1. Latest Announcement

2007-10-16 Published additional daily related transaction estimates and related transaction announcements for 2007, and trading was suspended for one hour in the morning

Bright Dairy Board of Directors Resolution and Announcement of the Extraordinary General Meeting of Shareholders

Bright Dairy Co., Ltd. held the seventh meeting of the third session of the Board of Directors on October 12, 2007. The meeting reviewed and approved the following resolutions:

1. Adoption of the following resolutions: Proposal to transfer shares by agreement between shareholders: Shanghai Milk (Group) Co., Ltd. (hereinafter referred to as: Milk Group) and SI Food Holdings Co., Ltd. (hereinafter referred to as SI Food), the company's shareholders of circulating shares with sales restrictions, are acting in concert , after reaching an agreement with Danone Asia Co., Ltd. (hereinafter referred to as: Danone Asia), Danone Asia transferred its 104241351 shares and 104241350 shares of the company to Dairy Milk Group and SI Food respectively, at a price of 4.58 yuan per share. The prices are RMB 477425387.58 and RMB 477425383.00 respectively.

After the completion of this transfer, Danone Asia will no longer hold shares in the company; Dairy Milk Group’s shares in the company will increase to 366,498,967 shares, accounting for 35.176 of the company’s total share capital; SI Food will hold shares in the company It will rise to 366,498,966 shares, accounting for 35.176 of the company's total share capital.

The above-mentioned equity transfer still needs to be approved by the China Securities Regulatory Commission and exempted from the obligation to make a tender offer, as well as approved by the Ministry of Commerce.

2. Adopt the motion on terminating the trademark and technology licensing agreement with Danone Gervais.

3. Adopted the motion on additional daily related transaction estimates for 2007.

4. Adopted the motion on selling 81% equity of Shanghai Kedi Convenience Store Co., Ltd.

The board of directors decided to convene the first extraordinary shareholders' meeting of 2007 on the morning of October 31, 2007 to review the above relevant matters.

Additional announcement of expected daily related transactions in 2007

The contents of the expected additional daily related transactions in 2007 of Bright Dairy Co., Ltd. are all between the company and its actual controller, Bright Food (Group) ) Co., Ltd. directly or indirectly controls the legal persons to purchase and sell goods, and they are all ongoing transactions required for the company's daily operations. Among the additional daily related transactions expected this time, except for the purchase of goods by the company's subsidiary Shanghai Guangming Dairy Sales Co., Ltd. from Oriental Pioneer Sugar and Wine Co., Ltd., the rest are sales of goods by the company to related legal persons. The total transaction volume of the company's sales and purchase of goods is estimated to be 400 million yuan and 40 million yuan respectively.

Related Transaction Announcement

According to the Agreement signed and revised by Bright Dairy Co., Ltd. and Danone Gervais (hereinafter referred to as: Danone) in September 2001 and August 2006 Under the license agreement, Danone licenses the company to use its "Danone" registered trademark and technology in mainland China in a non-exclusive and non-transferable manner free of charge.

In view of the fact that the company’s shareholders Shanghai Milk (Group) Co., Ltd. and SI Food Holdings Co., Ltd. acted as concerted parties to acquire the company’s restricted tradable shares held by Danone Asia Co., Ltd., the two parties agreed to purchase the company’s shares in Danone The company will bear the compensation of RMB 330 million in marketing, channel and other sales expenses incurred by the company in the early promotion and sales of products produced using the "Danone" registered trademark and technology, and will terminate the license agreement at the same time.

This transaction involves a compensation of RMB 330 million, paid in cash, which provides active financial support for the company's product structure adjustment due to the termination of the license agreement.

In July 2007, the company entered into an agreement with Nonggongshang Supermarket (Group) Co., Ltd. [the actual controller of the company, Bright Food (Group) Co., Ltd., directly and indirectly holds a total of 80% of its shares, hereinafter referred to as Nonggongshang Supermarket] Signed a letter of intent for equity transfer, and the company will transfer all the equity it holds in Shanghai Kedi Convenience Store Co., Ltd. (registered capital is 63.21 million yuan, the company holds 81% of its shares, hereinafter referred to as Kedi Convenience) to Nonggongshang Supermarket in order to Based on the corresponding appraised value of the underlying equity of 176.48 million yuan, the equity transfer price was determined to be 226.8 million yuan.

The above transactions all constitute related transactions.

2. Latest reports

The "marriage" ended in 2007-10-1615. Bright Dairy (600597) and Danone "broke up"

Trading suspended due to major matters Bright Dairy announced today that Danone Asia will transfer its 20.01 shares to the company's two major shareholders, Shanghai Milk Group and SI Food Holdings Co., Ltd., at a price of 4.58 yuan per share, and the relevant business cooperation agreement between Danone and Bright Dairy The intellectual property licensing agreement will also be terminated at the same time, and Danone will pay 330 million yuan in market, channel and other related compensation fees to Bright Dairy. At this point, the 15-year "marriage" between Bright Dairy and France's Danone has come to an end.

As early as March 1992, Danone and Bright Dairy invested US$3.9 million in a joint venture with a 50:50 equity structure, starting the first cooperation between Bright Dairy and Danone yogurt; in 1995, Danone and Guangming once again joined hands to invest US$9 million in the production and sales of Danone fresh milk with an equity structure of 82:18. Both companies are operated by Danone. In October 2000, Bright Dairy was restructured into a joint-stock company for the purpose of listing. Danone became a shareholder of Bright Dairy 5 and promised that all Danone's yogurt companies in China would be sold to Bright Dairy based on net assets and operated by Bright Dairy without compensation. Use the Danone brand until 2011.

In October 2005, Danone acquired 3.85% of each equity stake in Bright Dairy held by Shanghai State-owned Assets Management Company and Dazhong Transportation (Group) Company, increasing its shareholding to 11.55%. In early 2006, after launching the share reform During the process, after consensus reached by all non-tradable shareholders, Danone simultaneously acquired 4.23% (8.46% in total) of Bright Dairy shares held by Bright Food Group and Shanghai Industrial, increasing Danone’s shareholding ratio to 20.01%. At the same time, Danone has promised to extend the Danone brand license to Bright Dairy for free use until 2025.

Just when it seems to be getting more and more "like glue", the "crack" between the two parties is also getting wider and wider: Danone hopes to use the power of capital to make the Danone brand dominate the Chinese dairy industry; while Bright Dairy hopes to use the power of capital to dominate the Chinese dairy industry. It is the strategic goal to comprehensively lead China's dairy industry, and it will not give in on the issue of controlling the development of national independent brands.

In December 2006, Danone announced in Beijing that it would establish a joint venture with Mengniu to cooperate in the production and sales of yogurt. In early April 2007, Danone transferred the yogurt sub-brand "Biyou" that was originally entrusted to Bright Dairy to be produced and sold by Mengniu. On October 16, Bright Dairy announced in the securities media that the cooperation between the two parties was completely terminated and it would no longer be responsible for the production and sales of Danone brand yogurt.

Regarding the end of the 15-year "marriage" with Danone, Guo Benheng, President of Bright Dairy, said that after Danone sells its equity, Bright Dairy will be able to concentrate resources on making the national brand "Bright" bigger and stronger, and become a large-scale dairy company. The star core enterprise of Guangming Group has also further consolidated Guangming Dairy's leading industry position in the fresh dairy market.