Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 22

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 22
---

a rate faster than our costs and operating expenses increase, or by reducing our costs and operating expenses as a percentage of our net
revenues. We also expect to continue to make significant future expenditures related to the continuous development and expansion of our
business, including:

  acquisitions of new businesses and products and the ongoing working capital needs of those businesses and products;  

  investments in our product development team and research and development team and in the development of new products;  

  investments in sales and marketing, enlarging our customer base and promoting market awareness of our brands and products;  

  investments in expansion of our online and offline distribution channels in a measured manner;  

  investment in enhancing data and information technology and improving operating efficiency, including improving the efficiency in supply chain management, warehouse management and inventory con...  

  incurring costs associated with general administration, including legal, accounting and other expenses related to being a public company.  

As a result of these significant
expenses, we will have to generate sufficient revenue to remain profitable in future periods. We may not generate sufficient revenue for
a number of reasons, including potential lack of demand for our products, increasing competition, challenging macro-economic environment,
the ramifications of the COVID-19 pandemic, as well as other risks discussed elsewhere in this annual report. If we fail to sustain or
increase profitability, our business and results of operations could be adversely affected.

Our historical financial conditions and
results of operations are not representative of our future performance. We may be unable to effectively manage our future growth and expansion,
and may not achieve growth in revenue and profit. If we are unable to manage our growth effectively, we may not be able to capitalize
on new business opportunities and our business and financial results may be materially and adversely affected.

We have experienced growth
and plan to further expand in the future including through acquisitions. For the year ended December 31, 2023, we recorded RMB205.5 million
(or US$28.9 million) in total revenue compared to RMB179.6 million for the year ended December 31, 2022, representing a 14.4% increase.
Subsequent to December 31, 2023, we completed two acquisitions. Assuming these two acquisitions had taken place on 1 January 2023, the
unaudited pro forma revenue of the Company for the year ended December 31, 2023 would be RMB222.2 million (or US$31.3 million). For the
year ended December