Bright Dairy & Food to acquire remaining Xiaoxinniu stake, update governance

Bright Dairy & Food Co., Ltd. is acquiring the remaining 40% stake in Qinghai Xiaoxinniu Biological Dairy Co., Ltd. from Huzhou Foxin for 500,004,193.85 yuan. This transaction follows Huzhou Foxin's exercise of a put option, resulting in Bright Dairy & Food owning 100% of Xiaoxinniu. Xiaoxinniu's average non-recurring net profit for 2022-2024 was above the guaranteed 72.19 million yuan, with a total non-recurring net profit of 27,013,830,000 yuan against a promised 28,946,000,000 yuan. A performance compensation of 32,425,696.66 yuan will be deducted from the purchase price.

Concurrently, Bright Dairy & Food is proposing to change its registered address and abolish its Supervisory Board, transferring its functions to the Audit Committee. These governance changes will be put to a shareholder vote. The company also projects approximately 130 billion yuan in related-party transactions for 2026.

Additionally, Bright Dairy & Food's New Zealand subsidiary, Synlait Milk Limited, plans to engage in hedging activities for foreign exchange and interest rate risks in 2026, with a projected maximum foreign exchange forward contract value of NZ$1.5 billion and interest rate swap contracts up to NZ$100 million. The company will also purchase directors' and officers' liability insurance for its board and senior management, with a maximum annual compensation of 100 million yuan and an annual premium not exceeding 500,000 yuan. These initiatives aim to enhance risk management and operational efficiency.