You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under “Item 3.D. Risk Factors” and elsewhere in this annual report. 5.A. Operating Results General Factors Affecting Our Results of Operations Our business and results of operations are affected by a number of general factors in China, including: ● China’s overall economic growth, level of urbanization and level of per capita disposable income; ● Growth in consumer expenditure, especially the expenditure on food and beverage; ● Consumers’ demand for coffee and tea, especially for freshly brewed coffee and tea drinks; and ● Increasing usage of mobile internet and increasing adoption of mobile payment. Unfavorable changes in any of these general factors could materially and adversely affect our business and results of operations. Specific Factors Affecting Our Results of Operations Our Ability to Attract and Engage Customers Our revenue growth is mainly driven by our ability to attract new customers and actively engage and retain existing customers. Driven by technology, our new retail model is built upon our mobile apps and store networks, which allows us to stay close to our customers and engage them anytime, anywhere. We leverage our deep understanding of the coffee market in China and overseas market and our operation experiences to analyze our customer behavior and industry trends, which enable us to attract new customers and retain and engage existing customers to increase items sold. As of December 31, 2025, we had 20,234 self-operated stores and 10,814 partnership stores, as well as 451 million cumulative transacting customers. Increase Product Offerings and Cross-Sell We offer a wide variety of high-quality food and beverage items, mainly freshly brewed coffee. Powered by our robust product development capabilities, we have been constantly rolling out new products that became popular among consumers and well recognized by KOLs, such as our Coconut milk series and Fruity Americano series. Going forward, we endeavor to continuously offer innovative food and beverage products, as we believe that focusing on high-quality product development and strategically diversifying our product offerings will increase items sold and revenue per item. For the year ended December 31, 2025, we sold more than 4.4 billion items, among which 94.5% were freshly brewed drinks while for the year ended December 31, 2024, we sold approximately 3.1 billion items, among which 95.3% were freshly brewed drinks. 103 Table of Contents The Optimization of Our Sales Network Our store network affects our business and revenue growth. We started our business in October 2017 and we believe we are one of the largest coffee networks in China in terms of number of stores as of December 31, 2025. The following tables set out the total number of our self-operated stores and partnership stores and their movement for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended , ​ ​ ​ ​ March ​ ​ ​ June ​ ​ ​ September ​ ​ ​ December ​ ​ ​ March ​ ​ ​ June ​ ​ ​ September ​ ​ ​ December ​ ​ ​ March ​ ​ ​ June ​ ​ ​ September ​ ​ ​ December ​ ​ 31, ​ 30, ​ 30, ​ 31, ​ 31, ​ 30, ​ 30, ​ 31, ​ 31, ​ 30, ​ 30, ​ 31, ​ ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ 2024 ​ 2024 ​ 2024 ​ 2024 ​ 2025 ​ 2025 ​ 2025 ​ 2025 Number of self-operated stores at the end of the period 6,310 7,188 ​ 8,807 ​ 10,628 ​ 12,199 ​ 13,056 ​ 13,936 ​ 14,591 ​ 15,598 ​ 16,968 ​ 18,882 ​ 20,234 Net increase in the number of self-operated stores during the period 658 878 ​ 1,619 ​ 1,821 ​ 1,571 ​ 857 ​ 880 ​ 655 ​ 1,007 ​ 1,370 ​ 1,914 ​ 1,352 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended , ​ ​ March ​ June ​ September ​ December ​ March ​ June ​ September ​ December ​ March ​ June ​ September ​ December ​ ​ 31, ​ 30, ​ 30, ​ 31, ​ 31, ​ 30, ​ 30, ​ 31, ​ 31, ​ 30, ​ 30, ​ 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2023 ​ ​ ​ 2023 ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2024 ​ ​ ​ 2024 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ ​ 2025 ​ ​ ​ 2025 ​ 2025 Number of partnership stores at the end of the period 3,041 3,648 4,466 ​ 5,620 ​ 6,391 ​ 6,905 ​ 7,407 ​ 7,749 ​ 8,499 ​ 9,238 ​ 10,332 ​ 10,814 Net increase in the number of partnership stores during the period 479 607 818 ​ 1,154 ​ 771 ​ 514 ​ 502 ​ 342 ​ 750 ​ 739 ​ 1,094 ​ 482 ​ In September 2019, we launched our retail partnership model and opened the first partnership store in October 2019. Under this model, we will cooperate with selective retail partners to operate our partnership stores. This model will complement our self-operated store network and enable us to penetrate new markets more efficiently. In 2025, we granted exclusive franchise rights to local partners in Malaysia to develop and operate Luckin Coffee stores, which allows us to leverage the local partner’s market knowledge and operational capabilities to support efficient market entry and expansion. To improve profitability, we have conducted store performance reviews and upgraded our store opening criteria. As of December 31, 2025, we had 20,234 self-operated stores and 10,814 partnership stores. Our scale, supported by technology, enables us to gain more bargaining power over our suppliers and lower our operating cost as a percentage of our revenue. Our expanding presence in the market will also enhance our brand image, which we believe will further reduce our customer acquisition costs. We believe that our new retail model can help create a virtuous cycle which reinforces our leadership position. Effective Selling Prices of Our Products We have adopted a market-oriented pricing model where we take into account a number of factors, including cost of materials and market demand for our products, as well as our customers’ preferences. To achieve effective pricing, we leverage our deep understanding of the coffee market in China and operating experiences to learn the market dynamics and discover patterns of customer behavior. We implement incentive programs in the form of coupons and discount vouchers. The effective selling prices of our products represent our retail prices after applying such discounts. Our future profitability will be affected by our ability to properly manage the effective selling prices of our products. Efficient Store Operations We pursue and achieve store operational efficiency by leveraging technology. With our strong technology capabilities and smart supply chain management system, we are able to analyze sales and inventory status for each store on a real-time basis and efficiently replenish inventory. Our technology also helps us manage our overall workforce and enables us to maintain efficient storefront operations. 104 Table of Contents Our technology-driven new retail business model significantly improves our operational efficiency. We measure our self-operated store performance with store-level operating profit (loss) of self-operated stores, which is calculated by deducting cost for self-operated stores including cost of direct materials (including wastage in stores), cost of delivery packaging materials, storage and logistics expenses, commissions to third-party delivery platforms related to revenues from self-operated stores, store depreciation expense (including decoration loss for store closure), store rental and other operating costs, delivery expense, transaction fees, store preopening and other expenses from our self-operated store revenue. We achieved store-level operating profit which accounted for 22.2%, 19.0%, and 17.8% of our self-operated store revenue for the year ended December 31, 2023, 2024, and 2025 respectively. Seasonality We experience seasonality in our business, primarily as a result of order fluctuations and product mix changes across different seasons. We generally have fewer orders in winter compared to summer. Additionally, we may have reduced order volume during holidays such as the Chinese New Year period. We also experience product mix changes as a result of weather changes that affect consumers’ preference for different drinks. For risks related to the seasonality of our business, see “Item 3. Key Information—3.D. Risk Factors—Risks Relating to Our Business and Industry—Our business is subject to seasonal fluctuations and unexpected interruptions.” Key Operating Data The following table presents our key operating data for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended or as of ​ ​ ​ ​ March 31, ​ ​ ​ June 30, ​ ​ ​ September 30, ​ ​ ​ December 31, ​ ​ ​ March 31, ​ ​ ​ June 30, ​ ​ ​ September 30, ​ ​ ​ December 31, ​ ​ ​ March 31, ​ ​ ​ June 30, ​ ​ ​ September 30, ​ ​ ​ December 31, ​ ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ 2024 ​ 2024 ​ 2024 ​ 2024 ​ 2025 ​ 2025 ​ 2025 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stores ​ 9,351 ​ 10,836 ​ 13,273 ​ 16,248 ​ 18,590 ​ 19,961 ​ 21,343 ​ 22,340 ​ 24,097 ​ 26,206 ​ 29,214 ​ 31,048 ​ Total self-operated stores 6,310 7,188 8,807 ​ 10,628 ​ 12,199 ​ 13,056 ​ 13,936 ​ 14,591 ​ 15,598 ​ 16,968 ​ 18,882 ​ 20,234 ​ Total partnership stores 3,041 3,648 4,466 ​ 5,620 ​ 6,391 ​ 6,905 ​ 7,407 ​ 7,749 ​ 8,499 ​ 9,238 ​ 10,332 ​ 10,814 ​ Same-store sales growth for self-operated stores(1) 29.6 % 20.8 % 19.9 % 13.5 % (20.3) % (20.9) % (13.1) % (3.4) % 8.1 % 13.4 % 14.4 % 1.2 % Average monthly transacting customers (in thousands)(2) 29,489 43,070 58,477 ​ 62,438 ​ 59,914 ​ 69,689 ​ 79,846 ​ 77,766 ​ 74,272 ​ 91,697 ​ 112,295 ​ 98,351 ​ Notes: (1) The growth rate of total revenue from self-operated stores that (i) were in operation at the beginning of the comparable period and were not closed before the end of the current period and (ii) maintained an average of at least 15 operating days per month over both the current and comparable periods. (2) The total of each month’s number of transacting customers divided by the number of months during the period (includes those