2014-04-15 16:07:01 - Seed China News 1308 - a new market research report on companiesandmarkets.com
Domestic listed seed companies overall had an underperformance during the first half of this year, judging from their semi-annual financial reports successively released in August. Among the eight companies listed on domestic stock market, only two namely Longping High-tech and Shandong Denghai reported performance growth, respectively with 34.75% and 121.85% of YoY growth in net profit. While four witnessed profit decline to varied degrees, namely Hefei Fengle, Grand Agriseeds, Wanxiang Doneed and DBN Group (DBN Group: China´s leading feed manufacturer with all its seed business undertaken by its subsidiary Beijing Jinse Nonghua Seed Technology Co., Ltd.). The remaining two even suffered net losses â -USD12.22 million of Gansu Dunhuang and -USD1.73 million of Winall Hi-tech with.
Compared with the mixed
blessing in 2012, domestic seed companies seem to face a more tough situation in 2013. Obviously, the oversupply in seed market especially of corn and rice has posed an increasing pressure on domestic seed companies, judging from listed seed companies´ general drop in sales and gross profit margin. As is reported, the excess inventory of corn seeds and hybrid rice seeds is respectively 920,000 tonnes and 260,000 tonnes, both higher the previous year. While the competition in hybrid corn seed market seems more fierce mainly owing to the serious homogeneity of corn hybrids. For instance, Hefei Fengle, Wanxiang Doneed and Gansu Dunhuang who are too dependent on the single old varieties, all suffered a performance decrease in their corn seed business.
Under the oversupply situation in the market, a solid R&D capacity has become particularly important for the long-term growth of seed companies, which can be reflected in Shandong Denghai´s development history. Besides, stripping inferior businesses and developing core seed businesses is also seems sensible for seed companies, just as Longping High-tech is doing. After all, non-seed businesses would disperse their focus or even dragged down their performance, which has been reflected significantly by Hefei Fengle and Gansu Dunhuang.
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