As disclosed in a previous announcement, the directors of Modern Dairy Holdings have provided both joint and individual commitments to the Stock Exchange. They stated they will take appropriate steps to ensure China Shengmu (01432) complies with Listing Rule 13.32B as soon as possible.

China Shengmu has been informed that Modern Dairy Holdings is actively evaluating measures to restore the company's public float. These measures include, but are not limited to, off-market and on-market share sales. Following the publication of China Shengmu's interim results for the six months ending June 30, 2026, and depending on market conditions at that time, Modern Dairy Holdings intends to proceed with on-market share sales and/or seek out investors. It will then initiate discussions and negotiations on the terms and conditions of any share sales, aiming to restore the public float as soon as practically possible.

Considering the historical trading liquidity of the shares on The Stock Exchange of Hong Kong Limited, the time required to identify potential investors, and the expected duration for negotiating and finalizing transaction terms, China Shengmu has been advised, based on information from Modern Dairy Holdings, that the public float is currently expected to be restored to comply with Listing Rule 13.32B by the end of June 2027.

Simultaneously, Modern Dairy Holdings and China Shengmu will continue to explore other feasible measures to facilitate the restoration of the public float. These may include, but are not limited to, issuing equity instruments that are convertible or exchangeable into shares, and/or equity fundraising. For as long as China Shengmu remains non-compliant with Listing Rule 13.32B(2), it will adhere to the relevant disclosure requirements under the Listing Rules and refrain from any actions that could further reduce its public float percentage, unless the company can demonstrate exceptional circumstances.