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NEW YORK - DDC Enterprise, Ltd. (NYSEAM: DDC), a prominent Asian consumer food company with a market capitalization of $6.72 million, has announced a 1:25 reverse stock split, approved unanimously by the Board following a recent trading halt on the NYSE-American. The company's CEO, Norma Chu, assured shareholders of the company's resilience and future prospects, despite the current market volatility. According to InvestingPro analysis, DDC currently trades below its Fair Value, with 14 additional key insights available to subscribers.
Last week, DDC's shares were halted from trading as they fell below $0.10 amid a broader market selloff, marking a 94.55% decline over the past year and trading at just 0.43 times book value. The reverse stock split, ratified by shareholders on November 29, 2024, is set to take effect on April 21, 2025, with the goal of bringing the share price into a more favorable trading range.
DDC's revenue in 2024 was predominantly generated within China's domestic market, accounting for 80% of the total, which according to Chu, minimizes the company's exposure to international tariffs and geopolitical tensions. The company has shown promising revenue growth of 18.16% in the last twelve months, reaching $32.88 million. The company's expansion efforts include a focus on Southeast Asia and the establishment of a Joint Venture in China expected to contribute a net profit of USD 15 million over the next five years.
Chu also highlighted the company's return to full compliance with SEC and NYSE regulations and her personal investment of subscribing to 10 million additional shares, signaling leadership's confidence in the company's direction. Additionally, DDC is exploring strategic diversification of corporate reserves with cryptocurrency, planning an initial Bitcoin investment within the next 30 days.
The reverse stock split will reduce the number of outstanding Class A Ordinary Shares from approximately 79 million to about 3.2 million. Shareholders do not need to take any action as the adjustment will be made electronically. Fractional shares resulting from the split will be cancelled and returned to the pool of authorized but unissued shares.
Chu concluded the update with a message of confidence, emphasizing DDC's strong operational, financial, and strategic position. While InvestingPro data indicates an overall Financial Health Score of 1.7 (labeled as 'Weak'), she encouraged shareholders to focus on the company's performance and execution, expressing optimism for the year ahead. Investors seeking deeper insights into DDC's financial metrics and growth potential can access comprehensive analysis through InvestingPro's advanced tools and metrics.
This corporate update is based on a press release statement issued by DDC Enterprise, Ltd.
In other recent news, DDC Enterprise, Ltd. has announced significant developments, particularly in its financial outlook. The company is projecting record revenue for the calendar year 2024, with estimates ranging from $34 to $40 million and a gross margin between 23.5% and 27%. Additionally, the anticipated adjusted EBITDA for 2024 is expected to align with the figures reported as of June 30, 2024. As of December 31, 2024, DDC's cash, cash equivalents, and short-term investments are estimated at $26.2 million. Chairwoman and CEO Norma Chu has increased her stake in the company through a private placement of 10,000,000 shares, alongside a new investor contributing $2,278,080. DDC has also regained full compliance with the New York Stock Exchange's continued listing standards, resolving previous listing deficiencies. These recent developments reflect the company's confidence in its resilience and potential for long-term growth.
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