of partnership stores and those only paid with free-coupons). Key Components of Results of Operations Net Revenues The following table sets forth a breakdown of our net revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ RMB ​ ​ ​ % ​ RMB ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Net revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues from product sales 18,677,390 ​ 75.0 ​ 26,729,523 ​ 77.5 ​ 37,694,405 ​ 76.5 ​ 5,380,073 ​ 76.5 Freshly brewed drinks 16,877,880 ​ 67.8 ​ 24,501,085 ​ 71.1 ​ 34,616,741 ​ 70.2 ​ 4,940,802 ​ 70.2 Other products 1,241,868 ​ 5.0 ​ 1,685,413 ​ 4.9 ​ 2,319,079 ​ 4.7 ​ 330,999 ​ 4.7 Others 557,642 ​ 2.2 ​ 543,025 ​ 1.5 ​ 758,585 ​ 1.6 ​ 108,272 ​ 1.6 Revenues from partnership stores 6,225,776 ​ 25.0 ​ 7,745,291 ​ 22.5 ​ 11,593,690 ​ 23.5 ​ 1,654,752 ​ 23.5 Total net revenues 24,903,166 ​ 100.0 ​ 34,474,814 ​ 100.0 ​ 49,288,095 ​ 100.0 ​ 7,034,825 ​ 100.0 ​ 105 Table of Contents Revenues from product sales. Revenues from product sales include: ● Revenues from freshly brewed drinks. We offer an array of freshly brewed drinks, with a focus on freshly brewed coffee, supplemented with non-coffee drinks such as the Light Milk Tea series and the Fruits and Veggies Tea series. Net revenues from sales of freshly brewed drinks are recognized upon delivery to customers, net of VAT, surcharges and discounts, if any. ● Revenues from other products. Other products mainly consist of food and beverage items, such as light meals and various merchandise, including premium instant coffee, inspirational cups and other consumer goods. ● Revenues from others. Our revenues from others mainly include delivery fees derived from self-operated stores paid by our customers and membership fees collected from our subscribed members. Revenues from partnership stores. Revenues from partnership stores mainly consist of net revenues from the sales of materials, equipment and store construction-related materials to the partnership stores, delivery services, profit-sharing, franchise and other services including design and pre-opening services derived from partnership stores. Operating Expenses The following table sets forth a breakdown of our total operating expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of materials 10,897,409 ​ 49.8 ​ 14,083,291 ​ 45.6 ​ 18,783,453 ​ 42.5 ​ 2,680,938 ​ 42.5 Store rental and other operating costs 5,167,482 ​ 23.6 ​ 8,540,683 ​ 27.6 ​ 11,241,945 ​ 25.4 ​ 1,604,548 ​ 25.4 Depreciation and amortization expenses 604,580 ​ 2.8 ​ 1,190,037 ​ 3.9 ​ 1,557,383 ​ 3.5 ​ 222,283 ​ 3.5 Delivery expenses 2,010,699 ​ 9.1 ​ 2,821,069 ​ 9.2 ​ 6,878,734 ​ 15.6 ​ 981,793 ​ 15.6 Sales and marketing expenses 1,286,523 ​ 5.9 ​ 1,920,305 ​ 6.2 ​ 2,595,705 ​ 5.9 ​ 370,482 ​ 5.9 General and administrative expenses 1,829,651 ​ 8.4 ​ 2,420,462 ​ 7.8 ​ 3,057,020 ​ 6.9 ​ 436,324 ​ 6.9 Store preopening and other expenses 109,685 ​ 0.5 ​ 69,556 ​ 0.2 ​ 85,412 ​ 0.2 ​ 12,191 ​ 0.2 Impairment loss of long-lived assets ​ 5,229 ​ 0.0 ​ 8,925 ​ 0.0 ​ 8,495 ​ 0.0 ​ 1,212 ​ 0.0 Losses and expenses related to Fabricated Transactions and Restructuring ​ (28,515) ​ (0.1) ​ (149,583) ​ (0.5) ​ 7,013 ​ 0.0 ​ 1,001 ​ 0.0 Total operating expenses 21,882,743 ​ 100.0 ​ 30,904,745 ​ 100.0 ​ 44,215,160 ​ 100.0 ​ 6,310,772 ​ 100.0 ​ Cost of materials. Cost of materials consists primarily of cost for coffee beans and coffee condiments, pre-made food and beverage items, packaging, supplies and warehouse. Store rental and other operating costs. Our store rental and other operating costs consist primarily of rental expense of stores, staff costs, and utilities. Depreciation and amortization expenses. Depreciation expenses consist primarily of depreciation charges for our machines and equipment and amortization expenses for leasehold improvements. Delivery expenses. Delivery expenses consist primarily of fees for delivery service providers that we cooperate with to provide delivery services to our customers. Sales and marketing expenses. Sales and marketing expenses consist primarily of advertising expenses, commissions for third party service providers such as delivery platforms, subcontract service fee, as well as payroll expenses for sales and marketing employees. 106 Table of Contents General and administrative expenses. General and administrative expenses consist primarily of payroll and related expenses for employees involved in general corporate functions, research and development expenses, share-based compensation, professional fees, daily office expenses and rental fees for general corporate functions. Research and development expenses are included in general and administrative expenses, which are mainly payroll expenses, employee benefits, and other headcount-related expenses associated with platform development and data analysis to support our business operations. Store preopening and other expenses. Before opening new stores, it usually takes us some time to decorate the new stores and make preparation for store opening. Store preopening expenses mainly include store rental costs during the opening of new stores. Other expenses include lease exit costs, such as the write offs of prepaid store rental costs, deposits and leasehold improvements. Costs incurred in connection with the opening and closure of stores are expensed as incurred. Impairment loss of long-lived assets. Impairment loss of long-lived assets primarily consists of impairment loss of our long-lived assets whose fair value is less than the carrying amount. It consists of the impairment loss in connection with self-operating stores, as well as impairment loss in connection with Luckin Tea. Losses and expenses related to Fabricated Transactions and Restructuring. The losses and expenses related to Fabricated Transactions and Restructuring consisted primarily of professional and legal fees for U.S. securities litigations and other advisory service fees. We had successfully completed the provisional liquidation in March 2022. The negative amounts in 2023 and 2024 were mainly due to the reversal of previously accrued expenses following the settlement with certain underwriters relating to indemnification of defense costs, including but not limited to attorney’s fees and expenses incurred in connection with government inquiries and litigation relating to the Fabricated Transactions in 2023 and the receipt of compensation under the Directors & Officers Liability and Company Reimbursement Insurance in 2024. Taxation Cayman Islands Our parent company Luckin Coffee Inc. (the “Parent Company”) and our subsidiary First Ray Cayman are incorporated in the Cayman Islands and conducts its primary business operations through the subsidiaries and the Former VIE in the PRC or overseas. Under the current laws of the Cayman Islands, the Parent Company and First Ray Cayman are not subject to tax on income or capital gain arising in Cayman Islands. Additionally, upon payments of dividends by the Parent Company and First Ray Cayman to their shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Luckin BVI, Luckin International BVI and First Ray BVI are incorporated in the British Virgin Islands and conducts its primary business operations through the subsidiaries and the Former VIE in the PRC or overseas. Under the current laws of the British Virgin Islands, it is not subject to income or capital gains tax under the current laws of the British Virgin Islands. Additionally, upon payments of dividends by these companies to their shareholders, no BVI withholding tax will be imposed. Hong Kong, PRC Our subsidiaries incorporated in Hong Kong are subject to Hong Kong profit tax. Under the two-tiered profits tax rates regime, the first 2.0 million Hong Kong Dollar (“HKD”) of profits of the qualifying group entity will be taxed at 8.25%, and profits above HKD2.0 million will be taxed at 16.5%. Additionally, upon payments of dividends by these companies to their shareholders, no HK withholding tax will be imposed. Hong Kong does not impose a withholding tax on dividends. Singapore Under the current laws of Singapore, our subsidiaries in Singapore are subject to 17% income tax rate on any taxable income accruing in or derived from Singapore, or received in Singapore from outside Singapore. Additionally, upon payments of dividends by these companies to their shareholders, no Singapore withholding tax will be imposed. 107 Table of Contents United States Our subsidiaries incorporated in the United States are subject to a flat federal corporate income tax rate of 21% .in accordance with prevailing tax regulations of the United States. These subsidiaries are also subject to state and local income taxes in accordance with the applicable local tax regulations. Additionally, upon payments of dividends by the subsidiaries to their shareholder are generally subject to U.S. federal withholding tax at a rate of 30%, which may be reduced under an applicable income tax treaty. In July 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the U.S. The OBBBA includes a broad range of provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and others. These provisions have multiple effective dates beginning in 2025. Based on our preliminary analysis, this legislation is not expected to have a material impact on our consolidated financial statements. The Group will monitor the regulatory developments and continue to evaluate the impact, if any. Ireland Our subsidiary incorporated in Ireland is subject to a corporation tax rate of 12.5% on its trading income and 25% on its non-trading income under the prevailing Irish tax regulations. Additionally, upon payments of dividends by the subsidiary to its shareholder, such payments are subject to a statutory withholding tax of 25%; however, such withholding tax rate may be reduced or exempted under the applicable income tax treaty. Malaysia We have no incorporated entities in