Gansu Dunhuang Seed Co Ltd

In this morning's session, A-share market style shifted, with agricultural and non-ferrous metals cyclical sectors surging while semiconductor technology sectors pulled back. The Shanghai Composite Index reported at 3,946.99 points, up 0.36%, with combined turnover on the Shanghai and Shenzhen exchanges reaching 1.26 trillion yuan in the half-day session. The agricultural sector saw another wave of limit-ups, with Yasheng Group hitting its fourth consecutive limit-up, Dunhuang Seed achieving a third consecutive limit-up, and the Shenwan Agriculture, Forestry, Animal Husbandry and Fishery Index rising 1.53%. A World Meteorological Organization bulletin shows the probability of the El Niño event persisting until February 2027 is close to 100%, and it will reach super intensity in the coming months, with a peak expected around the end of 2026. Affected by this, global agricultural product prices have risen, with Chicago wheat futures hitting a three-year high. The fertilizer sector also moved, with Luhua Technology and other stocks hitting limit-up, and domestic urea quotes rising by 50 to 150 yuan per tonne in a single day. The non-ferrous metals sector rallied, with LME copper prices hitting a record high, touching 14,617 US dollars per tonne. Analysts at Guosen Futures noted that record-low copper concentrate processing fees, inventory divergence, and the start of peak-season restocking are supporting copper prices.

In early trading on September 7, grain concept stocks surged collectively. Yasheng Group hit limit up at the opening and achieved three consecutive limit-up boards, while Dunhuang Seed recorded four limit-up boards in seven trading days. On the news front, six departments including the Ministry of Agriculture and Rural Affairs jointly issued the Implementation Plan for Upholding Prioritized Development of Agriculture and Rural Areas and Improving the Rural Revitalization Investment Mechanism, proposing to basically establish a rural revitalization investment mechanism suited to the level of agricultural and rural development by 2030. In addition, a report by the United Nations Food and Agriculture Organization showed that the global food price index rose 1.9 percent month-on-month in August, and the World Meteorological Organization confirmed that an El Niño event has formed and may persist until 2027. In the first half of the year, Yasheng Group achieved operating revenue of 1.472 billion yuan, down 2.63 percent year-on-year, and net profit of 24.9188 million yuan, down 11.01 percent year-on-year.

Dunhuang Seed has released its 2026 interim report. Total operating revenue was 868 million yuan, up 20.93% year on year. Net profit attributable to the parent company was 145 million yuan, up 165.68% year on year, marking a fourth consecutive year of growth. Net cash flow from operating activities was 19.61 million yuan, up 177.10% year on year. The company's asset-liability ratio was 37.49%, gross margin was 48.61%, return on equity was 17.10%, and diluted earnings per share was 0.27 yuan. The number of shareholders was 55,000, and the top ten shareholders held 30.54% of total share capital.

JPMorgan recently issued a report warning that the next global food crisis may be brewing and could erupt next year. A-share agricultural stocks responded with broad gains on August 17, with Jinjian Rice hitting the daily limit up, and Qiule Seed, Shennong Seed, Kangnong Seed, Dunhuang Seed, and Shenzhen Cereals Holdings following higher. The report expects global food price inflation to rise from 2.8 percent in the first half of this year to 5 percent in the first half of next year. It also argues that Middle East conflict has disrupted passage through the Strait of Hormuz, and that a strong El Niño could reduce crop yields. The combination of these factors will hit agricultural production and keep food prices elevated through the first half of 2027. Nora Szentivanyi, the economist who led the research, said global crop prices have not yet peaked because transport of agricultural inputs such as fertiliser has been affected. This year's shock to global energy supply could double the impact of a super El Niño on food prices. The report also notes that agriculture in parts of Asia, Africa, and Latin America is more sensitive to weather changes, and food accounts for a higher share of household consumption there. Emerging market economies will be hit hardest by this shock. Last year, about 645 million people worldwide faced hunger, and about 2.1 billion people faced moderate or severe food insecurity, accounting for 25.8 percent of the global population.

Dunhuang Seed Industry disclosed its earnings forecast, estimating that net profit attributable to shareholders of the listed company for the first half of 2026 will be approximately 140 million yuan, representing a year-on-year increase of about 157.1%. The company stated that during the first half, it continued to optimize product marketing strategies, and by leveraging precise market positioning and multi-channel promotional initiatives, sales of its proprietary core competitive varieties steadily climbed.