The performance differentiation of listed seed companies in China in the first three quarters is basically the same with that in H1 this year, since Q3 is usually the off-season for corn and rice seeds sales at home. Seed players with reasonable business structure and sensible operating strategies could generate increasing profits while those with poor status generally witnessed declined performance, according to CCM’s October Issue of Seed China News.
In light of net profit, Longping High-tech and Winall Hi-tech achieved sharp growth in the first three quarters in 2012 mainly due to their efforts in seed business expansion. On the contrary, Hefei Fengle and Shandong Denghai suffered a remarkable decline in net profit; Gansu Dunhuang continued to suffer loss in Q3 2012, mainly due to its sluggish cotton and food processing businesses.
It seems that the enhancing and expanding seed business has brought good returns for seed companies like Longping High-tech and Winall Hi-tech, while some players like Hefei Fengle and Gansu Dunhuang have been implicated by non-core businesses with a high proportion in company's total revenue.
Some listed seed companies have started the distribution of seeds earlier for the marketing year of 2012/2013. For example, Shandong Denghai and Hefei Fengle have received increasing advance from customers in Q3 2012, which would be conducive to their performance rebound in 2012.
Shandong Denghai started the corn seed distribution in Sept., with more promotions for its distributors. Thanks to the good performance in field planting, "Denghai 605", a leading corn hybrid bred by Shandong Denghai, has seen an increase in the price of seeds, probably to create handsome profits for the company. However, the annual performance of Shandong Denghai would be not so optimistic in 2012, mainly in view of the declining profits of "Xianyu 335" promoted by its joint venture Pioneer Hi-Bred International Inc.
The performance differentiation of listed seed companies in China would be extended throughout the year of 2012. The serious loss of Gansu Dunhuang is almost impossible to be reversed in the remaining period of 2012. Mainly due to depressed non-core businesses, Hefei Fengle would probably continue to generate a decreasing net profit in 2012, following the similar situation in 2011. On the contrary, Longping High-tech and Winall Hi-tech, which have been strengthening their core business, would see continuous profit growth in the coming few years.
Source: Seed China News 1210
http://www.cnchemicals.com/Newsletter/NewsletterDetail_28.html
Content of Seed China News 1210:
Non-transgenic soybean price running high in Heilongjiang
"Zhongdan 909" suffered stalk breaking for strong wind in Hebei
Performance overview of listed seed enterprises in Q1-Q3 2012
ZARD to control HPSG
Longping High-tech to divest inferior businesses and enhance seed business
TYLCV occurrence in Northeast China
Foreign varieties dominate sweet pepper seed market in Shandong
SNP technology to reinforce seed testing
Interview to Ma Dehua on "Derit 10" cucumber variety
Major corn varieties promoted in Jilin
For more information about CCM’s Seed China News, please contact us at econtact@cnchemicals.com.