GF Securities released a research report stating that the overall inventory level in the seed industry is high, with the total inventory of listed seed companies exceeding 12 billion yuan in the third quarter of 2025, marking the highest point since 2015. The seed production area for 2025 was 3.85 million mu, a year-on-year decrease of 10%; seed production output was 1.527 billion kilograms, also down 10% year-on-year, indicating the seed industry is currently in an inventory reduction phase, with its market景气度 expected to gradually bottom out and recover. In the 2025 national crop variety approval process, a total of 1,564 varieties passed review, remaining largely flat compared to 2024, although the number of approved corn varieties saw a significant decrease. Policies are promoting breeding innovation, and the report is optimistic about leading companies with R&D advantages. GF Securities' main views are as follows: The seed industry cycle is bottoming out, currently in an inventory reduction phase. From 2021 to Q3 2025, the combined non-GAAP net profit attributable to parents of listed seed companies was only positive in 2023; in Q3 2025, the industry's total non-GAAP net profit attributable to parents was close to -1 billion yuan, indicating relatively severe losses. Overall industry inventory is also high, with the total inventory of listed seed companies exceeding 12 billion yuan in Q3 2025, the highest level since 2015. After 2023, the corn seed production area has continued to decline; the 2025 production area was 3.85 million mu, down 10% year-on-year; seed production output was 1.527 billion kilograms, down 10% year-on-year, placing the corn seed industry in an inventory reduction phase.

Policies are encouraging breeding innovation, and the number of approved corn varieties is gradually decreasing. In April 2025, the newly revised "Regulations of the People's Republic of China on the Protection of New Plant Varieties" was promulgated. The Regulations refine and expand the content of variety rights, make arrangements for implementing the Essential Derived Variety (EDV) system, clarify that agreements on rights ownership take precedence, and extend the protection period for variety rights. The most important aspect is the formal elevation of the EDV system to the level of administrative regulations, thereby effectively strengthening the protection of variety rights and incentivizing breeding innovation. In the 2025 national crop variety approval process, a total of 1,564 varieties passed review, remaining largely flat compared to 2024, although the number of approved corn varieties saw a significant decrease. Rice: The selection and breeding of new high-quality, green, and high-resistance varieties continues to increase. The number of "three-good varieties" combining high yield, high quality, and green traits (disease resistance) were 22, 28, 31, and 53 in the years 2022 to 2025 respectively. According to a company announcement from Longping High-tech on January 5, 2026, the comprehensive traits of its new rice varieties have significantly improved: varieties such as Juliangyou 6 and Juliangyou 5287 showed yield increases of over 5% in regional trials, possess characteristics like medium resistance to rice blast and resistance to brown planthopper, and achieve rice quality standards at the ministerial excellent grade three or above. Its Chenfengyou and Lingfengyou series of early-sowing, early-maturing three-line medium rice varieties passed national approval for the first time, filling gaps in the company's variety portfolio.

Corn: Emphasis is placed on increasing planting density and yield per unit area. In the Ministry of Agriculture's 2025 technical guidance for spring corn sowing production and the technical guidance for drought resistance and full seedling preservation in summer corn in the Huang-Huai-Hai region, recommendations for reasonable dense planting were proposed. In this round of variety approvals, the number of density-tolerant and high-yielding varieties increased, with some suitable for planting densities reaching 6,500 to 7,000 plants per mu in Xinjiang. Overall, the average yield per mu of the approved corn varieties exceeded 800 kilograms for the first time, a year-on-year increase of 1.7%, with 61 varieties in the northwest ecological region achieving yields over 1,000 kilograms per mu. Longping High-tech, Denghai Seeds, Winall High-tech, Kangnong Seed Industry, and China National Seed Group had 20, 10, 4, 6, and 5 varieties respectively pass national approval in this round.

Risk warnings include policy risks, natural disaster risks, and R&D progress falling short of expectations.