China Modern Dairy : (1) MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF ENTIRE EQUITY INTERESTS IN FUYUAN; (2) ISSUE OF CONSIDERATION SHARES UNDER SPECIFIC MANDATE; (3) APPLICATION FOR WHITEWASH WAIVER; AND (4) NOTICE OF EGM

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Modern Dairy Holdings Ltd., you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the licensed securities dealer, registered institution in securities, bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

This circular is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

China Modern Dairy Holdings Ltd.

中國現代牧業控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1117)

(1) MAJOR AND CONNECTED TRANSACTION

IN RELATION TO

THE ACQUISITION OF ENTIRE EQUITY INTERESTS IN FUYUAN;

1. ISSUE OF CONSIDERATION SHARES UNDER SPECIFIC MANDATE;
2. 1. APPLICATION FOR WHITEWASH WAIVER;

AND

(4) NOTICE OF EGM

Financial Adviser to the Company

Independent Financial Adviser to

the Listing Rules Independent Board Committee, the Takeovers Code Independent Board Committee and the Independent Shareholders

SOMERLEY CAPITAL LIMITED

Capitalised terms used on this cover shall have the same meanings as those defined in this circular, unless the context requires otherwise. A letter from the Board is set out on pages 10 to 42 of this Circular. A letter from the Listing Rules Independent Board Committee is set out on pages 43 to 44 of this circular. A letter from the Takeovers Code Independent Board Committee is set out on pages 45 to 46 of this circular. A letter from the Independent Financial Adviser, containing its advice to the Listing Rules Independent Board Committee, Takeovers Code Independent Board Committee and the Independent Shareholders is set out on pages 47 to 81 of this circular.

A notice convening the EGM of the Company to be held at Jasmine Room, 1/F, Mandarin Oriental Hong Kong, 5 Connaught Road Central, Hong Kong on June 2, 2021 (Wednesday) at 9:45 a.m. (or as soon as after the annual general meeting of the Company to be held at the same place on the same date at 8:45 a.m. shall have been concluded or adjourned) is set out on pages EGM-1 to EGM-4 of this circular. A form of proxy for use at the EGM is also enclosed. If you are not able to attend the EGM, please complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company in Hong Kong at Computershare Hong Kong Investor Services Limited at 17M, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM if you so wish.

PRECAUTIONARY MEASURES FOR THE EGM

To safeguard the health and safety of the Shareholders and to prevent the spreading of the COVID-19 pandemic, the following precautionary measures will be implemented at the EGM:

1. Compulsory body temperature screening/checks
2. Submission of health declaration form
3. Wearing of surgical face mask
4. No provision of refreshments or distribution of corporate gift
5. Maintenance of appropriate distancing and spacing

Attendees who do not comply with the precautionary measures (1) to (3) above or is subject to any HKSAR Government prescribed quarantine may be denied entry to the meeting venue of the EGM, at the absolute discretion of the Company as permitted by law.

For the health and safety of the Shareholders, the Company would like to encourage the Shareholders to exercise their right to vote at the EGM by appointing the Chairman of the EGM as their proxy instead of attending the EGM in person.

Completion and return of the proxy form will not preclude the Shareholders from attending and voting in person at the EGM or any adjournment thereof should they subsequently so wish.

May 14, 2021

PRECAUTIONARY MEASURES FOR THE EGM

1. PRECAUTIONARY MEASURES FOR THE EGM

With the outbreak and spreading of the COVID-19 pandemic, to safeguard the health and safety of Shareholders who might be attending the EGM in person, the Company will implement the following precautionary measures at the EGM:

1. Compulsory body temperature checks will be conducted on every shareholder, proxy or other attendee at the entrance of the meeting venue. Any person with a body temperature above the reference range quoted by the Department of Health from time to time, or is exhibiting flu-like symptoms, or is subject to any Hong Kong Government prescribed quarantine may be denied entry into the EGM venue and be requested to leave the venue.
2. Each attendee will be asked whether (a) he/she travels outside of Hong Kong within the 14-day period immediately before the EGM; and (b) he/she is subject to any Hong Kong Government prescribed quarantine. Anyone who responds positively to any of these questions may be denied entry into the meeting venue or be required to leave the meeting venue.
3. Each attendee will be required to wear a surgical face mask throughout the EGM and sit at a safe distance from other attendees. Please note that no masks will be provided at the EGM venue and attendees should bring and wear their own masks.
4. No refreshment will be served, and there will be no corporate gift.
5. Appropriate distancing and spacing in line with any guidance from the HKSAR Government will be maintained and as such, the Company may limit the number of attendees at the EGM as may be necessary to avoid over-crowding.

To the extent permitted under law, the Company reserves the right to deny entry into the venue of the EGM or require any person to leave the venue of the EGM so as to ensure the health and safety of the attendees at the EGM.

2. OTHERS

In light of the continuing risks posed by the COVID-19 pandemic, the Company strongly encourages Shareholders to exercise their right to vote at the EGM by appointing the chairman of the EGM as their proxy instead of attending the EGM in person, by completing and return the proxy form attached to this document to the Company's branch share registrar, Computershare Hong Kong Investor Services Limited by Monday, May 31, 2021 at 9:45 a.m. or not less than 48 hours before the time of any adjournment of the EGM (as the case may be) at the address stated below. If any shareholder chooses not to attend the meeting in person but has any question about any resolution or about the Company, or has any matter for communication with the Board of the Company, he/she is welcome to send such question or matter in writing to our principal office in Hong Kong or to our email at [e-mail].

