Financial Data and Key Metrics Changes - Corteva reported top and bottom line growth with over 200 basis points of operating EBITDA margin expansion in Q2 2025 compared to the same period last year [6] - Organic sales increased by 7% year-over-year in Q2, with operating EBITDA growth of 13% and a margin expansion of 215 basis points [17][18] - For the first half of 2025, operating EBITDA was up more than $400 million to just over $3.35 billion, with a margin of nearly 31%, reflecting a 300 basis point increase [20] Business Line Data and Key Metrics Changes - The Seed Business Unit experienced a 32% increase in price and volume gains, contributing to a significant performance in North America [18] - Crop Protection business saw an 8% increase in volume, with double-digit growth in Brazil, despite a 2% decline in pricing due to competitive dynamics [18][19] - The Seed segment achieved a $70 million benefit in net royalties, exceeding expectations for the full year [7] Market Data and Key Metrics Changes - Overall agricultural fundamentals remain mixed, with growing demand for grains and oilseeds, but moderated crop prices and margins [11] - The U.S. is expected to have a record harvest, with corn futures reflecting above-average crop condition ratings [12] - The market is seeing a shift from soybeans to corn, with expectations of increased corn acreage in Brazil and Argentina [26] Company Strategy and Development Direction - Corteva is focused on operational excellence initiatives and has raised its full-year net cost improvement target to $450 million from $400 million [7] - The company remains optimistic about growth in 2026, with a focus on investing in growth platforms and delivering meaningful royalty productivity [14] - The strategy includes enhancing product offerings and leveraging out-licensing opportunities, particularly in corn and soybeans [58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit bottom line growth and meaningful margin improvement for the year [10] - The company anticipates low to mid-single-digit pricing headwinds in the Crop Protection segment for the second half of the year [9] - Management highlighted the importance of global production keeping pace with consumption, which is critical for maintaining market stability [13] Other Important Information - Corteva is on track for $1 billion in share repurchases in 2025 and announced a nearly 6% increase in the annual dividend [29] - The company expects a full-year free cash flow of approximately $1.9 billion, with a cash conversion rate of about 50% [22] Q&A Session Summary Question: What factors are influencing the forecast for the back half of the year? - Management acknowledged the tough comparison for Crop Protection and negative pricing in Brazil, while also discussing seed acreage expectations [32][33] Question: Can you elaborate on the free cash flow guidance? - Management indicated that the increase in free cash flow guidance is driven by earnings growth and lower cash taxes due to recent legislation [38][41] Question: What are the expectations for share gains in corn and soy? - Management reported strong performance in both corn and soy, with significant market share gains attributed to product performance and licensing strategies [70] Question: How is the company navigating tariff impacts on the supply chain? - Management stated that the impact of tariffs has been minimal due to proactive strategies in improving supply chain resiliency [88][90] Question: What are the expectations for Crop Protection pricing in the back half? - Management noted that while pricing pressures exist, there are signs of stabilization and potential improvement in the Crop Protection market [82][84]

Financial Data and Key Metrics Changes - Corteva reported top and bottom line growth with over 200 basis points of operating EBITDA margin expansion in Q2 2025 compared to the same period last year [5] - Organic sales increased by 7% year-over-year for the quarter, driven by gains in both seed and crop protection [15] - Operating EBITDA for the quarter grew by 13%, with a margin expansion of 215 basis points compared to the prior year [16] Business Line Data and Key Metrics Changes - The Seed business unit experienced a 32% increase in price and volume gains, contributing significantly to the first half results [16] - Crop Protection saw an 8% increase in volume, with double-digit growth in new products and biologicals [17] - The Seed and Crop Protection units combined delivered over $400 million in productivity and cost benefits, including lower commodity costs and raw material deflation [19] Market Data and Key Metrics Changes - Overall agricultural fundamentals remain mixed, with growing demand for grains and oilseeds, but moderated crop prices and margins [10] - The U.S. is expected to see a record harvest, with corn futures reflecting above-average crop condition ratings [11] - The stocks-to-use ratio for corn is expected to remain below historical averages despite the anticipated large crop [12] Company Strategy and Development Direction - Corteva is focused on investing in growth platforms and delivering top-tier technology to enhance farmer productivity and sustainability [14] - The company raised its full-year operating EBITDA guidance to $3.8 billion, reflecting confidence in continued performance [9] - There is an emphasis on out-licensing opportunities, with a projected $4 billion market potential in corn and soybeans [55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit bottom line growth and meaningful margin improvement for the year [9] - The company anticipates low to mid-single-digit pricing headwinds in the Crop Protection segment for the second half of the year [8] - Management remains optimistic about growth in 2026, with expectations for continued strong performance in key markets [13] Other Important Information - Corteva announced a nearly 6% increase in the annual dividend, marking the fifth consecutive annual increase [27] - The company is on track for $1 billion in share repurchases in 2025, reflecting a strong balance sheet and cash flow outlook [27] Q&A Session Summary Question: What factors are influencing the forecast for the back half of the year? - Management acknowledged the tough comparisons in Crop Protection and negative pricing pressures in Brazil, while also highlighting expectations for mid-single-digit acreage increases in Latin America [30][34] Question: Can you elaborate on the free cash flow guidance? - The increase in free cash flow guidance to approximately $1.9 billion is attributed to earnings growth and lower cash taxes from recent legislation [40][41] Question: What are the expectations for share gains in corn and soy? - Management indicated strong performance in both corn and soy, with significant market share gains driven by product performance and licensing opportunities [68][70] Question: How are tariffs affecting the supply chain? - The impact of tariffs has been minimal due to proactive strategies in multisourcing and supply chain management [89] Question: What are the expectations for Crop Protection pricing? - Management expects low single-digit pricing declines in Crop Protection, particularly in Brazil, but sees signs of stabilization and potential improvement in 2026 [82][83]

