Financial fraud experience, bankruptcy and reorganization to continuous profitability,
In the past, Lakin coffee was involved in a court case due to financial fraud and faced bankruptcy for some time, and after paying the settlement fee at the beginning of this year, it has been reactivated in the Chinese coffee market.
According to Luckin Coffee’s latest financial report, the total net income in 2021 will be 7.965 billion yuan (approximately NT$34.4 billion), an increase of 97.5% compared to 2020.
Moreover, by the end of 2021, Luckin will have a total of 6,024 stores in China at home, surpassing Starbucks China’s 5,557 stores in 2022, becoming the largest coffee chain brand in China.
The financial report also shows that Ruixing’s GAAP operating loss in fiscal 2021 is significantly lower than that in 2020, at only 539 million yuan, while the non-GAAP operating loss is 236 million yuan. And Ruixing’s operating profit at the store level in 2021 also turned positive for the first time, reaching 1.253 billion yuan, compared with a loss of 435 million yuan in the same period in 2020.
Guo Jinyi, chairman and CEO of Luckin Coffee, said that due to the increase in the number of business customers, growth in product sales and higher average product sales prices, the profit margin at the self-service store level and the overall profitability of the company have improved. . He said: “The recently completed interim liquidation has played an important role in advancing our growth strategy, as it will allow us to operate from a stronger financial position and realize our full potential.
However, Manner, the Chinese coffee brand behind Luckin and Starbucks in store count, is also paying attention. Manner Coffee, which was founded in Shanghai in 2015, has grown from a small street shop to a company with a market value of about 2.8 billion dollars, according to “Economic News” and “Interface News”. Opened 10 coffee shops in China. There are more than 200 stores in this city, 143 stores are located in Shanghai.
Li Xinyi, an analyst of the brand retail industry of Analysys, a market analysis agency, noted that the coffee consumption market in Shanghai is comparable to that of foreign countries. In response to the challenges of future development, Lee Shinny said: “Management of talent and financial costs will bring significant pressure, and the greatest pressure may come from supply chain and quality control.”
Luckin Coffee Fraud Explained
In this video we explain the Luckin Coffee fraud. Luckin Coffee is a Chinese premium coffee chain. It IPOed on the US stock market in 2019 and reached a valuation of $9 billion at the peak. However, it turned out a large portion of their revenue was fake. They were exposed as a fraud in early 2020 and delisted from the NASDAQ.
Updated 2023
Luckin Coffee is a new professional retail coffee operator in Mainland China that orders food through a mobile app and delivers it to consumers quickly.
Its main product is coffee. Since its founding, the slogan has been to beat Starbucks and become the largest coffee operator in China.
By the end of 2019, Luckin Coffee’s 4,507 outlets in China actually outnumbered Starbucks’ roughly 4,100 stores.
In September 2021, Luckin Coffee announced that it had signed a $187.5 million settlement with US class-action plaintiffs, then referred to as an “astronomical fine”.
Ruixing Coffee filed a document with the United States Securities and Exchange Commission (SEC) on the 4th, indicating that “the company has complied with the terms of the previous settlement agreement with the SEC”, meaning that the final ruling of the Federal Court of the Southern District of New York agreed Ruixing Coffee will have to pay a fine of 180 million dollars.
Based on the price of 16 yuan for a cup of “latte” in Luckin’s program, Luckin Coffee would need to sell more than 75 million cups of latte to “earn” the fine.
In the financial report, from 2018 to 2020, Ruixing Coffee made losses of 1.619 billion yuan, 3.161 billion and 5.603 billion yuan, respectively, and the cumulative loss in three years exceeded 10 billion yuan.
However, Ruixing Coffee’s recent financial report indicates that operating conditions are stabilizing. Luckin Coffee’s unaudited financial report for the third quarter of 2021 revealed that net income increased by 105.6% to 2.35 billion yuan in the third quarter; The net loss was 23.5 million yuan, which was significantly lower than the same period last year.
98.6% annual decrease; The average monthly transaction of customers was 14.7 million yuan, an annual increase of 79.2%.
The above-mentioned signs show that Ruixing Coffee’s condition is gradually improving, so there are news that Ruixing Coffee may return to NASDAQ listing, which was later answered as false information by the official authorities.
