Core Points - Luckin Coffee Inc. will release its fourth quarter and full year 2024 financial results on February 20, 2025, before the U.S. market opens [1] - A conference call will be held on the same day at 8:00 am Eastern Time to discuss the financial results and answer questions [1] Access Information - Participants can access the call using specific dialing numbers for the United States, international, Mainland China, and Hong Kong, with a conference ID provided [2] - A replay of the call will be available until February 27, 2025, with access codes for different regions [2] - The earnings release, slides, and archived webcast will be available on the Company's Investor Relations website [2] Company Overview - Luckin Coffee has established a technology-driven retail network aimed at providing high-quality, convenient, and affordable coffee products [3] - The company was founded in 2017 and is based in China, with a vision to build a world-class coffee brand [3]

Investment Rating - The report maintains a "Buy" rating for Luckin Coffee (LKNCY.US) with a target price of $40, indicating a potential upside of 37% from the current price of $29.2 [4][18]. Core Insights - The recent volatility in Luckin Coffee's stock price is attributed to a significant increase in coffee bean prices over the past month, raising concerns about profit margins. However, the report suggests that the short-term impact on Luckin's performance is limited, and the long-term outlook remains positive for market share expansion and profit margin improvement [1][2]. - Despite a nearly 30% increase in stock price over the past two months, the current valuation at 17.6x 2025 P/E is still considered attractive, with substantial room for growth [1][4]. - Luckin Coffee's high inventory levels and a significant order with Brazil worth RMB 10 billion for 240,000 tons of coffee beans from 2025 to 2029 are expected to mitigate the impact of rising coffee bean prices [2][3]. Summary by Sections Financial Performance and Forecast - Revenue is projected to grow from RMB 13.293 billion in 2022 to RMB 50.520 billion in 2026, with a compound annual growth rate (CAGR) of 66.9% in 2022 and 87.3% in 2023 [11][13]. - Net profit is expected to increase from RMB 488 million in 2022 to RMB 4.268 billion in 2026, with a notable growth of 483.3% in 2023 [11][13]. - The report anticipates a steady improvement in profit margins, with the return on equity (ROE) projected to remain strong at around 25.6% in 2025 [11][12]. Market Dynamics - The report highlights that rising coffee bean prices may lead to a consolidation in the Chinese coffee market, benefiting larger players like Luckin Coffee due to their stronger supply chain and purchasing power [2][3]. - Luckin Coffee's innovative product offerings and marketing strategies are expected to enhance brand loyalty and capture consumer mindshare, opening up long-term growth opportunities [3][4]. Competitive Landscape - The competitive environment in the coffee industry is described as intense, but the report suggests that rising coffee bean prices could lead to reduced promotional activities among major players, allowing them to maintain profitability through price increases [2][3]. - Luckin Coffee's ability to adapt its product mix, as demonstrated by the successful launch of its light milk tea product, positions it well to withstand cost pressures [2][3].

Nvidia - Nvidia has seen a remarkable 179% increase in share price year to date, establishing itself as a leader in the generative AI industry [2] - The company reported a 94% increase in revenue for Q3 fiscal 2025, reaching $35.1 billion, driven by high demand for its GPUs used in AI applications [3] - Nvidia's forward price-to-earnings (P/E) ratio is 32, which is considered reasonable given its high growth rate [5] Luckin Coffee - Luckin Coffee's shares have decreased by 18% in 2024 due to increased competition and an economic slowdown in China [6] - The company reported a 41% increase in net revenue for Q3, totaling $1.45 billion, but this represents a significant slowdown from the 85% growth rate in the same period of 2023 [7] - Luckin Coffee plans to expand into the U.S. market, targeting major cities with large Chinese student populations, which could help drive future growth [8] - The forward P/E ratio for Luckin Coffee is 14, indicating it is undervalued, especially if the U.S. expansion is successful [9] Comparative Analysis - Nvidia's stock has significantly outperformed Luckin Coffee this year, but concerns exist about the sustainability of consumer-facing AI adoption [10] - Luckin Coffee is positioned for potential better performance in the coming years due to its reasonable valuation and international expansion plans [10]

