Street Calls of the Week
DDC Enterprise Ltd reported its Q2 2025 earnings, revealing a mix of financial outcomes and strategic shifts. The company posted earnings per share (EPS) of $4.04, with actual revenue reaching $111.39 million. Despite these figures, the company’s stock price saw a significant drop of 19.08% in pre-market trading, falling from $13.52 to $10.94. According to InvestingPro data, the stock has shown high price volatility, with a remarkable YTD return of 144.71%. Current analysis suggests the stock is slightly undervalued based on InvestingPro’s Fair Value model. For deeper insights into DDC’s valuation and 8 additional key ProTips, consider exploring the comprehensive Pro Research Report available on InvestingPro.
Key Takeaways
- Revenue decreased by 9.4% year-over-year for the first half of 2025.
- The core China business showed a 7.5% increase in revenue.
- Gross profit improved by 16.9% year-over-year.
- The company exited U.S. operations to focus on Asian markets.
- DDC aims to rank among the top 3 public Bitcoin treasury companies within three years.
Company Performance
DDC Enterprise’s Q2 2025 performance was marked by a strategic pivot towards Asian markets, particularly China, and an exit from U.S. operations due to tariff uncertainties. While the overall revenue for the first half of 2025 saw a decline, the company’s core China business experienced growth, indicating a successful market focus shift. InvestingPro data shows a healthy gross profit margin of 31.71% and a current ratio of 1.18, suggesting adequate liquidity to meet short-term obligations. The company also reported notable improvements in gross profit and margin, reflecting operational efficiencies and cost savings.
Financial Highlights
- Revenue: $15.6 million for H1 2025 (9.4% decline YoY)
- Gross Profit: $5.2 million (16.9% increase YoY)
- Gross Margin: 33.4% (improved by 750 basis points)
- GAAP Net Income: $5.2 million (compared to a loss of $5.2 million in the previous year)
- Cash and Equivalents: $25.1 million as of June 30, 2025
Earnings vs. Forecast
DDC Enterprise’s EPS of $4.04 was in line with expectations, yet the revenue of $111.39 million fell short of projections. This discrepancy, coupled with the strategic withdrawal from the U.S. market, likely contributed to the negative market reaction.
Market Reaction
Following the earnings release, DDC Enterprise’s stock experienced a sharp decline of 19.08% in pre-market trading. The stock’s current price of $10.94 represents a significant recovery from its 52-week low of $1.62, though still well below its high of $20.83. With an average daily trading volume of 130,000 shares over the past three months, InvestingPro analysts maintain a consensus recommendation of 2.0, with a notable upside potential according to their target price of $30. Get exclusive access to detailed technical analysis and 10+ additional ProTips with an InvestingPro subscription.
Outlook & Guidance
Looking ahead, DDC Enterprise is optimistic about its core business growth, targeting a significant increase in Bitcoin holdings to 10,000 by the end of 2025. InvestingPro forecasts indicate potential profitability this year, with an EPS forecast of $0.97 for FY2025. The company remains committed to expanding its presence in Asian markets and exploring further mergers and acquisitions to enhance its strategic positioning. Track DDC’s progress and access comprehensive financial analysis through the Pro Research Report, available exclusively on InvestingPro.
Executive Commentary
CEO Norma Chew emphasized the company’s strategic focus, stating, "We are building a company that compounds value on both the income statement and the balance sheet." She underscored the importance of Bitcoin in the company’s strategy, describing it as essential to financial well-being.
Risks and Challenges
- Potential market saturation in Asian markets could limit growth.
- Regulatory changes affecting Bitcoin could impact the company’s treasury strategy.
- Macroeconomic pressures, including currency fluctuations, may affect financial performance.
- Continued supply chain disruptions could pose operational challenges.
- Investor skepticism about the company’s strategic pivot could lead to stock volatility.
Q&A
During the earnings call, analysts inquired about the company’s joint venture announced in April, which is expected to contribute from September. There was also interest in Bitcoin yield enhancement strategies, with management focusing on principal-protected yield strategies to maximize returns.
Full transcript - DDC Enterprise Ltd (DDC) Q2 2025:
Conference Operator: Good morning, everyone, and welcome to DDC Enterprise Limited’s First Half twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you would need to press 11 on your telephone. You will then hear an automated message advising your hand is raised.
Please be advised that today’s conference is being recorded. I would like now to turn the conference over to Yuji Azai, Investor Relations for DDC. Please go ahead.
Yuji Azai, Investor Relations, DDC Enterprises: Thanks, operator. Hi, everyone. Thank you for joining DDC Enterprises first half twenty twenty five earnings conference call. Joining me today are Norma Chew, DDC’s founder, chairwoman, and CEO Qiu Ho, DDC’s Chief of Staff. Before we begin today’s call, I’d like to remind everyone that today’s call is being recorded and will be available on DDC’s Investor Relations website.
