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Cango Inc

Cango Inc. Reports Third Quarter 2024 Unaudited Financial Results

SHANGHAI , Nov. 4, 2024 /PRNewswire/ -- Cango Inc. (NYSE: CANG) ("Cango" or the "Company"), a leading automotive transaction service platform in China, today announced its unaudited financial results for the third quarter of 2024.

Third Quarter 2024 Financial and Operational Highlights

  • Total revenues were RMB27.0 million (US$3.8 million), compared with RMB353.6 million in the same period of 2023. Income from operations was RMB35.2 million (US$5.0 million) for the three months ended September 30, 2024, compared with a loss of RMB87.8 million in the same period last year. Net income was RMB67.9 million (US$9.7 million) for the three months ended September 30, 2024, compared with a loss of RMB49.1 million in the same period last year.

  • The total outstanding balance of financing transactions the Company facilitated was RMB4.8 billion (US$685.7 million) as of September 30, 2024. Our credit risk exposure has decreased to a lower level, with only RMB1.7 billion (US$ 246.1 million) of outstanding loan balances where the Company bears credit risks that have not been provided with full bad debt allowance or full risk assurance liabilities. M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 3.17% and 1.76%, respectively, as of September 30, 2024, compared with 2.93% and 1.57%, respectively, as of June 30, 2024.

  • Total balance of cash and cash equivalents and short-term investments increased by RMB89.3 million (US$12.7 million) compared with that as of June 30, 2024.

Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "In the third quarter of 2024, our business was primarily focused on the Cango U-car app and AutoCango.com, our international used car platform. We strengthened Cango U-car app's competitive advantages in vehicle inventory during the quarter by establishing strategic partnerships with numerous used car marketplaces, enabling real-time updates of vehicle listings and ensuring a diverse and abundant supply of vehicles on the Cango U-car app. For AutoCango.com, we have been continuously refining content development and search engine optimization to boost brand exposure and expand our market reach. Since its launch in March 2024, AutoCango.com has grown rapidly, accumulating over 370,000 page views, nearly 60,000 registered users and offering more than 100,000 used car SKUs covering over 65,000 models. Going forward, we will strengthen our data analysis capabilities to gain a deeper understanding of our target markets and user demographics and implement data-based, scientific marketing strategies to propel our balanced global development."

"While steadily advancing our existing business, we are also actively pursuing forward-looking, strategic investment opportunities worldwide. By establishing an international cooperation network, strengthening communication with leading global companies, and actively participating in the collaborative development of overseas projects, we aim to showcase Cango's strength and vision on a broader stage and create greater value for all of our stakeholders," concluded Mr. Lin.

Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "We are pleased to report another solid quarter thanks to our continued focus on rigorous cost control and robust risk management. As we continue to develop our business and actively explore growth opportunities overseas, we maintain prudent cash management to safeguard our balance sheet. Simultaneously, we remain committed to prudent financial strategies designed to generate long-term value for our shareholders."

Third Quarter 2024 Financial Results

REVENUES

Total revenues in the third quarter of 2024 were RMB27.0 million (US$3.8 million) compared with RMB353.6 million in the same period of 2023. Guarantee income, which represented the fee income earned on the non-contingent aspect of a guarantee, was RMB14.4 million (US$2.1 million) in the third quarter of 2024. This was presented separately from the contingent aspect of a guarantee pursuant to the adoption of ASC 326 since January 1, 2023.

OPERATING COST AND EXPENSES

  • Cost of revenue in the third quarter of 2024 decreased to RMB23.3 million (US$3.3 million) from RMB304.6 million in the same period of 2023. As a percentage of total revenues, cost of revenue in the third quarter of 2024 was 86.3% compared with 86.1% in the same period of 2023.

  • Sales and marketing expenses in the third quarter of 2024 decreased to RMB3.4 million (US$0.5 million) from RMB9.9 million in the same period of 2023.

  • General and administrative expenses in the third quarter of 2024 were RMB45.2 million (US$6.4 million) compared with RMB34.7 million in the same period of 2023.

  • Research and development expenses in the third quarter of 2024 decreased to RMB1.4 million (US$0.2 million) from RMB7.0 million in the same period of 2023.

  • Net gain on contingent risk assurance liabilities in the third quarter of 2024 was RMB7.1 million (US$1.0 million) compared with a net loss of RMB3.5 million in the same period of 2023.

  • Net recovery on provision for credit losses in the third quarter of 2024 was RMB74.4 million (US$10.6 million) compared with RMB66.9 million in the same period of 2023.

INCOME FROM OPERATIONS

Income from operations in the third quarter of 2024 was RMB35.2 million (US$5.0 million), compared with a loss of RMB87.8 million in the same period of 2023.

