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Luckin’s Q1 results exceed expectations despite impact of Covid-19

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.