The number of high-quality, green, and water-resistant rice varieties approved by the state continues to increase, with high-yield, dense, and machine-harvestable varieties becoming the main direction in Corn breeding.
According to the Zhitong Finance APP, GF SEC has released a Research Report stating that the Ministry of Agriculture has announced a new batch of national approvals for varieties of rice, Corn, and others. The number of new high-quality green and highly resistant rice varieties in national approval continues to increase, and varieties that are dense, high-yielding, and suitable for machine harvesting have become the main direction for Corn breeding. Leading companies have performed impressively in the breeding of new varieties, and market share is expected to increase further.
Event: On December 31, 2024, the Ministry of Agriculture and Rural Affairs announced a new batch of national-level variety approval notices, with 405 rice varieties, 888 Corn varieties, 50 Cotton varieties, 34 Soybean varieties, and 2 Chicago SRW Wheat varieties approved.
GF Securities' main points are as follows:
Nationally approved varieties have shifted from "numerical growth" to "quality breakthroughs."
After 2021, the threshold for approving new varieties has been significantly raised. From 2022 to 2024, the number of nationally approved varieties (including Transgenic) has decreased year-on-year by 17%/1%/1%, shifting from rapid growth before 2021 to a stable decline. The degree of market homogenization and competition intensity is expected to continue to decrease.
Rice: The number of new high-quality green and highly resistant varieties continues to increase.
From the perspective of nationally approved varieties, the number of "three good varieties" that are high-yielding, high-quality, and green (disease-resistant) is increasing year by year, with the numbers being 22/28/31 for the years 2022-2024 respectively; the number of varieties meeting the first-level standards for "Quality of Edible Rice Varieties" is also increasing year by year, with numbers being 44/50/70 for 2022-2024. Leading companies have a greater number of nationally approved varieties, with a high proportion of green and high-quality varieties. Yuan Longping High-Tech Agriculture and Winall Hi-tech Seed had 31 and 59 new rice varieties pass national approval respectively, with 8 and 18 new varieties meeting the first-level standard for "Quality of Edible Rice Varieties," totaling 37%.
Corn: Since 2023, the focus of breeding has shifted to varieties that are high-yielding, suitable for machine harvesting, and resistant to high density.
The 2023 No. 1 Central Document clearly states the need to implement a corn yield improvement project, transitioning grain corn varieties from low planting density, tall stalks, and large ears to varieties that are highly resistant, high-yielding, dense, widely adaptable, and machine harvesting-friendly. The number of newly approved high-density varieties in 2024 is expected to increase further, with 47 varieties achieving a planting density of 5,500 plants per mu or more, an increase of 1,000 plants over conventional density. In the Northwest spring corn region, 70 varieties and 2 varieties in the Northeast spring corn region have an average yield exceeding 1,000 kilograms per mu. Leading companies have seen an increase in the proportion of new varieties, demonstrating superior performance in high-density and high-yield characteristics.
Yuan Longping High-Tech Agriculture, ShanDongDenghai Seeds, Winall Hi-tech Seed, Kangnong Seed Industry, and Zhongnongfa Seed Industry Group had 46/22/16/11/6 varieties pass national approval respectively, with increases of 24, 6, 8, 4, and a decrease of 3 compared to 2023. The combined proportion of varieties from these five companies is approximately 11%, which is an increase of about 3 percentage points from 2023. Yuan Longping High-Tech Agriculture, ShanDongDenghai Seeds, and Zhongnongfa Seed Industry Group had 7/2/1 varieties each that can reach a planting density of 5,500 plants per mu or more, collectively making up 21% of the varieties with planting densities above 5,500 plants per mu. Additionally, Yuan Longping High-Tech Agriculture and Winall Hi-tech Seed had 7 and 1 varieties respectively averaging over 1,000 kilograms per mu.
Investment suggestion: Leading companies are performing well in the breeding of new varieties, and market share is expected to increase further.
It is recommended to pay attention to Yuan Longping High-Tech Agriculture (000998.SZ), ShanDongDenghai Seeds (002041.SZ), Winall Hi-tech Seed (300087.SZ), and Kangnong Seed Industry (837403.BJ), among others.
Risk warning: Policy risks, natural disaster risks, and research and development progress not meeting expectations.