NET INCOME

Net income in the third quarter of 2024 was RMB67.9 million (US$9.7 million). Non-GAAP adjusted net income in the third quarter of 2024 was RMB71.3 million (US$10.2 million). Non-GAAP adjusted net income excludes the impact of share-based compensation expenses. For further information, see "Use of Non-GAAP Financial Measure."

NET INCOME PER ADS

Basic and diluted net income per American Depositary Share (the "ADS") in the third quarter of 2024 were RMB0.66 (US$0.09) and RMB0.60 (US$0.09), respectively. Non-GAAP adjusted basic and diluted net income per ADS in the third quarter of 2024 were RMB0.69 (US$0.10) and RMB0.63 (US$0.09), respectively. Each ADS represents two Class A ordinary shares of the Company.

BALANCE SHEET

  • As of September 30, 2024, the Company had cash and cash equivalents of RMB691.8 million (US$98.6 million), compared with RMB949.5 million as of June 30, 2024.

  • As of September 30, 2024, the Company had short-term investments of RMB3.1 billion (US$439.3 million), compared with RMB2.7 billion as of June 30, 2024.

Business Outlook

For the fourth quarter of 2024, the Company expects total revenues to be between RMB15.0 million and RMB17.5 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.

Share Repurchase Program

Pursuant to the share repurchase program announced on April 23, 2024 (the "New Share Repurchase Program"), the Company had repurchased 996,640 ADSs with cash in the aggregate amount of approximately US$1.7 million up to September 30, 2024.

Conference Call Information

The Company's management will hold a conference call on Monday, November 4, 2024, at 8:00 P.M. Eastern Time or Tuesday, November 5, 2024, at 9:00 A.M. Beijing Time to discuss the financial results. Listeners may access the call by dialing the following numbers:

International: 

+1-412-902-4272

United States Toll Free: 

+1-888-346-8982

Mainland China Toll Free:  

4001-201-203

Hong Kong, China Toll Free:

800-905-945

Conference ID:

Cango Inc.

The replay will be accessible through November 11, 2024 by dialing the following numbers:          

International:




+1-412-317-0088

United States Toll Free:




+1-877-344-7529

Access Code:




8025630

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.cangoonline.com/.

About Cango Inc.

Cango Inc. (NYSE: CANG) is a leading automotive transaction service platform in China, connecting car buyers, dealers, financial institutions, and other industry participants. Founded in 2010 by a group of pioneers in China's automotive finance industry, the Company is headquartered in Shanghai and has a nationwide network. Leveraging its competitive advantages in technological innovation and big data, Cango has established an automotive supply chain ecosystem, and developed a matrix of products centering on customer needs for auto transactions, auto financing and after-market services. By working with platform participants, Cango endeavors to make car purchases simple and enjoyable, and make itself customers' car purchase service platform of choice. For more information, please visit: www.cangoonline.com. 

Definition of Overdue Ratios

The Company defines "M1+ overdue ratio" as (i) exposure at risk relating to financing transactions for which any installment payment is 30 to 179 calendar days past due as of a specified date, divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date, excluding amounts of outstanding principal that are 180 calendar days or more past due.

The Company defines "M3+ overdue ratio" as (i) exposure at risk relating to financing transactions for which any installment payment is 90 to 179 calendar days past due as of a specified date, divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date, excluding amounts of outstanding principal that are 180 calendar days or more past due.

Use of Non-GAAP Financial Measure

In evaluating the business, the Company considers and uses Non-GAAP adjusted net income (loss), a Non-GAAP measure, as a supplemental measure to review and assess its operating performance. The presentation of the Non-GAAP financial measure 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. The Company defines Non-GAAP adjusted net income (loss) as net income (loss) excluding share-based compensation expenses. The Company presents the Non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. Non-GAAP adjusted net income (loss) enables the management to assess the Company's operating results without considering the impact of share-based compensation expenses, which are non-cash charges. The Company also believes that the use of the Non-GAAP measure facilitates investors' assessment of its operating performance.

Non-GAAP adjusted net income (loss) is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This Non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using Non-GAAP adjusted net income (loss) is that it does not reflect all items of expense that affect the Company's operations. Share-based compensation expenses have been and may continue to be incurred in the business and are not reflected in the presentation of Non-GAAP adjusted net income (loss). Further, the Non-GAAP measure may differ from the Non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling the Non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.