Group 1 - The core point of the article is that Luckin Coffee (LKNCY) reported its Q3 2024 financial results, showing significant growth in revenue and profitability [1] - The total net revenue for Q3 reached 10.181 billion RMB, representing a year-over-year increase of 41.4%, marking the first time quarterly revenue exceeded 10 billion RMB [1] - Under GAAP, the company turned a profit in this quarter, with an operating profit of 1.558 billion RMB and a net profit of 1.303 billion RMB [1] Group 2 - In terms of store expansion, Luckin Coffee opened a net of 1,382 new stores in Q3 [1] - As of the end of Q3, the total number of stores reached 21,343 [1]

Summary of Luckin Coffee's Q3 2024 Earnings Call Company Overview - **Company**: Luckin Coffee - **Quarter**: Q3 2024 Key Financial Highlights - **Total Net Revenue**: RMB 10.81 billion, a year-over-year increase of 41.4% [4] - **Operating Profit**: RMB 1.56 billion, with an operating margin of 15.3% [4] - **Net Profit**: RMB 1.3 billion, reflecting a net margin of 12.8% [4][5] - **Self-Operated Store Profit**: RMB 1.75 billion, with a profit margin of 23.3% [4][5] - **Total Number of Stores**: 21,298, including 13,891 self-operated and 7,407 partnership stores [5][6] - **Cumulative Transaction Customers**: Exceeded 300 million, with an average monthly transaction customer count of 79.85 million [5][8] Business Performance and Strategy - **Growth Momentum**: Continued growth momentum from Q2 2024, with both revenue and profit reaching new heights [4][5] - **Market Expansion**: Focus on deepening domestic store layout and expanding market share to consolidate leading advantages [3][4] - **Product Innovation**: Launched 28 new limited-time beverages and multiple food items, enhancing product offerings [7][8] - **Supply Chain Investment**: Increased investment in supply chain to ensure stable supply for over 20,000 stores [8][10] International Market Insights - **International Expansion**: Continued investment in Singapore with 8 new stores, totaling 45 stores, despite not yet achieving profitability [5][6][28] - **Future Plans**: Exploring opportunities in the U.S. and other markets, with a cautious approach due to market maturity and competition [28][30] - **Learning from International Operations**: Gained valuable experience from operations in Singapore, which will inform future international strategies [28][29] Sustainability and Social Responsibility - **Sustainable Development**: Commitment to sustainable practices in sourcing and production, including training for local coffee farmers [10][12] - **Community Engagement**: Initiatives to support local communities and improve the ecological environment in coffee-producing regions [10][12] Challenges and Outlook - **Market Competition**: Facing heightened competition in the coffee market, which has impacted same-store sales growth (SSG) [23] - **Future Expectations**: Anticipation of improved SSG metrics as the company stabilizes its growth pace and refines its strategies [23] - **Focus on Long-Term Value**: Commitment to optimizing cost structure and enhancing operational efficiency to create sustainable value for stakeholders [21][30] Conclusion - **Management's Commitment**: Management expressed gratitude to employees, customers, and investors, emphasizing the company's focus on growth, innovation, and sustainability [20][30] - **Future Communication**: Plans to provide regular business updates and maintain open communication with stakeholders [30]

