Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Document and Entity Information | |
Document Type | 20-F |
Document Registration Statement | false |
Document Period End Date | Dec. 31, 2022 |
Entity Registrant Name | Luckin Coffee Inc. |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Title of 12(g) Security | American depositary shares, each ADS represents eight Class A Ordinary Shares, par value US$0.000002 per share |
Entity Address, Postal Zip Code | 361008 |
Trading Symbol | LKNCY |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 28th Floor, Building T3, Haixi Jingu Plaza |
Entity Address, Address Line Two | 1-3 Taibei Road |
Entity Address, Address Line Three | Siming District |
Entity Address, City or Town | Xiamen City |
Entity Address, Country | CN |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Auditor Name | Centurion ZD CPA & Co. |
Auditor Firm ID | 2769 |
Auditor Location | Hong Kong, China |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Entity Shell Company | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Entity Central Index Key | 0001767582 |
Amendment Flag | false |
Entity File Number | 001-38896 |
Document Accounting Standard | U.S. GAAP |
Common Class A [Member] | |
Document and Entity Information | |
Entity Common Stock, Shares Outstanding | 2,079,801,956 |
Common Class B [Member] | |
Document and Entity Information | |
Entity Common Stock, Shares Outstanding | 144,778,552 |
Business Contact [Member] | |
Document and Entity Information | |
Entity Address, Postal Zip Code | 361008 |
Entity Address, Address Line One | 28th Floor, Building T3, Haixi Jingu Plaza |
Entity Address, Address Line Two | 1-3 Taibei Road |
Entity Address, Address Line Three | Siming District |
Entity Address, City or Town | Xiamen City |
Entity Address, Country | CN |
Contact Personnel Name | Ms. Jing An |
Country Region | 86 |
City Area Code | 592 |
Local Phone Number | 3386666 |
Contact Personnel Email Address | ir@lkcoffee.com |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
Current assets: | |||
Cash and cash equivalents | ¥ 3,534,304 | $ 512,426 | ¥ 6,477,636 |
Restricted cash | 7,860 | 1,140 | 58,200 |
Accounts receivable, net | 58,782 | 8,523 | 38,605 |
Receivables from online payment platforms | 151,922 | 22,027 | 171,562 |
Inventories | 1,206,467 | 174,921 | 593,340 |
Prepaid expenses and other current assets, net | 1,077,719 | 156,256 | 1,044,007 |
Total current assets | 6,037,054 | 875,293 | 8,383,350 |
Non-current assets: | |||
Property and equipment, net | 1,867,378 | 270,744 | 1,805,101 |
Restricted cash | 35,755 | 5,184 | 19,438 |
Other non-current assets, net | 327,744 | 47,518 | 163,926 |
Deferred tax assets, net | 208,469 | 30,225 | 702,941 |
Operating lease right-of-use assets | 2,003,997 | 290,552 | 1,237,734 |
Total non-current assets | 4,443,343 | 644,223 | 3,929,140 |
Total assets | 10,480,397 | 1,519,516 | 12,312,490 |
Current liabilities: | |||
Accounts payable | 441,376 | 63,994 | 293,700 |
Accrued expenses and other current liabilities | 1,375,425 | 199,418 | 1,322,006 |
Deferred revenues | 97,366 | 14,117 | 96,212 |
Convertible senior notes | 2,931,396 | ||
Payable for equity litigants settlement | 33,796 | 4,900 | 1,350,257 |
Operating lease liabilities | 880,873 | 127,715 | 598,062 |
Total current liabilities | 2,828,836 | 410,144 | 6,591,633 |
Non-current liabilities: | |||
Operating lease liabilities | 1,024,274 | 148,506 | 575,060 |
Total non-current liabilities | 1,024,274 | 148,506 | 575,060 |
Total liabilities | 3,853,110 | 558,650 | 7,166,693 |
Commitments and contingencies | |||
Mezzanine equity: | |||
Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2021 and 2022, respectively; 295,384,615 and 307,692,307 issued and outstanding as of December 31, 2021 and 2022, respectively) | 1,578,040 | 228,794 | 1,514,660 |
Shareholders' equity: | |||
Additional paid-in capital | 16,037,406 | 2,325,205 | 15,037,992 |
Statutory reserves | 35,657 | 5,170 | 2,617 |
Accumulated deficits | (11,421,145) | (1,655,910) | (11,876,351) |
Accumulated other comprehensive income | 397,304 | 57,604 | 466,856 |
Total Company's ordinary shareholders' equity | 5,049,247 | 732,072 | 3,631,137 |
Total liabilities, mezzanine equity and shareholders' equity | 10,480,397 | 1,519,516 | 12,312,490 |
Common Class A [Member] | |||
Shareholders' equity: | |||
Ordinary shares | 23 | 3 | 21 |
Common Class B [Member] | |||
Shareholders' equity: | |||
Ordinary shares | 2 | 0 | 2 |
Convertible Preferred Stock [Member] | |||
Mezzanine equity: | |||
Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2021 and 2022, respectively; 295,384,615 and 307,692,307 issued and outstanding as of December 31, 2021 and 2022, respectively) | ¥ 1,578,040 | $ 228,794 | ¥ 1,514,660 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 CNY (¥) shares |
Current liabilities | ¥ 2,828,836 | $ 410,144 | ¥ 6,591,633 |
Non-current liabilities | 1,024,274 | 148,506 | 575,060 |
VIE | |||
Current liabilities | 2,900 | $ 400 | 95,500 |
Non-current liabilities | ¥ | ¥ 0 | ¥ 0 | |
Convertible Preferred Stock [Member] | |||
Mezzanine equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | ||
Mezzanine equity, shares authorized (in shares) | 307,692,307 | 307,692,307 | 307,692,307 |
Mezzanine equity, shares issued (in shares) | 307,692,307 | 307,692,307 | 295,384,615 |
Mezzanine equity, shares outstanding (in shares) | 307,692,307 | 307,692,307 | 295,384,615 |
Class A ordinary shares | |||
Mezzanine equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | ||
Equity, shares authorized (in shares) | 19,692,307,693 | 19,692,307,693 | 19,692,307,693 |
Equity, shares issued (in shares) | 2,079,801,956 | 2,079,801,956 | 1,950,457,380 |
Equity, shares outstanding (in shares) | 2,079,801,956 | 2,079,801,956 | 1,950,457,380 |
Class B ordinary shares | |||
Mezzanine equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | ||
Equity, shares authorized (in shares) | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 |
Equity, shares issued (in shares) | 144,778,552 | 144,778,552 | 144,778,552 |
Equity, shares outstanding (in shares) | 144,778,552 | 144,778,552 | 144,778,552 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | Dec. 31, 2020 CNY (¥) ¥ / shares shares | |
Net revenues: | ||||
Net revenues | ¥ 13,292,982 | $ 1,927,301 | ¥ 7,965,323 | ¥ 4,033,418 |
Cost of materials | (5,178,963) | (750,879) | (3,198,552) | (1,995,380) |
Store rental and other operating costs | (2,829,987) | (410,310) | (2,036,772) | (1,726,619) |
Depreciation and amortization expenses | (391,936) | (56,825) | (465,384) | (483,421) |
Delivery expenses | (1,373,200) | (199,098) | (819,549) | (414,808) |
Sales and marketing expenses | (570,122) | (82,660) | (336,855) | (462,112) |
General and administrative expenses | (1,459,550) | (211,615) | (1,269,988) | (981,645) |
Store preopening and other expenses | (36,012) | (5,221) | (16,352) | (9,982) |
Impairment loss of long-lived assets | (221,800) | (32,200) | (21,368) | (71,467) |
Losses and expenses related to Fabricated Transactions and Restructuring | (75,204) | (10,904) | (339,557) | (475,252) |
Total operating expenses | (12,136,803) | (1,759,671) | (8,504,377) | (6,620,686) |
Operating (loss)/income | 1,156,179 | 167,630 | (539,054) | (2,587,268) |
Interest income | 84,923 | 12,313 | 102,248 | 135,713 |
Interest and financing expenses | (23,484) | (3,405) | (35,490) | (116,471) |
Foreign exchange (loss) /gain, net | 10,661 | 1,546 | 12,441 | (70,937) |
Other (expenses)/income, net | 60,680 | 8,798 | (16,513) | (58,635) |
Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes | 6,381 | 925 | ||
Provision)/reversal for SEC settlement | 1,146,474 | (1,177,074) | ||
Provision for equity litigants settlement | (279,967) | (40,591) | (155,314) | (1,226,119) |
Gain from extinguishment of Series B Senior Secured Notes | 124,139 | 17,998 | ||
Impairment of trust investments | (1,140,000) | |||
Net (loss)/income before income taxes | 1,126,750 | 163,364 | 514,792 | (6,240,791) |
Income tax (expense)/benefits | (638,504) | (92,574) | 63,861 | 637,801 |
Net (loss)/income | 488,246 | 70,790 | 578,653 | (5,602,990) |
Less: Net (loss)/income attributable to non-controlling interests | 108 | (13,885) | ||
Net (loss)/income attributable to the Company's ordinary shareholders | ¥ 488,246 | $ 70,790 | ¥ 578,545 | ¥ (5,589,105) |
Net (loss)/income per share: | ||||
Basic | (per share) | ¥ 0.20 | $ 0.03 | ¥ 0.29 | ¥ (2.76) |
Diluted | (per share) | ¥ 0.19 | $ 0.03 | ¥ 0.27 | ¥ (2.76) |
Weighted average shares outstanding used in calculating basic and diluted (loss)/income per share: | ||||
Basic | shares | 2,473,078,408 | 2,473,078,408 | 2,051,263,478 | 2,021,919,061 |
Diluted | shares | 2,516,273,627 | 2,516,273,627 | 2,135,844,257 | 2,021,919,061 |
Net (loss)/income | ¥ 488,246 | $ 70,790 | ¥ 578,653 | ¥ (5,602,990) |
Other comprehensive (loss)/income, net of tax of nil: | ||||
Foreign currency translation difference, net of tax of nil | (69,552) | (10,084) | 102,802 | 286,697 |
Total comprehensive (loss)/income | 418,694 | 60,706 | 681,455 | (5,316,293) |
Less: total comprehensive (loss)/income attributable to non-controlling interests | 108 | (13,885) | ||
Total comprehensive (loss)/income | 418,694 | 60,706 | 681,347 | (5,302,408) |
Revenues from product sales | ||||
Net revenues: | ||||
Net revenues | 10,223,720 | 1,482,300 | 6,659,218 | 3,716,791 |
Revenues from partnership stores | ||||
Net revenues: | ||||
Net revenues | ¥ 3,069,262 | $ 445,001 | ¥ 1,306,105 | ¥ 316,627 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | |||
Other comprehensive (loss)/income, tax | ¥ 0 | ¥ 0 | ¥ 0 |
Foreign currency translation difference, tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICITS)/EQUITY ¥ in Thousands, $ in Thousands | Ordinary shares Class A ordinary shares CNY (¥) shares | Ordinary shares Class A ordinary shares USD ($) shares | Ordinary shares Class B ordinary shares CNY (¥) shares | Ordinary shares Class B ordinary shares USD ($) shares | Additional paid-in capital CNY (¥) | Additional paid-in capital USD ($) | Accumulated other comprehensive income CNY (¥) | Accumulated other comprehensive income USD ($) | Statutory reserves CNY (¥) | Statutory reserves USD ($) | Accumulated deficits CNY (¥) | Accumulated deficits USD ($) | Total Company's ordinary shareholders' equity CNY (¥) | Total Company's ordinary shareholders' equity USD ($) | Non-controlling interests CNY (¥) | Class A ordinary shares shares | CNY (¥) | USD ($) |
Beginning balance at Dec. 31, 2019 | ¥ 8 | ¥ 13 | ¥ 11,845,920 | ¥ 77,357 | ¥ 421 | ¥ (6,863,595) | ¥ 5,060,124 | ¥ 82,403 | ¥ 5,142,527 | |||||||||
Beginning balance (in shares) at Dec. 31, 2019 | shares | 664,687,728 | 664,687,728 | 1,277,687,072 | 1,277,687,072 | ||||||||||||||
Net (loss)/income | (5,589,105) | (5,589,105) | (13,885) | (5,602,990) | ||||||||||||||
Foreign currency translation difference | (190) | 286,697 | 286,507 | 286,507 | ||||||||||||||
Issuance of shares | ¥ 1 | 2,876,810 | 2,876,811 | 2,876,811 | ||||||||||||||
Issuance of shares (in shares) | shares | 82,800,000 | 82,800,000 | ||||||||||||||||
Conversion from Class B ordinary shares to Class A ordinary shares | ¥ 11 | ¥ (11) | ||||||||||||||||
Conversion from Class B ordinary shares to Class A ordinary shares (in shares) | shares | 1,132,908,520 | 1,132,908,520 | (1,132,908,520) | (1,132,908,520) | ||||||||||||||
Surrender of Class A ordinary shares (in shares) | shares | (4) | (4) | ||||||||||||||||
Share based compensation | 22,029 | 22,029 | 22,029 | |||||||||||||||
Appropriation to statutory reserves | 182 | (182) | ||||||||||||||||
Ending balance at Dec. 31, 2020 | ¥ 20 | ¥ 2 | 14,744,569 | 364,054 | 603 | (12,452,882) | 2,656,366 | 68,518 | 2,724,884 | |||||||||
Ending balance (in shares) at Dec. 31, 2020 | shares | 1,880,396,244 | 1,880,396,244 | 144,778,552 | 144,778,552 | ||||||||||||||
Net (loss)/income | 578,545 | 578,545 | 108 | 578,653 | ||||||||||||||
Foreign currency translation difference | 102,802 | 102,802 | 102,802 | |||||||||||||||
Issuance of shares | ¥ 1 | (1) | ||||||||||||||||
Issuance of shares (in shares) | shares | 70,061,136 | 70,061,136 | ||||||||||||||||
Share based compensation | 302,734 | 302,734 | 302,734 | |||||||||||||||
Purchase of non-controlling interest in a subsidiary | (9,310) | (9,310) | ¥ (68,626) | (77,936) | ||||||||||||||
Appropriation to statutory reserves | 2,014 | (2,014) | ||||||||||||||||
Ending balance at Dec. 31, 2021 | ¥ 21 | ¥ 2 | 15,037,992 | 466,856 | 2,617 | (11,876,351) | 3,631,137 | 3,631,137 | ||||||||||
Ending balance (in shares) at Dec. 31, 2021 | shares | 1,950,457,380 | 1,950,457,380 | 144,778,552 | 144,778,552 | ||||||||||||||
Net (loss)/income | 488,246 | 488,246 | 488,246 | $ 70,790 | ||||||||||||||
Foreign currency translation difference | (69,552) | (69,552) | (69,552) | |||||||||||||||
Issuance of shares | ¥ 1 | (1) | ||||||||||||||||
Issuance of shares (in shares) | shares | 53,123,768 | 53,123,768 | ||||||||||||||||
Share based compensation | 398,008 | 398,008 | 398,008 | |||||||||||||||
Appropriation to statutory reserves | 33,040 | (33,040) | ||||||||||||||||
Convertible senior notes restructuring | ¥ 1 | 601,407 | 601,408 | 601,408 | ||||||||||||||
Convertible Senior Notes Restructuring, Shares | shares | 76,220,808 | 76,220,808 | 76,220,808 | |||||||||||||||
Ending balance at Dec. 31, 2022 | ¥ 23 | $ 3 | ¥ 2 | $ 0 | ¥ 16,037,406 | $ 2,325,205 | ¥ 397,304 | $ 57,604 | ¥ 35,657 | $ 5,170 | ¥ (11,421,145) | $ (1,655,910) | ¥ 5,049,247 | $ 732,072 | ¥ 5,049,247 | $ 732,072 | ||
Ending balance (in shares) at Dec. 31, 2022 | shares | 2,079,801,956 | 2,079,801,956 | 144,778,552 | 144,778,552 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net (loss)/income | ¥ 488,246 | $ 70,790 | ¥ 578,653 | ¥ (5,602,990) |
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities: | ||||
Foreign exchange loss/ (gain), net | (10,661) | (1,546) | (12,441) | 70,937 |
Loss on disposal of property and equipment | 9,884 | 1,433 | 4,834 | 5,648 |
Depreciation and amortization | 391,936 | 56,825 | 465,384 | 483,421 |
Amortization of operating lease right-of-use assets | 854,646 | 123,912 | 672,910 | |
Change in the fair value of financial instrument | 6,381 | 925 | ||
Impairment of long-lived assets | 221,800 | 32,200 | 21,368 | 71,467 |
Gain from extinguishment of Series B Senior Secured Notes | (124,139) | (17,998) | ||
Allowance for prepayments and accounts receivable | 18,069 | 2,620 | 4,467 | 83,230 |
Loss on disposal of other non-current assets | 34,709 | |||
Deferred income tax | 494,472 | 71,692 | (64,221) | (638,720) |
Impairment of trust investments | 1,140,000 | |||
Interest expenses of convertible senior notes | 19,855 | 2,879 | 35,490 | 107,014 |
Share-based compensation expenses | 398,008 | 57,705 | 302,734 | 22,029 |
Provision /(reversal) for SEC settlement | (1,146,474) | 1,177,074 | ||
Donation of inventory | 3,889 | |||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (20,994) | (3,044) | (22,431) | 5,420 |
Inventories | (604,055) | (87,580) | (316,673) | 109,976 |
Receivables from online payment platforms | 19,640 | 2,848 | (145,834) | (9,538) |
Prepaid expenses and other current assets | (60,514) | (8,772) | (101,868) | (263,242) |
Other non-current assets | (64,132) | (9,298) | (20,548) | 20,710 |
Amount due from a related party | 90 | |||
Accounts payable | 147,676 | 21,411 | 84,005 | (331,848) |
Accrued expenses and other liabilities | 107,095 | 15,527 | 254,094 | (12,414) |
Amounts due to related parties | (19,174) | |||
Deferred revenues | 1,154 | 167 | 8,038 | (56,750) |
Operating lease liabilities | (875,653) | (126,958) | (637,243) | |
Payable for equity litigants settlement | (1,398,906) | (202,822) | 155,314 | 1,226,119 |
Net cash (used in)/provided by operating activities | 19,818 | 2,875 | 123,447 | (2,376,832) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchases of property and equipment | (781,676) | (113,332) | (173,217) | (822,333) |
Payment for land use right | (19,344) | (2,805) | ||
Cash received from disposal of property and equipment | 2,974 | 431 | 1,490 | |
Purchase of two trust investments | (1,140,000) | |||
Purchases of short-term investments | (455,404) | |||
Proceeds received from maturity of short-term investments | 250,000 | 705,404 | ||
Repayment of contribution from noncontrolling interest in a subsidiary | (77,936) | |||
Net cash (used in)/provided by investing activities | (798,046) | (115,706) | 337 | (1,712,333) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of Class A ordinary shares, net of issuance cost | 2,876,811 | |||
Capital lease payments | (7,656) | |||
Return of deposit for capital lease | 642 | |||
Proceeds from long-term borrowing | 69,900 | |||
Proceeds from the issuance of convertible senior notes (the "Notes") | 3,098,069 | |||
Repayments for long-term borrowing | (642,433) | |||
Cash received in relation to Fabricated Transaction | 942,844 | |||
Cash paid in relation to Fabricated Transaction | (2,309,107) | |||
Proceeds from issuance of convertible senior preferred shares | 63,380 | 9,189 | 1,514,660 | |
Repayment of convertible senior notes | (1,560,105) | (226,194) | ||
Repayment of Series B Secured Notes | (779,535) | (113,022) | ||
Net cash provided by/(used in) financing activities | (2,276,260) | (330,027) | 1,514,660 | 4,029,070 |
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | 77,133 | 11,183 | (22,215) | 17,711 |
Net (decrease)/ increase in cash and cash equivalents and restricted cash | (2,977,355) | (431,675) | 1,616,229 | (42,384) |
Cash and cash equivalents and restricted cash at beginning of years | 6,555,274 | 950,425 | 4,939,045 | 4,981,429 |
Cash and cash equivalents and restricted cash at end of years | 3,577,919 | 518,750 | 6,555,274 | 4,939,045 |
Supplemental disclosures of cash flow information: | ||||
Interests received | 88,517 | 12,834 | 103,863 | 132,439 |
Interests paid, net of capitalization | (34,148) | (4,951) | (15,171) | |
Income taxes paid | (68,802) | (9,975) | (1,200) | (3,105) |
Supplemental disclosures of non-cash activities: | ||||
Purchase of property and equipment included in accrued expenses and other liabilities | 120,227 | 17,431 | 46,659 | |
Obtaining right-of-use assets in exchange for lease liabilities | 1,552,538 | 225,095 | 947,853 | |
Shares issued in restructuring of the Notes | 601,408 | $ 87,196 | ||
Reconciliation of cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | 3,534,304 | 6,477,636 | 4,806,023 | |
Current resricted cash | 7,860 | 58,200 | 110,000 | |
Non-current restricted cash | 35,755 | 19,438 | 23,022 | |
Total cash, cash equivalents and restricted cash in the statements of cashflows | ¥ 3,577,919 | ¥ 6,555,274 | ¥ 4,939,045 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION | |
ORGANIZATION | 1. ORGANIZATION Luckin Coffee Inc. (the “Company”) was incorporated in the Cayman Islands on June 16, 2017 under the Cayman Islands Companies Act (2021 Revision) (the “Companies Act”) as an exempted company with limited liability. The Company through its consolidated subsidiaries and variable interest entity (the “VIE”) (collectively, the “Group”) are principally engaged in the provision of retail services for high-quality and affordable freshly brewed drinks and pre-made food and beverage items in the People’s Republic of China (the “PRC” or “China”). (a) Entity Date of incorporation Place of incorporation Percentage of direct or indirect ownership Principal activities Subsidiaries: Luckin Coffee Investment Inc. (“Luckin BVI”) June 16, 2017 British Virgin Islands 100 % Investment holding Luckin Coffee (Hong Kong) Limited (“Luckin HK”) June 19, 2017 Hong Kong 100 % Investment holding Luckin Coffee Roasting (Hong Kong) Limited (“Luckin Roasting”) April 12, 2019 Hong Kong 100 % Investment holding Luckin Coffee Roastery (Hong Kong) Limited (“Luckin Roastery”) April 30, 2019 Hong Kong 100 % Investment holding Beijing Luckin Coffee Co., Ltd. (“Beijing Wholly Foreign Owned Enterprise”, or, “Beijing WFOE”) (1) / (2) October 31, 2017 PRC 100 % Provision of retail services for freshly brewed drinks and pre-made food and beverage items and technical and consultation services Luckin Investment (Tianjin) Co., Ltd. (“Luckin TJ”) (1) / (5) December 7, 2017 PRC 100 % Investment holding Luckin Coffee (China) Co., Ltd. (“Luckin China”) (1) / (2) / (4) March 28, 2018 PRC 100 % Headquarter Luckin Coffee Roasting (Pingnan) Co., Ltd. (1) April 28, 2019 PRC 100 % Manufacture of materials for products Variable Interest Entity: Beijing Luckin Coffee Technology Ltd. (“VIE”) (3) June 14, 2017 PRC License holder (1) Including their subsidiaries, collectively as the “PRC subsidiaries”. (2) On July 27, 2018, Beijing WFOE transferred all its 100% equity interest in its subsidiaries to Luckin China. (3) Mr. Jinyi Guo and Mr. Gang Wu are nominal shareholders of the VIE, holding 83.33 % and 16.67 % of the equity interest, respectively. (4) As of December 31, 2022, Luckin China had 78 direct and indirect wholly-owned subsidiaries. (5) As of December 31, 2022, Luckin TJ had one direct wholly-owned subsidiary. 1. ORGANIZATION (CONTINUED) (b) Consolidation: Overall The VIE is not involved in the business operations or fund planning of the Group. However, Luckin Coffee Inc. and its subsidiaries may transfer cash to the VIE by loans or capital support, subject to satisfaction of applicable government registration and approval requirements, to satisfy the VIE’s miscellaneous cash demands, such as social insurance fees for employees whose social insurance accounts were registered under the VIE. In 2020, 2021 and 2022, the PRC subsidiaries transferred RMB74.1 million, RMB18.8 million and RMB115.5 million (US$16.7 million), respectively, to the VIE by loans or by capital support. In addition, the VIE may transfer cash as repayment of loans or, on an ad hoc basis, as working capital support to the PRC subsidiaries. In 2020, 2021 and 2022, the VIE transferred to the PRC subsidiaries RMB3.3 million, RMB58.8 million and RMB104.1 million (US$15.1 million), respectively. These funds were used for repayment of loans or to support operations of the PRC subsidiaries. In addition, the Group and the VIE do not currently have any plans to distribute earnings or settle amounts owed under the VIE Agreements. The following is a summary of the key VIE Agreements: Exclusive Option Agreement Pursuant to the Exclusive Option Agreement entered into amongst the VIE, the Nominee Shareholders and Beijing WFOE, the Nominee Shareholders granted Beijing WFOE or its designated party, an irrevocable and exclusive right to purchase all or part of the equity interests held by the Nominee Shareholders in the VIE at its sole discretion, to the extent permitted under the PRC laws, at an amount equal to the minimum consideration permitted under the applicable PRC law and administrative regulations. Any proceeds received by the Nominee Shareholders from the exercise of the options shall be remitted to Beijing WFOE or its designated party, to the extent permitted under PRC laws. In addition, the VIE and the Nominee Shareholders have agreed that without prior written consent of the Beijing WFOE, they will not create any pledge or encumbrance on their equity interests in the VIE, except for the pledge placed pursuant to the Share Pledge Agreement, or transfer or otherwise dispose of their equity interests in the VIE. The term of the agreement remains effective as long as each Nominee Shareholder remains as a shareholder of the VIE. Beijing WFOE may terminate the agreement at its sole discretion, whereas under no circumstances may the VIE or the Nominee Shareholders terminate the agreement. Share Pledge Agreement Pursuant to the Share Pledge Agreement entered into amongst Beijing WFOE, the VIE, and the Nominee Shareholders, the Nominee Shareholders pledged all of their equity interests in the VIE to Beijing WFOE as collateral to secure their obligations. Beijing WFOE shall have the right to collect dividends generated by the pledged shares during the term of the pledge. If the VIE or the Nominee Shareholders breach their respective contractual obligations under the share pledge agreement, Beijing WFOE, as pledgee, will be entitled to rights, including the right to dispose the pledged equity interests entirely or partially. The Nominee Shareholders agreed not to transfer or otherwise create any encumbrance on their equity interests in the VIE without prior consent of Beijing WFOE. The Equity Pledge Agreement will remain effective until all the obligations have been satisfied in full and the pledged equity interests have been transferred to Beijing WFOE and/or its designee. The Company completed the registration of the pledge of equity interests in the VIE with the relevant office of Administration for the Industry and Commerce in accordance with the PRC Property Rights Law. 1. ORGANIZATION (CONTINUED) Proxy Agreement and Power of Attorney Pursuant to the Proxy Agreement and Power of Attorney entered into amongst Beijing WFOE, the VIE, and the Nominee Shareholders, each Nominee Shareholder appointed Beijing WFOE to act on behalf of the Nominee Shareholders as exclusive agent and attorney with all respect to all matters concerning the shareholding including but not limited to (1) call and attend shareholders’ meetings of the VIE; (2) exercise all the shareholders’ rights, including voting rights; and (3) appoint at its sole discretion, a substitute or substitutes to perform any or all of its right of the VIE. The power of attorney remains irrevocable and continuously valid from the date of execution so long as each Nominee Shareholder remains as a shareholder of the VIE unless Beijing WFOE issues adverse instructions in writing. The Proxy Agreement and Power of Attorney was subsequently reassigned to the Company. Master Exclusive Service Agreement Pursuant to the Master Exclusive Service Agreement entered into between Beijing WFOE and the VIE, Beijing WFOE or its designated entities affiliated has the exclusive right to provide the VIE with technical support and business support services in return for fees equal to 100% of the consolidated net profits of the VIE. Beijing WFOE has sole discretion in determining the service fee charged to the VIE under this agreement. Without Beijing WFOE’s prior written consent, the VIE shall not, directly and indirectly, obtain the same or similar services as provided under this agreement from any third party, or enter into any similar agreement with any third party. Beijing WFOE will have the exclusive ownership of all intellectual property rights developed by performance of this agreement. This agreement will remain effective until it is terminated at the discretion of Beijing WFOE or upon the transfer of all the shares of the VIE to Beijing WFOE and/or a third party designated by Beijing WFOE. The Company is obligated and hereby undertakes to provide unlimited financial support to the VIE, to the extent permissible under the applicable PRC law and regulations, whether or not any such operational loss is actually incurred. The Company will forego the right to seek repayment in the event the VIE are unable to repay such funding. Business Cooperation Agreement Pursuant to the Business Cooperation Agreement entered into amongst Beijing WFOE, the VIE and the Nominee Shareholders, the VIE and the Nominee Shareholders agreed and covenanted that, without obtaining Beijing WFOE’s written consent, the VIE shall not, and the Nominee Shareholders shall cause the VIE not to, engage in any transaction which may materially affect the VIE’s assets, obligations, rights or operation. The VIE shall accept, and the Nominee Shareholders shall cause the VIE to accept, suggestions raised by Beijing WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems of the VIE. The Business Cooperation Agreement will remain effective until it is terminated at the discretion of Beijing WFOE or upon the transfer of all the shares of the VIE to Beijing WFOE and/or its designated party. In the opinion of the Group’s management and PRC counsel, (i) the ownership structure of the VIE is not in violation with any existing PRC laws and regulations in any material respect; and (ii) each of the VIE Agreements is valid, legally binding and enforceable to each party of such agreements and will not result in any violation of PRC laws or regulations currently in effect. However, the Group’s PRC legal counsel has also advised that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of the Group’s PRC legal counsel. 1. ORGANIZATION (CONTINUED) Business Cooperation Agreement (continued) Uncertainties in the PRC legal system could cause the relevant regulatory authorities to find the current VIE Agreements and businesses to be in violation of any existing or future PRC laws or regulations. If the Company, Beijing WFOE or any of its current or future VIE are found in violation of any existing or future laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, which may include but not limited to, confiscating the income of the primary beneficiary, and the VIE, revoking the business licenses or operating licenses of the primary beneficiary, and VIE, shutting down the Group’s servers, discontinuing or placing restrictions or onerous conditions on the Group’s operations, requiring the Group to undergo a costly and disruptive restructuring or enforcing actions that could be harmful to the Group’s business. Any of these actions could affect the legality and enforceability of the contractual arrangements with the VIE and, consequently, cause the primary beneficiary to lose the rights to direct the activities of the VIE or the right to receive their economic benefits and the ability to consolidate the financial results of the VIE. There are no assets that are pledged or collateralized for the VIE’ obligations and which can only be used to settle the VIE’s obligations, except for registered capital. Relevant PRC laws and regulations restrict the VIE from transferring a portion of their net assets, equivalent to the balance of its share capital and statutory reserve, to the Company in the form of loans and advances or cash dividends. Please refer to Note 11 for disclosure of restricted net assets. As the VIE is incorporated as limited liability company under the PRC Company Law, creditors of the VIE do not have recourse to the general credit of the Company for any of the liabilities of the VIE. There were no other pledges or collateralization of the VIE’s assets. The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents and restricted cash of the consolidated VIE structured by the Contractual Agreements: As of December 31, 2021 2022 RMB RMB US$ Total assets 106,998 6,865 995 Total liabilities 95,488 2,864 415 For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Total net revenues — — — — Net loss (15,464) (22,750) (23,542) (3,413) For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Net cash (used in)/provided by operating activities 58,819 (58,781) — — Net cash used in investing activities (47) — — — Net cash (used in)/ provided by financing activities — — — — Effect of foreign exchange rate changes on cash and cash equivalents — — — — Net increase/(decrease) in cash and cash equivalents 58,772 (58,781) — — Cash and cash equivalents and restricted cash at beginning of year 9 58,781 — — Cash and cash equivalents and restricted cash at end of year 58,781 — — — |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). (b) Principles of consolidation The consolidated financial statements of the Group include the financial statements of the Company, its subsidiaries and the VIE for which the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIE have been eliminated upon consolidation. (c) Non-controlling interests For the Group’s non-wholly owned subsidiaries, a non-controlling interest is recognized to reflect the portion of equity that is not attributable, directly or indirectly, to the Group. Non-controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets and have been separately disclosed in the Group’s consolidated statements of comprehensive (loss)/income to distinguish the interests from that of the Group. