20251118-招银国际-There_are_still_multiple_growth_drivers_in_FY26E_9页_1mb

Luckin Coffee (LKNCY US) Equity Research Summary

This CMB International Global Markets report provides an update on Luckin Coffee, maintaining a BUY rating and raising the target price to US$54.68 based on a 18x FY26E P/E ratio. Despite a 3Q25 earnings miss primarily due to higher delivery costs and an effective tax rate, the underlying business fundamentals show strength, with robust sales growth (50% YoY) and improving operational metrics like customer retention and store expansion.

The analysis highlights multiple growth drivers for FY26E, including category expansion (e.g., snacks, breakfast), increased focus on star products, potential marketing expense adjustments, and continued strong customer acquisition (40%+ YoY growth). While the high base from delivery subsidies in Q4 25E and FY26E presents challenges, Luckin Coffee's operational advantages, such as higher customer retention and efficiency improvements, position it favorably for positive same-store sales growth (SSSG), projected at 2% for FY26E under conservative assumptions.

Key financial metrics include expected revenue growth ranging from 45% to 69% across 2025-27E, with a 26% sales CAGR through 2027. Profit margins are anticipated to remain stable, with GP margins improving to 62.6% by 2026E, while delivery costs are expected to decrease YoY as subsidies phase out. Core operating profit and net profit forecasts for FY25E and 26E have been revised downward slightly (4% to 3%) due to higher-than-expected costs, but long-term prospects remain positive.

Additional support comes from comparisons with peers, where Luckin Coffee demonstrates superior customer retention and steadier SSSG. The fair valuation underscores the recommendation, with the BUY rating reflecting potential outperformance despite near-term headwinds. Store expansion is accelerating, with over 3,000 new openings in Q3 25E, and sales per customer show consistent improvement.