① Longping Hi-Tech released a performance forecast. The company expects to achieve net profit of 165 million yuan to 225 million yuan in 2023, turning a year-on-year loss into a profit ② The company achieved significant growth in corn and rice seeds during the reporting period ③ The company reduced costs and increased efficiency and improved gross margin contributed to the company's net profit growth
Finance Association, January 12 (Reporters Liu Jian and Wang Ping An) Seed industry revitalization is advancing at an accelerated pace, and domestic seed industry leader Longping Hi-Tech (000998.SZ) expects revenue growth in 2023 while turning a loss into a profit. “One of the main reasons is that we have acquired the main entity developed in Longping from abroad, and the second is because our business in the rice and corn sector has grown.” A relevant person from the company told the Financial Federation reporter.
This evening, Longping Hi-Tech disclosed its performance forecast. It is expected to achieve net profit of 165 million yuan to 225 million yuan in 2023, turning a year-on-year loss into a profit. The net loss for the same period last year was 833 million yuan after adjustment; it is expected to achieve operating income of 8.8 billion yuan to 9.5 billion yuan in 2023.
(Picture source: Company Announcement)
In 2023, Longping Hi-Tech University continued to move. Among them, it acquired 13.68% of the shares of Longping Agricultural Development Co., Ltd. through cash payments and completed major asset restructuring. Longping Development was included in the scope of the company's consolidated statements, which contributed to the company's revenue growth.
A Finance Association reporter noticed that due to the inclusion of Longping Development in the company's consolidated statements, the company's revenue increased by 138.56% to 157.54% year-on-year according to pre-adjustment estimates. According to adjusted estimates, the company's revenue increased 16.83%-26.13% year over year. The company said, “Mainly, the company's independent research and development capabilities are constantly improving. High-yield and high-quality varieties are very popular in the market, and the market share is constantly increasing. The operating income of corn seeds and rice seeds has increased significantly compared to the same period last year.”
In terms of net profit, promoting cost reduction and efficiency and improving gross margin have become important factors in the company's net profit growth. As can be seen from the previous three quarter earnings report, the company's gross margin for the first three quarters increased by 4 percentage points compared to the same period last year.
In addition, the company used RMB to replace all US dollar loans during the reporting period, reducing foreign exchange losses by about 123 million yuan compared to the same period last year, which also contributed to the increase in the company's net profit.
Longping Hi-Tech also confessed, “The company has vigorously implemented management measures to reduce costs, increase efficiency, and reduce costs. Domestic industrial companies have continuously optimized the layout of production bases and reduced production costs, so that gross margin has been improved and increased to a certain extent. At the same time, sales expenses and management expenses rates of domestic industrial companies have all been reduced to varying degrees compared to the same period last year, and the cost control results are obvious, so the company's profitability has been improved accordingly.”
Looking ahead to this year, the Ministry of Agriculture and Rural Affairs previously announced the approval list for the first batch of genetically modified corn and soybean varieties, and then issued the first batch of genetically modified corn and soybean seeds production and operation licenses, which means that commercialization of genetically modified genes is gradually being implemented. In terms of traits, Longping Hi-Tech holds shares in the three traits companies Hangzhou Ruifeng, Longping Biology, and Guofeng Biotechnology. Of the 37 genetically-modified corn varieties tested in the first batch, 8 are varieties owned by Longping Hi-Tech, accounting for 21.6%.
Some analysts pointed out, “With the commercialization of genetically modified genes, enterprises with superior reserves are expected to benefit first. According to our forecasts, subsequent licensing fees and genetically-modified corn seeds are expected to contribute to Longping Hi-Tech's net profit.”