Financial Data and Key Metrics - Total net revenue for Q3 2024 reached RMB10.80 billion, a 41.4% year-over-year increase [9] - Operating profit was RMB1.56 billion with an operating margin of 15.3% [9] - Net profit was RMB1.3 billion, reflecting a net margin of 12.8% [9] - Self-operated store operating profit was RMB1.75 billion with a margin of 23.3% [9] - Monthly average transacting customers reached 79.85 million, a new high [10] Business Line Performance - Revenues from product sales totaled RMB7.8 billion, a 46.3% year-over-year increase [25] - Revenues from freshly brewed drinks, the core product category, reached RMB7.2 billion [25] - Revenues from self-operated stores totaled RMB7.5 billion, a 45.9% year-over-year increase [26] - Revenues from partnership stores amounted to RMB2.3 billion, a 27.2% year-over-year increase [26] Market Performance - In Mainland China, the company added 1,374 net new stores, bringing the total to 21,298 stores (13,891 self-operated and 7,407 partnership stores) [10] - In Singapore, the company added 8 new stores, bringing the total to 45 stores [11] - Net revenues from the Singapore market amounted to RMB91.4 million, with costs and expenses totaling RMB167.7 million [27] Strategy and Industry Competition - The company plans to deepen its domestic store layout, increase density in top-tier cities, and extend into lower-tier cities [10] - Internationally, the company will continue steady expansion in Singapore and explore innovative organizational models for international business [11] - The company is committed to sustainable development, enhancing supply chain integration, and increasing investment in premium coffee bean regions [16][17][18] Management Commentary on Environment and Outlook - The company achieved solid growth despite a complex market environment, driven by its unique business model, expanding scale advantage, and product innovations [6] - The company aims to consolidate its leading edge in the domestic market and promote the sustainable development of China's coffee market [7] - The company is optimistic about the rapid development of China's coffee market and believes it will become the world's largest coffee consumption market [48] Other Important Information - The company launched 28 new freshly brewed beverages and several light food products in Q3, including the popular light Jasmine milk tea and Little Butter series [12][13][14] - The company broke ground on a new innovation and production center in Qingdao, which will form a roasting supply network with an annual capacity of 100,000 metric tons [15][16] - The company entered into agreements to purchase approximately 120,000 metric tons of coffee beans from Brazil over the next two years [17] Q&A Session Question: Same-store sales growth (SSG) fluctuations and future outlook - The company attributes SSG fluctuations to rapid store expansion and promotional activities, with self-operated store SSG at -13.1% in Q3 [43] - The company expects SSG to improve as the pace of expansion moderates and price gaps reduce [43] - SSG will remain a key metric for strategic decision-making and store opening strategies [44] Question: Overseas expansion and global capital market strategy - The company views overseas expansion as a long-term goal, with initial focus on Singapore and careful consideration of the U.S. market [47][50][51] - The company acknowledges the challenges of international markets and emphasizes the need for patience and continuous investment [50] - There is no definitive timetable for relisting in U.S. capital markets, with the primary focus remaining on business execution [52]

