Investment Rating - The report provides a positive outlook for the Hong Kong food and beverage sector, indicating potential investment opportunities in resilient companies within the industry [2][9]. Core Insights - The report outlines six phases of the Hang Seng Consumer Staples Index, highlighting the cyclical nature of the industry and the impact of external factors such as economic conditions and policy changes on consumer demand [3][4][28]. - The analysis emphasizes the importance of identifying resilient stocks in the food and beverage sector, particularly in the upstream farming and downstream dairy product industries, as they are expected to benefit from market dynamics and policy support [6][7][53]. Summary by Sections Phase Review of the Hang Seng Consumer Staples Index - Phase 1: Downward trend due to slowing GDP and reduced consumer demand, leading to a decline in the index [3]. - Phase 2: Strong recovery driven by global economic recovery and improved earnings of leading consumer staples companies [3]. - Phase 3: Period of volatility influenced by trade tensions and tightening global liquidity [3]. - Phase 4: Rapid increase in the index due to the rigid demand for essential consumption during the pandemic [3]. - Phase 5: Continuous decline influenced by repeated pandemic disruptions and rising raw material costs [4]. - Phase 6: Valuation recovery initiated by domestic consumption policies and inflow of long-term capital [4][28]. Investment Opportunities in the Food and Beverage Sector - Upstream farming opportunities are highlighted, with a focus on the dairy and beef sectors, where prices are expected to stabilize and rise due to supply constraints and recovering demand [6][44]. - Downstream dairy product opportunities are supported by recent policies aimed at boosting demand and improving market competition, which will benefit leading companies in the sector [7][53]. Investment Recommendations - Companies such as Yurun Agriculture (09858.HK) and Modern Farming (01117.HK) are recommended for their strong cash flow and potential to benefit from the anticipated recovery in raw milk prices [9][57]. - The report suggests that policy support will create upward momentum for companies like Mengniu Dairy (02319.HK) and H&H International Holdings (01112.HK), which are positioned to capitalize on market opportunities [10][57]. - The potential for industry restructuring and the emergence of leading companies is noted, particularly in the coconut water segment, with recommendations for IFBH (06603.HK) [11][58].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部 或任何部份內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 根 據 中 華 人 民 共 和 國（「中 國」）適 用 法 律 及 法 規，按 照 中 國 公 認 會 計 原 則 編 製 的 現 代 牧 業 截 至 二 零 二 五 年 九 月 三 十 日 止 九 個 月 的 未 經 審 核 綜 合 財 務 資 料（「現 代 牧業未經審核綜合財務資料」），將 於 二 零 二 五 年 十 月 三 十 一 日 或 之 前 在 上 海 清 算所(http://www.shclearing.com)及中國貨幣網網站(http://www.chinamoney.com.cn)刊載。 – 1 – 現代牧業截至二零二五年九月三十日止九個月的未經審核綜合財務資料隨附於 本公告附錄內。 China Modern Dairy Holdings Ltd. 中國現代牧業控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1117） 本 公 司 的 非 全 資 附 屬 公 司 現 代 ...

Core Viewpoint - Modern Dairy Holdings Limited is acquiring approximately 1.28% of China Shengmu Organic Milk Limited for HKD 37.52 million, which will trigger a mandatory conditional cash offer for the remaining shares at HKD 0.35 per share, totaling approximately HKD 2.016 billion [1][2]. Group 1: Acquisition Details - The acquisition will increase Modern Dairy's and its concerted parties' shareholding from 29.99% to over 30%, thus triggering the mandatory cash offer under Hong Kong's takeover regulations [1]. - Modern Dairy has signed a voting rights agreement with Start Great, granting it control over approximately 24.90% of China Shengmu's voting rights [1]. Group 2: Strategic Implications - The acquisition is expected to create a combined herd size of over 610,000 cattle, with an estimated annual raw milk production exceeding 4 million tons, positioning the company among the top global dairy farming enterprises [2]. - The integration will enhance bargaining power in bulk material procurement, effectively reducing unit costs and solidifying a cost leadership position [2]. - The share of specialty milk, including organic milk, in Modern Dairy's product mix is projected to increase from 8% to over 20%, thereby strengthening its high-end product line [2]. Group 3: Market Position and Future Outlook - The acquisition is seen as a strategic move in response to dual pressures of consumer upgrade and cost challenges, marking a pivotal choice in the industry's recovery phase [3]. - This consolidation is anticipated to reshape the organic milk market landscape, with a shift from price competition to value competition in the Chinese dairy industry [3]. - The deal signifies an increase in industry concentration and product structure upgrades, which are expected to become the main themes moving forward [3].

