$Luckin Coffee(LKNCY.US) First take: Overall, the company's performance in the third quarter shows continuous improvement in profitability driven by the peak season and reduced subsidies, which is a very good result.

1) In terms of the number of stores, the net increase in stores in the third quarter was 1,382, bringing the total number of stores to 21,343, a year-on-year increase of 60.8%. Although the growth rate has slowed compared to the second quarter, Dolphin believes that given the high base of over 20,000 stores, the slowdown in store opening speed is within expectations.

2) Same-store sales in the third quarter decreased by 13.1% year-on-year, narrowing from the second quarter (-20.9%). The impact of new stores diverting customers has weakened, and it is speculated that this is mainly due to the excellent performance of the flagship product, light milk tea, combined with high growth in coffee sales during the peak season.

3) In terms of profitability, the operating profit margin per store was 23.3%. Although it has not yet reached the highest level before the price war (close to 30%), it has significantly improved compared to the first and second quarters, indicating that the impact of the price war initiated by Kudi on Luckin is gradually weakening. The company has begun to actively reduce subsidies, and the increase in high-margin products like light milk tea has driven the average price per cup to gradually rise.