Financial Alliance News, October 30th (Reporter Liu Jian Zeng Chuchu) With the intensification of competition in the corn seed industry and the highlighting of the issue of oversupply, the performance of listed seed companies has been under pressure. According to the financial reports of most A-share listed seed companies that have been released so far, the majority of companies have shown a downward trend in Q3 performance, including the leading seed industry company Yuan Longping High-Tech Agriculture (000998.SZ), which saw a decline in revenue in Q3, with net profit losses expanding.

Tonight, Yuan Longping High-Tech Agriculture released the third quarter report for 2024, achieving revenue of 2.881 billion yuan in the first three quarters, a year-on-year decrease of 14.46%, with a net loss attributable to shareholders of the listed company amounting to 0.475 billion yuan, compared to a net loss of 0.578 billion yuan in the same period last year, representing a 17.82% reduction in losses. In the third quarter alone, revenue reached 0.299 billion yuan, a 60.27% year-on-year decrease, recording a net loss of 0.587 billion yuan, with losses expanding by 40.49%.

From the revenue perspective, the company's Q3 quarterly revenue was nearly halved compared to the same period last year, and the revenue for the first three quarters also declined by over 10%. In the financial report, the company stated, 'The main reason is the impact of intensified competition in the domestic and international corn industry markets and the continuous low grain prices, resulting in a year-on-year decrease in corn seed sales volume and subsequently a decrease in revenue.'

In fact, observing from an industry perspective also confirms this situation. A reporter from Financial Alliance News learned from an industry professional, 'In fact, corn seeds are quite unusual in this cycle. This year, affected by grain prices and the variety of seed types, along with significant production capacity, everyone is aggressively pricing, leading to intense market competition and a high rate of seed returns. Before the National Day this year, corn prices had dropped to 0.9 RMB per kilogram. In reality, not only the pressure on corn seeds is significant this year, but the pressure on wheat seeds is also high.'

Corn seeds account for a high proportion of Yuan Longping High-Tech Agriculture's seed sales revenue, highlighting the under pressure situation. According to the company's business operations report for 2023-2024 released on the same day, from October 1, 2023, to September 30, 2024, the company sold corn seeds worth 5.492 billion yuan, accounting for 62.87% of total revenue and 61.31% of seed sales quantity.

From the perspective of net income, the company's Q3 net loss expanded by 40.49% compared to the same quarter last year, with a 17.82% reduction in net losses for the first three quarters. However, Financial Alliance News reporters noted that the company's adjusted net losses in Q3 and the first three quarters increased by 77.97% and 113.21% respectively compared to the same period last year. In fact, the company transferred 10.94% of its equity hold in Yuan Longping Biological to the Rural Industry Investment Fund Co., Ltd. of Central Enterprises, resulting in a 0.34 billion yuan increase in the company's current investment income.

Looking at the adjusted net income, the company's main business operations are still under pressure, as mentioned in the financial report, 'The main operating income decreased year-on-year, the main operating gross margin decreased year-on-year, leading to a year-on-year decrease in net income.'

The change in gross margin can also indirectly confirm this situation, the company's gross margin has been declining for three consecutive quarters, and Q3 has dropped to -1.94 percentage points.

It is worth noting that, due to the special cyclical nature of the seed industry, most of its profits are generally recognized in the fourth quarter of the current year and the first quarter of the next year. Contract liabilities are an important indicator to observe its subsequent situation. The financial report shows that, as of the end of the third quarter, Yuan Longping High-Tech Agriculture's contract liabilities have increased significantly compared to the same period last year, reaching 3.87 billion yuan, an increase of 14.8% year-on-year.