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China's Starbucks Challenger Files for U.S. IPO
> Luckin applies to list on Nasdaq under the ticker symbol LK
> Firm seeks to unseat Starbucks as China’s biggest coffee chain
By Yueqi Yang
April 23, 2019, 3:15 AM GMT+7 Updated on April 23, 2019, 9:47 AM GMT+7

Luckin Coffee Inc., the ambitious startup that is challenging Starbucks Corp. in the race to dominate China’s growing coffee culture, filed for a U.S. initial public offering.

The Beijing-based company applied to list American depositary shares on Nasdaq under the ticker LK. The coffee unicorn is said to plan to raise around $300 million in the IPO, Bloomberg News reported in February. Last week, Luckin raised $150 million from BlackRock and other investors at a valuation of $2.9 billion.

Luckin is spending millions of dollars a year opening outlets to unseat Starbucks as China’s top coffee company. Since its inception in June 2017, Luckin has quickly expanded into 2,370 stores in 28 cities, with backing from investors including Singapore sovereign wealth fund GIC Pte and China International Capital Corp. By the end of this year, Luckin aims to become the largest coffee network in China in terms of number of stores.

It faces an uphill battle against Starbucks, which entered China 20 years ago and dominates with more than 50 percent of the market last year, according to Euromonitor. Luckin held only a 2.1 percent share in 2018. Starbucks has more than 3,700 outlets in the country and is also expanding at break-neck speed, opening a new store roughly every 15 hours. It’s aiming to have 6,000 sites in China by 2023.

China may become an increasingly important market for coffee retailers due to the country’s low per-capita consumption of the beverage and rising middle-class affluence, Bloomberg Intelligence analysts wrote in January. Coffee consumption is estimated to grow by roughly 3 percent a year through 2023, according to Euromonitor.

Luckin, with a focus on convenience and affordability, is seeking to lure urban office workers who don’t need the big plush spaces offered by Starbucks. Many customers are initially attracted to the coffee chain by its free vouchers, and the company plans to keep investing heavily in discounts and deals.

More details in
Coffee is indeed addictive and has an edge over other drinks. And it is definitely better to expand the market together with your competitors

7 Things Everyone Is Getting Wrong About the Luckin IPO (Pt 1 of 2)

Overall, I didn’t see any real surprises in strategy or execution. And based on that, here are seven things I think people are getting wrong about Luckin and its IPO.
The short report could be found over here:

It is 89 pages long (half of them are images/tables supporting their conclusions). Takes some time to read through, but i thought it is several times more instructive than some "Master XXX Class" touted locally. And yeah, the former is free while the latter needs to pay a few hundred bucks. The former can be summarized as "Luckin is the real badass nationalistic company for using foreign money to subsidize local consumers". The 3rd portion (debunking Luckin's business model/future growth plans) of the read also help one to understand a little bit of the coffee/tea retail industry.

Luckin Coffee apologises for alleged fraud

Luckin Coffee on Sunday apologised and pledged to strengthen controls after an internal investigation found hundreds of millions of dollars of alleged fake sales last year, wiping about 75 per cent off the company’s market value.
Good share. A very well-written report.

It debunks not only the integrity of its financials, but also demonstrate the less flattering history of the majority shareholders, and the weakness of its business model. Plenty of good stuff to pick up.

Some of the points mentioned by the article in post #2 are also congruent with the short report.

GIC must be quite displeased with this.
Luckin Coffee lenders seek to sell over 76 million shares after chairman defaults on loan
Chanos, Carson Block and their buddies would have less short candidates if Nasdaq tighten their listing rules for foreign firms.

It is part of Nasdaq's cycle where companies (especially foreign ones) list and then blow up once a while when it is revealed to contain shenanigans. We see similar listing-blow ups in our local markets but I just wonder if foreign investors have similar sentiment as local investors in trying to "blame the authorities" whenever there is a problem.

Luckin Coffee receives Nasdaq delisting notice

The US exchange cited concerns over Luckin's fabricated transactions and the company's past failure to publicly disclose material information, Luckin said in a regulatory filing on Tuesday. It will remain listed pending the outcome of an appeal hearing, which is expected to be scheduled within 45 days of a hearing request.

The disclosure comes amid heightened economic tension as Nasdaq plans to tighten listing rules for companies from China, France and other markets with national security or other laws restricting US regulators' access to information. The stock exchange also plans to impose a minimum fundraising size and float requirement, a filing shows.