Origin Agritech Limited Q1 FY2026 earnings call

- Strategic Plan Status * The first half of fiscal 2026 marks the midpoint of the 2-year recovery phase (2025-2026) of the company's three-stage strategic plan, which includes a growth phase from 2027-2029 and a target of returning to industrial leadership from 2030-2032. * The period focused on converting the pre-completed rebuilding of team, research, production, and sales infrastructure into tangible commercial and scientific outcomes.

- Research and Development Progress * A November 2025 R&D conference refocused the company on variety development and biotech commercialization under the "either be the first or be unique" philosophy. * Completed over 30,000 new test cross combinations from 2025 winter South China breeding, including work with breakthrough germplasm. * Completed precision smart plant type improvement for major market varieties using the high-thread haploid induction gene platform licensed from China Agricultural University, to support industry trends toward higher-density planting. * Deepened collaborations with over 30 top breeders across ecological zones, adding over 10,000 new corn combinations to the test pipeline, and acquired high-performing varieties including Zhenpai 8-8 lime (jointly developed with Hunan Agricultural University) and Zhonglongda 8-538 from China Agricultural University, which performs strongly in northwest China. * Beijing Origin Seed Limited received regulatory approval to add GMO crop seed production to its business scope in November 2025. * Implements AI-assisted breeding to improve breeding efficiency, using three core operational AI workflows: genomic selection, image-based phenotyping, and optimal gene editing pairing prediction.

- Commercial and Sales Progress * Restored the national sales team to 36 professionals, rebuilt regional market presence, and completed a strategic re-entry into the key northeastern China market. * Hosted industry events including a September 2025 variety showcase and technology seminar in Chongqing, and the March 2026 annual marketing conference in Changsha, where the company formally launched the Oyun 2026 new variety promotion program. * Assigned clear KPI performance contracts to general managers of all six regional sales companies covering China's primary corn production regions, with individual accountability for outcomes.

- Leadership and Capital Updates * Added Dr. Jian Zhang, a 20-year veteran of the global crop biotechnology industry with senior experience at DuPont Pioneer and Syngenta, as an independent director to the board of directors in March 2026, bringing valuable global biotech and commercialization expertise. * Dr. James Chen returned to the role of Chief Financial Officer, bringing continuity, capital market experience, and deep institutional knowledge of the company. * CEO Wei Bin Yan completed a direct personal equity investment in the company, demonstrating his personal conviction in the company's strategic execution.

Origin Agritech does not break out performance across multiple distinct product segments in this earning call. Overall consolidated company performance for the six months ended March 31, 2026 is as follows: Total revenue was 49.2 million RMB (7.1 million USD), a 31.9% decrease from 72.3 million RMB in the prior year first half. The revenue decrease is due to strategic product portfolio transition, with reduced external seed tooling service as the company shifts focus to new corn seed product sales. Gross profit was 5.5 million RMB (0.8 million USD), down from 8.1 million RMB in the prior year period. Total operating expenses were 18.4 million RMB (2.7 million USD), a 43.9% year-over-year reduction from 32.8 million RMB. General and administrative expenses fell 69.8% from 25.1 million RMB to 7.6 million RMB, following the December 2025 leadership restructuring and corporate function consolidation. Selling and marketing expenses rose 93.3% from 2.6 million RMB to 5.1 million RMB, reflecting intentional investment in sales team build-out and new commercial campaigns. Research and development expenses increased 11.1% from 5.2 million RMB to 5.7 million RMB, for continued investment in breeding platforms, gene editing programs, and new variety pipelines. Operating loss was 12.9 million RMB (1.9 million USD), a 47.8% reduction from the 24.7 million RMB operating loss in the prior year first half. Net loss attributable to Origin Agritech was 14.4 million RMB (2.1 million USD), a 43.8% improvement from the 25.6 million RMB net loss in the prior year period. Basic and diluted net loss per share was 1.21 RMB (0.17 USD), down from 3.55 RMB in the prior year. As of March 31, 2026, cash and cash equivalents totaled 13.4 million RMB (1.9 million USD), inventories were 24.8 million RMB (3.6 million USD) (a seasonal increase for spring planting), short-term borrowings were 9.5 million RMB (1.4 million USD), and total liabilities were 168.1 million RMB (24.3 million USD).

Management did not issue formal quantitative financial guidance for full fiscal 2026 in this call. Key forward-looking qualitative guidance includes: - The company has completed restructuring and cost-cutting, and now is positioned to grow into its optimized cost base, with operating leverage becoming visible in financial results. - The company's biotechnology platform is transitioning from a research-focused story to a commercial-focused story, with GMO varieties in trials and distribution channels being established. - Commercial results from the 18 months of restructuring and rebuilding work will be visible in the first half of fiscal 2027, following the 2026 spring planting season and execution of the Oyun 2026 promotion program. - Management reaffirmed the long-term target of becoming one of the top three corn seed companies in China by 2030-2032.

Forward-looking statements on the call are explicitly noted to carry inherent uncertainty, and key risks that could cause actual results to differ materially from expectations include: - Failure to successfully develop and market new products, or optimally manage product lifecycles - Uncertainty around regulatory approval timelines for GMO crop commercialization, which are controlled by China's Ministry of Agriculture and cannot be forecast by management - Inability to respond to changes in market acceptance, rules, regulations, and policies affecting the company's products - Failure to appropriately manage process safety and product stewardship issues - Changes in laws, regulations, or political conditions in operating markets - Adverse global economic and capital market conditions, including inflation, interest rate volatility, and currency exchange rate fluctuations - Business disruptions or supply chain disruptions - Natural disasters, adverse weather events, and shifting weather patterns - Inability to protect and enforce the company's intellectual property rights - Challenges related to the separation of underperforming or non-strategic assets or businesses

Q: How has China's gradual expansion of approved commercial GMO corn planting affected Origin's commercialization timeline, and when will GMO revenue be visible? / A: China's policy direction is favorable, but regulatory approval timelines are set by the Ministry of Agriculture and cannot be forecast by Origin. Origin is fully positioned for when the policy window fully opens: it holds the biosafety certificate for BBL 2-2, has added GMO seed production to its business scope, holds required production and operation licenses, has restored its Xinjiang processing facility to industry standards, and has a licensing consortium to monetize its biotechnology independent of its own seed sales. Origin is one of few Chinese seed companies with both the biotech credentials and infrastructure to scale GMO commercialization.

Q: How can Origin gain market share to reach its top 3 Chinese corn seed company target by 2030-2032 against larger incumbent competitors? / A: Origin does not plan to compete with incumbents on conventional scale. It will compete based on its unique stacked biotechnology credentials, at a time when the Chinese seed industry is expected to undergo a decade of consolidation that rewards biotech-focused players. Origin's biotech stack, including the award-winning HI3 haploid induction platform, licensed gene editing technology, 200,000+ germplasm resources for AI breeding, full regulatory GMO approvals, and required licenses, is the result of 20 years of focused investment that incumbents cannot easily match.

Q: What does Origin's AI-assisted breeding entail operationally, and what measurable improvements does it deliver? / A: AI is not a buzzword at Origin; it is deployed for three concrete operational tasks. First, it runs genomic selection models to score potential cross combinations against target traits, identifying high-probability candidates before field testing to save resources. Second, it powers image-based phenotyping at research stations to capture more consistent, dense performance data than manual evaluation, feeding back into selection models. Third, it predicts optimal donor-recipient pairings for gene editing pipelines, which directly speeds up the biotech development process. The operational outcome is a reduced number of field trials per candidate, lowering R&D cost per trait and shortening commercialization timelines.