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenues and expenses during the reporting periods. Accounting estimates reflected in the Group’s consolidated financial statements include, but not limited to, estimates for allowance for credit losses of accounts receivable and other receivables, inventory provision, and short-term investments, useful lives and impairment of long-lived assets, revenue recognized from breakage amount, refund liability, accounting for deferred income taxes and uncertain tax benefits, valuation allowance for deferred tax assets, fair value of share-based payments, provision of contingent liabilities, and valuations for derivative financial instruments, convertible senior preferred shares and convertible senior notes. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates due to risks and uncertainties, including uncertainty in the current economic environment due to the global COVID-19 pandemic, and as such, differences may be material to the consolidated financial statements. (e) Foreign currency The functional currency of the Company and its subsidiaries incorporated outside of the PRC is the United States dollar (“US$”), the HongKong dollar (“HKD”), or the Singapore dollar (“SGD”), while the functional currency of the PRC entities in the Group is Chinese Renminbi (“RMB”) as determined based on ASC 830, “Foreign Currency Matters”. The financial statements of the Company and its subsidiaries incorporated outside of the PRC are translated from the functional currency to the reporting currency, the RMB. The Group uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Equity accounts other than earnings generated in current year are translated into RMB at the appropriate historical rates. Translation differences are recorded in accumulated other comprehensive income, a component of shareholders’ equity. Foreign currency transactions denominated in currencies other than the functional currencies are translated into the functional currencies using the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currencies using the applicable exchange rates at the balance sheet dates. Non-monetary items that are measured in terms of historical costs in foreign currency are translated into the functional currencies using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of comprehensive (loss)/income. (f) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.8972 on December 30, 2022, the last business day in fiscal year 2022, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted, realized or settled into US$ at such rate or at any other rate. (g) Cash and cash equivalents Cash and cash equivalents consist of demand deposits, highly-liquid investments placed with banks which are unrestricted as to withdrawal or use, and have original maturities of three months or less. (h) Restricted cash Restricted cash is reported separately on the face of the Consolidated Balance Sheets and is included in the total cash and cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows. The Group’s restricted cash mainly represents security deposits held in bank accounts for bank guarantee letters and prepaid card business. Restricted cash is classified as current and non-current based on the duration of the restriction. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Accounts receivable Accounts receivable represents the amounts that the Group has an unconditional right to consideration. Accounts receivable that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. As of December 31, 2021 and 2022, bad debt allowance for the Gourp’s account receivable was RMB0.8 million and RMB0.2 million (US$0.03 million), respectively. (j) Inventories Inventories are stated at the lower of cost or net realizable value. Cost of inventory are determined using the weighted average method. The Company recorded inventory reserves to write down the cost of inventory to the estimated net realizable value due to obsolete and slow-moving inventories, which is dependent upon factors such as historical and forecasted consumer demand, and application of the specific identification method. As of December 31, 2021 and 2022, inventory reserves were RMB5.6 million and RMB33.4 million (US$4.8 million), respectively. Write downs are recorded in cost of materials in the Consolidated Statements of Operations and Comprehensive (Loss)/Income. (k) Property and equipment Property and equipment primarily consist of office buildings, store operating equipment, mechanical equipment, leasehold improvements, office equipments and others. Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated useful life Store operating equipment 5 years Office equipment and others 3-5 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Mechanical equipment 10 years Office buildings 40-50 years Direct costs that are related to the construction of property and equipment and incurred in connection with bringing the assets to their intended use are capitalized as construction in progress. Construction in progress is transferred to specific property and equipment items and the depreciation of these assets commences when the assets are ready for their intended use. Repair and maintenance costs are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirements, sale and disposals of assets are recorded by removing the cost, accumulated depreciation and relevant impairment, with any resulting gain or loss reflected in the consolidated statements of comprehensive (loss)/income. (l) Expected Credit Losses The Group’s account receivable, receivables from online payment platforms, other receivables and other certain financial assets are within the scope of ASU No. 2016-13. The Group maintains an estimated allowance for credit losses to reduce them to the amount that the it believes will be collected. When developing an estimation of expected credit losses, the Gourp applys the historical loss experience with appropriate adjustment. The Gourp consider available information relevant to assessing the collectability of cash flows. This information may include internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. The Gourp adjusts the allowance percentage periodically when there are significant differences between estimated bad debts and actual bad debts. If there is strong evidence indicating that these financial assets are likely to be unrecoverable, the Group also makes specific allowance in the period in which a loss is determined to be probable. The balance of these financial assests is written off after all collection efforts have been exhausted 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) Impairment of long-lived assets other than goodwill The Group evaluates its long-lived assets, including property and equipment with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that indicate that the carrying amount of an asset or asset group may not be fully recoverable. When these events occur, the Group evaluates the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows of the asset or asset group is less than the carrying amount of the assets or the asset groups, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets or the asset groups over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets or asset groups based on forecasted future sales and operating costs, using internal projections, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets’ remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Group estimates of future cash flows requires management to make assumptions and to apply judgment, including forecasting future sales and gross profits and estimating useful lives of the assets or asset groups. These estimates can be affected by factors such as future sales results, store closure plans, economic conditions, business interruptions, interest rates and government regulations that can be difficult to predict. If actual results and conditions are not consistent with the estimates and assumptions used in its calculations, the Group may be exposed to additional impairments of long-lived assets. For the years ended December 31, 2020, 2021 and 2022, the Group recognized impairment of long-lived assets other than goodwill of RMB71.5 million, RMB21.4 million and RMB221.8 million (US$32.2 millon), respectively. Impairment loss of long-lived assets mainly represented RMB46.7 million for the asset group related to Luckin Pop Mini, RMB12.8 million for the Linefriends food licensing and RMB9.8 million for the asset group related to store operating equipment and others for the year ended December 31, 2020, RMB21.4 million for the asset group related to store operating equipment and others for the year ended December 31, 2021, and RMB221.8 million for the asset group related to Luckin Coffee EXPRESS machines for the year ended December 31, 2022. (n) Derivative financial instrument All contracts that meet the definition of a derivative are recognized on the Group’s consolidated balance sheets as either assets or liabilities and recorded at fair value. The Group’s derivative financial instruments primarily consisted of derivative asset bifurcated from the New Notes (see Note 12 Convertible Senior Notes for details). Changes in the fair value of derivatives are recognized in the Group’s consolidated statements of operations and comprehensive (loss)/income as they were not qualified for hedge accounting. As of December 31, 2021 and 2022, there was no balance of the derivative instruments. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o) Fair value of financial instruments Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a three-tier fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Group’s financial instruments include cash and cash equivalents and restricted cash, accounts payable, receivables from online payment platforms, accounts receivable, other receivables and payables, and convertible senior notes. Cash equivalents and security deposits held in bank accounts for bank guarantee letters which is included in restricted cash are measured at fair value based on the pervasive interest rates in the market, which are also the interest rates as stated in the contracts with the banks. The Group classifies the valuation techniques that use the pervasive interest rates input as Level 2 of fair value measurements. As of December 31, 2021 and 2022, cash equivalents aggregately amounted to RMB4,478.4 million and RMB1,966.3million (US$285.1 million), respectively, and security deposits held in bank accounts for bank guarantee letters which is included in restricted cash amounted to RMB58.2 million and RMB7.7 million (US$1.1 million), respectively. The carrying values of above financial instruments except for cash equivalents and which is included in restricted cash 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p) Revenue recognition A description of the principal revenue generating activities of Group is as follows: Revenues from product sales The Group offers freshly brewed drinks and other products (including pre-made food, beverage and merchandise items) mainly through its physical self-operated stores, Luckin Coffee EXPRESS and online e-commerce platforms. Total revenues from product sales were RMB3,716.8 million, RMB6,659.2 million and RMB10,223.7 million (US$1,482.3 million) for the years ended December 31, 2020, 2021 and 2022, respectively, including revenues from self-operated stores of RMB3,472.8 million, RMB6,192.7 million and RMB9,414.5 million (US$1,365.0 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Revenues from product sales include: ● Revenues from freshly brewed drinks . The Group offers an array of freshly brewed drinks, with a focus on freshly brewed coffee, supplemented with non-coffee drinks such as Luckin Exfreezo series. Net revenues from freshly brewed drinks were RMB 3,218.7 million, RMB 5,909.7 million and RMB 9,079.3 million (US $1,316.4 million) for the years ended December 31, 2020, 2021 and 2022, respectively. ● Revenues from other products . Other products mainly consist of food and beverage items, such as light meals and various merchandise, including premium instant coffee, inspirational cups and other consumer goods. Net revenues from other products were RMB 309.7 million, RMB 395.6 million and RMB 686.8 million (US $99.6 million) for the years ended December 31, 2020, 2021 and 2022, respectively. ● Revenues from others . Revenues from others mainly include delivery fees derived from self-operated stores paid by the customers and membership fees collected from the subscribed members. Revenues from others were RMB 188.3 million, RMB 354.0 million and RMB 457.5 million (US $66.3 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Customers place orders for products mainly through the Group’s self-developed APP, Weixin mini-program and other third-party platforms with different options to pay through third-party online payment platforms. The Group recognizes revenues at point in time when the Group satisfies its performance obligation upon the control of the promised products are transferred to the customers or distributors. Delivery service is provided if it is a delivery order. Delivery service is determined as an activity to fulfill the Group’s promise to transfer the products, rather than another distinct performance obligation as it is performed before the customers obtain control of the products. Revenues represent the amount of consideration that the Group is entitled to, including products settlement price and delivery fees charged to customers, net of value-added tax (“VAT”), surcharges, discounts and returns, if any. There is no significant financing component or variable consideration in the transaction price. The Group reasonably estimates the possibility of return based on the historical experience, and there were no material returns historically. When a customer receives a discount for purchasing a bundle of goods, that discount is allocated proportionately among the performance obligations using the relative stand-alone selling price method. The Group also provides subscription membership service, which provides the members the access to an evolving suite of benefits, such as extra discount, limited-time promotions and special offer on selected product offerings and new products, which represent a single stand-ready obligation. Membership fees are paid for at the time of or in advance of delivering the services. Revenues from such arrangements are recognized over the subscription period on a straight-line basis. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Group evaluates whether it is appropriate to record the gross amount of product sales and related costs acting as a principal or the net amount acting as an agent. The Group is a principal for the substantial majority of product sales as the Group produces or obtains control of the specified goods before they are transferred to the customers, except for a portion of revenue from products sold on the Group’s own e-commerce platform, for which the Group’s obligation is to facilitate third-party merchants in fulfilling their performance obligation for the goods displayed on the Group’s own e-commerce platform acting as an agent. Revenue from product sales as an agent of RMB3.7 million, RMB2.0 million and RMB1.2 million (US$0.2 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Revenues from partnership stores The Group cooperates with selective retail partners to operate the partnership stores. Under retail partnership model, the Group sells materials such as coffee beans, milk, food and related products to retail partners and shares simplified and standardized operation experience and provides use right of brand name and sales and supply chain management in exchange for a profit-sharing on retail sales. Retail partners are responsible for pre-opening capital investments and operating costs. Revenues from partnership stores mainly consist of sales of materials, equipment and store construction-related materials to the partnership stores, profit-sharing revenue from the partnership stores for using the Luckin Coffee or Luckin Tea brand as well as integrated store operation solution, and other services including delivery services and pre-opening services. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p) Revenue recognition (continued) For material sales, the Group’s performance obligation is to transfer required materials at fixed unit price to retail partners. The Group provides allowance for materials sales as consideration payable to retail partners when the products sold in partnership stores to customers at lower price than the cost of materials with certain markup to cater for the Group’s promotion strategy. Allowance for partnership stores is accounted for as a reduction of the transaction price, which is usually determined upon the completion of each order. Therefore, sales of materials are generally recognized on the partnership stores’ acceptance of materials, the settlement price is then deducted by the allowance provided to partnership stores that is determined upon the products are sold in partnership stores, if any. Revenue from material sales to partnership stores were RMB227.2 million, RMB834.7 million and RMB2,011.2 million (US$291.6 million) for the years ended December 31, 2020, 2021 and 2022, respectively. For equipment and store construction-related materials sales, the Group’s performance obligation is to transfer equipment at a fixed consideration with one-year warrant and store construction-related materials to retail partners. The one-year warrant is not a distinct performance obligation as it is intended to provide by the Group’s suppliers to the customers an assurance that the equipment complies with agreed-upon functionality described in the contract. Revenue from sales of equipment which needs installation and testing for the intented use is recognized at point in time when equipment is installed and tested to be ready to use. Revenue from sales of store construction-related materials is recognized at point in time upon receipt. Revenue from equipment and store construction-related materials sales to partnership stores were RMB43.3 million, RMB178.8 million and RMB278.1 million (US$40.3 million) for the years ended December 31, 2020, 2021 and 2022, respectively, and warrant liability was immaterial. For profit-sharing, the Group provides the integrated store operation solution, which includes the right to use brand name of Luckin Coffee or Luckin Tea, products and brand name promotion activities, unified ordering and payment collections platform, and basic operation guidance on store management and sanitary conditions, etc., in exchange for the profit-sharing based on the gross profit of retail sales. The Group recognizes the profit-sharing revenue from partnership stores at a variable consideration that is based upon partnership stores’ monthly gross profits which are determined at the end of each month. The Group offers a price concession to its retail partners by waiving the new stores’ profit-sharing for a period of time ranging from the first one month to three months, which is subject to the Group’s adjustment. Between January to June 2020, during the outbreak of COVID-19, the Group waived substantially all the profit-sharing from partnership stores. Price concession for profit-sharing is accounted for as a reduction of the transaction price and deducts the revenue directly. Revenue from partnership stores’ profit-sharing were RMB12.8 million, RMB144.8 million and RMB427.9 million (US$62.0 million) for the years ended December 31, 2020, 2021 and 2022, respectively. The Group also provides other services including pre-opening services such as design of store decoration and provision of decoration materials and delivery service, which have distinct value to partnership stores and are recognized upon completion of the respective performance obligations. Other revenues from partnership stores were RMB33.3 million, RMB147.8 million and RMB352.1 million (US$51.0 million) for the years ended December 31, 2020, 2021 and 2022, respectively. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p) Revenue recognition (continued) Contract balance When either party to a revenue contract has performed, the Group presents the contract in the consolidated balance sheet as a contract asset or a contract liability, depending on the relationship between the Group’s performance and the customer’s payment. The Group presents any unconditional rights to consideration separately as a receivable. The Group does not have material contract asset. The balance of accounts receivable, net of RMB0.8 million and RMB0.2 millon (US$0.03 million) allowance for doubtful accounts, were RMB38.6 million and RMB58.8 million (US$8.5 million) as of December 31, 2021 and 2022, respectively. Contract liability is mainly related to prepaid coupons to be provided to customers. Customers pay in advance for prepaid coupons. All prepaid coupons are stored in the “Coffee Wallet” of the customers’ registered accounts for future use with a three-year validity period. Cash received from the sales of prepaid coupons are recognized as deferred revenues which are contract liabilities under ASC 606 and recognized as revenue when the customer redeems the coupons. However, a portion of the contract liability recognized as revenue may relate to coupons that the Company expects to expire, which is considered as a breakage amount. When the Company determines that it expects to be entitled to breakage, the estimated breakage is recognized as revenue in proportion to the pattern of rights exercised by the customer. As of December 31, 2021 and 2022, the balance of deferred revenues was RMB96.2 million and RMB97.4 million (US$14.1 million), respectively. Majority of the balance of deferred revenue as of December 31, 2021 was recognized as revenue in the year of 2022. (q) Costs of materials, store rental and other operating costs Costs of materials consisted primarily of cost for coffee beans and coffee condiments, pre-made food and beverage items, packaging, supplies and warehouse. Store rental and other operating costs consisted primarily of rental expense of stores, staff costs, and utilities, etc. (r) Delivery expenses Delivery expenses are the delivery service fee for delivery orders. The Group incurred delivery expenses of RMB414.8 million, RMB819.5 million and RMB1,373.2 million (US$199.1 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Delivery expenses are separated out of sales and marketing expenses from the fiscal year 2021 to optimize the disclosure and better reflect the nature of expenses. This reclassification is retrospectively applied. (s) Sales and marketing expenses Sales and marketing expenses consisted primarily of advertising expenditure, commission fees for third-party delivery platforms and subcontract service fee. Advertising expenditures are expensed when incurred and are included in sales and marketing expenses, which amounted to RMB354.5 million, RMB243.7 million and RMB338.0 million (US$49.0 million) for the years ended December 31, 2020, 2021 and 2022, respectively. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (t) General and administrative expenses General and administrative expenses consist primarily of payroll and related expenses for employees involved in general corporate functions, research and development expenses, share-based compensation, professional fees and daily office expenses and rental fees for general corporate functions. Research and development expenses are included in general and administrative expenses, which are mainly payroll expenses, employee benefits, and other headcount-related expenses associated with platform development and data analysis to support the Group’s business operations. The Group charged RMB265.5 million, RMB251.7 million and RMB301.4 million (US$43.7 millon) of research and development costs to expense for the years ended December 31, 2020, 2021 and 2022, respectively. (u) Store preopening and other expenses Store preopening expenses mainly include store rental costs during the start-up of new stores. Other expenses include lease exit costs, such as the write offs of prepaid store rental costs, deposits and leasehold improvements. Costs incurred in connection with the start-up and closure of stores are expensed as incurred. (v) Leases The Group enters into lease agreements to have leasing for self-operated stores, office spaces, and other corporate assets that the Group utilizes. The Group categorizes leases with contractual terms longer than twelve months as either operating or finance lease. However, the Group did not enter into finance leases for any of the periods presented. At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Group assess whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset. The rent under the majority of the current self-operated store lease agreements is generally payable in one of three ways: (i) fixed rent; (ii) the higher of a fixed base rent or a percentage of the store’s sales; or (iii) a percentage of the store’s sales. Right-of-use (“ROU”) assets represent the Group’s rights to use underlying assets for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v) Leases (continued) Operating lease ROU assets The right-of-use assets are initially measured at cost, which comprise the initial amounts of the lease liabilities adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received. Operating lease liabilities Lease liabilities are initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the discount rate for the leases. As most of the Group’s leases do not provide an implicit rate, the Group uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Lease payments included in the measurement of the lease liabilities comprise fixed lease payments, variable lease payments that depend on an index or a rate and any exercise price under a purchase option that the Group is reasonably certain to exercise. The Group generally has no renewal options and material residual value guarantees or material restrictive covenants for its leases. Lease liabilities are measured at amortized cost using the effective interest rate method. They are re-measured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Group assessment of option purchases, contract extensions or termination options. Asset retirement obligations The Group recognizes an asset and a lia |
PRINCIPAL RISKS
PRINCIPAL RISKS | 12 Months Ended |
Dec. 31, 2022 | |
PRINCIPAL RISKS | |
PRINCIPAL RISKS | 3. PRINCIPAL RISKS (a) Credit risk Financial instruments that potentially subject the Group to significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, accounts receivable and receivables from online payment platforms. As of December 31, 2021 and 2022, the aggregate amounts of cash and cash equivalents and restricted cash of RMB3,402.9 million and RMB3,316.8 millon (US$480.9 million), respectively, were held at major financial institutions located in the PRC and US$482.5 million and US$31.5 million (RMB217.6 million), respectively, were deposited with major financial institutions located outside the PRC. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. On May 1, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Group’s accounts, as its aggregate deposits are much higher than the compensation limit. However, the Group believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Group believes that those Chinese banks that hold the Group’s cash and cash equivalents and restricted cash are financially sound based on public available information. Accounts receivable and receivables from online payment platforms are unsecured and denominated in RMB. Accounts receivable represents the amounts that the Group has an unconditional right to consideration. Receivables from online payment platforms are derived when the third-party payment platforms, on behalf of the Company, collect the proceeds of sales made by the Group to its customers. They are exposed to credit risk. The risk is mitigated by credit evaluations the Group performs on the selected corporate customers and online payment platforms that are highly reputable, and the deposits from partners as guarantees. There has been no default of payments in history. (b) Business, customer, political, social and economic risks The Group participates in a dynamic and competitive industry and believes that changes in the following areas could have a material adverse effect on the Group’s future financial position, results of operations or cash flows: (i) Supplier risk — The Group’s operations rely on some suppliers for its major raw materials including coffee beans, dairy, sugar and syrup, pre-made products and coffee machine equipment. There can be no assurance that the Group will be able to secure the raw materials, pre-made products and coffee machine equipment supply from these suppliers. Any termination or suspension of the supply arrangements, any change in cooperation terms, or the deterioration of cooperation relationships with these suppliers may materially and adversely affect the Group’s results of operations. Suppliers accounting for 10% or more of total cost of purchased materials were: For the year ended December 31, Supplier 2020 2021 2022 RMB RMB RMB US$ A 196,886 * * * B 194,838 * * * * Accounts for less than 10% during the period. (ii) Customer risk – The success of the Group’s business going forward will rely in part on the Group’s ability to continue to obtain and expand business from existing customers while also attracting new customers. No customer accounted for 10% or more of the Group’s revenues for the years ended December 31, 2020, 2021 and 2022. 3. PRINCIPAL RISKS (CONTINUED) (b) Business, customer, political, social and economic risks (continued) (iii) Economic risk – The Group’s operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. (c) Foreign currency exchange rate risk From July 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. The appreciation/ (depreciation) of the US$ against RMB was approximately (6.3)%, (2.3)% and 8.2% for the years ended December 31, 2020, 2021 and 2022, respectively. The functional currency and the reporting currency of the Company, Luckin BVI and Luckin HK, Luckin Roasting and Luckin Roastery are the US$ and the RMB, respectively. The functional currency of the PRC subsidiaries and the VIE is the RMB. All of the Group’s revenues and costs are denominated in RMB, while a portion of cash and cash equivalents are denominated in U.S. dollars. Any significant revaluation of RMB may materially and adversely affect the Group’s cash flows, revenues, earnings and financial position in U.S. dollars. (d) Currency convertibility risk The Group transacts all of its business in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “ PBOC”). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. (e) Interest rate risk The Group is exposed to interest rate risk on its interest-bearing assets and liabilities. As part of its asset and liability risk management, the Group reviews and takes appropriate steps to manage its interest rate exposures on its interest-bearing assets and liabilities. The Group has not been exposed to material risks due to changes in market interest rates, and not used any derivative financial instruments to manage the interest risk exposure during the years presented. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | 4. ACCOUNTS RECEIVABLE, NET As of December 31, 2021 2022 RMB RMB US$ Receivables due from partners 8,688 20,235 2,934 Receivables due from corporate customers 30,682 38,738 5,616 Accounts receivable 39,370 58,973 8,550 Allowance for doubtful accounts (765) (191) (27) Accounts receivable, net 38,605 58,782 8,523 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