If any shareholder has any question relating to the EGM, please contact Computershare Hong Kong Investor Services Limited, the Company's branch share registrar as follows:

Computershare Hong Kong Investor Services Limited 17M Floor, Hopewell Centre

183 Queen's Road East, Wan Chai, Hong Kong Website: www.computershare.com/hk/contact Tel: [phone]

Fax: [phone]

- i -

		CONTENTS
			Page
DEFINITIONS . .	. . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
LETTER FROM THE LISTING RULES
INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	43
LETTER FROM THE TAKEOVERS CODE
INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	45
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . . . . . .	47
APPENDIX I	-	FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . .	I-1
APPENDIX II	-	FINANCIAL INFORMATION OF THE
		TARGET GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	-	MANAGEMENT DISCUSSION AND ANALYSIS ON
		THE TARGET GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
APPENDIX IV	-	UNAUDITED PRO FORMA FINANCIAL INFORMATION OF
		THE ENLARGED GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
APPENDIX V	-	VALUATION REPORT ON THE ENTIRE EQUITY
		VALUE IN FUYUAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
APPENDIX VI	-	LETTER FROM SOMERLEY IN RELATION TO
		THE VALUATION REPORT OF THE ENTIRE
		EQUITY VALUE IN FUYUAN. . . . . . . . . . . . . . . . . . . . . . . . . . .	VI-1
APPENDIX VII	-	GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VII-1
NOTICE OF EGM . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

- ii -

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

"Acquisition"	the proposed acquisition of the Target Assets by the Company
	pursuant to the terms and conditions of the Sale and Purchase
	Agreement
"Announcement"	the Company's announcement dated March 22, 2021 in respect
	of, among others, the Acquisition and the Whitewash Waiver
"associate(s)"	has the meaning as defined under the Listing Rules
"Board"	the board of Directors
"BOCI Financial Products"	BOCI Financial Products Limited
"Borrowed Securities"	the 613,877,227 Shares which Mengniu has lent to BOCI
	Financial Products pursuant to the Securities and Lending
	Agreement
"Burra Disposal"	the disposal of Burra Interests by Fuyuan in connection with
	the Reorganization
"Burra Group"	Austin Holding Co., Limited and its subsidiaries
"Burra Interests"	the entire interests held by Fuyuan in Burra Group
"Business Day"	any day (excluding a Saturday or Sunday) on which
	commercial banks are open for business in the PRC and Hong
	Kong
"Company"	China Modern Dairy Holdings Ltd., a company incorporated in
	the Cayman Islands with limited liability, the issued shares of
	which are listed on the Main Board of the Stock Exchange
	(stock code: 1117)
"Completion"	the completion of the sale and purchase of Target Assets
	pursuant to the terms of the Sale and Purchase Agreement
"Completion Date"	the date on which Completion occurs in accordance with the
	Sale and Purchase Agreement
"connected person(s)"	has the meaning ascribed to it in the Listing Rules
"Consideration"	the consideration for the sale and purchase of the Target Assets
	under the Sale and Purchase Agreement

- 1 -

	DEFINITIONS
"Consideration Shares"	either (i) if the Acquisition were to proceed pursuant to
	Settlement Scenario I, a total of 807,096,101 new Shares to be
	issued at the Issue Price, which will be allotted and issued to
	Mengniu SPV in accordance with the terms of the Sale and
	Purchase Agreement; or (ii) if the Acquisition were to proceed
	pursuant to Settlement Scenario II, a total of 262,195,758 new
	Shares to be issued to Mengniu SPV in accordance with the
	terms of the Sale and Purchase Agreement
"Director(s)"	director(s) of the Company
"EB Holder(s)"	holder(s) of the Exchangeable Bonds
"EGM"	the extraordinary general meeting of the Company to be held
	at Jasmine Room, 1/F, Mandarin Oriental Hong Kong, 5
	Connaught Road Central, Hong Kong, on June 2, 2021
	(Wednesday) at 9:45 a.m. for the Independent Shareholders to
	consider and, if thought fit, approve the (i) Sale and Purchase
	Agreement, the Acquisition and the issue of Consideration
	Shares under the Specific Mandate contemplated thereunder;
	and (ii) the Whitewash Waiver
"Enlarged Group"	the Group immediately upon completion of the Acquisition
"Exchange Period"	at any time on or after August 4, 2020 and up to the close of
	business on June 13, 2023
"Exchange Right(s)"	the right(s) of an EB Holder to exchange an Exchangeable
	Bond for Shares pursuant to terms of the Exchangeable Bonds
"Exchangeable Bonds"	the 1.50% exchangeable bonds due 2023 in the principal
	amount of US$100,000,000 issued by Mengniu
"Executive"	the Executive Director of the Corporate Finance Division of
	the SFC or any delegate of the Executive Director
"Framework Supply Agreement"	the framework supply agreement dated June 16, 2017 which
	was amended on November 28, 2017 and renewed on
	December 31, 2019, entered into between Modern Farming
	and Fuyuan in relation to the supply of feedstuffs by Fuyuan to
	the Modern Farming and its subsidiaries
"Fushengle"	北京富盛樂企業管理諮詢合夥企業(有限合夥) (Beijing Fushengle
	Corporate Management Consulting Partnership (Limited
	Partnership)*), one of the Individual Shareholders

- 2 -