China Shengmu Organic Milk Limited provided consolidated earnings guidance for the year ended 31 December 2017. For the year, the group is expected to record a loss attributable to owners of the parent for the year ended 31 December 2017 of an amount of approximately RMB 1 billion (audited profit attributable to owners of the parent for the year ended 31 December 2016: approximately RMB 680 million), which is mainly due to: based on the principle of prudence and latest announcement of the Board on the recoverability of individual receivables and customer creditworthiness, the Group is expecting to make a provision of approximately RMB 650 million for impairment of receivables; the Group is expected to experience a substantial loss arising from changes in fair value less costs of sales of biological assets of RMB 600 million for the year ended 31 December 2017 as a result of the Group controlled the numbers of its dairy cows in light of the weak demand of raw milk in the market, and the general decline in the price of raw milk; and in 2017, facing intense market competition of dairy products, the Group adjusted its market strategy, and both the sales volume and sales price of self-owned brand liquid milk products decreased substantially as compared to last year.