China Youran Dairy Group Limited provided unaudited consolidated earnings guidance for the year ended December 31, 2023. For the period, the group it is expected to record (i) a loss attributable to the owners of the Company of approximately RMB 1,030 million to RMB 1,070 million (profit attributable to the owners of the Company for the year ended December 31, 2022 ("FY2022"): RMB 415 million); and (ii) cash EBITDANote 1 of approximately RMB 3,832 million to RMB 3,872 million (FY2022: RMB 3,591 million), representing an increase of approximately 6.7% to 7.8% as compared with FY2022. The expected loss is mainly attributable to: 1. the expected loss arising from changes in fair value less costs to sell of biological assets of the Group of approximately RMB 3,593 million to RMB 3,633 million in FY2023 (FY2022: loss of RMB 1,617 million), which was mainly due to the impact of the decrease in the selling price of raw milk and the decrease in the market price of beef cattle and heifers in FY2023.

2. the decrease of approximately 2.8 percentage points in the gross profit margin of the Group's raw milk business to approximately 28.6% for FY2023 as compared to 31.4% for FY2022. The decrease in gross profit margin of raw milk was mainly attributable to the downward trend in the price of raw milk as a result of the phased imbalance in the supply and demand of raw milk, with the average selling price per kilogram of raw milk of the Group for FY2023 decreasing by approximately 6.0% as compared with that for FY2022. The impact of the decrease in gross profit margin on the profit was not fully offset by the increase in gross profit as a result of the increase in sales volume of raw milk of the Group for FY2023 as compared to FY2022.