INVENTORIES | 5. INVENTORIES As of December 31, 2021 2022 RMB RMB US$ Raw materials 378,520 886,336 128,506 Packaging and other supplies 191,188 289,537 41,979 Pre-made food and beverage items 23,632 30,594 4,436 593,340 1,206,467 174,921 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET As of December 31, 2021 2022 RMB RMB US$ Deductible input VAT 636,923 747,067 108,315 Prepaid rental and deposits 234,885 169,485 24,573 Prepayments for materials and advertising fees 79,332 108,638 15,751 Interest receivables 4,360 204 30 Others 88,507 52,325 7,587 1,044,007 1,077,719 156,256 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: As of December 31, 2021 2022 RMB RMB US$ Store operating equipment 1,260,623 1,341,127 194,445 Leasehold improvements 873,449 1,126,562 163,336 Office equipment and others 105,721 177,259 25,700 Office buildings 798,657 811,666 117,681 Mechanical equipment 77,072 80,481 11,669 Construction in progress 15,054 53,103 7,698 3,130,576 3,590,198 520,529 Less: accumulated depreciation (1,244,914) (1,546,362) (224,201) Less: impairment (80,561) (176,458) (25,584) 1,805,101 1,867,378 270,744 7. PROPERTY AND EQUIPMENT, NET (CONTINUED) Depreciation expense was RMB483.3 million, RMB465.2 million and RMB391.7 million (US$56.8 million) for the years ended December 31, 2020, 2021 and 2022, respectively. In June 2018, the Group entered into a project cooperation agreement and a strategic cooperation agreement with Xiamen municipal government and UCAR Inc. (collectively as the “Tri-Party Agreement”), pursuant to which the Group acquired the new headquarters building under favorable pricing terms that came with commitments, including meeting certain requirements around tax contribution, operating performance and capital investments. As of the date of this annual report, the Group is in the process of obtaining the real property ownership certificate for its headquarters, and is currently in discussions with the Xiamen municipal government to agree on a solution, including to enter into a new cooperation agreement. Impairment for property and equipment was RMB80.6 million and RMB176.5 million (US$25.6 million) as of December 31, 2021 and 2022, respectively. It mainly consisted of: (1) RMB54.0 million and RMB167.1 million (US$24.2 million) for the asset group related to Luckin Coffee EXPRESS as of December 31, 2021 and 2022, respectively. (See Note 2(m)); (2) RMB26.5 million and RMB9.3 million (US$1.4 million) for the asset group related to store operating equipment and others as of December 31, 2021 and 2022, respectively (See Note 2(m)). During the year ended December 31, 2022, impairment for property and equipment of RMB220.7 million (US$32.0 million) was provided, which was mainly related to a full impairment for Luckin Coffee EXPRESS machines due to historical underperformance and updated strategy and business projections for Luckin Coffee EXPRESS machines determined by the management. Impairment provision of RMB107.8 million for Luckin Coffee EXPRESS and RMB 17.0 million for store operating equipment and others were written off. |
OTHER NON-CURRENT ASSETS, NET
OTHER NON-CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
OTHER NON-CURRENT ASSETS, NET | |
OTHER NON-CURRENT ASSETS, NET | 8. OTHER NON-CURRENT ASSETS, NET As of December 31, 2021 2022 RMB RMB US$ Long-term deposits (1) 117,345 181,477 26,312 Prepayments for equipment, net 16,866 119,009 17,254 Land use rights, net (2) 6,947 26,081 3,781 Prepaid leasehold improvements 22,768 1,177 171 163,926 327,744 47,518 (1) Long-term deposits mainly represent rental and renovation deposits over 1 year. (2) Land use rights represent payments to the local government authorities for use of lands for 50 years , net of accumulated amortization. As of December 31, 2021 and 2022, the carrying amounts of land use rights are RMB 6.9 million and RMB 26.1 million, respectively, which represent the result of their original values of RMB 7.3 million and RMB 26.7 million, netting off accumulated amortization of RMB 0.4 million and RMB 0.6 million, respectively. Land use rights are amortized on a straight-line basis with amortization expenses of RMB 0.14 million, RMB 0.15 million and RMB 0.2 million (US $0.03 million) for the years ended December 31, 2020, 2021 and 2022, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of December 31, 2021 2022 RMB RMB US$ Payroll and welfare payables 260,177 372,795 54,050 Payables for office supplies and utilities 149,557 238,466 34,574 Payables for delivery costs 138,833 210,779 30,560 Payables for professional service fees 249,520 132,430 19,201 Payables for the purchase of property and equipment 124,456 120,227 17,431 Other taxes payables 36,495 105,970 15,364 Payables for advertising expenditures 66,203 55,261 8,012 Others 296,765 139,497 20,226 1,322,006 1,375,425 199,418 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 10. (a) Related parties Names of related parties Relationship with the Company UCAR Inc. (“UCAR Inc.”) (1) An entity controlled by Mr. Charles Zhengyao Lu Beijing QWOM Digital Technology Co., Ltd. (“QWOM”) (1) An affiliate of Mr. Charles Zhengyao Lu Goumei (Zhejiang) Information Technology Co., Ltd (“Goumei”) An entity significantly influenced by the Company’s controlling shareholder (1) (b) Other than disclosed elsewhere, the Group had the following significant related party transactions for the years ended December 31, 2020, 2021 and 2022: 10. RELATED PARTY TRANSACTIONS (CONTINUED) For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Services received from: —Goumei — — 13,947 2,022 —QWOM 28,920 — — — —UCAR Inc. 6,334 — — — Total 35,254 — 13,947 2,022 Agreement of payment for leasehold improvement of sublet rental office to: —UCAR Inc. (1) 36,599 — — — Trust investments (2) —Xiamen Trust 590,000 — — — —Yunnan Trust 550,000 — — — Total 1,140,000 — — — (1) The Group has entered into an agreement with UCAR Inc. on July 1, 2020 to pay RMB 36.6 million to UCAR Inc. for the costs UCAR Inc. incurred as a result of the leasehold improvements of certain office space that UCAR Inc. sublet to the Group. In December 2021, UCAR Inc. initiated an arbitration proceeding against Luckin China in China International Economic and Trade Arbitration Commission, seeking to recover its costs of the leasehold improvements, which had been recorded in the Group’s consolidated statements of comprehensive (loss)/income. As UCAR Inc. is no longer a related party of the Company since the termination of Mr. Charles Zhengyao Lu from the Group on July 5, 2020, the balance of amounts due to UCAR Inc. was classified in accrued expenses and other current liabilities as of December 31, 2021. As of December 31, 2022, the arbitration proceeding was closed with the final judgment that the Group was obligated to pay approximately RMB 31.7 million for the leasehold improvement and related legal fees. The Group has made full payment and the ending balance of this liability was nil as of December 31, 2022. (2) Xiamen Trust and Yunnan Trust were designated to be used to purchase receivables relating to property leased to Borgward and to invest in equity interests of Yousheng Information, respectively, upon the entry of the trust instruments. On the basis of substance over form, management considers the two trust investments made by former management as related party transactions. (c) Other than disclosed elsewhere, the Group had the following significant amounts due to related party as of December 31, 2021 and 2022: As of December 31, 2021 2022 RMB RMB US$ Amounts due to: —Goumei — 3,932 570 Total — 3,932 570 |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 11. RESTRICTED NET ASSETS The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries and VIE. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries and VIE. In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely the general reserve fund, the enterprise expansion fund and the staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual net profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and the staff welfare and bonus fund are at the discretion of the board of directors for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The PRC subsidiaries were established as foreign-invested enterprises and therefore, are subject to the above mandated restrictions on distributable profits. For the years ended December 31, 2020, 2021 and 2022, profit appropriation to statutory reserve for the Group’s entities incorporated in the PRC was approximately RMB0.2 million, RMB2.0 million and RMB33.0 million (US$4.8 million), respectively. No appropriation to other reserve funds was made for any of the periods presented. Foreign exchange and other regulations in the PRC may further restrict the Company’s VIE from transferring funds to the Company in the form of dividends, loans and advances. Amounts restricted include paid-in capital and statutory reserves of the Company’s PRC subsidiaries and the VIE, as determined pursuant to PRC generally accepted accounting principles. As of December 31, 2021 and 2022, restricted net assets of the Company’s PRC subsidiaries and the VIE were RMB6,606.9 million and RMB7,647.7 million (US$1,108.8 million), respectively. |
CONVERTIBLE SENIOR NOTES
CONVERTIBLE SENIOR NOTES | 12 Months Ended |
Dec. 31, 2022 | |
CONVERTIBLE SENIOR NOTES | |
CONVERTIBLE SENIOR NOTES | 12. CONVERTIBLE SENIOR NOTES On January 14, 2020, the Company closed the offering of US$400 million in aggregate principal amount of convertible senior notes due 2025 (the “Primary Notes Offering”) and on January 17, 2020, the Company completed the issuance of an additional US$60 million in aggregate principal amount of convertible senior notes due 2025 (the “Additional Notes Offering” and the notes offered under the Primary Notes Offering and the Additional Notes Offering collectively, the “Notes”), both of which were with a stated annual interest rate of 0.75%. The Company received aggregate net proceeds of approximately US$449.7 million from the Primary Notes Offering and the Additional Notes Offering. The Notes did not have any embedded conversion option which shall be bifurcated and separately accounted for as a derivative under ASC 815, nor did they contain a cash conversion feature. The Company accounted for the Notes in accordance with ASC 470, as a single debt instrument. No beneficial conversion feature (the “BCF”) was recognized as the set conversion price for the Notes was greater than the fair value of the ADSs price at date of issuance. The Company early adopted ASU No. 2020-06 using a modified retrospective method of transition. In applying the modified retrospective method, the Company should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. Transactions that were settled (or expired) during prior reporting periods are unaffected. The convertible senior notes issued on January 14, 2020 automatically became immediately due and payable as a normal liability upon the appointment of the Joint Provisional Liquidators (the “JPLs”) on July 15, 2020 which constituted an event of default (“Event of Default”) pursuant to the indenture with respect to the Notes (see below). Therefore, the adoption of ASU 2020-06 does not have an impact on the Notes which has turned to a normal liability upon the default event before the beginning of the fiscal year 2021. Upon the occurrence of this Event of Default, 100% of the principal of, and accrued and unpaid interest on the Notes automatically became immediately due and payable. 12. CONVERTIBLE SENIOR NOTES (CONTINUED) Pursuant to the indenture with respect to the Notes, the Company was obligated to pay additional interest at a rate equal to 0.5% per annum of the principal amount of the Notes outstanding for: (1) each day during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of the Notes, as the Company failed to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable ((i) after giving effect to all applicable grace periods thereunder and (ii) other than reports on Form 6-K); and (2) for so long as the restrictive legend on the Notes has not been removed as of the 380th day after the last date of original issuance of the Notes. The Company accrued the additional interest payable in the amount of US$1.1 million and US$2.0 million and charged against the interest expenses accordingly during the years ended December 31, 2020 and 2021, respectively. Due to the Event of Default, 100% of the principal of the Notes in the amount of US$460 million, the unpaid interest in the amount of US$3.3 million and US$6.8 million, and the additional interest in the amount of US$1.1 million and US$3.1 million were due and accrued as of December 31, 2020 and 2021, respectively. The Notes balances included the principal, the unpaid interest and the additional interest were recorded as non-current liabilities with total amount of US$464.4 million as of December 31, 2020 and current liabilities with total amount of US$469.9 million as of December 31, 2021. The accrued interest, additional interest and the unamortized issuance cost of the Notes with total amount of US$15.4 million, US$5.5 million and US$0.3 million were charged against the interest expenses in the consolidation statements of comprehensive (loss)/income for the years ended December 31, 2020, 2021and 2022, respectively. Subsequently in January 2022, a restructuring of the Notes was substantially consummated (as disclosed below), pursuant to which, the Notes were cancelled and the Company issued instructions to distribute certain consideration to all eligible holders of the Notes. The Group derecognized the Notes and recognized newly issued instruments upon the effectiveness of the restructuring in January 2022 and issuance of additional ADSs in April 2022 pursuant to the top-up mechanism of the restructuring. Following the restructuring of the Notes, the originally non-current liabilities recorded under the Notes before was compromised. As of December 31, 2022, the balance of liabilities related to the Notes was nil. Restructuring of the Notes On March 16, 2021, the Company announced that it entered into a restructuring support agreement (the “RSA”) with holders of a majority of the Notes in respect of a restructuring of the Company’s financial obligations under the supervision of the JPLs. On September 21, 2021, the Company announced that, in accordance with the terms of the RSA, it had filed a petition and summons for directions in the Cayman Court regarding a scheme of arrangement in respect of the Notes (the “Scheme”), which is a court approved arrangement in the Cayman Islands pursuant to the Companies Act. On December 1, 2021, the Company announced that at a meeting regarding the Scheme held on November 30, 2021, creditors representing approximately 97.7% in aggregate outstanding principal amount of the Notes voted unanimously to approve the Scheme and that accordingly, the Scheme was approved by the requisite majority of creditors. On December 14, 2021, the Company announced that the Cayman Court had sanctioned the Scheme. Effectiveness of the Restructuring On January 31, 2022, the Company announced that the Restructuring had been substantially consummated and the effective date of the Restructuring contemplated in the Scheme had occurred on January 28, 2022 (the “Restructuring Effective Date”). On January 28, 2022, the Notes were cancelled, and, in aggregate, the Company has issued consideration (collectively, the “Scheme Consideration”) totaling US$245.5 million of cash, US$109.9 million of 9.00% Series B Senior Secured Notes due 2027 (the “New Notes”) and 9,527,601 ADSs representing 76,220,808 class A ordinary shares, which included 291,699 ADSs issued on April 4, 2022 pursuant to the top-up mechanism under the Scheme, of which 25,004 ADSs were not claimed by creditors and therefore 200,032 Class A Ordinary Shares underlying such unclaimed ADSs were returned to the Company. The New Notes represent the Company’s only offshore debt securities. On January 31, 2022, the Company announced that (i) the Restructuring Effective Date occurred on January 28, 2022; (ii) on the Restructuring Effective Date (a) the Notes were cancelled; and (b) the Company issued the Scheme Consideration to all eligible Scheme creditors and the Holding Period Trustee (as applicable), in accordance with the terms of the Scheme. 12. CONVERTIBLE SENIOR NOTES (CONTINUED) In August 2022, the Group fully redeemed the New Notes. The aggregate redemption price of the New Notes was US$115.6 million, which constitutes the aggregate principal amount outstanding plus the aggregate accrued interest. The aggregate redemption price was paid from the Group’s available offshore cash balance. Following the redemption of the New Notes, US$18.3 million (approximately RMB124.1 million) gain from extinguishment of Series B Senior Secured Notes was recognized in the consolidateds statement of comprehensive income/(loss). According to ASC815, several options were identified and shall be bifurcated from the New Notes and separately accounted for as a derivative with fair value changes to be charged in the consolidated statements of comprehensive income/(loss). Derivative asset bifurcated from the New Notes was US$5.4 million on the date of initial recognition, and marked to fair value of US$4.5 million on the derecognition date, with the fair value loss of approximately US$0.9 million (RMB 6.4 million) recorded in “Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes”. The derivative was derecognized as the Group paid off all of the outstanding amounts of the New Notes in August 2022. |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2022 | |
ORDINARY SHARES | |
ORDINARY SHARES | 13. ORDINARY SHARES Prior to the completion of the Company’s IPO, the outstanding ordinary shares consisted of Ordinary Shares and Angel Shares. Upon the completion of the Company’s IPO, 750,000 Ordinary Shares, 1,428,750 Angel Shares, 544,688 Series A Preferred Shares, 279,152 Series B Preferred Shares and 173,182 Series B-1 Preferred Shares were automatically converted into 3,175,772 Class B ordinary shares at the conversion ratio of 1:1 and were divided into 1,587,886,000 shares at the par value of US$0.000002 per share, after the 1-to-500 share split. 15,211 Series B-1 Preferred Shares were automatically converted into 15,211 Class A ordinary shares at the conversion ratio of 1:1 and were divided into 7,605,500 shares at the par value of US$0.000002 per share, after the 1-to-500 share split. The Company issued an aggregate 33,000,000 ADSs through the IPO, representing 264,000,000 Class A ordinary shares for total proceeds net of underwriting discounts and commissions of US$527.7 million (RMB3,640.9 million). The Company also issued 23,529,412 Class A ordinary shares to Louis Dreyfus Company B.V. at the price of US$2.125 per share, through private placement concurrent with the IPO for total proceeds of US$50 million (RMB345.0 million). In addition, the underwriters exercised their over-allotment option on June 14, 2019 and June 18, 2019. As a result, the Company newly issued an aggregate of 4,950,000 ADSs, representing 39,600,000 Class A ordinary shares for total proceeds net of underwriting discounts and commissions of US$79.5 million (RMB548.0 million). In November 2019, 310,198,928 Class B ordinary shares were converted into Class A ordinary share at the conversion ratio of 1:1. In December 2019, the Company issued 19,753,888 Class A ordinary shares to The Bank of New York Mellon, the depositary of the Company on the vest of share options to the eligible employees. On January 9, 2020, the Company issued an aggregate 10,350,000 ADSs through the follow-on offering, representing 82,800,000 Class A ordinary shares (reflecting the full exercise of the over-allotment option by the underwriters to purchase an additional 4,950,000 ADSs) at a public offering price of US$42.00 per ADS for a total for total proceeds net of underwriting discounts and commissions of US$419.5 million (RMB2,888.5 million). In 2020, 1,132,908,520 Class B ordinary shares were converted into Class A ordinary share at the conversion ratio of 1:1. In 2021, the Company issued 70,061,136 Class A ordinary shares for the vested options and restricted share units to the eligible employees. In 2022, the Company issued 76,220,808 Class A ordinary share following the restructuring of the Notes and 53,123,768 Class A ordinary shares for the vested options and restricted share units to the eligible employees, respectively. The outstanding ordinary shares as of December 31, 2022 consisted of Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote; and each Class B ordinary share is entitled to ten votes and is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. |
SENIOR PREFERRED SHARES
SENIOR PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2022 | |
SENIOR PREFERRED SHARES | |
SENIOR PREFERRED SHARES | 14. Senior Preferred Shares On April 15, 2021, the Company entered into an investment agreement (the “Investment Agreement”) with an affiliate of Centurium Capital, as the lead investor, and Joy Capital to raise funds through a private placement, totaling US$240 million from Centurium Capital and US$10 million from Joy Capital, of convertible senior preferred shares of the Company (“Senior Preferred Share(s)”) (collectively, the “Transactions”). On November 30, 2021, the Company issued 295,384,615 Senior Preferred Shares to the affiliate of Centurium Capital with the proceeds of US$240 million (RMB1,527.4 million) at a subscription price equal to US$0.8125 per share under the Investment Agreement. On January 7, 2022, the Company issued 12,307,692 Senior Preferred Shares to Joy Capital with the proceeds of US$10 million (RMB63.7 millin) at a subscription price equal to US$0.8125 per share under the Investment Agreement. The Senior Preferred Shares are with rights, preferences and privileges pursuant to the certificate of designation, some of which are summarized below: Liquidation Preferences In the event of any Liquidation (as defined below), the holders of Senior Preferred Shares then issued and outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its shareholders before any distribution or payment out of the assets of the Company shall be made to the holders of junior securities of the Company including ordinary shares by reason of their ownership thereof, an amount in cash equal to the greater of (a) 100% of the original aggregate subscription price of the Senior Preferred Shares held by such holders, plus any declared but unpaid dividends on all such Senior Preferred Shares and (b) the aggregate value that such holders of Senior Preferred Shares would have received had all holders of Senior Preferred Shares, immediately prior to such liquidation, converted all Senior Preferred Shares then issued and outstanding (together with any declared but unpaid dividends thereon) into the Class A ordinary shares or the ADSs (the “Conversion Securities”) at the applicable conversion price. “Liquidation” is defined as the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary. If there shall occur any reclassification, statutory exchange, reorganization, recapitalization, consolidation or merger involving the Company with or into another person (excluding a merger solely for the purpose of changing the Company’s jurisdiction of incorporation), then any distribution following such event(s) with respect to the Senior Preferred Shares shall be subject to Liquidation preference described in the preceding paragraph. Dividend Ranking With respect to payment of dividends or distribution of assets upon any Liquidation, all the Senior Preferred Shares shall rank senior to all ordinary shares in issue from time to time. Voting Rights Each holder of issued and outstanding Senior Preferred Shares shall be entitled to vote with holders of issued and outstanding Class A ordinary shares, voting together as a single class, with respect to any and all matters presented to the shareholders, and such holder shall be entitled to a number of votes equal to the number of Class A ordinary shares into which such holder’s Senior Preferred Shares are convertible. Conversion Rights Each Senior Preferred Share is convertible, at the option of its holder at any time after the original issue date, into that number of Conversion Securities determined by dividing (i) the sum of the original issue price, US$0.8125 per Senior Preferred Share, plus any declared but unpaid dividends on each such Senior Preferred Share, by (ii) the conversion price in effect immediately prior to such conversion, which shall initially be the original issue price, US$0.8125 per Senior Preferred Share, and is subject to adjustment from time to time based on a variety of events pursuant to the Certificate of Designation including any subsequent equity financing, regulatory event, etc. The initial conversion ratio of Senior Preferred Shares to Convertible Securities shall be 1:1. 14. Accounting of Senior Preferred Shares The Group classified the Senior Preferred Shares as mezzanine equity in the consolidated balance sheets because the Senior Preferred Shares are considered redeemable in the event of any Liquidation, including certain liquidation events outside of the Company’s control (the “Involuntary Liquidation Event”) since the holders of Senior Preferred Shares shall be entitled to be paid out of an amount in cash according to liquidation preference. Therefore, the Group classifies the Senior Preferred Shares as mezzanine equity outside of permanent equity in accordance with SEC’s Accounting Series Release 268, Presentation in Financial Statements of Redeemable Preferred Stocks (ASR 268) and ASC 480 “Distinguishing Liabilities from Equity”. The Group early adopted ASU No. 2020-06 to eliminate the analysis requirement of separation of beneficial conversion and cash conversion features from convertible instruments. The mezzanine equity was initially measured based on its fair value at date of issue. At each reporting date, the Group evaluates the probability of occurrence of any Involuntary Liquidation Event that entitles the holders of the Senior Preferred Shares to be paid an amount in cash (the “redemption value”) subject to liquidation preference. If it is probable that an Involuntary Liquidation Event will occur and Senior Preferred Shares will become redeemable, the Group recognizes changes in carrying value immediately as the Involuntary Liquidation Event occurs and adjusts the carrying value of the instrument to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of Senior Preferred Shares shall be affected by charges against retained earnings, or additional paid-in capital in the absence of retained earnings. Accordingly, if the Senior Preferred Shares are not currently redeemable and it is not probable that the Senior Preferred Shares will become redeemable, subsequent adjustment of the amount presented in temporary equity is unnecessary. As of December 31, 2022, the Company evaluated that the Senior Preferred Shares were not currently redeemable and it is not probable that the Senior Preferred Shares would become redeemable as there was no noted indicator of any Involuntary Liquidation Event, and recorded the Senior Preferred Shares as carrying value accordingly. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
SHARE BASED COMPENSATION | |
