0001104659-24-044514 | 20-F | XBRL Viewer

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2023


	As of December 31,
	2022	2023
	RMB	RMB	US$

Raw materials	886,336	1,487,226	209,471
Packaging and other supplies	289,537	651,634	91,781
Pre-made food and beverage items	30,594	65,140	9,175
	1,206,467	2,204,000	310,427

TAXATION

12 Months Ended

Dec. 31, 2023

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 2.0 million Hong Kong Dollar (“HKD”) of profits of the qualifying group entity will be taxed at 8.25%, and profits above HKD2.0 million will be taxed at 16.5%. Additionally, upon payments of dividends by the Company to its shareholders, no HK withholding tax will be imposed.

Singapore

Under the current laws of Singapore, the Group’s subsidiaries in Singapore are subject to 17% income tax rate on any taxable income accruing in or derived from Singapore, or received in Singapore from outside Singapore.

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%. Most of the Group’s PRC subsidiaries and consolidated VIE are subject to the statutory income tax rate of 25%.

The EIT Law and its implementation rules permit certain High and New Technologies Enterprises, or HNTEs, to enjoy a reduced 15% enterprise income tax rate subject to these HNTEs meeting certain qualification criteria. Luckin Coffee Information Technology (Xiamen) Ltd, Co. renewed the privilege of HNTEs and enjoyed a reduced 15% enterprise income tax rate from November 2023 to November 2026.

16. TAXATION (CONTINUED)

PRC (continued)

From January 1, 2020 to December 31, 2024, enterprises registered in the Hainan Free Trade Port that are engaged in encouraged industries and are substantially in operation will be subject to a reduced 15% enterprise income tax rate. Luckin Trading (Hainan) Ltd, Co. and Luckin Coffee (Haikou) Ltd, Co. were qualified as such enterprises and enjoyed 15% preferential income tax rate.

From 2019, the State Administration of Taxation provides a preferential corporate income tax rate of 20%, an exemption at 75% or 87.5% for the assessable taxable profits under RMB 1.0 million, an exemption at 50% or 75% for the assessable taxable profits between RMB 1.0 million and RMB 3.0 million, for qualified small enterprises with low profits. The actual preferential corporate income tax rates after considering the exemption were 2.5%, 2.5% and 5% for assessable taxable profits less than RMB 1.0 million, respectively, for the year ended December 31, 2021, 2022 and 2023, while the rates were 10%, 5% and 5% for the assessable taxable profits between RMB1.0 million and RMB3.0 million from 2021 to 2023. The policy of the actual preferential corporate income tax rates of 5% after considering the exemption will continue to be implemented until December 31, 2027.

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.

The components of (loss)/income before tax are as follows:


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
(Loss)/income before tax
Non-PRC	617,090	(331,744)	(123,731)	(17,427)
PRC	(102,298)	1,458,494	3,231,090	455,089
Total (loss)/income before tax	514,792	1,126,750	3,107,359	437,662

Income tax expenses/(benefits)
Current income tax expenses	360	144,032	401,039	56,485
Deferred tax expenses/(benefits)	(64,221)	494,472	(141,613)	(19,946)
Income tax (benefits)/expenses	(63,861)	638,504	259,426	36,539

16. TAXATION (CONTINUED)

PRC (continued)

The reconciliation of tax computed by applying the statutory income tax rate of 25% for the years ended December 31, 2021, 2022 and 2023 to income tax expense were as follows:


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
Earnings before income taxes	514,792	1,126,750	3,107,359	437,662

Income tax expenses computed at PRC statutory
income tax rate of 25%	128,698	281,688	776,840	109,416
Additional deduction for R&D expenses	(11,095)	(13,516)	(19,397)	(2,732)
Non-deductible share-based compensation expenses	58,581	80,440	45,722	6,440
Non-deductible expenses and non-taxable income	9,415	(9,967)	5,378	757
Deferred tax assets writeoff related to closure entities	—	8,266	(401)	(56)
Expiration of tax loss	—	—	43,438	6,118
Effect of tax rate changes on deferred tax	—	—	725	102
Recognition of uncertain tax benefits	—	29,325	24,536	3,456
Change of valuation allowance	60,352	220,774	(609,815)	(85,891)
Effect of preferential tax rate	(158,362)	(18,626)	(48,123)	(6,778)
Effect of International tax rates	(155,242)	76,378	29,047	4,091
Prior-year tax filing difference	3,792	(16,258)	11,476	1,616

Income tax (benefits)/expenses	(63,861)	638,504	259,426	36,539

Deferred Taxes

The significant components of deferred taxes were as follows:


	As of December 31,
	2022	2023
	RMB	RMB	US$
Deferred tax assets
Donation	1,264	680	96
Accrued expenses	29,867	31,368	4,418
Accrued welfare	29,662	55,920	7,876
Impairment loss of long-lived assets and investments	327,764	4,568	643
Allowance for doubtful accounts	5,398	5,756	811
Tax losses	1,149,639	694,459	97,813
Valuation allowance	(1,335,125)	(442,669)	(62,349)

Total deferred tax assets, net	208,469	350,082	49,308

16. TAXATION (CONTINUED)

Deferred Taxes (Continued)

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, 2022, the Company and most of its subsidiaries and VIE were in cumulative loss position, except some new entities with immaterial taxable income. As of December 31, 2023, Company re-evaluated the realization of deferred tax assets given the largely reduced uncertainty of the Company’s business performance after a certain number of the Company’s operation entities have turned cumulative profits from cumulative losses. The valuation allowance of RMB1,335.1 million and RMB442.7 million (US$62.3 million) as of December 31, 2022 and 2023 was primarily provided for the deferred income tax assets of certain subsidiaries, which were not able to utilize portion or all of the benefits of the deferred tax assets due to lack of sufficient sources of qualified taxable income. The change of valuation allowance in 2023 includes RMB282.6 million derecognition of deferred tax assets in relation to temporary difference for certain entity since new information was received in current year. The derecognition of such temporary differences would not impact the Company’s income tax expenses due to full valuation allowance provided as December 31, 2022.

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, 2023, the Group had accumulated tax losses of RMB2,729.5 million (US$384.4 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 2024 to 2028 if not utilized.

Unrecognized Tax Position

As of December 31, 2022 and 2023, unrecognized tax benefits were RMB80.9 million and RMB79.5 million (US$11.2 million), among which, RMB 54.7 million and RMB57.6 million (US$8.1 million) of unrecognized tax benefits as of December 31,2022 and 2023,respectively, 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.

A roll-forward of unrecognized tax benefits is as follows:


	As of December 31,
	2022	2023
	RMB	RMB	US$
Balance at beginning of year	54,956	80,930	11,399
Additions/(Deduction) based on tax positions related to the current year	25,974	(1,410)	(199)

Balance at end of year	80,930	79,520	11,200

The Company’s tax returns continue to remain effectively subject to examination by China tax authorities for the years 2019 through 2023.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2023

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, 2023:


	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	67,162	59,941	7,221	—	—
Fixed assets purchasing commitment	549,715	549,715	—	—	—
Total	616,877	609,656	7,221	—	—

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

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.

The following table sets forth the Group’s contractual obligations and commercial commitments as of December 31, 2023:


	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	67,162	59,941	7,221	—	—
Fixed assets purchasing commitment	549,715	549,715	—	—	—
Total	616,877	609,656	7,221	—	—

Other than those shown above, the Group did not have any significant capital commitments as of December 31, 2023.

(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.

20. COMMITMENTS AND CONTINGENCIES (CONTINUED)

(b) Legal proceedings (continued)

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, 2022 and 2023 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, 2022 and 2023 and for the year then ended.

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, 1:20-cv-01293 (S.D.N.Y.) (the “Federal Class Action”). On June 12, 2020, the court appointed co-lead plaintiffs (the “Federal Lead Plaintiffs” ) pursuant to the Private Securities Litigation Reform Act of 1995 and ordered the lawsuits consolidated. A consolidated class action complaint was filed on September 24, 2020 that alleges, among other things, 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. The consolidated class action complaint variously alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, Rule 10b-5 of the Securities Exchange Act of 1934, and Sections 11 and 15 of the Securities Act. On October 26, 2021, the court issued an order preliminarily approving a class-wide settlement of all claims that had been or could have been asserted in the Federal Class Action, in exchange for payment of US$175 million to the class of investors who purchased or otherwise acquired the Company’s ADS during the period from May 17, 2019 through July 15, 2020, inclusive. On July 22, 2022, the court issued an order granting final approval of the settlement.

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, 651939/2020 (N.Y. Sup. Ct.). A consolidated amended complaint was filed on December 23, 2020, adding claims against investment vehicles owned by former officers and directors of Luckin and Luckin’s agent for service of process, Cogency Global. The amended complaint also asserted claims under the Securities Act on behalf of a class of purchasers of convertible senior notes issued by Luckin in January 2020 (the “Notes Class”). On January 9, 2022, the Company reached an agreement in principle with the lead plaintiffs in the State Class Action to resolve claims that have been or could be filed on behalf of a class of purchasers of the Notes who did not release their claims in connection with the Scheme. The State Class Settlement received final approval from the State Court on April 28, 2023.

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., 1:20-cv-07029 (S.D.N.Y.), Lai Ye v. Luckin Coffee et al., 1:21-cv-2020 (S.D.N.Y.), Nuveen Winslow Large-Cap Growth ESG Fund et al. v. Luckin Coffee et al., 655177/2020 (N.Y. Sup. Ct.) and Bequai v. Luckin Coffee, GV20019430-00 (Va. D. Ct., Fairfax Cty.) As of the date of this annual report, all of the above lawsuits have been voluntarily dismissed by the plaintiffs.

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 US$325 million. On April 13, 2023, two of those investors commenced legal proceedings against the Company in the High Court of the Repulic of Singapore, seeking to recover an alleged loss of US$145.8 million in the aggregate. These legal proceedings are currently in an early stage of development, and the Company intends to use its best efforts to defend.

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.

20. COMMITMENTS AND CONTINGENCIES (CONTINUED)

(b) Legal proceedings (continued)

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.

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 that a liability had been incurred as of the date of the consolidated financial statements and the Company can reasonably estimate the amount of that loss, the Company accrues a provision for that loss in accordance with ASC450. 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). The actual loss could be greater or smaller than our current estimate.

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), US$41.9 million (approximately RMB280.0 million) and US$12.6 million (approximately RMB92.2 million) in the year ended December 31, 2021, 2022 and 2023. As of December 31, 2022 and 2023, the balance of payable for equity litigants settlement was US$4.9 million (approximately RMB33.8 million) and US$16.4 million (approximately RMB116.3 million), respectively.

SHARE BASED COMPENSATION (Details) - 2019 Plan		12 Months Ended					24 Months Ended
SHARE BASED COMPENSATION (Details) - 2019 Plan	Jan. 18, 2019 shares	Dec. 31, 2023 shares	Dec. 31, 2022 shares	Dec. 31, 2021 shares	Dec. 31, 2020 shares	Dec. 31, 2019	Dec. 31, 2021
SHARE BASED COMPENSATION
Term (in years)	10 years
Vesting period (in years)	4 years			4 years	4 years	4 years
Granted	79,015,500	0	0	2,795,600	25,917,240
Share split ratio	500
First vesting date
SHARE BASED COMPENSATION
Vesting percentage (as a percent)				40.00%	40.00%	25.00%
Second vesting date
SHARE BASED COMPENSATION
Vesting percentage (as a percent)				40.00%	40.00%	25.00%	40.00%
Third vesting date
SHARE BASED COMPENSATION
Vesting percentage (as a percent)				10.00%	10.00%	25.00%
Fourth vesting date
SHARE BASED COMPENSATION
Vesting percentage (as a percent)				10.00%	10.00%	25.00%

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' 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, 2020	¥ 20		¥ 2		¥ 14,744,569		¥ 364,054		¥ 603		¥ (12,452,882)		¥ 2,656,366		¥ 68,518		¥ 2,724,884
Beginning balance (in shares) at Dec. 31, 2020 \| shares	1,880,396,244	1,880,396,244	144,778,552	144,778,552
Net income											578,545		578,545		108		578,653
Foreign currency translation difference							102,802						102,802				102,802
Issuance of Class A ordinary shares	¥ 1				(1)
Issuance of Class A ordinary shares (in shares) \| shares	70,061,136	70,061,136
Appropriation to statutory reserves									2,014		(2,014)
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)
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 income											488,246		488,246				488,246
Foreign currency translation difference							(69,552)						(69,552)				(69,552)
Issuance of Class A ordinary shares	¥ 1				(1)
Issuance of Class A ordinary shares (in shares) \| shares	53,123,768	53,123,768
Appropriation to statutory reserves									33,040		(33,040)
Share based compensation					398,008								398,008				398,008
Convertible senior notes restructuring	¥ 1				601,407								601,408				601,408
Convertible senior notes restructuring (in shares) \| shares	76,220,808	76,220,808														76,220,808
Ending balance at Dec. 31, 2022	¥ 23		¥ 2		16,037,406		397,304		35,657		(11,421,145)		5,049,247				5,049,247
Ending balance (in shares) at Dec. 31, 2022 \| shares	2,079,801,956	2,079,801,956	144,778,552	144,778,552
Net income											2,847,933		2,847,933				2,847,933	$ 401,123
Foreign currency translation difference							(360)						(360)				(360)
Issuance of Class A ordinary shares					79								79				79
Issuance of Class A ordinary shares (in shares) \| shares	13,478,384	13,478,384
Appropriation to statutory reserves									132,547		(132,547)
Share based compensation					239,506								239,506				239,506
Ending balance at Dec. 31, 2023	¥ 23	$ 3	¥ 2	$ 0	¥ 16,276,991	$ 2,292,566	¥ 396,944	$ 55,908	¥ 168,204	$ 23,691	¥ (8,705,759)	$ (1,226,181)	¥ 8,136,405	$ 1,145,987			¥ 8,136,405	$ 1,145,987
Ending balance (in shares) at Dec. 31, 2023 \| shares	2,093,280,340	2,093,280,340	144,778,552	144,778,552

CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	¥ 2,847,933	$ 401,123	¥ 488,246	¥ 578,653
Adjustments to reconcile net income to net cash provided by operating activities:
Foreign exchange gain, net	(2,968)	(418)	(10,661)	(12,441)
Loss on disposal of property and equipment	12,713	1,791	9,884	4,834
Depreciation and amortization	604,580	85,153	391,936	465,384
Amortization of operating lease right-of-use assets	1,399,217	197,076	854,646	672,910
Change in the fair value of derivative asset bifurcated from Series B Senior Secured Notes			6,381
Impairment of long-lived assets	5,200	700	221,810	21,368
Gain from extinguishment of Series B Senior Secured Notes			(124,139)
Allowance for prepayments and accounts receivable	(3,194)	(450)	18,069	4,467
Deferred income tax	(141,613)	(19,946)	494,472	(64,221)
Interest expenses of convertible senior notes			19,855	35,490
Share-based compensation expenses	239,506	33,734	398,008	302,734
Reversal for SEC settlement				(1,146,474)
Donation of inventory				3,889
Changes in operating assets and liabilities:
Accounts receivable	(21,685)	(3,054)	(20,994)	(22,431)
Inventories	(988,322)	(139,202)	(604,055)	(316,673)
Receivables from online payment platforms	(62,241)	(8,766)	19,640	(145,834)
Prepaid expenses and other current assets	(489,374)	(68,928)	(60,514)	(101,868)
Other non-current assets	(216,260)	(30,460)	(64,132)	(20,548)
Accounts payable	373,203	52,565	147,676	84,005
Accrued expenses and other liabilities	675,313	95,116	107,095	254,094
Deferred revenues	26,056	3,670	1,154	8,038
Operating lease liabilities	(1,442,016)	(203,104)	(875,653)	(637,243)
Payable for equity litigants settlement	84,348	11,880	(1,398,906)	155,314
Net cash provided by operating activities	2,900,425	408,516	19,818	123,447
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(2,750,220)	(387,360)	(781,676)	(173,217)
Payment for land use right	(6,478)	(912)	(19,344)
Cash received from disposal of property and equipment	1,982	279	2,974	1,490
Purchases of short-term investments	(1,550,000)	(218,313)
Proceeds received from maturity of short-term investments	1,450,000	204,228		250,000
Repayment of contribution from noncontrolling interest in a subsidiary				(77,936)
Floating interest received from structured deposits	22,545	3,175
Purchases of term deposit	(657,527)	(92,611)
Proceeds received from maturity of term deposit	42,599	6,000
Net cash (used in)/provided by investing activities	(3,447,099)	(485,514)	(798,046)	337
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible senior preferred shares			63,380	1,514,660
Repayment of convertible senior notes			(1,560,105)
Repayment of Series B Secured Notes (the "New Notes")			(779,535)
Net cash provided by/(used in) financing activities			(2,276,260)	1,514,660
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash	7,398	1,042	77,133	(22,215)
Net (decrease)/ increase in cash and cash equivalents and restricted cash	(539,276)	(75,956)	(2,977,355)	1,616,229
Cash and cash equivalents and restricted cash at beginning of years	3,577,919	503,939	6,555,274	4,939,045
Cash and cash equivalents and restricted cash at end of years	3,038,643	427,983	3,577,919	6,555,274
Supplemental disclosures of cash flow information:
Interests received	101,753	14,332	88,517	103,863
Interests paid, net of capitalization			(34,148)
Income taxes paid	(426,744)	(60,106)	(68,802)	(1,200)
Supplemental disclosures of non-cash activities:
Purchase of property and equipment included in accrued expenses and other liabilities	438,554	61,769	120,227	46,659
Obtaining right-of-use assets in exchange for lease liabilities	4,463,919	$ 628,730	1,552,538	947,853
Shares issued in restructuring of the Notes			601,408
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	2,925,709		3,534,304	6,477,636
Current restricted cash	66,080		7,860	58,200
Non-current restricted cash	46,854		35,755	19,438
Total cash, cash equivalents and restricted cash in the statements of cashflows	¥ 3,038,643		¥ 3,577,919	¥ 6,555,274

SENIOR PREFERRED SHARES (Details) $ / shares in Units, ¥ in Thousands, $ in Millions						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, 2021 CNY (¥)
SENIOR PREFERRED SHARES
Proceeds from issuance of convertible senior preferred shares \| ¥						¥ 63,380	¥ 1,514,660
Convertible Senior Preferred Shares
SENIOR PREFERRED SHARES
Percentage of the original aggregate subscription price of the Senior Preferred Shares					100.00%
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
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
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
Senior Preferred Shares issued (in shares) \| shares	12,307,692	12,307,692
Proceeds from issuance of convertible senior preferred shares	¥ 63,700	$ 10
Issue price per share (in US dollars per share) \| $ / shares		$ 0.8125

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Convenience translation, Restricted cash, Accounts receivable and Inventories (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 29, 2023 $ / ¥
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Buying rate					7.0999
Allowance for credit losses	¥ 0		¥ 191	$ 0
Inventory wrote off	¥ 30,000	$ 4,200	¥ 33,400

PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed statements of comprehensive loss (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
Operating(loss)/income
General and administrative expenses	¥ (1,829,651)	$ (257,701)	¥ (1,459,550)	¥ (1,269,988)
Sales and marketing expenses	(1,286,523)	(181,203)	(570,122)	(336,855)
Losses and expenses related to Fabricated Transactions and restructuring	28,515	4,016	(75,204)	(339,557)
Foreign exchange loss	2,968	418	10,661	12,441
Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes			(6,381)
Gain from extinguishment of Series B Senior Secured Notes			124,139
Other (expense)/income	62,283	8,772	60,680	(16,513)
Interest and financing expenses			(23,484)	(35,490)
Provision for SEC settlement				1,146,474
Provision for equity litigants settlement	(92,192)	(12,985)	(279,967)	(155,314)
Income before income taxes	3,107,359	437,662	1,126,750	514,792
Net income attributable to the Company's ordinary shareholders	2,847,933	401,123	488,246	578,545
Net (loss)/income	2,847,933	401,123	488,246	578,545
Other comprehensive income/(loss), net of tax of nil:
Foreign currency translation difference, net of tax of nil	(360)	(51)	(69,552)	102,802
Total comprehensive income attributable to the Company's ordinary shareholders	2,847,573	401,072	418,694	681,347
Foreign currency translation adjustments, tax	0		0	0
Parent Company \| Reportable Legal Entities
Operating(loss)/income
General and administrative expenses	(46,722)	(6,581)	(39,773)	(85,567)
Sales and marketing expenses	(566)	(80)
Losses and expenses related to Fabricated Transactions and restructuring	32,422	4,567	(69,233)	(246,410)
Foreign exchange loss	(3,320)	(468)	8,817	138
Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes			(6,381)
Share of (losses)/income from subsidiaries and VIE	2,949,195	415,385	791,186	(40,522)
Gain from extinguishment of Series B Senior Secured Notes			124,139
Interest income	2,476	349	576	296
Other (expense)/income				4,784
Interest and financing expenses			(23,484)	(35,490)
Provision for SEC settlement				1,146,474
Provision for equity litigants settlement	(92,192)	(12,985)	(279,967)	(155,314)
Income before income taxes	2,847,933	401,123	488,246	578,545
Net (loss)/income	2,847,933	401,123	488,246	578,545
Net income attributable to the Company's ordinary shareholders	2,847,933	401,123	488,246	578,545
Net (loss)/income	2,847,933	401,123	488,246	578,545
Other comprehensive income/(loss), net of tax of nil:
Foreign currency translation difference, net of tax of nil	(360)	(51)	(69,552)	102,802
Total comprehensive income attributable to the Company's ordinary shareholders	2,847,573	$ 401,072	418,694	681,347
Other comprehensive (loss)/income, tax	0		0	0
Foreign currency translation adjustments, tax	¥ 0		¥ 0	¥ 0

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Other comprehensive (loss)/income, tax	¥ 0	¥ 0	¥ 0
Foreign currency translation difference, tax	¥ 0	¥ 0	¥ 0

- Definition

Amount of tax expense (benefit) allocated to other comprehensive income (loss).

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 45
-Paragraph 12
-SubTopic 10
-Topic 220
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-12

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482765/220-10-50-4

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 830
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481674/830-30-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 830
-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481694/830-30-45-17

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 830
-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 20
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481694/830-30-45-20

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-10

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 11
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482659/740-20-45-11

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(23))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482659/740-20-45-2

+ Details

LEASES

12 Months Ended

Dec. 31, 2023

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,
	2022	2023
	RMB	RMB	US$
Right-of-use assets	2,003,997	5,186,855	730,553

Operating lease liabilities – current	880,873	1,851,310	260,752
Operating lease liabilities – non-current	1,024,274	3,114,855	438,718
Total operating lease liabilities	1,905,147	4,966,165	699,470

The weighted average remaining lease terms and discount rates for the operating lease as of December 31, 2023 were as follows:


Remaining lease term and discount rate:

Weighted average remaining lease term (years)	1.78
Weighted average discount rate	3.943	%

18. LEASES (CONTINUED)

During the years ended December 31, 2022 and 2023, the Group incurred total operating lease expenses of RMB854.6 million and RMB1,399.2 million (US$197.1 million), respectively, and operating lease payment of RMB 875.7 million and RMB1,442.0 million (US$203.1 million), respectively.

As of December 31, 2023, the Group has entered into operating leases that have not yet commenced of RMB143.7 million (US$20.2 million), primarily related to store leases. These leases will commence between fiscal year 2024 and fiscal year 2028 with lease terms ranging from 12 months to 122 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, 2023:


	RMB	US$
2024	1,851,310	260,752
2025	1,510,927	212,810
2026	997,107	140,440
2027	569,961	80,277
2028 and thereafter	386,414	54,425
Less: interest	(349,554)	(49,234)

Total	4,966,165	699,470

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details) ¥ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2023 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 24,903,166	$ 3,507,537,000	¥ 13,292,982	¥ 7,965,323
Total net revenues, percentage	100.00%	100.00%	100.00%	100.00%
Allowance for doubtful accounts	¥ 0		¥ 191		$ 0
Receivables due from partners	80,665		58,782		11,361,000
Deferred revenues	123,400		97,400		$ 17,400,000
Revenues from product sales
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 18,677,400	$ 2,630,700,000	¥ 10,223,720	¥ 6,659,218
Revenues from product sales \| Product concentration risk \| Product and services benchmark
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues, percentage	75.00%	75.00%	76.90%	83.60%
Revenues from freshly brewed drinks
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 16,877,900	$ 2,377,200,000	¥ 9,079,349	¥ 5,909,655
Revenues from freshly brewed drinks \| Product concentration risk \| Product and services benchmark
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues, percentage	67.80%	67.80%	68.30%	74.20%
Revenues from other products
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 1,241,900	$ 174,900,000	¥ 686,837	¥ 395,573
Revenues from other products \| Product concentration risk \| Product and services benchmark
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues, percentage	5.00%	5.00%	5.20%	5.00%
Revenues from others
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 557,600	$ 78,500,000	¥ 457,534	¥ 353,990
Revenues from others \| Product concentration risk \| Product and services benchmark
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues, percentage	2.20%	2.20%	3.40%	4.40%
Revenues from partnership stores
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 6,225,776	$ 876,882,000	¥ 3,069,262	¥ 1,306,105
Revenues from partnership stores \| Product concentration risk \| Product and services benchmark
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues, percentage	25.00%	25.00%	23.10%	16.40%
Revenues from self-operated stores
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 17,880,100	$ 2,518,400,000	¥ 9,786,200	¥ 6,528,200
Partnership stores - material sales
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	4,157,600	585,600,000	2,011,200	834,700
Partnership stores - Other services
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	510,800	71,900,000	352,100	147,800
Partnership stores - profit sharing
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 680,200	$ 95,800,000	427,900	144,800
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
Total net revenues	¥ 100	$ 12,400	1,200	2,000
Partnership stores - equipment sales
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total net revenues	¥ 877,200	$ 123,500,000	¥ 278,100	¥ 178,800

SHARE BASED COMPENSATION - Expenses were allocated in operating expenses by function (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
SHARE BASED COMPENSATION
Total share-based compensation expenses recognized	¥ 239,506	$ 33,734	¥ 398,008	¥ 302,734
Sales and marketing expenses
SHARE BASED COMPENSATION
Total share-based compensation expenses recognized	11,422	1,609	17,452	9,185
General and administrative expenses
SHARE BASED COMPENSATION
Total share-based compensation expenses recognized	¥ 228,084	$ 32,125	¥ 380,556	¥ 293,549

COMMITMENTS AND CONTINGENCIES - Capital commitments (Details) ¥ in Thousands	Dec. 31, 2023 CNY (¥)
COMMITMENTS AND CONTINGENCIES
Less than 1 year	¥ 609,656
2-3 years	7,221
Total	616,877
Factory and office building construction commitments
COMMITMENTS AND CONTINGENCIES
Less than 1 year	59,941
2-3 years	7,221
Total	67,162
Fixed assets purchasing commitment
COMMITMENTS AND CONTINGENCIES
Less than 1 year	549,715
Total	¥ 549,715

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

10. RELATED PARTY TRANSACTIONS

(a)

Related parties

Names of related parties

Relationship with the Company

Shanghai Tianshu Zhixin Semiconductor Co., Ltd (“Tianshu”)

An entity significantly influenced by the Company’s controlling shareholder

Goumei (Zhejiang) Information Technology Co., Ltd (“Goumei”)

An entity significantly influenced by the Company’s controlling

shareholder

(b)

Other than disclosed elsewhere, the Group had the following significant related party transactions for the years ended December 31, 2021, 2022 and 2023:


	For the year ended December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$

Services received from:
—Goumei	—	13,947	48,258	6,797

Assets purchased from
—Tianshu	—	—	33,850	4,768

Total	—	13,947	82,108	11,565

(c)Other than disclosed elsewhere, the Group had the following significant amounts due to related party as of December 31, 2022 and 2023:


	As of December 31,
	2022	2023
	RMB	RMB	US$
Amounts due to:
—Goumei	3,932	4,530	638
—Tianshu	—	27,080	3,814
Total	3,932	31,610	4,452

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

ORGANIZATION (Details) ¥ in Millions		12 Months Ended
ORGANIZATION (Details) ¥ in Millions	Jul. 27, 2018	Dec. 31, 2023 CNY (¥) subsidiary	Dec. 31, 2023 USD ($) subsidiary	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
ORGANIZATION.
Amount transferred from PRC subsidiaries to the VIE by loans or by capital support		¥ 11.1	$ 1,600,000	¥ 115.5	¥ 18.8
Amount transferred from VIE to PRC subsidiaries		¥ 0.6	$ 83,300	¥ 104.1	¥ 58.8
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		100.00%	100.00%
Luckin International BVI
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Luckin Singapore
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Luckin HK
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Luckin Trading HK
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Luckin Roasting
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Luckin Roastery
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Beijing WFOE
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Luckin TJ
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Luckin China
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
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		100.00%	100.00%
Luckin Coffee Food (Jiangsu) Co., Ltd
ORGANIZATION.
Percentage of direct or indirect ownership by the Company in subsidiaries		100.00%	100.00%
Luckin coffee
ORGANIZATION.
Number of subsidiaries		68	68
Luckin China \| Beijing WFOE
ORGANIZATION.
Percentage of equity interest in subsidiaries transferred	100.00%
Beijing WFOE and VIE
ORGANIZATION.
Percentage fees to be paid from the consolidated net profits		100.00%	100.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

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 revenue recognition


	For the year ended December 31,
	2021		2022		2023		2023
	RMB	%	RMB	%	RMB	%	US$	%

	(in thousands, except for percentages)
Net revenues:
Revenues from product sales	6,659,218	83.6	10,223,720	76.9	18,677,390	75.0	2,630,655	75.0
Freshly brewed drinks	5,909,655	74.2	9,079,349	68.3	16,877,880	67.8	2,377,200	67.8
Other products	395,573	5.0	686,837	5.2	1,241,868	5.0	174,913	5.0
Others	353,990	4.4	457,534	3.4	557,642	2.2	78,542	2.2
Revenues from partnership stores	1,306,105	16.4	3,069,262	23.1	6,225,776	25.0	876,882	25.0
Total net revenues	7,965,323	100.0	13,292,982	100.0	24,903,166	100.0	3,507,537	100.0

