Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 68

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 68
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, if we decide to convert our RMB into U. S. dollars
for the purpose of paying dividends on our Class A ordinary shares or for other business purposes, appreciation of the U. S. dollar
against the RMB would have a negative effect on the U. S. dollar amount available to us. In addition, fluctuations of the RMB against
other currencies may increase or decrease the cost of imports and exports, and thus affect the price-competitiveness of our products against
products of foreign manufacturers or products relying on foreign inputs.

Since July 2005, the
RMB is no longer pegged to the U. S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange
market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value
against the U. S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions
on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Restrictions on currency exchange may limit
our ability to utilize our revenues effectively.

Some of our cash are denominated
in Renminbi. The Renminbi is currently convertible under the “current account,” which includes dividends, trade and service-related
foreign exchange transactions, but not under the “capital account,” which includes foreign direct investment and loans, including
loans we may secure from our PRC subsidiaries. Currently, our Shanghai subsidiary may purchase foreign currency for settlement of “current
account transactions,” including payment of dividends to us, without the approval of SAFE by complying with certain procedural requirements.
However, the relevant PRC governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for
current account transactions. As we have some operations in PRC, we expect a portion of our cash will be denominated in Renminbi, any
existing and future restrictions on currency exchange may limit our ability to utilize our Renminbi to fund our business activities outside
of the PRC or pay dividends in foreign currencies to our shareholders. Foreign exchange transactions under the capital account remain
subject to limitations and require approvals from, or registration with, SAFE and other relevant PRC governmental authorities. This could
affect our ability to obtain foreign currency through debt or equity financing for our subsidiary.

A significant portion of our cash has been
invested in short term investments which may decline in value and which we may not be able to