Reconciliations of Cango's Non-GAAP financial measure to the most comparable U.S. GAAP measure are included at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.0176 to US$1.00, the noon buying rate in effect on September 30, 2024, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the "Business Outlook" section and quotations from management in this announcement, contain forward-looking statements. Cango may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Cango's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Cango's goal and strategies; Cango's expansion plans; Cango's future business development, financial condition and results of operations; Cango's expectations regarding demand for, and market acceptance of, its solutions and services; Cango's expectations regarding keeping and strengthening its relationships with dealers, financial institutions, car buyers and other platform participants; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Cango's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Cango does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact

Yihe Liu
Cango Inc.
Tel: +86 21 3183 5088 ext.5581
Email: ir@cangoonline.com 

Helen Wu
Piacente Financial Communications
Tel: +86 10 6508 0677
Email: ir@cangoonline.com

 

 

CANGO INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data ）





 As of December 31, 2023 


As of September 30, 2024





 RMB 


 RMB 

 US$ 









ASSETS:








Current assets:








Cash and cash equivalents




1,020,604,191


691,818,800

98,583,390

Restricted cash - current - bank deposits held for short-term

investments




1,670,006,785


-

-

Restricted cash - current - others




14,334,937


12,816,134

1,826,284

Short-term investments




635,070,394


3,082,865,458

439,304,813

Accounts receivable, net




64,791,709


25,529,710

3,637,955

Finance lease receivables - current, net




200,459,435


47,126,581

6,715,484

Financing receivables, net




29,522,035


8,535,562

1,216,308

Short-term contract asset




170,623,200


55,923,363

7,969,015

Prepayments and other current assets 




78,606,808


29,955,505

4,268,625

Total current assets




3,884,019,494


3,954,571,113

563,521,874









Non-current assets:








Restricted cash - non-current




583,380,417


461,367,450

65,744,336

Property and equipment, net




8,239,037


6,586,202

938,526

Intangible assets




48,373,192


47,634,678

6,787,887

Long-term contract asset




36,310,769


448,353

63,890

Finance lease receivables - non-current, net




36,426,617


9,761,388

1,390,987

Operating lease right-of-use assets




47,154,944


42,815,154

6,101,111

Other non-current assets




4,705,544


4,104,803

584,930

Total non-current assets




764,590,520


572,718,028

81,611,667

TOTAL ASSETS




4,648,610,014


4,527,289,141

645,133,541









LIABILITIES AND SHAREHOLDERS' EQUITY








Current liabilities:








Short-term debts




39,071,500


-

-

Long-term debts - current




926,237


649,300

92,525

Accrued expenses and other current liabilities




206,877,626


130,806,077

18,639,717

Deferred guarantee income




86,218,888


20,638,251

2,940,927

Contingent risk assurance liabilities 




125,140,991


33,692,222

4,801,103

Income tax payable




311,904,279


311,235,998

44,350,775

Short-term lease liabilities




7,603,380


8,015,363

1,142,180

Total current liabilities




777,742,901


505,037,211

71,967,227









Non-current liabilities:








Long-term debts




712,023


470,216

67,005

Deferred tax liability




10,724,133


10,724,133

1,528,177

Long-term operating lease liabilities




42,228,435


39,375,249

5,610,928

Other non-current liabilities




226,035


140,038

19,955

Total non-current liabilities




53,890,626


50,709,636

7,226,065

Total liabilities




831,633,527


555,746,847

79,193,292









Shareholders' equity








Ordinary shares




204,260


204,260

29,107

Treasury shares




(773,130,748)


(782,800,080)

(111,548,119)

Additional paid-in capital




4,813,679,585


4,747,032,306

676,446,692

Accumulated other comprehensive income




111,849,166


98,802,836

14,079,291

Accumulated deficit




(335,625,776)


(91,697,028)

(13,066,722)

Total Cango Inc.'s  equity




3,816,976,487


3,971,542,294

565,940,249

Total shareholders' equity




3,816,976,487


3,971,542,294

565,940,249

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY




4,648,610,014


4,527,289,141

645,133,541

 

 

CANGO INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data)





 Three months ended September 30, 


 Nine months ended September 30, 





2023


2024


2023


2024





 RMB 


 RMB 

 US$ 


 RMB 


 RMB 

 US$ 














Revenues




353,638,119


26,953,433

3,840,833


1,571,681,558


136,455,663

19,444,776

Loan facilitation income and other related income 




11,345,343


819,779

116,818


27,618,224


16,310,549

2,324,235

Guarantee income 




50,006,711


14,414,947

2,054,114


170,010,917


65,581,347

9,345,267

Leasing income




11,298,293


2,057,631

293,210


50,157,926


10,338,904

1,473,282

After-market services income 




14,116,184


7,956,088

1,133,733


41,364,974


36,110,901

5,145,762

Automobile trading income




263,821,645


1,202,198

171,312


1,256,429,781


6,116,392

871,579

Others




3,049,943


502,790

71,646


26,099,736


1,997,570

284,651

Operating cost and expenses:













Cost of revenue




304,638,147


23,260,308

3,314,567


1,400,985,230


78,844,658

11,235,274

Sales and marketing




9,854,441


3,375,602

481,019


34,546,132


10,909,363

1,554,572

General and administrative




34,682,695


45,196,454

6,440,443


111,319,960


122,290,803

17,426,300

Research and development




6,990,685


1,424,250

202,954


22,841,206


4,192,881

597,481

Net loss (gain) on contingent risk assurance liabilities




3,541,506


(7,110,545)