ACCOUNTS RECEIVABLE, NET (Tables)

12 Months Ended

Dec. 31, 2023

ACCOUNTS RECEIVABLE, NET

Schedule of accounts receivable


	As of December 31,
	2022	2023
	RMB	RMB	US$

Receivables due from partners	20,235	31,611	4,452
Receivables due from corporate customers	38,738	49,054	6,909
Accounts receivable	58,973	80,665	11,361
Allowance for credit losses	(191)	—	—
Accounts receivable, net	58,782	80,665	11,361

ORDINARY SHARES (Details) $ / shares in Units, ¥ in Millions, $ in Millions							1 Months Ended		12 Months Ended
	Jan. 09, 2020 CNY (¥) shares	Jan. 09, 2020 USD ($) $ / shares shares	Jun. 18, 2019 CNY (¥) shares	Jun. 18, 2019 USD ($) shares	May 17, 2019 CNY (¥) shares	May 17, 2019 USD ($) $ / shares shares	Dec. 31, 2019 shares	Nov. 30, 2019 shares	Dec. 31, 2023 Vote shares	Dec. 31, 2022 shares	Dec. 31, 2021 shares	Dec. 31, 2020 shares
IPO
ORDINARY SHARES
Total proceeds, net of underwriting discounts and commissions					¥ 3,640.9	$ 527.7
Overallotment option
ORDINARY SHARES
Total proceeds, net of underwriting discounts and commissions			¥ 548.0	$ 79.5
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									13,478,384	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
Issue price per share (in US dollars per share) \| $ / shares						$ 2.125
Total proceeds, net of issuance costs					¥ 345.0	$ 50.0
Class A ordinary shares \| Overallotment option
ORDINARY SHARES
Aggregate shares issued			39,600,000	39,600,000
ADSs
ORDINARY SHARES
Issue price per share (in US dollars per share) \| $ / shares		$ 42.00
Total proceeds, net of underwriting discounts and commissions	¥ 2,888.5	$ 419.5
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

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 ($)	Dec. 31, 2019 shares	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Aug. 31, 2022 USD ($)
CONVERTIBLE SENIOR NOTES
Aggregate principal amount														$ 115,600
Interest expenses \| ¥									¥ 19,855		¥ 35,490
Percentage of aggregate principal amount of creditors to approve the scheme			97.70%
Fair value loss \| ¥									(6,381)
Gain from extinguishment \| ¥									124,139
Convertible senior notes due 2025
CONVERTIBLE SENIOR NOTES
Aggregate principal amount					$ 60,000	$ 400,000
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%
Interest expenses								$ 0		$ 300		$ 5,500
Total amount due												469,900	$ 464,400
Series B Senior Secured Notes
CONVERTIBLE SENIOR NOTES
Gain from extinguishment									124,100	18,300
Class A ordinary shares
CONVERTIBLE SENIOR NOTES
Issuance of Class A ordinary 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)		9.00%
Net proceeds from Notes Offering		$ 109,900
Additional interest rate		9.00%
Restructuring support agreement \| Convertible senior notes due 2025
CONVERTIBLE SENIOR NOTES
Aggregate principal amount								$ 460,000
Percentage of principal and accrued and unpaid interest on Notes which automatically became due and payable								100.00%
Threshold number of days for additional interest				380 days
Additional interest payable												3,100	1,100
Percentage of principal of notes upon default								100.00%
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 Class A ordinary 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

PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET
Deductible input VAT	¥ 1,113,018	$ 156,765	¥ 747,067
Prepaid rental and deposits	191,972	27,039	169,485
Prepayments for materials and advertising fees	134,956	19,008	108,638
Prepaid operating expenses	81,293	11,450	36,573
Interest receivables	4,183	589	204
Others	19,496	2,746	15,752
Prepaid expenses and other current assets, net	¥ 1,544,918	$ 217,597	¥ 1,077,719

ORGANIZATION - Consolidated VIE Structured by the Contractual Agreements (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2023 USD ($)
Variable Interest Entity [Line Items]
Total assets	¥ 18,291,978		¥ 10,480,397		$ 2,576,370
Total liabilities	8,577,533		3,853,110		1,208,121
Total net revenues	24,903,166	$ 3,507,537	13,292,982	¥ 7,965,323
Net loss	2,847,933	401,123	488,246	578,653
Net cash (used in)/provided by operating activities	2,900,425	408,516	19,818	123,447
Net cash used in investing activities	(3,447,099)	(485,514)	(798,046)	337
Net cash (used in)/ provided by financing activities			(2,276,260)	1,514,660
Effect of foreign exchange rate changes on cash and cash equivalents	7,398	1,042	77,133	(22,215)
Net increase/(decrease) in cash and cash equivalents	(539,276)	(75,956)	(2,977,355)	1,616,229
Cash and cash equivalents and restricted cash at beginning of years	3,577,919	503,939	6,555,274	4,939,045
Cash and cash equivalents and restricted cash at end of years	3,038,643	427,983	3,577,919	6,555,274
VIE
Variable Interest Entity [Line Items]
Total assets	2		6,865
Total liabilities	4,336		2,864		$ 610
Net loss	¥ (9,233)	$ (1,300)	¥ (23,542)	(22,750)
Net cash (used in)/provided by operating activities				(58,781)
Net increase/(decrease) in cash and cash equivalents				(58,781)
Cash and cash equivalents and restricted cash at beginning of years				¥ 58,781

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Government subsidies and Income taxes (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2023 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Government subsidies	¥ 71.2	$ 10.0	¥ 78.0	¥ 47.1
Government Assistance, Statement of Income or Comprehensive Income [Extensible Enumeration]	Other (expenses)/income, net	Other (expenses)/income, net
Accrued interest and penalties	¥ 7.6		¥ 4.5	¥ 0.0	$ 1.1

LEASES (Tables)

12 Months Ended

Dec. 31, 2023

LEASES.

Schedule of supplemental balance sheet information related to operating lease


	As of December 31,
	2022	2023
	RMB	RMB	US$
Right-of-use assets	2,003,997	5,186,855	730,553

Operating lease liabilities – current	880,873	1,851,310	260,752
Operating lease liabilities – non-current	1,024,274	3,114,855	438,718
Total operating lease liabilities	1,905,147	4,966,165	699,470

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)	1.78
Weighted average discount rate	3.943	%

Schedule of future minimum lease payments under non-cancellable operating leases


	RMB	US$
2024	1,851,310	260,752
2025	1,510,927	212,810
2026	997,107	140,440
2027	569,961	80,277
2028 and thereafter	386,414	54,425
Less: interest	(349,554)	(49,234)

Total	4,966,165	699,470

PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2023

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,
	2022	2023
	RMB	RMB	US$
ASSETS
Current assets:
Cash and cash equivalents	214,992	30,752	4,331
Amounts due from subsidiaries	12,534,774	13,043,055	1,837,076
Prepaid expenses and other current assets	6,910	2,778	391
Total current assets	12,756,676	13,076,585	1,841,798

Non-current assets:
Investments in subsidiaries and VIE	(5,736,325)	(2,926,400)	(412,175)
Other non-current assets	—	—	—
Total non-current assets	(5,736,325)	(2,926,400)	(412,175)

Total assets	7,020,351	10,150,185	1,429,623

LIABILITIES AND SHAREHOLDERS’ DEFICITS
Current liabilities:
Amounts due to subsidiaries	247,743	309,318	43,567
Accrued expenses and other current liabilities	111,525	10,108	1,425
Convertible senior notes	—	—	—
Payable for equity litigants settlement	33,796	116,314	16,382
Total current liabilities	393,064	435,740	61,374
Total liabilities	393,064	435,740	61,374

21. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED)

Condensed balance sheets (continued)


	As of December 31,
	2022	2023
	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, 2022 and 2023, respectively; 307,692,307 and 307,692,307 issued and outstanding as of December 31,2022 and 2023, respectively)	1,578,040	1,578,040	222,262
Total Mezzanine equity	1,578,040	1,578,040	222,262

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, 2022 and 2023, respectively, 2,079,801,956 and 2,093,280,340 issued and outstanding as of December 31, 2022 and 2023, respectively)	23	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, 2022 and 2023, respectively; 144,778,552 and 144,778,552 issued and outstanding as of December 31, 2022 and 2023, respectively)	2	2	0
Additional paid-in capital	16,073,063	16,445,195	2,316,257
Accumulated deficit	(11,421,145)	(8,705,759)	(1,226,181)
Accumulated other comprehensive income	397,304	396,944	55,908
Total shareholders’ equity	5,049,247	8,136,405	1,145,987

Total liabilities and shareholders’ equity	7,020,351	10,150,185	1,429,623

21. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED)

Condensed statements of comprehensive income


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$

General and administrative expenses	(85,567)	(39,773)	(46,722)	(6,581)
Sales and marketing expenses	—	—	(566)	(80)
Losses and expenses related to Fabricated Transactions and restructuring	(246,410)	(69,233)	32,422	4,567
Foreign exchange loss	(138)	(8,817)	3,320	468
Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes	—	(6,381)	—	—
Share of (losses)/income from subsidiaries and VIE	(40,522)	791,186	2,949,195	415,385
Gain from extinguishment of Series B Senior Secured Notes	—	124,139	—	—
Interest income	296	576	2,476	349
Other (expense)/income	(4,784)	—	—	—
Interest and financing expenses	(35,490)	(23,484)	—	—
Provision for SEC settlement	1,146,474	—	—	—
Provision for equity litigants settlement	(155,314)	(279,967)	(92,192)	(12,985)
Net income before income taxes	578,545	488,246	2,847,933	401,123
Net income	578,545	488,246	2,847,933	401,123
Net income attributable to the Company’s ordinary shareholders	578,545	488,246	2,847,933	401,123

Net income	578,545	488,246	2,847,933	401,123
Other comprehensive income/(loss), net of tax of nil:
Foreign currency translation difference, net of tax of nil	102,802	(69,552)	(360)	(51)
Total comprehensive income	681,347	418,694	2,847,573	401,072

21. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED)

Condensed statements of cash flows


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
Net cash provided by/(used in) operating activities	1,383,630	(587,039)	(184,240)	(25,950)
Net cash (used in)/provided by investing activities	—	—	—	—
Net cash provided by/(used in) financing activities	1,514,660	(2,276,260)	—	—
Net (decrease)/increase in cash and cash equivalents	2,898,290	(2,863,299)	(184,240)	(25,950)
Cash and cash equivalents at beginning of the years	180,001	3,078,291	214,992	30,281
Cash and cash equivalents at end of the years	3,078,291	214,992	30,752	4,331

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. Such investments are presented on the condensed balance sheets as “Investments in subsidiaries and the VIE” and their respective profit or loss as “Share of loss in subsidiaries and the VIE” on the condensed statements of comprehensive income. Equity method accounting ceases when the carrying amount of the investment, including any additional financial support, in a subsidiary or VIE is reduced to zero unless the parent company has guaranteed obligations of the subsidiary or VIE or is otherwise committed to provide further financial support. If the subsidiary or VIE subsequently reports net income, the parent company shall resume applying the equity method only after its share of that net income equals the share of net loss not recognized during the period the equity method was suspended.

The subsidiaries and VIE did not pay any dividends to the Company for the years presented.

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS

Schedule of significant related party transactions

(a)

Related parties

Names of related parties

Relationship with the Company

Shanghai Tianshu Zhixin Semiconductor Co., Ltd (“Tianshu”)

An entity significantly influenced by the Company’s controlling shareholder

Goumei (Zhejiang) Information Technology Co., Ltd (“Goumei”)

An entity significantly influenced by the Company’s controlling

shareholder

(b)

Other than disclosed elsewhere, the Group had the following significant related party transactions for the years ended December 31, 2021, 2022 and 2023:


	For the year ended December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$

Services received from:
—Goumei	—	13,947	48,258	6,797

Assets purchased from
—Tianshu	—	—	33,850	4,768

Total	—	13,947	82,108	11,565

(c)Other than disclosed elsewhere, the Group had the following significant amounts due to related party as of December 31, 2022 and 2023:


	As of December 31,
	2022	2023
	RMB	RMB	US$
Amounts due to:
—Goumei	3,932	4,530	638
—Tianshu	—	27,080	3,814
Total	3,932	31,610	4,452

PRINCIPAL RISKS (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
PRINCIPAL RISKS (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
PRINCIPAL RISKS
Cost of purchased materials	¥ 10,892,214	$ 1,534,136	¥ 5,178,963	¥ 3,198,552
Total cost of purchased materials	100.00%	100.00%	100.00%	100.00%
Credit risk
PRINCIPAL RISKS
Cash and cash equivalents and short-term investments	¥ 3,724,900		¥ 3,316,800		$ 524,600
Credit risk \| Outside PRC
PRINCIPAL RISKS
Cash and cash equivalents and short-term investments	¥ 27,800				$ 3,900	$ 31,500
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	2.90%	2.90%	8.20%	(2.30%)

ACCOUNTS RECEIVABLE, NET

12 Months Ended

Dec. 31, 2023

ACCOUNTS RECEIVABLE, NET

ACCOUNTS RECEIVABLE, NET

4. ACCOUNTS RECEIVABLE, NET


	As of December 31,
	2022	2023
	RMB	RMB	US$

Receivables due from partners	20,235	31,611	4,452
Receivables due from corporate customers	38,738	49,054	6,909
Accounts receivable	58,973	80,665	11,361
Allowance for credit losses	(191)	—	—
Accounts receivable, net	58,782	80,665	11,361

SENIOR PREFERRED SHARES

12 Months Ended

Dec. 31, 2023

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 million) 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. SENIOR PREFERRED SHARES (CONTINUED)

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, 2023, 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.

PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET

12 Months Ended

Dec. 31, 2023

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,
	2022	2023
	RMB	RMB	US$
Deductible input VAT	747,067	1,113,018	156,765
Prepaid rental and deposits	169,485	191,972	27,039
Prepayments for materials and advertising fees	108,638	134,956	19,008
Prepaid operating expenses	36,573	81,293	11,450
Interest receivables	204	4,183	589
Others	15,752	19,496	2,746

	1,077,719	1,544,918	217,597

LEASES - The weighted average remaining lease terms and discount rates (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	1 year 9 months 10 days	1 year 9 months 10 days
Weighted average discount rate	3.943%	3.943%
Operating lease payments	¥ 1,442.0	$ 203.1	¥ 875.7
Total operating lease expenses	1,399.2	197.1	¥ 854.6
Operating leases that have not yet commenced	¥ 143.7	$ 20.2
Minimum
Remaining lease term and discount rate:
Term of operating leases that have not yet commenced (in months)	12 months	12 months
Maximum
Remaining lease term and discount rate:
Term of operating leases that have not yet commenced (in months)	122 months	122 months

NET INCOME PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥) ¥ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares
Numerator:
Net income	¥ 2,847,933	$ 401,123	¥ 488,246	¥ 578,653
Less: Net income attributable to non-controlling interests \| ¥				108
Net income attributable to ordinary shareholders	¥ 2,847,933	$ 401,123	¥ 488,246	¥ 578,545
Denominator:
Weighted average number of shares - basic	2,532,109,710	2,532,109,710	2,473,078,408	2,051,263,478
Adjustments for dilutive options and RSUs	453,592	453,592	43,195,219	84,580,779
Weighted average number of shares - diluted	2,532,563,302	2,532,563,302	2,516,273,627	2,135,844,257
Basic net (loss)/income per share attributable to ordinary shareholders \| (per share)	¥ 1.12	$ 0.16	¥ 0.20	¥ 0.29
Diluted net (loss)/income per share attributable to ordinary shareholders \| (per share)	¥ 1.12	$ 0.16	¥ 0.19	¥ 0.27
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	453,592	453,592	43,195,219	84,580,779

ACCOUNTS RECEIVABLE, NET (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
ACCOUNTS RECEIVABLES
Receivables due from partners	¥ 80,665	$ 11,361	¥ 58,782
Accounts receivable	80,665	11,361	58,973
Allowance for credit losses	0	0	(191)
Accounts receivable, net	80,665	11,361	58,782
Partners
ACCOUNTS RECEIVABLES
Receivables due from partners	31,611	4,452	20,235
Accounts receivable, net	31,611	4,452	20,235
Corporate customers
ACCOUNTS RECEIVABLES
Receivables due from corporate customers	¥ 49,054	$ 6,909	¥ 38,738

PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2023

PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET

Schedule of prepaid expenses and other current assets, net


	As of December 31,
	2022	2023
	RMB	RMB	US$
Deductible input VAT	747,067	1,113,018	156,765
Prepaid rental and deposits	169,485	191,972	27,039
Prepayments for materials and advertising fees	108,638	134,956	19,008
Prepaid operating expenses	36,573	81,293	11,450
Interest receivables	204	4,183	589
Others	15,752	19,496	2,746

	1,077,719	1,544,918	217,597

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

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.

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 operations and comprehensive income to distinguish the interests from that of the Group.

(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.

(e) Foreign currency

The functional currency of the PRC entities in the Group is Chinese Renminbi (“RMB”) as determined based on ASC 830, “Foreign Currency Matters”, while 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”).

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 operations and comprehensive income.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(f) Convenience translation

Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB 7.0999 on December 29, 2023, the last business day in fiscal year 2023, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted, realized or settled into US$ 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) Short - term investments

Short - term investments purchased primarily represent structured deposits that are principal - protected and provide returns in the form of both fixed and variable interests with original maturities of less than one year.

(i) Term deposits

Term deposits represent term deposits or certificate of deposits which bear fixed interest rate. The term - deposits or certificate of deposits with remaining maturities less than one year were classified as “Term deposit - current”, while term deposits or certificate of deposits with remaining maturities exceeding one year for which the Group has the positive intent to hold for more than one year were classified as “Term deposit - noncurrent”.

(j) 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.

(k) 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 credit losses. As of December 31, 2022 and 2023, the allowance for credit losses for the Group’s account receivable was RMB0.2 million and RMB nil million (US$nil), respectively.

(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 it believes will be collected. When developing an estimation of expected credit losses, the Group applies the historical loss experience with appropriate adjustment. The Group considers 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 Group 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 assets is written off after all collection efforts have been exhausted.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(m) 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, 2022 and 2023, inventory reserves were RMB33.4 million and RMB30.0 million (US$4.2 million), respectively. Write downs are recorded in cost of materials in the consolidated statements of operations and comprehensive income.

(n) Property and equipment

Property and equipment primarily consist of office buildings, store operating equipment, mechanical equipment, leasehold improvements, office equipment 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 operations and comprehensive income.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(o) 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, 2021, 2022 and 2023, the Group recognized impairment of long-lived assets other than goodwill of RMB21.4 million, RMB221.8 million and RMB5.2 million (US$0.7 million), respectively.

Impairment loss of long-lived assets mainly represented 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 and RMB5.2 million mainly for the assets in relation to Luckin Tea for the year ended December 31, 2023.

(p) 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 income as they were not qualified for hedge accounting. As of December 31, 2022 and 2023, there was no balance of the derivative instruments.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(q) Fair value

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, term deposits, short term investments, accounts payable, receivables from online payment platforms, accounts receivable and other receivables and payables. Cash equivalents, short term investments, term deposits 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. The carrying values of financial instruments except for above mentioned items are measured at amortized cost, which approximate their fair values due to their short-term maturities.

(r) Revenue recognition


	For the year ended December 31,
	2021		2022		2023		2023
	RMB	%	RMB	%	RMB	%	US$	%

	(in thousands, except for percentages)
Net revenues:
Revenues from product sales	6,659,218	83.6	10,223,720	76.9	18,677,390	75.0	2,630,655	75.0
Freshly brewed drinks	5,909,655	74.2	9,079,349	68.3	16,877,880	67.8	2,377,200	67.8
Other products	395,573	5.0	686,837	5.2	1,241,868	5.0	174,913	5.0
Others	353,990	4.4	457,534	3.4	557,642	2.2	78,542	2.2
Revenues from partnership stores	1,306,105	16.4	3,069,262	23.1	6,225,776	25.0	876,882	25.0
Total net revenues	7,965,323	100.0	13,292,982	100.0	24,903,166	100.0	3,507,537	100.0

A description of the principal revenue generating activities of the Group is as follows:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) Revenue recognition (continued)

Revenues from product sales

The Group offers freshly brewed drinks and other products and services (including pre-made food, beverage and merchandise items, membership and delivery services) mainly through its physical self-operated stores and online e-commerce platforms. Total revenues from product sales were RMB6,659.2 million, RMB10,223.7 million and RMB18,677.4 million (US$2,630.7 million) for the years ended December 31, 2021, 2022 and 2023, respectively, including revenues from self-operated stores of RMB6,528.2 million, RMB9,786.2 million and RMB17,880.1 million (US$2,518.4 million) for the years ended December 31, 2021, 2022 and 2023, 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 RMB5,909.7 million, RMB9,079.3 million and RMB16,877.9 million (US$2,377.2 million) for the years ended December 31, 2021, 2022 and 2023, 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 RMB395.6 million, RMB686.8 million and RMB1,241.9 million (US$174.9 million) for the years ended December 31, 2021, 2022 and 2023, 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 RMB354.0 million, RMB457.5 million and RMB557.6 million (US$78.5 million) for the years ended December 31, 2021, 2022 and 2023, 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 RMB2.0 million, RMB1.2 million and RMB0.1 million (US$12.4 thousands) for the years ended December 31, 2021, 2022 and 2023, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) Revenue recognition (continued)

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 partnership stores sell products to customers catering 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 RMB834.7 million, RMB2,011.2 million and RMB4,157.6 million (US$585.6 million) for the years ended December 31, 2021, 2022 and 2023, respectively.

For equipment and store construction-related materials sales, the Group’s performance obligation is to transfer equipment at a fixed consideration with standard warranty provision and store construction-related materials to retail partners. The standard warranty is not a distinct performance obligation as it is intended to provide by the Group’s suppliers to the partners 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 intended 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 RMB178.8 million, RMB278.1 million and RMB877.2 million (US$123.5 million) for the years ended December 31, 2021, 2022 and 2023, 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 calculated using a tiered percentage approach, which is based upon the partnership stores’ monthly gross profits. 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. 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 RMB144.8 million, RMB427.9 million and RMB680.2 million (US$95.8 million) for the years ended December 31, 2021, 2022 and 2023, 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 RMB147.8 million, RMB352.1 million and RMB510.8 million (US$71.9 million) for the years ended December 31, 2021, 2022 and 2023, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) 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 RMB0.2 million and RMB nil million (US$ nil) allowance for doubtful accounts, were RMB58.8 million and RMB80.7 million (US$11.4 million) as of December 31, 2022 and 2023, respectively.

Contract liability is mainly related to prepaid coupons to be provided to customers. Customers pay in advance for prepaid coupon. 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, 2022 and 2023, the balance of deferred revenues was RMB97.4 million and RMB123.4 million (US$17.4 million), respectively. Majority of the balance of deferred revenue as of December 31, 2022 was recognized as revenue in the year of 2023.

(s) 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.

(t) Delivery expenses

Delivery expenses are the delivery service fee for delivery orders. The Group incurred delivery expenses of RMB819.5 million, RMB1,373.2 million and RMB2,010.7 million (US$283.2 million) for the years ended December 31, 2021, 2022 and 2023, 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.

(u) 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 RMB243.7 million, RMB338.0 million and RMB801.1 million (US$112.8 million) for the years ended December 31, 2021, 2022 and 2023, respectively.

(v) 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 RMB251.7 million, RMB301.4 million and RMB338.8 million (US$47.7 million) of research and development costs to expense for the years ended December 31, 2021, 2022 and 2023, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(w) 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.

(x) 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.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(x) Leases (continued)

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 operations and comprehensive income.

The Group leases offices to third parties. The arrangements are in nature of operating leases, therefore, the assets subject to operating lease are measured at their carrying value under property, plant and equipment on the Group’s consolidated balance sheets and continue to depreciate based on the estimated useful life. Rental income is recognized over the lease term on a straight-line basis.

(y) 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 operations and comprehensive income. Government subsidies of RMB47.1 million, RMB78.0 million and RMB71.2 million (US$10.0 million) were recorded in “Other income/(expenses), net” for the years ended December 31, 2021, 2022 and 2023.

(z) Income taxes

The Group follows the liability method of accounting for income taxes in accordance with ASC 740 (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate.

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 operations and comprehensive income as income tax expenses. The accrued interest and penalties related to unrecognized tax benefit for the years ended December 31, 2021, 2022 and 2023 were RMB nil, RMB4.5million and RMB7.6 million (US$1.1 million), respectively, which represent the Group’s best estimate, in accordance with current PRC tax laws and regulations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(aa) 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 RMB247.3 million, RMB333.5 million and RMB530.3 million (US$74.7 million) for the years ended December 31, 2021, 2022 and 2023, respectively.

(bb) Comprehensive income

Comprehensive income is defined as the change 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, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Group’s comprehensive income included net income and foreign currency translation adjustments that are presented in the consolidated statements of operations and comprehensive income.

(cc) Segment reporting

The Group follows ASC 280, Segment Reporting. Certain members of the Group’s management team, acting as the chief operating decision-maker, review the consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole and hence, the Group has only one reportable segment. The Group operates and manages its business as a single segment. As the Group’s long-lived assets are substantially all located in the PRC and substantially all the Group’s revenues are derived from within the PRC, no geographical segments are presented.

(dd) Net income per share

In accordance with ASC 260, Earnings per Share, basic income per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares and participating securities during the period. Holders of Class A ordinary shares and Class B ordinary shares have the same dividend rights. For the calculation of diluted net income per share, the weighted average number of ordinary shares is adjusted by the effect of dilutive potential ordinary shares, including unvested restricted share units (“RSUs”) and ordinary shares issuable upon the exercise of outstanding share options using the treasury stock method. The effect mentioned above is not included in the calculation of the diluted income per share when inclusion of such effect would be anti-dilutive.

(ee) Share-based compensation

The Group applies ASC 718, Compensation-Stock Compensation (“ASC 718”), to account for its employee share-based payments. In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or equity award. All the Group’s share-based awards to employees and directors were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values. The Group recognizes share-based compensation expenses for equity awards to employees with a performance condition based on the probable outcome of that performance condition. Compensation expense is recognized over the requisite service period for each separately vesting portion of the award, and only when it is probable that the performance condition, if any, will be achieved. The Group accounts for forfeitures as they occur. The Group issues new shares of common stock upon exercise of stock options and the vesting of restricted share units.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(ff) Comparative information

Certain items in prior years’ consolidated financial statements or disclosures have been reclassified to conform to the current period’s presentation to facilitate comparison.

Revenues from self-operated stores include net revenue from the sales of freshly brewed and non-freshly brewed items through self-operating stores, and delivery fees derived from self-operated stores paid by the Company’s customers. Before 2023, the definition of revenues from self-operated stores did not include delivery fees derived from self-operated stores paid by the Company’s customers. Comparative figures from previous periods presented were also adjusted to be consistent.

(gg) Recent accounting pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which focuses on improving reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. A public entity shall disclose for each reportable segment the significant expense categories and amounts that are regularly provided to the CODM and included in reported segment profit or loss. ASU 2023-07 also requires public entities to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Entities are permitted to disclose more than one measure of a segment’s profit or loss if such measures are used by the CODM to allocate resources and assess performance, as long as at least one of those measures is determined in a way that is most consistent with the measurement principles used to measure the corresponding amounts in the consolidated financial statements. ASU 2023-07 is applied retrospectively to all periods presented in financial statements, unless it is impracticable. This update will be effective for the Group’s fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Group is currently in the process of evaluating the disclosure impact of adopting ASU 2023-07.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Under this ASU, public entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). This ASU’s amendments are effective for all entities that are subject to Topic 740, Income Taxes, for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of this pronouncement on our disclosures.

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.

