Gengchen Han
谢谢大家。早上好，对于在中国的各位，晚上好。在开始之前，我想说明一下，2014财年财务业绩的新闻稿已于今天早些时候发布。2014财年是中国种子行业极具挑战性的一年。然而，我们成功度过了这场风暴，并且相信我们走出风暴时已成为一家更强大、更快乐的公司。尽管管理层无法控制我们运营所处的环境，但我们有效管理了我们可以控制的部分，并很自豪地与大家分享其中的一些成就。在今天的准备发言中，我将首先讨论我们的生物技术发展，然后是我们的运营改进以及这些改进如何帮助我们降低成本结构。接着我将回顾本财年的财务业绩。首先关于生物技术进展，我们通过几代转基因技术进一步推进了转基因玉米种子产品线。我们已从中国农业部获得并宣布了第一代转基因植酸酶玉米种子的生物安全证书。此外，我们有四个商业杂交种或植酸酶性状已完成第四阶段生产试验，目前正处于第五阶段生物安全证书申请阶段。更重要的是，我们下一代生物技术产品草甘膦耐受性状也已进入第四阶段生产试验，正如我提到的，正在为第五阶段生物安全证书做准备。我们草甘膦耐受与抗虫叠加性状的新技术已显示出非常有前景的结果，目前正处于第三阶段环境释放试验。我们相信我们是中国领先的生物技术种子公司，今天我想与大家分享的是，我们的领先地位通过专利得到了强有力的知识产权保护。除了研究机构合作伙伴拥有的专利外，Origin目前在国内拥有六项专利，并在生物技术领域拥有一项广泛的国际PCT专利。2014财年是取得重大进展的一年，我们获得了三项专利，并申请了另外三项专利。现在我也想与大家分享同样令人兴奋的消息：将生物技术性状回交到杂交玉米品种中，这是生物技术种子产品商业化的重要一步。在不深入技术细节的情况下，我应该说明的是，通常需要数年时间才能完成每个玉米品种的回交步骤。在此，我想向大家报告，我们已经取得了理想的结果，将我们的生物技术性状整合到了我们自己的玉米品种以及跨国公司的品种中。这些跨国公司有意在中国商业专利获批后授权使用我们的转基因技术。接下来在运营改进方面，我们在2014财年实现了运营效率和成本降低方面的显著改善，将管理费用减少了22%，并将一般及行政费用同比降低了30%。我们相信过去三年在成本削减和运营改进方面的努力至关重要，尤其是在我们面临行业低谷周期挑战时。仅就G&A费用而言，我们自2011财年以来减少了约4000万元人民币或650万美元的成本，2014财年的G&A费用已接近2011财年费用的一半。现在我想总结一下2014财年的财务表现。本年度净亏损为953万元人民币或155万美元，而去年同期净利润为749万元人民币。亏损主要是由于收入下降以及生产成本增加所致。2014财年每股净亏损为0.42元人民币或0.07美元，而2013财年每股净利润为0.32元人民币。2014财年总收入为4.1489亿元人民币或6752万美元，较上年的4.8169亿元人民币下降14%。总体而言，收入下降主要是由于公司水稻种子业务销售下降以及玉米种子合同生产业务减少所致。2014财年毛利率为27.4%，而2013财年为34.6%。这一下降主要是由于2014财年生产产量损失导致种子平均单位采购成本上升所致。在资产负债表方面，截至2014年9月30日，我们拥有现金及现金等价物4627万元人民币或752万美元，总借款为2.8983亿元人民币或4711万美元。年末库存为5.1637亿元人民币，高于2013年9月30日的4.7081亿元人民币。我们预计库存将在2015财年减少，这是由于2014财年生产面积减少的结果。在现金流方面，2014财年经营活动产生的净现金流出为8564万元人民币或1492万美元，而2013财年现金流出为1.4611亿元人民币。2014财年投资活动和筹资活动的净现金变动均较小，低于100万元人民币。展望2015财年，我们有信心增加销售收入并显著改善整体营业利润。我们预计随着行业玉米种子库存预计下降，市场状况将有所恢复。更重要的是，我们相信随着我们按产品管理库存和销售工作，经营活动产生的现金流将显著恢复。至此，我已完成了今天的演示。现在我将开放电话会议进行问答环节。接线员，请开始问答环节。
Gengchen Han
Thank you. Good morning, and for those in China, good evening. Before I start, I would like to state that the press release for fiscal year 2014s financial results have been released earlier this morning. Fiscal Year 2014 was a very challenging year in the seed industry in China. However, we have successfully weathered through the storm and we believe we have come out of the storm with a much stronger and a happier company. Although the management couldn’t control the environment we are operating at, we have effectively managed what we can control and we are proud to share with you some of those achievements. In today’s prepared remark, I will first discuss about our biotechnology development, followed by our operational improvements and how those improvements helped us to reduce our cost structure. I will then go over our financial results for the year. First on the biotechnology progress, we have further advanced our genetically modified corn seed pipeline with several generations of GM technologies. We received and announced the Bio-Safety Certificate from Chinese Ministry of Agriculture this with from our first generation transgenic phytase corn seed. In addition, we have four commercial hybrids or phytase traits that have as per the Phase 4 production test and they are now in the Phase 5 by safety certificate stage. More importantly, our next generation biotech products glyphosate tolerance concept has also has the Phase 4 production test and as I mentioned [ph] for the Phase 5 Bio-Safety Certificate. Our new technology of stacked traits of glyphosate tolerance and the insect of resistance has shown very promising results and is now in Phase three environmental release test. We believe we are the leading biotechnology seed company in China, and I would like to share with you today that our leading position is protected with strong intellectual protections through patents. Other than the patents owned are research institutional partners. Origin now has six domestic patents and a wide