But this news caused Luckin’s stock price to increase by more than 16 percent at one point.
Coffee brand Ruixing has been put in a pink deal by the New York Stock Exchange due to financial fraud, and changes have been made at a high level.
The company’s life is almost over. Unexpectedly, in just two years, Ruixing turned a loss into a profit and even surpassed its competitor Starbucks in the number of stores, fighting a beautiful battle.
According to Ruixing’s latest financial report for the second quarter of 2022, total revenue was 3.299 billion yuan (same below) (about US$488 million), up 72.4% from 1.914 billion yuan in the same period in 2021.
As for rival Starbucks China, in the third quarter of fiscal 2022 (April 3-July 3), revenue was US$540 million, down 40 percent year-on-year. In addition, Luckin’s announced 7,195 new stores, far more than Starbucks’ 5,761.
Contents
Learn more about luckin coffee chain store
Luckin Coffee Inc. (Chinese: 瑞幸咖啡;) is a Chinese coffee company and coffeehouse chain.
The company was established in Beijing in 2017. By September 2021, it managed 5671 kiosks.
It has shops, stores and kiosks that offer coffee, tea and food. Customers need to download an application to order and pay for drinks online. The headquarters of the coffee chain is in Xiamen. Luckin Coffee expanded rapidly over the years and by 2019 it had surpassed Starbucks in China.
In April 2020, the company revealed that it had increased its 2019 sales to $310 million. It led to a crash in stock prices and the dismissal of several executives.
Trading was suspended and the company was delisted from NASDAQ on 29 June 2020.
In February 2021, the company filed for Chapter 15 bankruptcy in the United States. In December 2021, Luckin Coffee received court approval from a federal judge.
Luckin Coffee is a Chinese coffeehouse chain that primarily serves coffee, tea, and baked goods. Their menu may vary depending on the location, but some of the popular items that you might find on their menu include:
- Coffee beverages: Luckin Coffee offers a variety of coffee drinks, including espresso, americano, latte, cappuccino, mocha, and more. They also have seasonal drinks and cold brew options.
- Tea beverages: In addition to coffee, Luckin Coffee also serves a range of tea beverages, such as green tea, black tea, and fruit tea.
- Baked goods: You can also find a selection of baked goods at Luckin Coffee, including croissants, muffins, cookies, and cakes.
- Breakfast items: Some Luckin Coffee locations also offer breakfast items, such as egg sandwiches, oatmeal, and yogurt.
Again, keep in mind that the specific items on the menu may vary by location, and the menu may have changed since my knowledge cutoff of September 2021.
luckin coffee vs starbucks
Luckin Coffee and Starbucks are two popular coffee chains with different origins and approaches to business.
Luckin Coffee is a Chinese coffee chain that was founded in 2017 and primarily operates in China. It initially gained popularity for its aggressive expansion strategy and low prices, which were often lower than those of Starbucks. Luckin Coffee focused on providing a convenient and affordable coffee experience, primarily through its online ordering system and delivery service. However, the company faced controversy in 2019 when it was discovered that it had falsified financial records, and it has since gone through major restructuring.
Starbucks, on the other hand, is an American coffee chain that has been around since 1971 and has a global presence with over 30,000 stores in more than 80 countries. Starbucks is known for its premium coffee and tea beverages, its focus on customer experience, and its cozy and welcoming cafe atmosphere. Starbucks also offers a range of food options, including pastries, sandwiches, and salads.
In terms of menu offerings, Starbucks has a wider variety of drinks and food options compared to Luckin Coffee, and its prices are generally higher. Starbucks also places a stronger emphasis on providing a welcoming environment for customers to relax and enjoy their coffee.
In summary, while both Luckin Coffee and Starbucks offer coffee and baked goods, they have different business models, target markets, and brand images. Luckin Coffee aims to provide a convenient and affordable coffee experience, while Starbucks focuses on providing a premium and comfortable customer experience.
luckin coffee website
It’s worth noting that Luckin Coffee’s website may vary depending on your location and the language you prefer. They may also have separate websites or social media pages for different countries or regions.
https://en.wikipedia.org/wiki/Luckin_Coffee
https://udn.com/
