Key Points from Recent Disclosure on China Shengmu Organic Milk Limited

• Date of Disclosure: 4 March 2026
• Subject: Possible mandatory general offer for China Shengmu Organic Milk Limited
• Reporting Party: CITIC Securities Company Limited, a Class (5) associate connected with the Offeror
• Nature of Dealings: Variation of derivatives related to China Shengmu Organic Milk Limited shares
• Number of Securities Involved: 333,000 units per transaction (two transactions disclosed)
• Reference Price: HK\$0.3401 per security
• Total Amount per Transaction: HK\$113,253.30 (with two transactions of identical amounts)
• Resultant Balance: Zero after the transactions
• Dealings Made For: CITIC Securities’ own account

Details of the Securities Dealings

On 4 March 2026, the Executive received a public disclosure form in accordance with Rule 22 of the Hong Kong Code on Takeovers and Mergers regarding dealings in the shares of China Shengmu Organic Milk Limited. The disclosure was made by CITIC Securities Company Limited, identified as a Class (5) associate connected with the Offeror, and the transactions were conducted for their own account.

The disclosure detailed two separate transactions, both executed on 3 March 2026. Each involved the variation of derivatives classified as “other types of products” referencing 333,000 shares of China Shengmu Organic Milk Limited. The reference price for each transaction was HK\$0.3401 per share, resulting in a total transaction amount of HK\$113,253.30 for each deal.

The maturity or closing out date for both transactions was also 3 March 2026. Notably, the resultant balance of securities in relation to these derivatives was recorded as zero, indicating that CITIC Securities no longer holds open positions in these particular derivatives following the variations.

Implications for Shareholders and Potential Price Sensitivity

• Possible Mandatory General Offer: The disclosure highlights the possibility of a mandatory general offer for China Shengmu Organic Milk Limited, which is a significant event for shareholders. Such offers can often lead to increased trading activity and potential volatility in the share price as investors react to the news and speculate on the offer terms.
• Derivatives Position Closed: CITIC Securities, as a party connected to the Offeror, has closed out their derivatives positions related to 666,000 shares (333,000 per transaction). This may signal a change in strategic positioning in anticipation of a larger corporate action, such as a takeover or buyout.
• Price-Sensitive Information: The involvement of a connected associate in derivative dealings—especially in the context of a potential general offer—can have material implications for the company’s share price. Investors should closely monitor further disclosures or announcements regarding any formal offer.
• Dealings for Own Account: The fact that CITIC Securities made these trades for its own account may suggest internal restructuring or risk management ahead of any offer-related developments.

What Should Investors Do?

Investors in China Shengmu Organic Milk Limited should remain vigilant for additional disclosures or official announcements regarding the possible mandatory general offer. The closing of derivative positions by CITIC Securities is notable, particularly given its connected status, and could precede further significant corporate actions.

Shareholders are advised to consider the potential impact of a takeover or similar transaction on the company’s valuation and to adjust their portfolios accordingly, keeping in mind their own risk tolerance and investment strategies.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a professional advisor before making any investment decisions. The information is based on a disclosure form and may not include all material facts.

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