After management’s prepared remarks, we’ll open the line for Q and A. A press release of DDC’s first half twenty twenty five results and a supplemental investor presentation are also available on DDC’s IR website. Please note that during the course of this call, we may make forward looking statements. These statements reflect our current views and expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a more detailed discussion of these risk factors.
With that, I’ll pass the call to Norma.
Norma Chew, Founder, Chairwoman, and CEO, DDC Enterprises: Hello, everyone, and thank you for joining us today. The 2025 was transformational for DDC. DDC started as a content driven Asian food platform that has since grown into a portfolio of beloved ready to eat consumer brands. In the first six months of 2025, BDC turned profitable and delivered record high gross margin and net income of 33.4% and US5.2 million dollars respectively. Hugh will expand on this shortly, but our core operating business is the strongest it has ever been, and we expect continued growth into the second half of the year.
For our second transformation in May, following in the footsteps of strategy, we added a balance sheet engine to our business, Bitcoin as a core treasury asset and a strategic tool to accelerate long term value for our shareholders. We published CDC’s Bitcoin manifesto, a public statement that outlines the standards by which we want to be measured by our investors and how we plan to operate as a Bitcoin treasury company with execution, transparency, discipline, and long term conviction. That manifesto is now core to how we guide our team, speak to investors, and measure internal investment decisions. It’s an extension of our values around stewardship, resilience, and sovereignty. Just as food is essential to our personal well-being, we at BDC believe Bitcoin is essential to financial well-being.
We invest in our health through what we eat, and we protect the value of capital by holding an asset designed to resist fiat debasement. Concurrently in late May, we made our first purchase of Bitcoin and outlined a structured plan for responsible accumulation. Since then, we have scaled quickly, executing multiple purchases, bringing our holdings to 1,008 Bitcoin as of the August. Alongside our accumulation, we have secured record breaking financing and institutional partnerships to support scaling our Bitcoin treasury aggressively. Our goal is clear.
Build one of the largest and most strategic public Bitcoin treasuries in the world and do it the DDC way. With methodical and disciplined execution, tight risk controls, and transparency while remaining steadfast with our company’s core values. Our approach draws on proven playbooks such as strategy to show the value of a clear treasury policy, disciplined disclosure, and aligning the capital stack to a long term accumulation strategy. We’ve learned from each treasury company that has successfully executed the strategy and adapted it to DDC’s brand, business model, and investor base. We believe two core differentiators design our approach.
Our first edge is reach. BDC is a trusted brand among Chinese speaking audiences, engaging over 60,000,000 active users, 3,500,000 paying customers, and roughly 475,000,000 monthly views across our website and streaming platforms. Platforms. This reach connects us to a fast and underpenetrated investor base with an estimated 6,500,000 mainland Chinese investors with U. Brokerage accounts and 150,000,000,000 in AUM.
Along with Chinese high net worth individuals holding 1,500,000,000,000.0 US dollars in US assets. For these investors, BDC offers a compliant US listed equity proxy for Bitcoin exposure within a familiar ecosystem. Our second edge is a profitable core business. This foundation allows us to stack Bitcoin sustainably independent of market volatility. Strong earnings reduce the risk of forced sales and strengthens our access to capital markets, enabling us to build our Bitcoin treasury while continuing to invest in our brand and products.
Together, we believe these create a powerful flywheel, distribution plus cash flow that compounds on both our income statement and the balance sheet. To support this strategy, we are strengthening our team and governance. I’m excited to welcome Q Ho as chief of staff. Q brings over two decades of investment experience across public markets and digital assets, including cofounding initial ventures and early stage crypto investment firm and managing a disruptive technology investment portfolio at CPPIB, where he focused on areas including blockchain technology and AI. CPPIB is the largest pension fund in Canada with over 700,000,000,000 Canadian dollars in assets.
In addition, he has held senior investment and management roles at hedge funds, including Cayden Capital and Valley Partners, and was the founder and CIO of Wuzhou Asian Partners. At EDC, he will drive cross functional execution across capital markets, treasury operations, partnerships, and investor relations to ensure tight operating cadence as we scale. We’re also formalizing external oversight through our newly formed Bitcoin Visionary Council. I’m proud to announce Yatsu, cofounder and executive chairman of Animoca Brands as our inaugural member. Ya’ll brings global experience across venture, regulation, and digital asset ecosystems and will help us pressure test our governance and strategic road map as we grow our Bitcoin holdings.