Malaysia. However, we generates revenue from our franchise business within Malaysia. Under the prevailing tax regulations of Malaysia, certain payments made by Malaysian residents to non-residents are subject to Malaysian withholding tax at a statutory rate of 10%. Such withholding tax rate may be reduced or exempted under the applicable tax treaty. PRC Our subsidiaries incorporated in China and our Former VIE are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws. Pursuant to the PRC Enterprise Income Tax Law, or the EIT Law, which became effective on January 1, 2008 and most recently amended on December 29, 2018, a uniform 25% enterprise income tax rate is generally applicable to both foreign-invested enterprises and domestic enterprises, except where a special preferential rate applies. The EIT Law and its implementation rules permit certain High and New Technologies Enterprises, or HNTEs, to enjoy a reduced 15% enterprise income tax rate subject to these HNTEs meeting certain qualification criteria. Luckin Coffee Information Technology (Xiamen) Ltd, Co. (“LK Xiamen Tech”) renewed the privilege of HNTEs and enjoyed a reduced 15% enterprise income tax rate from November 2023 to November 2025. LK Xiamen Tech will renew the qualification in 2026. From January 1, 2020 to December 31, 2027, enterprises registered in the Hainan Free Trade Port that are engaged in encouraged industries and are substantially in operation will be subject to a reduced 15% enterprise income tax rate. Luckin Trading (Hainan) Ltd, Co. , Luckin Coffee (Haikou) Ltd, Co. and Luckin Coffee Technology (Hainan) Co., Ltd. were qualified as such enterprises and enjoyed 15% preferential income tax rate. From 2019, the State Administration of Taxation provides a preferential corporate income tax rate of 20%, an exemption at 75% or 87.5% for the assessable taxable profits under RMB1.0 million, an exemption at 50% or 75% for the assessable taxable profits between RMB1.0 million and RMB3.0 million, for qualified small enterprises with low profits. The actual preferential corporate income tax rate after considering the exemption was 5% for assessable taxable profits less than RMB1.0 million, while the rate was 5% for the assessable taxable profits between RMB1.0 million and RMB3.0 million from 2023 to 2025. The policy of the actual preferential corporate income tax rates of 5% after considering the exemption will continue to be implemented until December 31, 2027. 108 Table of Contents Our PRC subsidiaries are subject to value-added tax, or VAT, at a rate of 6%, 10% and 16% before April 1, 2019 and since then 6%, 9% and 13%, on our products and services, less any deductible VAT we have already paid or borne. They are also subject to surcharges on VAT payments in accordance with PRC law. As a Cayman Islands holding company, we may receive dividends from our PRC subsidiaries. The PRC EIT Law and its implementing rules provide that dividends paid by a PRC entity to a non-resident enterprise for income tax purposes are subject to PRC withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with China. Pursuant to the Arrangement between PRC and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise. Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or SAT Circular 81, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (i) it must be a company; (ii) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (iii) it must have directly owned such required percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends. Furthermore, pursuant to the SAT Circular 81, to qualify for the tax treaty benefits, a Hong Kong resident enterprise must also meet the following conditions simultaneously : (i) it must be a tax resident of Hong Kong; (ii) it must be the beneficial owner of the relevant dividends; (iii) the dividends eligible for tax treaty benefits must constitute equity investment income, such as dividends and bonuses, as determined in accordance with PRC domestic tax laws and regulations; and (iv) any other conditions prescribed by the SAT. The State Administration of Taxation promulgated the Notice on Issues Concerning “Beneficial Owners” in Tax Treaties in February 2018, which took effect in April 2018 and provided that in determining whether a non-resident enterprise has the status as a beneficial owner, comprehensive analysis shall be conducted based on the factors listed therein and the actual circumstances of the specific case shall be taken into consideration. In October 2019, the State Administration of Taxation promulgated the State Taxation Administration on Issuing the Measures for Non-Resident Taxpayers’ Enjoyment of Treaty Benefits, or SAT Circular 35, which became effective on January 1, 2020. SAT Circular 35 provides that non-resident enterprises are not required to obtain preapproval from the relevant tax authority in order to enjoy the reduced withholding tax. Instead, non-resident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms when performing tax filings and collect and retain supporting documents, which will be subject to post-tax filing examinations by the relevant tax authorities. Dividends, interests, rent or royalties payable by our PRC subsidiaries, to non-PRC resident enterprises, and proceeds from any such non-resident enterprise investor’s disposition of assets (after deducting the net value of such assets) shall be subject to 10% withholding tax, unless the respective non-PRC resident enterprise’s jurisdiction of incorporation has a tax treaty or arrangements with China that provides for a reduced withholding tax rate or an exemption from withholding tax. If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information—3.D. Risk Factors—Risks Relating to Doing Business in China—If our offshore companies are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and the ADS holders.” The Organization for Economic Cooperation and Development introduced Base Erosion and Profit Shifting Pillar Two rules that impose a global minimum tax rate of 15%.For 2025, Hong Kong, China has completed relevant legislation, and its Income Inclusion Rule (IIR) and Qualified Domestic Minimum Top-up Tax (QDMTT) have taken effect on January 1, 2025, which may give rise to top-up tax implications for the Group’s Hong Kong/Cayman holding structure. Mainland China has not yet implemented such legislation. Based on our analysis, this legislation did not have a material impact on our financial statements. We will monitor the regulatory developments and continue to evaluate the impact, if any. 109 Table of Contents Results of Operations The following table sets forth our consolidated results of operations for the periods indicated, both in absolute amounts and as percentages of total net revenues. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % of net revenues ​ ​ ​ RMB ​ ​ ​ % of net revenues ​ ​ ​ RMB ​ ​ ​ % of net revenues ​ ​ ​ US$ ​ ​ ​ % of net revenues ​ ​ (in thousands, except for percentages) Net revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues from product sales 18,677,390 75.0 ​ 26,729,523 77.5 ​ 37,694,405 ​ 76.5 ​ 5,380,073 ​ 76.5 Freshly brewed drinks 16,877,880 67.8 ​ 24,501,085 71.1 ​ 34,616,741 ​ 70.2 ​ 4,940,802 ​ 70.2 Other products 1,241,868 5.0 ​ 1,685,413 4.9 ​ 2,319,079 ​ 4.7 ​ 330,999 ​ 4.7 Others 557,642 2.2 ​ 543,025 1.5 ​ 758,585 ​ 1.6 ​ 108,272 ​ 1.6 Revenues from partnership stores 6,225,776 25.0 ​ 7,745,291 22.5 ​ 11,593,690 ​ 23.5 ​ 1,654,752 ​ 23.5 Total net revenues 24,903,166 100.0 ​ 34,474,814 100.0 ​ 49,288,095 ​ 100.0 ​ 7,034,825 ​ 100.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of materials (10,897,409) (43.7) ​ (14,083,291) (40.9) ​ (18,783,453) ​ (38.1) ​ (2,680,938) ​ (38.1) Store rental and other operating costs (5,167,482) (20.8) ​ (8,540,683) (24.8) ​ (11,241,945) ​ (22.8) ​ (1,604,548) ​ (22.8) Depreciation and amortization expenses (604,580) (2.4) ​ (1,190,037) (3.5) ​ (1,557,383) ​ (3.2) ​ (222,283) ​ (3.2) Delivery expenses (2,010,699) (8.2) ​ (2,821,069) (8.0) ​ (6,878,734) ​ (13.9) ​ (981,793) ​ (13.9) Sales and marketing expenses (1,286,523) (5.2) ​ (1,920,305) (5.6) ​ (2,595,705) ​ (5.3) ​ (370,482) ​ (5.3) General and administrative expenses (1,829,651) (7.3) ​ (2,420,462) (7.0) ​ (3,057,020) ​ (6.2) ​ (436,324) ​ (6.2) Store preopening and other expenses (109,685) (0.4) ​ (69,556) (0.2) ​ (85,412) ​ (0.2) ​ (12,191) ​ (0.2) Impairment loss of long-lived assets ​ (5,229) ​ (0.0) ​ (8,925) ​ (0.0) ​ (8,495) ​ (0.0) ​ (1,212) ​ (0.0) Losses and expenses related to Fabricated Transactions and Restructuring 28,515 0.1 ​ 149,583 0.4 ​ (7,013) ​ (0.0) ​ (1,001) ​ (0.0) Total operating expenses (21,882,743) (87.9) ​ (30,904,745) (89.6) ​ (44,215,160) ​ (89.7) ​ (6,310,772) ​ (89.7) Operating income 3,020,423 12.1 ​ 3,570,069 10.4 ​ 5,072,935 ​ 10.3 ​ 724,053 ​ 10.3 Interest and investment income ​ 108,682 0.4 ​ 89,195 0.3 ​ 188,630 ​ 0.4 ​ 26,923 ​ 0.4 Interest and financing expenses — — ​ (3,924) 0.0 ​ (125) ​ 0.0 ​ (18) ​ 0.0 Foreign exchange gain/(loss), net 2,968 0.0 ​ (13,239) (0.1) ​ (26,747) ​ (0.1) ​ (3,818) ​ (0.1) Other income, net ​ 62,283 ​ 0.3 ​ 84,161 ​ 0.2 ​ 80,808 ​ 0.2 ​ 11,534 ​ 0.2 Provision for equity litigants settlement (92,192) (0.4) ​ — — ​ (35,326) ​ (0.1) ​ (5,042) ​ (0.1) Income before income taxes 3,102,164 12.4 ​ 3,726,262 10.8 ​ 5,280,175 ​ 10.7 ​ 753,632 ​ 10.7 Income tax expense (258,127) (1.0) ​ (770,553) (2.2) ​ (1,679,793) ​ (3.4) ​ (239,755) ​ (3.4) Net income* 2,844,037 11.4 ​ 2,955,709 8.6 ​ 3,600,382 ​ 7.3 ​ 513,877 ​ 7.3 ​ Discussion of the Years Ended December 31, 2025 and 2024 Net Revenues Our net revenues were RMB49,288.1 million (US$7,034.8 million) in 2025, increasing by 43.0% from RMB34,474.8 million in 2024. The growth of our net revenues was primarily driven by year-over-year increase in GMV, which reached RMB56.6 billion, as a result of an increase in the number of products sold resulting from growth in (i) the number of stores in operation as well as (ii) monthly transacting customers. In 2025, our total items sold were approximately 4.4 billion, compared to 3.1 billion in 2024. In 2025, the net increase in the number of stores was 8,708, resulting in a year-over-year store unit growth of 39.0%, ending the year with 31,048 stores. As of December 31, 2025, we had 451.2 million cumulative transacting customers, compared to 334.0 million as of December 31, 2024. Revenues from product sales Our revenues from product sales were RMB37,694.4 million (US$5,380.1 million) in 2025, increasing by 41.0% from RMB26,729.5 million in 2024. Our revenues from product sales consist of revenues from freshly brewed drinks, revenues from other products and revenues from others. 