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About Modern Dairy

China Modern Dairy Holdings Ltd. (“Modern Dairy”) was established in September 2005, specializing in dairy farming and milk production. Modern Dairy (stock code: 01117) was successfully listed on the Hong Kong Stock Exchange on 26 November 2010, making itself the world’s first company listed using dairy farming resources. Backed by the world’s pioneered business model featuring the “integration of forage grass planting, dairy farming and milk processing”, Modern Dairy has developed into the largest dairy farming enterprise, a high-quality raw milk supplier and a quality milk processor in China. Modern Dairy’s farms are situated in favourable geographical locations close to a number of downstream dairy processing plants and feed sources in China. Up to now, 26 farms have been built with a capacity of 10,000 cows in seven provinces across the country, nearly 230,000 dairy cows have been kept, various pieces of land with a total area of more than 1 million mu have been signed up for forage grass planting and 3,300 tons of raw milk is produced on a daily basis. Dairy cows produce more than 9 tons of milk per unit.

Modern Dairy designs and builds farms based on advanced scientific planning to make sure milk production is high and cost-effective. Since its inception, Modern Dairy has been employing the innovative production method featuring the “integration of planting, breeding and processing as well as a 2-hour zero distance” by building modernized processing plants in large-scale farms and by building these large-scale farms in supporting grassland farms. This not only makes the organic integration of the primary, secondary and tertiary industries possible but also offers a zero-distance, seamless connection between the whole industry chain and each section of the production process which is kept under surveillance. We believe our raw milk is one of the highest quality and safest milk in China, and we also believe we are operating the most well-established, large-scale livestock farms in China, backed by the highly experienced management, comprehensive facilities and the latest breeding, feeding and herd management skills.

In 2010, Modern Dairy was rated as the fastest growing company in China by “China Entrepreneur” (an independent magazine published since 1985 and sponsored by the Economic Daily Newspaper Group). In 2016, Modern Dairy won the Gold Medal for the third consecutive time from Monde Selection. Given the increasing disposable income of Chinese residents, more and more Chinese consumers are able and willing to spend more on dairy products of better brands and higher quality. They have a rising demand for quality raw milk because there is still a lot of room for an increase in the per capita consumption of milk, and the introduction of the two-child policy will increase the number of consumer groups of dairy products. In the long run, China’s dairy industry will continue to hold tremendous growth potential, indicating a stable growth momentum. Hit by various factors such as the macro economy, the dairy product mix will be further adjusted which will, in turn, quicken the pace of product mix adjustment and upgrade by major dairy enterprises. As the government is introducing more new policies to boost the development of the dairy industry, the positive results of these policies are expected to generate growth potential for the Chinese dairy industry in the future development outlook. We believe we are able to seize these opportunities because we have taken up a favourable position. We will further strengthen our leading position in China’s dairy farm industry.