Complementing this institutional leadership, in July, we also announced the Bitcoin Influence Collective, a mission driven advisory group of key thought leaders and seasoned Bitcoin investors focused on contributing to the company’s strategic directions and industry specific innovations. Its four founding members include Adrian Morris, Lamar Arshara, Magdalena Gronowska, and Tim Cosman. These new leadership and advisory additions reflect DDC’s commitment in executing one of the most forward thinking and disciplined Bitcoin strategies among public companies globally. Since launching our program in May, we’ve executed several tranches, reaching 1,008 Bitcoin as of August 31 with an average purchase price of a $108,416 Compared to our first purchase in May, we’ve increased our Bitcoin yield by 1798%. As of today, BDC is now the second largest Bitcoin treasury company in the world.
We intend to continue accumulating on an opportunistic risk management basis and only when it is accretive on a Bitcoin per share basis. Capital raising is the lifeblood of treasury companies, and this quarter, we secured up to $528,000,000 in financing from Ensign Funds, Animoca Group, Kinetic Capital, QCP, and other premier institutions. This represents one of the largest Bitcoin dedicated races ever completed by NYSE listed company. It is an especially notable achievement given the size of the company at the time of the race. It underscores the strength of our management team’s capital market expertise and ability to attract world class investors.
In addition, we filed a 500,000,000 US dollars S-three Universal Shelf that further enhances our financing capability. Importantly, 100% of these proceeds are dedicated to one purpose, accumulating Bitcoin for the long term. Going forward, we will continue to leverage a mix of cash on our balance sheet, selective equity, convertible notes, and structured capital applied opportunistically with a singular goal of maximizing our BTC yield. In addition to building our Bitcoin treasury, we’ve partnered with leading institutions and Bitcoin native advisers to strengthen our platform. These collaborations expand DDC’s capabilities in trading efficiency, secure custody, and Bitcoin yield enhancement.
Together, these partnerships bring institutional grade oversight to our Bitcoin strategy while unlocking new opportunities for growth and reach. Looking forward, we expect strong revenue growth in our core business driven by our focus on markets with higher consumer demand with healthier margins. In regards to our Bitcoin treasury, we will continue accumulating Bitcoin and we’ll publish updates with each material event. Lastly, we believe transparency matters. As such, we began reporting our Bitcoin holdings, cost basis, average purchase price, MF calculations, and other Bitcoin treasury metrics on a regular basis on our treasury dashboard on our website at dtc.xyz.
Our near term goal is to achieve 10,000 DTC by the 2025 through a combination of purchases with our existing financing facilities as well as structured transactions. Longer term, our goal is to rank among the world’s top three public Bitcoin treasury companies within three years. Thank you to our team at DDC, our partners and our shareholders. We are building a company that compounds value on both the income statement and the balance sheet. With that, I’ll now pass the call over to Kew, DDC’s Chief of Staff, to provide a detailed update on our first half twenty twenty five financial results.
Qiu Ho, Chief of Staff, DDC Enterprises: Thank you, Norma. DDC is a global Asian food platform. Our portfolio includes DayDay Coke, Nonna Lim, and Yai Thai, brands with strong consumer engagement and distribution. During the 2025, we made the strategic decision to shut down our U. S.
Operations amid tariff uncertainty. This strategic decision allowed us to focus on growing our profitable Asia business and our Bitcoin treasury strategy. The exit of our U. S. Operations removed significant costs related to headcount, marketing, logistics and other costs that were weighing on our profitability, and it simplified our operating model.
We plan to maintain this focused approach for the near term with option for reassessment in the future following greater clarity on trade tariff policies. Now turning to our financial performance. Revenue came in at $15,600,000 for the first half, which represents a 9.4% year on year decline. This decrease was entirely the result of our strategic exit from loss making U. S.
Operations where our goodwill was already written off in 2024. The underlying story is much stronger. Our core China business revenue grew 7.5% year on year, mainly driven by the increase in sales volume in China, where we are seeing increased demand as consumer environment improved in 2025, particularly at the price points where we operate. Looking forward, we expect our China business to continue to grow into our seasonally stronger second half of the year. Our sales will be boosted by new target markets in Southeast Asia, including Thailand and Indonesia, where we have strong synergies due to close proximity of supply chain and logistics with our domestic China business.
Despite lower overall revenues, gross profit increased a strong 16.9% year on year to $5,200,000 This translates to a gross margin of 33.4%, a remarkable seven fifty basis points improvement year on year. This marks our sixth consecutive quarter of margin improvement, driven by economies of scale, stringent supply chain optimization and cost discipline. In addition, deflation in China provided raw material cost savings. Perhaps most importantly, we achieved GAAP net income of 5,200,000 and net income excluding BTC fair value gain of $1,300,000 GAAP net income represents a remarkable turnaround from negative $5,200,000 in the prior year, demonstrating the impact of our decision to exit The U. S.
