Dingdong Announces Intention to Utilize Substantial Majority of Proceeds from Sale of China Operations for Share Repurchase Plans and/or Dividends upon Closing of Transaction

Rhea-AI Summary

Dingdong (NYSE: DDL) announced it intends to use a substantial majority of cash proceeds from the planned sale of its China operations for share repurchases and/or dividends upon closing.

The Share Purchase Agreement with a Meituan affiliate values the transaction at US$717 million plus up to US$280 million, implying up to US$997 million in cash proceeds before adjustments; 90%/10% payment structure and closing conditions apply.

Positive

• Up to US$997 million in potential cash proceeds
• Plan to allocate ≥90% of post-close cash to buybacks/dividends
• 90% of consideration payable at closing, improving near-term liquidity

Negative

• Transaction requires SAMR anti-monopoly clearance before closing
• Purchase price subject to adjustments based on net cash and working capital
• Buyer may reduce price if net cash post-distributions is below US$150 million

Key Figures

Headline cash consideration: US$717 million Additional cash entitlement: US$280 million Minimum net cash covenant: US$150 million +5 more

8 metrics

Headline cash consideration US$717 million Cash consideration payable by Buyer in the Transaction

Additional cash entitlement US$280 million Cash Dingdong Cayman may receive from Dingdong BVI and subsidiaries

Minimum net cash covenant US$150 million Minimum consolidated net cash for Dingdong BVI entities as of Dec 31, 2025

Expected max proceeds US$997 million Total cash proceeds Dingdong Cayman expects from the Transaction

Closing payment tranche 90% Portion of final adjusted consideration payable at closing

Post-tax payment tranche 10% Remainder of consideration payable after tax settlement

Post-closing cash return Not less than 90% Share of post-Transaction cash balance earmarked for buybacks/dividends

Cash receipt deadline August 31, 2026 Latest date to receive up to US$280M from Dingdong BVI entities

Market Reality Check

Price: $2.74 Vol: Volume 3,442,202 is close...

normal vol

$2.74 Last Close

Volume Volume 3,442,202 is close to the 20-day average of 3,527,048 (relative volume 0.98x), suggesting no unusual trading ahead of this announcement. normal

Technical Price at $2.74 is trading above the 200-day MA of $2.21 and sits about 28.83% below the 52-week high and 66.06% above the 52-week low.

Peers on Argus

DDL slipped 1.09% while grocery peers were mixed: DNUT -3.13%, NGVC -4.79%, but ...

DDL slipped 1.09% while grocery peers were mixed: DNUT -3.13%, NGVC -4.79%, but VLGEA and GO were modestly positive. With no momentum flags or same-day peer news, today’s move appears more stock-specific than sector-driven.

Historical Context

5 past events · Latest: Feb 05 (Neutral)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 05	Business sale deal	Neutral	-14.4%	Definitive agreement to sell China business to Meituan subsidiary for cash.
Nov 12	Q3 2025 earnings	Positive	-2.3%	Continued profitability with revenue and GMV growth and healthy cash trends.
Nov 10	Earnings date notice	Neutral	+8.4%	Announcement of upcoming Q3 2025 results and conference call details.
Aug 21	Q2 2025 earnings	Positive	-4.7%	Sixth straight profitable quarter with revenue, GMV and cash position growth.
Aug 18	Earnings date notice	Neutral	+7.7%	Scheduled Q2 2025 earnings release and call logistics announcement.

Pattern Detected

Recent history shows several instances where seemingly constructive corporate or earnings updates coincided with negative next-day price moves, suggesting a tendency for the stock to sell off on ostensibly positive news.

Recent Company History

Over the last six months, DDL has reported multiple quarters of profitability and steady revenue growth, yet share reactions were often muted or negative. The Aug 21, 2025 and Nov 12, 2025 earnings both highlighted ongoing profits but saw small declines afterward. On Feb 5, 2026, the company announced a definitive agreement to sell its China business for US$717M, which led to a sharp -14.37% move. Today’s plan to return a substantial majority of sale proceeds via buybacks/dividends fits into this strategic transition narrative.

