Asian cuisine business DayDayCook (DDC) has recently entered into a joint-venture agreement with China-based ready-meals producer Hewen Agricultural Technology.
This binding agreement, announced on April 2, outlines Hewen’s commitment to generate $15 million in profits from the venture in mainland China over the next five years.
The purpose of this joint venture, which will operate under the name DDC Enterprises, is to “scale delivery of ready-to-eat solutions for major e-commerce platforms, restaurant chains, and direct-to-consumer brands” throughout China, as stated in the official announcement.
Furthermore, Hewen has committed to ensuring that this venture delivers an annual profit of “more than” 20 million yuan ($2.7 million) in 2025, continuing this level of success for the subsequent four years.
DDC Chair and CEO Norma Chu remarked, “By combining DDC’s innovation-driven brands with Hewen’s localized production expertise, we’re poised to capture the fast-growing demand for high-quality, health-focused meal solutions across China’s digital and offline ecosystem.”
The agreement specifies that all after-tax profits will be distributed as shareholder dividends, following the shareholding distribution among the joint-venture partners, although the specific ratios remain undisclosed.
Additionally, Hewen plans to “further expand” its market reach by targeting more e-commerce platforms, restaurant chains, and direct-to-consumer brands on social media platforms such as Douyin, the Chinese equivalent of TikTok.
As part of this agreement, DDC will issue “restricted” shares to Hewen within ten business days following the finalization of the joint venture.
These shares will become “unlocked” based on the joint venture’s “actual achievement” of the profit targets committed by Hewen throughout the five-year duration.
Founded in 2012, DDC has effectively grown its business through e-commerce strategies. This Hong Kong-based company, which became publicly listed on the New York Stock Exchange in 2023, specializes in ready-to-heat (RTH), ready-to-cook (RTC), and ready-to-eat (RTE) products.
Its extensive portfolio includes prominent brands such as Nona Lim, Yai’s Thai, Omsom, MengWei, and Yujia Weng.
Notably, Asian cuisine business Omsom, based in the US, was acquired by DDC for an undisclosed sum in June.
DDC submitted its annual accounts for the 2023 financial/calendar year in January, having received an extension from the New York exchange. The company’s revenue increased by 14.4% to 205.4 million yuan; however, it still reported losses.
Adjusted EBITDA reflected a loss of 38.6 million yuan for the year, compared to a loss of 37.5 million yuan the prior year. Additionally, net losses widened to 162 million yuan, up from 122.2 million yuan.
Founded in 2015, Hewen specializes in producing pre-made and convenience meal solutions, catering services, and ready-to-eat products. Its brand portfolio includes Haidilao, Xi Bei, and Dingdong Maicai.
Hewen CEO Wenbo Qin stated, “Our collaboration with DDC is a milestone in advancing China’s prepared-food industry. With shared values in quality and scalability, this JV will set new benchmarks for culinary excellence and operational efficiency in the RTE sector.”