Revenue Growth - Total net revenues in Q3 2024 were RMB10,180.8 million (US$1,452.1 million), a 41.4% increase from RMB7,200.0 million in Q3 2023[2] - Revenues from self-operated stores in Q3 2024 were RMB7,501.4 million (US$1,069.9 million), a 45.9% increase from RMB5,141.0 million in Q3 2023[3] - Revenues from partnership stores in Q3 2024 were RMB2,341.3 million (US$333.9 million), a 27.2% increase from RMB1,840.8 million in Q3 2023[4] - Net revenues from freshly brewed drinks in Q3 2024 were RMB7,210.8 million (US$1,028.5 million), representing 70.8% of total net revenues, compared to 67.6% in Q3 2023[13] - Total net revenues for the three months ended September 30, 2024, reached RMB 10,180,766 (US$ 1,452,092), a significant increase from RMB 7,200,039 in the same period of 2023[55] - Revenues from product sales for the three months ended September 30, 2024, were RMB 7,839,479 (US$ 1,118,152), compared to RMB 5,359,262 in the same period of 2023[55] Customer Metrics - Average monthly transacting customers in Q3 2024 reached 79.8 million, a 36.5% increase from 58.5 million in Q3 2023[3] - Average monthly transacting customers reached 79,846 thousand in September 2024, up from 29,489 thousand in March 2023[30] Store Performance - Same-store sales growth for self-operated stores in Q3 2024 was negative 13.1%, compared to positive 19.9% in Q3 2023[3] - Store level operating profit margin for self-operated stores in Q3 2024 was 23.3%, compared to 23.1% in Q3 2023[24] - Net new store openings in Q3 2024 were 1,382, resulting in a total of 21,343 stores, including 13,936 self-operated stores and 7,407 partnership stores[2] - Total stores increased to 21,343 as of September 30, 2024, from 9,351 as of March 31, 2023[30] - Self-operated stores increased to 13,936 as of September 30, 2024, from 6,310 as of March 31, 2023[30] - Same-store sales growth for self-operated stores was -13.1% in September 2024, compared to 29.6% in March 2023[30] Profitability and Margins - GAAP operating income in Q3 2024 was RMB1,557.5 million (US$222.1 million), with a GAAP operating margin of 15.3%, compared to RMB961.7 million and a 13.4% margin in Q3 2023[25] - Net income in Q3 2024 was RMB1,302.6 million (US$185.8 million), with a net margin of 12.8%, compared to RMB988.0 million and a net margin of 13.7% in Q3 2023[27] - Non-GAAP net income in Q3 2024 was RMB1,400.8 million (US$199.8 million), with a non-GAAP net margin of 13.8%, compared to RMB1,144.0 million and a non-GAAP net margin of 15.9% in Q3 2023[27] - Net income for the three months ended September 30, 2024, was RMB 1,302,641 (US$ 185,796), compared to RMB 988,011 in the same period of 2023[55] - Operating income for the three months ended September 30, 2024, was RMB 1,557,472 (US$ 222,143), up from RMB 961,724 in the same period of 2023[55] - Total comprehensive income for the three months ended September 30, 2024, was RMB 1,211,645 (US$ 172,817), compared to RMB 987,772 in the same period of 2023[56] - Non-GAAP operating income for the nine months ended September 30, 2024, was RMB 2,811,235 thousand (USD 400,969 thousand), an increase from RMB 2,992,216 thousand in the same period in 2023[58] - Non-GAAP net income for the nine months ended September 30, 2024, was RMB 2,358,758 thousand (USD 336,432 thousand), a decrease from RMB 2,823,035 thousand in the same period in 2023[58] Earnings Per Share - Basic and diluted net income per ADS in Q3 2024 was RMB4.08 (US$0.56), compared to RMB3.12 in Q3 2023[28] - Non-GAAP basic and diluted net income per ADS in Q3 2024 was RMB4.40 (US$0.64), compared to RMB3.60 in Q3 2023[28] - Net income per diluted ADS for the three months ended September 30, 2024, was US$ 0.56, compared to US$ 0.07 in the same period of 2023[55] - Non-GAAP net income per share (basic) for the nine months ended September 30, 2024, was RMB 0.93 (USD 0.13), a decrease from RMB 1.11 in the same period in 2023[59] - Non-GAAP net income per ADS (basic) for the nine months ended September 30, 2024, was RMB 7.44 (USD 1.04), a decrease from RMB 8.88 in the same period in 2023[59] Cash Flow and Financial Position - Net cash provided by operating activities in Q3 2024 was RMB1,316.1 million (US$187.7 million), compared to RMB1,310.1 million in Q3 2023[29] - Cash and cash equivalents, restricted cash, term deposits, and short-term investments were RMB4,753.2 million (US$678.0 million) as of September 30, 2024, compared to RMB3,752.7 million as of December 31, 2023[30] - Cash and cash equivalents as of September 30, 2024, stood at RMB 3,802,087 (US$ 542,295), up from RMB 2,925,709 at the end of 2023[53] - Net cash provided by operating activities for the nine months ended September 30, 2024, was RMB 2,600,897 thousand (USD 370,969 thousand), a decrease from RMB 3,827,171 thousand in the same period in 2023[57] - Net cash used in investing activities for the nine months ended September 30, 2024, was RMB 2,097,443 thousand (USD 299,161 thousand), a decrease from RMB 3,271,026 thousand in the same period in 2023[57] - Net cash provided by financing activities for the nine months ended September 30, 2024, was RMB 300,000 thousand (USD 42,789 thousand), compared to no financing activities in the same period in 2023[57] - Cash and cash equivalents and restricted cash at the end of the period for the nine months ended September 30, 2024, was RMB 3,847,792 thousand (USD 548,814 thousand), an increase from RMB 4,140,971 thousand at the end of the same period in 2023[57] Operating Expenses - Total operating expenses in Q3 2024 were RMB8,623.3 million (US$1,229.9 million), a 38.2% increase from RMB6,238.3 million in Q3 2023[16] - Total operating expenses for the three months ended September 30, 2024, were RMB 8,623,294 (US$ 1,229,949), up from RMB 6,238,315 in the same period of 2023[55] Assets and Liabilities - Total assets as of September 30, 2024, amounted to RMB 22,093,766 (US$ 3,151,255), up from RMB 18,291,978 at the end of 2023[53] - Total liabilities as of September 30, 2024, were RMB 10,082,383 (US$ 1,438,061), compared to RMB 8,577,533 at the end of 2023[51] Share-Based Compensation and Shares Outstanding - Share-based compensation expenses for the nine months ended September 30, 2024, were RMB 268,188 thousand (USD 38,252 thousand), an increase from RMB 179,311 thousand in the same period in 2023[58] - Weighted average shares outstanding used in calculating basic and diluted income per share for the nine months ended September 30, 2024, were 2,545,551,167, an increase from 2,532,072,783 in the same period in 2023[58]

