Origin Agritech Ltd. (NASDAQ:SEED)
Shares of Origin Agritech Ltd. (NASDAQ:SEED) rallied 21.62% after the company announced it had received RMB 152 million as the first batch payment of RMB421 with regard to the sale of its corn seed production and distribution business to Beijing Shihui. The selloff is part of a restructuring push that seeks to align the company’s operations to leading agricultural biotechnology and corn seed breeding programs.
Shares of Origin Agritech Ltd. (NASDAQ:SEED) are currently trading in an upward trend after bouncing back from this year’s low of $1.40 a share. The stock is trading in a tight $1.51 to $1.96 trading range with immediate resistance at the $1.90 mark, above which it could rise to $2.20 mark.
Origin Agritech Ltd. (NASDAQ:SEED) is an agricultural biotechnology company specializing in the development, production, and distribution of hybrid seeds. The company also specializes in crop seed breeding, genetic improvement, and related technical services.
In April, Origin Agritech Ltd. (NASDAQ:SEED) sold its Corn, seed production and distribution business as it sought to reposition its commercial seed business for stronger future growth. Under the terms of an agreement, Beijing Shihui is to make an additional payment of RMB 69 Million, before November 15, 2017.
The buyer is also to make a final payment of RMB 200 million including an initial RMB 10 million down payment, no later than December 15, 2017. Origin Agritech Ltd. (NASDAQ:SEED) also retained its corn breeding and biotech research programs as well as all intellectual properties as part of the sell-off agreement.
Origin Agritech Big Play
The company’s chief executive officer, Bill Niebur, expects proceeds from the sale to spearhead the company’s journey to becoming a leading international corn seed technology company.
“The proceeds significantly accelerate and expand our capabilities to develop and deliver corn biotechnology traits and corn product licensing business within China and around the globe. All current indicators point to a near-term commercial launch for the projected USD 5-6 billion GM-trained corn seed market in China,” said Mr. Niebur.
Origin Agritech Ltd. (NASDAQ:SEED) already boasts of a leading corn, germplasm collection and biotech trait platform that it plans to use to address strong customer demand for superior products. The company is also eyeing strategic partnerships with leading agricultural multinationals and Chinese seed companies as it looks to pursue growth opportunities in China’s seed market.
Separately. Mr. Niebur recently purchased 73, 530 of the company’s treasury shares valued at $100,000. The private placement purchase occurred at a purchase price of $1.36 a share.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.