China Shengmu Organic Milk Limited provided consolidated earnings guidance for the year ended December 31, 2023. Based on a preliminary assessment of the Group's unaudited consolidated management accounts and the information currently available to the Board, the Group is expected to record a profit attributable to the owners of the parent company for the year ended 31 December 2023 (the "Reporting Period") in the range of RMB 75 million to RMB 90 million (2022: RMB 416 million), representing a year-on-year ("yoy") decrease of approximately 78% to 82%; cash EBITDA (Note) in the range of RMB 960 million to RMB 1,000 million (2022: RMB 937 million), representing a yoy increase of approximately 2.5% to 6.7%. As mentioned above, the profit attributable to the owners of the parent company is expected to decrease in the Reporting Period as compared with 2022, which is mainly attributable to the following reasons: Against the industry backdrop of weakening domestic consumption of dairy products, which led to a continuous downward trend in the market price of raw milk, despite having strengthened its operational efficiency to achieve a yoy decrease in the cost of sales of a kilogram of raw milk, however, the Group was impacted by price of bulk raw materials which remained relatively high, and the extent of such decrease was unable to make up for the decrease in the price of raw milk, which resulted in a yoy decrease in the gross profit margin of the Group of approximately 1% to 2% during the Reporting Period as compared with 2022; and Loss arising from changes in fair value less costs to sell of biological assets increased by more than RMB400 million as compared with 2022, mainly attributable to (i) a substantial increase in the number of culled cows as compared with 2022 as the Group proactively culled inefficient cows in order to improve the structure of the high-quality milkable cow herd; and (ii) a yoy decrease in the appraised value of biological assets, as a result of the decrease in the market price of raw milk, the constant high cost of feeds, the decrease in the market price of beef and other factors.