Performance Forecast - The company expects a net loss attributable to shareholders of between 25 million and 30 million yuan, compared to a loss of 22.34 million yuan in the same period last year [1] - The net profit after deducting non-recurring gains and losses is projected to be between 30 million and 35 million yuan, compared to a loss of 27.35 million yuan in the previous year [1] - Basic earnings per share are estimated to be between -0.0407 yuan and -0.0488 yuan, compared to -0.0364 yuan per share last year [1] Reasons for Performance Changes - Sales revenue increased year-on-year, driven by the successful launch of the Le You series and Xiang Liang You series, which showed excellent performance in yield and disease resistance, leading to higher average prices [1] - Corn seed sales revenue declined due to oversupply in the domestic corn seed market, increased inventory pressure, and intensified market competition [1] - The market performance of the transgenic variety Tie 391K was below expectations, resulting in increased return volumes [1] - The company reduced sales of low-margin products and decreased production of raw materials and intermediates to improve safety and environmental standards, impacting sales revenue [1] - Overall market conditions for raw materials declined, leading to price decreases for some products year-on-year [1] - Increased depreciation from construction projects being put into use and higher environmental expenditures also contributed to the performance changes [1]

Group 1 - The company expects to turn a profit in the first half of 2025, with a projected net profit between 19 million and 25 million yuan, compared to a loss in the same period last year [1][2] - The seed business has shown significant growth, with rice seed sales increasing by over 100% and corn seed sales increasing by over 300% year-on-year [1] - The company has improved its feed business, with sales growth and reduced operating expenses due to enhanced management and efficiency [1] Group 2 - The company has reported a total of 3.8347 million pigs sold from its controlled and affiliated companies, representing a year-on-year increase of 34.64% [2] - Continuous improvements in production metrics and breeding capabilities have led to a decrease in pig farming costs, contributing to profitability in the pig farming segment [2]

Core Viewpoint - Xiangyang Chia Tai Seed Industry Co., Ltd. has been accepted for IPO on the Beijing Stock Exchange, with CITIC Securities as the sponsor and KPMG Huazhen as the accounting firm [2] Company Overview - Established in July 1996, the company focuses on the research, production, and sales of corn seeds, operating as an integrated seed enterprise with a complete system for research, production, sales, promotion, and service [2] - As of December 31, 2024, the company has obtained 68 plant variety authorizations and has 71 approved corn varieties for sale, covering major corn production areas in China [2] Financial Performance - The company reported revenues of 319 million yuan, 409 million yuan, and 380 million yuan for the years 2022, 2023, and 2024 respectively, indicating a year-on-year revenue decline of 7.1% in 2024 [3] - Net profits for the same years were 94.69 million yuan, 88.43 million yuan, and 81.13 million yuan, reflecting a decrease of 8.25% in 2024 compared to the previous year [3] - The gross profit margin was 40.71%, 39.52%, and 47.13% for the years 2022, 2023, and 2024 respectively [3] - Research and development expenses accounted for 5.37%, 5.70%, and 7.04% of operating revenue in the respective years [3] Shareholding Structure - Chia Tai Group directly holds 49 million shares, representing a 33.99% stake, while Chia Tai Livestock Investment holds 40.01 million shares, accounting for 27.76% [5] - Chia Tai Group is the controlling shareholder of the company, with no actual controller reported during the reporting period [5] - Chia Tai Group, established in 1976 in Thailand, operates in various sectors including agriculture, food, retail, telecommunications, finance, real estate, pharmaceuticals, and machinery across over 100 countries [5]

