China Modern Dairy Holdings Ltd. provided Consolidated earnings guidance for the year ended December 31, 2016. For the year, the company expected net loss attributable to the equity holders of the company of not less than RMB 600 million (unaudited consolidated net loss attributable to the equity holders of the company for the six months ended 30 June 2016: approximately RMB 566 million) for the year ended 31 December 2016 (the "Profit Warning"), mainly attributable to: due to the impact of and effect from the import of milk powder in large packs and concentrated milk, the raw milk market condition became harsh and there were difficulties in the sale of raw milk in the first half of 2016, as a result of which part of raw milk production was sprayed into dried milk powder, and the selling of all milk powder in stock at market price resulted in losses; the increased expenditure on marketing and sales to respond to the fierce competition in the branded product market and to increase the market share in the branded product market; and a non-cash loss on changes in the fair value less costs to sell of dairy cows of the Group in the year ended 31 December 2016, which is expected to be significantly greater as compared to 2015. This is mainly due to the decline in the raw milk selling price in China in 2016 and control on the number of dairy cows in response to the difficulties in the sale of raw milk.