T. H. Data Flash - Luckin Coffee - November & 4Q19: Continuing Expansion In Stores and Customer Spending Drive Better Financials
We are positive on LK’s 4Q19E operations. Based on our data, preliminarily, LK’s store counts are likely to reach approximately 4,946 stores by the end of 2019, which include ~400 partnership or franchised stores. High growth of the number of stores is driving topline growth. At the same time, the user frequency showed improvements and discounts were less than before; and partnership stores started to make small contributions to revenue. We believe the total net revenue is likely to be higher than consensus at RMB2,170.3M ($310.1M) based on exchange rate of RMB6.9985 = USD 1. The level of discounts is not as aggressive as before.
T.H. Capital is an independent research and investment advisory firm specializing in China. We offers real-time, on-the-ground, bottom-up research across a wide spectrum from macro and industry analysis to company specific projects; from China ADRs to international names that have meaningful exposure to China market. We deliver relevant, comprehensive and data driven research adding immense value to clients.
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