yeah, a lot of good question.
Speaker Change: We have a unique people advantage. First, we are the only Chinese seed company with both GMO and gene editing capabilities.
Speaker Change: at the advanced level, demonstrated by our GMO Safety Certificate BBL222, and our later publication.
Speaker Change: Second, we have end-to-end capabilities for research through production, which our state-of-the-art Xinjiang facility.
of processing 75,000 tons annually capability.
Speaker Change: This will enable us to gain a stronger position than other seed biotechnology companies.
Third, we have an extensive gemplasm bank and brazing program.
Speaker Change: that have been developed over in the past 25 years. This compilation allows us to develop breakthrough technologies and quickly incorporate them into commercial production. Yeah, thank you.
Matthew Abenante: The next question: Your 8-year strategy seems quite ambitious. What gives you confidence you can achieve these goals?
Speaker Change: The next question, your eight-year strategy seems quite ambitious. What gives you confidence you can achieve these goals?
Weibin Yan: Okay. Thank you. You see, we have four key advantages that make our goals achievable. First, GMO. We just received the GMO safety certificate for our BBL2-2 corn, which has already been incorporated into 35 varieties. Second, gene editing. Our gene editing platform is providing transformation as validated by Nature. Third, service platform. We established the Origin Marker Biological Breeding Service Consortium, which is already generating revenue through partnerships. Fourth, seed platform. Origin has a good reputation in Chinese corn seed market for its high quality, extensive network of distribution partners, research partners, modern seed processing facilities, and rich germplasm resources. It's a full cycle seed company. Of course, finally, we have a new management team with deep industrial expertise. We added key executives across research and development, production, and sales. Most importantly, we've already seen the results.
Okay.
Thank you.
Speaker Change: You see, we have four key advantages that make our goals achievable. First, GMO.
Speaker Change: We just received the GMO safety certificate for our BBL22 cone, which has already been incorporated into solid-fiber rodents.
Second, gene editing. Our gene editing platform is providing transformation.
As what is stated by nature.
Speaker Change: Third, service platform. We established the OriginMarket Biological Breeding Service Consulting, which is already generating revenue through a partnership.
Fourth, SEAD platform.
Speaker Change: Origin has a good reputation in Chinese corn seed market for its high quality and extensive network of distribution porous and research porous.
Speaker Change: Modern seed processing facilities and rich germplasm resources is a full-cycle seed company.
Speaker Change: Of course, finally, we have a new management team with deep industrial expertise.
Speaker Change: We added key executives across research and development, production and sales.
Most importantly,
Speaker Change: We've already seen the results, 25% revenue growth this year, reduced losses on the eight new varieties ready for launching in 2025.
Weibin Yan: 25% revenue growth this year, reduced the losses, and eight new varieties ready for launching in 2025. Thank you.
Matthew Abenante: Here's our last question: How do you see the Chinese agricultural biotechnology market evolving?
Thank you.
Speaker Change: And here's our last question. How do you see the Chinese agricultural biotechnology market evolving?
Weibin Yan: Thank you. China is at an inflection point in the adoption of agricultural biotechnology. The government strongly supports GMO commercialization and in a way to bring technologies to ensure food security. We are perfectly positioned to capitalize on this shift. We have approved GMO traits, advanced gene editing capabilities, and the production facilities to scale quickly. Our position as the first Chinese seed company to achieve many biotechnology milestones give us a first mover advantage as the market develops. Thank you, Matthew.
Thank you. China is at a
and inflection point in the adoption of agricultural biotechnology.
Speaker Change: The government strongly supports GMO commercialization and innovative breeding technologies to ensure food security. We are perfectly positioned to
Speaker Change: Capture Nights on this shift, we have improved GMO traits, advanced gene editing capabilities under the production facilities to scale quickly.
Speaker Change: So our position as the first Chinese seed company to achieve many biotechnology milestones
Keywords.
Fester Moorer at the Wanage.
as the market develops.
Matthew Abenante: Thank you. As I said, there's no further questions. I'll hand the floor back over to you, Mr. Yan.
Thank you, Matthew.
Speaker Change: Thank you, and as I said, there's no further questions, so I'll hand the floor back over to you, Mr. Yan.
Weibin Yan: Thank you. Thank you, Matthew. Thank you everyone for participating on today's call. Before we end our call, I would like to thank you for your continuous support and belief in Origin Agritech. We have made remarkable strides in the past years in advancing our groundbreaking agricultural technologies. In closing, I want to reiterate that we are committed to enhancing shareholder value and achieving a fair market valuation that reflects the true potential of our company. Thank you once again for joining us today, and we look forward to sharing more of our journey with you in the coming months. Thank you.
Oh, thank you. Thank you, Matthew.
And thank you everyone for participating on today's call.
Speaker Change: Before we end our call, I want to thank you for your continuous support.
Speaker Change: on the belief in origin algorithm. We have made remarkable strides in the past years in advancing our groundbreaking agriculture technologies.
Speaker Change: In closing, I want to reiterate that we are committed to enhancing shareholder value and achieving a fair market valuation that reflects the true potential of our company.
Speaker Change: Thank you once again for joining us today, and we look forward to sharing more of our journey with you in the coming months. Thank you.
Operator 3: Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.
Speaker Change: Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.