Market Pulse Summary

This announcement outlines Dingdong’s plan to use a substantial majority of up to US$997 million in ...

Analysis

This announcement outlines Dingdong’s plan to use a substantial majority of up to US$997 million in expected cash proceeds from the China business sale for buybacks and/or dividends, targeting not less than 90% of post-Transaction cash. The plan remains contingent on numerous closing conditions and regulatory approvals. Historically, the stock’s reaction to positive operational and deal news has been uneven, so monitoring progress toward closing milestones and any adjustments to consideration will be important.

Key Terms

share purchase agreement, american depositary shares, anti-monopoly clearance, material adverse effect, +1 more

5 terms

share purchase agreement financial

"the Company entered into a definitive Share Purchase Agreement (the "Share Purchase Agreement") with Two Hearts"

A share purchase agreement is a written contract that outlines the terms and conditions for buying and selling shares of a company. It specifies details like the price, number of shares, and any special conditions, ensuring both buyer and seller agree on the transaction. For investors, it provides clarity and legal protection, making sure the purchase is clear and enforceable.

american depositary shares financial

"holders of the Company's American Depositary Shares ("ADSs") and potential investors to exercise caution"

American depositary shares (ADSs) are a way for investors in the United States to buy shares of foreign companies without dealing with international markets directly. They represent ownership in a foreign company's stock and are traded on U.S. stock exchanges, making it easier for American investors to buy, sell, and own parts of companies from around the world.

anti-monopoly clearance regulatory

"the receipt of anti-monopoly clearance from the State Administration for Market Regulation"

Antimonopoly clearance is regulatory approval from competition authorities that a proposed merger, acquisition or business practice does not unfairly reduce competition. Investors care because this clearance determines whether a deal can proceed, may impose conditions or delays, and affects the combined business’s ability to raise prices or capture market share — like a referee deciding if a play is fair before the game continues.

material adverse effect regulatory

"the absence of any material adverse effect. A description of the primary closing conditions"

A material adverse effect is a significant negative change or event that substantially reduces a company’s business, financial condition, or future prospects — think of it like a sudden major engine failure that makes a car unreliable. Investors care because such an event can lower expected profits, trigger contract clauses (allowing counterparties to renegotiate or walk away), and prompt swift stock-price reassessment based on the higher risk and uncertainty.

pre-closing inventory check technical

"and the pre-closing inventory check shall have been completed by Dingdong Cayman and Buyer."

A pre-closing inventory check is a physical and accounting review of a company's goods and materials done just before a deal or reporting period is finalized to confirm quantities and value. It matters to investors because inventory levels affect a company’s reported assets, working capital and final purchase price in transactions—like counting the items in a moving truck before you sign off, it helps ensure the numbers are accurate and reduces surprise adjustments later.

AI-generated analysis. Not financial advice.

SHANGHAI, Feb. 10, 2026 /PRNewswire/ -- Dingdong (Cayman) Limited ("Dingdong Cayman" or the "Company") (NYSE: DDL), a leading fresh grocery e-commerce company in China, today announced that it intends to utilize a substantial majority of the cash proceeds from the sale of its China operations upon the closing of such Transaction (as defined below) for share repurchases or the issuance of dividends to its shareholders.

As previously disclosed on February 5, 2026, the Company entered into a definitive Share Purchase Agreement (the "Share Purchase Agreement") with Two Hearts Investments Limited ("Buyer"), a wholly-owned subsidiary of Meituan (HKEX: 3690). Pursuant to the Share Purchase Agreement, Dingdong Cayman has agreed to sell to the Buyer all issued and outstanding shares of Dingdong Fresh Holding Limited, Dingdong Cayman's wholly-owned subsidiary incorporated in the British Virgin Islands ("Dingdong BVI" or the "Target Company"), which holds through a series of wholly-owned and majority equity interest subsidiaries substantially all of Dingdong Cayman's operations in China (the "Transaction").