Market and focusing on higher margin territories. Lastly, our balance sheet remains strong with $25,100,000 in cash, cash equivalents and short term investments as of 06/30/2025. Of the $528,000,000 financing, we have utilized $53,000,000 for our Bitcoin purchases as of the date of this call. Dollars $275,000,000 in convertible notes and $200,000,000 equity line of credit remain undrawn. In addition, to date, we have not utilized any of the $500,000,000 universal shelf.
With that, we’ll open the call for questions.
Conference Operator: Thank you. And our first question will come from Matthew Galinko with Maxim Group. Your line is open.
Matthew Galinko, Analyst, Maxim Group: Great. Thanks for taking my questions and congratulations on the move into the treasury. So I was hoping maybe we could start a little bit in the operating business in the food business. I know in I think it was April that you announced a joint venture. Is what did that contribute anything to first half results?
Or is there a second half impact from the JV you announced?
Conference Operator: Okay. One moment, please. Stand by. One moment, please. There seems to be a technical difficulty.
Norma Chew, Founder, Chairwoman, and CEO, DDC Enterprises: Oh, hi, Matt. Sorry. I was on mute earlier. Thanks for joining the call, and thanks for the question. So for our JV that was announced in April, it did not contribute to the first half results.
I completed the setup in September, and so we we expect to have contribution starting this month and going into the fourth quarter.
Matthew Galinko, Analyst, Maxim Group: Alright. Terrific. And is there potential for additional of those sorts of JVs moving forward, or do you feel like you have capacity to do more on that front to kinda help grow the operating business and cash flow?
Norma Chew, Founder, Chairwoman, and CEO, DDC Enterprises: Yeah. I mean, we are looking at a number of potential m and a and JV opportunities, and the structure is gonna be very similar to the one that we did in April. You know, there is a likelihood that we could do one more in the fourth quarter of this year.
Matthew Galinko, Analyst, Maxim Group: Great. Thank you. And then just another couple on the Bitcoin side. I think you mentioned a few partnerships around yield enhancement. I was hoping you could go maybe a little bit further into you know, what what sorts of strategies you can employ to improve yield.
Norma Chew, Founder, Chairwoman, and CEO, DDC Enterprises: Sure. I’ll I’ll pass this one to Q. Yeah.
Qiu Ho, Chief of Staff, DDC Enterprises: Sure. Hi, Matt. This is Q, chief of staff at DDC. Thanks for your question. So from a yield enhancement standpoint, what we have found is there are quite a lot of partners that we have and also there are quite a lot of inbound interest that we have had received over the last couple of months in suggesting different Bitcoin yield products to us, and we’ve been busy evaluating each of them.
Right now, the fact that we’re around four months into our strategy, we have taken an approach from a treasury standpoint to be much more conservative than others, meaning that we’re looking for new enhancement strategies that gives us principal protection. These strategies can range from any from someone offering us to put some capital, Bitcoin specifically, into their fund to be managed for passive yield to potentially structured products where we may enjoy some yield. To give you an example, some of these unit enhancement suggestions that were given to us include selling puts, covered calls. They could be shops and products. It could be accumulators, all of which we’re evaluating at the moment.
Matthew Galinko, Analyst, Maxim Group: Got it. Thank you. That’s that’s a helpful overview. Maybe secondly, you talked about potentially structured purchases to help move towards the 10,000 Bitcoin goal by the ’25. I was hoping you could talk a little bit more about, know, you know, MNAV being, you know, pretty close to one.
You know, we’ve seen strategies sort of talk about a more stringent approach to deploying the common ATM for Bitcoin. I’m just curious sort of how you’re thinking about issuing common relative to MNAV and what sort of the other approach you have to accretively, you know, acquire Bitcoin? Thank you.
Qiu Ho, Chief of Staff, DDC Enterprises: So I can give you a general sense of how we approach this. MNAP is out of our control, obviously. It’s whatever market wants to place that multiple to be on our share price. And, obviously, from a management standpoint, we do as much as we can to be transparent. We are we try to be consistent with how we execute and how we communicate to shareholders.
In terms of how we think about what instruments to use, you can think about it from a perspective of our ultimate goal is and always will be increasing the coin per share, which means that even as we were to issue new equity or if we’re to use convertible debt, it’s always keeping in mind that that action itself will increase our decline per share so that even if it’s issuing new equity, it’s accretive dilution. So this is really key because to us, that’s a really important yardstick in which we measure whether we’re adding value to shareholders. So with that in mind, we evaluate different instruments that is available to us, and we look for what would make the most sense from a cost of capital standpoint.
Matthew Galinko, Analyst, Maxim Group: Great. Well, I appreciate the answers, and congrats again on the progress.
Conference Operator: At this time, I do not show any additional questions in the queue. So this will conclude today’s conference call. And thank you for participating, and you may now disconnect.
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