SHARE BASED COMPENSATION | 15. SHARE BASED COMPENSATION For the years ended December 31, 2020, 2021 and 2022, total share-based compensation expenses recognized were RMB22.0 million, RMB302.7 million and RMB398.0 million, respectively. Share-based compensation expenses were allocated in operating expenses by function as follows: For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Sales and marketing expenses — 9,185 17,452 2,530 General and administrative expenses 22,029 293,549 380,556 55,175 22,029 302,734 398,008 57,705 2019 Equity Incentive Plan On January 18, 2019, the shareholders and Board of Directors of the Company approved the 2019 share option plan (the “2019 Plan”), which is administrated by the Board of Directors and has a term of 10 years from the date of adoption. Under the 2019 Plan, the Company issued approximately 79,015,500 options to purchase the Ordinary Shares of the Company, after the 1-to-500 share split, to its eligible employees, officers, directors or any other individual as determined by the board of directors. The purpose of the 2019 Plan is to attract and retain exceptionally qualified individuals and to motivate them to exert their best efforts on behalf of the Group by providing incentives through granting awards. 15. SHARE BASED COMPENSATION (CONTINUED) The options granted under the 2019 Plan have a contractual term of 10 years. The options granted to the employees are to be vested over four years. For options granted in 2019, the vesting schedule of four years is subject to four equal annual rate of 25%, with.the first 25% of the share options vesting on December 31, 2019, which is the first vesting date and 25% vesting on each anniversary A summary of the employee equity award activity under the 2019 Plan is stated below: Weighted- average Weighted- remaining Aggregate Number of average contractual intrinsic options exercise price term Value US$ Years US$ Outstanding as of December 31, 2019 72,529,960 0.0002 9.05 Granted 25,917,240 0.0002 — Exercised — 0.0002 — — Forfeit (38,418,992) 0.0002 — Outstanding as of December 31, 2020 60,028,208 0.0002 8.83 Granted 2,795,600 0.0002 — Exercised — 0.0002 — — Forfeit (2,370,736) 0.0002 — Outstanding as of December 31, 2021 60,453,072 0.0002 7.91 Granted — — Exercised (32,008,561) 0.0002 88,097 Forfeit — 0.0002 Outstanding as of December 31, 2022 28,444,511 0.0002 7.24 Fully vested and expected to vest as of December 31, 2022 66,938,584 0.0002 6.83 184,235 Exercisable as of December 31, 2022 25,293,687 0.0002 7.16 69,616 The weighted average grant date fair value of options granted during the years ended December 31, 2020 and 2021 was US$0.63 and US$1.07 per share, respectively. There were no options granted in the year ended December 31, 2022. As of December 31, 2022, there was US$0.8 million of unrecognized share-based compensation expense for share options granted, which are expected to be recognized over a weighted average period of 1.2 years. The aggregated intrinsic value for share options exercised during the year ended December 31, 2022 and for share options fully vested and expected to vest and exercisable as of December 31, 2022 was calculated based on the closing price of the Company’s Ordinary Shares on the last trading day in 2022 of US$22.02 per ADS (equivalent to US$2.75 per Ordinary Share). 15. SHARE BASED COMPENSATION (CONTINUED) 2021 Equity Incentive Plan On January 25, 2021, the Company announced the adoption of a 2021 Equity Incentive Plan (the “2021 Plan”) to retain, attract and motivate employees and directors by providing them with equity incentives. The 2021 Plan has a ten-year term, and has a maximum number of 222,769,232 Class A ordinary shares, represented by 27,846,154 American Depositary Shares, available for issuance pursuant to all awards under the 2021 Plan. The Company may grant options, restricted shares, restricted share units and other form of awards pursuant to the 2021 Plan. A summary of the employee equity award activity under the 2021 Plan is stated below: Weighted-Average Grant-Date Number Fair Value of RSUs US$ Unvested as of December 31, 2020 — — Granted 40,842,760 1.09 Vested (31,943,824) 1.10 Forfeited or cancelled (6,368,184) 1.06 Unvested as of December 31, 2021 2,530,752 1.09 Granted 45,722,392 1.26 Vested (43,329,376) 1.26 Forfeited or cancelled (739,472) 1.30 Unvested as of December 31, 2022 4,184,296 1.23 The weighted average grant-date fair value of the restricted share units granted during the year ended December 31, 2021 and 2022 was US$1.09 and, US$1.23 per share. As of December 31, 2022, there was US$2.9 million of unrecognized share-based compensation expense related to restricted share units, which are expected to be recognized over a weighted average period of 0.62 years. Fair value of employee share options The fair value of share options was determined using the binomial option valuation model, with the assistance from an independent third-party appraiser. The binomial model requires the input of highly subjective assumptions, including the expected share price volatility and the suboptimal early exercise factor. For expected volatilities, the Company has made reference to historical volatilities of several comparable companies. The suboptimal early exercise factor was estimated based on the Company’s expectation of exercise behavior of the grantees. The dividend yield is estimated based on the Company’s expected dividend policy over the expected term of the options. The risk-free rate for periods within the contractual lives of the options is based on the market yield of U.S. Treasury Bonds in effect at the time of grant. The exercised multiple is estimated based on the changes in intrinsic value of the options and the likelihood of early exercises by employees. The estimated fair value of the ordinary shares, at the option grant dates, were determined with the assistance from an independent third-party appraiser. 15. SHARE BASED COMPENSATION (CONTINUED) The assumptions used to estimate the fair value of the share options granted to employees were as follows: 2020 2021 Risk-free interest rate 0.82 % 1.04 % Expected volatility 74.37 % 74.49 % Expected dividend yield 0.00 % 0.00 % Exercise multiple 2.20 2.20 Expected post-vesting forfeiture rate 0.00 % 0.00 % Fair value of share option US$ 0.63 US$ 1.07 |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2022 | |
TAXATION | |
TAXATION | 16. TAXATION Enterprise income tax (“EIT”) Cayman Islands The Company is incorporated in the Cayman Islands and conducts its primary business operations through the subsidiaries and VIE in the PRC. Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain arising in Cayman Islands. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Luckin BVI is incorporated in the British Virgin Islands and conducts its primary business operations through the subsidiaries and VIE in the PRC. Under the current laws of the British Virgin Islands, Luckin BVI is not subject to tax on income or capital gains. Additionally, upon payments of dividends by the Company to its shareholders, no BVI withholding tax will be imposed. Hong Kong Luckin HK, Luckin Roasting and Luckin Roastery are incorporated in Hong Kong and are subject to Hong Kong profits tax rate. Under the two-tiered profits tax rates regime, the first 2,000 Hong Kong Dollar (“HKD”) of profits of the qualifying group entity will be taxed at 8.25%, and profits above HKD2,000 will be taxed at 16.5%. Additionally, upon payments of dividends by the Company to its shareholders, no HK withholding tax will be imposed. PRC Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25% . In January 2019, the State Administration of Taxation provides a preferential tax rate of 20% and an exemption ranged from 50% to 75% in the taxable profits for entities qualified as small-size enterprises (the exemption range has been changed to from 50% to 87.5% for the period from January 1, 2021 to December 31, 2022, then the exemption range has been changed to from 75% to 87.5% for the period from January 1, 2022 to December 31, 2024). The policy is effective for the period from January 1, 2019 to December 31, 2024. Dividends, interests, rent or royalties payable by the Company’s PRC subsidiaries, to non-PRC resident enterprises, and proceeds from any such non-resident enterprise investor’s disposition of assets (after deducting the net value of such assets) shall be subject to 10% withholding tax, unless the respective non-PRC resident enterprise’s jurisdiction of incorporation has a tax treaty or arrangements with China that provides for a reduced withholding tax rate or an exemption from withholding tax. 16. TAXATION (CONTINUED) PRC (continued) The components of (loss)/income before tax are as follows: For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ (Loss)/income before tax Non-PRC (2,937,591) 617,090 (331,744) (48,098) PRC (3,303,200) (102,298) 1,458,494 211,462 Total (loss)/income before tax (6,240,791) 514,792 1,126,750 163,364 Income tax expenses/(benefits) Current income tax expenses 919 360 144,032 20,882 Deferred tax benefits (638,720) (64,221) 494,472 71,692 Income tax (benefits)/expenses (637,801) (63,861) 638,504 92,574 The reconciliation of tax computed by applying the statutory income tax rate of 25% for the years ended December 31, 2020, 2021 and 2022 to income tax expense were as follows: For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ (Loss)/income before income taxes (6,240,791) 514,792 1,126,750 163,364 Income tax (benefits)/expenses computed at PRC statutory income tax rate of 25% (1,560,198) 128,698 281,688 40,841 Additional deduction for R&D expenses (9,108) (11,095) (13,516) (1,960) Non-deductible share-based compensation expenses 5,507 58,581 80,440 11,663 Non-deductible expenses and non-taxable income 24,495 9,415 (9,967) (1,445) Defer tax assets writeoff related to closure entities — — 8,266 1,198 Recognition of uncertain tax benefits — — 29,325 4,252 Change of valuation allowance 164,850 60,352 220,774 32,009 Effect of preferential tax rate 9,395 (158,362) (18,626) (2,701) Effect of International tax rates 727,446 (155,242) 76,378 11,074 Prior-year tax filing difference (188) 3,792 (16,258) (2,357) Income tax (benefits)/expenses (637,801) (63,861) 638,504 92,574 16. TAXATION (CONTINUED) Deferred Taxes The significant components of deferred taxes were as follows: As of December 31, 2021 2022 RMB RMB US$ Deferred tax assets Donation 4,075 1,264 183 Accrued expenses 31,843 29,867 4,330 Accrued welfare 14,538 29,662 4,301 Impairment loss of long-lived assets and investments 303,168 327,764 47,521 Allowance for doubtful accounts 22,577 5,398 783 Tax losses 1,441,091 1,149,639 166,682 Valuation allowance (1,114,351) (1,335,125) (193,575) Total deferred tax assets, net 702,941 208,469 30,225 Realization of the net deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate future taxable income. The Group evaluates the potential realization of deferred tax assets on an entity-by-entity basis. As of December 31, 2021 and 2022, the Company and most of its subsidiaries and VIE were in cumulative loss position, except some new entities with immaterial taxable income. The valuation allowance of RMB1,114.4 million and RMB1,335.1 million (US$193.6 million) as of December 31, 2021 and 2022 was primarily provided for the deferred income tax assets of certain subsidiaries, which were not estimated to generate enough future taxable income to utilize its some portion or all of the benefits of the deferred tax assets. Valuation allowances were provided against deferred tax assets in entities where it was determined it was more likely than not that some portion or all of the benefits of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilizable. In making such determination, the Group evaluates a variety of factors including the Group’s operating history, accumulated deficit, existence of taxable temporary differences and reversal periods. As of December 31, 2022, the Group had accumulated tax losses of RMB4,706.3 million (US$682.3 million) derived from entities in the mainland PRC, which can be carried forward per tax regulation to offset future taxable income. The PRC taxable losses will expire from 2023 to 2027 if not utilized. Unrecognized Tax Position As of December 31, 2020, 2021 and 2022, unrecognized tax benefit were RMB54.0 million, RMB55.0 million and RMB80.9 million (US$11.7 million), among which, RMB54.7 million (US$7.9 million) of unrecognized tax benefits as of December 31, 2022 would impact the effective tax rate if ultimately recognized after considering valuation allowance. The unrecognized tax benefits were primarily related to deemed sales of free coupons to customers. The unrecognized tax benefits represent a reduction of the deferred income tax assets for tax loss carry forwards since the uncertain tax position would reduce the tax loss carry forwards under the tax law and the estimated income tax expenses the Group would be required to pay should its revenue for tax purposes be recognized in accordance with current PRC tax laws and regulations. The amounts of unrecognized tax benefits will change in the next 12 months, pending clarification of current tax law or audit by the tax authorities, however, an estimate of the range of the possible change cannot be made at this time. 16. TAXATION (CONTINUED) Unrecognized Tax Position (continued) A roll-forward of unrecognized tax benefits is as follows: As of December 31, 2021 2022 RMB RMB US$ Balance at beginning of year 53,961 54,956 7,968 Additions based on tax positions related to the current year 995 25,974 3,766 Balance at end of year 54,956 80,930 11,734 The Company’s tax returns continue to remain effectively subject to examination by China tax authorities for the years 2018 through 2022. |
NET (LOSS)_INCOME PER SHARE
NET (LOSS)/INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
NET (LOSS)/INCOME PER SHARE | |
NET (LOSS)/INCOME PER SHARE | 17. NET (LOSS)/INCOME PER SHARE Basic and diluted net (loss)/income per share for the years presented were calculated as follows: For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Numerator: Net (loss)/income (5,602,990) 578,653 488,246 70,790 Less: Net (loss)/income attributable to non-controlling interests (13,885) 108 — — Net (loss)/income attributable to ordinary shareholders (5,589,105) 578,545 488,246 70,790 Denominator: Weighted average number of shares – basic 2,021,919,061 2,051,263,478 2,473,078,408 2,473,078,408 Adjustments for dilutive options and RSUs — 84,580,779 43,195,219 43,195,219 Weighted average number of shares – diluted 2,021,919,061 2,135,844,257 2,516,273,627 2,516,273,627 Basic net (loss)/income per share attributable to ordinary shareholders (2.76) 0.29 0.20 0.03 Diluted net (loss)/income per share attributable to ordinary shareholders (2.76) 0.27 0.19 0.03 Generally, basic net (loss)/income per share is computed using the weighted average number of ordinary shares and Senior Preferred Shares outstanding during the respective year. Senior Preferred Shares were considered as participating securities under ASC 260, therefore, they are included in the computation of basis shares. Diluted net (loss)/income per share is computed using the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the respective year. The potentially dilutive ordinary shares included RSUs and options to purchase ordinary shares of 54,785,705, 84,580,779 and 43,195,219 for the years ended December 31, 2020, 2021 and 2022 on a weighted average basis, respectively. They were not included in the calculation of diluted net loss per share in 2020 presented where their inclusion would be anti-dilutive. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | 18. LEASES The Group enters into lease agreements to have leasing for self-operated stores, office spaces, and other corporate assets that the Group utilizes. Supplemental balance sheet information related to operating lease was as follows: As of December 31, 2021 2022 RMB RMB US$ Right-of-use assets 1,237,734 2,003,997 290,552 Operating lease liabilities – current 598,062 880,873 127,715 Operating lease liabilities – non-current 575,060 1,024,274 148,506 Total operating lease liabilities 1,173,122 1,905,147 276,221 The weighted average remaining lease terms and discount rates for the operating lease as of December 31, 2022 were as follows: Remaining lease term and discount rate: Weighted average remaining lease term (years) 1.47 Weighted average discount rate 4.358 % During the years ended December 31, 2021 and 2022, the Group incurred total operating lease expenses of RMB 672.9 million and RMB 854.6 million (US$ 123.9 million), respectively, and operating lease payment of RMB 637.2 million and RMB 875.7 million (US $127.0 million), respectively. As of December 31, 2022, the Group has entered into operating leases that have not yet commenced of RMB45.1 million (US$6.5 million), primarily related to store leases. These leases will commence between fiscal year 2023 and fiscal year 2028 with lease terms ranging from 0.5 month to 62 months. Future minimum lease payments under non-cancellable operating leases with initial terms in excess of one year consisted of the following as of December 31, 2022: RMB US$ 2023 880,873 127,715 2024 606,689 87,962 2025 310,270 44,985 2026 149,595 21,689 2027 and thereafter 80,962 11,738 Less: interest (123,242) (17,868) Total 1,905,147 276,221 |
PROVISION FOR SEC SETTLEMENT
PROVISION FOR SEC SETTLEMENT | 12 Months Ended |
Dec. 31, 2022 | |
PROVISION FOR SEC SETTLEMENT. | |
PROVISION FOR SEC SETTLEMENT | 19. PROVISION FOR SEC SETTLEMENT On December 16, 2020, the SEC announced its settlement with the Company (“SEC Settlement”) regarding the Fabricated Transactions. Under the terms of the settlement, the Group, without admitting or denying the allegations of the SEC, consented to the entry of an order (i) requiring it to pay a civil money penalty in the amount of US$180 million to the SEC, which shall be offset by any cash payments made by the Group to its security holders pursuant to any schemes of arrangement approved by the Cayman Court in the proceeding for the provisional liquidation and restructuring, provided that such payments are made within 18 months subject to extensions granted by the SEC up to 24 months and the final distribution plan is not reasonably objectionable to the SEC staff, and (ii) permanently enjoining it from violations of certain federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934. On February 4, 2021, the United States District Court for the Southern District of New York issued a judgment (the “Judgement”) approving the SEC Settlement. On March 16, 2021, the Company announced that it entered into a restructuring support agreement with holders of a majority of the Notes. However, the Company was unable to predict with certainty the total amount of cash that would be paid to security holders according to the Cayman Court proceeding within the timeframe stipulated in the SEC Settlement and whether any ultimately approved distribution plan would be subject to any successful reasonable objections by the SEC Staff as contemplated by the SEC Settlement. Consequently, as of December 31, 2020, the full amount of the SEC penalty in the amount of US$180 million (RMB1,174.5 million) was recorded as non-current liability. On December 17, 2021, the Scheme in relation to the Restructuring of the Notes became effective, pursuant to which the Company’s best estimate was that the final total cash payment to the bond holders would well exceed US$180 million. Also, during December 2021, the Company had informal communications with SEC on predicted distribution plan and the proposed proof of cash payment to Scheme creditors. The SEC did not state any objection and agreed to the method of payment confirmation proposed by the Company. Therefore, based on all available conditions as of December 31, 2021, it was very probable that the SEC staff would be satisfied that the cash payment to the bond holders to be made in January 2022, estimated at the time to exceed US $180 million, would fully offset the SEC civil penalty as stated in the Judgement. Accordingly, the Company fully reversed the provision for the SEC Settlement during the year ended December 31, 2021 and no outstanding balance of penalty was existed as of December 31, 2021. On February 3, 2022, the Company received a Notice of Satisfaction of Penalty Provision of the Final Judgment (the “Satisfaction Notice”) on SEC Penalty of US $ 180 million from SEC who acknowledged the Company that the final distribution plan was not objectionable to the SEC, and proof of cash payments of at least US $180 million made by the Company and distributed to its security holders has been provided to the Commission. Accordingly, the Company has satisfied the penalty provisions of the Final Judgment and no outstanding balance of penalty shall be paid to SEC as of December 31, 2022. For the years ended December 31, 2020, 2021 and 2022, provision for SEC settlement of RMB1,177.1 million, negative RMB1,146.5 million and nil were charge in the Group’s consolidated statements of comprehensive income/(loss), respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES. | 20. COMMITMENTS AND CONTINGENCIES (a) Capital commitments The Group’s capital commitments primarily relate to investing activities contracted but not yet reflected in the financial statements. 20. COMMITMENTS AND CONTINGENCIES (CONTINUED) (a) Capital commitments (continued) The following table sets forth the Group’s contractual obligations and commercial commitments as of December 31, 2022: Payment Due by Period Less than More than Total 1 year 2–3 years 4–5 years 5 years (in thousands of RMB) Factory and office building construction commitments 156,195 138,744 17,451 — — Fixed assets purchasing commitment 159,882 159,882 — — — Total 316,077 298,626 17,451 — — Other than those shown above, the Group did not have any significant capital commitments as of December 31, 2022. (b) Legal proceedings From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. The Group assesses these contingent liabilities, which inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Group or unasserted claims that may result in legal proceedings, the Group, in consultation with its legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of the reasonably possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed since they do not involve guarantees. The Group made adequate disclose of contingency loss of which an unfavorable outcome of legal proceeding is determined to be reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated. U.S. Department of Justice Investigation (the “DOJ”) The Group was contacted by the U.S. Attorney’s Office for the Southern District of New York (“SDNY”) following the Group’s public disclosure on April 2, 2020 relating to the Fabricated Transactions. The SDNY indicated that it had commenced an investigation into the Fabricated Transactions. The Group apprised the SDNY of the relevant Chinese laws that restrict the Group from providing evidence and information without prior approval from the Chinese Ministry of Justice, and is committed to cooperating with the DOJ to the extent permissible under the applicable PRC laws. The Group cannot predict the outcome or the duration of this investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Group arising out of this investigation. No liability or loss was recognized as of December 31, 2021 and 2022 and for the year then ended. Ministry of Finance Investigation On May 6, 2020, the Ministry of Finance of the PRC initiated its investigation into the accounting information of two entities of the Group. On July 31, 2020, the Ministry of Finance of the PRC announced its investigation has been substantially completed. The Ministry of Finance of the PRC further announced that they would impose and publish its relevant penalty decision to the Group in due course. The Group cannot predict the outcome or the duration of this investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Group arising out of this investigation. No liability or loss was recognized as of December 31, 2021 and 2022 and for the year then ended. 20. COMMITMENTS AND CONTINGENCIES (CONTINUED) (b) Legal proceedings (continued) U.S. Class Actions On February 13, 2020, April 2, 2020, April 8, 2020, and April 10, 2020, putative securities class action complaints were filed in the United States District Court for the Eastern and Southern Districts of New York against the Company, certain of its current and former directors and executives, and the underwriters of the Company’s initial public offering and follow-on offering. These lawsuits were consolidated in the Southern District of New York, and is captioned In re Luckin Coffee Inc. Securities Litigation 20. COMMITMENTS AND CONTINGENCIES (CONTINUED) (b) Legal proceedings (continued) On May 26, 2020, June 18, 2020, and June 23, 2020, putative securities class actions complaints were filed in the Supreme Court of the State of New York, County of New York, against the Company, certain of its current and former directors and executives, and the underwriters of the Company’s initial public offering and follow-on offering. The lawsuits variously alleged that the Company made false and misleading statements and material omissions in its prior registration statements and other public statements by failing to disclose the Fabricated Transactions disclosed in the Company’s April 2, 2020 announcement, and the impact of those Fabricated Transactions on the Company’s financial statements, in violation of Sections 11, 12 and 15 of the Securities Act. On October 16, 2020, the court appointed co-lead plaintiffs and consolidated the lawsuits under the caption In re Luckin Coffee Inc. Securities Litigation U.S. “Opt Out” Claims The Company had also been named as a defendant in the following opt-out lawsuits alleging violations of U.S. securities laws: Kingstown Capital Management. v. Luckin Coffee et al. Lai Ye v. Luckin Coffee et al. Nuveen Winslow Large-Cap Growth ESG Fund et al. v. Luckin Coffee et al. Bequai v. Luckin Coffee Certain individuals and institutions claiming to be ADS investors have made informal demands for the company to pay alleged losses resulting from the Fabricated Transactions disclosed on April 2, 2020, but have not commenced legal proceedings. In the aggregate, the investors that have made informal demands have asserted losses in excess of $325 million. 20. COMMITMENTS AND CONTINGENCIES (CONTINUED) (b) Legal proceedings (continued) U.S. Derivative Action The Company was a nominal defendant in a consolidated putative derivative action filed in the Supreme Court of the State of New York captioned In re Luckin Coffee Inc. Derivative Litigation, 652800/2020 (N.Y. Sup. Ct.). The Federal Class Settlement includes releases of derivative claims on behalf of members of the Federal Class. On November 8, 2022, the parties filed a stipulation of discontinuance with prejudice to conclude the derivative litigation, which the court so-ordered on November 9, 2022. Canadian Class Action On or about April 14, 2020, an Application for Authorization to Bring a Class Action was filed against Luckin Coffee Inc. by Martin Banoon (the “Applicant”) in the Superior Court of Quebec file no. 500-06-001058-201. The Applicant sought authorization to institute a class action on behalf of the proposed class members comprised of holders of Luckin Coffee’s ADS, as a result of Fabricated Transactions. On August 9, 2022, the Superior Court of Quebec entered judgment approving the Applicant’s request to discontinue the proceeding. Cayman Bondholder Action In May 2020, a group of bondholders commenced proceedings in the Cayman Court seeking to recover approximately US$155,000 of losses from the Company. By summons dated May 1, 2020, the bondholders applied ex parte for a worldwide freezing order (the “WFO”) against the Company, which order was granted by the Cayman Court on May 8, 2020. On July 1, 2020 to July 3, 2020 the Cayman Court heard the Company’s application to set aside the WFO. By order dated July 22, 2020, the Cayman Court discharged the WFO. The litigation was automatically stayed on the appointment of the JPLs on July 15, 2020 by operation of section 97 of the Companies Act. On August 12, 2020 the Cayman Court further ordered that the bondholders could seek to appeal the discharge order until 14 days after the discharge of the JPLs. However, there can be no further action in these proceedings as the indebtedness under the Notes has been effectively compromised due to the successful Restructuring as of January 28, 2022. In July 2022, these proceedings were discontinued by a consent order issued by the Cayman Court upon parties’ agreement. (c) Provision for U.S. securities litigation The Company has been named as a defendant in various U.S. securities litigations described in “Note 20. Commitments And Contingencies – (b) legal proceedings. Where possible, the Company contests liability and/or the amount of damages appropriate in each pending matter. Where available information indicates that it is probable a liability had been incurred at the date of the financial statements and the Company can reasonably estimate the amount of that loss, the Company accrues a provision for that loss in accordance with relevant ASC 450. The Company recorded a provision for equity litigation of US$187.5 million (approximately RMB1,226.1 million) in the year ended December 31, 2020. The Company recorded an additional US$24.4 million (approximately RMB155.3 million) and US$41.9 million (approximately RMB280.0 million)in the year ended December 31, 2021 and 2022. The Company’s estimate of probable losses from these litigations is based on either the amount of a settlement (if a settlement has been reached), the Company’s most recent offer made to a claimant (if no settlement has been reached but settlement negotiations have begun), or the implied recovery represented by the Federal Class Action settlement (where no settlement negotiations have begun). As of December 31, 2022, the balance of payable for equity litigants settlement was US$4.9 million (approximately RMB33.8 million). |
PARENT COMPANY ONLY CONDENSED F
