Premium agricultural and chemical solutions provider Syngenta AG (SYT) lately secured the safety certificate from the Chinese regulatory authorities relating to the trade of Agrisure Viptera in the country. The approval, strengthening the company’s Chinese business opportunities, has also carved new prospects to improve its revenue and margins in the upcoming quarters. With the declaration of the approval agreement on Dec 22, share prices of the stock increased a marginal 0.4% on the following day.
Permit Details
Syngenta had submitted the papers regarding the import allowance permit to the regulatory authorities of China back in 2010. However, the company received the green signal only in Dec 2014. Along with the consent, the agricultural authorities of the country have also agreed to import certain processing byproducts and specialized corn grains form Syngenta.
Agrisure Viptera trait is a primordial constituent of Syngenta's insect-controlling chemicals. The substance helps farmers to keep a check on corn pests and hence improves their overall crop yield. Agricultural authorities in many countries such as U.S., Argentina, Canada, Brazil, Indonesia, Colombia, Japan and Paraguay have already permitted the usage of Agrisure Viptera for ensuring greater supply of food grains in the contemporary era of food price inflation.
Moving Forward
Syngenta is a popular agro-based solution provider and owns a wide global network of branches. The company aims to improve the global crop productivity without hampering the quality of the natural environment. Not only does the Agrisure Viptera import sanction augment the brand status of Syngenta, but it would also help improve the food security level of the most populated country in the world.
Insights
Last quarter, Syngenta reported gross revenue of $11.5 billion, up 3% from the year-ago value. Considering that the company earns the major portion of its surplus from emerging countries such as Brazil, the new Chinese import allowance is expected to enhance both its top and bottom line results in the upcoming quarters. Furthermore, the increase in the share price, albeit marginally, that followed the news indicates positive sentiments of investors toward the stock.
With a market capitalization of $29.94 billion, Syngenta currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Allied Nevada Gold Corp. (ANV), Banro Corporation (BAA) and Amerigo Resources Ltd. (ARREF). All three stocks currently sport a Zacks Rank #2 (Buy).
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