China Modern Dairy (HKG:1117) subsidiary Modern Farming Saibei agreed to supply whole milk powder and skimmed milk powder to Mengniu's subsidiaries Shanxi Yashili and Oushi Mengniu for a period starting from the date of the agreement until Dec. 31, 2025, a Tuesday filing with the Hong Kong Exchange said.
The agreement set 10 million yuan as the annual cap from the procurement date until Dec. 31, 2024, and 100 million yuan for the financial year ending Dec. 31, 2025.
The dairy company seeks to overcome the issue of oversupply of raw milk in the market resulting from weak demand under the current market conditions in China by producing powdered milk and having a stable source of income through the purchasers.
The company's shares were up nearly 4% in recent trade.
Price (HKD): $0.79, Change: $+0.030, Percent Change: +3.95%
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