Starbucks' Chinese challenger, Luckin Coffee, will likely be listed on the high-end or above

Luckin Coffee will set the price of its initial public offering at $ 17 per share, sources told CNBC Thursday. The company will also increase its IPO to 33 million shares, according to a source.

The range expected by the Chinese coffee company ranged from $ 15 to $ 17 per share, according to a regulatory filing filed last week. Luckin plans to be listed on the Nasdaq on Friday under the symbol "LK".

In its latest round of financing, the Beijing-based channel was valued at $ 2.9 billion.

"It's not since the 1999-2000 Internet bubble that a company made a public evaluation of $ 3 billion less than two years after its launch," said Kathleen Smith, director of Renaissance Capital. , which tracks and invests in IPOs.

With 2,370 stores open at the end of the first quarter and planning to add 2,500 this year alone, Luckin is trying to beat Starbucks as the first coffee chain in China. Since its inception less than two years ago, the company has been trying to develop a customer base with smaller sites formatted for convenience and offering significant discounts.

In 2018, the chain reported net sales of $ 125.3 million and a net loss of $ 241.3 million. To cover his losses and fund his ambitious expansion projects, Luckin has already raised $ 550 million, according to Crunchbase.

"As a result, the main controversy is whether Luckin can generate sales in the absence of discounts," commented Bernstein analyst Sara Senatore in a research note last week.

China is one of the long-term growth markets of Starbucks, alongside the United States. The global coffee giant, celebrating its twentieth anniversary in China, wants its customers to consider its stores as a third place – the place outside of home and work where consumers go out and relax. The Seattle-based company has tried to meet the expectations of Chinese customers in terms of convenience by partnering with Alibaba for the supply of its beverages.

Starbucks saw store transactions in China open at least a year, down 1% in its second quarter, meaning traffic was down. But customers spent more, driving comparable store sales growth of 3%.

Starbucks shares, which have a market value of $ 95.8 billion, have increased by 22% since the beginning of the year.

President and CEO Kevin Johnson said rivals in China are focusing on short-term gains, while Starbucks is using a long-term strategy.

"Some of these competitors are competing with very heavy discounts that we do not think are viable," Johnson said recently on CNBC's "Squawk on the Street" show.

Luckin's beginnings will depend not only on how investors perceive his ability to compete with Starbucks, but also on the current market situation. The recent escalation of the trade war between China and the United States has led to market volatility as investors prepared for a new round of tariffs.

So far this year, 54 companies have raised $ 20 billion in the IPO market in the US, with Uber's debut being responsible for about 40% of that figure, according to Uber. Renaissance Capital data. Uber and its giant giant Lyft have struggled since their debut, but the rest of this year's new public companies are doing well. Of the IPOs of the year, 63% are trading above their price, Smith said.