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment


	As of December 31,
	2022	2023
	RMB	RMB	US$
Store operating equipment	1,341,127	2,417,877	340,551
Leasehold improvements	1,126,562	2,235,034	314,798
Office equipment and others	177,259	315,291	44,408
Office buildings	811,666	480,792	67,718
Assets subject to operating leases	—	346,223	48,764
Mechanical equipment	80,481	82,303	11,592
Construction in progress	53,103	345,904	48,720
	3,590,198	6,223,424	876,551
Less: accumulated depreciation	(1,546,362)	(2,036,969)	(286,901)
Less: impairment	(176,458)	(17,314)	(2,439)

	1,867,378	4,169,141	587,211

PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed balance sheets (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥) shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 CNY (¥) shares	Dec. 31, 2022 $ / shares	Dec. 31, 2021 CNY (¥)	May 17, 2019 $ / shares
Current assets:
Cash and cash equivalents	¥ 2,925,709	$ 412,077	¥ 3,534,304		¥ 6,477,636
Prepaid expenses and other current assets	1,544,918	217,597	1,077,719
Total current assets	7,599,554	1,070,374	6,037,054
Non-current assets:
Other non-current assets	789,492	111,198	327,744
Total non-current assets	10,692,424	1,505,996	4,443,343
Total assets	18,291,978	2,576,370	10,480,397
Current liabilities:
Amounts due to subsidiaries	294,673	41,504	139,497
Accrued expenses and other current liabilities	2,556,977	360,143	1,375,425
Payable for equity litigants settlement	116,314	16,382	33,796
Total current liabilities	5,462,678	769,403	2,828,836
Total liabilities	8,577,533	1,208,121	3,853,110
Mezzanine equity:
Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2022 and 2023, respectively; 307,692,307 and 307,692,307 issued and outstanding as of December 31, 2022 and 2023, respectively)	1,578,040	222,262	1,578,040
Shareholders' equity:
Additional paid-in capital	16,276,991	2,292,566	16,037,406
Accumulated deficit	(8,705,759)	(1,226,181)	(11,421,145)
Accumulated other comprehensive income	396,944	55,908	397,304
Total Company's ordinary shareholders' equity	8,136,405	1,145,987	5,049,247
Total liabilities and shareholders' equity	18,291,978	2,576,370	10,480,397
Class A ordinary shares
Shareholders' equity:
Shares	¥ 23	$ 3	¥ 23
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)	2,093,280,340	2,093,280,340	2,079,801,956
Equity, shares outstanding (in shares)	2,093,280,340	2,093,280,340	2,079,801,956
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, 2022 and 2023, respectively; 307,692,307 and 307,692,307 issued and outstanding as of December 31, 2022 and 2023, respectively)	¥ 1,578,040	$ 222,262	¥ 1,578,040
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	307,692,307
Mezzanine equity, shares outstanding (in shares)	307,692,307	307,692,307	307,692,307
Parent Company \| Reportable Legal Entities
Current assets:
Cash and cash equivalents	¥ 30,752	$ 4,331	¥ 214,992
Prepaid expenses and other current assets	2,778	391	6,910
Total current assets	13,076,585	1,841,798	12,756,676
Non-current assets:
Investments in subsidiaries and VIE	(2,926,400)	(412,175)	(5,736,325)
Total non-current assets	(2,926,400)	(412,175)	(5,736,325)
Total assets	10,150,185	1,429,623	7,020,351
Current liabilities:
Accrued expenses and other current liabilities	10,108	1,425	111,525
Payable for equity litigants settlement	116,314	16,382	33,796
Total current liabilities	435,740	61,374	393,064
Total liabilities	435,740	61,374	393,064
Mezzanine equity:
Convertible senior preferred shares (US$0.000002 par value; 307,692,307 and 307,692,307 shares authorized as of December 31, 2022 and 2023, respectively; 307,692,307 and 307,692,307 issued and outstanding as of December 31, 2022 and 2023, respectively)	1,578,040	222,262	1,578,040
Shareholders' equity:
Additional paid-in capital	16,445,195	2,316,257	16,073,063
Accumulated deficit	(8,705,759)	(1,226,181)	(11,421,145)
Accumulated other comprehensive income	396,944	55,908	397,304
Total Company's ordinary shareholders' equity	8,136,405	1,145,987	5,049,247
Total liabilities and shareholders' equity	10,150,185	1,429,623	7,020,351
Parent Company \| Reportable Legal Entities \| Related Party
Current assets:
Amounts due from subsidiaries	13,043,055	1,837,076	12,534,774
Current liabilities:
Amounts due to subsidiaries	309,318	43,567	247,743
Parent Company \| Reportable Legal Entities \| Class A ordinary shares
Shareholders' equity:
Shares	¥ 23	$ 3	¥ 23
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)	2,093,280,340	2,093,280,340	2,079,801,956
Equity, shares outstanding (in shares)	2,093,280,340	2,093,280,340	2,079,801,956
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, 2022 and 2023, respectively; 307,692,307 and 307,692,307 issued and outstanding as of December 31, 2022 and 2023, respectively)	¥ 1,578,040	$ 222,262	¥ 1,578,040
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	307,692,307
Mezzanine equity, shares outstanding (in shares)	307,692,307	307,692,307	307,692,307

NET INCOME PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

NET INCOME PER SHARE

Schedule of basic and diluted income per share


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
Numerator:
Net income	578,653	488,246	2,847,933	401,123
Less: Net income attributable to non-controlling interests	108	—	—	—
Net income attributable to ordinary shareholders	578,545	488,246	2,847,933	401,123

Denominator:
Weighted average number of shares – basic	2,051,263,478	2,473,078,408	2,532,109,710	2,532,109,710
Adjustments for dilutive options and RSUs	84,580,779	43,195,219	453,592	453,592
Weighted average number of shares – diluted	2,135,844,257	2,516,273,627	2,532,563,302	2,532,563,302

Basic net income per share attributable to ordinary shareholders	0.29	0.20	1.12	0.16
Diluted net income per share attributable to ordinary shareholders	0.27	0.19	1.12	0.16

OTHER NON-CURRENT ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2023

OTHER NON-CURRENT ASSETS, NET

Schedule of other non-current assets, net


	As of December 31,
	2022	2023
	RMB	RMB	US$
Long-term guarantee deposits⁽¹⁾	181,477	397,737	56,020
Prepayments for equipment, net	119,009	354,005	49,861
Land use rights, net⁽²⁾	26,081	31,950	4,500
Prepaid leasehold improvements	1,177	2,874	405
Interest receivable non-current	—	2,926	412

	327,744	789,492	111,198

(1)

Long-term guarantee 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, 2022 and 2023, the carrying amounts of land use rights are RMB26.1 million and RMB32.0 million, respectively, which represent the result of their original values of RMB26.7 million and RMB33.1 million, netting off accumulated amortization of RMB0.6 million and RMB1.2 million, respectively. Land use rights are amortized on a straight-line basis with amortization expenses of RMB0.15 million, RMB0.2 million and RMB0.6 million (US$0.1 million) for the years ended December 31, 2021, 2022 and 2023, respectively.

ORGANIZATION

12 Months Ended

Dec. 31, 2023

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)In 2023, the details of the Company’s principal subsidiaries and VIE are as follows:

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 International Holdings Inc. (“Luckin International BVI”)	February 20, 2020	British Virgin Islands	100	%	Investment holding
Luckin Coffee (SGP) PTE. LTD (“Luckin Singapore”)	August 11, 2022	Singapore	100	%	Singapore store operating
Luckin Coffee (Hong Kong) Limited (“Luckin HK”)	June 19, 2017	Hong Kong	100	%	Investment holding
Luckin Coffee Trading (Hong Kong) Limited (“Luckin Trading HK”)	April 1, 2022	Hong Kong	100	%	International trading of materials for products
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	%	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 Group Co., Ltd. (formerly as “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
Luckin Coffee Food (Jiangsu) Co., Ltd (1)	May 27, 2022	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)

As of December 31, 2023, Mr. Jinyi Guo and Mr. Gang Wu are nominal shareholders of the VIE, holding 83.33% and 16.67% of the equity interest, respectively. As of the date of the report, the Company has terminated the contractual agreements entered into by and among the Beijing WFOE and VIE.

(4)

As of December 31, 2023, Luckin China had 68 direct and indirect wholly-owned subsidiaries.

(5)

As of December 31, 2023, Luckin TJ had one direct wholly-owned subsidiary.

1. ORGANIZATION (CONTINUED)

(b)PRC laws and regulations prohibit foreign ownership in certain telecommunication related businesses. To comply with these foreign ownership restrictions, the Company relies on contractual arrangements with the VIE rather than equity ownership in it to use, or otherwise benefit from, certain foreign restricted licenses and permits that the Company may need in the future, such as the internet content provider license, or the ICP license held by the VIE. Despite the lack of technical majority ownership, the Company has effective control of the VIE through a series of contractual agreements (the “VIE Agreements”). The equity interest of the VIE is legally held by PRC individuals (the “Nominee Shareholders”). Through the VIE Agreements, the Nominee Shareholders of the VIE effectively assign all their voting rights underlying their equity interests in the VIE to the Company, and therefore, the Company has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. The Company also has the right to receive economic benefits and obligations to absorb losses from the VIE that potentially could be significant to the VIE. Based on the above, the Company consolidates the VIE in accordance with SEC Regulation S-X Rule 3A-02 and Accounting Standards Codification (“ASC”) 810-10 (“ASC 810-10”), Consolidation: Overall. VIE was established to hold certain foreign restricted licenses and permits which the Company might need in the future, such as the ICP license, the financial results of the VIE have not been material to the Company and are not expected to be material in the future.

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 2021, 2022 and 2023, the PRC subsidiaries transferred RMB18.8 million, RMB115.5 million and RMB11.1 million (US$1.6 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 2021, 2022 and 2023, the VIE transferred to the PRC subsidiaries RMB58.8 million, RMB104.1 million and RMB0.6 million (US$83.3 thousands), 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 the Group’s PRC legal 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.

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:


	For the year ended December 31,
	2022	2023
	RMB	RMB	US$

Total assets	6,865	2	—
Total liabilities	2,864	4,336	610


	For the year ended December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$

Total net revenues	—	—	—	—
Net loss	(22,750)	(23,542)	(9,233)	(1,300)


	For the year ended December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$

Net cash (used in)/provided by operating activities	(58,781)	—	—	—
Net cash used in investing activities	—	—	—	—
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	(58,781)	—	—	—
Cash and cash equivalents and restricted cash at beginning of year	58,781	—	—	—
Cash and cash equivalents and restricted cash at end of year	—	—	—	—

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥) ¥ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares
Net revenues:
Total net revenues	¥ 24,903,166	$ 3,507,537	¥ 13,292,982	¥ 7,965,323
Cost of materials	(10,892,214)	(1,534,136)	(5,178,963)	(3,198,552)
Store rental and other operating costs	(5,167,482)	(727,825)	(2,829,987)	(2,036,772)
Depreciation and amortization expenses	(604,580)	(85,153)	(391,936)	(465,384)
Delivery expenses	(2,010,700)	(283,200)	(1,373,219)	(819,549)
Sales and marketing expenses	(1,286,523)	(181,203)	(570,122)	(336,855)
General and administrative expenses	(1,829,651)	(257,701)	(1,459,550)	(1,269,988)
Store preopening and other expenses	(109,685)	(15,449)	(36,012)	(16,352)
Impairment loss of long-lived assets	(5,200)	(700)	(221,810)	(21,368)
Losses and expenses related to Fabricated Transactions and Restructuring	28,515	4,016	(75,204)	(339,557)
Total operating expenses	(21,877,548)	(3,081,388)	(12,136,803)	(8,504,377)
Operating (loss)/income	3,025,618	426,149	1,156,179	(539,054)
Interest and investment income	108,682	15,308	84,923	102,248
Interest and financing expenses			(23,484)	(35,490)
Foreign exchange gain, net	2,968	418	10,661	12,441
Other (expenses)/income, net	62,283	8,772	60,680	(16,513)
Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes			6,381
Reversal for SEC settlement	0		0	(1,146,474)
Provision for equity litigants settlement	(92,192)	(12,985)	(279,967)	(155,314)
Gain from extinguishment of Series B Senior Secured Notes			124,139
Income before income taxes	3,107,359	437,662	1,126,750	514,792
Income tax (expense)/benefits	(259,426)	(36,539)	(638,504)	63,861
Net income	2,847,933	401,123	488,246	578,653
Less: Net (loss)/income attributable to non-controlling interests				108
Net income attributable to the Company's ordinary shareholders	¥ 2,847,933	$ 401,123	¥ 488,246	¥ 578,545
*Net income per share:**
Basic \| (per share)	¥ 1.12	$ 0.16	¥ 0.20	¥ 0.29
Diluted \| (per share)	¥ 1.12	$ 0.16	¥ 0.19	¥ 0.27
Weighted average shares outstanding used in calculating basic and diluted income per share:
Basic \| shares	2,532,109,710	2,532,109,710	2,473,078,408	2,051,263,478
Diluted \| shares	2,532,563,302	2,532,563,302	2,516,273,627	2,135,844,257
Net income	¥ 2,847,933	$ 401,123	¥ 488,246	¥ 578,653
Other comprehensive (loss)/income, net of tax of nil:
Foreign currency translation difference, net of tax of nil	(360)	(51)	(69,552)	102,802
Total comprehensive income	2,847,573	401,072	418,694	681,455
Less: total comprehensive income attributable to non-controlling interests				108
Total comprehensive income attributable to the Company's ordinary shareholders	2,847,573	401,072	418,694	681,347
Revenues from product sales
Net revenues:
Total net revenues	18,677,400	2,630,700	10,223,720	6,659,218
Revenues from partnership stores
Net revenues:
Total net revenues	¥ 6,225,776	$ 876,882	¥ 3,069,262	¥ 1,306,105

ORGANIZATION (Tables)

12 Months Ended

Dec. 31, 2023

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 International Holdings Inc. (“Luckin International BVI”)	February 20, 2020	British Virgin Islands	100	%	Investment holding
Luckin Coffee (SGP) PTE. LTD (“Luckin Singapore”)	August 11, 2022	Singapore	100	%	Singapore store operating
Luckin Coffee (Hong Kong) Limited (“Luckin HK”)	June 19, 2017	Hong Kong	100	%	Investment holding
Luckin Coffee Trading (Hong Kong) Limited (“Luckin Trading HK”)	April 1, 2022	Hong Kong	100	%	International trading of materials for products
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	%	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 Group Co., Ltd. (formerly as “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
Luckin Coffee Food (Jiangsu) Co., Ltd (1)	May 27, 2022	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)

(4)

As of December 31, 2023, Luckin China had 68 direct and indirect wholly-owned subsidiaries.

(5)

As of December 31, 2023, 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


	For the year ended December 31,
	2022	2023
	RMB	RMB	US$

Total assets	6,865	2	—
Total liabilities	2,864	4,336	610


	For the year ended December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$

Total net revenues	—	—	—	—
Net loss	(22,750)	(23,542)	(9,233)	(1,300)


	For the year ended December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$

Net cash (used in)/provided by operating activities	(58,781)	—	—	—
Net cash used in investing activities	—	—	—	—
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	(58,781)	—	—	—
Cash and cash equivalents and restricted cash at beginning of year	58,781	—	—	—
Cash and cash equivalents and restricted cash at end of year	—	—	—	—

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

NET INCOME PER SHARE

12 Months Ended

Dec. 31, 2023

NET INCOME PER SHARE

NET INCOME PER SHARE

17. NET INCOME PER SHARE

Basic and diluted net income per share for the years presented were calculated as follows:


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
Numerator:
Net income	578,653	488,246	2,847,933	401,123
Less: Net income attributable to non-controlling interests	108	—	—	—
Net income attributable to ordinary shareholders	578,545	488,246	2,847,933	401,123

Denominator:
Weighted average number of shares – basic	2,051,263,478	2,473,078,408	2,532,109,710	2,532,109,710
Adjustments for dilutive options and RSUs	84,580,779	43,195,219	453,592	453,592
Weighted average number of shares – diluted	2,135,844,257	2,516,273,627	2,532,563,302	2,532,563,302

Basic net income per share attributable to ordinary shareholders	0.29	0.20	1.12	0.16
Diluted net income per share attributable to ordinary shareholders	0.27	0.19	1.12	0.16

Generally, basic net 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 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 84,580,779, 43,195,219 and 453,592 for the years ended December 31, 2021, 2022 and 2023 on a weighted average basis, respectively.

