This report is the second in a series of Syngenta Group reports, which aims to explore the industry development opportunities and competitive advantages of Syngenta's seed business.
Syngenta's seed business mainly depends on Syngenta Seeds and Syngenta China's seed plate, and the seed industry ranks third in the world. According to the category of products, the seeds sold by Syngenta Group can be divided into field crop seeds, vegetable seeds and flower seeds. Among them, the seed of field crops accounts for the highest proportion, accounting for 45% of the income in 2020. The company has the world's leading germplasm and character platform, occupies a large share of the international mainstream biotechnology varieties and traits, and also has the world's leading gene editing technology.
The global seed market tends to be stable, and China has considerable potential for growth. The global seed industry has experienced the stage from government leadership to globalization, and has experienced the promotion of biological breeding and the reform of the industry. at present, the overall industry scale has tended to be stable. The market size of China's seed industry has increased from 49.3 billion yuan in 2015 to 55.2 billion yuan in 2020, with a compound annual growth rate of 2.3%. It is expected to grow at a compound growth rate of 5.8% to 73.2 billion yuan in 2025 in the future. Compared with overseas markets, China's seed industry started relatively late, and the domestic market is pregnant with greater development opportunities. With the continuous promotion of biological breeding products, the scale of China's seed industry is expected to continue to expand.
The overseas seed industry has a high degree of market concentration, and there are still opportunities for reform at home. Global seed enterprises have experienced three waves of mergers and acquisitions, multinational seed giants have carried out super-large mergers and acquisitions and resource integration, and have gradually formed a global seed industry pattern of "two super, two strong + characteristic seed enterprises". However, the pattern of seed industry in China is relatively scattered, and there is no monopoly oligopoly for the time being. In 2020, Syngenta Group's domestic market share is about 3%, second only to Longping Hi-Tech. China is in the early stage of the promotion of biological breeding, benefiting from the improvement of the industry intellectual property protection mechanism and the continuous optimization of the competitive environment, the industry pattern is expected to be reshaped, and enterprises with core biological breeding technology are expected to achieve a continuous increase in market share. As the second largest seed market in the world and the market with the greatest growth potential in the next few years, enterprises that can grasp the opportunities in the domestic market are expected to explore new growth points through the Chinese market. It is also expected to occupy a more important position in the international market competition.
The company is rich in germplasm resources and leads the R & D and innovation industry. We believe that Syngenta Group has three advantages: germplasm resources, R & D innovation and platform coordination after a hundred years of development. Germplasm resources: the company has established one of the largest germplasm banks in the world, and Syngenta is also in the forefront of the world in terms of transgenic patent reserves. R & D innovation: the company has the top R & D technology in the industry to ensure the core competitiveness of the company's seed R & D from the seed life cycle dimension. Syngenta was one of the earliest companies to carry out biological breeding, and then it was inferior to Monsanto in the field of transgenic breeding because of its strategic focus. However, in recent years, the company has regained its momentum and renewed its efforts in the field of biological breeding, leading the industry in R & D investment and platform construction. Platform collaboration: as the "national team" in the agricultural field, the company can become a comprehensive solution provider of products + modern agricultural services by integrating its own agrochemical resources and sales channels with Sinochem, and through the interaction and coordination between plates.
Company profit forecast and investment rating: we are optimistic about the continuous expansion of the domestic seed market and the continuous improvement of the industry pattern. Syngenta Group has three major advantages of germplasm resources, R & D innovation and platform coordination. We believe that the company can fully grasp the opportunities in the domestic market and explore new growth points through the Chinese market. It is also expected to occupy a more important position in the international market competition. The company is not yet listed and will not be rated for the time being.
Risk tips: major changes in industry policy, the company's domestic business expansion is not as expected, GM seed commercial landing progress is not as expected, and so on.