Dear Shareholders,

Thank you for your relentless support towards Dachan Food!

During the past year, the international macro-environment became more challenging with increasing complexity and volatility. The Russian-Ukrainian conflict continued and the resurgence of war in the Middle East region has aggravated the already fragile global supply chain, increasing the risk of global economic stagflation. The GDP of China grew by 5.2% year-onyear, with the economy rebounding and improving, but at the same time there were difficulties and challenges as effective demand was inadequate and there was overcapacity in some industries.

Through years of development, the market structure of the white feather meat chicken industry in China has been shifted from demand exceeding supply in the past to the current condition of supply exceeding demand. To cope with market changes, the Company took the initiative to restructure its business model focusing on downstream food processing, increasing the scale of food processing, downscaling the breeding operation, diversifying the supply mode of feathered chicken, putting great efforts in developing differentiated products and processed products catering to value customers, and improving the value of each chicken to gradually reduce the risk of fluctuation of the white feather meat chicken market.

2023 was the third year for the Company to concentrate its efforts in China and food processing transformation. From the sale of its Southeast Asian business to the parent company in 2021 to commencement of the Bengbu food processing facilities for one-stop food production chain in the third quarter of 2023, the Company has continued to focus its resources on the strategic adjustments of food development. Benefiting from this core strategy, when the domestic meat chicken market took a sharp downturn in the fourth quarter, the Company was able to avoid substantial losses as the negative impact of the meat segment was mitigated by the performance of the foods segment. In 2023, operating income of the foods segment accounted for 36% of the Group’s total operating income and 72% of its gross profit, making it the Company’s most important source of profitability and growth driver.

TAKING THE FOODS SEGMENT AS THE LEAD AND DRIVING THE GROWTH OF THE WHOLE CHAIN OF BUSINESS

The PRC market is enormous with intense competition, and placing focused attention is the only way out for small and medium enterprises. We have chosen the fast-growing food processing industry for development, as the Company has an excellent market base due to its long-established business in food processing. Following the changes of living habit, furtherdemands on food safety, tastiness and convenience, and the increase in market scenarios, numerous opportunities will be brought to the Company.

1. SPECIALISING SALES CHANNELS WITH DIVERSIFIED RANGE OFPRODUCT PRICES

With in depth development in domestic meat and food product market over a decade, we believe that the Company has a leading edge in the industry regarding channel setup and team building. Of course, objectively we are also aware that in order to cushion the impact ofcyclical fluctuations in the livestock and poultry market on profitability, large-scale rearing and breeding enterprises have increased their investment in food processing in the downstream of the industrial chain, which has led to increasingly fierce competition in the foods business. We will strengthen our investment in research and development of food sales channels, continue to promote channel specialization, and design products with differentprice ranges according to different consumption scenarios, in order to cope with the growing trend of consumer segmentation in the existing market.

2. CONTINUING INVESTMENT IN FOOD PRODUCTION CAPACITY.PRIORITISING RESOURCES TO EXPAND AND STRENGTHENPROCESSED fOOD

The Company’s new meat and food one-stop production line in Bengbu with total investment of RMB1 billion was successfully commissioned in the fourth quarter of 2023, marking the beginning of a new chapter in our strategic presence in the Yangtze River Delta. With the capacity of the new food workshop in Bengbu already in operation and the second phase of the project which is expected to be commissioned in May 2024, the new annual production capacity will reach 46,000 tonnes. In addition, in the third quarter of 2023, we have also commenced a food processing plant expansion project in Dalian, which will becarried out in two phases and completion is expected in the fourth quarter of 2024, which will have an additional annual production capacity of 9 thousand tonnes upon fully operational. These two investment projects will provide a temporary relief to the current capacity pressure brought about by the rapid growth in food demand.

In the future, we will continue to expand our food production capacity and increase our investment in hardware and software in the food supply chain, research and development, and digital operation, so as to further strengthen our dominant position in the meat and foodproduct industry.

KEEPING SUFFICIENT CASH，ENHANCING RELATIVECOMPETITIVENESS AND RIDING OUT ECONOMIC DOWNTURNS

In the face of the severe and complicated external environment, we insisted that keeping sufficient cash is crucial and strived to make progress while maintaining stability, so as to survive the economic downturn and win the increasingly fierce competition in the elimination race.

In the fourth quarter of 2023, due to poor macro-economic environment and weakening market demand, the meat chicken industry faced worsened situation of supply and demand imbalance resulting in widespread losses among the industry. Through business model transformation, structural adjustment, inventory reduction, strengthened management, as well as more robust financial operations, the Company has achieved a steady increase in operating cash flow in 2023 and a safe financial gearing ratio as of the end of 2023, which provides a reliable capital guarantee for the further expansion of processed food productioncapacity in 2024.

PRACTICING ESG CONCEPTS AND PURSUING LONG-TERMSUSTAINABLE DEVELOPMENT

We have always attached great importance to environmental, social and corporate governance, and are committed to integrating ESG concepts with the Company’s strategies and business activities. Through the authorisation, supervision and execution at all levels of the Board, the Executive Committee and the management, ESG, or corporate governance in particular, has become an operating philosophy to be followed in all aspects of the Company. The middle-office function supported by the ESG system provides the front-end business departments with a strong enabling support and a reliable risk control barrier. We have always adhered to the corporate culture of “integrity, modesty and foresight”, and are committedto enhancing the efficiency and value of the enterprise, providing consumers with safe, nutritious and healthy products and services, and promoting the benefit-sharing mechanism among all parties in the upstream, midstream and downstream of the industrial chain, including shareholders, employees, suppliers and farmers, so as to realize the sustainable development of the Group and promote the harmonious development of the society.

In 2024, there may be more uncertainties in the international political and economic environment and the domestic economic situation. In the face of the unfavorable external environment, the Company’s business strategy remains focused on seeking progress while maintaining stability and continuing in the building of long-term relative competitiveness; focusing on the development of food products and accelerating the pace of growth of foodproducts so as to drive the overall development of one-stop food products; continuing to promote the diversification of feeds products in order to counter the risk of the hog cycle; and continuing to adjust the business model of meat products, focusing on the differentiation and enhancement of products and value to minimize the impact of market fluctuation on the Company’s operating results.

We are well aware that it takes time in adjusting our meat business model and we will inevitably experience transitional pains in the process. However, we are confident and determined to overcome the challenges and weather the economic downturn, to continue our efforts in China’s food market, continue to uphold the concept of honesty and integrity in our operations, provide consumers with safe and healthy food products, further strengthenour corporate governance system, proactively assume our corporate social responsibility, and withstand the uncertainties of the external environment with sustainable and high-quality development.

Thank you for all your support.

Chairman

James Chun-Hsien Wei

Hong Kong

March 2024