Luckin Coffee is accelerating store growth in China
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Luckin Coffee Inc. (OTCPK:LKNCY) filed its annual report with the SEC after the company was released from bankruptcy earlier in the week.
CEO Guo Jinyi on Luckin's path ahead: "The company's recent completion of the provisional liquidation plays a major role in advancing our growth strategy as it allows us to operate from a position of greater financial strength and unlock our full potential. As we enter 2022, we are energized and cognizant of predicted macroeconomic headwinds, including the recent outbreaks of COVID-19 in China."
Quo Vadis is positive on the stock after noting that store growth in the early part of 2022 is ahead of projections and accelerated from the pace seen in Q4.
"We believe this growth rate makes Luckin among the fastest growing quick-service food companies in the market," observed analyst John Zolidis.
In looking at the operating cash flow numbers disclosed by Luckin Coffee (OTCPK:LKNCY), Zolidis said the firm continues to believe Luckin is on track to generate positive free cash flow for the first time in 2022, depending on how bad COVID is for operations.
Luckin Coffee (OTCPK:LKNCY) is also noted to have replaced its Hong Kong-based auditor with BDO. Zolidis stated that the purpose of the change was to bring in an auditor that can comply with U.S. listing requirements regarding opening the books to inspection.
Luckin Coffee's (OTCPK:LKNCY) resurgence in China could make it a bigger competitor to Starbucks (SBUX) in the region.
Dig in further: Luckin Coffee rallies after shooting out of bankruptcy and looking to recharge growth story.