China Shengmu Organic Milk : EXERCISE OF WARRANTS B

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHINA SHENGMU ORGANIC MILK LIMITED

中 國 聖 牧 有 機 奶 業 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1432)

EXERCISE OF WARRANTS B

References are made to the announcements of the Company dated 24 December 2018, 27 December 2018, 3 January 2019, 11 January 2019 and 26 December 2019 respectively (the "Announcements") and the circular of the Company dated 7 January 2019 (the "Circular") in relation to, among other things, the entering into of the Warrant Subscription Agreement B dated 23 December 2018 between the Company and the Subscriber B, pursuant to which the Company has agreed to issue to the Subscriber B, and the Subscriber B has agreed to subscribe for the Warrants B.

Unless otherwise defined herein, capitalized terms used in this announcement shall have the same meaning as defined in the Announcements and the Circular.

EXERCISE OF WARRANTS B

On 31 July 2020, the Company received the exercise notice from the Subscriber B to exercise all 140,862,105 Warrants B to subscribe for 140,862,105 Warrant Shares at the exercise price of HK$0.33 per Warrant Share. The Company confirmed receipt in the sum of HK$46,484,494.65, being the aggregate subscription price payable for the 140,862,105 Warrant Shares, on 3 August 2020. Pursuant to the terms of the Warrants B, the Company shall allot and issue a total of 140,862,105 Warrant Shares to the Subscriber B on 6 August 2020 (the "Completion"). The Warrant Shares shall rank pari passu in all aspects among themselves and with all the Shares in issue as at the date of allotment and issue of such Warrant Shares, and will represent approximately 1.68% of the issued share capital of the Company as enlarged by the allotment and issue of 140,862,105 Warrant Shares. After the exercise of the Subscription Rights of Warrants B noted above, there are no outstanding Subscription Rights of Warrants B for the Subscriber B.

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EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

For illustrative purpose only, set out below is a summary of the shareholding structure of the Company (i) as at the date of this announcement and (ii) immediately after the Completion assuming no shares of the Company will be issued from the date of this announcement to the date of Completion apart from the 140,862,105 Warrant Shares:

	As at the date of this	Immediately after the
	announcement	Completion
	Number of	Approximate	Number of	Approximate
	Shares	%	Shares	%
Name of Shareholder
Start Great Holdings
Limited ("Start Great")
(1)	1,467,193,490		17.80		1,467,193,490		17.51
Nong You Co., Ltd. (2)	1,301,651,000		15.80		1,301,651,000		15.53
Subscriber B	395,235,200		4.80		536,097,305		6.40
Yao Tongshan	409,092,700		4.96		409,092,700		4.88
Other shareholders	4,667,260,734		56.64		4,667,260,734		55.68
Total	8,240,433,124		100.00		8,381,295,229		100.00

1. As Start Great is a direct wholly-owned subsidiary of China Mengniu Dairy Company Limited ("China Mengniu"), China Mengniu is deemed to be interested in the Shares in which Start Great is interested.
2. Mr. SHAO Genhuo (邵根夥), the Chairman and a non-executive Director of the Company, holds the entire equity interests of Beijing Zhi Nong Investment Co., Ltd., which in turn holds the entire equity interests of Nong You Co., Ltd. Therefore, Mr. Shao is deemed to be interested in the Shares held by Nong You Co., Ltd.

By order of the Board of

China Shengmu Organic Milk Limited

Shao Genhuo

Chairman

Hong Kong, 3 August 2020

As at the date of this announcement, the executive directors of the Company are Mr. Yao Tongshan and Mr. Zhang Jiawang; the non-executive directors of the Company are Mr. Shao Genhuo, Mr. Zhao Jiejun, Mr. Sun Qian and Mr. Lu Boxiang; and the independent non-executive directors of the Company are Mr. Fu Wenge, Mr. Wang Liyan and Mr. Li Xuan.

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