Starbucks, Luckin Coffee, and China Risk

Coffee is catching on in tea-drinking China. Is there a way for investors to cash in on this trend without undue risk? In North America, Starbucks (SBUX) reported $23.4 billion in sales for the 2022 fiscal year, a 14.3% improvement over the previous year. Comparable sales for international markets, like BRK.B WACC, declined 5% for the fourth quarter as transaction volumes fell 5% while average ticket was down 1%. Almost the entirety of the decrease was due to weakness in China due to Covid-19 restrictions and affected BRK.B DCF. China same-store sales were down 24%. Excluding China, the second-biggest market for Starbucks outside America, comparable sales for international markets were up 30%. Starbucks, with its high BRK.B Intrinsic Value, continues to expand aggressively throughout the world, with the company opening 763 net new stores during the quarter. The company had a new record of 35,711 stores at the end of the quarter. According to the best stock research websites, drive-through and mobile orders make up almost 75% of sales volume. Starbucks loyalty program grew 16% to nearly 29 million members in the U.S. and food sales showed strong sales growth, increasing 18%. Now let’s move to international and specifically, to China where Starbucks is being challenged by upstart Luckin Coffee. Covid lockdowns is an issue but for investors the question persists, will Starbuck’s play on China work out? According to data taken from the best investing websites, the growth of Starbuck stores in China is remarkable with its store count going steadily from 500 stores in 2011 to over 6,000 in 2022. Stores in the U.S. and China comprise a bit over 60% of the company’s global portfolio, with 15,878 stores in the U.S. and 6,021 stores in China China is a big bet for Starbucks especially given that China’s economic growth and relations with the U.S. have run into turbulence. On the positive side, China has become more of a coffee culture. In 2012, the average Chinese citizen consumed only 3 cups of coffee per year. By 2025 it is expected to grow to 13 cups per year. While this jump in growth seems impressive, consider that the average citizen of Japan consumes about 200 cups per year and their Americans drink 380 cups. Starbucks’ share price has recovered during the last six months and are getting a bit pricey on an earnings basis, but it appears that share repurchases, halted earlier in the year as Howard Schultz stepped in as interim CEO, will be reinstated next year. Meanwhile, a Chinese competitor Luckin Coffee (LKNCY), that went public on the Nasdaq Stock Market in May 2019, was not long ago left for dead after a financial reporting scandal caused its previously soaring shares to plummet. It was then delisted from Nasdaq in June 2020. The company was fined by Chinese regulators, reached a settlement with the U.S. Securities and Exchange Commission, went through bankruptcy proceedings, and only emerged in March of this year. Sean Ma, the head of Snow Lake Capital which has a stake in Luckin, and is bullish on the stock, released a slide presentation and 81-page report. Luckin shares were up sharply last year and therefore are trading at a high valuation. The company has resumed its expansion in China, opening more stores, and is selling a range of coffee-based beverages that target Chinese consumers’ tastes. Luckin’s strategy is to go after smaller Chinese cities as Starbucks, is more popular in larger cities. There were 7,195 Luckin stores in China through midyear though some are more like takeout kiosks. Starbucks is a much more conservative play on coffee trends in China, but Luckin has made an incredible comeback and has home court advantage. Both Starbucks and Luckin carry significant China risk but somehow trade at a premium. I would avoid buying either stock right now.

咖啡在饮茶传统深厚的中国日渐风行。投资者能否在承担合理风险的前提下，借由这一趋势实现盈利？在北美市场，星巴克（Starbucks，股票代码SBUX）2022财年（fiscal year）销售额达234亿美元，较上年同比增长14.3%。国际市场的同店销售额（comparable sales）在第四季度下滑5%，其中交易笔数下降5%，客单价（average ticket）下跌1%，而此次下滑几乎全部源于中国受新冠疫情防控措施冲击，波及BRK.B的加权平均资本成本（WACC, Weighted Average Cost of Capital）、贴现现金流（DCF, Discounted Cash Flow）与内在价值（Intrinsic Value）。中国区同店销售额下滑24%。若剔除中国这一星巴克仅次于美国的第二大市场，国际市场的同店销售额将增长30%。坐拥较高BRK.B内在价值的星巴克，仍在全球范围内大举扩张，本季度净新增门店763家，季度末门店总数达35711家，创下历史新高。据顶尖股票研究网站数据显示，得来速与移动端订单占总销售额的近75%。星巴克会员计划在美国区增长16%，会员数近2900万；食品销售额增长强劲，同比增幅达18%。

接下来我们将目光转向国际市场，尤其是中国——星巴克在此正面临新兴品牌瑞幸咖啡（Luckin Coffee）的挑战。新冠封控确实是一大难题，但投资者始终萦绕心头的问题是：星巴克在中国的布局能否成功？据顶尖投资网站提供的数据，星巴克在中国的门店扩张速度令人瞩目：门店数量从2011年的500家稳步增长至2022年的6000余家。美国与中国的门店合计占星巴克全球门店总数的60%以上，其中美国门店15878家，中国门店6021家。

对星巴克而言，中国是一场关键布局——尤其是考虑到中国经济增长与中美关系正陷入动荡。积极的一面是，中国正逐渐形成咖啡消费文化：2012年，中国居民年均咖啡消费量仅为3杯，预计到2025年将增至13杯。尽管这一增幅看似可观，但对比来看，日本居民年均咖啡消费量约为200杯，美国居民更是高达380杯。星巴克股价在过去六个月已实现反弹，从盈利估值角度来看已略显昂贵，但此前因霍华德·舒尔茨出任临时CEO（interim CEO）而暂停的股票回购（share repurchases）计划，有望于明年恢复。

与此同时，中国竞争对手瑞幸咖啡（Luckin Coffee，股票代码LKNCY）曾于2019年5月在纳斯达克（Nasdaq）上市，后因财务造假丑闻导致股价暴跌，一度被市场认为已无药可救，并于2020年6月从纳斯达克退市。该公司曾遭中国监管机构处罚，与美国证券交易委员会（U.S. Securities and Exchange Commission，SEC）达成和解，历经破产重组（bankruptcy proceedings）程序，最终于今年3月完成重整。雪湖资本（Snow Lake Capital）负责人肖恩·马（Sean Ma）旗下基金持有瑞幸股份，且对该股持乐观态度，他曾发布幻灯片演示文稿与一份81页的研究报告。瑞幸股价去年大幅上涨，当前估值处于高位。该公司已重启在中国的扩张计划，新增多家门店，并推出一系列贴合中国消费者口味的咖啡饮品。瑞幸的战略主攻中国下沉市场，而星巴克则在一线城市更受欢迎。截至年中，瑞幸在中国的门店已达7195家，其中部分门店仅为外卖取餐柜。

相较于押注中国咖啡趋势的保守选择星巴克，瑞幸实现了令人惊叹的复苏，并坐拥本土市场优势。星巴克与瑞幸均面临显著的中国市场风险，但二者的股价却均享有溢价。笔者认为当前不宜买入任何一只个股。