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 21. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION Condensed balance sheets As of December 31, 2021 2022 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 3,078,291 214,992 31,171 Amounts due from subsidiaries 14,354,254 12,534,774 1,817,371 Prepaid expenses and other current assets 6,889 6,910 1,002 Total current assets 17,439,434 12,756,676 1,849,544 Non-current assets: Investments in subsidiaries and VIE (6,191,904) (5,736,325) (831,689) Other non-current assets 6,373 — — Total non-current assets (6,185,531) (5,736,325) (831,689) Total assets 11,253,903 7,020,351 1,017,855 LIABILITIES AND SHAREHOLDERS’ DEFICITS Current liabilities: Amounts due to subsidiaries 1,410,584 247,743 35,919 Accrued expenses and other current liabilities 415,869 111,525 16,170 Convertible senior notes 2,931,396 — — Payable for equity litigants settlement 1,350,257 33,796 4,900 Total current liabilities 6,108,106 393,064 56,989 Total liabilities 6,108,106 393,064 56,989 21. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED) Condensed balance sheets (continued) As of December 31, 2021 2022 RMB RMB US$ LIABILITIES AND SHAREHOLDERS’ EQUITY Mezzanine equity: Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2021 and 2022, respectively; 295,384,615 and 307,692,307 issued outstanding 1,514,660 1,578,040 228,794 Total Mezzanine equity 1,514,660 1,578,040 228,794 Shareholders’ equity: Class A ordinary shares (US$0.000002 par value;19,692,307,693 and 19,692,307,693 shares authorized as of December 31, 2021 and 2022, respectively, 1,950,457,380 and 2,079,801,956 issued outstanding 21 23 3 Class B ordinary shares (US$0.000002 par value; 5,000,000,000 and 5,000,000,000 shares authorized as of December 31, 2021 and 2022, respectively; 144,778,552 and 144,778,552 issued outstanding 2 2 0 Additional paid-in capital 15,040,609 16,073,063 2,330,375 Accumulated deficit (11,876,351) (11,421,145) (1,655,910) Accumulated other comprehensive income 466,856 397,304 57,604 Total shareholders’ equity 3,631,137 5,049,247 732,072 Total liabilities and shareholders’ equity 11,253,903 7,020,351 1,017,855 21. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED) Condensed statements of comprehensive (loss)/income For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Operating(loss)/income General and administrative expenses (109,119) (85,567) (39,773) (5,766) Losses and expenses related to Fabricated Transactions and restructuring (332,814) (246,410) (69,233) (10,038) Foreign exchange loss — (138) (8,817) (1,278) Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes — — (6,381) (925) Share of (losses)/income from subsidiaries and VIE (2,661,076) (40,522) 791,186 114,711 Gain from extinguishment of Series B Senior Secured Notes — — 124,139 17,998 Interest income 21,910 296 576 84 Other (expense)/income 2,445 (4,784) — — Interest and financing expenses (107,258) (35,490) (23,484) (3,405) Provision for SEC settlement (1,177,074) 1,146,474 — — Provision for equity litigants settlement (1,226,119) (155,314) (279,967) (40,591) Net (loss)/income before income taxes (5,589,105) 578,545 488,246 70,790 Net (loss)/income (5,589,105) 578,545 488,246 70,790 Net (loss)/income attributable to the Company’s ordinary shareholders (5,589,105) 578,545 488,246 70,790 Net (loss)/income (5,589,105) 578,545 488,246 70,790 Other comprehensive income/(loss), net of tax of nil: Foreign currency translation difference, net of tax of nil 286,697 102,802 (69,552) (10,084) Total comprehensive (loss)/income (5,302,408) 681,347 418,694 60,706 21. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED) Condensed statements of cash flows For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Net cash provided by/(used in) operating activities 130,504 1,383,630 (587,039) (85,112) Net cash (used in)/provided by investing activities (6,802,055) — — — Net cash provided by/(used in) financing activities 5,806,861 1,514,660 (2,276,260) (330,027) Net (decrease)/increase in cash and cash equivalents (864,690) 2,898,290 (2,863,299) (415,139) Cash and cash equivalents at beginning of the years 1,044,691 180,001 3,078,291 446,310 Cash and cash equivalents at end of the years 180,001 3,078,291 214,992 31,171 Basis of presentation Condensed financial information is used for the presentation of the Company, or the parent company. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investments in its subsidiaries and VIE. The parent company records its investments in its subsidiaries and VIE under the equity method of accounting as prescribed in ASC 323, Investments-Equity Method and Joint Ventures The subsidiaries and VIE did not pay any dividends to the Company for the years presented. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). |
Principles of consolidation | (b) Principles of consolidation The consolidated financial statements of the Group include the financial statements of the Company, its subsidiaries and the VIE for which the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIE have been eliminated upon consolidation. |
Non-controlling interests | (c) Non-controlling interests For the Group’s non-wholly owned subsidiaries, a non-controlling interest is recognized to reflect the portion of equity that is not attributable, directly or indirectly, to the Group. Non-controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets and have been separately disclosed in the Group’s consolidated statements of comprehensive (loss)/income to distinguish the interests from that of the Group. |
Use of estimates | (d) Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenues and expenses during the reporting periods. Accounting estimates reflected in the Group’s consolidated financial statements include, but not limited to, estimates for allowance for credit losses of accounts receivable and other receivables, inventory provision, and short-term investments, useful lives and impairment of long-lived assets, revenue recognized from breakage amount, refund liability, accounting for deferred income taxes and uncertain tax benefits, valuation allowance for deferred tax assets, fair value of share-based payments, provision of contingent liabilities, and valuations for derivative financial instruments, convertible senior preferred shares and convertible senior notes. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates due to risks and uncertainties, including uncertainty in the current economic environment due to the global COVID-19 pandemic, and as such, differences may be material to the consolidated financial statements. |
Foreign currency | (e) Foreign currency The functional currency of the Company and its subsidiaries incorporated outside of the PRC is the United States dollar (“US$”), the HongKong dollar (“HKD”), or the Singapore dollar (“SGD”), while the functional currency of the PRC entities in the Group is Chinese Renminbi (“RMB”) as determined based on ASC 830, “Foreign Currency Matters”. The financial statements of the Company and its subsidiaries incorporated outside of the PRC are translated from the functional currency to the reporting currency, the RMB. The Group uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Equity accounts other than earnings generated in current year are translated into RMB at the appropriate historical rates. Translation differences are recorded in accumulated other comprehensive income, a component of shareholders’ equity. Foreign currency transactions denominated in currencies other than the functional currencies are translated into the functional currencies using the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currencies using the applicable exchange rates at the balance sheet dates. Non-monetary items that are measured in terms of historical costs in foreign currency are translated into the functional currencies using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of comprehensive (loss)/income. |
Convenience translation | (f) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.8972 on December 30, 2022, the last business day in fiscal year 2022, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted, realized or settled into US$ at such rate or at any other rate. |
Cash and cash equivalents | (g) Cash and cash equivalents Cash and cash equivalents consist of demand deposits, highly-liquid investments placed with banks which are unrestricted as to withdrawal or use, and have original maturities of three months or less. |
Restricted cash | (h) Restricted cash Restricted cash is reported separately on the face of the Consolidated Balance Sheets and is included in the total cash and cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows. The Group’s restricted cash mainly represents security deposits held in bank accounts for bank guarantee letters and prepaid card business. Restricted cash is classified as current and non-current based on the duration of the restriction. |
Accounts receivable | (i) Accounts receivable Accounts receivable represents the amounts that the Group has an unconditional right to consideration. Accounts receivable that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. As of December 31, 2021 and 2022, bad debt allowance for the Gourp’s account receivable was RMB0.8 million and RMB0.2 million (US$0.03 million), respectively. |
Inventories | (j) Inventories Inventories are stated at the lower of cost or net realizable value. Cost of inventory are determined using the weighted average method. The Company recorded inventory reserves to write down the cost of inventory to the estimated net realizable value due to obsolete and slow-moving inventories, which is dependent upon factors such as historical and forecasted consumer demand, and application of the specific identification method. As of December 31, 2021 and 2022, inventory reserves were RMB5.6 million and RMB33.4 million (US$4.8 million), respectively. Write downs are recorded in cost of materials in the Consolidated Statements of Operations and Comprehensive (Loss)/Income. |
Property and equipment | (k) Property and equipment Property and equipment primarily consist of office buildings, store operating equipment, mechanical equipment, leasehold improvements, office equipments and others. Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated useful life Store operating equipment 5 years Office equipment and others 3-5 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Mechanical equipment 10 years Office buildings 40-50 years Direct costs that are related to the construction of property and equipment and incurred in connection with bringing the assets to their intended use are capitalized as construction in progress. Construction in progress is transferred to specific property and equipment items and the depreciation of these assets commences when the assets are ready for their intended use. Repair and maintenance costs are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirements, sale and disposals of assets are recorded by removing the cost, accumulated depreciation and relevant impairment, with any resulting gain or loss reflected in the consolidated statements of comprehensive (loss)/income. |
Expected Credit Losses | (l) Expected Credit Losses The Group’s account receivable, receivables from online payment platforms, other receivables and other certain financial assets are within the scope of ASU No. 2016-13. The Group maintains an estimated allowance for credit losses to reduce them to the amount that the it believes will be collected. When developing an estimation of expected credit losses, the Gourp applys the historical loss experience with appropriate adjustment. The Gourp consider available information relevant to assessing the collectability of cash flows. This information may include internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. The Gourp adjusts the allowance percentage periodically when there are significant differences between estimated bad debts and actual bad debts. If there is strong evidence indicating that these financial assets are likely to be unrecoverable, the Group also makes specific allowance in the period in which a loss is determined to be probable. The balance of these financial assests is written off after all collection efforts have been exhausted |
Impairment of long-lived assets other than goodwill | (m) Impairment of long-lived assets other than goodwill The Group evaluates its long-lived assets, including property and equipment with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that indicate that the carrying amount of an asset or asset group may not be fully recoverable. When these events occur, the Group evaluates the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows of the asset or asset group is less than the carrying amount of the assets or the asset groups, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets or the asset groups over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets or asset groups based on forecasted future sales and operating costs, using internal projections, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets’ remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Group estimates of future cash flows requires management to make assumptions and to apply judgment, including forecasting future sales and gross profits and estimating useful lives of the assets or asset groups. These estimates can be affected by factors such as future sales results, store closure plans, economic conditions, business interruptions, interest rates and government regulations that can be difficult to predict. If actual results and conditions are not consistent with the estimates and assumptions used in its calculations, the Group may be exposed to additional impairments of long-lived assets. For the years ended December 31, 2020, 2021 and 2022, the Group recognized impairment of long-lived assets other than goodwill of RMB71.5 million, RMB21.4 million and RMB221.8 million (US$32.2 millon), respectively. Impairment loss of long-lived assets mainly represented RMB46.7 million for the asset group related to Luckin Pop Mini, RMB12.8 million for the Linefriends food licensing and RMB9.8 million for the asset group related to store operating equipment and others for the year ended December 31, 2020, RMB21.4 million for the asset group related to store operating equipment and others for the year ended December 31, 2021, and RMB221.8 million for the asset group related to Luckin Coffee EXPRESS machines for the year ended December 31, 2022. |
Derivative financial instrument | (n) Derivative financial instrument All contracts that meet the definition of a derivative are recognized on the Group’s consolidated balance sheets as either assets or liabilities and recorded at fair value. The Group’s derivative financial instruments primarily consisted of derivative asset bifurcated from the New Notes (see Note 12 Convertible Senior Notes for details). Changes in the fair value of derivatives are recognized in the Group’s consolidated statements of operations and comprehensive (loss)/income as they were not qualified for hedge accounting. As of December 31, 2021 and 2022, there was no balance of the derivative instruments. |
Fair value of financial instruments | (o) Fair value of financial instruments Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a three-tier fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Group’s financial instruments include cash and cash equivalents and restricted cash, accounts payable, receivables from online payment platforms, accounts receivable, other receivables and payables, and convertible senior notes. Cash equivalents and security deposits held in bank accounts for bank guarantee letters which is included in restricted cash are measured at fair value based on the pervasive interest rates in the market, which are also the interest rates as stated in the contracts with the banks. The Group classifies the valuation techniques that use the pervasive interest rates input as Level 2 of fair value measurements. As of December 31, 2021 and 2022, cash equivalents aggregately amounted to RMB4,478.4 million and RMB1,966.3million (US$285.1 million), respectively, and security deposits held in bank accounts for bank guarantee letters which is included in restricted cash amounted to RMB58.2 million and RMB7.7 million (US$1.1 million), respectively. The carrying values of above financial instruments except for cash equivalents and which is included in restricted cash |
Revenue recognition | (p) Revenue recognition A description of the principal revenue generating activities of Group is as follows: Revenues from product sales The Group offers freshly brewed drinks and other products (including pre-made food, beverage and merchandise items) mainly through its physical self-operated stores, Luckin Coffee EXPRESS and online e-commerce platforms. Total revenues from product sales were RMB3,716.8 million, RMB6,659.2 million and RMB10,223.7 million (US$1,482.3 million) for the years ended December 31, 2020, 2021 and 2022, respectively, including revenues from self-operated stores of RMB3,472.8 million, RMB6,192.7 million and RMB9,414.5 million (US$1,365.0 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Revenues from product sales include: ● Revenues from freshly brewed drinks . The Group offers an array of freshly brewed drinks, with a focus on freshly brewed coffee, supplemented with non-coffee drinks such as Luckin Exfreezo series. Net revenues from freshly brewed drinks were RMB 3,218.7 million, RMB 5,909.7 million and RMB 9,079.3 million (US $1,316.4 million) for the years ended December 31, 2020, 2021 and 2022, respectively. ● Revenues from other products . Other products mainly consist of food and beverage items, such as light meals and various merchandise, including premium instant coffee, inspirational cups and other consumer goods. Net revenues from other products were RMB 309.7 million, RMB 395.6 million and RMB 686.8 million (US $99.6 million) for the years ended December 31, 2020, 2021 and 2022, respectively. ● Revenues from others . Revenues from others mainly include delivery fees derived from self-operated stores paid by the customers and membership fees collected from the subscribed members. Revenues from others were RMB 188.3 million, RMB 354.0 million and RMB 457.5 million (US $66.3 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Customers place orders for products mainly through the Group’s self-developed APP, Weixin mini-program and other third-party platforms with different options to pay through third-party online payment platforms. The Group recognizes revenues at point in time when the Group satisfies its performance obligation upon the control of the promised products are transferred to the customers or distributors. Delivery service is provided if it is a delivery order. Delivery service is determined as an activity to fulfill the Group’s promise to transfer the products, rather than another distinct performance obligation as it is performed before the customers obtain control of the products. Revenues represent the amount of consideration that the Group is entitled to, including products settlement price and delivery fees charged to customers, net of value-added tax (“VAT”), surcharges, discounts and returns, if any. There is no significant financing component or variable consideration in the transaction price. The Group reasonably estimates the possibility of return based on the historical experience, and there were no material returns historically. When a customer receives a discount for purchasing a bundle of goods, that discount is allocated proportionately among the performance obligations using the relative stand-alone selling price method. The Group also provides subscription membership service, which provides the members the access to an evolving suite of benefits, such as extra discount, limited-time promotions and special offer on selected product offerings and new products, which represent a single stand-ready obligation. Membership fees are paid for at the time of or in advance of delivering the services. Revenues from such arrangements are recognized over the subscription period on a straight-line basis. The Group evaluates whether it is appropriate to record the gross amount of product sales and related costs acting as a principal or the net amount acting as an agent. The Group is a principal for the substantial majority of product sales as the Group produces or obtains control of the specified goods before they are transferred to the customers, except for a portion of revenue from products sold on the Group’s own e-commerce platform, for which the Group’s obligation is to facilitate third-party merchants in fulfilling their performance obligation for the goods displayed on the Group’s own e-commerce platform acting as an agent. Revenue from product sales as an agent of RMB3.7 million, RMB2.0 million and RMB1.2 million (US$0.2 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Revenues from partnership stores The Group cooperates with selective retail partners to operate the partnership stores. Under retail partnership model, the Group sells materials such as coffee beans, milk, food and related products to retail partners and shares simplified and standardized operation experience and provides use right of brand name and sales and supply chain management in exchange for a profit-sharing on retail sales. Retail partners are responsible for pre-opening capital investments and operating costs. Revenues from partnership stores mainly consist of sales of materials, equipment and store construction-related materials to the partnership stores, profit-sharing revenue from the partnership stores for using the Luckin Coffee or Luckin Tea brand as well as integrated store operation solution, and other services including delivery services and pre-opening services. For material sales, the Group’s performance obligation is to transfer required materials at fixed unit price to retail partners. The Group provides allowance for materials sales as consideration payable to retail partners when the products sold in partnership stores to customers at lower price than the cost of materials with certain markup to cater for the Group’s promotion strategy. Allowance for partnership stores is accounted for as a reduction of the transaction price, which is usually determined upon the completion of each order. Therefore, sales of materials are generally recognized on the partnership stores’ acceptance of materials, the settlement price is then deducted by the allowance provided to partnership stores that is determined upon the products are sold in partnership stores, if any. Revenue from material sales to partnership stores were RMB227.2 million, RMB834.7 million and RMB2,011.2 million (US$291.6 million) for the years ended December 31, 2020, 2021 and 2022, respectively. For equipment and store construction-related materials sales, the Group’s performance obligation is to transfer equipment at a fixed consideration with one-year warrant and store construction-related materials to retail partners. The one-year warrant is not a distinct performance obligation as it is intended to provide by the Group’s suppliers to the customers an assurance that the equipment complies with agreed-upon functionality described in the contract. Revenue from sales of equipment which needs installation and testing for the intented use is recognized at point in time when equipment is installed and tested to be ready to use. Revenue from sales of store construction-related materials is recognized at point in time upon receipt. Revenue from equipment and store construction-related materials sales to partnership stores were RMB43.3 million, RMB178.8 million and RMB278.1 million (US$40.3 million) for the years ended December 31, 2020, 2021 and 2022, respectively, and warrant liability was immaterial. For profit-sharing, the Group provides the integrated store operation solution, which includes the right to use brand name of Luckin Coffee or Luckin Tea, products and brand name promotion activities, unified ordering and payment collections platform, and basic operation guidance on store management and sanitary conditions, etc., in exchange for the profit-sharing based on the gross profit of retail sales. The Group recognizes the profit-sharing revenue from partnership stores at a variable consideration that is based upon partnership stores’ monthly gross profits which are determined at the end of each month. The Group offers a price concession to its retail partners by waiving the new stores’ profit-sharing for a period of time ranging from the first one month to three months, which is subject to the Group’s adjustment. Between January to June 2020, during the outbreak of COVID-19, the Group waived substantially all the profit-sharing from partnership stores. Price concession for profit-sharing is accounted for as a reduction of the transaction price and deducts the revenue directly. Revenue from partnership stores’ profit-sharing were RMB12.8 million, RMB144.8 million and RMB427.9 million (US$62.0 million) for the years ended December 31, 2020, 2021 and 2022, respectively. The Group also provides other services including pre-opening services such as design of store decoration and provision of decoration materials and delivery service, which have distinct value to partnership stores and are recognized upon completion of the respective performance obligations. Other revenues from partnership stores were RMB33.3 million, RMB147.8 million and RMB352.1 million (US$51.0 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Contract balance When either party to a revenue contract has performed, the Group presents the contract in the consolidated balance sheet as a contract asset or a contract liability, depending on the relationship between the Group’s performance and the customer’s payment. The Group presents any unconditional rights to consideration separately as a receivable. The Group does not have material contract asset. The balance of accounts receivable, net of RMB0.8 million and RMB0.2 millon (US$0.03 million) allowance for doubtful accounts, were RMB38.6 million and RMB58.8 million (US$8.5 million) as of December 31, 2021 and 2022, respectively. Contract liability is mainly related to prepaid coupons to be provided to customers. Customers pay in advance for prepaid coupons. All prepaid coupons are stored in the “Coffee Wallet” of the customers’ registered accounts for future use with a three-year validity period. Cash received from the sales of prepaid coupons are recognized as deferred revenues which are contract liabilities under ASC 606 and recognized as revenue when the customer redeems the coupons. However, a portion of the contract liability recognized as revenue may relate to coupons that the Company expects to expire, which is considered as a breakage amount. When the Company determines that it expects to be entitled to breakage, the estimated breakage is recognized as revenue in proportion to the pattern of rights exercised by the customer. As of December 31, 2021 and 2022, the balance of deferred revenues was RMB96.2 million and RMB97.4 million (US$14.1 million), respectively. Majority of the balance of deferred revenue as of December 31, 2021 was recognized as revenue in the year of 2022. |
Costs of materials, store rental and other operating costs | (q) Costs of materials, store rental and other operating costs Costs of materials consisted primarily of cost for coffee beans and coffee condiments, pre-made food and beverage items, packaging, supplies and warehouse. Store rental and other operating costs consisted primarily of rental expense of stores, staff costs, and utilities, etc. |
Delivery expenses | (r) Delivery expenses Delivery expenses are the delivery service fee for delivery orders. The Group incurred delivery expenses of RMB414.8 million, RMB819.5 million and RMB1,373.2 million (US$199.1 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Delivery expenses are separated out of sales and marketing expenses from the fiscal year 2021 to optimize the disclosure and better reflect the nature of expenses. This reclassification is retrospectively applied. |
Sales and marketing expenses | (s) Sales and marketing expenses Sales and marketing expenses consisted primarily of advertising expenditure, commission fees for third-party delivery platforms and subcontract service fee. Advertising expenditures are expensed when incurred and are included in sales and marketing expenses, which amounted to RMB354.5 million, RMB243.7 million and RMB338.0 million (US$49.0 million) for the years ended December 31, 2020, 2021 and 2022, respectively. |
General and administrative expenses | (t) General and administrative expenses General and administrative expenses consist primarily of payroll and related expenses for employees involved in general corporate functions, research and development expenses, share-based compensation, professional fees and daily office expenses and rental fees for general corporate functions. Research and development expenses are included in general and administrative expenses, which are mainly payroll expenses, employee benefits, and other headcount-related expenses associated with platform development and data analysis to support the Group’s business operations. The Group charged RMB265.5 million, RMB251.7 million and RMB301.4 million (US$43.7 millon) of research and development costs to expense for the years ended December 31, 2020, 2021 and 2022, respectively. |
Store preopening and other expenses | (u) Store preopening and other expenses Store preopening expenses mainly include store rental costs during the start-up of new stores. Other expenses include lease exit costs, such as the write offs of prepaid store rental costs, deposits and leasehold improvements. Costs incurred in connection with the start-up and closure of stores are expensed as incurred. |
Leases | (v) Leases The Group enters into lease agreements to have leasing for self-operated stores, office spaces, and other corporate assets that the Group utilizes. The Group categorizes leases with contractual terms longer than twelve months as either operating or finance lease. However, the Group did not enter into finance leases for any of the periods presented. At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Group assess whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset. The rent under the majority of the current self-operated store lease agreements is generally payable in one of three ways: (i) fixed rent; (ii) the higher of a fixed base rent or a percentage of the store’s sales; or (iii) a percentage of the store’s sales. Right-of-use (“ROU”) assets represent the Group’s rights to use underlying assets for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease ROU assets The right-of-use assets are initially measured at cost, which comprise the initial amounts of the lease liabilities adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received. Operating lease liabilities Lease liabilities are initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the discount rate for the leases. As most of the Group’s leases do not provide an implicit rate, the Group uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Lease payments included in the measurement of the lease liabilities comprise fixed lease payments, variable lease payments that depend on an index or a rate and any exercise price under a purchase option that the Group is reasonably certain to exercise. The Group generally has no renewal options and material residual value guarantees or material restrictive covenants for its leases. Lease liabilities are measured at amortized cost using the effective interest rate method. They are re-measured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Group assessment of option purchases, contract extensions or termination options. Asset retirement obligations The Group recognizes an asset and a liability for the fair value of required asset retirement obligations (“ARO”) when such obligations are incurred. The Group’s AROs are primarily associated with leasehold improvements, which, at the end of a lease, it is contractually obligated to remove in order to comply with the lease agreement. At the inception of a lease with such conditions, the Group records an ARO liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. As such, the Group amortizes the asset on a straight-line basis over the lease term and accretes the liability to its nominal value using the effective interest method over the lease term. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement costs incurred is recognized as a gain or loss in store rental and other operating expenses on its consolidated statements of comprehensive income/(loss). |
