Customers sit inside a Luckin Coffee shop at a shopping center in Beijing, May 18, 2019. (MARK SCHIEFELBEIN / AP)
NEW YORK — Shares of Luckin Coffee, a fast-growing rival to Starbucks in China, rose 20% in their US stock market debut Friday.
Luckin raised US$561m in its IPO Friday by selling 33m American depositary shares at US$17 apiece
The Chinese company, which opened its first store in Beijing less than two years ago, has 2,370 locations and plans to surpass the 3,700 stores Starbucks has in China by the end of the year.
But unlike Starbucks, Luckin is losing money.
It brought in US$125 million in revenue last year, but spent much more than that on coffee beans, store rent and other costs. Last year, it lost US$475 million.
ALSO READ: China's Luckin Coffee files for US IPO to raise US$100m
In this Aug 15, 2018 photo, a customer picks up her order from a Luckin Coffee pop-up shop at the World Robot Conference in Beijing. (MARK SCHIEFELBEIN / AP)
Most of Luckin's stores are small, have few seats and are used mainly as a place to pick up mobile orders. It also offers delivery in 30 minutes and promises a refund for delays or spilled drinks. Through its app, customers can watch their coffee being made after making an order.
Luckin raised US$561 million in its initial public offering Friday by selling 33 million American depositary shares at US$17 apiece. The ADS, which are trading on Nasdaq under the symbol "LK," closed at US$20.38 after rising as high as US$25.96 earlier in the day.
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