Financial Data and Key Metrics - The company's daily sales volume in the first half of 2024 was 450-470 cups, with off-season sales dropping to 300-320 cups, showing a significant decline compared to previous years but still maintaining profitability at around 300 cups [1] - The company expects to return to profitability in Q2 2024, driven by seasonal factors and cost optimization, with a focus on achieving profitability to meet future IPO requirements [1][10] Business Line Data and Key Metrics - The company is rapidly expanding its store network, with the number of stores exceeding 20,000 and expected to reach 24,000 by the end of 2024, adding 4,000 new stores primarily to counter competition from Cotti Coffee [1][9] - The company is shifting its store locations towards high-traffic areas such as streets and shopping malls, with a high customer retention rate of 90% but slowing new customer growth [1] Market Data and Key Metrics - In the Northeast region, including cities like Dalian, Shenyang, and Changchun, the company has a strong presence with a mix of self-operated and franchised stores, with plans to further expand in these areas [15] - The company's store density in certain cities like Dalian is already high, with 5-6 stores within a 3-kilometer radius in main commercial areas, indicating limited room for further expansion [15] Company Strategy and Industry Competition - The company is focusing on rapid store expansion to counter competition from Cotti Coffee, with a strategic shift towards high-traffic locations and a mix of self-operated and franchised stores [1][9] - The company is preparing for a potential IPO within the next three years, which requires a focus on profitability and store network optimization [1][29] Management Commentary on Operating Environment and Future Outlook - Management attributes the Q1 2024 loss to rapid store expansion, with high initial costs for new stores impacting profitability, but expects a return to profitability in Q2 due to seasonal factors and cost optimization [7][10] - The company is optimistic about future growth, with plans to continue expanding its store network and improving operational efficiency to meet IPO requirements [1][29] Other Important Information - The company's pricing strategy includes offering promotions like the 9.9 RMB coffee to attract new customers, with a focus on balancing customer acquisition and profitability [21][22] - The company's gross margin for self-operated stores is estimated to be around 30-40%, with profitability varying by store location and sales volume [23] Summary of Q&A Session Q: What is the company's strategy for store expansion in 2024? - The company plans to add 4,000 new stores by the end of 2024, focusing on high-traffic areas and a mix of self-operated and franchised stores to counter competition from Cotti Coffee [1][9] Q: How does the company plan to return to profitability in Q2 2024? - The company expects seasonal factors and cost optimization to drive profitability in Q2, with a focus on improving operational efficiency and store performance [10] Q: What is the company's outlook on competition with Cotti Coffee? - The company believes it has a stronger market position compared to Cotti Coffee, with a focus on maintaining store quality and customer retention to stay ahead in the competitive landscape [28] Q: What are the company's plans for future growth and IPO? - The company is preparing for a potential IPO within the next three years, with a focus on achieving profitability and optimizing its store network to meet IPO requirements [1][29]

瑞幸咖啡 (LKNCY.US) 夏新报告 | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|---------------|--------|--------|-------|------------|----------------| | | | 买入 | | | | | 2024年7月31日 | | 旺季来临+积极调整,利润实现大幅改善 | | | | | | | | | >FY24Q2 业绩概览:FY24Q2 公司总收入 84.0 亿元,同比+35.5%:其中自营门店 | | | | | | 李卓群 | | ...

股 票 研 究 证 券 研 究 报 告 Q2 盈利能力环比改善，期待暑期旺季 瑞幸咖啡(LKNCY) [Table_Industry] 社会服务业 股票研究 /[Table_Date] 2024.07.31 | --- | --- | --- | |----------|-------------------------------------|--------------------------------------| | | | ——瑞幸咖啡 2024 年二季报业绩点评 | | | [table_Authors] 刘越男 ( 分析师 ) | 宋小寒 ( 研究助理 ) | | | 021-38677706 | 010-83939087 | | | liuyuenan@gtjas.com | songxiaohan026736@gtjas.com | | 登记编号 | S0880516030003 | S0880122070054 | [Table_Invest] 评级： 增持 [当前价格 Table_CurPrice] (美元)： 22.50 l and the support of t 本报告导读： Q ...