Origin Agritech Limited (NASDAQ: SEED) (“Origin” or the “Company”)
, a vertically–integrated supplier of hybrid and genetically modified crop seeds in China, today announced unaudited financial results for the year ended September 30, 2010. Origin plans to file its audited financial statements in conjunction with the annual report next week on Form 20-F with the SEC on January 27, 2011. These unaudited year end results reflect the Company’s financial statements during the period from October 1, 2009 to September 30, 2010. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.
China’s Seed Industry: Growth and Prosperity for 2011
Fiscal year 2010 showed significant progress again toward improved industry conditions. The seed industry is beginning to enter the early phases of a consolidation period, in which we believe the next 3 to 5 years will have increased opportunity. These upcoming years should make the period of change and development in the industry. The fiscal year end September 30, 2010 marks the third consecutive year of improvement in our earnings as a result of these improving industry conditions.
With the rapid growth in China prompting greater demands on domestic food production, and China rapidly becoming a net corn importer, as a result of the rising consumer desire for higher quality food products, the Chinese central government has taken several measures to deal with these core issues. Seed is the fundamental input in the corn industry, and the input which possesses the greatest future upside in gains from biotechnological improvements. According to research, corn seed plays the most active factor in the increase of yield gains, accounting for over 35.5% of the total contribution.
During the past years, the Chinese central government initiated a comprehensive US $6 billion plan for the implementation of genetically modified food products throughout China. In 2010, they furthered this plan through further implementation, including the approval of the first genetically modified main crop seed in rice and corn. Compared with conventional varieties, the obvious advantages of transgenic varieties are high yield, high quality, disease-resistance, and herbicide resistance. Farmers plant transgenic varieties to both save time and cost, while also reducing the amount of fieldwork. Given our unique position with our late stage product pipeline, we believe we are the beneficiary of such emerging trends affecting our industry for the next decade.