COMMITMENTS AND CONTINGENCIES - Contingency (Details) ¥ in Thousands, $ in Thousands			1 Months Ended	12 Months Ended
	Apr. 13, 2023 USD ($)	Oct. 26, 2021 USD ($)	May 31, 2020 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2020 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	May 06, 2020 entity	Apr. 02, 2020 USD ($)
COMMITMENTS AND CONTINGENCIES
Provision for equity litigants settlement				¥ 92,192	$ 12,985	¥ 279,967	¥ 155,314
Payable for equity litigants settlement				116,314		33,796				$ 16,382
Fabrication of Transactions
COMMITMENTS AND CONTINGENCIES
Sought value for losses from Company	$ 145,800
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				92,200		280,000	¥ 155,300			12,600	41,900	$ 24,400
Payable for equity litigants settlement				¥ 116,300		¥ 33,800				16,400	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

SHARE BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2023

SHARE BASED COMPENSATION

Schedule of share-based compensation expenses were allocated in operating expenses by function


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
Sales and marketing expenses	9,185	17,452	11,422	1,609
General and administrative expenses	293,549	380,556	228,084	32,125
	302,734	398,008	239,506	33,734

Summary of assumptions used to estimate the fair value of the share options granted to employees


		2021
Risk-free interest rate		1.04	%
Expected volatility		74.49	%
Expected dividend yield		0.00	%
Exercise multiple		2.20
Expected post-vesting forfeiture rate		0.00	%
Fair value of share option	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
Granted	—	—
Exercised	(24,108,314)	0.0002
Forfeit	(243,016)	0.0002		82,205
Outstanding as of December 31, 2023	4,093,181	0.0002	6.34
Fully vested and expected to vest as of December 31, 2023	66,695,568	0.0002
Exercisable as of December 31, 2023	3,935,132	0.0002

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
Granted	10,551,248	3.05
Vested	(13,239,120)	2.52
Forfeited or cancelled	(117,792)	3.08
Unvested as of December 31, 2023	1,378,632	2.56

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
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-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (c)(1)(iv)(04)
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Subparagraph (c)(2)(i)
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

INVENTORIES

12 Months Ended

Dec. 31, 2023

INVENTORIES

INVENTORIES

5. INVENTORIES


	As of December 31,
	2022	2023
	RMB	RMB	US$

Raw materials	886,336	1,487,226	209,471
Packaging and other supplies	289,537	651,634	91,781
Pre-made food and beverage items	30,594	65,140	9,175
	1,206,467	2,204,000	310,427

RELATED PARTY TRANSACTIONS - Related Party Balances (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
RELATED PARTY TRANSACTIONS
Total	¥ 31,610	$ 4,452	¥ 3,932
Goumei
RELATED PARTY TRANSACTIONS
Total	4,530	638	¥ 3,932
Tianshu \| Related Party
RELATED PARTY TRANSACTIONS
Total	¥ 27,080	$ 3,814

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Employee benefit expenses and Segment reporting (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2023 CNY (¥) segment	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Employee benefit expenses	¥ 530.3	$ 74.7	¥ 333.5	¥ 247.3
Number of reportable segments	1	1

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

7. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:


	As of December 31,
	2022	2023
	RMB	RMB	US$
Store operating equipment	1,341,127	2,417,877	340,551
Leasehold improvements	1,126,562	2,235,034	314,798
Office equipment and others	177,259	315,291	44,408
Office buildings	811,666	480,792	67,718
Assets subject to operating leases	—	346,223	48,764
Mechanical equipment	80,481	82,303	11,592
Construction in progress	53,103	345,904	48,720
	3,590,198	6,223,424	876,551
Less: accumulated depreciation	(1,546,362)	(2,036,969)	(286,901)
Less: impairment	(176,458)	(17,314)	(2,439)

	1,867,378	4,169,141	587,211

Depreciation expense was RMB465.2 million, RMB391.7 million and RMB604.0 million (US$85.1 million) for the years ended December 31, 2021, 2022 and 2023, 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. On February 19, 2024, the Company entered into a new cooperation agreement with Xiamen municipal government, in which the commitments for the favorable pricing terms were modified. As of the date of this annual report, the Group is in the process of obtaining the real property ownership certificate for its headquarters.

As of December 31, 2022, the balance of impairment for property and equipment was RMB176.5 million, which consisted of RMB 175.7 million for store operating equipment (including RMB167.1 million for the asset group related to Luckin Coffee EXPRESS) and RMB 0.8 million for office equipment and others. 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 for the year ended December 31, 2022.

As of December 31, 2023, the balance of impairment for property and equipment was RMB17.3 million (US$2.4 million), which mainly consisted of RMB 11.7 million for store operating equipment and RMB 5.6 million for office equipment and others (including RMB 4.5 million for assets in relation to Luckin Tea).

During the year ended December 31, 2023, impairment for property and equipment of RMB5.2 million (US$0.7 million) was provided, which was mainly related to a full impairment for assets in relation to Luckin Tea due to the permanent closure of related business. Impairment provision of RMB164.6 million for store operating equipment and others, which primarily consisted of provision for Luckin Coffee EXPRESS, were written off for the year ended December 31, 2023.

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, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Delivery expenses	¥ 2,010,700	$ 283,200	¥ 1,373,219	¥ 819,549
Sales and marketing expenses
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Advertising expenditure	801,100	112,800	338,000	243,700
General and administrative expenses
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Research and development costs	¥ 338,800	$ 47,700	¥ 301,400	¥ 251,700

TAXATION - Components of deferred taxes (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
Deferred tax assets
Donation	¥ 680	$ 96	¥ 1,264
Accrued expenses	31,368	4,418	29,867
Accrued welfare	55,920	7,876	29,662
Impairment loss of long-lived assets and investments	4,568	643	327,764
Allowance for doubtful accounts	5,756	811	5,398
Tax losses	694,459	97,813	1,149,639
Valuation allowance	(442,700)	(62,300)	(1,335,125)
Total deferred tax assets, net	350,082	49,308	208,469
Accumulated tax losses	2,729,500	384,400
Valuation allowance	442,700	$ 62,300	¥ 1,335,125
Change in valuation allowance	¥ 282,600

OTHER NON-CURRENT ASSETS, NET (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2023 USD ($)
OTHER NON-CURRENT ASSETS, NET
Long-term guarantee deposits(1)	¥ 397,737		¥ 181,477		$ 56,020
Prepayments for equipment, net	354,005		119,009		49,861
Land use rights, net(2)	32,000		26,081		4,500
Prepaid leasehold improvements	2,874		1,177		405
Interest receivable non-current	2,926				412
Other non-current assets, net	789,492		327,744		$ 111,198
Original values	33,100		26,700
Accumulated amortization	¥ 1,200		600
Period of land use rights (in years)	50 years	50 years
Amortization of land use rights	¥ 600	$ 100	¥ 200	¥ 150

Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2023 shares
Document and Entity Information
Document Type	20-F
Document Registration Statement	false
Document Period End Date	Dec. 31, 2023
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
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
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	2,093,280,340
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

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

22.SUBSEQUENT EVENT

In January 2024, 12,307,688 Senior Preferred Shares were converted to 1,538,461 ADSs at the request of the holder of such Senior Preferred Shares pursuant to the Certificate of Designation. To consummate such conversion, 12,307,688 Senior Preferred Shares had been re-designated as 12,307,688 Class A Ordinary Shares.

In March 2024, the Company terminated its contractual arrangements with VIE because (i) the foreign restricted licenses and permits held through the VIE are not necessary for the Company’s business operations as currently conducted, and (ii) the Company believes the termination of these arrangements help to optimize its corporate governance structure. Due to the termination, the financial results of the VIE will no longer be consolidated into the Company’s consolidated financial statements for accounting purpose from the termination date.

OTHER NON-CURRENT ASSETS, NET

12 Months Ended

Dec. 31, 2023

OTHER NON-CURRENT ASSETS, NET

OTHER NON-CURRENT ASSETS, NET

8. OTHER NON-CURRENT ASSETS, NET


	As of December 31,
	2022	2023
	RMB	RMB	US$
Long-term guarantee deposits⁽¹⁾	181,477	397,737	56,020
Prepayments for equipment, net	119,009	354,005	49,861
Land use rights, net⁽²⁾	26,081	31,950	4,500
Prepaid leasehold improvements	1,177	2,874	405
Interest receivable non-current	—	2,926	412

	327,744	789,492	111,198

(1)

Long-term guarantee deposits mainly represent rental and renovation deposits over 1 year.

(2)

TAXATION (Tables)

12 Months Ended

Dec. 31, 2023

TAXATION

Schedule of components of (loss)/income before tax


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
(Loss)/income before tax
Non-PRC	617,090	(331,744)	(123,731)	(17,427)
PRC	(102,298)	1,458,494	3,231,090	455,089
Total (loss)/income before tax	514,792	1,126,750	3,107,359	437,662

Income tax expenses/(benefits)
Current income tax expenses	360	144,032	401,039	56,485
Deferred tax expenses/(benefits)	(64,221)	494,472	(141,613)	(19,946)
Income tax (benefits)/expenses	(63,861)	638,504	259,426	36,539

Schedule of reconciliation of tax computed by applying the statutory income tax rate


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
Earnings before income taxes	514,792	1,126,750	3,107,359	437,662

Income tax expenses computed at PRC statutory
income tax rate of 25%	128,698	281,688	776,840	109,416
Additional deduction for R&D expenses	(11,095)	(13,516)	(19,397)	(2,732)
Non-deductible share-based compensation expenses	58,581	80,440	45,722	6,440
Non-deductible expenses and non-taxable income	9,415	(9,967)	5,378	757
Deferred tax assets writeoff related to closure entities	—	8,266	(401)	(56)
Expiration of tax loss	—	—	43,438	6,118
Effect of tax rate changes on deferred tax	—	—	725	102
Recognition of uncertain tax benefits	—	29,325	24,536	3,456
Change of valuation allowance	60,352	220,774	(609,815)	(85,891)
Effect of preferential tax rate	(158,362)	(18,626)	(48,123)	(6,778)
Effect of International tax rates	(155,242)	76,378	29,047	4,091
Prior-year tax filing difference	3,792	(16,258)	11,476	1,616

Income tax (benefits)/expenses	(63,861)	638,504	259,426	36,539

Schedule of Significant components of deferred taxes


	As of December 31,
	2022	2023
	RMB	RMB	US$
Deferred tax assets
Donation	1,264	680	96
Accrued expenses	29,867	31,368	4,418
Accrued welfare	29,662	55,920	7,876
Impairment loss of long-lived assets and investments	327,764	4,568	643
Allowance for doubtful accounts	5,398	5,756	811
Tax losses	1,149,639	694,459	97,813
Valuation allowance	(1,335,125)	(442,669)	(62,349)

Total deferred tax assets, net	208,469	350,082	49,308

Schedule of unrecognized tax benefits roll-forward


	As of December 31,
	2022	2023
	RMB	RMB	US$
Balance at beginning of year	54,956	80,930	11,399
Additions/(Deduction) based on tax positions related to the current year	25,974	(1,410)	(199)

Balance at end of year	80,930	79,520	11,200

SHARE BASED COMPENSATION - Options granted to employees (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended					24 Months Ended
	Jan. 25, 2021	Jan. 18, 2019	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2021
Aggregated intrinsic value
Legally granted shares			49,494,272
2019 Plan
Number of options
Outstanding, at the beginning of period			28,444,511	60,453,072	60,028,208	72,529,960		72,529,960
Granted		79,015,500	0	0	2,795,600	25,917,240
Exercised			(24,108,314)	(32,008,561)
Forfeit			(243,016)		(2,370,736)	(38,418,992)
Outstanding, at the end of period			4,093,181	28,444,511	60,453,072	60,028,208	72,529,960	60,453,072
Fully vested and expected to vest as of December 31, 2022			66,695,568
Exercisable at the end of period			3,935,132
Weighted-average exercise price
Outstanding, at the beginning of period			$ 0.0002	$ 0.0002	$ 0.0002	$ 0.0002		$ 0.0002
Granted					0.0002	0.0002
Exercised			0.0002	0.0002	0.0002	0.0002
Forfeit			0.0002	0.0002	0.0002	0.0002
Outstanding, at the end of period			0.0002	$ 0.0002	$ 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			6 years 4 months 2 days	7 years 2 months 26 days	7 years 10 months 28 days	8 years 9 months 29 days	9 years 18 days
Aggregated intrinsic value
Exercised				$ 88,097
Forfeit			$ 82,205
Closing price					$ 1.07			$ 1.07
Weighted average grant date fair value of options granted					$ 1.07
Unrecognized share-based compensation expense for share options			$ 42
Weighted average period of which unrecognized share-based compensation expense for share options granted, which are expected to be recognized			1 year
Term (in years)		10 years
Vesting period (in years)		4 years			4 years	4 years	4 years
2019 Plan \| ADSs
Aggregated intrinsic value
Closing price			$ 27.28
2019 Plan \| Ordinary shares
Aggregated intrinsic value
Closing price			$ 3.41
2019 Plan \| First vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)					40.00%	40.00%	25.00%
2019 Plan \| Second vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)					40.00%	40.00%	25.00%	40.00%
2019 Plan \| Third vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)					10.00%	10.00%	25.00%
2019 Plan \| Fourth vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)					10.00%	10.00%	25.00%
2021 plan
Number of RSUs
Unvested, at the beginning of period			4,184,296	2,530,752
Granted			10,551,248	45,722,392	40,842,760
Vested			(13,239,120)	(43,329,376)	(31,943,824)
Forfeited or cancelled			(117,792)	(739,472)	(6,368,184)
Unvested, at the end of period			1,378,632	4,184,296	2,530,752			2,530,752
Weighted-Average Grant-Date Fair Value
Unvested, at the beginning of period			$ 1.23	$ 1.09
Granted			3.05	1.26	$ 1.09
Vested			2.52	1.26	1.10
Forfeited or cancelled			3.08	1.30	1.06
Unvested, at the end of period			2.56	1.23	1.09			$ 1.09
Aggregated intrinsic value
Total weighted average grant-date fair value RSUs (in US dollars per share)			$ 3.05	$ 1.26	1.09
Weighted average period of which unrecognized share-based compensation expense for share options granted, which are expected to be recognized			5 months 26 days
Term (in years)	10 years			1 year
Vesting period (in years)			4 years
2021 plan \| ADSs
Aggregated intrinsic value
Maximum number of shares authorized	27,846,154
2021 plan \| Ordinary shares
Aggregated intrinsic value
Maximum number of shares authorized	222,769,232
2021 plan \| Scenario One \| First vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)			15.00%
2021 plan \| Scenario One \| Second vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)			25.00%
2021 plan \| Scenario One \| Third vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)			25.00%
2021 plan \| Scenario One \| Fourth vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)			35.00%
2021 plan \| Scenario Two \| First vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)			25.00%
2021 plan \| Scenario Two \| Second vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)			25.00%
2021 plan \| Scenario Two \| Third vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)			25.00%
2021 plan \| Scenario Two \| Fourth vesting date
Aggregated intrinsic value
Vesting percentage (as a percent)			25.00%
2021 plan \| RSUs
Aggregated intrinsic value
Weighted average grant date fair value of options granted			$ 3.05	$ 1.26	$ 1.09
Unrecognized share-based compensation expense for share options			$ 1,400

INVENTORIES (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
INVENTORIES
Raw materials	¥ 1,487,226	$ 209,471	¥ 886,336
Packaging and other supplies	651,634	91,781	289,537
Pre-made food and beverage items	65,140	9,175	30,594
Inventory, net	¥ 2,204,000	$ 310,427	¥ 1,206,467

PRINCIPAL RISKS

12 Months Ended

Dec. 31, 2023

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, short - term investment, term deposits, accounts receivable and receivables from online payment platforms. As of December 31, 2022 and 2023, the aggregate amounts of cash and cash equivalents and restricted cash of RMB3,316.8 million and RMB3,724.9 million (US$524.6 million), respectively, were held at major financial institutions located in the PRC and US$31.5 million and US$3.9 million (RMB27.8 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.

