Asian cuisine business DayDayCook has entered a joint-venture agreement with China-based ready-meals producer Hewen Agricultural Technology.
Under the binding agreement announced on 2 April, Hewen has “committed” to generate $15m in profits from the venture in mainland China over the next five years.
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The aim of the JV, which will become a subsidiary of DayDayCook (DDC Enterprises), is to “scale delivery of ready-to-eat solutions for major e-commerce platforms, restaurant chains, and direct-to-consumer brands” in China, according to a statement.
Additionally, Hewen has also “committed” to DDC that the JV will deliver an annual profit of “more than” 20m yuan ($2.7m) in 2025 and for the following four years.
DDC chair and CEO Norma Chu said: “By combining DDC’s innovation-driven brands with Hewen’s localised 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 stipulates that all after-tax profits will be distributed as shareholder dividends in accordance with the individual shareholding of the JV partners, the ratio of which was not disclosed..
Hewen plans to “further expand” its market reach to more e-commerce platforms, restaurant chains and direct-to-consumer brands on social media platforms such as Douyin (the Chinese version of TikTok), the statement added.
As part of the agreement, DDC will issue “restricted” shares to Hewen within ten business days of the JV’s finalisation.
The shares will be “unlocked” based on the JV’s “actual achievement” of Hewen-committed profit targets over the five-year period.
Founded in 2012, DDC has built up its business through e-commerce. The Hong Kong-based company, which was listed on the New York Stock Exchange in 2023, offers ready-to-heat (RTH), ready-to-cook (RTC), and ready-to-eat (RTE) products.
It has a portfolio of brands including Nona Lim, Yai’s Thai, Omsom, MengWei, and Yujia Weng.
Asian cuisine business Omsom, based in the US, was acquired by DCC for an undisclosed sum in June.
DDC only filed its annual accounts for the 2023 financial/calendar year in January after gaining an extension from the New York exchange.
Revenue for 2023 increased 14.4% to 205.4m yuan. However, the business continued to post losses.
Adjusted EBITDA came in at a 38.6m yuan loss for the year, compared to a loss of 37.5m yuan a year earlier.
Net losses widened to 162m yuan from 122.2m yuan.
Founded in 2015, Hewen produces pre-made and convenience meal solutions, provides catering services, and offers ready-to-eat products.
Its brands include Haidilao, Xi Bei, and Dingdong Maicai.
Wenbo Qin, the CEO of Hewen, said in the statement: “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.”