Government subsidies | (w) Government subsidies Government subsidies primarily consist of financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. There are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. The government subsidies with no further conditions to be met are recognized as income in “Other income/(expenses), net” or as a reduction of specific operating costs and expenses for which the grants are intended to compensate. If the government subsidies are related to an asset, it is recognized as a deduction of the carrying amount of the asset when it is probable that the conditions are met and then recognized ratably over the expected useful life of the related asset as a reduction to the related amortization or depreciation in the consolidated statements of comprehensive income/(loss). Government subsidies of RMB26.3 million, RMB47.1million and RMB78.0 million (US$11.3 million) were recorded in “Other income/( expenses |
Income taxes | (x) Income taxes The Group follows the liability method of accounting for income taxes in accordance with ASC 740 (“ASC 740”), Income Taxes The Group accounts for uncertainties in income taxes in accordance with ASC 740. Interest and penalties related to unrecognized tax benefit recognized in accordance with ASC 740 are classified in the consolidated statements of comprehensive (loss)/income as income tax expenses. No material interest and penalties related to unrecognized tax benefit were recorded for the years ended December 31, 2020, 2021 and 2022. |
Employee benefit expenses | (y) Employee benefit expenses As stipulated by the regulations of the PRC, full-time employees of the Group are entitled to various government statutory employee benefit plans, including medical insurance, maternity insurance, workplace injury insurance, unemployment insurance, pension benefits and housing provident fund through a PRC government-mandated multi-employer defined contribution plan. The Group is required to make contributions to the plan and accrues for these benefits based on certain percentages of the qualified employees’ salaries. The total expenses the Group incurred for the plan were RMB139.6 million, RMB247.3 million and RMB333.5 million (US$48.4 million) for the years ended December 31, 2020, 2021 and 2022, respectively. |
Comprehensive (loss)/income | (z) Comprehensive (loss)/income Comprehensive (loss)/income is defined as the (decrease)/increase in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Amongst other disclosures, ASC 220, Comprehensive Income |
Segment reporting | (aa) Segment reporting The Group follows ASC 280, Segment Reporting |
Net (loss)/income per share | (bb) Net (loss)/income per share In accordance with ASC 260, Earnings per Share, |
Share-based compensation | (cc) Share-based compensation The Group applies ASC 718, Compensation-Stock Compensation |
Comparative information | (dd) Comparative information Certain items in prior years’ consolidated financial statements have been reclassified to conform to the current period’s presentation to facilitate comparison. |
Recent accounting pronouncements | (ee) Recent accounting pronouncements Accounting standards or accounting standards updates that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. |
Revision of Previously Issued Consolidated Financial Statements | (ff) Revision of Previously Issued Consolidated Financial Statements The Company has revised its previously announced unaudited financial statements as of and for the six months ended June 30, 2021 to reclassify the treatment of the foreign exchange impact of a planned capital reduction to transfer funds out of China for the settlement of overseas debt, which had been recorded in the Company’s foreign exchange gain, net. Following the revision, the Company has made adjustments in each subsequent period, including to its previously announced unaudited financial statements as of and for the nine months ended September 30, 2021 and the audited financial statements as of and for the year ended December 31, 2021. The Company has determined that it is more appropriate under ASC830 to present the foreign exchange impact of the capital reduction transaction in other comprehensive income, rather than in foreign exchange gain, net. The impact of the reclassification was a RMB107.7 million reduction to the Company’s foreign exchange gain, net, for the six months ended June 30, 2021, the nine months ended September 30, 2021 and the year ended December 31, 2021, respectively. Correspondingly, the Company’s accumulated other comprehensive income as of June 30, 2021, September 30, 2021, December 31, 2021, March 31, 2022 and June 30, 2022 increased by the same amount, respectively. The reclassification was non-cash and non-operating in nature and did not have any impact on the Company’s operating (loss)/income, assets or liabilities, or consolidated statements of cash flows. The Company assessed the effects of the above reclassification in the prior periods’ financial statements and determined that it was not material to any of the Company’s prior interim and annual financial statements. The following tables present the impact of the reclassification to prior period financials: For the six months ended June 30, 2021 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Foreign exchange gain/(loss), net 109,056 (107,725) 1,331 Net loss (211,439) (107,725) (319,164) Foreign currency translation difference, net of tax of nil (64,862) 107,725 42,863 Total comprehensive loss (276,301) — (276,301) Net loss per share - basic (0.10) (0.05) (0.15) Net loss per share - diluted (0.10) (0.05) (0.15) For the nine months ended September 30, 2021 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Foreign exchange gain/(loss), net 111,062 (107,725) 3,337 Net loss (234,948) (107,725) (342,673) Foreign currency translation difference, net of tax of nil (57,026) 107,725 50,699 Total comprehensive loss (291,974) — (291,974) Net loss per share - basic (0.12) (0.05) (0.17) Net loss per share - diluted (0.12) (0.05) (0.17) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (ff) Revision of Previously Issued Consolidated Financial Statements (continued) For the year ended December 31, 2021 As previously reported Adjustment As revised (Amounts in thousands of RMB) Foreign exchange gain/(loss), net 120,166 (107,725) 12,441 Net (loss)/income 686,378 (107,725) 578,653 Foreign currency translation difference, net of tax of nil (4,923) 107,725 102,802 Total comprehensive income 681,455 — 681,455 Net (loss)/income per share - basic 0.34 (0.05) 0.29 Net (loss)/income per share - diluted 0.32 (0.05) 0.27 As of June 30, 2021 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (12,664,429) (107,725) (12,772,154) Accumulated other comprehensive income 299,192 107,725 406,917 Total Company’s ordinary shareholders’ equity 2,505,582 — 2,505,582 As of September 30, 2021 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (12,687,938) (107,725) (12,795,663) Accumulated other comprehensive income 307,028 107,725 414,753 Total Company’s ordinary shareholders’ equity 2,568,027 — 2,568,027 As of December 31, 2021 As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (11,768,626) (107,725) (11,876,351) Accumulated other comprehensive income 359,131 107,725 466,856 Total Company’s ordinary shareholders’ equity 3,631,137 — 3,631,137 As of March 31, 2022 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (11,748,791) (107,725) (11,856,516) Accumulated other comprehensive income 355,258 107,725 462,983 Total Company’s ordinary shareholders’ equity 4,324,593 — 4,324,593 As of June 30, 2022 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (11,863,498) (107,725) (11,971,223) Accumulated other comprehensive income 306,161 107,725 413,886 Total Company’s ordinary shareholders’ equity 4,261,790 — 4,261,790 |
ORGANIZATION (Tables)
ORGANIZATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION | |
Schedule of principal subsidiaries and VIE | Entity Date of incorporation Place of incorporation Percentage of direct or indirect ownership Principal activities Subsidiaries: Luckin Coffee Investment Inc. (“Luckin BVI”) June 16, 2017 British Virgin Islands 100 % Investment holding Luckin Coffee (Hong Kong) Limited (“Luckin HK”) June 19, 2017 Hong Kong 100 % Investment holding Luckin Coffee Roasting (Hong Kong) Limited (“Luckin Roasting”) April 12, 2019 Hong Kong 100 % Investment holding Luckin Coffee Roastery (Hong Kong) Limited (“Luckin Roastery”) April 30, 2019 Hong Kong 100 % Investment holding Beijing Luckin Coffee Co., Ltd. (“Beijing Wholly Foreign Owned Enterprise”, or, “Beijing WFOE”) (1) / (2) October 31, 2017 PRC 100 % Provision of retail services for freshly brewed drinks and pre-made food and beverage items and technical and consultation services Luckin Investment (Tianjin) Co., Ltd. (“Luckin TJ”) (1) / (5) December 7, 2017 PRC 100 % Investment holding Luckin Coffee (China) Co., Ltd. (“Luckin China”) (1) / (2) / (4) March 28, 2018 PRC 100 % Headquarter Luckin Coffee Roasting (Pingnan) Co., Ltd. (1) April 28, 2019 PRC 100 % Manufacture of materials for products Variable Interest Entity: Beijing Luckin Coffee Technology Ltd. (“VIE”) (3) June 14, 2017 PRC License holder (1) Including their subsidiaries, collectively as the “PRC subsidiaries”. (2) On July 27, 2018, Beijing WFOE transferred all its 100% equity interest in its subsidiaries to Luckin China. (3) Mr. Jinyi Guo and Mr. Gang Wu are nominal shareholders of the VIE, holding 83.33 % and 16.67 % of the equity interest, respectively. (4) As of December 31, 2022, Luckin China had 78 direct and indirect wholly-owned subsidiaries. (5) As of December 31, 2022, Luckin TJ had one direct wholly-owned subsidiary. |
Schedule of assets, liabilities, results of operations and changes in cash and cash equivalents and restricted cash | As of December 31, 2021 2022 RMB RMB US$ Total assets 106,998 6,865 995 Total liabilities 95,488 2,864 415 For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Total net revenues — — — — Net loss (15,464) (22,750) (23,542) (3,413) For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Net cash (used in)/provided by operating activities 58,819 (58,781) — — Net cash used in investing activities (47) — — — Net cash (used in)/ provided by financing activities — — — — Effect of foreign exchange rate changes on cash and cash equivalents — — — — Net increase/(decrease) in cash and cash equivalents 58,772 (58,781) — — Cash and cash equivalents and restricted cash at beginning of year 9 58,781 — — Cash and cash equivalents and restricted cash at end of year 58,781 — — — |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of property and equipment | Category Estimated useful life Store operating equipment 5 years Office equipment and others 3-5 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Mechanical equipment 10 years Office buildings 40-50 years |
Schedule of revision of previously issued consolidated financial statements | For the six months ended June 30, 2021 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Foreign exchange gain/(loss), net 109,056 (107,725) 1,331 Net loss (211,439) (107,725) (319,164) Foreign currency translation difference, net of tax of nil (64,862) 107,725 42,863 Total comprehensive loss (276,301) — (276,301) Net loss per share - basic (0.10) (0.05) (0.15) Net loss per share - diluted (0.10) (0.05) (0.15) For the nine months ended September 30, 2021 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Foreign exchange gain/(loss), net 111,062 (107,725) 3,337 Net loss (234,948) (107,725) (342,673) Foreign currency translation difference, net of tax of nil (57,026) 107,725 50,699 Total comprehensive loss (291,974) — (291,974) Net loss per share - basic (0.12) (0.05) (0.17) Net loss per share - diluted (0.12) (0.05) (0.17) For the year ended December 31, 2021 As previously reported Adjustment As revised (Amounts in thousands of RMB) Foreign exchange gain/(loss), net 120,166 (107,725) 12,441 Net (loss)/income 686,378 (107,725) 578,653 Foreign currency translation difference, net of tax of nil (4,923) 107,725 102,802 Total comprehensive income 681,455 — 681,455 Net (loss)/income per share - basic 0.34 (0.05) 0.29 Net (loss)/income per share - diluted 0.32 (0.05) 0.27 As of June 30, 2021 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (12,664,429) (107,725) (12,772,154) Accumulated other comprehensive income 299,192 107,725 406,917 Total Company’s ordinary shareholders’ equity 2,505,582 — 2,505,582 As of September 30, 2021 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (12,687,938) (107,725) (12,795,663) Accumulated other comprehensive income 307,028 107,725 414,753 Total Company’s ordinary shareholders’ equity 2,568,027 — 2,568,027 As of December 31, 2021 As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (11,768,626) (107,725) (11,876,351) Accumulated other comprehensive income 359,131 107,725 466,856 Total Company’s ordinary shareholders’ equity 3,631,137 — 3,631,137 As of March 31, 2022 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (11,748,791) (107,725) (11,856,516) Accumulated other comprehensive income 355,258 107,725 462,983 Total Company’s ordinary shareholders’ equity 4,324,593 — 4,324,593 As of June 30, 2022 (Unaudited) As previously reported Adjustment As revised (Amounts in thousands of RMB) Accumulated deficits (11,863,498) (107,725) (11,971,223) Accumulated other comprehensive income 306,161 107,725 413,886 Total Company’s ordinary shareholders’ equity 4,261,790 — 4,261,790 |
PRINCIPAL RISKS (Tables)
PRINCIPAL RISKS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PRINCIPAL RISKS | |
Schedule of suppliers account for 10% or more of total cost of materials | For the year ended December 31, Supplier 2020 2021 2022 RMB RMB RMB US$ A 196,886 * * * B 194,838 * * * * Accounts for less than 10% during the period. |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of accounts receivable | As of December 31, 2021 2022 RMB RMB US$ Receivables due from partners 8,688 20,235 2,934 Receivables due from corporate customers 30,682 38,738 5,616 Accounts receivable 39,370 58,973 8,550 Allowance for doubtful accounts (765) (191) (27) Accounts receivable, net 38,605 58,782 8,523 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
Schedule of inventories | As of December 31, 2021 2022 RMB RMB US$ Raw materials 378,520 886,336 128,506 Packaging and other supplies 191,188 289,537 41,979 Pre-made food and beverage items 23,632 30,594 4,436 593,340 1,206,467 174,921 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |
Schedule of prepaid expenses and other current assets, net | As of December 31, 2021 2022 RMB RMB US$ Deductible input VAT 636,923 747,067 108,315 Prepaid rental and deposits 234,885 169,485 24,573 Prepayments for materials and advertising fees 79,332 108,638 15,751 Interest receivables 4,360 204 30 Others 88,507 52,325 7,587 1,044,007 1,077,719 156,256 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | As of December 31, 2021 2022 RMB RMB US$ Store operating equipment 1,260,623 1,341,127 194,445 Leasehold improvements 873,449 1,126,562 163,336 Office equipment and others 105,721 177,259 25,700 Office buildings 798,657 811,666 117,681 Mechanical equipment 77,072 80,481 11,669 Construction in progress 15,054 53,103 7,698 3,130,576 3,590,198 520,529 Less: accumulated depreciation (1,244,914) (1,546,362) (224,201) Less: impairment (80,561) (176,458) (25,584) 1,805,101 1,867,378 270,744 |
OTHER NON-CURRENT ASSETS, NET (
OTHER NON-CURRENT ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OTHER NON-CURRENT ASSETS, NET | |
Schedule of other non-current assets, net | As of December 31, 2021 2022 RMB RMB US$ Long-term deposits (1) 117,345 181,477 26,312 Prepayments for equipment, net 16,866 119,009 17,254 Land use rights, net (2) 6,947 26,081 3,781 Prepaid leasehold improvements 22,768 1,177 171 163,926 327,744 47,518 (1) Long-term deposits mainly represent rental and renovation deposits over 1 year. (2) Land use rights represent payments to the local government authorities for use of lands for 50 years , net of accumulated amortization. As of December 31, 2021 and 2022, the carrying amounts of land use rights are RMB 6.9 million and RMB 26.1 million, respectively, which represent the result of their original values of RMB 7.3 million and RMB 26.7 million, netting off accumulated amortization of RMB 0.4 million and RMB 0.6 million, respectively. Land use rights are amortized on a straight-line basis with amortization expenses of RMB 0.14 million, RMB 0.15 million and RMB 0.2 million (US $0.03 million) for the years ended December 31, 2020, 2021 and 2022, respectively. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2021 2022 RMB RMB US$ Payroll and welfare payables 260,177 372,795 54,050 Payables for office supplies and utilities 149,557 238,466 34,574 Payables for delivery costs 138,833 210,779 30,560 Payables for professional service fees 249,520 132,430 19,201 Payables for the purchase of property and equipment 124,456 120,227 17,431 Other taxes payables 36,495 105,970 15,364 Payables for advertising expenditures 66,203 55,261 8,012 Others 296,765 139,497 20,226 1,322,006 1,375,425 199,418 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
Schedule of significant related party transactions | (a) Related parties Names of related parties Relationship with the Company UCAR Inc. (“UCAR Inc.”) (1) An entity controlled by Mr. Charles Zhengyao Lu Beijing QWOM Digital Technology Co., Ltd. (“QWOM”) (1) An affiliate of Mr. Charles Zhengyao Lu Goumei (Zhejiang) Information Technology Co., Ltd (“Goumei”) An entity significantly influenced by the Company’s controlling shareholder (1) (b) Other than disclosed elsewhere, the Group had the following significant related party transactions for the years ended December 31, 2020, 2021 and 2022: For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Services received from: —Goumei — — 13,947 2,022 —QWOM 28,920 — — — —UCAR Inc. 6,334 — — — Total 35,254 — 13,947 2,022 Agreement of payment for leasehold improvement of sublet rental office to: —UCAR Inc. (1) 36,599 — — — Trust investments (2) —Xiamen Trust 590,000 — — — —Yunnan Trust 550,000 — — — Total 1,140,000 — — — (1) The Group has entered into an agreement with UCAR Inc. on July 1, 2020 to pay RMB 36.6 million to UCAR Inc. for the costs UCAR Inc. incurred as a result of the leasehold improvements of certain office space that UCAR Inc. sublet to the Group. In December 2021, UCAR Inc. initiated an arbitration proceeding against Luckin China in China International Economic and Trade Arbitration Commission, seeking to recover its costs of the leasehold improvements, which had been recorded in the Group’s consolidated statements of comprehensive (loss)/income. As UCAR Inc. is no longer a related party of the Company since the termination of Mr. Charles Zhengyao Lu from the Group on July 5, 2020, the balance of amounts due to UCAR Inc. was classified in accrued expenses and other current liabilities as of December 31, 2021. As of December 31, 2022, the arbitration proceeding was closed with the final judgment that the Group was obligated to pay approximately RMB 31.7 million for the leasehold improvement and related legal fees. The Group has made full payment and the ending balance of this liability was nil as of December 31, 2022. (2) Xiamen Trust and Yunnan Trust were designated to be used to purchase receivables relating to property leased to Borgward and to invest in equity interests of Yousheng Information, respectively, upon the entry of the trust instruments. On the basis of substance over form, management considers the two trust investments made by former management as related party transactions. (c) Other than disclosed elsewhere, the Group had the following significant amounts due to related party as of December 31, 2021 and 2022: As of December 31, 2021 2022 RMB RMB US$ Amounts due to: —Goumei — 3,932 570 Total — 3,932 570 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHARE BASED COMPENSATION | |
Schedule of share-based compensation expenses were allocated in operating expenses by function | For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Sales and marketing expenses — 9,185 17,452 2,530 General and administrative expenses 22,029 293,549 380,556 55,175 22,029 302,734 398,008 57,705 |
Summary of assumptions used to estimate the fair value of the share options granted to employees | 2020 2021 Risk-free interest rate 0.82 % 1.04 % Expected volatility 74.37 % 74.49 % Expected dividend yield 0.00 % 0.00 % Exercise multiple 2.20 2.20 Expected post-vesting forfeiture rate 0.00 % 0.00 % Fair value of share option US$ 0.63 US$ 1.07 |
2019 Plan | |
SHARE BASED COMPENSATION | |
Summary of the employee equity award activity | Weighted- average Weighted- remaining Aggregate Number of average contractual intrinsic options exercise price term Value US$ Years US$ Outstanding as of December 31, 2019 72,529,960 0.0002 9.05 Granted 25,917,240 0.0002 — Exercised — 0.0002 — — Forfeit (38,418,992) 0.0002 — Outstanding as of December 31, 2020 60,028,208 0.0002 8.83 Granted 2,795,600 0.0002 — Exercised — 0.0002 — — Forfeit (2,370,736) 0.0002 — Outstanding as of December 31, 2021 60,453,072 0.0002 7.91 Granted — — Exercised (32,008,561) 0.0002 88,097 Forfeit — 0.0002 Outstanding as of December 31, 2022 28,444,511 0.0002 7.24 Fully vested and expected to vest as of December 31, 2022 66,938,584 0.0002 6.83 184,235 Exercisable as of December 31, 2022 25,293,687 0.0002 7.16 69,616 |
2021 plan | |
SHARE BASED COMPENSATION | |
Summary of the employee equity award activity | Weighted-Average Grant-Date Number Fair Value of RSUs US$ Unvested as of December 31, 2020 — — Granted 40,842,760 1.09 Vested (31,943,824) 1.10 Forfeited or cancelled (6,368,184) 1.06 Unvested as of December 31, 2021 2,530,752 1.09 Granted 45,722,392 1.26 Vested (43,329,376) 1.26 Forfeited or cancelled (739,472) 1.30 Unvested as of December 31, 2022 4,184,296 1.23 |
TAXATION (Tables)
TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
TAXATION | |
Schedule of components of (loss)/income before tax | For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ (Loss)/income before tax Non-PRC (2,937,591) 617,090 (331,744) (48,098) PRC (3,303,200) (102,298) 1,458,494 211,462 Total (loss)/income before tax (6,240,791) 514,792 1,126,750 163,364 Income tax expenses/(benefits) Current income tax expenses 919 360 144,032 20,882 Deferred tax benefits (638,720) (64,221) 494,472 71,692 Income tax (benefits)/expenses (637,801) (63,861) 638,504 92,574 |
Schedule of reconciliation of tax computed by applying the statutory income tax rate | For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ (Loss)/income before income taxes (6,240,791) 514,792 1,126,750 163,364 Income tax (benefits)/expenses computed at PRC statutory income tax rate of 25% (1,560,198) 128,698 281,688 40,841 Additional deduction for R&D expenses (9,108) (11,095) (13,516) (1,960) Non-deductible share-based compensation expenses 5,507 58,581 80,440 11,663 Non-deductible expenses and non-taxable income 24,495 9,415 (9,967) (1,445) Defer tax assets writeoff related to closure entities — — 8,266 1,198 Recognition of uncertain tax benefits — — 29,325 4,252 Change of valuation allowance 164,850 60,352 220,774 32,009 Effect of preferential tax rate 9,395 (158,362) (18,626) (2,701) Effect of International tax rates 727,446 (155,242) 76,378 11,074 Prior-year tax filing difference (188) 3,792 (16,258) (2,357) Income tax (benefits)/expenses (637,801) (63,861) 638,504 92,574 |
Schedule of Significant components of deferred taxes | As of December 31, 2021 2022 RMB RMB US$ Deferred tax assets Donation 4,075 1,264 183 Accrued expenses 31,843 29,867 4,330 Accrued welfare 14,538 29,662 4,301 Impairment loss of long-lived assets and investments 303,168 327,764 47,521 Allowance for doubtful accounts 22,577 5,398 783 Tax losses 1,441,091 1,149,639 166,682 Valuation allowance (1,114,351) (1,335,125) (193,575) Total deferred tax assets, net 702,941 208,469 30,225 |
Schedule of unrecognized tax benefits roll-forward | As of December 31, 2021 2022 RMB RMB US$ Balance at beginning of year 53,961 54,956 7,968 Additions based on tax positions related to the current year 995 25,974 3,766 Balance at end of year 54,956 80,930 11,734 |
NET (LOSS)_INCOME PER SHARE (Ta
NET (LOSS)/INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET (LOSS)/INCOME PER SHARE | |
Schedule of basic and diluted (loss)/income per | For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Numerator: Net (loss)/income (5,602,990) 578,653 488,246 70,790 Less: Net (loss)/income attributable to non-controlling interests (13,885) 108 — — Net (loss)/income attributable to ordinary shareholders (5,589,105) 578,545 488,246 70,790 Denominator: Weighted average number of shares – basic 2,021,919,061 2,051,263,478 2,473,078,408 2,473,078,408 Adjustments for dilutive options and RSUs — 84,580,779 43,195,219 43,195,219 Weighted average number of shares – diluted 2,021,919,061 2,135,844,257 2,516,273,627 2,516,273,627 Basic net (loss)/income per share attributable to ordinary shareholders (2.76) 0.29 0.20 0.03 Diluted net (loss)/income per share attributable to ordinary shareholders (2.76) 0.27 0.19 0.03 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES. | |
Schedule of supplemental balance sheet information related to operating lease | As of December 31, 2021 2022 RMB RMB US$ Right-of-use assets 1,237,734 2,003,997 290,552 Operating lease liabilities – current 598,062 880,873 127,715 Operating lease liabilities – non-current 575,060 1,024,274 148,506 Total operating lease liabilities 1,173,122 1,905,147 276,221 |
Schedule of the weighted average remaining lease terms and discount rates for the operating lease | Remaining lease term and discount rate: Weighted average remaining lease term (years) 1.47 Weighted average discount rate 4.358 % |
Schedule of future minimum lease payments under non-cancellable operating leases | RMB US$ 2023 880,873 127,715 2024 606,689 87,962 2025 310,270 44,985 2026 149,595 21,689 2027 and thereafter 80,962 11,738 Less: interest (123,242) (17,868) Total 1,905,147 276,221 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of contractual obligations and commercial commitments | The following table sets forth the Group’s contractual obligations and commercial commitments as of December 31, 2022: Payment Due by Period Less than More than Total 1 year 2–3 years 4–5 years 5 years (in thousands of RMB) Factory and office building construction commitments 156,195 138,744 17,451 — — Fixed assets purchasing commitment 159,882 159,882 — — — Total 316,077 298,626 17,451 — — |
PARENT COMPANY ONLY CONDENSED_2
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | |
Schedule of condensed balance sheets | As of December 31, 2021 2022 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 3,078,291 214,992 31,171 Amounts due from subsidiaries 14,354,254 12,534,774 1,817,371 Prepaid expenses and other current assets 6,889 6,910 1,002 Total current assets 17,439,434 12,756,676 1,849,544 Non-current assets: Investments in subsidiaries and VIE (6,191,904) (5,736,325) (831,689) Other non-current assets 6,373 — — Total non-current assets (6,185,531) (5,736,325) (831,689) Total assets 11,253,903 7,020,351 1,017,855 LIABILITIES AND SHAREHOLDERS’ DEFICITS Current liabilities: Amounts due to subsidiaries 1,410,584 247,743 35,919 Accrued expenses and other current liabilities 415,869 111,525 16,170 Convertible senior notes 2,931,396 — — Payable for equity litigants settlement 1,350,257 33,796 4,900 Total current liabilities 6,108,106 393,064 56,989 Total liabilities 6,108,106 393,064 56,989 As of December 31, 2021 2022 RMB RMB US$ LIABILITIES AND SHAREHOLDERS’ EQUITY Mezzanine equity: Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2021 and 2022, respectively; 295,384,615 and 307,692,307 issued outstanding 1,514,660 1,578,040 228,794 Total Mezzanine equity 1,514,660 1,578,040 228,794 Shareholders’ equity: Class A ordinary shares (US$0.000002 par value;19,692,307,693 and 19,692,307,693 shares authorized as of December 31, 2021 and 2022, respectively, 1,950,457,380 and 2,079,801,956 issued outstanding 21 23 3 Class B ordinary shares (US$0.000002 par value; 5,000,000,000 and 5,000,000,000 shares authorized as of December 31, 2021 and 2022, respectively; 144,778,552 and 144,778,552 issued outstanding 2 2 0 Additional paid-in capital 15,040,609 16,073,063 2,330,375 Accumulated deficit (11,876,351) (11,421,145) (1,655,910) Accumulated other comprehensive income 466,856 397,304 57,604 Total shareholders’ equity 3,631,137 5,049,247 732,072 Total liabilities and shareholders’ equity 11,253,903 7,020,351 1,017,855 |
Schedule of condensed statements of comprehensive (loss)/ income | For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Operating(loss)/income General and administrative expenses (109,119) (85,567) (39,773) (5,766) Losses and expenses related to Fabricated Transactions and restructuring (332,814) (246,410) (69,233) (10,038) Foreign exchange loss — (138) (8,817) (1,278) Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes — — (6,381) (925) Share of (losses)/income from subsidiaries and VIE (2,661,076) (40,522) 791,186 114,711 Gain from extinguishment of Series B Senior Secured Notes — — 124,139 17,998 Interest income 21,910 296 576 84 Other (expense)/income 2,445 (4,784) — — Interest and financing expenses (107,258) (35,490) (23,484) (3,405) Provision for SEC settlement (1,177,074) 1,146,474 — — Provision for equity litigants settlement (1,226,119) (155,314) (279,967) (40,591) Net (loss)/income before income taxes (5,589,105) 578,545 488,246 70,790 Net (loss)/income (5,589,105) 578,545 488,246 70,790 Net (loss)/income attributable to the Company’s ordinary shareholders (5,589,105) 578,545 488,246 70,790 Net (loss)/income (5,589,105) 578,545 488,246 70,790 Other comprehensive income/(loss), net of tax of nil: Foreign currency translation difference, net of tax of nil 286,697 102,802 (69,552) (10,084) Total comprehensive (loss)/income (5,302,408) 681,347 418,694 60,706 |
