We tried Qu Xiaomian, the new noodle chain from the founder of Luckin. It looks to us like it’s just another noodle shop in a crowded market.
Luckin Coffee announced Friday that it has paid the $180 million civil penalty agreed to as part of a settlement plan it reached with the US Securities and Exchange Commission (SEC) in December. On February 3, the SEC acknowledged in a notice to the Southern District of New York that Luckin Coffee had satisfied the penalty provisions by making cash payments to the company’s security holders. The US court had ordered the China-based company to pay the civil penalty after it found that Luckin had defrauded investors by inflating its revenues by around $310 million in 2019. [Luckin press release]
Luckin on Tuesday posted better-than-expected results for the first quarter of this year. The company’s revenue soared 89.5% year-on-year to RMB 2.4 billion ($379.3 million), easily beating the high-end $310.8 million estimate compiled by Yahoo Finance. The Xiamen-based company also announced a total of 6,580 stores as of the end of the reporting period, including 556 new store openings, which represents a 9% growth on a quarter-over-quarter basis. Net income was RMB 19.8 million for the period, compared to a net loss of RMB 232.5 million a year ago. While the company’s shares are still reeling from the negative impacts of the financial fraud scandal revealed in April 2020, the company is gearing up for a comeback in the Chinese market. However, new Covid-19 outbreaks, increasing competition, and its infamous fraud history may factor in this turnaround.
Chinese beverage chain Luckin Coffee released its unaudited financial report for the first half of 2021, posting doubled revenue.
A US federal judge in Manhattan has passed Luckin Coffee’s debt restructuring plan for a $460 million bond due 2025. Court documents show that noteholders will get $320 million in cash and new debt. Luckin announced Tuesday that the plan has already won approval from creditors and the grand court of Cayman Islands, where it registered. US court approval means the plan can be implemented in the US. [Bloomberg Law]
Luckin Coffee is striving for a business turnaround and repairing its image after the April 2020 fraud scandal.
A year after getting kicked off Nasdaq, former unicorn Luckin Coffee is still delivering cheap coffee in China.
Luckin Coffee has reached a $175 million settlement in a shareholder class-action lawsuit over accounting fraud that broke out last April. Lawyers for the shareholders called the all-cash settlement an “excellent” result, Reuters reported on Wednesday. The settlement still requires approval by a US district judge, and by a Cayman Islands court. [Reuters]
The US Securities and Exchange Commission (SEC) added seventeen US-listed Chinese companies to its provisional delisting list, identified under the Holding Foreign Companies Accountable Act in the US. Some of China’s major tech-related firms are included, such as coffee chain Luckin, electric vehicle maker Li Auto, Q&A platform Zhihu, and online housing firm KE Holdings. The US regulator has given these companies 15 business days to submit evidence to oppose the commission’s charge, with a deadline of May 12.
For many Chinese tech watchers, the year 2021 can be divided into two distinct periods: before and after Didi’s cybersecurity review.