Origin Agritech Reports Fiscal Year End 2023 Results

Rhea-AI Summary

Origin Agritech Ltd. (NASDAQ: SEED) reported net income of RMB 120 million (US$ 16.7 million) for the fiscal year ended September 30, 2023, compared to RMB 2.3 million in fiscal year 2022. Revenue was RMB 93.3 million (US$13.0 million), an increase of RMB 40.7 million over the prior fiscal year. However, the company had a loss from operations of RMB 14.5 million (US$ 2 million). Total assets increased to RMB 303.6 million (US$42.3 million) from RMB 136 million, with cash and cash equivalents of approximately RMB 23.7 million (US$3.3 million) as of September 30, 2023. Total shareholders' equity was RMB 12.8 million (US$1.8 million) as of September 30, 2023.

Insights

Financial Analyst

The reported financial results of Origin Agritech Ltd. indicate a significant increase in net income and revenue, which suggests a strong year-over-year performance. The company's ability to grow its net income from RMB 2.3 million to RMB 120 million reflects a robust operational efficiency and successful market penetration, particularly with their new hybrid products. However, the loss from operations of RMB 14.5 million amidst this revenue increase raises questions about the scalability of their current business model and the management of operating expenses which have risen by RMB 2.6 million.

Investors should note the substantial growth in total assets, from RMB 136 million to RMB 303.6 million, which may be indicative of strategic investments or acquisitions, such as the sale of a subsidiary mentioned. This asset growth, alongside a stable cash reserve, could position the company favorably for future investments and development. Nevertheless, the relatively low shareholders' equity at RMB 12.8 million warrants a closer examination of the company's capital structure and potential dilution effects.

Market Research Analyst

The agricultural technology sector is becoming increasingly competitive, with innovation as a key driver for growth. Origin Agritech's focus on their 'Green Pass' facility in Xinjiang and the development of new hybrids appears to have paid off, resulting in a notable increase in revenue. This alignment with market demand for advanced agricultural technologies and high-performance crops is essential for maintaining a competitive edge.

However, the broader market implications of Origin's financial results may hinge on the company's ability to manage its operational costs and improve its profit margins. The reported loss from operations suggests that while the top-line growth is strong, there may be underlying inefficiencies or high costs associated with the rapid expansion that need to be addressed. Investors should consider the potential for Origin to leverage its increased assets and revenue to optimize operations and achieve sustainable profitability in the long-term.

Agricultural Technology Expert

Origin Agritech's financial results reflect the growing importance of agricultural technology in enhancing crop yields and quality. The 'Green Pass' certification is a significant achievement, indicating compliance with stringent environmental and agricultural standards. This certification, along with the company's successful introduction of new hybrids, is likely contributing to the increased market share and customer trust.

Looking at the industry, the investment income from the sale of a subsidiary could be indicative of strategic portfolio realignment, allowing Origin to focus on core competencies and potentially invest in research and development. As the agricultural technology sector evolves, continuous innovation and adaptation to market needs are crucial. The company's substantial asset increase and cash reserves suggest a readiness to invest in these areas, which could have positive long-term implications for its competitiveness and market positioning.

BEIJING, Jan. 8, 2024 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), a leading Chinese agricultural technology company, today announced results for the fiscal year ended September 30, 2023. 

The Company reported net income from continuing operations for the fiscal year ended September 30, 2023 of RMB 120 million (US$ 16.7 million), compared with net income from continuing operations of RMB 2.3 million in fiscal year 2022. For the fiscal year ended September 30, 2023, revenue was RMB 93.3 million (US$13.0 million), compared to RMB 52.6 million for the fiscal year ended September 30, 2022. The increase in revenues was mainly due to our operations at our Xinjiang facility that holds our "Green Pass," the strong market performance of our new hybrids, and investment income from the sale of our subsidiary.

Although revenues for the year ended September 30, 2023 were RMB 93.0 million (US$13.0 million), an increase of RMB 40.7 million over the prior fiscal year, the Company had a loss from operations of RMB 14.5 million (US$ 2 million). Overall operating expenses had increased over the prior fiscal year by RMB 2.6 million.

Total assets were RMB 303.6 million (US$42.3 million) for the fiscal year ended September 30, 2023, compared with RMB 136 million for the fiscal year ended September 30, 2022. As of September 30, 2023, and 2022, we had approximately RMB 23.7 million (US$3.3 million) and RMB 17.7 million, respectively, in cash and cash equivalents for continuing operations.

Total shareholders' equity was RMB 12.8 million (US$1.8 million) as of September 30, 2023.

Dr. Gengchen Han, Chairman and CEO of Origin Agritech, commented, "I am pleased to report our 2023 financial results, which underscore our growth and strategic progress. Despite facing operational challenges, our overall financial position remains solid, with a substantial increase in total assets. These results are a testament to our commitment to innovation and excellence in the agricultural technology sector."

About Origin Agritech Limited

Origin Agritech Limited, founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, is a leading Chinese agricultural technology company. In crop seed biotechnologies, Origin Agritech's phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture. Over the years, Origin has established a robust biotechnology seed pipeline including products with glyphosate tolerance and pest resistance (Bt) traits. For further information, please visit the Company's website at www.originagritech.com. The Company also maintains a Twitter account for updating investors on company and industry developments, which is https://x.com/origin_agritech.

Forward-Looking Statements

This communication contains "forward-looking statements" as defined in the federal securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements address expected future business and financial performance and financial condition, 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. 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. 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. 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.

For more information, please contact:

Origin Agritech Limited Contact:
Kate Lang (Mandarin/English)
Director of Investor Relations
Phone: +86 186-1839-3368
Email: bing.lang@originseed.com.cn

Investor Relations Contact:
Matthew Abenante, IRC
President
Strategic Investor Relations, LLC
Tel: 347-947-2093
Email: matthew@strategic-ir.com

View original content:https://www.prnewswire.com/news-releases/origin-agritech-reports-fiscal-year-end-2023-results-302028073.html

SOURCE Origin Agritech Limited

FAQ

What is the net income reported by Origin Agritech Ltd. for the fiscal year ended September 30, 2023?

The net income reported was RMB 120 million (US$ 16.7 million), compared to RMB 2.3 million in fiscal year 2022.

What was the revenue for Origin Agritech Ltd. for the fiscal year ended September 30, 2023?

The revenue was RMB 93.3 million (US$13.0 million), an increase of RMB 40.7 million over the prior fiscal year.

Did Origin Agritech Ltd. have a loss from operations for the fiscal year ended September 30, 2023?

Yes, the company had a loss from operations of RMB 14.5 million (US$ 2 million).

What were the total assets and cash and cash equivalents for Origin Agritech Ltd. as of September 30, 2023?

Total assets were RMB 303.6 million (US$42.3 million) with cash and cash equivalents of approximately RMB 23.7 million (US$3.3 million).

What was the total shareholders' equity for Origin Agritech Ltd. as of September 30, 2023?

Total shareholders' equity was RMB 12.8 million (US$1.8 million) as of September 30, 2023.