3. PRINCIPAL RISKS (CONTINUED)

(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. No supplier accounted for 10% or more of the Group’s total purchasing for the years ended December 31, 2021, 2022 and 2023.

(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, 2021, 2022 and 2023.

(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.

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 (2.3)%, 8.2% and 2.9% for the years ended December 31, 2021, 2022 and 2023, respectively. The functional currency and the reporting currency of the Company, Luckin BVI and Luckin HK, Luckin Roasting, Luckin Trading HK 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.

LEASES - Future minimum lease payments (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
LEASES
2024	¥ 1,851,310	$ 260,752
2025	1,510,927	212,810
2026	997,107	140,440
2027	569,961	80,277
2028 and thereafter	386,414	54,425
Less: interest	(349,554)	(49,234)
Total	¥ 4,966,165	$ 699,470	¥ 1,905,147

TAXATION - Unrecognized tax position (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2023 USD ($)
TAXATION
Unrecognized tax benefits	¥ 79,520		¥ 80,930	$ 11,200
Unrecognized tax benefits, if ultimately recognized, that will impact the effective tax rate	57,600		54,700	$ 8,100
TAXATION
Balance at beginning of year	80,930	$ 11,399	54,956
Additions/(Deduction) based on tax positions related to the current year	(1,410)	(199)	25,974
Balance at end of year	¥ 79,520	$ 11,200	¥ 80,930

CONVERTIBLE SENIOR NOTES

12 Months Ended

Dec. 31, 2023

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$5.5 million, US$0.3 million and US$nil were charged against the interest expenses in the consolidation statements of operations and comprehensive income for the years ended December 31, 2021, 2022 and 2023, 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 and 2023, the balance of liabilities related to the Notes was both 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 consolidated statement of operations and comprehensive income.

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 operations and comprehensive income. 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” for the year ended December 31, 2022. The derivative was derecognized as the Group paid off all of the outstanding amounts of the New Notes in August 2022.

SUBSEQUENT EVENTS (Details)	1 Months Ended
SUBSEQUENT EVENTS (Details)	Jan. 31, 2024 shares
American Depositary Shares
Subsequent Event [Line Items]
Temporary equity shares on conversion	1,538,461
Subsequent Event [Member]
Subsequent Event [Line Items]
Temporary equity shares	12,307,688
Subsequent Event [Member] \| Common Class A [Member]
Subsequent Event [Line Items]
Common shares re-designated	12,307,688

TAXATION - Enterprise income tax ("EIT") (Details) $ in Thousands, $ in Thousands, ¥ in Millions	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2023 HKD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2019 CNY (¥)
TAXATION
Tax rate (as a percent)	25.00%	25.00%	25.00%	25.00%	25.00%
Minimum
TAXATION
Profit to qualify for tax rate \| ¥						¥ 1.0
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%	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%	16.50%
Profit to qualify for tax rate			$ 2,000
PRC
TAXATION
Tax rate (as a percent)	25.00%	25.00%	25.00%
Preferential tax rate (as a percent)	15.00%	15.00%	15.00%
Preferential corporate income tax rate						20
Withholding tax rate (as a percent)	10.00%	10.00%	10.00%
PRC \| Assessable Taxable Profit Less Than 1 Million
TAXATION
Preferential corporate income tax rate	5	5	5	2.5	2.5
PRC \| Taxable profits between RMB1.0 million and RMB3.0 million
TAXATION
Preferential corporate income tax rate	5	5	5	5	10
PRC \| Maximum \| Assessable Taxable Profit Less Than 1 Million
TAXATION
Exemption range in taxable profits						87.50%
Profit to qualify for tax rate \| ¥	¥ 1.0			¥ 1.0	¥ 1.0	¥ 1.0
PRC \| Maximum \| Taxable profits between RMB1.0 million and RMB3.0 million
TAXATION
Exemption range in taxable profits						75.00%
Profit to qualify for tax rate \| ¥	3.0			3.0	3.0	¥ 3.0
PRC \| Minimum \| Assessable Taxable Profit Less Than 1 Million
TAXATION
Exemption range in taxable profits						75.00%
PRC \| Minimum \| Taxable profits between RMB1.0 million and RMB3.0 million
TAXATION
Exemption range in taxable profits						50.00%
Profit to qualify for tax rate \| ¥	¥ 1.0			¥ 1.0	¥ 1.0	¥ 1.0
Cayman Islands
TAXATION
payments of dividends by the Company		$ 0
British Virgin Islands
TAXATION
payments of dividends by the Company		$ 0
Singapore
TAXATION
Tax rate (as a percent)	17.00%	17.00%	17.00%

RESTRICTED NET ASSETS

12 Months Ended

Dec. 31, 2023

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, 2021, 2022 and 2023, profit appropriation to statutory reserve for the Group’s entities incorporated in the PRC was approximately RMB2.0 million, RMB33.0 million and RMB132.5 million (US$18.7 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, 2022 and 2023, restricted net assets of the Company’s PRC subsidiaries and the VIE were RMB7,647.7 million and RMB10,061.4 million (US$1,417.1 million), respectively.

PROVISION FOR SEC SETTLEMENT (Details) ¥ in Thousands, $ in Thousands		12 Months Ended
	Feb. 03, 2022 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 17, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2020 USD ($)	Dec. 16, 2020 USD ($)
PROVISION FOR SEC SETTLEMENT
Settlement of civil money penalty amount to SEC										$ 180,000
Payable for SEC settlement								¥ 1,174,500	$ 180,000
Provision for SEC settlement \| ¥		¥ 0	¥ 0	¥ (1,146,474)
Penalty from SEC
PROVISION FOR SEC SETTLEMENT
Penalty loss	$ 180,000
Outstanding balance of penalty					$ 0	$ 0
Minimum
PROVISION FOR SEC SETTLEMENT
Settlement of civil money penalty amount to SEC						$ 180,000	$ 180,000

CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥) shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 CNY (¥) shares
Current liabilities	¥ 5,462,678	$ 769,403	¥ 2,828,836
Non-current liabilities	3,114,855	438,718	1,024,274
VIE
Current liabilities	4,300	$ 600	2,900
Non-current liabilities \| ¥	¥ 0		¥ 0
Convertible senior preferred shares
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	307,692,307
Mezzanine equity, shares outstanding (in shares)	307,692,307	307,692,307	307,692,307
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)	2,093,280,340	2,093,280,340	2,079,801,956
Equity, shares outstanding (in shares)	2,093,280,340	2,093,280,340	2,079,801,956
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

TAXATION - Reconciliation of tax (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
TAXATION
Statutory income tax rate (as a percent)	25.00%	25.00%	25.00%	25.00%
Earnings before income taxes	¥ 3,107,359	$ 437,662	¥ 1,126,750	¥ 514,792
Income tax expenses computed at PRC statutory income tax rate of 25%	776,840	109,416	281,688	128,698
Additional deduction for R&D expenses	(19,397)	(2,732)	(13,516)	(11,095)
Non-deductible share-based compensation expenses	45,722	6,440	80,440	58,581
Non-deductible expenses	5,378	757	(9,967)	9,415
Deferred tax assets writeoff related to closure entities	(401)	(56)	8,266
Expiration of tax loss	43,438	6,118
Effect of tax rate changes on deferred tax	725	102
Recognition of uncertain tax benefits	24,536	3,456	29,325
Change of valuation allowance	(609,815)	(85,891)	220,774	60,352
Effect of preferential tax rate	(48,123)	(6,778)	(18,626)	(158,362)
Effect of International tax rates	29,047	4,091	76,378	(155,242)
Prior-year tax filing difference	11,476	1,616	(16,258)	3,792
Effect of tax rate	(725)	(102)
Income tax expense	¥ 259,426	$ 36,539	¥ 638,504	¥ (63,861)

SHARE BASED COMPENSATION - Fair value of employee share options (Details) - 2019 Plan	12 Months Ended
	Dec. 31, 2021 $ / shares
SHARE BASED COMPENSATION
Risk-free interest rate	1.04%
Expected volatility	74.49%
Expected dividend yield	0.00%
Exercise multiple	$ 2.20
Expected post-vesting forfeiture rate	0.00%
Fair value of share option	$ 1.07

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

LEASES - Supplemental balance sheet information related to operating lease (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
LEASES
Right-of-use assets	¥ 5,186,855	$ 730,553	¥ 2,003,997
Operating lease liabilities - current	1,851,310	260,752	880,873
Operating lease liabilities - non-current	3,114,855	438,718	1,024,274
Total operating lease liabilities	¥ 4,966,165	$ 699,470	¥ 1,905,147

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2023

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

Non-controlling interests

Use of estimates

(d) Use of estimates

Foreign currency

(e) Foreign currency

Convenience translation

(f) Convenience translation

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.

Short-term investments

(h) Short - term investments

Term deposits

(i) Term deposits

Restricted cash

(j) Restricted cash

Accounts receivable

(k) Accounts receivable

Expected Credit Losses

(l) Expected Credit Losses

Inventories

(m) Inventories

Property and equipment

(n) 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

Impairment of long-lived assets other than goodwill

(o) Impairment of long-lived assets other than goodwill

Derivative financial instrument

(p) Derivative financial instrument

Fair value

(q) Fair value

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.

Revenue recognition

(r) Revenue recognition


	For the year ended December 31,
	2021		2022		2023		2023
	RMB	%	RMB	%	RMB	%	US$	%

	(in thousands, except for percentages)
Net revenues:
Revenues from product sales	6,659,218	83.6	10,223,720	76.9	18,677,390	75.0	2,630,655	75.0
Freshly brewed drinks	5,909,655	74.2	9,079,349	68.3	16,877,880	67.8	2,377,200	67.8
Other products	395,573	5.0	686,837	5.2	1,241,868	5.0	174,913	5.0
Others	353,990	4.4	457,534	3.4	557,642	2.2	78,542	2.2
Revenues from partnership stores	1,306,105	16.4	3,069,262	23.1	6,225,776	25.0	876,882	25.0
Total net revenues	7,965,323	100.0	13,292,982	100.0	24,903,166	100.0	3,507,537	100.0

A description of the principal revenue generating activities of the Group is as follows:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) Revenue recognition (continued)

Revenues from product sales

Revenues from product sales include:

●

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) Revenue recognition (continued)

Revenues from partnership stores

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) Revenue recognition (continued)

Contract balance

Costs of materials, store rental and other operating costs

(s) Costs of materials, store rental and other operating costs

Delivery expenses

(t) Delivery expenses

Sales and marketing expenses

(u) Sales and marketing expenses

Sales and marketing expenses consisted primarily of advertising expenditure, commission fees for third-party delivery platforms and subcontract service fee.

General and administrative expenses

(v) General and administrative expenses

Store preopening and other expenses

(w) Store preopening and other expenses

Leases

(x) Leases

The Group enters into lease agreements to have leasing for self-operated stores, office spaces, and other corporate assets that the Group utilizes.

Operating lease ROU assets

Operating lease liabilities

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(x) Leases (continued)

Asset retirement obligations

Government subsidies

(y) Government subsidies

Income taxes

(z) Income taxes

Employee benefit expenses

(aa) Employee benefit expenses

Comprehensive income

(bb) Comprehensive income

Segment reporting

(cc) Segment reporting

Net income per share

(dd) Net income per share

Share-based compensation

(ee) Share-based compensation

Comparative information

(ff) Comparative information

Certain items in prior years’ consolidated financial statements or disclosures have been reclassified to conform to the current period’s presentation to facilitate comparison.

Recent accounting pronouncements

(gg) Recent accounting pronouncements

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2023

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	As of December 31,
	2022	2023
	RMB	RMB	US$
Payroll and welfare payables	372,795	746,185	105,098
Payables for the purchase of property and equipment	120,227	529,448	74,571
Payables for office supplies and utilities	238,466	455,001	64,086
Payables for delivery costs	210,779	260,153	36,642
Payables for advertising expenditures	55,261	132,211	18,622
Other taxes payables	105,970	102,241	14,400
Payables for professional service fees⁽¹⁾	132,430	37,065	5,220
Others	139,497	294,673	41,504

	1,375,425	2,556,977	360,143

ORDINARY SHARES

12 Months Ended

Dec. 31, 2023

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.

In 2023, the Company issued 13,478,384 Class A ordinary shares for the vested options and restricted share units to the eligible employees.

The outstanding ordinary shares as of December 31, 2023 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.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (i)
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

TAXATION - The components of (loss)/income before tax (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
TAXATION
Total (loss)/income before tax	¥ 3,107,359	$ 437,662	¥ 1,126,750	¥ 514,792
Income tax (expenses)/benefits
Current income tax expenses	(401,039)	(56,485)	(144,032)	(360)
Deferred tax expenses/(benefits)	(141,613)	(19,946)	494,472	(64,221)
Income tax (benefits)/expenses	259,426	36,539	638,504	(63,861)
Non-PRC
TAXATION
Total (loss)/income before tax	(123,731)	(17,427)	(331,744)	617,090
PRC
TAXATION
Total (loss)/income before tax	¥ 3,231,090	$ 455,089	¥ 1,458,494	¥ (102,298)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Section S99
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-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details)	Dec. 31, 2023
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

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2023

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES


	As of December 31,
	2022	2023
	RMB	RMB	US$
Payroll and welfare payables	372,795	746,185	105,098
Payables for the purchase of property and equipment	120,227	529,448	74,571
Payables for office supplies and utilities	238,466	455,001	64,086
Payables for delivery costs	210,779	260,153	36,642
Payables for advertising expenditures	55,261	132,211	18,622
Other taxes payables	105,970	102,241	14,400
Payables for professional service fees⁽¹⁾	132,430	37,065	5,220
Others	139,497	294,673	41,504

	1,375,425	2,556,977	360,143

(1)

For the year ended December 31, 2023, the Company reversed RMB 44.7 million (US$ 6.3 million) of accrued professional service fees following the settlement with certain underwriters relating to indemnification of their defense costs in connection with the Fabricated Transactions.

