Luckin Coffee Reports 2020 Revenue and Moves Toward U.S. Class-Action Settlement

This is an English adaptation of a FoodBud historical article originally published on September 21, 2021.

Luckin Coffee said on September 21, 2021 that it had issued three announcements marking progress on restructuring and capital-market disclosure.

The company said it had signed a letter of intent with representatives of plaintiffs in a U.S. securities class-action lawsuit for a proposed settlement of USD 187.5 million. It also formally submitted a debt restructuring plan for convertible bond creditors to the Cayman court, and filed its 2020 annual report with the U.S. Securities and Exchange Commission, including audited financial statements.

2020 performance

Luckin Coffee reported 2020 net revenue of RMB 4.033 billion, up 33.3% year on year.

As of December 31, 2020, cumulative transacting customers exceeded 64.9 million, compared with 40.6 million a year earlier.

The company said its current management team had spent more than a year reshaping earlier strategy and operating models, with support from shareholders and the board. It also said management would continue focusing on products and services positioned around quality, value for money, and convenience.

Restructuring timeline

On the evening of September 7, 2021, Luckin released the third report submitted by its joint provisional liquidators to the Grand Court of the Cayman Islands. The report said the company’s overall restructuring plan was progressing in an orderly way and had completed several interim targets.

Luckin said it was continuing to meet disclosure obligations under the current management team. On June 30, 2021, the company reissued its audited 2019 annual financial report and said it would publish the 2020 annual report as soon as possible, gradually returning to a normal financial reporting schedule.

According to the reissued 2019 annual report, Luckin generated RMB 3.0249 billion in net revenue in 2019, up 259.8% from RMB 840.7 million in 2018. The company attributed the increase mainly to attracting new customers and engaging existing customers. Operating loss was RMB 3.212 billion, compared with RMB 1.598 billion in 2018, widening by 101%.

Store base, users, and cash

As of June 30, 2021, Luckin had 5,259 stores, including 4,018 self-operated stores and 1,241 partnership stores. Cumulative consuming users had exceeded 75 million.

The company said its newly launched coconut latte series sold more than 10 million cups in June 2021, setting a new product sales record for the company.

As of July 31, 2021, Luckin had USD 775.8 million in unrestricted cash and cash equivalents.

Note: settlement, restructuring, disclosure timing, and forward-looking statements are historical as of the article date in September 2021.