Origin Agritech Limited Q2 FY2026 earnings call

### Strategic Plan Status - The period represents the midpoint of the recovery phase of the company's 3-stage strategic plan announced in November 2024, which targets recovery through 2025-2026, scaling up from 2027-2029, and industry leadership from 2030-2032. - H1 FY2026 focused on converting the rebuilt foundational capabilities (team, R&D, production, sales infrastructure completed in 2025) into measurable commercial and scientific outcomes.

### R&D and Product Development Progress - The November 2025 R&D conference refocused the company on variety development, operations and biotech commercialization under the "be first or be unique" philosophy. - 2025 Winter South China breeding produced over 30,000 new test-cross combinations, including those from breakthrough germplasms. - Completed precision smart plant type improvement for major market varieties using the Hi3 platform and two leaf-angle reduction genes licensed from China Agriculture University, to support the industry trend toward higher-density planting. - Deepened industry collaborations, adding over 10,000 new corn combinations to the test pipeline via partnerships with more than 30 external breeders across ecological zones. - Acquired rights to top-performing varieties: Zhengtai 889 (co-developed with Henan Agriculture University) and CAU-bred Zhongnongda 8538 (strong performance in Northwest China). - Expanded AI-assisted breeding operations to improve breeding efficiency: genomic selection models to identify high-probability candidate crosses, image-based automated phenotyping, and AI prediction of optimal parents for gene editing projects.

### Commercial and Sales Progress - Restored the national sales team to 36 dedicated professionals and rebuilt regional presence, including a successful reentry into Northeast China with a September 2025 Variety Showcase and technology seminar in Changchun that attracted over 200 dealers and partners. - Held the 2026 Annual Marketing Conference in Changsha in March 2026, formally launching the Aoyun 2026 New Variety Promotion Program and signing performance KPI contracts with general managers of 6 regional sales companies covering China's main corn production regions, assigning clear accountability for outcomes across all teams and product lines.

### Leadership and Regulatory Updates - Obtained regulatory approval in November 2025 to add GMO crop seed production to the business scope of Beijing Origin Seed Limited. - Added Dr. Jian Zhang (a 20+ year global crop biotechnology veteran with prior senior roles at DuPont Pioneer, Syngenta and BAFS) as an independent director to the Board of Directors in March 2026, adding critical biotech and international commercialization expertise. - Welcomed Dr. Zheng James Chen back to the role of Chief Financial Officer, bringing continuity, capital market experience and deep institutional knowledge of the company. - CEO Weibin Yan completed a direct equity investment in the company, aligning his personal capital with shareholder value creation.

Total revenues for the first half of fiscal 2026 (H1 FY2026) were RMB 49.2 million (USD 7.1 million), a 31.9% decrease from RMB 72.3 million in the prior-year period (H1 FY2025). The revenue decline was primarily driven by a strategic portfolio transition that reduced external seed tolling service as the company shifts focus to new corn seed product sales. Gross profit was RMB 5.5 million (USD 0.8 million) in H1 FY2026, down from RMB 8.1 million in H1 FY2025. Total operating expenses decreased 43.9% year-over-year to RMB 18.4 million (USD 2.7 million): general and administrative expenses dropped 69.8% from RMB 25 million to RMB 7.6 million following leadership restructuring and corporate function consolidation; selling and marketing expenses increased 93.3% from RMB 2.6 million to RMB 5.1 million to support sales team expansion and the Aoyun 2026 commercial campaign; research and development expenses rose 11.1% from RMB 5.2 million to RMB 5.7 million, reflecting sustained investment in the Hi3 platform, gene editing programs and new variety development. Operating loss for H1 FY2026 was RMB 12.9 million (USD 1.9 million), a 47.8% reduction from the RMB 24.7 million operating loss in H1 FY2025. Net loss attributable to shareholders was RMB 14.4 million (USD 2.1 million), a 43.8% improvement from the RMB 25.6 million net loss in the prior-year period. Basic and diluted net loss per share was RMB 1.21 (USD 0.17), down from RMB 3.55 in H1 FY2025. As of March 31, 2026, the company held RMB 13.4 million (USD 1.9 million) in cash and cash equivalents, RMB 24.8 million (USD 3.6 million) in inventory (a seasonal increase from RMB 14.4 million at fiscal year-end 2025 for spring planting), and total liabilities of RMB 168.1 million (USD 24.3 million), up from RMB 162.2 million at fiscal year-end 2025. Segment-specific revenue contribution percentages were not disclosed in the call.

