Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 237

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 237
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2% of the Company’s net accounts
receivable balance at December 31, 2024 have been subsequently collected.

F-48

6. INVENTORIES, NET

Inventories consisted of the following:

                                     As of December 31,                                             
                                     2023                                    2024                   
 ────────────────────────────────────────────────────────────────────────────────────────────────────
                                     RMB                                     RMB                    
  Raw materials                                                 182,882                          -  
  Finished goods                                             10,478,683                  6,001,646  
  Less: allowance for provision                               ( 677,465                ( 1,281,842  
  Inventories, net                                            9,984,100                  4,719,804  

The movement of the allowance for inventory valuation
is as follows:

                                            For the Years Ended                                                                     
                                            December 31,                                                                            
                                            2022                                    2023                     2024                   
                                            RMB                                     RMB                      RMB                    
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Balance at the beginning of the year                                ( 59,960                ( 181,499                  ( 677,465  
  Current year provision                                             ( 149,075                ( 802,807                ( 4,887,040  
  Write-downs                                                           27,536                  306,841                  4,282,663  
  Balance at the end of the year                                     ( 181,499                ( 677,465                ( 1,281,842  

Write-downs of RMB27,536, RMB306,841and RMB4,282,663were made to
the inventories and recorded in cost of revenues for the years ended December 31, 2022, 2023 and 2024, respectively. Provisions of
RMB149,075, RMB802,807and RMB4,887,040were made to the inventories for the year ended December 31, 2022, 2023 and 2024.

For the years ended December 31, 2022, 2023 and
2024, the Company received insurance proceeds of RMB0.5million, niland nilfor claims of unharvested crop. These insurance proceeds
are included as a reduction to “cost of revenues” in the consolidated statements of operations and comprehensive loss.

7. PREPAY