Core Viewpoint - Modern Dairy Holdings Limited is acquiring approximately 1.28% of China Shengmu Organic Milk Limited for HKD 37.52 million, which will increase its shareholding to over 30%, triggering a mandatory cash offer for the remaining shares at HKD 0.35 per share, totaling approximately HKD 2.016 billion [1][2] Group 1 - The acquisition will allow Modern Dairy and its concert party, Mengniu, to gain substantial control over China Shengmu's decision-making processes through a voting rights agreement [1] - The offer price of HKD 0.35 represents a premium of approximately 14.75% over China Shengmu's last trading price of HKD 0.305 [2] - Post-acquisition, the combined herd size will exceed 610,000 heads, and the estimated annual raw milk production will surpass 4 million tons, positioning the merged entity among the top global dairy farming companies [2]

Core Viewpoint - Modern Dairy Holdings Limited is acquiring approximately 1.28% of China Shengmu Organic Milk Limited for HKD 37.52 million, which will trigger a mandatory conditional cash offer for the remaining shares at HKD 0.35 per share, totaling approximately HKD 2.016 billion [1][2]. Group 1: Acquisition Details - The acquisition will increase Modern Dairy's and its concerted parties' shareholding from 29.99% to over 30%, triggering a mandatory cash offer under Hong Kong's takeover regulations [1]. - Modern Dairy has signed a voting rights agreement with Start Great, granting it control over approximately 20.87 billion shares (24.90%) of China Shengmu [1]. Group 2: Strategic Implications - The acquisition price of HKD 0.35 represents a premium of approximately 14.75% over the last closing price of HKD 0.305 [2]. - Post-acquisition, the combined herd size will exceed 610,000 heads, with an estimated annual raw milk production surpassing 4 million tons, positioning the company among the top global dairy farming enterprises [2]. - The integration is expected to enhance bargaining power in bulk material procurement, effectively reducing unit costs and solidifying a cost leadership position [2]. Group 3: Product and Market Impact - The merger will optimize the product mix, increasing the share of specialty milk (including organic milk) from 8% to over 20%, thereby strengthening Modern Dairy's high-end product line [2]. - The acquisition will also integrate China Shengmu's organic milk business, providing diverse and distinctive raw milk supply, with organic milk typically priced higher than premium milk, enhancing overall product quality and competitiveness in high-value segments [2]. - China Shengmu's unique "Desert Organic Cycle" model combines desert reclamation with organic dairy farming, serving as a global example of sustainable development, which Modern Dairy aims to leverage to establish a differentiated competitive advantage and improve its ESG profile [2]. Group 4: Industry Context - The acquisition reflects a strategic move by dairy giants in response to dual pressures of consumer upgrades and cost challenges, marking a critical choice during the industry's recovery phase [3]. - By integrating the advantages of large-scale farming and organic milk sourcing, Modern Dairy is expected to reshape the organic milk market landscape, while China Shengmu will leverage capital for "second growth" [3]. - This acquisition signifies a shift in the Chinese dairy industry from "price competition" to "value competition," with increasing industry concentration and product structure upgrades becoming the main theme [3].

经济观察网10月30日晚，现代牧业宣布将以3752万港元收购中国圣牧约1.28%的股权，这笔收购成功完 成将使现代牧业及其一致行动人士(蒙牛)的持股比例从29.99%超过30%，从而触发要约收购：现代牧业 将以每股0.35港元的价格收购中国圣牧剩余股份，最高总价约为20.16亿港元。 基于现代牧业与中国圣牧现有产量规模预估，整合后的原奶年产量将突破400万吨，跃居全球牧业养殖 企业前列。规模优势将提升在饲料等大宗物料采购中的议价能力，有效降低单位成本，巩固成本领先地 位。此外，现代牧业特色奶(含有机奶)合并占比将从8%提升至20%以上，中国圣牧的加入可补强现代牧 业的高端产品线。(记者阿茹汗) ...

