Origin Agritech obtains new licenses for crop seed production

BEIJING - Origin Agritech Ltd. (NASDAQ:SEED), a small-cap agricultural technology company with a market capitalization of $13.8 million and currently trading at $1.79, has received a new crop seed production and operation license from the Beijing Municipal Bureau of Agriculture and Rural Affairs, the company announced Friday. According to InvestingPro analysis, the stock appears undervalued despite recent operational challenges.

The license authorizes Origin to produce, process, package, wholesale, and retail corn seeds, marking the company's second such license in China alongside one held by its subsidiary Xinjiang OriginBio Seed Limited.

The Beijing Tongzhou District Market Supervision Administration has also approved the inclusion of genetically modified (GMO) crop seed production in the company's business scope, though each specific GMO crop will still require individual registration and approval before commercialization.

In addition, Origin has increased the registered capital of its subsidiary Beijing Origin Seed Ltd. from RMB 30 million (US$4.2 million) to RMB 100 million (US$14 million) and completed a strategic restructuring that consolidates key production and sales entities under Beijing Origin. However, InvestingPro analysis indicates the company is quickly burning through cash, with a concerning current ratio of 0.43, suggesting potential liquidity challenges ahead.

"The addition of our new GMO-inclusive business license, combined with the successful capital increase and organizational restructuring, provides a powerful infrastructure for our next phase of growth," said Weibin Yan, Chief Executive Officer of Origin Agritech, in a press release.

The restructuring establishes Beijing Origin as the company's primary operational hub, which Origin states will enhance efficiency and support future scalability, particularly in serving the North China Plain agricultural region.

Founded in 1997, Origin Agritech is a Chinese agricultural technology company whose phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture.

In other recent news, Origin Agritech Ltd. has secured approximately $3.88 million through new investments, with CEO Weibin Yan personally investing $2.4 million to acquire 2 million ordinary shares. Additionally, the company modified a securities purchase agreement with institutional investors, consolidating remaining tranches to provide an additional $1.48 million. Origin Agritech also reported the re-entry into the Northeast China agricultural market, successfully hosting its Northeast Variety Showcase and Technology Seminar in Changchun. This event introduced newly approved corn varieties such as Jinqiao 8, Jingke 4580, and Jingke 317. Furthermore, Origin Agritech has appointed two new independent directors as part of a board restructuring, reducing the board size from seven to five members. Dr. Changqing Mao and Mr. Siu Laam Hau have taken on roles as Independent Directors and Chairmen of the Nomination and Audit Committees, respectively. These developments highlight the company's strategic movements in both financial and operational aspects.

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