Core Viewpoint The company, Yuan Long Ping High-Tech Agriculture Co., Ltd., is conducting a private placement of shares to raise approximately 1.2 billion RMB, primarily aimed at repaying bank loans and supplementing working capital. The issuance has received necessary approvals from regulatory bodies and is structured to avoid significant changes in control or ownership distribution. Group 1: Issuance Details - The total amount to be raised from the issuance is 1,199,999,994.81 RMB, with a net amount of 1,187,526,409.91 RMB after deducting related issuance costs [3][4] - The issuance price is set at 7.87 RMB per share, which is not lower than 80% of the average trading price over the previous 20 trading days [4] - The number of shares to be issued is 152,477,763, which does not exceed 30% of the total share capital prior to the issuance [4][5] Group 2: Shareholder Structure - After the issuance, the controlling shareholders will remain as CITIC Agriculture and CITIC Xingye, and the issuance will not trigger mandatory tender offer obligations [5] - The first major shareholder, CITIC Agriculture, holds 16.54% of the shares, while the top ten shareholders collectively hold 33.85% of the total share capital [19][20] Group 3: Financial Performance and Risks - The company has experienced fluctuations in net profit, with figures of -980.31 million RMB, 486.87 million RMB, -288.75 million RMB, and 10.74 million RMB for the periods from 2022 to the first quarter of 2025 [8] - The company faces risks related to grain price volatility, which can impact seed sales prices and overall revenue [7][8] - The company has significant overseas operations, with foreign currency exposure that may affect financial performance due to exchange rate fluctuations [9][10] Group 4: Regulatory Environment - The company operates under the supervision of the Ministry of Agriculture and Rural Affairs in China, with relevant industry regulations governing seed production and sales [23][24] - The seed industry in China is regulated by a comprehensive legal framework, including laws on variety protection and seed quality inspection [24]

Investment Rating - The investment rating for the agriculture, forestry, animal husbandry, and fishery industry is "Positive" (maintained) [2] Core Insights - The agricultural industry achieved a revenue of CNY 11,498.20 billion in 2024, a year-on-year decrease of 3.68%, while the net profit attributable to shareholders rose to CNY 466.39 billion, an increase of 806.55% [6][17] - In Q1 2025, the industry reported a revenue of CNY 2,706.77 billion, a year-on-year growth of 6.79%, with a net profit of CNY 133.13 billion, up 795.07% [6][17] - The overall profitability of the industry improved significantly in Q1 2025, with gross profit margin at 12.91%, net profit margin at 5.16%, and return on equity (ROE) at 2.57%, all showing year-on-year increases [21][30] Summary by Sections Overall Industry Performance - In 2024, the agricultural industry saw a slight decline in revenue but a substantial increase in net profit, indicating improved profitability despite lower sales [17] - The profitability metrics for Q1 2025 showed significant improvements compared to the previous year, with a notable decrease in the expense ratio [21] Sub-industry Analysis - The livestock sector experienced a remarkable increase in net profit, with pig farming turning profitable in 2024 and continuing strong performance into 2025 [6][29] - The poultry farming sector also showed strong growth, with net profit increasing significantly due to reduced feed costs and improved efficiency [43][44] - The pet food sector maintained high growth rates, with revenues and profits continuing to rise [6][25] Livestock Farming - In 2024, pig farming companies generated CNY 4,370.03 billion in revenue, a slight decline, but net profit surged to CNY 320.13 billion, reflecting a recovery in profitability [29] - In Q1 2025, revenues for pig farming increased by 18.69% year-on-year, with net profit rising by 236.12% [29][30] Poultry Farming - Poultry farming companies achieved a revenue of CNY 520.71 billion in 2024, with a net profit of CNY 28.49 billion, marking a significant increase [43] - In Q1 2025, revenue continued to grow, reaching CNY 118.71 billion, with net profit increasing to CNY 4.51 billion [43][44] Feed Industry - The feed industry reported a revenue of CNY 1,863.30 billion in 2024, with a net profit of CNY 52.48 billion, showing a significant recovery in profitability [58] - In Q1 2025, revenues rose to CNY 428.66 billion, with net profit increasing to CNY 15.26 billion [58][61] Animal Health - The animal health sector saw a revenue of CNY 129.02 billion in 2024, with a net profit of CNY 10.82 billion, despite a decline in profitability [66] - In Q1 2025, revenues increased to CNY 30.96 billion, with net profit rising to CNY 4.26 billion [66]

