Luckin Coffee(US:LKNCY)2023-05-01 16:01Financial Data and Key Metrics Changes - Total net revenue increased by 84.5% year-on-year to RMB 4.4 billion, with a GAAP operating profit margin of 15.3% [31][63] - The operating expenses as a percentage of net revenues decreased to 84.7% in Q1 2023 from 99.3% in Q1 2022 [14] - The net margin achieved double digits in Q1 at 12.7% [34] Business Line Data and Key Metrics Changes - Net revenue from self-operated stores reported a 74.9% year-on-year growth, with same-store sales growth (SSSG) of 29.6% [31][63] - Store level operating profit margin of self-operated stores reached 25.2%, up from 18.5% in the same period last year [22][90] - Partnership revenues grew by 106.7% in Q1, contributing 25.6% of total net revenues [82] Market Data and Key Metrics Changes - As of March 31, 2023, the company had 9,349 stores in 240 cities, with 1,135 net new store openings in Q1 [20][75] - The average monthly transacting customers reached about 30 million, doubling from the previous year [65][71] Company Strategy and Development Direction - The company aims to expand market share by accelerating store openings and launching more affordable products [62] - Luckin Coffee is committed to sustainable development and has established a subcommittee on climate change and carbon neutrality [58][16] - The international expansion strategy includes the opening of stores in Singapore to test the business model in overseas markets [18][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to compete in the rapidly growing Chinese coffee market, emphasizing the importance of consumer value and competitive pricing [89] - The company noted a positive trajectory in business performance, with recovery in consumer spending following the lifting of COVID restrictions [70][81] - Management highlighted the importance of technology-driven operations and cost controls in improving profitability [73][82] Other Important Information - The company reported a positive operating cash flow of RMB 1,072.6 million compared to RMB 107.7 million in Q1 2022 [92] - Expenses related to previously reported fabricated transactions decreased significantly to 0.1% of net revenue in Q1 2023 [24][43] Q&A Session Summary Question: How does the company perceive the competition in the Chinese coffee market? - The company is confident in its ability to compete and plans to improve consumer acquisition through innovative marketing activities [95] Question: Could you please share more color on the operating profit margin and its key drivers? - The operating profit margin achieved a record high of 15.3%, driven by strong business growth and improved efficiency from cost controls [90][96]