(1,013,245)


3,475,114


(32,385,904)

(4,614,954)

Net recovery on provision for credit losses




(66,945,232)


(74,429,953)

(10,606,183)


(105,260,489)


(203,759,529)

(29,035,501)

Impairment loss from goodwill




148,657,971


-

-


148,657,971


-

-

Total operation cost and expense




441,420,213


(8,283,884)

(1,180,445)


1,616,565,124


(19,907,728)

(2,836,828)














(Loss) income from operations




(87,782,094)


35,237,317

5,021,278


(44,883,566)


156,363,391

22,281,604

Interest income




19,481,911


25,742,760

3,668,314


58,981,302


76,001,320

10,830,101

Net gain on equity securities




7,038,386


2,237,825

318,888


15,439,734


7,217,751

1,028,521

Interest expense




(153,088)


-

-


(4,099,783)


-

-

Foreign exchange (loss) gain, net




(489,215)


(1,414,569)

(201,574)


2,346,525


(921,077)

(131,252)

Other income




21,806,106


3,053,224

435,081


29,404,718


8,470,829

1,207,083

Other expenses




(141,358)


(216,395)

(30,836)


(368,492)


(2,051,858)

(292,387)

Net (loss) income before income taxes




(40,239,352)


64,640,162

9,211,151


56,820,438


245,080,356

34,923,670

Income tax (expenses) benefits  




(8,847,190)


3,238,963

461,549


9,084,706


(1,151,608)

(164,103)

Net (loss) income




(49,086,542)


67,879,125

9,672,700


65,905,144


243,928,748

34,759,567

Net (loss) income attributable to Cango Inc.'s

shareholders




(49,086,542)


67,879,125

9,672,700


65,905,144


243,928,748

34,759,567

(Losses) earnings per ADS attributable to ordinary

shareholders:













Basic




(0.45)


0.66

0.09


0.52


2.34

0.33

Diluted




(0.45)


0.60

0.09


0.50


2.16

0.31

Weighted average ADS used to compute earnings

per ADS attributable to ordinary shareholders: 













Basic




109,587,726


103,486,998

103,486,998


125,710,975


104,346,709

104,346,709

Diluted




109,587,726


113,911,629

113,911,629


131,630,583


112,853,015

112,853,015














Other comprehensive income (loss), net of tax













Foreign currency translation adjustment




7,806,144


(41,774,075)

(5,952,758)


79,837,076


(13,046,330)

(1,859,087)














Total comprehensive (loss) income




(41,280,398)


26,105,050

3,719,942


145,742,220


230,882,418

32,900,480

Total comprehensive (loss) income attributable to

Cango Inc.'s shareholders




(41,280,398)


26,105,050

3,719,942


145,742,220


230,882,418

32,900,480

 

 

CANGO INC.
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data



 Three months ended September 30, 


 Nine months ended September 30, 



2023


2024


2023


2024



 (Unaudited) 


 (Unaudited) 

 (Unaudited) 


 (Unaudited) 


 (Unaudited) 

 (Unaudited) 



 RMB 


 RMB 

 US$ 


 RMB 


 RMB 

 US$ 












Net (loss) income


(49,086,542)


67,879,125

9,672,700


65,905,144


243,928,748

34,759,567












Add: Share-based compensation expenses


7,857,905


3,407,729

485,597


33,897,580


13,814,122

1,968,497

  Cost of revenue


444,748


170,312

24,269


1,920,626


637,320

90,817

  Sales and marketing


1,608,169


635,874

90,611


6,747,135


2,551,010

363,517

  General and administrative


5,427,332


2,569,932

366,212


23,710,996


10,369,108

1,477,586

  Research and development


377,656


31,611

4,505


1,518,823


256,684

36,577












Non-GAAP adjusted net (loss) income


(41,228,637)


71,286,854

10,158,297


99,802,724


257,742,870

36,728,064

Net (loss) income attributable to Cango Inc.'s

shareholders


(41,228,637)


71,286,854

10,158,297


99,802,724


257,742,870

36,728,064












Non-GAAP adjusted net (loss) income per ADS-

basic


(0.38)


0.69

0.10


0.79


2.47

0.35

Non-GAAP adjusted net (loss) income per ADS-

diluted


(0.38)


0.63

0.09


0.76


2.28

0.33












Weighted average ADS outstanding—basic


109,587,726


103,486,998

103,486,998


125,710,975


104,346,709

104,346,709

Weighted average ADS outstanding—diluted


109,587,726


113,911,629

113,911,629


131,630,583


112,853,015

112,853,015

 

 

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SOURCE Cango Inc.