行业概览 2024 年在大宗农产品原料价格下行的背景下，农林牧渔行业整体营收小幅下滑，但是原材料成本的下降利好养殖板块 的盈利回暖，在生猪养殖产能去化的驱动下，生猪养殖板块盈利实现明显好转，禽养殖板块实现稳健盈利，农业板块 整体盈利表现明显改善。2024 年农林牧渔板块实现营业收入为 1.24 万亿，同比-4.06%；实现归母净利润 479.85 亿 元，同比由亏转盈，养殖板块盈利出现明显改善。2024Q4 板块实现营业收入 3496.94 亿元，同比+0.98%，实现归母净 利润 162.09 亿元，同比+293.20%；2025Q1 板块实现营业收入 2907 亿元，同比+4.44%，实现归母净利润 133.35 亿元， 同比实现扭亏为盈，农林牧渔板块盈利实现好转。 生猪养殖 2024 年生猪养殖板块景气回升，2024 年实现收入 4832.76 亿元，同比-2.98%；实现归母净利润 331.42 亿元，同比扭 亏为盈，板块盈利明显改善。2025Q1 板块实现收入 1188.88 亿元，同比+17.32%；实现归母净利润 81.51 亿元，同比 扭亏为盈，在头部企业出栏量持续增加与养殖成本持续改善的背景 ...

Summary of Conference Call Records Industry Overview Agriculture Sector - Focus on the application of AI and low-altitude data technologies in agriculture, with a long-term positive impact on leading agricultural technology companies. Short-term effects are limited [1][2] - The pig farming industry is currently profitable, but capacity reduction has not yet begun. Pig prices are expected to fluctuate downwards in the first half of the year, with rising soybean meal prices increasing cost pressures. Recommended stocks include Muyuan Foods and Juxing Agriculture [1][4] Pet Food Industry - The impact of increased tariffs on pet food exports to the U.S. is limited, as major companies have established overseas production capabilities. Companies like Zhongchong and Petty are well-positioned to handle U.S. orders [1][5] - Guobao's brand upgrades for the Maifudi brand include the Buff series and goat milk meat series, enhancing brand recognition and product pricing [1][6][7] - Zhongchong and Petty plan to launch staple food products in 2025, indicating continued rapid growth in the industry [1][9] Planting and Seed Industry - The planting and seed sectors face uncertainty, with expectations for genetically modified crop promotion already priced in. High seed inventories and falling grain prices may lead to bottom-line profitability [1][10] Baijiu (Chinese Liquor) Sector - The baijiu sector is undergoing valuation recovery, with consumption demand during the Spring Festival showing differentiation, leading to market share concentration among leading companies. The price system for Feitian Moutai is stabilizing [1][11] - 2025 is expected to be a year for the baijiu industry to solidify its bottom, with the second quarter being particularly critical [1][12] Key Points and Arguments Agriculture Sector - The agricultural sector's performance post the 2025 Central Document is subdued, with traditional agriculture being stable and conservative language regarding genetically modified crops leading to some capital withdrawal [2] Pig Farming Industry - As of late February, the average price of pigs is approximately 14.5 yuan/kg, down about 10% from before the Spring Festival. Leading companies are achieving profits of around 100 yuan per pig, while excellent family farms can achieve profits of 150-200 yuan per pig [4] Pet Food Industry - The potential increase in tariffs on pet food exports to the U.S. is not expected to significantly impact overall profits, as the majority of companies have adapted their production strategies [5] Brand Upgrades in Pet Food - Guobao's Maifudi brand has undergone significant updates, including a shift in product naming and packaging, which may lead to the Buff series becoming a standalone brand [6][7] Baijiu Sector Trends - The baijiu sector is experiencing a recovery in valuation, with a stable price system for key products like Feitian Moutai. The market is expected to stabilize as core products find their positioning [11][12] Pharmaceutical Innovation - The innovative pharmaceutical sector is performing well, with companies like Heng Rui Pharmaceutical expected to launch nearly ten new products in the next two to three years, leading to explosive growth [3][17] - Bai Jie Shen Zhou is expected to achieve profitability in 2025, with significant revenue from its leading product, Zebu Tini [3][18] Investment Recommendations - Recommended stocks include Muyuan Foods and Juxing Agriculture in the pig farming sector, and Heng Rui Pharmaceutical in the pharmaceutical sector. The baijiu sector recommends high-end brands like Moutai and Wuliangye [1][14][17] Other Important Insights - The planting and seed industry requires close monitoring of new genetically modified crop data and U.S.-China trade relations affecting agricultural tariffs [1][10] - The pet food industry is expected to continue its rapid growth trajectory, with significant product launches planned for 2025 [1][9]