Pursuant to the terms of the Share Purchase Agreement, Buyer will pay cash consideration of US$717 million in the Transaction. In addition,  Dingdong Cayman will have the right to receive prior to August 31, 2026 total cash not exceeding US$280 million from Dingdong BVI and its subsidiaries (provided that the total net cash of Dingdong BVI and its subsidiaries on a consolidated basis as of December 31, 2025 minus such amounts received by Dingdong Cayman shall not be less than US$150 million). As such, Dingdong Cayman expects that it will receive up to US$997 million in cash proceeds from the Transaction. This amount is subject to certain adjustments, including those based on certain net cash, net working capital and other financial line item thresholds of Dingdong BVI and its subsidiaries as of certain agreed upon dates. In the event that the net cash of Dingdong BVI and its subsidiaries on a consolidated basis as of December 31, 2025 minus the amounts received by Dingdong Cayman as described above is less than US$150 million, the Buyer has the right to adjust the purchase price cash consideration at closing for any such shortfalls.

The final adjusted consideration will be payable in cash in two installments: (i) 90% of the consideration payable at closing, and (ii) the remaining 10% payable following the Company's settlement of applicable taxes related to the Transaction.

As previously disclosed, the closing of the Transaction is subject to the satisfaction or waiver of various conditions, including, among other things, the approval by the Company's shareholders, the receipt of anti-monopoly clearance from the State Administration for Market Regulation of the People's Republic of China (SAMR), the completion of the carve-out of the Company's overseas business carve-out, the completion of non-resident indirect transfer tax filings and the absence of any material adverse effect. A description of the primary closing conditions for the Transaction is set out at the end of this press release.

Subject to the satisfaction and/or waiver of the Transaction's closing conditions and the successful closing of the Transaction and the receipt by the Company of the cash proceeds from the Transaction, the Company intends to utilize not less than 90% of the Company's cash balance after the closing of the Transaction (after adjustments for cost and expense payables) for share repurchase plans and/or dividends to the Company's shareholders. The terms of any such share repurchase plans and dividends will be determined after the closing of the Transaction and subject to approval by the Company's Board of Directors and, if required, by the Company's shareholders. However, there can be no assurance that (i) the Transaction's closing conditions will be satisfied or waived, (ii) the Transaction will close and the Company will receive cash proceeds from the Transaction and (iii) any share repurchase plans or dividends will be made. As the closing of the Transaction is subject to substantial uncertainty and factors beyond the Company's control, the Company and its board of directors urges the Company's shareholders, holders of the Company's American Depositary Shares ("ADSs") and potential investors to exercise caution when dealing in ordinary shares, ADSs and/or other securities of the Company.

The Transaction is subject to, among others, the following closing conditions:

• Dingdong Cayman's and the founder's representations and warranties in the Share Purchase Agreement shall be true, accurate and not misleading in all material respects and shall not omit any material facts on the closing date, except for those would not result in a material adverse effect;
• each party thereto shall have performed all covenants and obligations under transaction documents to be performed prior to the closing date in all material respects, except for those would not result in a material adverse effect;
• there shall be no applicable laws or actions by any governmental authority that restricts, prohibits or cancels the Transaction;
• (i) resolutions of shareholders and board of Dingdong BVI in respect of this Transaction and the resignation of existing directors of Dingdong BVI, (ii) resolutions of shareholders and board of Dingdong Cayman in respect of this Transaction and the transaction documents, (iii) resolutions of board of Dingdong BVI and its subsidiaries established outside China in respect of the resignation of existing authorized signatories of the bank accounts thereof effective as of the closing date, (iv) resolutions of shareholders and board of Dingdong BVI's subsidiaries in respect of the resignation of existing legal representatives, directors, supervisors and senior management personnel effective as of the closing date, shall have been passed;
• no material adverse effect shall have been discovered by the Buyer in its due diligence of Dingdong BVI and its subsidiaries;
• there shall have been no material adverse change since December 31, 2025;
• Dingdong Cayman shall have completed non-resident indirect transfer tax filings related to the Transaction;
• the receipt of anti-monopoly clearance in respect of the Transaction from the State Administration for Market Regulation of the People's Republic of China (SAMR);
• the Buyer has completed the filing with the PRC National Development and Reform Commission related to the Transaction;
• other than certain contracts under ordinary course of business, the relevant existing contracts between Dingdong BVI and its subsidiaries (as one party) and Dingdong Cayman and its subsidiaries (other than Dingdong BVI and its subsidiaries) (as the other party) shall have been completed; and, if after receipt by Dingdong Cayman of total cash not exceeding US$280 million from Dingdong BVI and its subsidiaries, Dingdong BVI and its subsidiaries owe any debts to Dingdong and its subsidiaries (other than Dingdong BVI and its subsidiaries), such debts shall have been fully waived;
• Dingdong Cayman shall have submitted to the Buyer a reorganization plan for the carve-out of overseas business and relevant personnel and assets and such reorganization shall have been completed;
• Dingdong BVI and its subsidiaries shall have obtained all necessary consents from loan institutions in respect of the Transaction; and
• the pre-closing inventory check shall have been completed by Dingdong Cayman and Buyer.

