Origin Agritech (NASDAQ:SEED) released quarterly financial results and hosted an earnings call on Friday. Read the complete transcript below.

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Summary

Origin Agritech reported a decrease in total revenue to 49.2 million RMB (7.1 million USD), down by 31.9% compared to the previous year, due to a strategic shift in product portfolio.

Operating expenses decreased by 43.9%, reflecting a significant reduction in general and administrative expenses, while selling and marketing expenses increased to support new commercial campaigns.

The company highlighted its strategic plan to achieve industrial leadership by 2030-2032, focusing on biotechnology commercialization and expanding breeding and variety development.

Operational highlights include the restoration of the sales team to 36 professionals and re-entry into Northeast China, with a focus on promoting the Oyun 2026 new variety program.

Management expressed optimism about future growth, emphasizing the commercialization of its biotechnology platform and AI-assisted breeding to enhance R&D efficiency.

Full Transcript

OPERATOR

We'd like to thank you for your patience. Your program will begin shortly. Thank you for standing by and welcome to Origin Agritech first half fiscal year 2026 results conference call Please note that today's call is being recorded. It is now my pleasure to introduce Matthew Abenotti of Strategic Investor Relations. Please go ahead.

Matthew Abenotti (Strategic Investor Relations)

Thank you Operator and thanks to all of you for joining us today on the Origin Agritech Conference Call. Joining us on the call today are Mr. Wei Bin Yan, Chief Executive Officer, Dr. Zhang, James Chen, Chief Financial Officer and Ms. Kate Lang, Director of Investor Relations. 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 such as expect, anticipate, intend, plan, believe, seek, will, would, target and similar expressions and variations. Forward looking statements address matters that are uncertain and they 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 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. With that I would like to turn the call over to Our first speaker, Mr. Wei Bin Yan, Chief Executive Officer of origin Agritech. Hello Mr. Yan.

Wei Bin Yan (Chief Executive Officer)

Thank you Matthew and good morning. Good evening to everyone joining us around the world. The six months ended March 31, 2026 represent the midpoint of the recovery phase of the three stage strategic plan. We are launched in November 2024. As a reminder, that plan calls for recovery in 2025 and 2026 standing up from 2027 to 2029. On the right hand, the industrial leadership from 2030 to 2032. When I addressed you on our fiscal year 2025 earnings call in February, I described the recovery work we had completed across our team building research capabilities, production facilities and sales infrastructure. This half year of the fiscal year 2026 was about taking that rebuild foundation at the beginning to convert it into measurable commercial and scientific outcomes. I want to take you through several operational areas where we made tangible progress during the period and then Daxchain will walk you through what that progress looked like in our financial statements. In November 2025 we hold a research and development conference that sharpens our focus on variety acquisitions, variety development and biotech commercialization with the philosophy either be the first or be unique. We expanded breeding approach and test scales and have made very good progress since then. Our 2025 winter soft China breeding work generated over 30,000 new test cross compilations including those by the most breakthrough gem plasms by using our High3 platform and Toll-like receptor gene. Licensed from China Agriculture University, we completed Precision smart plant type improvement on the major varieties in the market to support our partners answer ourselves to meet higher density trend in the industry. During this period, we have restored the sales team to 36 professionals deployed across the country and we have rebuilt the regional presence including most importantly a re entry into Northeast China or in September 2025 we hosted a variety showcase on the Technology seminar in Chongqing which draws more than 200 dinners on the partners. In early March of the year, we hold our 2026 annual marketing conference in Changshan, Guangnan Province. The The conference convened our subsidiary general managers, regional marketing leadership and key distribution partners. As a conclusion of that conference, we formally launched the Oyun 2026 new variety promotion Program. Our integrated commercial campaigns for this marketing cycle and signed KPI contracts with general managers of the six regional sales companies across China's principal corn production regions. With OEN2026 program on the performance contract, we sans every manager, every region under every product line now has a very clear annual target and personally owns the outcome. To fill our product portfolio with the most competitive varieties, we have deepened collaborations with top breeders across ecological zones, introduced or jointly assembled over 10,000 new con compilations in our test pipeline this year by working with more than 30 outstanding products in the industry and we now acquired a Top ranked variety, Gentile8.8 line which was jointly developed with Hona Agriculture university, also a CAU-bred Zhonglongda 8538 which performs strongly in northwestern China. In November 2025, the Beijing Tungzhou District Marketing Civilization Administration approved the inclusion of JIMMY Crop Seed Production License with OR Beijing Origin State limited in the business scope. I have reported to you previously. And we have two leadership matters subsequent to the reporting period that I want to address directly. First, you must 2026 we welcomed Dr. Jian Zhang to our Board of Directors as an independent director. Dr. Zhang has 20 years above experience in global crop biotechnology industry with PARACENP roles at the Tufan Pioneer, Saginda and bassus. His appointment brings world class biotechnology and international commercialization experience to our boards at exactly the right time in our development. We are also happy to welcome back Dr. James Chan, retained as Chief Financial Officer. Many of you will know Dr. Chen from his prior service at Orange two 10 years as CFO and one as CFO. Dr. Chen Prince continuality, capital market sophistication and a deep institutional understanding of the company. I'm pleased to have him back on the executive team and this is very helpful for me and we'll turn the call over to him in a moment to walk through the numbers. Finally, during the reporting period, we completed an investment agreement that included a direct equity investment by myself. I want our shareholders to know that my conviction in the path we are executing is reflected not just in my words on the scope, also in my own financial commitment. With that, let me hand it over to Dr. Chen. Thank you,

