China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

[Luckin (LKNCY US, SELL, TP US$17) Rating Change]: Old Tricks Might Have Run Out of Its Use

Luckin's Small Step into Non-Coffee Drinks Is a Big Step of Its Future Directions

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[Luckin Coffee (LKNCY US, BUY, TP US$44) TP Change]: Moutai Latte Is Not Just a Blockbuster

[Luckin Coffee(LKNCY US, BUY, TP US$43) TP Change]: Weak Earnings in 4Q23 but Better Outlook in 2024

[Luckin Coffee (LKNCY US, BUY, TP US$41) TP Change]: Weak Earnings Could Be Temporary…Reiterate BUY

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

Equity Bottom-Up

<ul>
<li>We cut Luckin Coffee’s 1Q24 revenue estimate by 3% to RMB7.9bn with 79% yoy and cut non-GAAP net income estimate by 42% to RMB318mn due to (1) weak sales；</li>
<li>We expect 2Q24 to be the turning point for earnings due to (1) sales improving with weather warm-up (2) ASP rebound from easing competition </li>
<li>We maintain the stock as BUY rating but lower TP by US$4 to US$37 to factor in the temporary near-term weak sale.</li>
</ul>


We cut Luckin Coffee’s 1Q24 revenue estimate by 3% to RMB7.9bn with 79% yoy and cut non-GAAP net income estimate by 42% to RMB318mn due to (1) weak sales；
We expect 2Q24 to be the turning point for earnings due to (1) sales improving with weather warm-up (2) ASP rebound from easing competition 
We maintain the stock as BUY rating but lower TP by US$4 to US$37 to factor in the temporary near-term weak sale.


[Luckin Coffee (LKNCY US, BUY, TP US$37) TP Change]:Weak Sales in 1Q24 but Likely to Improve in 2Q24