DaChan Food (Asia) Limited has signed a Renewal Agreement with ultimate controlling shareholder Great Wall Enterprise (GWE) to secure coated flour and feed ingredients for a further three years, effective 1 January 2027 to 31 December 2029. The new framework largely mirrors the terms of the master purchase agreement that expires on 31 December 2026.

The revised annual caps for connected transactions are set at RMB20.99 million, RMB22.42 million and RMB23.99 million for 2027, 2028 and 2029 respectively, totalling RMB67.40 million. Caps remain below the 5% threshold under Chapter 14A of the Hong Kong Listing Rules, requiring only reporting, announcement and annual review.

Pricing will continue to be negotiated on an arm’s-length basis, benchmarked against prevailing market prices and quotations from at least two independent third-party suppliers. Internal controls include multi-party tendering, monthly price reviews for coated flour and quality-adjusted price comparisons for fermented soybeans and microbial feed additives.

Historical transaction data show purchases of RMB18.50 million for 2025 and RMB2.10 million for the first two months of 2026, representing utilisation rates of 74.84% and 46.29% against the existing caps. Management attributes rising demand to a new Bengbu plant, projecting a 10% annual increase in processed-food output, which is expected to drive incremental coated-flour purchases. Feed-ingredient spending is projected to remain flat, with a mix shift toward higher-value microbial additives.

Because GWE indirectly owns 61.61% of DaChan Food, directors overlapping both entities abstained from voting. No shareholder approval is required as the percentage ratios for the renewed caps remain below 5%.

The company views the long-term supply arrangement as essential for securing high-quality raw materials and supporting anticipated growth in processed foods and feed products.