Management did not provide explicit quantitative revenue or profit guidance for the full fiscal year 2026 or future periods. Key forward-looking qualitative guidance includes: - The company has completed core restructuring, with reduced general administrative costs demonstrating operating discipline that positions the business for growth as commercial scale increases. - The biotechnology platform is transitioning from a pure research focus to commercial development, with GMO varieties already in trial and channel preparation, and commercialization infrastructure in place to scale when policy allows. - Commercial outcomes from 18 months of recovery and restructuring work will be visible in the first half of fiscal 2027, following the 2026 spring planting season and execution of the Aoyun 2026 program. - The company maintains a long-term strategic goal of becoming one of the top 3 corn seed companies in China by 2030-2032, built on its differentiated biotechnology capabilities.

- Forward-looking statements are inherently uncertain, and actual results may differ materially from expectations due to a range of external and internal factors outside management's control. - Key risks include: failure to successfully develop, market new products or manage product lifecycles effectively; inability to adapt to changing market acceptance, regulatory rules and policies for biotech and seed products; failure to manage process safety and product stewardship requirements; changes in laws, regulations or political conditions in China; global economic and capital market volatility including inflation, interest rate and currency exchange rate fluctuations; supply chain disruptions; natural disasters and adverse weather patterns; challenges protecting and enforcing intellectual property rights; and unforeseen issues when separating underperforming or non-strategic assets or businesses. - GMO commercialization timelines are dependent on future regulatory approvals from the Ministry of Agriculture, which follow an independent timeline that cannot be forecast by the company.

Q: How has China's gradual expansion of approved commercial GMO corn planting affected Origin's commercialization timeline, and when can investors expect visible GMO-related revenue? A: The policy direction toward expanded GMO planting is favorable, but final regulatory approvals are set by the Ministry of Agriculture on its own timeline, which Origin cannot forecast. Origin is fully prepared: it holds a biosafety certificate for BBL2-2, has added GMO seed production to its approved business scope, holds all required production licenses, has restored its Xinjiang processing facility to industry standards, and has a licensing consortium to monetize its biotechnology independent of own-brand seed sales. Origin is one of the few Chinese seed companies with both the biotech credentials and scale infrastructure to launch commercial GMO corn at scale once full regulatory approval is granted.

Q: What specific competitive advantage allows Origin to take market share from larger incumbents and reach its goal of top 3 Chinese corn seed company by 2030-2032? A: Origin does not plan to compete on conventional scale, but instead on differentiated biotechnology credentials, as the Chinese seed industry enters a period of consolidation that rewards specialized biotech-focused players. Origin's 20-year focused investment in next-generation breeding has built an unmatched biotech stack, including the industry-recognized Hi3 haploid induction gene editing platform, the Cas-SF01 editing tool from Shunfeng Biotech, a 200,000+ germplasm library for AI breeding, all required regulatory approvals and the BBL2-2 biosafety certificate. This stack cannot be easily matched by large conventional incumbents, and will grow in market value over the next decade.

Q: What does AI-assisted breeding mean operationally at Origin, and what measurable improvements has it delivered? A: AI at Origin is used for three concrete operational tasks, not just branding: first, genomic selection models that score potential crosses against key trait targets (yield, drought tolerance, leaf angle) using the 200,000+ germplasm database, to identify high-probability candidates before committing field resources; second, automated image-based phenotyping at research stations that captures denser, more consistent performance data than manual evaluation to feed selection models; third, prediction of optimal donor and recipient parents for gene editing projects, which most directly speeds up the biotech platform. The core measurable benefits are a reduced number of field trials needed to validate candidate varieties, which lowers per-trait R&D costs and shortens overall commercialization timelines.