RELATED PARTY TRANSACTIONS - Significant related party transactions (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
Services received from:
RELATED PARTY TRANSACTIONS
Total	¥ 82,108	$ 11,565	¥ 13,947
Services received from: \| Goumei
RELATED PARTY TRANSACTIONS
Total	48,258	6,797	¥ 13,947
Assets purchased from related party \| Tianshu
RELATED PARTY TRANSACTIONS
Total	¥ 33,850	$ 4,768

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Detail) ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Payroll and welfare payables	¥ 746,185	$ 105,098	¥ 372,795
Payables for the purchase of property and equipment	529,448	74,571	120,227
Payables for office supplies and utilities	455,001	64,086	238,466
Payables for delivery costs	260,153	36,642	210,779
Payables for advertising expenditures	132,211	18,622	55,261
Other taxes payables	102,241	14,400	105,970
Payables for professional service fees	37,065	5,220	132,430
Others	294,673	41,504	139,497
Accrued expenses and other current liabilities	2,556,977	360,143	¥ 1,375,425
Accrued professional fees reversed	¥ 44,700	$ 6,300

RESTRICTED NET ASSETS (Details) ¥ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2023 USD ($)
RESTRICTED NET ASSETS
Minimum percentage of after-tax profits appropriated to the general reserve fund	10.00%	10.00%
Maximum percentage of after-tax profits appropriated to the general reserve fund	50.00%	50.00%
Statutory reserves allocated	¥ 132,500	$ 18.7	¥ 33,000	¥ 2,000
Appropriation to other reserve funds	0		0	¥ 0
Restricted net assets of PRC subsidiaries and the VIE	¥ 10,061,400		¥ 7,647,700		$ 1,417.1

PROVISION FOR SEC SETTLEMENT

12 Months Ended

Dec. 31, 2023

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.

19. PROVISION FOR SEC SETTLEMENT (CONTINUED)

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, 2021, 2022 and 2023, provision for SEC settlement of negative RMB1,146.5 million, nil and nil were charge in the Group’s consolidated statements of operations and comprehensive income, respectively.

PROPERTY AND EQUIPMENT, NET (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2023 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and equipment, gross	¥ 6,223,424		¥ 3,590,198			$ 876,551
Less: accumulated depreciation	(2,036,969)		(1,546,362)			(286,901)
Less: impairment	(17,300)		(176,458)			(2,400)
Property, plant and equipment, net	4,169,141		1,867,378			587,211
Depreciation	604,000	$ 85,100	391,700		¥ 465,200
Luckin coffee express
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss \| $		107,800
Impairment provision written off	164,600
Luckin Tea
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Less: impairment	4,500
Self-operating stores
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss			17,000
Store operating equipment
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and equipment, gross	2,417,877		1,341,127			340,551
Less: impairment	11,700
Impairment loss			175,700
Leasehold improvements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and equipment, gross	2,235,034		1,126,562			314,798
Office equipment and others
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and equipment, gross	315,291		177,259			44,408
Less: impairment	5,600
Impairment loss			800
Office buildings
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and equipment, gross	480,792		811,666			67,718
Assets subject to operating leases
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and equipment, gross	346,223					48,764
Mechanical equipment
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and equipment, gross	82,303		80,481			11,592
Construction in progress
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and equipment, gross	345,904		53,103			$ 48,720
Luckin coffee express machines
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss	¥ 5,200	$ 700	167,100	$ 32,000
Luckin coffee express machines \| Luckin coffee express
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss			220,700
Store operating equipment and others
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss			¥ 176,500

CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
Current assets:
Cash and cash equivalents	¥ 2,925,709	$ 412,077	¥ 3,534,304
Restricted cash	66,080	9,307	7,860
Short-term investments, net	100,000	14,085
Accounts receivable, net	80,665	11,361	58,782
Receivables from online payment platforms	214,163	30,164	151,922
Inventories	2,204,000	310,427	1,206,467
Prepaid expenses and other current assets, net	1,544,918	217,597	1,077,719
Term deposit-current	464,019	65,356
Total current assets	7,599,554	1,070,374	6,037,054
Non-current assets:
Property and equipment, net	4,169,141	587,211	1,867,378
Restricted cash	46,854	6,599	35,755
Other non-current assets, net	789,492	111,198	327,744
Deferred tax assets, net	350,082	49,308	208,469
Operating lease right-of-use assets	5,186,855	730,553	2,003,997
Term deposit-non current	150,000	21,127
Total non-current assets	10,692,424	1,505,996	4,443,343
Total assets	18,291,978	2,576,370	10,480,397
Current liabilities:
Accounts payable	814,655	114,742	441,376
Accrued expenses and other current liabilities	2,556,977	360,143	1,375,425
Deferred revenues	123,422	17,384	97,366
Payable for equity litigants settlement	116,314	16,382	33,796
Operating lease liabilities	1,851,310	260,752	880,873
Total current liabilities	5,462,678	769,403	2,828,836
Non-current liabilities:
Operating lease liabilities	3,114,855	438,718	1,024,274
Total non-current liabilities	3,114,855	438,718	1,024,274
Total liabilities	8,577,533	1,208,121	3,853,110
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, 2022 and 2023, respectively; 307,692,307 and 307,692,307 issued and outstanding as of December 31, 2022 and 2023, respectively)	1,578,040	222,262	1,578,040
Shareholders' equity:
Additional paid-in capital	16,276,991	2,292,566	16,037,406
Statutory reserves	168,204	23,691	35,657
Accumulated deficits	(8,705,759)	(1,226,181)	(11,421,145)
Accumulated other comprehensive income	396,944	55,908	397,304
Total Company's ordinary shareholders' equity	8,136,405	1,145,987	5,049,247
Total liabilities, mezzanine equity and shareholders' equity	18,291,978	2,576,370	10,480,397
Common Class A [Member]
Shareholders' equity:
Ordinary shares	23	3	23
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, 2022 and 2023, respectively; 307,692,307 and 307,692,307 issued and outstanding as of December 31, 2022 and 2023, respectively)	¥ 1,578,040	$ 222,262	¥ 1,578,040

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of long-lived assets other than goodwill (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss of long-lived assets	¥ 5,200	$ 700	¥ 221,810	¥ 21,368
Store operating equipment and others
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss of long-lived assets				¥ 21,400
Luckin coffee express machines
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss of long-lived assets			221,800
Luckin Tea
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss of long-lived assets			¥ 5,200

SHARE BASED COMPENSATION

12 Months Ended

Dec. 31, 2023

SHARE BASED COMPENSATION

SHARE BASED COMPENSATION

15. SHARE BASED COMPENSATION

For the years ended December 31, 2021, 2022 and 2023, total share-based compensation expenses recognized were RMB302.7 million, RMB398.0 million and RMB239.5 million (US$33.7 million), respectively. Share-based compensation expenses were allocated in operating expenses by function as follows:


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
Sales and marketing expenses	9,185	17,452	11,422	1,609
General and administrative expenses	293,549	380,556	228,084	32,125
	302,734	398,008	239,506	33,734

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)

2019 Equity Incentive Plan (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 day from the first vesting date thereafter over the next three years. For options granted in 2020 and 2021, the vesting schedule of four years is at the annual rate of 40%, 40%, 10% and 10%. The first 40% of share options shall vest on the first vesting date, which is December 31, 2020 and December 31, 2021, respectively, for options granted in 2020 and 2021, and accordingly, the remaining 40%, 10% and 10% shall vest on each anniversary day from the respective first vesting date.

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
Granted	—	—
Exercised	(24,108,314)	0.0002
Forfeit	(243,016)	0.0002		82,205
Outstanding as of December 31, 2023	4,093,181	0.0002	6.34
Fully vested and expected to vest as of December 31, 2023	66,695,568	0.0002
Exercisable as of December 31, 2023	3,935,132	0.0002

The weighted average grant date fair value of options granted during the years ended December 31, 2021 was US$1.07 per share. There were no options granted in the years ended December 31, 2022 and 2023.

As of December 31, 2023, there was US$42 thousands of unrecognized share-based compensation expense for share options granted, which are expected to be recognized over a weighted average period of 1.0 years.

The aggregated intrinsic value for share options exercised during the year ended December 31, 2023 and for share options fully vested and expected to vest and exercisable as of December 31, 2023 was calculated based on the closing price of the Company’s Ordinary Shares on the last trading day in 2023 of US$27.28 per ADS (equivalent to US$3.41 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. Substantially all the RSUs granted under the 2021 Plan are subjected to both performance condition and service condition. Before 2023, the RSUs granted were mainly vested within one year. Starting from 2023, the RSUs granted to directors and employees are mostly vested in four years. The vesting schedule of four years are 15%- 25%- 25%- 35% or 25%-25%-25%-25%. Each tranche of the RSUs granted has a separate grant date, because the board of directors has discretion in determining and approving the performance objectives, a mutual understanding of the terms and conditions does not exist until the Company’s objectives are approved and communicated with the employees. Compensation expenses are recognized in a straight-line basis from the grant date of each tranche to the vesting date of such tranche. As of December 31, 2023, 49,494,272 shares have been legally granted but not expensed since the unsatisfaction of accounting grant date.

A summary of the employee equity award activity under the 2021 Plan from accounting perspective 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
Granted	10,551,248	3.05
Vested	(13,239,120)	2.52
Forfeited or cancelled	(117,792)	3.08
Unvested as of December 31, 2023	1,378,632	2.56

The weighted average grant-date fair value of the restricted share units granted during the years ended December 31, 2021, 2022 and 2023 was US$1.09, US$1.26 and US$3.05 per share, respectively.

As of December 31, 2023, there was US$1.4 million of unrecognized share-based compensation expense related to restricted share units, which are expected to be recognized over a weighted average period of 0.49 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:


		2021
Risk-free interest rate		1.04	%
Expected volatility		74.49	%
Expected dividend yield		0.00	%
Exercise multiple		2.20
Expected post-vesting forfeiture rate		0.00	%
Fair value of share option	US$	1.07

PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2023

PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Schedule of condensed balance sheets


	As of December 31,
	2022	2023
	RMB	RMB	US$
ASSETS
Current assets:
Cash and cash equivalents	214,992	30,752	4,331
Amounts due from subsidiaries	12,534,774	13,043,055	1,837,076
Prepaid expenses and other current assets	6,910	2,778	391
Total current assets	12,756,676	13,076,585	1,841,798

Non-current assets:
Investments in subsidiaries and VIE	(5,736,325)	(2,926,400)	(412,175)
Other non-current assets	—	—	—
Total non-current assets	(5,736,325)	(2,926,400)	(412,175)

Total assets	7,020,351	10,150,185	1,429,623

LIABILITIES AND SHAREHOLDERS’ DEFICITS
Current liabilities:
Amounts due to subsidiaries	247,743	309,318	43,567
Accrued expenses and other current liabilities	111,525	10,108	1,425
Convertible senior notes	—	—	—
Payable for equity litigants settlement	33,796	116,314	16,382
Total current liabilities	393,064	435,740	61,374
Total liabilities	393,064	435,740	61,374


	As of December 31,
	2022	2023
	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, 2022 and 2023, respectively; 307,692,307 and 307,692,307 issued and outstanding as of December 31,2022 and 2023, respectively)	1,578,040	1,578,040	222,262
Total Mezzanine equity	1,578,040	1,578,040	222,262

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, 2022 and 2023, respectively, 2,079,801,956 and 2,093,280,340 issued and outstanding as of December 31, 2022 and 2023, respectively)	23	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, 2022 and 2023, respectively; 144,778,552 and 144,778,552 issued and outstanding as of December 31, 2022 and 2023, respectively)	2	2	0
Additional paid-in capital	16,073,063	16,445,195	2,316,257
Accumulated deficit	(11,421,145)	(8,705,759)	(1,226,181)
Accumulated other comprehensive income	397,304	396,944	55,908
Total shareholders’ equity	5,049,247	8,136,405	1,145,987

Total liabilities and shareholders’ equity	7,020,351	10,150,185	1,429,623

Schedule of condensed statements of comprehensive (loss)/ income


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$

General and administrative expenses	(85,567)	(39,773)	(46,722)	(6,581)
Sales and marketing expenses	—	—	(566)	(80)
Losses and expenses related to Fabricated Transactions and restructuring	(246,410)	(69,233)	32,422	4,567
Foreign exchange loss	(138)	(8,817)	3,320	468
Fair value changes of derivative asset bifurcated from Series B Senior Secured Notes	—	(6,381)	—	—
Share of (losses)/income from subsidiaries and VIE	(40,522)	791,186	2,949,195	415,385
Gain from extinguishment of Series B Senior Secured Notes	—	124,139	—	—
Interest income	296	576	2,476	349
Other (expense)/income	(4,784)	—	—	—
Interest and financing expenses	(35,490)	(23,484)	—	—
Provision for SEC settlement	1,146,474	—	—	—
Provision for equity litigants settlement	(155,314)	(279,967)	(92,192)	(12,985)
Net income before income taxes	578,545	488,246	2,847,933	401,123
Net income	578,545	488,246	2,847,933	401,123
Net income attributable to the Company’s ordinary shareholders	578,545	488,246	2,847,933	401,123

Net income	578,545	488,246	2,847,933	401,123
Other comprehensive income/(loss), net of tax of nil:
Foreign currency translation difference, net of tax of nil	102,802	(69,552)	(360)	(51)
Total comprehensive income	681,347	418,694	2,847,573	401,072

Schedule of condensed statements of cash flows


	For the year ended
	December 31,
	2021	2022	2023
	RMB	RMB	RMB	US$
Net cash provided by/(used in) operating activities	1,383,630	(587,039)	(184,240)	(25,950)
Net cash (used in)/provided by investing activities	—	—	—	—
Net cash provided by/(used in) financing activities	1,514,660	(2,276,260)	—	—
Net (decrease)/increase in cash and cash equivalents	2,898,290	(2,863,299)	(184,240)	(25,950)
Cash and cash equivalents at beginning of the years	180,001	3,078,291	214,992	30,281
Cash and cash equivalents at end of the years	3,078,291	214,992	30,752	4,331

PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed statements of cash flows (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION
Net cash provided by/(used in) operating activities	¥ 2,900,425	$ 408,516	¥ 19,818	¥ 123,447
Net cash (used in)/provided by investing activities	(3,447,099)	(485,514)	(798,046)	337
Net cash provided by/(used in) financing activities			(2,276,260)	1,514,660
Net increase/(decrease) in cash and cash equivalents	(539,276)	(75,956)	(2,977,355)	1,616,229
Cash and cash equivalents and restricted cash at beginning of years	3,577,919	503,939	6,555,274	4,939,045
Cash and cash equivalents and restricted cash at end of years	3,038,643	427,983	3,577,919	6,555,274
Parent Company \| Reportable Legal Entities
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION
Net cash provided by/(used in) operating activities	(184,240)	(25,950)	(587,039)	1,383,630
Net cash provided by/(used in) financing activities			(2,276,260)	1,514,660
Net increase/(decrease) in cash and cash equivalents	(184,240)	(25,950)	(2,863,299)	2,898,290
Cash and cash equivalents and restricted cash at beginning of years	214,992	30,281	3,078,291	180,001
Cash and cash equivalents and restricted cash at end of years	¥ 30,752	$ 4,331	¥ 214,992	¥ 3,078,291