Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 102

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 5
Chunk 102
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The increase in total revenue
was mainly due to the increase in offline consumer product sales of RMB64.4 million (US$9.1 million) deducted by the decrease of online
consumer product sales of RMB36.2 million (US$5.1 million). In the second quarter of 2022, nationwide strict lockdown measures were imposed
by the Chinese government in response to the outbreak of the COVID-19 Omicron variant, which led to disruption to all social and economic
activities. As a result, fewer shipping locations were open, and our e-commerce operations were adversely affected. As a result, we decided
to expand DayDayCook’s brand portfolio via acquisition of target companies with more offline distributors.

For the year ended December
31, 2023, we incurred net loss of RMB162.0 million (US$22.8 million) and net loss of RMB122.2 million for the year ended December 31,
2022. We also had negative cash flows from operating activities of RMB89.4 million (US$12.6 million) and RMB37.1 million for the years
ended December 31, 2023 and 2022 respectively.

Management uses the adjusted
EBITDA, non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes. For
the years ended December 31, 2023 and 2022, we incurred an adjusted EBITDA with loss of RMB38.6 million (US$5.4 million) and loss of RMB37.5
million respectively. For details, please refer to section “ Non-GAAP Financial Measure”.

Key Factors Affecting Our Results of Operations

There are several macro and
microeconomic factors that contributed to the growth of our business, specifically the RTC, RTH, RTE and plant-based product and service
markets in China and the United States. These include (but are not limited to):

  China’s rapid economic growth and urbanization, which has resulted in an increase in per capita annual disposable income;  
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  China’s investments in its technological infrastructure and increase in internet and mobile subscriber penetration rates induced by COVID-19;  
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  Favorable domestic social, governmental, and economic reforms centered on promoting a healthier lifestyle and