Core Viewpoint - China Shengmu (01432) saw a significant stock price increase of nearly 10% following announcements from Modern Dairy and China Shengmu regarding shareholding changes and potential cash offers [1] Group 1: Stock Performance - China Shengmu's stock opened nearly 10% higher and was reported at 0.335 HKD, with a trading volume of 1.7723 million HKD [1] Group 2: Shareholding Changes - Modern Dairy announced an investment of 37.52 million HKD to increase its stake in China Shengmu by 1.28% [1] - Mengniu Dairy (02319) granted voting rights of its 24.9% stake in China Shengmu to Modern Dairy [1] Group 3: Potential Cash Offer - Modern Dairy proposed a conditional cash offer for China Shengmu at a price of 0.35 HKD per share, representing a 14.75% premium over the previous closing price of 0.305 HKD [1] - The total cost of the offer could reach approximately 2.02 billion HKD [1] Group 4: Strategic Implications - The merger is expected to leverage economies of scale to reduce procurement costs, with a combined herd size exceeding 610,000 heads [1] - The expanded scale will allow Modern Dairy to benefit from production advantages, securing better prices for bulk materials like feed, thereby enhancing competitiveness and reducing unit costs [1]

Core Viewpoint - China Shengmu (01432) shares opened nearly 10% higher, reflecting positive market sentiment following the announcement of a stake acquisition by Modern Dairy (01117) [1] Group 1: Company Actions - Modern Dairy announced an investment of HKD 37.52 million to increase its stake in China Shengmu by 1.28% [1] - Modern Dairy has been granted voting rights for 24.9% of China Shengmu's shares previously held by Mengniu Dairy (02319) [1] - Modern Dairy intends to make a conditional cash offer for China Shengmu at HKD 0.35 per share, representing a 14.75% premium over the previous closing price of HKD 0.305 [1] Group 2: Financial Implications - The total cost of the offer from Modern Dairy could reach approximately HKD 2.02 billion [1] - The merger will result in a combined herd size exceeding 610,000 heads, allowing for economies of scale in procurement [1] - The increased scale is expected to enhance purchasing power for bulk materials like feed, leading to lower unit costs and improved competitiveness [1]

Group 1 - Modern Dairy Holdings has conditionally agreed to purchase 107.2 million shares of China Shengmu from shareholders for a total cash consideration of HKD 37.52 million, representing approximately 1.28% of China Shengmu's total issued share capital as of the announcement date [1] - Following the completion of the share purchase agreements, Modern Dairy Holdings and its concert parties will hold approximately 30% or more of China Shengmu's total issued share capital, triggering an obligation to make a mandatory offer for all outstanding shares at HKD 0.35 per share, a premium of about 14.75% over the last closing price of HKD 0.305 [2] - The merger will result in a combined herd size of over 610,000 heads, allowing Modern Dairy Holdings to leverage economies of scale in procurement of bulk materials like feed, thereby reducing unit costs and enhancing market competitiveness [3] Group 2 - The acquisition and subsequent offer are expected to strengthen Modern Dairy Holdings' market position in the raw milk supply sector, enhancing its overall risk resilience and competitive edge [3]

Group 1 - Modern Dairy Holdings and China Shengmu announced a share purchase agreement for the sale of 107.2 million shares of China Shengmu, representing approximately 1.28% of its total issued share capital, for a total cash consideration of HKD 37.52 million [1] - Start Great irrevocably granted Modern Dairy Holdings the proxy to exercise voting rights for 2,086,942,512 shares of China Shengmu, which is about 24.90% of its total issued share capital [1] - Following the completion of the share purchase agreements, Modern Dairy Holdings and its concert parties will hold 30% or more of China Shengmu's total issued share capital, triggering a mandatory offer for all outstanding shares at a price of HKD 0.35 per share, which is a premium of approximately 14.75% over the last closing price of HKD 0.305 [2] Group 2 - Modern Dairy Holdings intends to maintain the listing status of China Shengmu on the Stock Exchange after the offer concludes [3] - Modern Dairy Holdings is a leading dairy farming operator and raw milk producer in China, focusing on supplying high-quality raw milk to dairy product manufacturers [3]