Schedule of condensed statements of cash flows | For the year ended December 31, 2020 2021 2022 RMB RMB RMB US$ Net cash provided by/(used in) operating activities 130,504 1,383,630 (587,039) (85,112) Net cash (used in)/provided by investing activities (6,802,055) — — — Net cash provided by/(used in) financing activities 5,806,861 1,514,660 (2,276,260) (330,027) Net (decrease)/increase in cash and cash equivalents (864,690) 2,898,290 (2,863,299) (415,139) Cash and cash equivalents at beginning of the years 1,044,691 180,001 3,078,291 446,310 Cash and cash equivalents at end of the years 180,001 3,078,291 214,992 31,171 |
ORGANIZATION (Details)
ORGANIZATION (Details) ¥ in Millions, $ in Millions | 12 Months Ended | ||||
Jul. 27, 2018 | Dec. 31, 2022 CNY (¥) subsidiary | Dec. 31, 2022 USD ($) subsidiary | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
ORGANIZATION. | |||||
Amount transferred from PRC subsidiaries to the VIE by loans or by capital support | ¥ 115.5 | $ 16.7 | ¥ 18.8 | ¥ 74.1 | |
Amount transferred from VIE to PRC subsidiaries | ¥ 104.1 | $ 15.1 | ¥ 58.8 | ¥ 3.3 | |
Mr. Jinyi Guo | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in variable interest entities | 83.33% | 83.33% | |||
Mr. Gang Wu | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in variable interest entities | 16.67% | 16.67% | |||
Luckin BVI | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in subsidiaries | 100% | 100% | |||
Luckin HK | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in subsidiaries | 100% | 100% | |||
Luckin Roasting | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in subsidiaries | 100% | 100% | |||
Luckin Roastery | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in subsidiaries | 100% | 100% | |||
Beijing WFOE | Beijing WFOE | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in subsidiaries | 100% | 100% | |||
Luckin TJ | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in subsidiaries | 100% | 100% | |||
Luckin China | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in subsidiaries | 100% | 100% | |||
Luckin Coffee Roasting (Tianjin) Co., Ltd. | |||||
ORGANIZATION. | |||||
Number of subsidiaries | 1 | 1 | |||
Luckin Coffee Roasting (Pingnan) Co., Ltd | |||||
ORGANIZATION. | |||||
Percentage of direct or indirect ownership by the Company in subsidiaries | 100% | 100% | |||
Luckin coffee | |||||
ORGANIZATION. | |||||
Number of subsidiaries | 78 | 78 | |||
Luckin China | Beijing WFOE | |||||
ORGANIZATION. | |||||
Percentage of equity interest in subsidiaries transferred | 100% | ||||
Beijing WFOE and VIE | |||||
ORGANIZATION. | |||||
Percentage fees to be paid from the consolidated net profits | 100% | 100% |
ORGANIZATION - Consolidated VIE
ORGANIZATION - Consolidated VIE Structured By The Contractual Agreements - (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 CNY (¥) | Sep. 30, 2021 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | |
Variable Interest Entity [Line Items] | |||||||
Total assets | ¥ 10,480,397 | ¥ 12,312,490 | $ 1,519,516 | ||||
Total liabilities | 3,853,110 | 7,166,693 | 558,650 | ||||
Net revenues | 13,292,982 | $ 1,927,301 | 7,965,323 | ¥ 4,033,418 | |||
Net loss | ¥ (319,164) | ¥ (342,673) | 488,246 | 70,790 | 578,653 | (5,602,990) | |
Net cash (used in)/provided by operating activities | 19,818 | 2,875 | 123,447 | (2,376,832) | |||
Net cash used in investing activities | (798,046) | (115,706) | 337 | (1,712,333) | |||
Net cash (used in)/ provided by financing activities | (2,276,260) | (330,027) | 1,514,660 | 4,029,070 | |||
Effect of foreign exchange rate changes on cash and cash equivalents | 77,133 | 11,183 | (22,215) | 17,711 | |||
Net increase/(decrease) in cash and cash equivalents | (2,977,355) | (431,675) | 1,616,229 | (42,384) | |||
Cash and cash equivalents and restricted cash at beginning of years | 4,939,045 | 4,939,045 | 6,555,274 | 950,425 | 4,939,045 | 4,981,429 | |
Cash and cash equivalents and restricted cash at end of years | 3,577,919 | 518,750 | 6,555,274 | 4,939,045 | |||
VIE | |||||||
Variable Interest Entity [Line Items] | |||||||
Total assets | 6,865 | 106,998 | 995 | ||||
Total liabilities | 2,864 | 95,488 | $ 415 | ||||
Net loss | ¥ (23,542) | $ (3,413) | (22,750) | (15,464) | |||
Net cash (used in)/provided by operating activities | (58,781) | 58,819 | |||||
Net cash used in investing activities | (47) | ||||||
Net increase/(decrease) in cash and cash equivalents | (58,781) | 58,772 | |||||
Cash and cash equivalents and restricted cash at beginning of years | ¥ 58,781 | ¥ 58,781 | ¥ 58,781 | 9 | |||
Cash and cash equivalents and restricted cash at end of years | ¥ 58,781 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Convenience translation, Restricted cash, Accounts receivable and Inventories (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) $ / ¥ | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2022 USD ($) $ / ¥ | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Buying rate | 6.8972 | 6.8972 | ||
Bad debt allowance | ¥ 191 | ¥ 765 | $ 27 | |
Inventory wrote off | ¥ 33,400 | $ 4,800 | ¥ 5,600 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Store operating equipment | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of the assets | 5 years |
Mechanical equipment | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of the assets | 10 years |
Minimum [Member] | Office equipment and others | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of the assets | 3 years |
Minimum [Member] | Office buildings | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of the assets | 40 years |
Maximum [Member] | Office equipment and others | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of the assets | 5 years |
Maximum [Member] | Office buildings | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of the assets | 50 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of long-lived assets other than goodwill (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Impairment loss of long-lived assets | ¥ 221,800 | $ 32,200 | ¥ 21,368 | ¥ 71,467 |
Luckin pop mini | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Impairment loss of long-lived assets | 46,700 | |||
Store operating equipment and others | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Impairment loss of long-lived assets | ¥ 21,400 | ¥ 9,800 | ||
Luckin Coffee EXPRESS machines | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Impairment loss of long-lived assets | 221,800 | |||
Linefriends food licensing | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Impairment loss of long-lived assets | ¥ 12,800 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair value of financial instruments (Details) - Significant other observable inputs (Level 2) ¥ in Millions, $ in Millions | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
Summary Of Significant Accounting Policies [Line Item] | |||
Cash equivalents | ¥ 1,966.3 | $ 285.1 | ¥ 4,478.4 |
Security deposits held in bank accounts for bank guarantee letters which is included in restricted cash | ¥ 7.7 | $ 1.1 | ¥ 58.2 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | ¥ 13,292,982 | $ 1,927,301 | ¥ 7,965,323 | ¥ 4,033,418 | |
Allowance for doubtful accounts | 191 | 765 | $ 27 | ||
Accounts receivable, net | 58,782 | 38,605 | 8,523 | ||
Deferred revenues | 97,400 | 96,200 | $ 14,100 | ||
Revenues from product sales | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | 10,223,720 | 1,482,300 | 6,659,218 | 3,716,791 | |
Revenues from self-operated stores | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | 9,414,500 | 1,365,000 | 6,192,700 | 3,472,800 | |
Partnership stores - material sales | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | 2,011,200 | 291,600 | 834,700 | 227,200 | |
Partnership stores - Other services | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | 352,100 | 51,000 | 147,800 | 33,300 | |
Partnership stores - profit sharing | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | ¥ 427,900 | $ 62,000 | 144,800 | 12,800 | |
Partnership stores - profit sharing | Minimum [Member] | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Term of profit-sharing freed (in months) | 1 month | 1 month | |||
Partnership stores - profit sharing | Maximum [Member] | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Term of profit-sharing freed (in months) | 3 months | 3 months | |||
Revenue from product sales on a net basis | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | ¥ 1,200 | $ 200 | 2,000 | 3,700 | |
Partnership stores - equipment sales | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | 278,100 | 40,300 | 178,800 | 43,300 | |
Revenues from freshly brewed drinks | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | 9,079,300 | 1,316,400 | 5,909,700 | 3,218,700 | |
Revenues from other products | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | 686,800 | 99,600 | 395,600 | 309,700 | |
Revenues from others | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Revenue | ¥ 457,500 | $ 66,300 | ¥ 354,000 | ¥ 188,300 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Sales and marketing expenses and General and administrative expenses ,Income taxes (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Delivery expenses | ¥ 1,373,200 | $ 199,098 | ¥ 819,549 | ¥ 414,808 |
Interest expense or penalty accrued in relation to unrecognized tax benefit | 0 | 0 | 0 | |
Sales and marketing expenses | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Advertising expenditure | 338,000 | 49,000 | 243,700 | 354,500 |
General and administrative expenses | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Research and development costs | ¥ 301,400 | $ 43,700 | ¥ 251,700 | ¥ 265,500 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Government subsidies (Details) ¥ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Government subsidies | ¥ 78 | $ 11.3 | ¥ 47.1 | ¥ 26.3 |
Government Assistance, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other (expenses)/income, net | Other (expenses)/income, net |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Employee benefit expenses and Segment reporting (Details) ¥ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) segment | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Employee benefit expenses | ¥ 333.5 | $ 48.4 | ¥ 247.3 | ¥ 139.6 |
Number of reportable segments | 1 | 1 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revision of Previously Issued Financial Statements (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2021 CNY (¥) ¥ / shares | Sep. 30, 2021 CNY (¥) ¥ / shares | Dec. 31, 2022 CNY (¥) ¥ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 CNY (¥) ¥ / shares | Dec. 31, 2020 CNY (¥) ¥ / shares | Dec. 31, 2019 CNY (¥) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 CNY (¥) | Mar. 31, 2022 CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | ||||||||||
Foreign exchange (loss) /gain, net | ¥ 1,331 | ¥ 3,337 | ¥ 10,661 | $ 1,546 | ¥ 12,441 | ¥ (70,937) | ||||
Net loss | (319,164) | (342,673) | 488,246 | 70,790 | 578,653 | (5,602,990) | ||||
Foreign currency translation difference, net of tax of nil | 42,863 | 50,699 | (69,552) | (10,084) | 102,802 | 286,697 | ||||
Total comprehensive income/loss | ¥ (276,301) | ¥ (291,974) | ¥ 418,694 | $ 60,706 | ¥ 681,455 | ¥ (5,316,293) | ||||
Basic net (loss)/income per share attributable to ordinary shareholders | (per share) | ¥ (0.15) | ¥ (0.17) | ¥ 0.20 | $ 0.03 | ¥ 0.29 | ¥ (2.76) | ||||
Diluted | (per share) | ¥ (0.15) | ¥ (0.17) | ¥ 0.19 | $ 0.03 | ¥ 0.27 | ¥ (2.76) | ||||
Foreign currency translation difference, tax | ¥ 0 | ¥ 0 | ¥ 0 | ¥ 0 | ¥ 0 | |||||
Accumulated deficits | (12,772,154) | (12,795,663) | ¥ (11,421,145) | (11,876,351) | $ (1,655,910) | ¥ (11,971,223) | ¥ (11,856,516) | |||
Accumulated other comprehensive income | 406,917 | 414,753 | 397,304 | 466,856 | 57,604 | 413,886 | 462,983 | |||
Total Company's ordinary shareholders' equity | 2,505,582 | 2,568,027 | ¥ 5,049,247 | 3,631,137 | $ 732,072 | 4,261,790 | 4,324,593 | |||
As previously reported | ||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | ||||||||||
Foreign exchange (loss) /gain, net | 109,056 | 111,062 | 120,166 | |||||||
Net loss | (211,439) | (234,948) | 686,378 | |||||||
Foreign currency translation difference, net of tax of nil | (64,862) | (57,026) | (4,923) | |||||||
Total comprehensive income/loss | ¥ (276,301) | ¥ (291,974) | ¥ 681,455 | |||||||
Basic net (loss)/income per share attributable to ordinary shareholders | ¥ / shares | ¥ (0.10) | ¥ (0.12) | ¥ 0.34 | |||||||
Diluted | ¥ / shares | ¥ (0.10) | ¥ (0.12) | ¥ 0.32 | |||||||
Accumulated deficits | ¥ (12,664,429) | ¥ (12,687,938) | ¥ (11,768,626) | (11,863,498) | (11,748,791) | |||||
Accumulated other comprehensive income | 299,192 | 307,028 | 359,131 | 306,161 | 355,258 | |||||
Total Company's ordinary shareholders' equity | 2,505,582 | 2,568,027 | 3,631,137 | 4,261,790 | 4,324,593 | |||||
Adjustment | ||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | ||||||||||
Foreign exchange (loss) /gain, net | 107,700 | 107,700 | 107,700 | |||||||
Reclassification of treatment of the foreign exchange impact | Adjustment | ||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | ||||||||||
Foreign exchange (loss) /gain, net | (107,725) | (107,725) | (107,725) | |||||||
Net loss | (107,725) | (107,725) | (107,725) | |||||||
Foreign currency translation difference, net of tax of nil | ¥ 107,725 | ¥ 107,725 | ¥ 107,725 | |||||||
Basic net (loss)/income per share attributable to ordinary shareholders | ¥ / shares | ¥ (0.05) | ¥ (0.05) | ¥ (0.05) | |||||||
Diluted | ¥ / shares | ¥ (0.05) | ¥ (0.05) | ¥ (0.05) | |||||||
Accumulated deficits | ¥ (107,725) | ¥ (107,725) | ¥ (107,725) | (107,725) | (107,725) | |||||
Accumulated other comprehensive income | ¥ 107,725 | ¥ 107,725 | ¥ 107,725 | ¥ 107,725 | ¥ 107,725 |
PRINCIPAL RISKS (Details)
PRINCIPAL RISKS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
PRINCIPAL RISKS | ||||||
Cost of purchased materials | ¥ 5,178,963 | $ 750,879 | ¥ 3,198,552 | ¥ 1,995,380 | ||
Credit risk | ||||||
PRINCIPAL RISKS | ||||||
Cash and cash equivalents and short-term investments | 3,316,800 | ¥ 3,402,900 | $ 480,900 | |||
Credit risk | Outside PRC | ||||||
PRINCIPAL RISKS | ||||||
Cash and cash equivalents and short-term investments | ¥ 217,600 | $ 31,500 | $ 482,500 | |||
Supplier A | Total cost of purchased materials | ||||||
PRINCIPAL RISKS | ||||||
Cost of purchased materials | 196,886 | |||||
Supplier B | Total cost of purchased materials | ||||||
PRINCIPAL RISKS | ||||||
Cost of purchased materials | ¥ 194,838 | |||||
Economic risk | ||||||
PRINCIPAL RISKS | ||||||
Minimum term of PRC government's economic reform policies (in years) | 20 years | 20 years | ||||
Foreign currency exchange rate risk | ||||||
PRINCIPAL RISKS | ||||||
(Depreciation) / Appreciation of US$ against RMB | 8.20% | 8.20% | (2.30%) | (6.30%) |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
ACCOUNTS RECEIVABLES | |||
Accounts receivable | ¥ 58,973 | $ 8,550 | ¥ 39,370 |
Allowance for doubtful accounts | (191) | (27) | (765) |
Accounts receivable, net | 58,782 | 8,523 | 38,605 |
Partners | |||
ACCOUNTS RECEIVABLES | |||
Receivables due from partners | 20,235 | 2,934 | 8,688 |
Corporate customers | |||
ACCOUNTS RECEIVABLES | |||
Receivables due from corporate customers | ¥ 38,738 | $ 5,616 | ¥ 30,682 |
INVENTORIES (Details)
INVENTORIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
INVENTORIES | |||
Raw materials | ¥ 886,336 | $ 128,506 | ¥ 378,520 |
Packaging and other supplies | 289,537 | 41,979 | 191,188 |
Pre-made food and beverage items | 30,594 | 4,436 | 23,632 |
Inventory, net | ¥ 1,206,467 | $ 174,921 | ¥ 593,340 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |||
Deductible input VAT | ¥ 747,067 | $ 108,315 | ¥ 636,923 |
Prepaid rental and deposits | 169,485 | 24,573 | 234,885 |
Prepayments for materials and advertising fees | 108,638 | 15,751 | 79,332 |
Interest receivables | 204 | 30 | 4,360 |
Others | 52,325 | 7,587 | 88,507 |
Prepaid expenses and other current assets, net | ¥ 1,077,719 | $ 156,256 | ¥ 1,044,007 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Property and equipment, gross | ¥ 3,590,198 | ¥ 3,130,576 | $ 520,529 | ||
Less: accumulated depreciation | (1,546,362) | (1,244,914) | (224,201) | ||
Less: impairment | (176,458) | (80,561) | (25,584) | ||
Property, plant and equipment, net | 1,867,378 | 1,805,101 | 270,744 | ||
Depreciation | 391,700 | $ 56,800 | 465,200 | ¥ 483,300 | |
Impairment loss | 176,500 | 25,600 | 80,600 | ||
Luckin coffee express | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Impairment loss | 167,100 | 24,200 | 54,000 | ||
Impairment provision written off | 107,800 | ||||
Self-operating stores | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Impairment loss | 9,300 | 1,400 | 26,500 | ||
Store operating equipment | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Property and equipment, gross | 1,341,127 | 1,260,623 | 194,445 | ||
Leasehold improvements | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Property and equipment, gross | 1,126,562 | 873,449 | 163,336 | ||
Office equipment and others | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Property and equipment, gross | 177,259 | 105,721 | 25,700 | ||
Office buildings | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Property and equipment, gross | 811,666 | 798,657 | 117,681 | ||
Mechanical equipment | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Property and equipment, gross | 80,481 | 77,072 | 11,669 | ||
Construction in progress | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Property and equipment, gross | 53,103 | ¥ 15,054 | $ 7,698 | ||
Luckin Coffee EXPRESS machines | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Impairment loss | 220,700 | $ 32,000 | |||
Store operating equipment and others | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Impairment provision written off | ¥ 17,000 |
OTHER NON-CURRENT ASSETS, NET_2
OTHER NON-CURRENT ASSETS, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | |
OTHER NON-CURRENT ASSETS, NET | |||||
Long-term deposits | ¥ 181,477 | ¥ 117,345 | $ 26,312 | ||
Prepayments for equipment, net | 119,009 | 16,866 | 17,254 | ||
Carrying amounts of land use rights | 26,100 | 6,947 | 3,781 | ||
Prepaid leasehold improvements | 1,177 | 22,768 | 171 | ||
Other non-current assets, net | 327,744 | 163,926 | $ 47,518 | ||
Original values | 26,700 | 7,300 | |||
Accumulated amortization | ¥ 600 | 400 | |||
Period of land use rights (in years) | 50 years | 50 years | |||
Amortization of land use rights | ¥ 200 | $ 30 | ¥ 150 | ¥ 140 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Detail) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Payroll and welfare payables | ¥ 372,795 | $ 54,050 | ¥ 260,177 |
Payables for office supplies and utilities | 238,466 | 34,574 | 149,557 |
Payables for delivery costs | 210,779 | 30,560 | 138,833 |
Payables for professional service fees | 132,430 | 19,201 | 249,520 |
Payables for the purchase of property and equipment | 120,227 | 17,431 | 124,456 |
Other taxes payables | 105,970 | 15,364 | 36,495 |
Payables for advertising expenditures | 55,261 | 8,012 | 66,203 |
Others | 139,497 | 20,226 | 296,765 |
Accrued expenses and other current liabilities | ¥ 1,375,425 | $ 199,418 | ¥ 1,322,006 |
RELATED PARTY TRANSACTIONS - Si
RELATED PARTY TRANSACTIONS - Significant related party transactions (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Jul. 01, 2020 CNY (¥) | Dec. 31, 2022 CNY (¥) item | Dec. 31, 2022 USD ($) item | Dec. 31, 2020 CNY (¥) | |
RELATED PARTY TRANSACTIONS | ||||
Total | ¥ 0 | |||
Number of trust investments | item | 2 | 2 | ||
Services received from: | ||||
RELATED PARTY TRANSACTIONS | ||||
Total | ¥ 13,947 | $ 2,022 | ¥ 35,254 | |
Services received from: | Goumei | ||||
RELATED PARTY TRANSACTIONS | ||||
Total | 13,947 | $ 2,022 | ||
Services received from: | Beijing QWOM Digital Technology Co., Ltd. ("QWOM") | ||||
RELATED PARTY TRANSACTIONS | ||||
Total | 28,920 | |||
Services received from: | UCAR Inc. ("UCAR") | ||||
RELATED PARTY TRANSACTIONS | ||||
Total | 6,334 | |||
Agreement of payment for leasehold improvement of sublet rental office to: | UCAR Inc. ("UCAR") | ||||
RELATED PARTY TRANSACTIONS | ||||
Total | ¥ 36,600 | ¥ 31,700 | 36,599 | |
Trust investments | ||||
RELATED PARTY TRANSACTIONS | ||||
Total | 1,140,000 | |||
Trust investments | Xiamen trust | ||||
RELATED PARTY TRANSACTIONS | ||||
Total | 590,000 | |||
Trust investments | Yunnan trust | ||||
RELATED PARTY TRANSACTIONS | ||||
Total | ¥ 550,000 |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related Party Balances (Details) - Dec. 31, 2022 ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) |
RELATED PARTY TRANSACTIONS | ||
Total | ¥ 3,932 | $ 570 |
Goumei | ||
RELATED PARTY TRANSACTIONS | ||
Total | ¥ 3,932 | $ 570 |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) ¥ in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | |
RESTRICTED NET ASSETS | |||||
Minimum percentage of after-tax profits appropriated to the general reserve fund | 10% | 10% | |||
Maximum percentage of after-tax profits appropriated to the general reserve fund | 50% | 50% | |||
Statutory reserves allocated | ¥ 33,000 | $ 4.8 | ¥ 2,000 | ¥ 200 | |
Appropriation to other reserve funds | 0 | 0 | ¥ 0 | ||
Restricted net assets of PRC subsidiaries and the VIE | ¥ 7,647,700 | ¥ 6,606,900 | $ 1,108.8 |
CONVERTIBLE SENIOR NOTES (Detai
CONVERTIBLE SENIOR NOTES (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||
Apr. 04, 2022 shares | Jan. 28, 2022 USD ($) shares | Dec. 01, 2021 | Jul. 15, 2020 | Jan. 17, 2020 USD ($) | Jan. 14, 2020 USD ($) | Dec. 31, 2019 shares | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2020 USD ($) | Aug. 31, 2022 USD ($) | |
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Net proceeds from Notes Offering | ¥ | ¥ 3,098,069 | |||||||||||||
Aggregate principal amount | $ 115,600 | |||||||||||||
Interest expenses | ¥ 19,855 | $ 2,879 | ¥ 35,490 | ¥ 107,014 | ||||||||||
Percentage of aggregate principal amount of creditors to approve the scheme | 97.70% | |||||||||||||
Fair value loss | (6,381) | (925) | ||||||||||||
Gain from extinguishment | 124,139 | 17,998 | ||||||||||||
Convertible senior notes due 2025 | ||||||||||||||
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Interest rate (as a percent) | 0.50% | 0.75% | ||||||||||||
Net proceeds from Notes Offering | $ 449,700 | |||||||||||||
Beneficial conversion feature | $ 0 | |||||||||||||
Additional interest rate | 0.50% | 0.75% | ||||||||||||
Aggregate principal amount | $ 60,000 | $ 400,000 | ||||||||||||
Total amount due | $ 469,900 | $ 464,400 | ||||||||||||
Interest expenses | 300 | 5,500 | $ 15,400 | |||||||||||
Series B Senior Secured Notes | ||||||||||||||
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Gain from extinguishment | 124,100 | 18,300 | ||||||||||||
Class A ordinary shares | ||||||||||||||
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Issuance of shares (in shares) | shares | 19,753,888 | |||||||||||||
Restructuring support agreement | ||||||||||||||
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Cash consideration principle amount | $ 245,500 | |||||||||||||
Derivative asset bifurcated from the New Notes | 5,400 | |||||||||||||
Marked to fair value | 4,500 | |||||||||||||
Fair value loss | ¥ 6,400 | $ 900 | ||||||||||||
Restructuring support agreement | 9% Series B - senior secured notes due 2027 | ||||||||||||||
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Interest rate (as a percent) | 9% | |||||||||||||
Net proceeds from Notes Offering | $ 109,900 | |||||||||||||
Additional interest rate | 9% | |||||||||||||
Restructuring support agreement | Convertible senior notes due 2025 | ||||||||||||||
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Percentage of principal and accrued and unpaid interest on Notes which automatically became due and payable | 100% | 100% | ||||||||||||
Threshold number of days for additional interest | 380 days | |||||||||||||
Additional interest payable | $ 3,100 | 1,100 | ||||||||||||
Percentage of principal of notes upon default | 100% | 100% | ||||||||||||
Aggregate principal amount | $ 460,000 | |||||||||||||
Accrued and unpaid interest | 6,800 | 3,300 | ||||||||||||
Interest expenses | $ 2,000 | $ 1,100 | ||||||||||||
Restructuring support agreement | Class A ordinary shares | ||||||||||||||
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Issuance of shares including shares issued under top-up mechanism (in shares) | shares | 76,220,808 | |||||||||||||
Restructuring support agreement | ADSs | ||||||||||||||
CONVERTIBLE SENIOR NOTES | ||||||||||||||
Issuance of shares (in shares) | shares | 291,699 | |||||||||||||
Issuance of shares including shares issued under top-up mechanism (in shares) | shares | 9,527,601 | |||||||||||||
Number of shares claimed by creditors | shares | 25,004 | |||||||||||||
Number of shares unclaimed which are returned | shares | 200,032 |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) $ / shares in Units, ¥ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||||||||||
Jan. 09, 2020 USD ($) $ / shares shares | Jan. 09, 2020 CNY (¥) shares | Jun. 18, 2019 USD ($) shares | Jun. 18, 2019 CNY (¥) shares | May 17, 2019 USD ($) $ / shares shares | May 17, 2019 CNY (¥) shares | Jan. 31, 2022 shares | Dec. 31, 2019 shares | Nov. 30, 2019 shares | Dec. 31, 2022 Vote shares | Dec. 31, 2021 shares | Dec. 31, 2020 shares | |
IPO | ||||||||||||
ORDINARY SHARES | ||||||||||||
Total proceeds, net of underwriting discounts and commissions | $ 527.7 | ¥ 3,640.9 | ||||||||||
Overallotment option | ||||||||||||
ORDINARY SHARES | ||||||||||||
Total proceeds, net of underwriting discounts and commissions | $ 79.5 | ¥ 548 | ||||||||||
Conversion into Class B ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Conversion ratio | 1 | 1 | ||||||||||
Conversion into Class A ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Conversion ratio | 1 | 1 | 1 | |||||||||
Ordinary shares | Conversion into Class B ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares converted | 750,000 | 750,000 | ||||||||||
Angel shares | Conversion into Class B ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares converted | 1,428,750 | 1,428,750 | ||||||||||
Series A convertible redeemable preferred shares | Conversion into Class B ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares converted | 544,688 | 544,688 | ||||||||||
Series B convertible redeemable preferred shares | Conversion into Class B ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares converted | 279,152 | 279,152 | ||||||||||
Series B-1 Preferred shares | Conversion into Class B ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares converted | 173,182 | 173,182 | ||||||||||
Series B-1 Preferred shares | Conversion into Class A ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares converted | 15,211 | 15,211 | ||||||||||
Class B ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares issued upon conversion | 3,175,772 | 3,175,772 | ||||||||||
Number of shares after share split | 1,587,886,000 | |||||||||||
Par value per share (in US dollars per share) | $ / shares | $ 0.000002 | |||||||||||
Share split ratio | 500 | 500 | ||||||||||
Number of voting rights entitled | Vote | 10 | |||||||||||
Class B ordinary shares | Conversion into Class A ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares issued upon conversion | 1,132,908,520 | |||||||||||
Conversion ratio | 1 | 1 | ||||||||||
Class A ordinary shares | ||||||||||||
ORDINARY SHARES | ||||||||||||
Number of shares issued upon conversion | 15,211 | 15,211 | 310,198,928 | |||||||||
Number of shares after share split | 7,605,500 | |||||||||||
Par value per share (in US dollars per share) | $ / shares | $ 0.000002 | |||||||||||
Share split ratio | 500 | 500 | ||||||||||
Aggregate shares issued | 19,753,888 | |||||||||||
Number of voting rights entitled | Vote | 1 | |||||||||||
Issue of class A ordinary shares for vested options and RSU | 53,123,768 | 70,061,136 | ||||||||||
Convertible senior notes restructuring (in shares) | 76,220,808 | |||||||||||
Class A ordinary shares | IPO | ||||||||||||
ORDINARY SHARES | ||||||||||||
Aggregate shares issued | 264,000,000 | 264,000,000 | ||||||||||
Class A ordinary shares | Follow on Offering | ||||||||||||
ORDINARY SHARES | ||||||||||||
Aggregate shares issued | 82,800,000 | 82,800,000 | ||||||||||
Class A ordinary shares | Private placement | ||||||||||||
ORDINARY SHARES | ||||||||||||
Aggregate shares issued | 23,529,412 | 23,529,412 | ||||||||||
Total proceeds, net of issuance costs | $ 50 | ¥ 345 | ||||||||||
Issue price per share (in US dollars per share) | $ / shares | $ 2.125 | |||||||||||
Class A ordinary shares | Overallotment option | ||||||||||||
ORDINARY SHARES | ||||||||||||
Aggregate shares issued | 39,600,000 | 39,600,000 | ||||||||||
ADSs | ||||||||||||
ORDINARY SHARES | ||||||||||||
Total proceeds, net of underwriting discounts and commissions | $ 419.5 | ¥ 2,888.5 | ||||||||||
Issue price per share (in US dollars per share) | $ / shares | $ 42 | |||||||||||
ADSs | IPO | ||||||||||||
ORDINARY SHARES | ||||||||||||
Aggregate shares issued | 33,000,000 | 33,000,000 | ||||||||||
ADSs | Follow on Offering | ||||||||||||
ORDINARY SHARES | ||||||||||||
Aggregate shares issued | 10,350,000 | 10,350,000 | ||||||||||
ADSs | Overallotment option | ||||||||||||
ORDINARY SHARES | ||||||||||||
Aggregate shares issued | 4,950,000 | 4,950,000 | 4,950,000 | 4,950,000 | ||||||||
Minimum | ||||||||||||
ORDINARY SHARES | ||||||||||||
Aggregate shares issued | 180,000,000 |
SENIOR PREFERRED SHARES (Detail
SENIOR PREFERRED SHARES (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||||
Jan. 07, 2022 CNY (¥) shares | Jan. 07, 2022 USD ($) $ / shares shares | Nov. 30, 2021 CNY (¥) shares | Nov. 30, 2021 USD ($) $ / shares shares | Apr. 15, 2021 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | |
SENIOR PREFERRED SHARES | ||||||||
Proceeds from issuance of convertible senior preferred shares | ¥ 63,380 | $ 9,189 | ¥ 1,514,660 | |||||
Convertible Senior Preferred Shares | ||||||||
SENIOR PREFERRED SHARES | ||||||||
Percentage of the original aggregate subscription price of the Senior Preferred Sahres | 100% | |||||||
Initial conversion ratio of Senior Preferred Shares to Ordinary shares | 1 | |||||||
