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Investing.com -- Macquarie has initiated coverage of Luckin Coffee with an Outperform rating, saying the chain is set to benefit from rapid growth in China’s coffee market and its own ability to keep drawing customers with new products.
Luckin has already overtaken Starbucks as the largest coffee chain in China, operating about 26000 stores as of mid-2025.
Macquarie expects the company to deliver profit growth of more than 20% a year, helped by rising demand and its low customer acquisition costs.
The broker highlighted that China’s coffee drinkers still consume far fewer cups per person each year than consumers in the United States or Japan, leaving plenty of room for growth.
It expects the number of coffee shops in China to keep expanding strongly through 2028.
Luckin’s frequent product launches, such as its popular Coconut Latte, have been a key driver of sales and customer retention. Macquarie said the company’s scale and innovation give it a cushion against cost pressures such as higher coffee bean prices.
Outside China, Luckin has opened nearly 90 outlets in Singapore, Malaysia and the United States.
These operations are not yet profitable, but Macquarie said the company’s track record of creating hit products could help it succeed overseas.
The broker set a price target of $52, based on earnings estimates for 2026. Key catalysts ahead include Luckin’s third-quarter results, rising coffee consumption in China and new product launches.