informational PCT patent in the biotechnology area. Fiscal year 2014 marks the year of great progress with three patents awarded and the three additional patents we applied for. Now I would also like to share with you equally exciting news in the backcrossing of biotech traits into hybrid corn varieties, an important step towards the commercialisation for biotechnology seed products. Without going into the technical details I should see that it’s usually takes several years to complete the closing step for each corn variety. At this point I would like to report to you that we have achieved desirable results to incorporate our biotech’s traits into our own corn varieties and those varieties for multinational companies. Those multinational companies have the intention to license our GM technologies when commercial patent is approved in China. Next on the operational improvement front, we achieved significant improvements in operating efficiency in the cost reduction in fiscal year 2014 as we reduced overhead count by 22% and reduced the general and administrative expenses by 30% year-over-year. We believe our efforts over the last three years in cost reduction and operational improvements are critical, especially when we face the challenges during the industry bottom cycle. Just in the G&A expenses alone, we reduced the cost by about RMB40 million or US$6.5 million from the fiscal year 2011, and the G&A expenses in the fiscal year 2014 were close to just half of the expenses in fiscal year 2011. Now I would like to summarize the financial performance for fiscal year 2014. Net loss for the year was RMB9.53 million or US$1.55 million compared to the net income of RMB7.49 million a year ago. The loss was mainly due to the decline in revenue and then increase in production cost. Net loss per share was RMB0.42 or US$0.07 for the fiscal year 2014, compared with net income of RMB0.32 in fiscal year 2013. Total revenues for the fiscal 2014 were RMB414.89 million or US$67.52 million, a decrease of 14% from RMB481.69 million in the previous year. Overall, the decrease in revenues was mainly due to the lower sales for the Company’s rice seed business and a decline in corn seed contract production businesses. Gross margin was 27.4% in fiscal year 2014 compared with 34.6% [ph] in fiscal year 2013. This decrease was mainly due to higher average unit purchase cost of seed as a result of loss in the production yield for fiscal year 2014. On the balance sheet, we have cash and cash equivalent of RMB46.27 million or US$7.52 million and our total borrowing were RMB289.83 million or US$47.11 million as of September 30, 2014. For year-end the inventory was RMB516.37 million up from RMB470.81 million as of September 30, 2013. We expect the inventory to reduce in fiscal year 2015 as the result of reduced production acreage in fiscal year 2014. On the cash flow, we had a net cash used in operating activities of RMB85.64 million or US$14.92 million during fiscal year 2014 compared to the cash outflow of RMB146.11 million for the fiscal year 2013. Net cash change in for both the investing activities and the financing activities were small and below RMB1 million for the fiscal year 2014. Looking forward to fiscal year 2015, we have the confidence to increase our sales revenues and improve overall operating income meaningfully. We expect the market condition to recover as the industry corn seed inventory is expected to decline. More importantly, we believe that our cash flow from operating activities will have a significant recovery as we manage our inventory and the sales efforts product by product. With that, I have reached to the end of today’s presentation. I will now open the call for questions. Operator, please begin the Q&A.