About Dingdong (Cayman) Limited

Dingdong (Cayman) Limited is a leading fresh grocery e-commerce company in mainland China, with sustainable long-term growth. We directly provide users and households with fresh groceries, prepared food, and other food products through delivering a convenient and excellent shopping experience supported by an extensive self-operated frontline fulfillment grid. Leveraging our deep insights into consumers' evolving needs and our strong food innovation capabilities, we have successfully launched a series of private label products spanning a variety of food categories. Many of our private label products are produced at our Dingdong production plants, allowing us to more efficiently produce and offer safe and high-quality food products. We aim to be the first choice for fresh and food shopping.

For more information, please visit: https://ir.100.me. 

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continue," or other similar expressions. Among other things, business outlook and quotations from management in this announcement, as well as Dingdong's strategic, operational, share repurchase and dividend plans, contain forward-looking statements. Dingdong may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its interim and annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Dingdong's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the successful completion of the Transaction; Dingdong's goals and strategies; Dingdong's future business development, financial conditions, and results of operations; the expected outlook of the on-demand e-commerce market in China; Dingdong's expectations regarding demand for and market acceptance of its products and services; Dingdong's expectations regarding its relationships with its users, clients, business partners, and other stakeholders; competition in Dingdong's industry; Dingdong's proposed use of proceeds; and relevant government policies and regulations relating to Dingdong's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the Securities and Exchange Commission. All information provided in this announcement and in the attachments is as of the date of the announcement, and the Company undertakes no duty to update such information, except as required under applicable law.

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SOURCE Dingdong (Cayman) Limited

FAQ

What cash proceeds does Dingdong (DDL) expect from the sale of its China operations?

Dingdong expects up to US$997 million in cash proceeds. According to the company, that includes US$717 million cash consideration plus up to US$280 million receivable before specified adjustments and thresholds.

How much of the sale proceeds will Dingdong (DDL) use for share repurchases or dividends?

Dingdong intends to use not less than 90% of the company's cash balance after closing for buybacks/dividends. According to the company, final terms will be determined after closing and board approval.

What are the key closing conditions for Dingdong's (DDL) transaction with Meituan affiliate?

The deal requires shareholder approvals, SAMR anti-monopoly clearance, tax filings, and carve-out completion. According to the company, additional conditions include no material adverse effect and required corporate resolutions.

Could the US$997 million estimate for Dingdong (DDL) change before closing?

Yes. The final consideration is subject to adjustments for net cash, net working capital and other financial thresholds. According to the company, the buyer may adjust price for shortfalls against agreed net cash targets.

When will Dingdong (DDL) receive the transaction proceeds and how is payment structured?

The adjusted consideration is payable in cash in two installments: 90% at closing and 10% after tax settlement. According to the company, remaining amounts depend on post-closing tax and adjustment processes.