China Shengmu renews major fresh milk supply deal with Mengniu subsidiary

China Shengmu Organic Milk Limited announced on November 24, 2025, the renewal of its raw fresh milk supply framework agreement. Its indirect wholly-owned subsidiary, Shengmu High-tech, entered into the 2026 Raw Fresh Milk Supply Framework Agreement with Inner Mongolia Mengniu, a wholly-owned subsidiary of China Mengniu, for a three-year term from January 1, 2026, to December 31, 2028. This agreement is a renewal of a previous agreement dated November 17, 2022.

Under the agreement, China Shengmu Group will sell raw fresh milk to China Mengniu Group, committing to supply on average more than 80% of its annual raw fresh milk production. Inner Mongolia Mengniu, being a wholly-owned subsidiary of China Mengniu, is considered a connected person of China Shengmu, as China Mengniu holds approximately 29.99% equity interest in China Shengmu through Start Great.

The proposed annual sales caps for raw fresh milk under the renewed agreement are RMB3,500m for 2026, RMB4,000m for 2027, and RMB4,500m for 2028. This transaction is subject to reporting, announcement, and independent shareholders' approval requirements under Chapter 14A of the Listing Rules due to the applicable percentage ratios exceeding 5%. Start Great will be required to abstain from voting at the EGM.