THAT IS A COMEBACK.>>>NOW THIS. THE COFFEE CHAIN LUCKIN GOES PUBLIC TODAY. IT’S A CHINESE COMPANY WHICH WANTS TO USE AMERICAN MONEY TO COMPETE WITH STARBUCKS, AN AMERICAN COMPANY, IN CHINA. JOINING US NOW IS LUCKIN COFFEE’S CHIEF FINANCIAL OFFICER AND CHIEF STRATEGY OFFICER, TO BOOT. WELCOME TO THE PROGRAM. GOOD TO HAVE YOU WITH US.>>THANK YOU SO MUCH FOR HAVING ME. THANK YOU. STUART: AM I RIGHT IN SAYING THAT AT THE MOMENT IN CHINA, YOU’VE GOT 2,300 STORES AND YOU WANT TO DOUBLE THAT IN THE NEXT 12 MONTHS. IS THAT ACCURATE?>>YES. I THINK IF YOU LOOK AT THE NUMBERS AS OF Q1, CLOSE TO 2400 STORES, WE ARE GROWING RELATIVELY QUICKLY AND I THINK WE HAVE COMMUNICATED THAT WE WANT TO GET TO THAT TARGET BY THE END OF THIS YEAR. THAT’S CORRECT. STUART: SO BY THE END OF THIS YEAR. SO LITERALLY EIGHT MONTHS, YOU ARE GOING TO BUILD 2400 STORES, RIGHT?>>YEAH, THAT’S RIGHT. I THINK WHEN YOU THINK ABOUT OUR MODEL, HOW WE ARE DIFFERENT FROM, FOR EXAMPLE, YOUR TRADITIONAL RETAILER, FIRST OF ALL, THE STORE FOOTPRINT WE HAVE IS RELATIVELY SMALL. THAT’S WHAT WE DO TO SAVE RENTAL EXPENSES AND ALSO BY USING TECHNOLOGY, WE’VE GOT A VERY GOOD ASSESSMENT OF WHERE WE CAN FIND THE DEMAND. IT’S A DEMAND-DRIVEN BUSINESS AND I THINK BY THE END OF THIS YEAR BASED ON THE DEMAND THAT WE ARE SEEING, WE WILL GET QUITE CLOSE TO THE NUMBER. SUSAN: YOUR LOSSES HAVE QUADRUPLED IN THE FIRST QUARTER AND YOUR MODEL, ACCORDING TO SOME, IT’S ABOUT PRICE DISCOUNTING. CAN YOU KEEP THIS UP, THIS KIND OF CASH BURN?>>YEAH, HOW WE LOOK AT IT IS AS FOLLOWS. I THINK WHAT WE’RE DOING IS TRYING TO DISRUPT THE INDUSTRY BY USING TECHNOLOGY, DIFFERENT APPROACH AND LOCATION AND REALLY SORT OF TRY TO BRING THE PER CUP COST DOWN. I THINK WE HAVE BEEN VERY SUCCESSFUL IN BRINGING THAT DOWN. THE WAY WE LOOK AT IT IS WE SET OUR TARGET PRICE AROUND $16 TO ‘ OUR TARGET PRICE AROUND $16 $1 ‘ OUR TARGET PRICE AROUND $16 $17 OVER TIME. AT THESE LEVELS WE CAN BE PROFITABLE. WHEN YOU THINK OF THE SUBSIDIES FROM THE LISTING PRICE, WE THINK THE PRICE SHOULD BE GOOD ENOUGH TO DRIVE REALLY THE MASS MARKET DEMAND. WHEN YOU LOOK AT THE COST BASE, YOU SEE THAT GOING DOWN VERY QUICKLY. SUSAN: YOU ARE UNDERPRICING STARBUCKS BY 25% IN THE MARKET AND SOME WOULD SAY THAT GIVEN THE U.S./CHINA TRADE CONCERNS, LUCKIN MIGHT BE BENEFITING FROM A NATIONALIZED FERVOR IN CHINA, MEANING ANTI-AMERICAN, SO THEY WILL GO TO LUCKIN INSTEAD OF STARBUCKS. YOU THINK THAT’S TRUE?>>WE ARE VERY FOCUSED ON OUR OWN MODEL. I THINK THE TRADE WAR FOR US IS SOMETHING WE WILL MONITOR BUT IT’S NOT SOMETHING THAT WILL DRIVE THE SUCCESS OF OUR MODEL. STUART: CHINESE NATIONALISM WOULD DRIVE YOUR MODEL. IN A TRADE FIGHT WITH AMERICA, YOU ARE GOING UP AGAINST AN AMERICAN COFFEE CHAMPION, STARBUCKS, I WOULD SURELY SUGGEST THAT NATIONALISM COULD DRIVE YOUR BUSINESS.>>WELL, THAT WOULD BE A TAIL WIND I THINK, BUT THE WAY WE LOOK AT OUR MODEL IS WE LOOK AT THE FUNDAMENTALS OF THE MODEL AND I THINK WITH THE POSITIONING WE HAVE, HIGH QUALITY, HIGH AFFORDABILITY, HIGH CONVENIENCE, THAT’S REALLY WHAT’S GOING TO DRIVE OUR SUCCESS. STUART: BUT YOU CAN’T IGNORE POLITICS HERE. YOU CAN’T IGNORE THAT YOU ARE RAISING AMERICAN MONEY, AMERICAN DOLLARS, TO USE AGAINST AN AMERICAN CHAMPION, STARBUCKS, IN CHINA, SO YOU CAN EXPAND AND BEAT THEM. THERE’S A POLITICAL ANGLE TO THIS.>>WELL, I THINK WHEN YOU LOOK AT SORT OF YOU WERE LISTED ON THE U.S. EXCHANGE, WHAT WE HAVE DONE IS ALSO GETTING A VERY SORT OF GLOBAL SORT OF INVESTOR BASE, INCLUDING SEVERAL WEALTH FUNDS THAT HAVE GLOBAL POCKETS SO I THINK WE ARE TRYING TO GET TO A PLACE WHERE WE ARE VERY WELL CAPITALIZED WHICH WE REACHED TODAY IN ORDER TO BE ABLE TO GROW AND CONTINUE OUR SUCCESS WE HAVE SEEN IN THE LAST 18 MONTHS AND REALLY BUILD ON THAT SUCCESS. STUART: I DO HAVE TO ASK THIS QUESTION. I HAVE HEARD THAT YOU SERVE COFFEE WITH CREAM CHEESE IN CHINA. IS THAT ACCURATE?>>WELL, ACTUALLY IT’S NOT COFFEE. IT’S ACTUALLY A TEA PRODUCT. IT’S A VERY POPULAR PRODUCT IN CHINA WHERE YOU HAVE EFFECTIVELY FRUIT JUICE WITH A SMALL PORTION OF CREAM CHEESE ON TOP OF IT, AND IT’S PROBABLY ONE OF THE MORE POPULAR PRODUCTS IN CHINA TODAY. SUSAN: TRY THE GRAPEFRUIT CHEESE JASMINE TEA, ONE OF THEIR PREMIER DRINKS.>>IT’S GREAT. STUART: PERHAPS YOU COULD ARRANGE FOR DELIVERY.>>NO PROBLEM. I THINK WE CAN MAKE IT HAPPEN. STUART: I’LL TRY IT ON CAMERA. I REALLY WOULD.