Luckin Coffee(LKNCY)2024-10-30 15:37Financial 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]