Origin Agritech announces 300% revenue growth in the first half of 2022 and profitability achieved

BEIJING, May 5, 2022 /PRNewswire/ — Origin Agritech Ltd. (NASDAQ:SEED) (the “Company” or “Origin”), an agricultural technology company, announced first-half fiscal 2022 revenues of 46.4 million RMB (WE $7.3 million) up 300% compared to the first half of 2021, and a result of 1.3 million RMB (WE $0.2 millionor $0.03 per share).

Summary of financial results 6-month period ending March 31, 2022

1st semester 2021
RMB

1st semester 2022
RMB

%
Switch

1st semester 2022
USD

Revenue

11.6mm

46.4mm

300%

7.3mm

Operating Expenses

12.1mm

14.3mm

18%

2.3mm

Operating profit/(loss)

(7.8mm)

(1.3mm)

N / A

(0.2mm)

Net income/(loss)

(4.6mm)

1.3mm

N / A

0.2mm

The company had 6.5 million RMB (WE $1 million) cash out 03/31/22 vs. 15.4 million RMB on 09/30/21. The money was used to increase seed production and for other working capital purposes which funded the rapid growth of the business. The Company has access to borrowings under credit facilities which it can access as needed to fund its future growth. Origin’s complete financial statements will be filed as a Form 6-K with the SEC which will be accessible on the company’s website at: SEC Filings – Origin Agritech.

Growth engines

Growth in the first half of 2022 comes from the sale of the company’s new high-yielding, disease-tolerant corn variety that can adapt to stressful environments. During the 2021 growing season, one of the China major growing areas experienced extreme weather fluctuations of drought followed by massive flooding. Despite this, the variety performed extremely well in this environment while other maize varieties planted nearby were decimated. This created goodwill for the Origin Agritech brand and strong demand for the new hybrid seed. Origin did not have enough seed to meet demand and is expanding seed production to meet expected demand in 2023.

What awaits Origin?

Despite the company’s rapid growth rate in the first half of 2022, the company’s primary near-term growth driver, the sale of its Nutritionally Enhanced Corn (NEC), did not add to sales during the first half of 2022. period, but will hit them more in the second half of the year, after the harvest. We have formed joint ventures with our commodity partners and are busy increasing NEC production using contract growth. The partners are responsible for the capital expenditure for the cultivation contract and Origin provides the seeds and technical assistance. The annual fodder maize market is China is estimated at over 1.9 million metric tons and is worth over 500 billion RMB ($75 billion). Origin expects to capture a significant share of this market in the coming years, as the NEC reduces the need for expensive nutritional additives and thereby doubles the profit margin of raw material companies. It is important to note that there are no other varieties of corn with similar properties, leaving Origin with no competition for this product.

Origin continues to expand its leadership in next-generation breeding technologies. The company was an early adopter of CRISPR for corn gene editing and has created more than a dozen desirable traits, including the recently announced change in leaf angle that allows for denser planting maize plants and therefore a higher yield. The company has already incorporated these traits into the company’s hybrid corn and is filing for approval.

Origin is encouraged by the Chinese government’s continued progress in establishing the legal framework regulating the commercialization of GMO crops and sees this as a sign that they will soon move to legalizing the planting of GMO crops. The company has incorporated its GMO traits into its hybrid corn varieties and is ready to launch commercial sales once the government approves GMOs.

The origin is reaffirming its 2022 annual objectives 300% sales growth. In addition, the company expects continued and improving profitability.

“Origin has many tools in its corn breeding toolbox,” said Dr. Gengchen Han, President of Origin Agritech. “We use these tools to create new bespoke maize varieties that meet the needs of our customers and it creates a lot of buzz for the Origin Agritech brand. We are confident that this innovation will create great returns for Origin shareholders, customers and employees. .”

Conference call

Origin will host a conference call today, May 5and to 8:00 a.m. ET.

Participants can connect to the call as follows:
Domestic access: 1 (877) 270-2148
International access: 1 (412) 902-6510

When registering, please request to be added to the Origin Agritech conference call.

Click here for a live webcast of the conference call: https://services.choruscall.com/mediaframe/webcast.html?webcastid=ytZsRl8k

A replay of the call is accessible until May 12, 2022 at 1 (877) 344-7529 or 1 (412) 317-0088 for international callers and entering the replay access code: 5632563.

An audio archive of the call will be available shortly after the call on Origin Agritech’s Investor Relations page at https://originagritech.com/investor-relations/.

About Origin Agritech Limited

Origin Agritech Limited, founded in 1997 and based in Zhong-Guan-Cun Life Science Park (ZGC) in beijing, is one of China’s leading agricultural technology enterprises. In crop seed biotechnology, Origin Agritech’s phytase maize was the first transgenic maize to receive the Biosafety Certificate from China The Minister of Agriculture. Over the years, Origin has built a strong biotech seed pipeline that includes products with glyphosate tolerance and pest resistance (Bt) traits. For more information, please visit the company’s website at: www.originagritech.com. The company also maintains a Twitter account to update investors on company and industry developments, which is @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 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 such as “expect”, “anticipate”, “have the intent to”, “plan”, “believe”, “seek”, “will”, “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 that may not materialize. They are based on management’s current expectations, assumptions, estimates and projections regarding 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 the forward-looking statements are: the inability to develop and market new products and to 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 financial market conditions, such as inflation, interest rates 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 activities. The Company undertakes no duty or obligation to publicly revise or update any forward-looking statements as a result of future developments, new information or otherwise, if circumstances change, except as required by applicable securities and other laws. require it. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that these expectations will prove to be correct, and actual results may differ materially from anticipated results. You are urged to carefully consider these factors when evaluating the forward-looking statements contained herein and you 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:

Kirin Smith
President, PCG Advisory
646-823-8656

Joe Ramelli
Investor Relations Director
Phone: 310-845-6238
Email: joe@originagritech.com

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SOURCE Origin Agritech Limited