Convertible Senior Preferred Shares | Centurium Capital | ||||||||
SENIOR PREFERRED SHARES | ||||||||
Value of temporary equity to be issued under the investment agreement | $ | $ 240,000 | |||||||
Senior Preferred Shares issued (in shares) | shares | 295,384,615 | 295,384,615 | ||||||
Proceeds from issuance of convertible senior preferred shares | ¥ 1,527,400 | $ 240,000 | ||||||
Issue price per share (in US dollars per share) | $ / shares | $ 0.8125 | |||||||
Convertible Senior Preferred Shares | Joy Capital | ||||||||
SENIOR PREFERRED SHARES | ||||||||
Value of temporary equity to be issued under the investment agreement | $ | $ 10,000 | |||||||
Senior Preferred Shares issued (in shares) | shares | 12,307,692 | 12,307,692 | ||||||
Proceeds from issuance of convertible senior preferred shares | ¥ 63,700 | $ 10,000 | ||||||
Issue price per share (in US dollars per share) | $ / shares | $ 0.8125 |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) - 2019 Plan | 12 Months Ended | |||||
Jan. 18, 2022 | Jan. 18, 2019 shares | Dec. 31, 2022 | Dec. 31, 2021 shares | Dec. 31, 2020 shares | Dec. 31, 2019 | |
SHARE BASED COMPENSATION | ||||||
Term (in years) | 10 years | |||||
Vesting period (in years) | 4 years | 4 years | 4 years | 4 years | ||
Granted | 79,015,500 | 2,795,600 | 25,917,240 | |||
Share split ratio | 500 | |||||
First vesting date | ||||||
SHARE BASED COMPENSATION | ||||||
Vesting percentage (as a percent) | 40% | 40% | 25% | |||
Second vesting date | ||||||
SHARE BASED COMPENSATION | ||||||
Vesting percentage (as a percent) | 40% | 40% | 40% | 25% | ||
Third vesting date | ||||||
SHARE BASED COMPENSATION | ||||||
Vesting percentage (as a percent) | 10% | 10% | 25% | |||
Fourth vesting date | ||||||
SHARE BASED COMPENSATION | ||||||
Vesting percentage (as a percent) | 10% | 10% | 25% |
SHARE BASED COMPENSATION - Expe
SHARE BASED COMPENSATION - Expenses were allocated in operating expenses by function (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
SHARE BASED COMPENSATION | ||||
Total share-based compensation expenses recognized | ¥ 398,008 | $ 57,705 | ¥ 302,734 | ¥ 22,029 |
Sales and marketing expenses | ||||
SHARE BASED COMPENSATION | ||||
Total share-based compensation expenses recognized | 17,452 | 2,530 | 9,185 | |
General and administrative expenses | ||||
SHARE BASED COMPENSATION | ||||
Total share-based compensation expenses recognized | ¥ 380,556 | $ 55,175 | ¥ 293,549 | ¥ 22,029 |
SHARE BASED COMPENSATION - Opti
SHARE BASED COMPENSATION - Options granted to employees (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Jan. 25, 2021 | Jan. 18, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
2019 Plan | ||||||
Number of options | ||||||
Outstanding, at the beginning of period | 60,453,072 | 60,028,208 | 72,529,960 | |||
Granted | 79,015,500 | 2,795,600 | 25,917,240 | |||
Exercised | 32,008,561 | |||||
Forfeit | (2,370,736) | (38,418,992) | ||||
Outstanding, at the end of period | 28,444,511 | 60,453,072 | 60,028,208 | 72,529,960 | ||
Fully vested and expected to vest as of December 31, 2022 | 66,938,584 | |||||
Exercisable at the end of period | 25,293,687 | |||||
Weighted-average exercise price | ||||||
Outstanding, at the beginning of period | $ 0.0002 | $ 0.0002 | $ 0.0002 | |||
Granted | 0.0002 | 0.0002 | ||||
Exercised | 0.0002 | 0.0002 | 0.0002 | |||
Forfeit | 0.0002 | 0.0002 | 0.0002 | |||
Outstanding, at the end of period | 0.0002 | $ 0.0002 | $ 0.0002 | $ 0.0002 | ||
Fully vested and expected to vest as of December 31, 2022 | 0.0002 | |||||
Exercisable at the end of period | $ 0.0002 | |||||
Weighted-average remaining contractual term | ||||||
Weighted-average remaining contractual term of outstanding stock options | 7 years 2 months 26 days | 7 years 10 months 28 days | 8 years 9 months 29 days | 9 years 18 days | ||
Fully vested and expected to vest as of December 31, 2022 | 6 years 9 months 29 days | |||||
Exercisable as of December 31, 2022 | 7 years 1 month 28 days | |||||
Aggregated intrinsic value | ||||||
Exercised | $ 88,097 | |||||
Fully vested and expected to vest as of December 31, 2022 | 184,235 | |||||
Exercisable as of December 31, 2022 | $ 69,616 | |||||
Closing price | $ 1.07 | $ 0.63 | ||||
Weighted average grant date fair value of options granted | $ 0 | $ 1.07 | 0.63 | |||
Unrecognized share-based compensation expense for share options | $ 800 | |||||
Weighted average period of which unrecognized share-based compensation expense for share options granted, which are expected to be recognized | 1 year 2 months 12 days | |||||
Term (in years) | 10 years | |||||
2019 Plan | ADSs | ||||||
Aggregated intrinsic value | ||||||
Closing price | $ 1.09 | |||||
2021 plan | ||||||
Number of RSUs | ||||||
Outstanding, at the beginning of period | 2,530,752 | |||||
Granted | 45,722,392 | 40,842,760 | ||||
Vested | (43,329,376) | (31,943,824) | ||||
Forfeited or cancelled | (739,472) | (6,368,184) | ||||
Outstanding, at the end of period | 4,184,296 | 2,530,752 | ||||
Weighted-Average Grant-Date Fair Value | ||||||
Outstanding, at the beginning of period | $ 1.09 | |||||
Granted | 1.26 | $ 1.09 | ||||
Vested | 1.26 | 1.10 | ||||
Forfeited or cancelled | 1.30 | 1.06 | ||||
Outstanding, at the end of period | 1.23 | 1.09 | ||||
Aggregated intrinsic value | ||||||
Total weighted average grant-date fair value RSUs (in US dollars per share) | $ 1.26 | 1.09 | ||||
Weighted average period of which unrecognized share-based compensation expense for share options granted, which are expected to be recognized | 7 months 13 days | |||||
Term (in years) | 10 years | |||||
2021 plan | ADSs | ||||||
Aggregated intrinsic value | ||||||
Closing price | $ 22.02 | |||||
Maximum number of shares authorized | 27,846,154 | |||||
2021 plan | Ordinary shares | ||||||
Aggregated intrinsic value | ||||||
Closing price | 2.75 | |||||
Maximum number of shares authorized | 222,769,232 | |||||
2021 plan | RSUs | ||||||
Aggregated intrinsic value | ||||||
Weighted average grant date fair value of options granted | $ 1.23 | $ 1.09 | ||||
Unrecognized share-based compensation expense for share options | $ 2,900 |
SHARE BASED COMPENSATION - Fair
SHARE BASED COMPENSATION - Fair value of employee share options (Details) - 2019 Plan - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SHARE BASED COMPENSATION | ||
Risk-free interest rate | 1.04% | 0.82% |
Expected volatility | 74.49% | 74.37% |
Expected dividend yield | 0% | 0% |
Exercise multiple | $ 2.20 | $ 2.20 |
Expected post-vesting forfeiture rate | 0% | 0% |
Fair value of share option | $ 1.07 | $ 0.63 |
TAXATION - Enterprise income ta
TAXATION - Enterprise income tax ("EIT") (Details) $ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | 24 Months Ended | 36 Months Ended | |||
Jan. 31, 2019 | Dec. 31, 2022 USD ($) | Dec. 31, 2022 HKD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2024 | |
TAXATION | |||||||
Tax rate (as a percent) | 25% | 25% | 25% | 25% | |||
Hong Kong | |||||||
TAXATION | |||||||
payments of dividends by the Company | $ 0 | ||||||
Hong Kong | First 2,000,000 Hong Kong Dollar ("HKD") of profits | |||||||
TAXATION | |||||||
Tax rate (as a percent) | 8.25% | 8.25% | |||||
Profit to qualify for tax rate | $ 2,000 | ||||||
Hong Kong | Above 2,000,000 Hong Kong Dollar ("HKD") of profits | |||||||
TAXATION | |||||||
Tax rate (as a percent) | 16.50% | 16.50% | |||||
Profit to qualify for tax rate | $ 2,000 | ||||||
PRC | |||||||
TAXATION | |||||||
Tax rate (as a percent) | 25% | 25% | |||||
Preferential corporate income tax rate | 20 | ||||||
Withholding tax rate (as a percent) | 10% | 10% | |||||
PRC | Maximum | |||||||
TAXATION | |||||||
Exemption range in taxable profits | 75% | ||||||
Change in exemption range | 87.50% | 87.50% | 87.50% | ||||
PRC | Minimum | |||||||
TAXATION | |||||||
Exemption range in taxable profits | 50% | ||||||
Change in exemption range | 50% | 50% | 75% | ||||
Cayman Islands | |||||||
TAXATION | |||||||
payments of dividends by the Company | $ 0 | ||||||
British Virgin Islands | |||||||
TAXATION | |||||||
payments of dividends by the Company | $ 0 |
TAXATION - The Components of in
TAXATION - The Components of income(loss) before tax (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
TAXATION | ||||
Total (loss)/income before tax | ¥ 1,126,750 | $ 163,364 | ¥ 514,792 | ¥ (6,240,791) |
Income tax (expenses)/benefits | ||||
Current income tax expenses | (144,032) | (20,882) | (360) | (919) |
Deferred tax benefits | 494,472 | 71,692 | (64,221) | (638,720) |
Income tax (benefits)/expenses | (638,504) | (92,574) | 63,861 | 637,801 |
Non-PRC | ||||
TAXATION | ||||
Total (loss)/income before tax | (331,744) | (48,098) | 617,090 | (2,937,591) |
PRC | ||||
TAXATION | ||||
Total (loss)/income before tax | ¥ 1,458,494 | $ 211,462 | ¥ (102,298) | ¥ (3,303,200) |
TAXATION - Reconciliation of ta
TAXATION - Reconciliation of tax (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
TAXATION | ||||
Statutory income tax rate (as a percent) | 25% | 25% | 25% | 25% |
(Loss)/income before income taxes | ¥ 1,126,750 | $ 163,364 | ¥ 514,792 | ¥ (6,240,791) |
Income tax (benefits)/expenses computed at PRC statutory income tax rate of 25% | (281,688) | (40,841) | (128,698) | 1,560,198 |
Additional deduction for R&D expenses | (13,516) | (1,960) | (11,095) | (9,108) |
Non-deductible share-based compensation expenses | (80,440) | (11,663) | (58,581) | (5,507) |
Non-deductible expenses and non-taxable income | 9,967 | 1,445 | (9,415) | (24,495) |
Defer tax assets writeoff related to closure entities | 8,266 | 1,198 | ||
Recognition of uncertain tax benefits | 29,325 | 4,252 | ||
Change of valuation allowance | (220,774) | (32,009) | (60,352) | (164,850) |
Effect of preferential tax rate | 18,626 | 2,701 | 158,362 | (9,395) |
Effect of International tax rates | (76,378) | (11,074) | 155,242 | (727,446) |
Prior-year tax filing difference | 16,258 | 2,357 | (3,792) | 188 |
Income tax (benefits)/expenses | ¥ (638,504) | $ (92,574) | ¥ 63,861 | ¥ 637,801 |
TAXATION - Components of deferr
TAXATION - Components of deferred taxes (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
Deferred tax assets | |||
Donation | ¥ 1,264 | $ 183 | ¥ 4,075 |
Accrued expenses | 29,867 | 4,330 | 31,843 |
Accrued welfare | 29,662 | 4,301 | 14,538 |
Impairment loss of long-lived assets and investments | 327,764 | 47,521 | 303,168 |
Allowance for doubtful accounts | 5,398 | 783 | 22,577 |
Tax losses | 1,149,639 | 166,682 | 1,441,091 |
Valuation allowance | (1,335,100) | (193,600) | (1,114,351) |
Total deferred tax assets, net | 208,469 | 30,225 | 702,941 |
Accumulated tax losses | 4,706,300 | 682,300 | |
Valuation allowance | ¥ 1,335,100 | $ 193,600 | ¥ 1,114,351 |
TAXATION - Unrecognized tax pos
TAXATION - Unrecognized tax position (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | |
TAXATION | |||||
Unrecognized tax benefit | ¥ 80,930 | ¥ 54,956 | ¥ 53,961 | $ 11,734 | |
Unrecognized tax benefits, if ultimately recognized, that will impact the effective tax rate | 54,700 | $ 7,900 | |||
TAXATION | |||||
Balance at beginning of year | 54,956 | $ 7,968 | 53,961 | ||
Additions based on tax positions related to the current year | 25,974 | 3,766 | 995 | ||
Balance at end of year | 80,930 | $ 11,734 | 54,956 | 53,961 | |
Interest expense or penalty accrued in relation to unrecognized tax benefit | ¥ 0 | ¥ 0 | ¥ 0 |
NET (LOSS)_INCOME PER SHARE (De
NET (LOSS)/INCOME PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 CNY (¥) ¥ / shares | Sep. 30, 2021 CNY (¥) ¥ / shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | Dec. 31, 2020 CNY (¥) ¥ / shares shares | |
Numerator: | ||||||
Net (loss)/income | ¥ (319,164) | ¥ (342,673) | ¥ 488,246 | $ 70,790 | ¥ 578,653 | ¥ (5,602,990) |
Less: Net (loss)/income attributable to non-controlling interests | ¥ | 108 | (13,885) | ||||
Net (loss)/income attributable to ordinary shareholders | ¥ 488,246 | $ 70,790 | ¥ 578,545 | ¥ (5,589,105) | ||
Denominator: | ||||||
Weighted average number of shares - basic | 2,473,078,408 | 2,473,078,408 | 2,051,263,478 | 2,021,919,061 | ||
Adjustments for dilutive options and RSUs | 43,195,219 | 43,195,219 | 84,580,779 | |||
Weighted average number of shares - diluted | 2,516,273,627 | 2,516,273,627 | 2,135,844,257 | 2,021,919,061 | ||
Basic net (loss)/income per share attributable to ordinary shareholders | (per share) | ¥ (0.15) | ¥ (0.17) | ¥ 0.20 | $ 0.03 | ¥ 0.29 | ¥ (2.76) |
Diluted net (loss)/income per share attributable to ordinary shareholders | (per share) | ¥ (0.15) | ¥ (0.17) | ¥ 0.19 | $ 0.03 | ¥ 0.27 | ¥ (2.76) |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 43,195,219 | 43,195,219 | 84,580,779 | 54,785,705 |
LEASES - Supplemental balance s
LEASES - Supplemental balance sheet information related to operating lease (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
LEASES | |||
Right-of-use assets | ¥ 2,003,997 | $ 290,552 | ¥ 1,237,734 |
Operating lease liabilities - current | 880,873 | 127,715 | 598,062 |
Operating lease liabilities - non-current | 1,024,274 | 148,506 | 575,060 |
Total | ¥ 1,905,147 | $ 276,221 | ¥ 1,173,122 |
LEASES - The weighted average r
LEASES - The weighted average remaining lease terms and discount rates (Details) ¥ in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | |
Remaining lease term and discount rate: | |||
Weighted average remaining lease term (years) | 1 year 5 months 19 days | 1 year 5 months 19 days | |
Weighted average discount rate | 4.358% | 4.358% | |
Operating lease payments | ¥ 875.7 | $ 127 | ¥ 637.2 |
Total operating lease expenses | 854.6 | 123.9 | ¥ 672.9 |
Operating leases that have not yet commenced | ¥ 45.1 | $ 6.5 | |
Minimum | |||
Remaining lease term and discount rate: | |||
Term of operating leases that have not yet commenced (in months) | 15 days | 15 days | |
Maximum | |||
Remaining lease term and discount rate: | |||
Term of operating leases that have not yet commenced (in months) | 62 months | 62 months |
LEASES - Future minimum lease p
LEASES - Future minimum lease payments (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
LEASES | |||
2023 | ¥ 880,873 | $ 127,715 | |
2024 | 606,689 | 87,962 | |
2025 | 310,270 | 44,985 | |
2026 | 149,595 | 21,689 | |
2027 and thereafter | 80,962 | 11,738 | |
Less: interest | (123,242) | (17,868) | |
Total | ¥ 1,905,147 | $ 276,221 | ¥ 1,173,122 |
PROVISION FOR SEC SETTLEMENT (D
PROVISION FOR SEC SETTLEMENT (Details) $ in Thousands, ¥ in Millions | 1 Months Ended | 12 Months Ended | |||||||||
Feb. 03, 2022 USD ($) | Jan. 31, 2022 shares | Dec. 31, 2019 shares | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 17, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 CNY (¥) | Dec. 16, 2020 USD ($) | |
PROVISION FOR SEC SETTLEMENT | |||||||||||
Settlement of civil money penalty amount to SEC | $ 180,000 | ||||||||||
Payable for SEC settlement | $ 180,000 | ¥ 1,174.5 | |||||||||
Provision for SEC settlement | ¥ | ¥ 0 | ¥ (1,146.5) | |||||||||
Penalty from SEC | |||||||||||
PROVISION FOR SEC SETTLEMENT | |||||||||||
Penalty loss | $ 180,000 | ||||||||||
Outstanding balance of penalty | $ 0 | $ 0 | |||||||||
Common Class A [Member] | |||||||||||
PROVISION FOR SEC SETTLEMENT | |||||||||||
Issuance of shares (in shares) | shares | 19,753,888 | ||||||||||
Minimum | |||||||||||
PROVISION FOR SEC SETTLEMENT | |||||||||||
Settlement of civil money penalty amount to SEC | $ 180,000 | ¥ 1,177.1 | |||||||||
Issuance of shares (in shares) | shares | 180,000,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Capital commitments (Details) ¥ in Thousands | Dec. 31, 2022 CNY (¥) |
COMMITMENTS AND CONTINGENCIES | |
Less than 1 year | ¥ 298,626 |
2-3 years | 17,451 |
Total | 316,077 |
Factory and office building construction commitments | |
COMMITMENTS AND CONTINGENCIES | |
Less than 1 year | 138,744 |
2-3 years | 17,451 |
Total | 156,195 |
Fixed assets purchasing commitment | |
COMMITMENTS AND CONTINGENCIES | |
Less than 1 year | 159,882 |
Total | ¥ 159,882 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Contingency (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
Oct. 26, 2021 USD ($) | May 31, 2020 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 16, 2020 USD ($) | May 06, 2020 entity | Apr. 02, 2020 USD ($) | |
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Net revenues | ¥ 13,292,982 | $ 1,927,301 | ¥ 7,965,323 | ¥ 4,033,418 | |||||||||
Costs and expenses | 12,136,803 | 1,759,671 | 8,504,377 | 6,620,686 | |||||||||
Settlement of civil money penalty amount to SEC | $ 180,000 | ||||||||||||
Payable for SEC settlement | 1,174,500 | $ 180,000 | |||||||||||
Provision for equity litigants settlement | 279,967 | $ 40,591 | 155,314 | 1,226,119 | |||||||||
Payable for equity litigants settlement | 33,796 | 1,350,257 | $ 4,900 | ||||||||||
Fabrication of Transactions | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Asserted losses | $ 325,000 | ||||||||||||
U.S. Opt Out Claims | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Settlement amount | $ 175,000 | ||||||||||||
U.S. Department of Justice Investigation | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Liability or loss recognized at the end of year | 0 | $ 0 | |||||||||||
U.S. Securities Litigation | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Provision for equity litigants settlement | ¥ 1,226,100 | $ 187,500 | |||||||||||
Additional equity litigation provision | 280,000 | ¥ 155,300 | 41,900 | 24,400 | |||||||||
Payable for equity litigants settlement | ¥ 33,800 | 4,900 | |||||||||||
Ministry of Finance Investigation | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Liability or loss recognized at the end of year | $ 0 | $ 0 | |||||||||||
Number of entities of the Group | entity | 2 | ||||||||||||
Cayman Bondholder Action | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Sought value for losses from Company | $ 155,000 |
PARENT COMPANY ONLY CONDENSED_3
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed balance sheets (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2022 USD ($) $ / shares shares | Jun. 30, 2022 CNY (¥) | Mar. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) shares | Dec. 31, 2021 $ / shares | Sep. 30, 2021 CNY (¥) | Jun. 30, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | May 17, 2019 $ / shares |
Current assets: | ||||||||||
Cash and cash equivalents | ¥ 3,534,304 | $ 512,426 | ¥ 6,477,636 | ¥ 4,806,023 | ||||||
Prepaid expenses and other current assets | 1,077,719 | 156,256 | 1,044,007 | |||||||
Other current assets | 52,325 | 7,587 | 88,507 | |||||||
Total current assets | 6,037,054 | 875,293 | 8,383,350 | |||||||
Non-current assets: | ||||||||||
Other non-current assets | 327,744 | 47,518 | 163,926 | |||||||
Total non-current assets | 4,443,343 | 644,223 | 3,929,140 | |||||||
Total assets | 10,480,397 | 1,519,516 | 12,312,490 | |||||||
Current liabilities: | ||||||||||
Accrued expenses and other current liabilities | 1,375,425 | 199,418 | 1,322,006 | |||||||
Convertible senior notes | ¥ | 2,931,396 | |||||||||
Payable for equity litigants settlement | 33,796 | 4,900 | 1,350,257 | |||||||
Total current liabilities | 2,828,836 | 410,144 | 6,591,633 | |||||||
Total liabilities | 3,853,110 | 558,650 | 7,166,693 | |||||||
Mezzanine equity: | ||||||||||
Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2021 and 2022, respectively; 295,384,615 and 307,692,307 issued and outstanding as of December 31, 2021 and 2022, respectively) | 1,578,040 | 228,794 | 1,514,660 | |||||||
Shareholders' equity: | ||||||||||
Additional paid-in capital | 16,037,406 | 2,325,205 | 15,037,992 | |||||||
Accumulated deficit | (11,421,145) | (1,655,910) | ¥ (11,971,223) | ¥ (11,856,516) | (11,876,351) | ¥ (12,795,663) | ¥ (12,772,154) | |||
Accumulated other comprehensive income | 397,304 | 57,604 | 413,886 | 462,983 | 466,856 | 414,753 | 406,917 | |||
Total Company's ordinary shareholders' equity | 5,049,247 | 732,072 | ¥ 4,261,790 | ¥ 4,324,593 | 3,631,137 | ¥ 2,568,027 | ¥ 2,505,582 | |||
Total liabilities and shareholders' equity | 10,480,397 | 1,519,516 | 12,312,490 | |||||||
Class A ordinary shares | ||||||||||
Shareholders' equity: | ||||||||||
Shares | ¥ 23 | $ 3 | ¥ 21 | |||||||
Mezzanine equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | $ 0.000002 | ||||||||
Equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | |||||||||
Equity, shares authorized (in shares) | 19,692,307,693 | 19,692,307,693 | 19,692,307,693 | |||||||
Equity, shares issued (in shares) | 2,079,801,956 | 2,079,801,956 | 1,950,457,380 | |||||||
Equity, shares outstanding (in shares) | 2,079,801,956 | 2,079,801,956 | 1,950,457,380 | |||||||
Class B ordinary shares | ||||||||||
Shareholders' equity: | ||||||||||
Shares | ¥ 2 | $ 0 | ¥ 2 | |||||||
Mezzanine equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | 0.000002 | ||||||||
Equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | |||||||||
Equity, shares authorized (in shares) | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 | |||||||
Equity, shares issued (in shares) | 144,778,552 | 144,778,552 | 144,778,552 | |||||||
Equity, shares outstanding (in shares) | 144,778,552 | 144,778,552 | 144,778,552 | |||||||
Convertible senior preferred shares | ||||||||||
Mezzanine equity: | ||||||||||
Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2021 and 2022, respectively; 295,384,615 and 307,692,307 issued and outstanding as of December 31, 2021 and 2022, respectively) | ¥ 1,578,040 | $ 228,794 | ¥ 1,514,660 | |||||||
Shareholders' equity: | ||||||||||
Mezzanine equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | 0.000002 | ||||||||
Mezzanine equity, shares authorized (in shares) | 307,692,307 | 307,692,307 | 307,692,307 | |||||||
Mezzanine equity, shares issued (in shares) | 307,692,307 | 307,692,307 | 295,384,615 | |||||||
Mezzanine equity, shares outstanding (in shares) | 307,692,307 | 307,692,307 | 295,384,615 | |||||||
Parent Company | Reportable Legal Entities | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | ¥ 214,992 | $ 31,171 | ¥ 3,078,291 | |||||||
Amounts due from subsidiaries | 12,534,774 | 1,817,371 | 14,354,254 | |||||||
Prepaid expenses and other current assets | 6,910 | 1,002 | 6,889 | |||||||
Total current assets | 12,756,676 | 1,849,544 | 17,439,434 | |||||||
Non-current assets: | ||||||||||
Investments in subsidiaries and VIE | (5,736,325) | (831,689) | (6,191,904) | |||||||
Other non-current assets | ¥ | 6,373 | |||||||||
Total non-current assets | (5,736,325) | (831,689) | (6,185,531) | |||||||
Total assets | 7,020,351 | 1,017,855 | 11,253,903 | |||||||
Current liabilities: | ||||||||||
Amounts due to subsidiaries | 247,743 | 35,919 | 1,410,584 | |||||||
Accrued expenses and other current liabilities | 111,525 | 16,170 | 415,869 | |||||||
Convertible senior notes | ¥ | 2,931,396 | |||||||||
Payable for equity litigants settlement | 33,796 | 4,900 | 1,350,257 | |||||||
Total current liabilities | 393,064 | 56,989 | 6,108,106 | |||||||
Total liabilities | 393,064 | 56,989 | 6,108,106 | |||||||
Mezzanine equity: | ||||||||||
Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2021 and 2022, respectively; 295,384,615 and 307,692,307 issued and outstanding as of December 31, 2021 and 2022, respectively) | 1,578,040 | 228,794 | 1,514,660 | |||||||
Shareholders' equity: | ||||||||||
Additional paid-in capital | 16,073,063 | 2,330,375 | 15,040,609 | |||||||
Accumulated deficit | (11,421,145) | (1,655,910) | (11,876,351) | |||||||
Accumulated other comprehensive income | 397,304 | 57,604 | 466,856 | |||||||
Total Company's ordinary shareholders' equity | 5,049,247 | 732,072 | 3,631,137 | |||||||
Total liabilities and shareholders' equity | 7,020,351 | 1,017,855 | 11,253,903 | |||||||
Parent Company | Reportable Legal Entities | Class A ordinary shares | ||||||||||
Shareholders' equity: | ||||||||||
Shares | ¥ 23 | $ 3 | ¥ 21 | |||||||
Equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | 0.000002 | ||||||||
Equity, shares authorized (in shares) | 19,692,307,693 | 19,692,307,693 | 19,692,307,693 | |||||||
Equity, shares issued (in shares) | 2,079,801,956 | 2,079,801,956 | 1,950,457,380 | |||||||
Equity, shares outstanding (in shares) | 2,079,801,956 | 2,079,801,956 | 1,950,457,380 | |||||||
Parent Company | Reportable Legal Entities | Class B ordinary shares | ||||||||||
Shareholders' equity: | ||||||||||
Shares | ¥ 2 | $ 0 | ¥ 2 | |||||||
Equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | 0.000002 | ||||||||
Equity, shares authorized (in shares) | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 | |||||||
Equity, shares issued (in shares) | 144,778,552 | 144,778,552 | 144,778,552 | |||||||
Equity, shares outstanding (in shares) | 144,778,552 | 144,778,552 | 144,778,552 | |||||||
Parent Company | Reportable Legal Entities | Convertible senior preferred shares | ||||||||||
Mezzanine equity: | ||||||||||
Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2021 and 2022, respectively; 295,384,615 and 307,692,307 issued and outstanding as of December 31, 2021 and 2022, respectively) | ¥ 1,578,040 | $ 228,794 | ¥ 1,514,660 | |||||||
Shareholders' equity: | ||||||||||
Mezzanine equity, par value (in US dollars per share) | $ / shares | $ 0.000002 | $ 0.000002 | ||||||||
Mezzanine equity, shares authorized (in shares) | 307,692,307 | 307,692,307 | 307,692,307 | |||||||
Mezzanine equity, shares issued (in shares) | 307,692,307 | 307,692,307 | 295,384,615 | |||||||
Mezzanine equity, shares outstanding (in shares) | 307,692,307 | 307,692,307 | 295,384,615 |
PARENT COMPANY ONLY CONDENSED_4
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed statements of comprehensive loss (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 CNY (¥) | Sep. 30, 2021 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2019 CNY (¥) | |
Operating(loss)/income | |||||||
Sales and marketing expenses | ¥ (570,122) | $ (82,660) | ¥ (336,855) | ¥ (462,112) | |||
General and administrative expenses | (1,459,550) | (211,615) | (1,269,988) | (981,645) | |||
Losses and expenses related to Fabricated Transactions and restructuring | (75,204) | (10,904) | (339,557) | (475,252) | |||
Foreign exchange loss | ¥ 1,331 | ¥ 3,337 | 10,661 | 1,546 | 12,441 | (70,937) | |
Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes | (6,381) | (925) | |||||
Gain from extinguishment of Series B Senior Secured Notes | 124,139 | 17,998 | |||||
Interest income | 84,923 | 12,313 | 102,248 | 135,713 | |||
Other (expense)/income | 60,680 | 8,798 | (16,513) | (58,635) | |||
Interest and financing expenses | (23,484) | (3,405) | (35,490) | (116,471) | |||
Provision)/reversal for SEC settlement | 1,146,474 | (1,177,074) | |||||
Provision for equity litigants settlement | (279,967) | (40,591) | (155,314) | (1,226,119) | |||
Net (loss)/income before income taxes | 1,126,750 | 163,364 | 514,792 | (6,240,791) | |||
Income tax expense | (638,504) | (92,574) | 63,861 | 637,801 | |||
Net (loss)/income attributable to the Company's ordinary shareholders | 488,246 | 70,790 | 578,545 | (5,589,105) | |||
Net (loss)/income attributable to ordinary shareholders | 488,246 | 70,790 | 578,545 | (5,589,105) | |||
Other comprehensive income/(loss), net of tax of nil: | |||||||
Foreign currency translation difference, net of tax of nil | 42,863 | 50,699 | (69,552) | (10,084) | 102,802 | 286,697 | |
Total comprehensive (loss)/income | 418,694 | 60,706 | 681,347 | (5,302,408) | |||
Foreign currency translation adjustments, tax | ¥ 0 | ¥ 0 | 0 | 0 | ¥ 0 | ||
Parent Company | Reportable Legal Entities | |||||||
Operating(loss)/income | |||||||
General and administrative expenses | (39,773) | (5,766) | (85,567) | (109,119) | |||
Losses and expenses related to Fabricated Transactions and restructuring | (69,233) | (10,038) | (246,410) | (332,814) | |||
Foreign exchange loss | 8,817 | 1,278 | 138 | ||||
Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes | (6,381) | (925) | |||||
Share of (losses)/income from subsidiaries and VIE | 791,186 | 114,711 | (40,522) | (2,661,076) | |||
Gain from extinguishment of Series B Senior Secured Notes | 124,139 | 17,998 | |||||
Interest income | 576 | 84 | 296 | 21,910 | |||
Other (expense)/income | 4,784 | (2,445) | |||||
Interest and financing expenses | (23,484) | (3,405) | (35,490) | (107,258) | |||
Provision)/reversal for SEC settlement | 1,146,474 | (1,177,074) | |||||
Provision for equity litigants settlement | (279,967) | (40,591) | (155,314) | (1,226,119) | |||
Net (loss)/income before income taxes | (488,246) | (70,790) | (578,545) | 5,589,105 | |||
Net (loss)/income | (488,246) | (70,790) | (578,545) | 5,589,105 | |||
Net (loss)/income attributable to the Company's ordinary shareholders | 488,246 | 70,790 | 578,545 | (5,589,105) | |||
Net (loss)/income attributable to ordinary shareholders | 488,246 | 70,790 | 578,545 | (5,589,105) | |||
Other comprehensive income/(loss), net of tax of nil: | |||||||
Foreign currency translation difference, net of tax of nil | (69,552) | (10,084) | 102,802 | 286,697 | |||
Total comprehensive (loss)/income | 418,694 | $ 60,706 | 681,347 | (5,302,408) | |||
Other comprehensive (loss)/income, tax | 0 | 0 | 0 | ||||
Foreign currency translation adjustments, tax | ¥ 0 | ¥ 0 | ¥ 0 |
PARENT COMPANY ONLY CONDENSED_5
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed statements of cash flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | ||||
Net cash provided by/(used in) operating activities | ¥ 19,818 | $ 2,875 | ¥ 123,447 | ¥ (2,376,832) |
Net cash (used in)/provided by investing activities | (798,046) | (115,706) | 337 | (1,712,333) |
Net cash provided by/(used in) financing activities | (2,276,260) | (330,027) | 1,514,660 | 4,029,070 |
Net (decrease)/ increase in cash and cash equivalents and restricted cash | (2,977,355) | (431,675) | 1,616,229 | (42,384) |
Cash and cash equivalents and restricted cash at beginning of years | 6,555,274 | 950,425 | 4,939,045 | 4,981,429 |
Cash and cash equivalents and restricted cash at end of years | 3,577,919 | 518,750 | 6,555,274 | 4,939,045 |
Parent Company | Reportable Legal Entities | ||||
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | ||||
Net cash provided by/(used in) operating activities | (587,039) | (85,112) | 1,383,630 | 130,504 |
Net cash (used in)/provided by investing activities | (6,802,055) | |||
Net cash provided by/(used in) financing activities | (2,276,260) | (330,027) | 1,514,660 | 5,806,861 |
Net (decrease)/ increase in cash and cash equivalents and restricted cash | (2,863,299) | (415,139) | 2,898,290 | (864,690) |
Cash and cash equivalents and restricted cash at beginning of years | 3,078,291 | 446,310 | 180,001 | 1,044,691 |
Cash and cash equivalents and restricted cash at end of years | ¥ 214,992 | $ 31,171 | ¥ 3,078,291 | ¥ 180,001 |