China Kangda Food Company Limited Issues Key Quarterly Update on Action Plan to Address Disclaimer of Opinion

Overview

China Kangda Food Company Limited (“the Company”) has published a significant quarterly update regarding the implementation of its action plan to address the previous disclaimer of opinion issued by its auditors. This follows up on prior announcements related to the Company’s annual results and prior quarterly updates.

Key Financial and Operational Highlights

• Strengthened Lending Position: Between end-2024 and 30 November 2025, the Company secured new bank loans totaling RMB104 million, while repaying RMB160 million in bank loans. As of 30 November 2025, the outstanding loan balance stood at RMB93.80 million. This demonstrates active management of the Company’s debt profile and improved liquidity.
• Related Party Loans Extended and Reclassified:
  • Following the completion of a general offer by Hong Kong Sheng Yuan Holding Co., Limited in December 2025, which became the controlling shareholder, the Company extended the repayment deadlines for related party loans totaling approximately HK\$41.7 million to 31 December 2027.
  • The related party loans were reclassified as loans provided by the new controlling shareholder, and crucially, these will not trigger any legal action or winding-up petition during the term of the loans.
  • The Company believes these changes will remove audit concerns regarding the Company’s going concern status for the financial year ending 31 December 2025, a potentially major positive for investor sentiment.
• Zenith Hope Limited Loan Extension:
  • The HK\$115 million loan from Zenith Hope Limited, the former controlling shareholder, has been extended to 31 December 2026. The Company plans to repay this loan in installments in the second half of 2026, providing more flexibility in its capital management.
• Additional Financing Secured:
  • The Company maintains diversified and stable financing channels with several commercial banks and will receive a shareholder loan of HK\$60 million from the controlling shareholder in Q1 2026 to supplement working capital.
• Operational Efficiency and Expansion Initiatives:
  • Processed Food Segment: Expansion of the cold storage system was completed by September 2025, increasing capacity by 78% (from 450 to 800 tonnes), enabling future growth.
  • Chilled and Frozen Chicken Meat Segment: A new cold storage facility was commissioned in June 2025, raising capacity from 3,000 to 4,000 tonnes and expected to reduce costs by approximately RMB1.5 million per year.
  • Chilled and Frozen Rabbit Meat Segment: The processing facility expansion completed in October 2025 has boosted slaughtering capacity, paving the way for scalable development.
• Cost Control Measures Achieve Significant Savings:
  • The Company implemented a budget assessment mechanism, quota system, cost management, and technological upgrades since March 2025. These measures have generated cumulative savings of approximately RMB7.24 million by end-November 2025.

Material Information for Shareholders

• Audit Disclaimer Risks Mitigated: The extension and reclassification of related party loans, along with the extension of the Zenith Hope loan, are likely to remove the going concern disclaimer for FY2025. This addresses a critical risk that had previously cast uncertainty over the Company’s financial stability and could materially affect share valuation.
• Improvements in Liquidity and Capital Structure: The Company’s ability to secure new loans, repay existing obligations, and obtain shareholder support through additional loans reflects enhanced liquidity and financial flexibility.
• Operational Expansion: Completion of key expansion projects in storage and processing capacity not only resolves previous bottlenecks but also positions the Company for future growth, improved efficiency, and cost reductions.
• Cost Savings: The introduction of robust cost control mechanisms has already resulted in substantial savings, directly benefiting the bottom line and potentially supporting improved profitability.

Potential Share Price Impact

The removal of the risk of an audit disclaimer, improved liquidity, support from the controlling shareholder, and completed expansion projects are all positive developments that could materially impact the Company’s valuation and share price. Investors should note these substantial improvements in the Company’s financial and operational positions.

Board and Management Update

The announcement was authorized by the Board, composed of Executive Directors Mr. Gao Sishi, Mr. Gao Yanxu, and Mr. An Fengjun, as well as Independent Non-Executive Directors Mr. Sun Gang, Mr. Fok Wai Hung, and Ms. Lau Pik Ki.

Ongoing Disclosure

The Company has committed to keeping shareholders and potential investors updated on relevant matters with further announcements as appropriate.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. The information is based on the latest quarterly update from China Kangda Food Company Limited as of 6 February 2026.

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