James Chen

thank you Mr. Yan and hello everyone. It is great to be back addressing Origin Agritech shareholders. I will walk you through our financial results for the six months ended March 31, 2026 with comparisons to the prior year period. Total revenues for the first half of fiscal 2026 were 49.2 million RMB or 7.1 million US dollar compared with 72.3 million RMB in the first half of fiscal 2025, a decrease of approximately 31.9%. The decrease was mainly due to the strategic transition in the company's product portfolio as we are focusing more on the sales of new consolidated products and reducing the external seed tolling service. Gross profit was 5.5 million in B or 0.8 million US dollar in the first half of fiscal 2026 compared with 8.1 million RMB in the prior year period. Total operating expenses for the first half of fiscal 2026 were 18.4 million RMB or 2.7 million US dollar compared with 32.8 million RMB in the prior year period, a 43.9% reduction. Let me break that down General and administrative expenses declined sharply from 25 million RMB to 7.6 million RMB at 69.8% at year over year reduction. That reduction reflects the operating discipline now embedded in the business following the leadership restructuring completed in December 2025 and the consolidation of cooperative functions on the Beijing origin. Selling and marketing expenses increased from 2.6 million RMB to 5.1 million RMB, up 93.3%. That increases intentionally and entirely consistent with our strategy. It reflects the build out of the 36% sales organization and field deployment of the OWIN 2026 commercial campaign. Research and development expenses were 5.7 million RMB compared with 5.2 million RMB in the prior year period, an increase of approximately 11.1% reflecting continued investment in the High3 platform and strong phone licensed gene editing program and the New Variety pipelines. Loss from operations for the first half of the fiscal 2026 was 12.9 million IMB or US$1.9 million compared with a loss from operation of 24.7 million in B in the prior year period, a reduction of 47.8% year over year. Net loss attributable to Origin Agritech Ltd. Was 14.4 million RMB or US$2.1 million compared with a net loss of 25.6 million RMB in the prior year period, a 43.8% improvement. Basic and diluted net loss per share was 1.21 RMB or 0.17 US dollar compared with 3.55 RMB in the prior year period. Turning to the balance sheet, as of March 31, 2026, the Company had cash and cash equivalents of 13.4 million RMB or 1.9 million US dollar compared with 15.9 million RMB as of September 30, 2025. Inventories were 24.8 million RMB or 3.6 million US DOL compared with 14.4 million RMB at fiscal year end. That increase is seasonal reflecting the inventory build into spring planting season. Short term borrowings were 9.5 million RMB or 1.4 million US dollar compared with 8.0 million RMB at fiscal year end. Total liabilities were 68.1 million RMB or 24.3 million US dollar compared with 162.2 million RMB at fiscal year end. With that financial summary, I will turn the call back to Mr. Yan for closing remark.

