Generally, the performance of all the listed seed companies is far better in 2010 than that in 2009, with strong net profit increase in 2010. Thanks to high commodity prices, the good performance has brought little surprise. The prices of wheat, corn, rice, cotton, etc. has witnessed huge increase in 2010. Although supply exceeded demand for seed industry in 2010, the supply for some seed varieties were in shortage, which in part pushed up the prices of seed products.
Shandong Denghai Seeds Co., Ltd. (Shandong Denghai) released that its net profit in 2010 surged by more than 50%. Analysts predicted that sales revenue of Shandong Denghai in 2010 would reach about $125.00 million, about $28.64 million of net profit, up 42.46% and 101.97% year on year respectively.
Gansu Dunhuang Seed Co., Ltd. (Gansu Dunhuang) has witnessed huge increase in seed business in 2010. Sales revenue from seed business was $45.76 million in H1 2010, up 18.90% year on year. Besides, the gross profit margin went up from 48.61% in H1 2009 to 58.64% in H1 2010. However, the performance of the company was affected by cotton processing, tomato processing, etc.
Hefei Fengle Seed Co., Ltd. (Hefei Fengle) forecasted that net profit in 2010 reached about $17.20 million to $22.26 million, up 70%~120% year on year, and most of its net profit was contributed by real estate business. However, the company plans to withdraw from real estate business in 2011 and focuses on seed and agrochemical business. The main seed products of the company in 2011 are Fengliangyou 1 (rice variety), Fengliangyouxiang 1 (rice variety), Jundan 20 (corn variety) and Ludan 818 (corn variety).
Yuan Longping High-Tech Agriculture Co. Ltd. (Longping High-Tech) plans to focus on seed business in the future. Sales revenue and net profit in rice seed are the major business, hitting $36.36 million and $13.12 million in H1 2010, up 8.66% and 45.22% respectively year on year. Besides, the company has strengthened corn seed business by obtaining marketing right of Lihe 16, a corn variety from Limagrain, which is expected to generate profit in 2011.
The year 2011 is predicted to be a nice year for domestic seed companies, and the price of seed products is expected to maintain a high level. Besides, impacted by the adverse weather in 2010, the price of seed products will be pushed up.
Moreover, the government is formulating policy to regulate seed industry. Some leading companies are expected to benefit much from the policy. However, they should try their best to enhance R&D capability in order to compete with overseas seed companies.
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