Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 240

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 240
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MB44,852,000recognized in “ Changes in fair value of financial instruments”,
due to the overall under performance of the industry and PFI Food’s inability to obtain external financing in the poor economic
environment. In determining the fair value of the investment in PFI Foods, the Company made estimates and judgments regarding the cash
flow forecasts of PFI Foods, the weighted average cost of capital of15.4% and the discount for lack of marketability of20.0% applied
to the projected cash flows with the assistance of an independent valuation firm.

After obtaining equity interests in PFI Foods,
the Company does not have significant influence over PFI Foods and elected to measure investment in PFI Foods, without a readily determinable
fair value, at cost adjusted for changes resulting from impairments, if any, and observable price changes in orderly transactions for
the identical or similar securities of the same issuer. As of December 31, 2023 and 2024, the Company made a qualitative assessment and
considered there were impairment indicators that investment in PFI Foods were impaired as of December 31, 2023 and 2024, respectively,
as it was significantly behind the forecasted revenue growth target and there has been a declining trend of the plant-based meat industry
performance. In determining the fair value of the investment in PFI Foods, the Company made estimates and judgments regarding the cash
flow forecasts of PFI Foods, the weighted average cost of capital of13.2% (2023: 14.6%, 2022: 15.2%) and the discount for lack of marketability
of20.0% (2023: 20.0%, 2022: 20.0%) applied to the projected cash flows with the assistance of an independent valuation firm. As a result,
the investment in PFI Foods was written down to its fair value and the difference of RMB22,705,285, RMB7,934,161and RMB5,645,887between
its fair value and the carrying value as of December 31, 2022, 2023 and 2024 was included in “impairment loss for equity investments
accounted for using measurement alternative” in the consolidated statements of operations and comprehensive loss for the years ended
2022, 2023 and 2024, respectively.

On May 26, 2022, the Company purchased431series
seed preferred shares from Good Food Technologies (Cayman