Recent Developments Among Three Listed Seed Companies in China

Summary

Three major listed seed companies in China—China Agricultural Development Seed Industry Group Co., Ltd. (CADSG), Henan Qiule Seed Industry Technology Co., Ltd. (Qiule Seed Industry), and Gansu Dunhuang Seed Industry Group Co., Ltd. (Dunhuang Seed)—have recently announced operational adjustments and financial results, highlighting the diverse challenges and strategies within the competitive seed market.

CADSG: Establishes New Research Institute Amid Profitability Pressure

On November 7, CADSG announced the establishment of a wholly-owned subsidiary, China Agricultural Development Grain Security (Beijing) Biotechnology Research Institute Co., Ltd., with a registered capital of RMB 15 million (approximately USD 2.12 million). This move aims to enhance its biotechnology R&D capabilities. The parent company maintains a broad business portfolio, with investments in 24 enterprises and ownership of 10 registered trademarks and 11 administrative licenses.

According to its 2024 annual report, CADSG achieved total operating revenue of RMB 556.3 million (approximately USD 78.50 million). However, net profit attributable to shareholders of the parent company declined to RMB 4.69 million (approximately USD 0.66 million). The year-on-year decrease was primarily attributed to two factors: first, weakened performance in the pesticide segment due to a sharp reduction in export orders, destocking, and falling domestic prices; second, challenges in the seed business resulting from an oversupplied domestic market and intensified competition.

Dunhuang Seed: Provides Guarantees for Subsidiary, Shows Profit Growth but Faces Liability Concerns

On November 3, Dunhuang Seed provided a working capital loan guarantee of RMB 9.80 million (approximately USD 1.38 million) for its controlled subsidiary, Guazhou Dunzhong Cotton Industry Co., Ltd. (Guazhou Cotton). The company's cumulative guarantee balance now stands at RMB 49.80 million (approximately USD 7.03 million), accounting for 7.64% of its audited net assets as of the end of 2024. All guarantees are within the limits authorized by the shareholders' meeting.

Guazhou Cotton, established in 2019, is primarily engaged in the purchase, processing, and sales of cotton and other agricultural products. As of December 31, 2024, its total assets were USD6.69 million, with a high asset-liability ratio of 80.98%. Its net profit for 2024 was USD 123,400.

Looking at the parent company's overall performance, Dunhuang Seed has demonstrated relatively stable revenue and consistent year-on-year growth in net profit attributable to the parent company from 2022 to the first three quarters of 2025. Notably, net profit grew by over 20% annually from 2022 to 2024, and surged by 106.98% year-on-year for the first three quarters of 2025. However, the company's asset-liability ratio, while showing a declining trend from 62.51% in 2022 to 49.40% by the end of the third quarter of 2025, remains at a level that warrants attention for long-term financial health.

Qiule Seed Industry: Consolidates Subsidiaries, Reports Net Loss in First Three Quarters

On October 28, Qiule Seed Industry announced that its wholly-owned subsidiary, Henan Weite Seed Industry Co., Ltd., would absorb and merge another wholly-owned subsidiary, Henan Jinwawa Seed Industry Co., Ltd. The consolidation is intended to optimize the management structure and reduce operational costs. Following the merger, Jinwawa Seed Industry will cease to exist as an independent legal entity, with all its assets, liabilities, and operations transferred to Weite Seed Industry. As a high-tech enterprise with an integrated "breeding and promotion" industrial system, this internal restructuring aims to improve efficiency.

Financially, the company reported operating income of RMB 150 million (approximately USD 21.17 million) for the first three quarters of 2025, representing an 8.31% year-on-year decrease. It recorded a net loss of RMB 16.14 million (approximately USD 2.28 million), a significant decline of 275.12% compared to the same period last year, indicating substantial operational pressure.

Summary

The recent moves by these three seed companies reflect the common industry challenges of intensified competition and market volatility. CADSG is strengthening its R&D layout for long-term development; Qiule Seed Industry is undergoing internal consolidation to address current profitability pressures; and Dunhuang Seed continues to support its subsidiary's operations through guarantees while maintaining its own profit growth, though it must manage guarantee risks and liability levels. The path toward transformation, upgrading, and high-quality development for China's seed enterprises remains ongoing.

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