Luckin Coffee(LKNCY)2024-04-30 14:29Financial Data and Key Metrics - Total net revenue reached RMB6.28 billion, representing a year-over-year growth of 41.5% [5] - Operating profit stood at negative RMB65.1 million, with an operating profit margin of negative 1.0% [5] - Self-operated store operating profits was RMB320.8 million with a self-operated store operating profit margin of 7.0% [5] - The total number of net new stores opened was 2,342, and the number of monthly averaging transacting customers was 59.91 million [5] - Revenues from partnership stores totaled RMB1.5 billion, representing a 32.8% increase from the same quarter last year [12] - Net operating cash outflow was RMB264.4 million compared to a net operating cash inflow of RMB1.1 billion in the same quarter of 2023 [32] Business Line Data and Key Metrics - Luckin Coffee added 2,342 new stores, bringing the total number of stores to 18,590, including 12,199 self-operated stores and 6,391 partnership stores [6] - The company launched 22 new products in the first quarter, including the Chu's Orange Latte, pear flavored velvet latte, and the new Gesha series [25] - The pear flavored velvet latte sold more than 7.24 million cups in its first week alone [25] - Total sales of the Coconut Milk Latte surpassed 700 million cups, and the Orange Americano reached annual sales exceeding 100 million cups [25] Market Data and Key Metrics - The average monthly transacting customers reached 59.9 million, representing a 103.2% increase from the same quarter last year [39] - The company observed surging consumer purchasing power in lower-tier cities during Chinese New Year, highlighting the growth potential of the coffee market in these cities [6] - The company expanded into more than 350 cities throughout China and one overseas market [39] Company Strategy and Industry Competition - Luckin Coffee plans to increase the number of stores in higher-tier cities while accelerating expansion into lower-tier cities through the partnership model [6] - The company remains committed to a robust and sustainable store expansion strategy, focusing on market share and customer needs [6] - The company is leading the industry with innovative products and strategic promotion initiatives, aiming to drive continuous development of the Chinese coffee market [4][15] - The company is dedicated to incorporating low-carbon and sustainability principles across all aspects of its operations, including raw material procurement and manufacturing processes [9] Management Commentary on Operating Environment and Future Outlook - The company experienced a slight decline in profits due to seasonality and rising competition within the industry [5] - The company remains confident in its brand, products, and employees, despite anticipating continued volatility in market dynamics and competition [15] - The company is optimistic about future growth, leveraging its unique business model, continuous product innovation, and scale advantages [21] - The company expects challenges in the upcoming second quarter similar to those faced in the first quarter [36] Other Important Information - Luckin Coffee became the exclusive official coffee partner of the 2024 Badminton Asia Championships [8] - The company commenced the trial operation of its first grain coffee bean processing plant in Yunnan province, with an annual processing capacity of up to 5,000 tons [9] - The company officially opened its Four Seasons and Eight Solar Terms theme store in Shenzhen in partnership with Kweichow Moutai [24] - The company plans to establish a training center to provide coffee planting and processing-related knowledge for employees and local farmers [27] Q&A Session Summary Question: How does the company view the significant drop in profit in the first quarter of 2024? Will there be any adjustments regarding the store expansion strategy? - The profit drop was attributed to cold weather, temperature variations, and fierce competition in the Chinese coffee industry [36] - The company has prioritized market share and recalibrated the pace of store expansion, focusing on a robust and sustainable strategy [36] - The company expects challenges in the second quarter but remains committed to maintaining high standards for new stores and solidifying its leading position in the industry [36] Question: Are there any updates to the company's capital strategy? - The company is currently focused on executing its business strategy, with no specific timeline for uplifting on any mainboard market [44] - The emphasis is on enhancing operational and developmental pursuits, increasing market penetration, and ensuring consistent long-term returns for investors [44]