Wei Bin Yan (Chief Executive Officer)

Thank you. I want to leave you with three observations as we head into the second half of fiscal 2026 and the back half of the recovery phase. First, the operating leverage in the business is becoming visible in the numbers a fundamental reduction in general administrative costs in a single year with sustainable cross margin and intentional investments in selling and marketing. It's a financial signature of a company that has completed its restructuring and is now positioned to grow into its customer base. Second, our biotechnology platform is no longer a research story, it is becoming a commercial story. T3 is recognized externaling the GMO variety are in trial or in the channel. The connective tissue between the laboratory and the consumer and the customer is being built. Third, the commercial cycle ahead is concrete and metric. The spring planting season is on the way. Orion 2026 is in the field. Performance contracts are signed. The 36 professional sales team is deployed against a defined target. Our fiscal year, our first half of fiscal 2027 will tell the market whether the work of the past 18 months is converting to in the commercial outcomes. And I believe it will. Thank you.

Matthew Abenotti (Strategic Investor Relations)

Thank you, Mr. Yan. Moreover, we did receive a number of questions in advance of today's call. Ms. Kate Lang will now answer the questions submitted by ambassadors. Hello Kate, hello Matthew. Thank you and thank everyone who has submitted questions. Thank you. Let's hear about them.

Kate Lang

The policy direction in China has been moving favorably over the past two years with gradual expansion of the geography and accurate approved for commercial GMO corn planting. We are encouraged by that direction. However, I want to be careful now to characterize future regulatory decisions. Those are decisions the Ministry of Agriculture makes on its own timeline and I am not in a position to forecast them. What I can speak to is origin's position relative to the policy window. We hold the BioSafety certificate for BBL2.2. We have included GMO crop seed production within Beijing Origins Business scope as of October 2025 we have two crop seed production and operation license in China, we have the Xinjiang Processing Facility restored to industry leading standards and we have the Origin Marker Biological Breeding Service Consortium with the China Golden Marker Biotech which gave us a licensing pathway that monetizes the biotechnology independent of our own seed cells. The way I would frame it for shareholders is there are not many seed companies in China that hold both the biotechnology credentials and the production and distribution infrastructure to commercialize GMO corn at scale once the policy window fully opens. Origin is one of them. I appreciate the question. The path to a top three position by 2030-2032 is not a path of outscaling the incumbents on conventional terms. It is a path of competing on biotechnology credentials in the Chinese seed industry that in my view is entering a decade of consolidation that rewards biotechnology credentialed players. Hi3 corn haploid induction gene Editing Recognized by the Chinese Academy of agricultural Sciences in December 2025 as one of the top 10 major progresses in Chinese agricultural science. The Xun Feng Biotech patent license brings CAS SF01 into our editing toolkit. In house, AI assisted breeding is running against more than 200,000 germplasm resources. Two crops in production and operation license GMO Business Scope at Beijing origin, the BBL2.2 biosafety certificate that is a biotechnology stack that the conventional scale incumbents cannot easily match because it is the product of a sustained, focused 20 year investment in next generation braiding over the next decade. I believe the market will increasingly value biotechnology credentials and Origin is well positioned for that. It is a fair question and I want to answer it concretely because I know that AI can be an overused term in our industry and in the broader market. What we are running operationally is principally three things. First, genomic selection models that score potential crosses against the trait targets. We are yield, drought tolerance, leaf angle loading resistance and growth payroll. Using our germplasm database of more than 200,000 core resources. The model identifies the highest probability candidates before we commit field seeding capacity to to evaluate them. Second, image based phenotyping in our research stations that captures plant performance data at a density and consistency that manual evaluation cannot match and feeds that data back into the selection models. Third, prediction of optimal donor recipient pairings for the Hi3 and Xun Feng licensed gene editing pipeline, which is where AI has the most direct impact on the speed of our biotechnology platform. The operational outcome we are working toward and beginning to see is a reduction in the number of field seed required to validate a candidate variety that translates into lower RND cost per validated treatment and a faster commercialization path.

Matthew Abenotti (Strategic Investor Relations)

Thank you again to everyone for participating in today's call. We look forward to providing additional updates in the near future. Goodbye.

OPERATOR

We'd like to thank everybody for their participation on today's conference call. We appreciate your time and participation. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.