[Click eStock] "Asiajongmyo, Seeds Are More Valuable Than Gold"

[Asia Economy Reporter Park Jihwan] IBK Investment & Securities evaluated that Asia Seed has succeeded in turning operating profit positive due to reduced fixed cost burden from external growth, and is expected to overcome the sales stagnation trend of the past three years.

Researcher Yoo Wookjae of IBK Investment & Securities analyzed, "The seed sales proportion of Asia Seed accounts for 94.3% of total sales," and "As of the third quarter this year, the sales proportions by major items are composed of sweet pumpkin 28.2%, cabbage 13.0%, radish and others 53.1%." Other product sales include sprout cultivators and other items at 5.7%. The domestic and overseas sales proportions are 75.7% domestic and 24.3% export.

Asia Seed is a company that develops and produces seeds and sells them to domestic and overseas crop growers. It was established in 2004, listed on the KONEX market in 2014, and transferred to the KOSDAQ market in 2018.

The seed industry has a technical entry barrier where new variety development requires continuous investment of about 10 years, and upon successful development, exclusive rights can be exercised for more than 20 years through variety registration. The seed price, which is more expensive than gold, is cited as an advantage of the industry.

Researcher Yoo Wookjae stated, "The current domestic vegetable seed market size was about KRW 270.9 billion last year, and Asia Seed's market share is about 5.9% in the domestic vegetable seed market and 8.5% in the export market," adding, "As of the third quarter cumulative basis, sales were KRW 16.9 billion, up 32% year-on-year, and operating profit was KRW 900 million, successfully turning positive."

He explained, "A comprehensive urban agriculture department store covering all seeds and agricultural materials recently opened in Hanam, and the operation of the local subsidiary in Vietnam is shortening the seed breeding development period."

Researcher Yoo added, "Not only offline marketing but also online services using delivery are being strengthened," and "It is expected to overcome the sales stagnation trend from 2017 to 2019."