110 Table of Contents (i)Revenues from freshly brewed drinks Our net revenues from freshly brewed drinks were RMB34,616.7 million (US$4,940.8 million) in 2025, increasing by 41.3% from RMB24,501.1 million in 2024. The growth of our revenue from freshly brewed drinks was primarily driven by the increase in the number of freshly brewed drinks sold by our self-operated stores resulting from growth in (i) the number of self-operated stores in operation as well as (ii) monthly transacting customers. In 2025, our average monthly items of freshly brewed drinks sold in self-operated stores were approximately 227.6 million, compared to 164.3 million in 2024. In 2025, the net increase in the number of our self-operated stores was 5,643, resulting in self-operated store unit growth of 38.7% over 2024, ending the year with 20,234 self-operated stores. (ii)Revenues from other products Our net revenues from other products were RMB2,319.1 million (US$331.0 million) in 2025, increasing by 37.6% from RMB1,685.4 million in 2024, primarily driven by the increase in the number of non-freshly brewed items sold and the increase in products sold through e-commerce platforms. (iii)Revenues from others Our revenues from others increased by 39.7% from RMB543.0 million in 2024 to RMB758.6 million (US$108.3 million) in 2025, primarily as a result of increased revenue from delivery service fees derived from self-operated stores due to an increase in the number of delivery orders, offset by a decrease in revenue from membership service. Revenues from partnership stores Our revenues from partnership stores were RMB11,593.7 million (US$1,654.8 million) in 2025, including sales of materials of RMB6,959.3 million (US$993.3 million), profit sharing of RMB1,638.3 million (US$233.8 million), sales of equipment and store construction-related materials of RMB860.8 million (US$122.9 million), delivery service fees of RMB2,053.1 million (US$293.0 million) and franchise and other services of RMB82.2 million (US$11.7 million). Our revenues from partnership stores in 2025 increased by 49.7% from RMB7,745.3 million in 2024. The growth of our revenues from partnership stores was primarily driven by the increase in materials sold to partnership stores, profit sharing and delivery services, which resulted from the increase in the number of our partnership stores in operation and items sold by partnership stores; offset by the decrease in the equipment and store construction-related materials sold to the partnership store due from our moderate expansion pace in 2025. As of December 31, 2025, we had 10,814 partnership stores compared to 7,749 stores in 2024, and our average monthly total items sold in partnership stores was approximately 119.0 million in 2025, compared with approximately 85.4 million in 2024. Operating Expenses Our operating expenses were RMB44,215.2 million (US$6,310.8 million) in 2025, compared to RMB30,904.7 million in 2024. The growth of our operating expenses was generally in line with our business expansion. Meanwhile, our operating expenses as a percentage of our net revenues slightly increased from 89.6% in 2024 to 89.7% in 2025. 111 Table of Contents Cost of materials The following table sets forth the components of our costs of materials in absolute amounts and as percentages of total costs of materials for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Cost of raw materials 5,957,768 ​ 54.7 ​ 8,190,526 ​ 58.2 ​ 10,891,341 ​ 58.0 ​ 1,554,507 ​ 58.0 Freshly brewed drinks 5,298,013 ​ 48.6 ​ 7,262,761 ​ 51.6 ​ 9,558,472 ​ 50.9 ​ 1,364,268 ​ 50.9 Other products 659,755 ​ 6.1 ​ 927,765 ​ 6.6 ​ 1,332,869 ​ 7.1 ​ 190,239 ​ 7.1 Low value consumables 136,528 ​ 1.3 ​ 162,216 ​ 1.2 ​ 210,218 ​ 1.1 ​ 30,004 ​ 1.1 Offline sales ​ 1,203 ​ 0.0 ​ 1,388 ​ 0.0 ​ 2,533 ​ 0.0 ​ 362 ​ 0.0 Cost of partnership ​ 3,932,489 ​ 36.0 ​ 4,545,686 ​ 32.2 ​ 6,149,121 ​ 32.8 ​ 877,656 ​ 32.8 Storage fees 282,271 ​ 2.6 ​ 404,105 ​ 2.9 ​ 544,112 ​ 2.9 ​ 77,660 ​ 2.9 Logistic expenses 587,150 ​ 5.4 ​ 779,370 ​ 5.5 ​ 986,128 ​ 5.2 ​ 140,749 ​ 5.2 Total 10,897,409 ​ 100.0 ​ 14,083,291 ​ 100.0 ​ 18,783,453 ​ 100.0 ​ 2,680,938 ​ 100.0 ​ Our cost of materials was RMB18,783.5 million (US$2,680.9 million) in 2025, compared to RMB14,083.3 million in 2024. The increase was mainly due to increases in (i) the number of products sold and (ii) sales of materials and equipment to partnership stores. Store rental and other operating costs The following table sets forth the components of our store rental and other operating costs in absolute amounts and as percentages of total store rental and other operating costs for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Store rental costs 1,481,609 ​ 28.7 ​ 2,540,934 ​ 29.8 ​ 3,236,032 ​ 28.7 ​ 461,875 ​ 28.7 Payroll 3,036,365 ​ 58.8 ​ 4,903,491 ​ 57.4 ​ 6,607,850 ​ 58.8 ​ 943,130 ​ 58.8 Utilities and other store expenses 649,508 ​ 12.5 ​ 1,096,258 ​ 12.8 ​ 1,398,063 ​ 12.5 ​ 199,543 ​ 12.5 Total 5,167,482 ​ 100.0 ​ 8,540,683 ​ 100.0 ​ 11,241,945 ​ 100.0 ​ 1,604,548 ​ 100.0 ​ Our store rental and other operating costs were RMB11,241.9 million (US$1,604.5 million) in 2025, compared to RMB8,540.7 million in 2024. The increased store rental and other operating costs in 2025 were primarily attributable to increases in (i) labor costs, (ii) store rental costs as well as (iii) utilities and other store operating costs as a result of the increased number of stores and increased items sold compared to 2024. 112 Table of Contents Depreciation and amortization expenses The following table sets forth the components of our depreciation expenses in absolute amounts and as percentages of total depreciation expenses for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Depreciation of equipment 279,905 ​ 46.3 ​ 434,586 ​ 36.5 ​ 593,607 ​ 38.1 ​ 84,725 ​ 38.1 Amortization of leasehold improvements and others 324,066 ​ 53.6 ​ 753,222 ​ 63.3 ​ 960,782 ​ 61.7 ​ 137,131 ​ 61.7 Amortization of land use right ​ 609 ​ 0.1 ​ 2,229 ​ 0.2 ​ 2,994 ​ 0.2 ​ 427 ​ 0.2 Total 604,580 ​ 100.0 ​ 1,190,037 ​ 100.0 ​ 1,557,383 ​ 100.0 ​ 222,283 ​ 100.0 ​ Our depreciation and amortization expenses increased from RMB1,190.0 million in 2024 to RMB1,557.4 million (US$222.3 million) in 2025, primarily due to the increase in amortization of leasehold improvements for the stores and the increase in depreciation expenses of additional equipment put into use in new stores in 2025. Delivery expenses Our delivery expenses increased from RMB2,821.1 million in 2024 to RMB6,878.7 million (US$981.8 million) in 2025. The significant increase was mainly driven by the surge in delivery volumes, especially from the third-party food delivery platforms. Sales and marketing expenses The following table sets forth the components of our sales and marketing expenses in absolute amounts and as percentages of total sales and marketing expenses for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Advertising expenses 801,078 ​ 62.3 ​ 1,206,426 ​ 62.9 ​ 1,293,226 ​ 49.9 ​ 184,580 ​ 49.9 Commission 288,899 ​ 22.5 ​ 461,078 ​ 24.0 ​ 982,995 ​ 37.9 ​ 140,302 ​ 37.9 Others 196,546 ​ 15.2 ​ 252,801 ​ 13.1 ​ 319,484 ​ 12.2 ​ 45,600 ​ 12.2 Total 1,286,523 ​ 100.0 ​ 1,920,305 ​ 100.0 ​ 2,595,705 ​ 100.0 ​ 370,482 ​ 100.0 ​ Our sales and marketing expenses were RMB2,595.7 million (US$370.5 million) in 2025, compared to RMB1,920.3 million in 2024. The increase in sales and marketing expenses mainly driven by increases in (i) commission fees to third-party platforms, and (ii) an increase in advertising and other promotion expenses as we continued to make strategic investments in our branding through various channels. 113 Table of Contents General and administrative expenses The following table sets forth the components of our general and administrative expenses in absolute amounts and as percentages of total general and administrative expenses for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ 2025 ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Payroll 841,876 ​ 46.3 ​ 1,092,714 ​ 45.2 ​ 1,325,630 ​ 43.3 ​ 189,206 ​ 43.3 Research and development expenses 338,823 ​ 18.5 ​ 493,845 ​ 20.4 ​ 612,618 ​ 20.0 ​ 87,438 ​ 20.0 Share-based compensation 187,172 ​ 10.2 ​ 271,657 ​ 11.2 ​ 427,795 ​ 14.0 ​ 61,059 ​ 14.0 Office expenses ​ 170,699 ​ 9.3 ​ 215,322 ​ 8.9 ​ 262,378 ​ 8.6 ​ 37,449 ​ 8.6 Professional fees 109,748 ​ 6.0 ​ 119,401 ​ 4.9 ​ 129,935 ​ 4.3 ​ 18,545 ​ 4.3 Others 181,333 ​ 9.7 ​ 227,523 ​ 9.4 ​ 298,664 ​ 9.8 ​ 42,627 ​ 9.8 Total 1,829,651 ​ 100.0 ​ 2,420,462 ​ 100.0 ​ 3,057,020 ​ 100.0 ​ 436,324 ​ 100.0 ​ Our general and administrative expenses were RMB3,057.0 million (US$436.3 million) in 2025, compared to RMB2,420.5 million in 2024. The increase in general and administrative expenses was mainly driven by increases in (i) payroll costs for general and administrative staff, (ii) share-based compensation for restricted share units and options issued to management and employees, (iii) research and development expenses, and (iv) expenditures for office supplies. The following table further sets forth the components of our research and development expenses, which are included in general and administrative expenses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ ​ 2025 ​ ​ RMB ​ ​ ​ % ​ RMB ​ ​ ​ % ​ RMB ​ ​ ​ % ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Payroll 220,834 ​ 65.2 ​ 298,479 ​ 60.4 ​ 324,806 ​ 53.1 ​ 46,359 ​ 53.1 Share-based compensation 40,912 ​ 12.1 ​ 73,982 ​ 15.0 ​ 114,769 ​ 18.7 ​ 16,381 ​ 18.7 Office expenses 72,229 ​ 21.3 ​ 113,602 ​ 23.0 ​ 163,626 ​ 26.7 ​ 23,354 ​ 26.7 Others 4,848 ​ 1.4 ​ 7,782 ​ 1.6 ​ 9,417 ​ 1.5 ​ 1,344 ​ 1.5 Total 338,823 ​ 100.0 ​ 493,845 ​ 100.0 ​ 612,618 ​ 100.0 ​ 87,438 ​ 100.0 ​ Store preopening and other expenses Our store preopening and other expenses were RMB85.4 million (US$12.2 million) in 2025, compared to RMB69.6 million in 2024. Our store preopening and other expenses increased in 2025 was primarily due to more stores preparing to be opened. Impairment loss of long-lived assets Our impairment loss of long-lived assets was RMB8.5 million (US$1.2 million) in 2025, compared to RMB8.9 million in 2024. The impairment loss of long-lived assets in 2024 and 2025 was mainly related to unrecoverable damaged coffee machines. 