Dr. Gengchen Han, Origin Agritech'sChairman and CEO, Discussed Strategic Directions of New Origin Agritech in anInvestor Meeting at Wells Fargo Securities
Jun 16, 2015
BEIJING, June 16, 2015 /PRNewswire/ --Origin Agritech Limited (NASDAQ GS: SEED) ("Origin", or the"Company"), a technology-focused supplier of crop seeds in China,today announced that Dr. Gengchen Han, Chairman and CEO of Origin, met withinvestors at a meeting organized by Wells Fargo Securities and discussed thestrategic directions of new Origin Agritech on June 16th, 2015. During hispresentation, Dr. Han announced that Origin has successfully transitioned froma traditional seed company to a biotechnology seed company after more than 10years of agri-biotech developments. This is marked by the successfuldevelopment of our biotech seed product pipelines, especially the newtechnology of stacked traits of glyphosate tolerance (GT) and insect resistance(Bt).
With the transformation to new OriginAgritech, the Company is now organized into a simple structure of twofundamental business lines: agri-biotech and product develop under StateHarvest and seed production and distribution under Beijing Origin. StateHarvest is now in the position to introduce to the seed market its first generationphytase transgenic corn, second generation glyphosate tolerance corn seed, andits new technology of stacked traits of GT and Bt genes. While waiting for theapproval for commercial planting in China, State Harvest is ready to introducethese agri-biotech products into the global seed market. In addition, StateHarvest has also built a solid capacity for breeding technologies, includingmarker-assisted breeding and doubled haploids technologies, which along withits rich germplasm resources, will allow State Harvest to become an importantglobal seed technology company.
Beijing Origin will focus on our seedproduction and distribution business in China. After recent restructurings,Beijing Origin's corn seed business now represents over 85% of the revenues inBeijing Origin, and we believe it has a strong potential to generate EBITDA ofover RMB100 million. Beijing Origin's broad product lines across all majorplanting regions in China and innovative distribution network are thecornerstones for its leadership position in China. Its state-of-the-art cornseed production and conditioning facilities in Gansu and Xinjiang provincesprovide superior quality products to the farmers in China and they are thegrowth engine for Beijing Origin.
During the meeting today, Dr. Han alsodiscussed the Company's current business performance and financial conditions.Dr. Han pointed out that we should see a significant year-over-year improvementin the income from operations during the fiscal year 2015, despite continuouschallenges due to industry oversupply. On the balance sheet, Dr. Han discussedthe inventory adjustment during both 2014 and 2015 planting seasons, whichcould improve our operating cash flow significantly this and next year. Inaddition, the company is expected to have minimal needs in CAPEX during thenext couple of years as our new state-of-the-art facility in Xinjiang provinceallows us to double our corn seed revenues.
"As Origin Agritech is celebrating itseighteenth anniversary, we are excited to launch our new strategies and move tothe new stage for Origin Agritech", said Dr. Han in the meeting, "webelieve the earnings potential of Beijing Origin could demonstrate the value ofOrigin's fundamental seed production and distribution businesses while our newglobal strategy for State Harvest's agri-biotech and product developmentbusinesses could move Origin to the global market and allows Origin to become aglobal player in the biotech seed business."
The presentation materials used in today'smeeting have been filed with SEC on June 15, 2015.
About Origin
Founded in 1997 and headquartered inZhong-Guan-Cun (ZGC) Life Science Park in Beijing, Origin Agritech Limited(NASDAQ GS: SEED) is China's leading agricultural biotechnology company,specializing in crop seed breeding and genetic improvement, seed production,processing, distribution, and related technical services. Leading thedevelopment of crop seed biotechnologies in China, Origin Agritech's phytasecorn was the first transgenic corn to receive the Bio-Safety Certificate fromChina's Ministry of Agriculture. Over the years, Origin has established a robustbiotechnology seed pipeline including products with glyphosate tolerance andpest resistance (Bt) traits. Origin operates production centers, processingcenters and breeding stations nationwide with sales centers located in keycrop-planting regions. Product lines are vertically integrated for corn, riceand canola seeds. For further information, please log on to the Company'swebsite at: 网页链接
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