Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 135

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 5
Chunk 135
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 establish our footprint and sales channel
internationally. We are actively looking at potential targets in the US, Europe, Australia, SE Asia, and Middle East. Historically, virtually
all of our sales on been in China. For example, our international sales were zero in 2022 and 17% of our total revenue for the year ended
December 31, 2023. As a group, we are targeting to have international sales to account for 20 - 30% of total revenue in
2024 and around 50% in 2025. There can be no assurances that we will be successful in generating revenues internationally. For example,
our M& A strategy may not identify M& A candidates and acquisitions that are completed may not be successfully integrated into our
operations and may not produce significant international revenues.

On February 1, 2022, the Company,
through its wholly owned subsidiary, entered into a purchase agreement with Mr. LIN Kai Hang, Mr. SIO Leng Kit and Mr. Tang Wai Cheung,
to acquire 51% shares of Lin’s Group Limited (“ Lin’s Group”). Lin’s Group have its own brand “ Deliverz”
and principally engaged in manufacturing and distribution of RTC products with its major online sales channel. This was an upstream integration
where Lin’s Group is the major supplier of RTC meal kits for the company’s Hong Kong operations. This acquisition allows the
company to optimize cost structure for the RTC meal kits in the Hong Kong market. It also enables the company to expand its product offerings
with its own production facility.

On May 1, 2022, the Company,
through its wholly owned subsidiary, entered into a purchase agreement with Mr. Gao Xiaomin, Mr. Zhang Yi and Ms Chen Di, to acquire 51%
shares of Shanghai Lishang Trading Ltd, (“ Lishang”). Lishang is principally engaged in distribution of private label products.
This acquisition was completed during the nation-wide lock down when the company expedited its strategy to diversify revenue streams and
improve overall margin structure. Lishang has strong sales channel access into the corporate gifting channel which carries higher margin
compared to the company’s existing e-commerce and offline distribution channels. By acquiring Lishang, the company now has healthier
gross margins as well as access to sales and distribution partnerships with global FMCG brands such as Pepsi Co (Lays brand.) These partnerships
in turn can help the company secure better traffic and overall sales conversion on social