114 Table of Contents Losses and expenses related to Fabricated Transactions and Restructuring We incurred losses and expenses related to Fabricated Transactions and Restructuring in a total amount of RMB7.0 million (US$1.0 million) in 2025, compared to negative RMB149.6 million in 2024. In 2024, we received approximately US$22.4 million (RMB157.9 million) compensation under the Directors & Officers Liability and Company Reimbursement Insurance (the “D&O Insurance”). See “Item 3. Key Information—3.D. Risk Factors—Risks Relating to the Fabricated Transactions, Internal Investigation, Internal Control, Offshore Restructuring and Related Matters—The Fabricated Transactions (as defined in Item 3.D. Risk Factors) first disclosed in 2020 have exposed us to a number of legal proceedings, investigations and inquiries, resulted in significant legal and other expenses, and required significant time and attention from our senior management, among other adverse impacts.” Operating Income As a result of the foregoing, our operating income was RMB5,072.9 million (US$724.1 million) in 2025, compared to RMB3,570.1 million in 2024. Interest and Investment Income Our interest and investment income was RMB188.6 million (US$26.9 million) in 2025, compared to RMB89.2 million in 2024. The increase was mainly due to the increase in average cash holdings in 2025. Interest and Financing Expenses Our interest and financing expenses were RMB0.1 million (US0.0 million) in 2025 and RMB3.9 million in 2024. The interest and financing expenses in 2025 were primarily due from interest expenses for our interest-bearing short-term bank borrowings. Following the early repayment of the bank borrowings, our interest and financing expenses decreased sharply in 2025. Foreign Exchange Gain/(Loss), Net We recorded net foreign exchange loss of RMB26.7 million (US$3.8 million) in 2025, compared to net foreign exchange loss of RMB13.2 million in 2024. Other Income, Net We recorded net other income of RMB80.8 million (US$11.5 million) in 2025, compared to RMB84.2 million in 2024. The net other income was primarily attributable to the government grants, partially offset by donations and loss from asset disposals. Provision for U.S. Securities Litigation We have been named as a defendant in various U.S. securities litigations. Provision for equity litigation was mainly for the estimated amounts we should pay for U.S. securities litigations. In 2025, we recorded an additional amount of US$5.0million (approximately RMB35.3 million) based on the litigation progress. See “Item 8. Financial Information—8.A. Consolidated Statements and Other Financial Information—Legal Proceedings” and “Note 20 Commitments and Contingencies—Legal proceedings—U.S. Class Actions” to the consolidated financial statements included in this annual report. Where possible, the Company contests liability and/or the amount of damages appropriate in each pending matter. Where available information indicates that it is probable that a liability had been incurred as of the date of the consolidated financial statements and the Company can reasonably estimate the amount of that loss, the Company accrues a provision for that loss in accordance with relevant U.S. GAAP. Our estimate of probable losses from these litigations is the best estimate after we evaluated the likelihood of various potential outcomes. 115 Table of Contents Income Tax Expense The income tax expenses were RMB770.6 million and RMB1,679.8 million, respectively in 2024 and 2025. The increase was mainly due to the continued profit and the accrual of withholding tax of undistributed earnings for certain entities in mainland China with cumulative profits. Net Income As a result of the foregoing, we recorded a net income of RMB3,600.4 million (US$513.9 million) in 2025, compared to RMB2,955.7 million in 2024. Discussion of the Years Ended December 31, 2024 and 2023 See “Item 5. Operating and Financial Review and Prospects—5.A. Operating Results—Results of Operations—Discussion of the Years Ended December 31, 2024 and 2023” of our annual report on Form 20-F for the fiscal year ended December 31, 2024 filed with the SEC on March 31, 2025. Non-GAAP Financial Measures In evaluating the business, we consider and use adjusted operating (loss)/income and adjusted net (loss)/income, each a non-GAAP financial measure, in reviewing and assessing our operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We present these non-GAAP financial measures because they are used by our management to evaluate operating performance and formulate business plans. We believe that the non-GAAP financial measures help identify underlying trends in our business, provide further information about our results of operations, and enhance the overall understanding of our past performance and future prospects. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. Our non-GAAP financial measures do not reflect all items of income and expense that affect our operations and do not represent the residual cash flow available for discretionary expenditures. Furthermore, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. We compensate for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. 116 Table of Contents We define non-GAAP operating income as operating income excluding share-based compensation expenses. We define non-GAAP net income as net income excluding share-based compensation expenses, fair value changes of derivative asset bifurcated from Series B Senior Secured Notes, provision for equity litigants settlement, gain from extinguishment of Series B Senior Secured Notes, and income tax effect of GAAP to non-GAAP reconciling items. We define non-GAAP net income attributable to our company’s ordinary shareholders as net income attributable to our company’s ordinary shareholders excluding share-based compensation expenses, fair value changes of derivative asset bifurcated from Series B Senior Secured Notes, provision for equity litigants settlement, gain from extinguishment of Series B Senior Secured Notes, and income tax effect of GAAP to non-GAAP reconciling items. From 2024, we added income tax effects of GAAP to non-GAAP reconciling items when reconciling adjustments from GAAP to Non-GAAP net income and Non-GAAP net income attributable to our company’s ordinary shareholders. Comparative figures were also adjusted accordingly. The table below sets forth a reconciliation of our operating income to non-GAAP operating income, our net income to non- GAAP net income and non-GAAP net income attributable to our company’s ordinary shareholders for the years indicated below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Operating income ​ 3,020,423 ​ 3,570,069 ​ 5,072,935 ​ 724,053 Adjusted for: Share-based compensation expenses 239,506 364,846 573,148 81,805 Non-GAAP operating income 3,259,929 3,934,915 5,646,083 805,858 Net income ​ 2,844,037 ​ 2,955,709 ​ 3,600,382 ​ 513,877 Adjusted for: Share-based compensation expenses 239,506 364,846 573,148 81,805 Add: Provision for equity litigants settlement 92,192 — 35,326 5,042 Add: Income tax effects of GAAP to non-GAAP reconciling items ​ (5,529) ​ (9,842) ​ (12,562) ​ (1,793) Non-GAAP net income 3,170,206 3,310,713 4,196,294 598,931 Non-GAAP net income attributable to our company’s ordinary shareholders 3,170,206 3,310,713 4,196,294 598,931 ​ 5.B. Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ ​ ​ ​ Net cash provided by operating activities 2,900,425 4,229,272 ​ 6,091,062 869,371 Net cash used in investing activities (3,447,099) (3,209,806) ​ (7,786,503) (1,111,358) Net cash provided by/ (used in) financing activities — 333,600 ​ (333,600) (47,615) Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash 7,398 14,976 ​ (20,711) (2,956) Net increase/(decrease) in cash and cash equivalents and restricted cash (539,276) 1,368,042 ​ (2,049,752) (292,558) Cash and cash equivalents and restricted cash at beginning of year 3,577,919 3,038,643 ​ 4,406,685 628,960 Cash and cash equivalents and restricted cash at end of year 3,038,643 4,406,685 ​ 2,356,933 336,402 ​ Our principal source of liquidity has been cash provided by our operating activities and historical financing activities, including the proceeds from our IPO in May 2019, and our follow-on public offering and convertible note offering in January 2020, the Investment Agreement with an affiliate of Centurium Capital and Joy Capital, and the interest-bearing bank borrowings. See “Item 4. Information on the Company—4.A. History and Development of the Company.” As of December 31, 2023, 2024, and 2025, we had RMB3,038.6 million, RMB4,406.7 million, and RMB2,356.9 milllion in cash and cash equivalents and restricted cash, respectively. Our operating expenses continued to increase historically and are expected to continue to increase in line with our business expansion. Our operating margin in 2023, 2024 and 2025 were 12.1%, 10.4% and 10.3%, respectively. Nevertheless, as we continue to focus on business growth and expansion, our operating expenses in absolute amounts are expected to continue to increase in the near future. Moreover, the competitive landscape and customer demand and preference may also affect our financial performance. As a result, there is uncertainty with respect to our results of operations and our profitability. 