(Yicai) Aug. 7 -- Chinese state-owned financial giant Citic Group will invest up to CNY1.2 billion (USD167 million) in its majority-owned seed breeding subsidiary Yuan Longping High-Tech Agriculture to speed up the implementation of the national seed industry revitalization strategy.

Citic Agriculture Technology will buy up to 152.5 million shares of Longping High-Tech for CNY7.87 (USD1.10) apiece in a private placement, hiking its stake to 25.9 percent from 17.4 percent, Changsha-based Longping High-Tech announced yesterday.

Shares of Longping High-Tech [SHE: 000998] closed 1.4 percent down at CNY9.96 in Shenzhen today.

The proceeds will be used to repay bank loans and supplement working capital, enabling the company to hike investment in research and development and conduct industrial integration to better support China’s seed industry revitalization action plan, Longping High-Tech noted.

China launched its seed industry revitalization action plan in 2021 to ensure food safety. It aims to promote innovation in seed breeding technologies, upgrade the construction of seed breeding bases, and hike support to leading companies in the seed breeding industry.

Longping High-Tech was founded in 1999 by Yuan Longping, who is known as the father of hybrid rice. Citic became the company’s largest shareholder after purchasing privately issued shares for CNY2.8 billion in 2016.

Longping High-Tech expects to have logged a net profit of CNY90 million to CNY120 million (USD12.5 million to USD16.7 million) in the first half of the year, compared with a net loss of CNY145 million a year earlier, thanks to the sale of a stake in one of its subsidiaries for CNY340 million, which offset losses of CNY280 million from exchange rate fluctuations, the firm said in a recent earnings forecast.

Editor: Futura Costaglione