117 Table of Contents We believe that our current cash and cash equivalents, short-term investments, term deposits and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for our current business plan, including our cash needs for working capital and capital expenditures, for at least the next 12 months. In utilizing the proceeds we received from our IPO in May 2019, and our follow-on public offering and convertible note offering in January 2020, we have made and may make capital contributions to our PRC subsidiaries, acquire or establish new PRC subsidiaries or give loans to our PRC subsidiaries for further expansion of our store network. However, most of these uses are subject to PRC regulations. See “Item 3. Key Information—3.D. Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay us from using the proceeds of our offshore financing to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” We used and intend to use the proceeds from the Transactions to facilitate the Restructuring and fulfill our obligations under the settlement with the SEC. Majority of our future net revenues are likely to continue to be denominated in Renminbi. Under existing PRC foreign exchange regulations, Renminbi may be converted into foreign currencies for current account items, including profit distributions, interest payments and trade-related and service-related foreign exchange transactions, without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our PRC subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. Operating Activities Net cash provided by operating activities was RMB6,091.1 million (US$869.4 million) in 2025, compared to net cash provided by operating activities RMB4,229.3 million in 2024. Our net cash provided by operating activities in 2025 reflected a net income of RMB3,600.4 million (US$513.9 million), adjusted by (i) the add back of non-cash items mainly consisting of lease cost of RMB2,917.7 million (US$416.4 million), depreciation and amortization of RMB1,557.4 million (US$222.3 million), share-based compensation expenses of RMB573.1 million (US$81.8 million), loss on disposal of property and equipment of RMB3.5 million (US$0.5million), impairment of long-lived assets of RMB8.5 million (US$1.2 million), deferred income tax expenses of RMB394.4 million (US$56.3 million), and foreign exchange gain of RMB26.7 million (US$3.8 million), which was (ii) partially offset by the changes in operating assets and liabilities of RMB2,990.7 million (US$426.9 million). The change in operating assets and liabilities mainly arises from the decrease of operating lease liabilities of RMB2,989.2 million (US$426.6 million), the decrease of inventories of RMB436.6 million (US$62.3 million), the increase of accounts payable of RMB365.5 million (US$52.2 million), and the decrease of accounts receivable, receivables from online payment platforms, prepaid expenses and other current assets and other non-current assets of RMB901.1 million (US$128.6 million), partially offset by the increase of accrued expenses and other liabilities, payable for equity litigants settlement and deferred revenues of RMB970.7 million (US$138.5 million). Investing Activities Net cash used in investing activities was RMB7,786.5 million (US$1,111.4 million) in 2025, compared to net cash used in investing activities of RMB3,209.8 million in 2024. The net cash used in investing activities was primarily attributable to the purchase of property and equipment of RMB2,623.7 million (US$374.5 million) and net purchase of short-term investments and term-deposits of RMB5,163.8 million (US$737.0 million), partially offset by proceeds from disposal of property and equipment of RMB0.9 million (US$0.1 million). Financing Activities Net cash used in financing activities was RMB333.6 million in 2025, compared to net cash provided by financing activities of 333.6 million in 2024. The net cash used in financing activities in 2025 was primarily attributable to the interest-bearing short-term and long-term bank borrowings. There were no such activities in 2024. 118 Table of Contents Material Cash Requirements Our capital expenditures are incurred primarily in connection with the purchase of property and equipment. Our capital expenditures for the purchase of property and equipment were RMB2,623.7 million (US$374.5 million) in 2025, compared to RMB2,301.8 million in 2024. We intend to fund our future capital expenditures with our existing cash balance, cash from operating activities and bank loans. Our capital commitments primarily relate to investing activities contracted but not yet reflected in the financial statements. The following table sets forth our contractual obligations and commercial commitments as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ More than ​ ​ Total ​ 1 year ​ 2–3 years ​ 4–5 years ​ 5 years ​ ​ (in thousands of RMB) Factory and office building construction commitments 177,750 ​ ​ ​ 166,842 ​ ​ ​ 10,908 ​ ​ ​ — ​ ​ ​ — Fixed assets purchasing commitment 201,297 201,297 — — — Total 379,047 368,139 10,908 — — ​ We lease stores and offices for operation under operating lease. Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases. As of December 31, 2025, our operating lease commitments were RMB58.6 million (US$8.4 million), primarily related to store leases. These leases will be in operation between fiscal year 2026 and fiscal year 2032 with lease terms ranging from 3 months to 72 months. Off-Balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. Holding Company Structure The Company, or Luckin Coffee Inc., is a holding company with no material operations of its own. We conduct our operations primarily through our PRC subsidiaries. As a result, the Company’s ability to pay dividends depends upon dividends paid by our subsidiaries. If our subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to the Company. In addition, to the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to rules and restrictions under the PRC laws and regulations to the transfer of cash. 119 Table of Contents Our subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with the Accounting Standards for Business Enterprise as promulgated by the Ministry of Finance of the PRC, or PRC GAAP. Before January 1, 2020, pursuant to the law applicable to China’s foreign investment enterprise, our subsidiaries that are foreign investment enterprises in the PRC have to make appropriation from their after-tax profit, as determined under PRC GAAP, to reserve funds including (i) the general reserve fund, (ii) the enterprise expansion fund and (iii) the staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of our subsidiary. Appropriations to the other two reserve funds are at our subsidiary’s discretion. On January 1, 2020, the Foreign Investment Law and the Implementation Regulations came into effect, which repealed the PRC Wholly Foreign-Owned Enterprise Law and the Implementation Regulations on the Wholly Foreign-Owned Enterprise Law and became the legal foundation for foreign investment in the PRC. Pursuant to the Foreign Investment Law, the corporate governance matters, including the dividend distribution, shall be governed by the Company Law, the Partnership Law or other laws of the PRC. In accordance with the Company Law of the PRC, our subsidiaries in China must make appropriations from their after-tax profit to non-distributable reserve funds including (i) the statutory surplus fund and (ii) the discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of our subsidiaries. Appropriation to the discretionary surplus fund is made at the discretion of our subsidiaries. However, according to the Foreign Investment Law and the Implementation Regulations, the foreign investment enterprises established before January 1, 2020 may elect to maintain their current corporate governance rules, including the dividend distribution policy, adopted under the PRC Wholly Foreign-Owned Enterprise Law, within five years after January 1, 2020. As an offshore holding company, we are permitted under PRC laws and regulations to provide funding from the proceeds of our offshore fundraising activities to our PRC subsidiaries only through loans or capital contributions, in each case subject to the satisfaction of the applicable government registration and approval requirements. See “Item 3. Key Information—3.D. Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay us from using the proceeds of our offshore financing to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” As a result, there is uncertainty with respect to our ability to provide prompt financial support to our PRC subsidiaries when needed. Before the termination of our VIE structure (see “Item 4. Information on the Company—4.C. Organizational Structure—Former contractual arrangements with the Former VIE and Its Nominee Shareholders”), our PRC subsidiaries may use their own retained earnings (rather than Renminbi converted from foreign currency denominated capital) to provide financial support to our Former VIE either through entrustment loans from our PRC subsidiaries to our Former VIE or direct loans to such Former VIE’s nominee shareholders, which would be contributed to the consolidated variable entity as capital injections. Such direct loans to the nominee shareholders would be eliminated in our consolidated financial statements against the Former VIE’s share capital. Transfer of Funds and Other Assets Luckin Coffee Inc. has not previously declared or paid any cash dividend or dividend in kind, and has no definite plan against declaring or paying any dividends in the near future on its Shares or the ADSs. Certain of our PRC subsidiaries have issued dividends or distributions to their respective onshore parent companies, but no dividends or distributions were repatriated from PRC subsidiaries to our offshore entities as of the date of this annual report. In the future, our ability to pay dividends, if any, to our shareholders and ADS holders and to service any debt we may incur will depend upon dividends and other distributions paid by our PRC subsidiaries. As of December 31, 2025, we have established cash management policies in place that dictate how funds are transferred between our offshore entities and our PRC subsidiaries. Rather, the funds can be transferred in accordance with the applicable PRC laws and regulations. In accordance with the applicable PRC laws and regulations, the funds can be transferred between Luckin Coffee Inc., our PRC subsidiaries and the investors. Cash is transferred (a) among the offshore entities which in Cayman, Singapore, Hongkong and US based on business requirement, and (b) between offshore entities and PRC entities under PRC laws and regulations in the following manner: (i) funds are transferred to the PRC subsidiaries, from the Company as needed through our Cayman subsidiary, BVI subsidiaries, and Hong Kong subsidiaries in the form of capital contributions or intercompany loans, as the case may be; (ii) dividends or other distributions may be paid by the PRC subsidiaries to Luckin Coffee Inc. through our Hong Kong subsidiaries, BVI subsidiaries and Cayman subsidiary; and (iii) other cash management tools provided by PRC commercial banks and approved by PBOC. 120 Table of Contents As of December 31, 2025, Luckin Coffee Inc. made cumulative capital contributions of US$1,573.8 million to its PRC subsidiaries through its intermediate holding companies which were accounted as loans to its intermediate holding companies of Luckin Coffee Inc. These funds have been used by the PRC subsidiaries for their operations. In the future, cash proceeds raised from overseas financing activities may be transferred by us through Luckin HK to Luckin Group via capital contribution and shareholder loans, as the case may be. Luckin Group then will transfer funds to its subsidiaries to meet the capital needs of our business operations. Moreover, as of December 31, 2025, Luckin Coffee Inc. also made cumulative cash transfers of US$1.98 million, through its intermediate holding company, to Luckin Trading HK and Luckin Coffee (SGP) Pte.Ltd. In addition, we also made RMB1,123.0 million from PRC subsidiaries to offshore entities for operation support. The Former VIE had not been involved in the business operations or fund planning of the Group. However, Luckin Coffee Inc. and its subsidiaries may transfer cash to the Former VIE by loans or capital support, subject to satisfaction of applicable government registration and approval requirements, to satisfy the Former VIE’s miscellaneous cash demands, such as social insurance fees for employees whose social insurance accounts were registered under the Former VIE. For the year ended December 31, 2023, and for the period ended March 15, 2024, the PRC subsidiaries transferred RMB11.1 million and RMB0.2 million, respectively, to the Former VIE by loans or by capital support. In addition, the Former VIE may transfer cash as repayment of loans or, on an ad hoc basis, as working capital support to our PRC subsidiaries. For the year ended December 31, 2023, and for the period ended March 15, 2024, the Former VIE transferred to the PRC subsidiaries RMB0.6 million and RMB nil, respectively. These funds were used for repayment of loans or to support operations of our PRC subsidiaries. There were no other assets transferred between our PRC subsidiaries and the Former VIE in 2023, 2024 and 2025. Upon termination of the contractual arrangements regarding the Former VIE, we recorded full impairment for the loan receivables under the VIE agreements. For the purpose of illustration, the below table reflects the hypothetical taxes that might be required to be paid within China, assuming that: (i) we have taxable earnings and (ii) we determine to pay a dividend in the future: ​ ​ ​ ​ ​ ​ ​ ​ Taxation ​ ​ ​ Scenario(1) ​ ​ ​ Statutory Tax ​ ​ ​ ​ ​ and Standard ​ ​ ​ Rates ​ Hypothetical pre-tax earnings(2) 100 % Tax on earnings at statutory rate of 25% ​ (25) % Net earnings available for distribution ​ 75 % Withholding tax at standard rate of 10%(3) ​ (7.5) % Net distribution to Parent/Shareholders ​ 67.5 % Notes: (1) For purposes of this example, the tax calculation has been simplified. The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in China. (2) Under the terms of the contractual arrangements between us and the Former VIE, Beijing WFOE may charge the Former VIE for services provided to the Former VIE. These service fees shall be recognized as expenses of the Former VIE, with a corresponding amount as service income by Beijing WFOE and eliminated in consolidation. For income tax purposes, Beijing WFOE and the Former VIE file income tax returns on a separate company basis. The service fees paid are recognized as a tax deduction by the Former VIE and as income by Beijing WFOE and are tax neutral. (3) The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise, or FIE, to its immediate holding company outside of China if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by a FIE in China to its immediate holding company in Hong Kong can be subject to withholding tax at a rate of no more than 5% if the immediate holding company in Hong Kong owns directly at least 25% of the shares of the FIE and could be recognized as a Beneficial Owner of the dividend from PRC tax perspective. 121 Table of Contents Condensed Consolidating Schedule The following tables present the summary statements of operations for the Company’s Former VIE and other entities for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ The Former ​ Other ​ ​ ​ ​ ​ ​ Luckin ​ ​ ​ The WFOE ​ ​ ​ VIE ​ ​ ​ subsidiaries ​ ​ ​ Eliminations ​ ​ ​ Consolidated ​ ​ (in thousands of RMB) Net revenues — 1,008,660 ​ — 24,677,136 (782,630) 24,903,166 Cost of materials — (99,900) ​ — (10,797,509) — (10,897,409) Store rental and other operating costs — (227,876) ​ (4) (5,405,851) 466,249 (5,167,482) Depreciation and amortization expenses — (2,418) ​ (13) (602,149) — (604,580) Delivery expenses — — ​ — (2,010,699) — (2,010,699) Sales and marketing expenses (566) (45,697) ​ (512) (1,239,748) — (1,286,523) General and administrative expenses (46,722) (214,116) ​ (8,746) (1,876,445) 316,378 (1,829,651) Store preopening and other expenses — 187 ​ — (109,872) — (109,685) Impairment loss of long-lived assets — — ​ — (5,229) — (5,229) Losses and expenses related to Fabricated Transactions and Restructuring 32,422 — ​ — (3,907) — 28,515 Total operating expenses (14,866) (589,820) ​ (9,275) (22,051,409) 782,627 (21,882,743) Interest and investment income 2,476 21,800 ​ — 84,406 — 108,682 Foreign exchange (loss)/gain, net 3,320 (805) ​ — 850 (397) 2,968 Other (expenses)/ income, net — 14,860 ​ 42 47,381 — 62,283 Share of (losses)/income from subsidiaries and VIE 2,945,299 (9,233) ​ — 622,752 (3,558,818) — Provision for equity litigants settlement (92,192) — ​ — — — (92,192) (Loss)/income before income taxes 2,844,037 445,462 ​ (9,233) 3,381,116 (3,559,218) 3,102,164 Income tax benefits/(expenses) — 177,292 ​ — (435,419) — (258,127) Net (loss)/income 2,844,037 622,754 ​ (9,233) 2,945,697 (3,559,218) 2,844,037 ​ 122 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ The Former ​ Other ​ ​ ​ ​ ​ ​ Luckin ​ ​ ​ The WFOE ​ ​ ​ VIE ​ ​ ​ subsidiaries ​ ​ ​ Eliminations ​ ​ ​ Consolidated ​ ​ (in thousands of RMB) Net revenues — 1,001,026 ​ — 34,357,710 (883,922) 34,474,814 Cost of materials — (78,242) ​ — (14,005,049) — (14,083,291) Store rental and other operating costs — (379,592) ​ 3 (8,817,021) 655,927 (8,540,683) Depreciation and amortization expenses — (6,227) ​ — (1,183,810) — (1,190,037) Delivery expenses — — ​ — (2,821,069) — (2,821,069) Sales and marketing expenses (309) (17,760) ​ — (1,908,341) 6,105 (1,920,305) General and administrative expenses (33,002) (249,101) ​ 142 (2,360,773) 222,272 (2,420,462) Store preopening and other expenses — (303) ​ — (69,253) — (69,556) Impairment loss of long-lived assets — — ​ — (8,925) — (8,925) Losses and expenses related to Fabricated Transactions and Restructuring 149,946 (7) ​ — (356) — 149,583 Total operating expenses 116,635 (731,232) ​ 145 (31,174,597) 884,304 (30,904,745) Interest and investment incomes 17,915 3,243 ​ — 68,037 — 89,195 Interest and financing expenses — — ​ — (3,924) — (3,924) Foreign exchange (loss)/gain, net 6,007 (787) ​ — (13,393) (5,066) (13,239) Other income/(expenses), net (18,575) 528 ​ — 23,633 78,575 84,161 Share of (losses)/income from subsidiaries and VIE 2,833,727 21,265 ​ — 209,356 (3,064,348) — Provision for equity litigants settlement — — ​ — — — — (Loss)/income before income taxes 2,955,709 294,043 ​ 145 3,466,822 (2,990,457) 3,726,262 Income tax expenses ​ — ​ (84,687) ​ — ​ (685,866) ​ — ​ (770,553) Net (loss)/income 2,955,709 209,356 ​ 145 2,780,956 (2,990,457) 2,955,709 Notes: (1) The eliminations are mainly related to the internal transactions of raw materials and service fees charged between our subsidiaries and the WFOE, and subsidiaries’ net income/(loss) picked up by corresponding parent companies through profit and loss. 123 Table of Contents The following tables present the summary balance sheet data for the Former VIE and other entities as of the dates presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ The Former ​ Other ​ ​ ​ ​ ​ ​ Luckin ​ ​ ​ The WFOE ​ ​ ​ VIE ​ ​ ​ subsidiaries ​ ​ ​ Eliminations ​ ​ ​ Consolidated ​ ​ (in thousands of RMB) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents 639,488 ​ 150,924 ​ — ​ 3,571,897 ​ — ​ 4,362,309 Restricted cash — ​ 201 ​ — ​ 3,580 ​ — ​ 3,781 Short-term investments, net ​ — ​ — ​ — ​ 250,000 ​ — ​ 250,000 Receivables from online payment platforms — ​ 550 ​ — ​ 437,908 ​ — ​ 438,458 Accounts receivables, net — ​ 44 ​ — ​ 111,207 ​ — ​ 111,251 Inventories — ​ — ​ — ​ 2,500,205 ​ — ​ 2,500,205 Prepaid expenses and other current assets, net 21,153 ​ 46,592 ​ — ​ 1,870,309 ​ — ​ 1,938,054 Amount due from subsidiaries 12,233,657 ​ 7,288 ​ — ​ 619,683 ​ (12,860,628) ​ — Term deposits-current 656,820 ​ — ​ — ​ 470,721 ​ — ​ 1,127,541 Total current assets ​ 13,551,118 ​ 205,599 ​ — ​ 9,835,510 ​ (12,860,628) ​ 10,731,599 Non-current assets (38,667) ​ 182,579 ​ — ​ 11,602,231 ​ 648,184 ​ 12,394,327 Total assets 13,512,451 ​ 388,178 ​ — ​ 21,437,741 ​ (12,212,444) ​ 23,125,926 Current Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term bank borrowings ​ — ​ — ​ — ​ 300,000 ​ — ​ 300,000 Accounts payable — ​ — ​ — ​ 738,677 ​ — ​ 738,677 Accrued expenses and other current liabilities 9,757 ​ 80,270 ​ — ​ 2,944,178 ​ — ​ 3,034,205 Deferred revenues — ​ 217 ​ — ​ 153,031 ​ — ​ 153,248 Amount due to subsidiaries ​ 310,414 ​ 402,835 ​ — ​ 12,147,379 ​ (12,860,628) ​ — Payable for equity litigants settlement ​ 119,560 ​ — ​ — ​ — ​ — ​ 119,560 Operating lease liabilities ​ — ​ — ​ — ​ 2,343,387 ​ — ​ 2,343,387 Total current liabilities ​ 439,731 ​ 483,322 ​ — ​ 18,626,652 ​ (12,860,628) ​ 6,689,077 Non-current liabilities ​ — ​ 72,638 ​ — ​ 3,291,491 ​ — ​ 3,364,129 Total liabilities ​ 439,731 ​ 555,960 ​ — ​ 21,918,143 ​ (12,860,628) ​ 10,053,206 Mezzanine equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible senior preferred shares ​ 1,514,660 ​ — ​ — ​ — ​ — ​ 1,514,660 Total mezzanine equity ​ 1,514,660 ​ — ​ — ​ — ​ — ​ 1,514,660 Total Company’s ordinary shareholders’ equity ​ 11,558,060 ​ (167,782) ​ — ​ (480,402) ​ 648,184 ​ 11,558,060 Total liabilities, mezzanine equity and shareholders’ equity ​ 13,512,451 ​ 388,178 ​ — ​ 21,437,741 ​ (12,212,444) ​ 23,125,926 ​ ​ 124 Table of Contents The following tables present the summary cash flow data for the Former VIE and other entities for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ The Former ​ Other ​ ​ ​ ​ ​ ​ Luckin ​ ​ ​ The WFOE ​ ​ ​ VIE ​ ​ ​ subsidiaries ​ ​ ​ Eliminations ​ ​ ​ Consolidated ​ ​ (in thousands of RMB) Net cash provided by/(used in) operating activities (184,240) (445,797) — 3,530,462 — 2,900,425 Net cash provided by/(used in) investing activities — 14,843 — (3,461,942) — (3,447,099) Net cash used in financing activities — — — — — — Effect of exchange rate on cash, cash equivalents and restricted cash — — — 7,398 — 7,398 Net increase/(decrease) in cash, cash equivalents and restricted cash (184,240) (430,954) — 75,918 — (539,276) Cash, cash equivalents and restricted cash at the beginning of year 214,992 683,935 — 2,678,992 — 3,577,919 Cash and cash equivalents and restricted cash at the end of the year 30,752 252,981 — 2,754,910 — 3,038,643 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ The Former ​ Other ​ ​ ​ ​ ​ Luckin ​ ​ ​ The WFOE ​ ​ ​ VIE ​ ​ ​ subsidiaries ​ ​ ​ Eliminations ​ ​ ​ Consolidated ​ (in thousands of RMB) Net cash provided by/(used in) operating activities 1,259,823 (91,797) 12 3,061,234 — 4,229,272 Net cash used in investing activities (654,185) (10,059) (12) (2,545,550) — (3,209,806) Net cash provided by financing activities — — — 333,600 — 333,600 Effect of exchange rate on cash, cash equivalents and restricted cash 3,098 — — 11,878 — 14,976 Net increase/(decrease) in cash, cash equivalents and restricted cash 608,736 (101,856) — 861,162 — 1,368,042 Cash, cash equivalents and restricted cash at the beginning of year 30,752 252,981 — 2,754,910 — 3,038,643 Cash and cash equivalents and restricted cash at the end of the year 639,488 151,125 — 3,616,072 — 4,406,685 ​ ​ 125 Table of Contents 5.C. Research and Development Technology is at the core of our business, and we will continue to invest in our technology, which covers every aspect of our business, from customer engagement and storefront operations to supply chain management. With our centralized technology system, we are able to simplify and standardize our operations, which allows us to improve operational efficiency and quickly expand and scale up our business. See “Item 4. Information on the Company—4.B. Business Overview—Technology.” 5.D. Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the fiscal year ended December 31, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 5.E. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet dates and revenues and expenses during the reporting periods. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our consolidated financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our consolidated financial statements. You should read the following description of critical accounting policies, judgments and estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report. Impairment of long-lived assets other than goodwill We evaluate our long-lived assets, including property and equipment with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that indicate that the carrying amount of an asset or asset group may not be fully recoverable. When these events occur, we evaluate the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows of the asset or asset group is less than the carrying amount of the assets or the asset groups, we recognize an impairment loss based on the excess of the carrying amount of the assets or the asset groups over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets or asset groups based on forecasted future sales and operating costs, using internal projections, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets’ remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. We estimate of future cash flows requires us to make assumptions and to apply judgment, including forecasting future sales and gross profits and estimating useful lives of the assets or asset groups. These estimates can be affected by factors such as future sales results, store closure plans, economic conditions, business interruptions, interest rates and government regulations that can be difficult to predict. If actual results and conditions are not consistent with the estimates and assumptions used in its calculations, we may be exposed to additional impairments of long-lived assets. For the years ended December 31, 2023, 2024, and 2025, we recognized impairment of long-lived assets other than goodwill of RMB5.2 million and RMB8.9 million, and RMB8.5 million (US$1.2 million), respectively. 126 Table of Contents Impairment loss of long-lived assets mainly represented RMB5.2 million primarily for assets in relation to Luckin Tea for the year ended December 31, 2023, RMB8.9 million for store operating equipment and others, generally for the unrecoverable damaged coffee machines for the year ended December 31, 2024, and RMB8.5 million for the year ended December 31, 2025. Income Taxes We follow the liability method of accounting for income taxes in accordance with ASC 740 (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. For certain subsidiaries, we record a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. We account for uncertainties in income taxes in accordance with ASC 740. Interest and penalties related to unrecognized tax benefit recognized in accordance with ASC 740 are classified in the consolidated statements of operations and comprehensive income as income tax expenses. The accrued interest and penalties related to unrecognized tax benefit for the years ended December 31, 2023, 2024 and 2025 were RMB7.6 million, RMB7.2 million and RMB negative 5.0 million (US$0.7 million), respectively, which represent our best estimate, in accordance with current PRC tax laws and regulations. Commitments and Contingencies In the normal course of business, we are subject to contingencies, such as legal proceedings. Liabilities for the contingencies are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. We assess these contingent liabilities, which inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in legal proceedings, in consultation with its legal counsel, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of the reasonably possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed since they do not involve guarantees. Share-Based Compensation We apply ASC 718, Compensation—Stock Compensation (“ASC 718”), to account for our employee share-based payments. In accordance with ASC 718, we determine whether an award should be classified and accounted for as a liability award or equity award. All the share-based awards to employees and directors were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values, which are the closing prices of the Company’s ordinary shares on the public trade market. We recognize share-based compensation expenses for equity awards to employees with a performance condition based on the probable outcome of that performance condition. Compensation expense is recognized over the requisite service period for each separately vesting portion of the award, and only when it is probable that the performance condition, if any, will be achieved. We account for forfeitures as they occur. We issue new shares of common stock upon exercise of stock options and the vesting of restricted share units. Recently Issued Accounting Pronouncements A list of recent relevant accounting pronouncements, if any, is included in Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements included in this annual report. ​ ​ 127 Table of Contents