Cango Inc. Reports Third Quarter 2022 Unaudited Financial Results
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 2022
SHANGHAI, Nov. 29, 2022 /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 2022.
Third Quarter 2022 Financial and Operational Highlights
Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "Within a complex external operating environment, COVID-19 resurgences continued to affect China's automotive industry. Despite these challenges, we delivered a solid performance in the third quarter with total revenues reaching RMB416.4 million, of which revenues from car trading transactions accounted for over 83.4%. The pandemic's ongoing impact together with favorable policies released in the last two quarters is reshaping the landscape of the domestic automotive industry. In light of evolving market trends and positive regulatory changes, we remained focused on our car trading transactions business and continued to elevate our one-stop platform service capabilities.
"In the third quarter, we made significant strides in upgrading our car transaction-related services for dealers and other automotive industry chain participants. Notably, we enhanced our 'Cango Haoche' APP with refined online product offerings and integrated after-market and financing services. The combination of tailored products and expanded vehicle inventory further improved our service capabilities as well as dealers' experience on our platform, reinforcing their stickiness. Furthermore, building on the success of 'Cango Haoche,' we officially launched our 'Cango U-Car' WeChat mini program, leveraging our long-time strengths to provide dealers with more convenient used car transaction services. As of September 30, 2022, 'Cango U-Car' had more than 3,000 registered dealers with increasing engagement.
"Looking ahead, given ongoing COVID-19 recurrences and the complex global macroeconomic environment, we will maintain our strategy focused on developing our new and used car businesses in parallel, creating value for OEMs and dealers and making car purchases simple and enjoyable," concluded Mr. Lin.
Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "Our third quarter performance showcases the resilience and strength of our car trading transactions business, even in a challenging environment. In addition to the advancements we made in our platform, we implemented additional cost optimization measures and continued our share repurchase programs, underscoring our confidence in Cango's sustainable future. Going forward, we will continue to exercise strict cost discipline and invest selectively as we strive to upgrade our platform and operations to capture growth opportunities in both the new and used car markets."
Third Quarter 2022 Financial Results
REVENUES
Total revenues in the third quarter of 2022 were RMB416.4 million (US$58.5 million) compared with RMB800.6 million in the same period of 2021. Revenues from car trading transactions in the third quarter of 2022 were RMB347.2 million (US$48.8 million), or 83.4% of total revenues in the third quarter of 2022, compared with RMB429.2 million in the same period of 2021.
OPERATING COST AND EXPENSES
Total operating cost and expenses in the third quarter of 2022 were RMB608.8 million (US$85.6 million) compared with RMB839.6 million in the same period of 2021.
LOSS FROM OPERATIONS
Loss from operations in the third quarter of 2022 was RMB192.3 million (US$27.0 million), compared with RMB39.0 million in the same period of 2021.
NET LOSS
Net loss in the third quarter of 2022 was RMB130.3 million (US$18.3 million). Non-GAAP adjusted net loss in the third quarter of 2022 was RMB110.0 million (US$15.5 million). Non-GAAP adjusted net loss excludes the impact of share-based compensation expenses. For further information, see "Use of Non-GAAP Financial Measure."
NET LOSS PER ADS
Basic and diluted net loss per American Depositary Share (ADS) in the third quarter of 2022 were both RMB0.96 (US$0.13). Non-GAAP adjusted basic and diluted net loss per ADS in the third quarter of 2022 were both RMB0.81 (US$0.11). Each ADS represents two Class A ordinary shares of the Company.
BALANCE SHEET
As of September 30, 2022, the Company had cash and cash equivalents of RMB745.0 million (US$104.7 million), compared with RMB1,280.7 million as of June 30, 2022.
As of September 30, 2022, the Company had short-term investments of RMB2,698.0 million (US$379.3 million), compared with RMB2,116.2 million as of June 30, 2022.
Business Outlook
For the fourth quarter of 2022, the Company expects total revenues to be between RMB450 million and RMB500 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
Conference Call Information
The Company's management will hold a conference call on Tuesday, November 29, 2022, at 8:00 P.M. Eastern Time or Wednesday, November 30, 2022, 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 December 6, 2022, by dialing the following numbers:
International:
+1-412-317-0088
United States Toll Free:
+1-877-344-7529
Access Code:
9238628
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 analytical tools. 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 RMB7.1135 to US$1.00, the noon buying rate in effect on September 30, 2022, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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
Twitter: https://twitter.com/Cango_Group
Emilie Wu
The Piacente Group, Inc.
Tel: +86 21 6039 8363
Email: ir@cangoonline.com
CANGO INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data）
As of December 31, 2021
As of September 30, 2022
RMB
RMB
US$
ASSETS:
Current assets:
Cash and cash equivalents
1,434,806,922
744,956,280
104,724,296
Restricted cash - current
61,293,114
52,870,726
7,432,449
Short-term investments
2,598,935,704
2,698,017,297
379,281,268
Accounts receivable, net
223,544,396
130,712,532
18,375,277
Finance lease receivables - current, net
1,414,164,625
978,680,772
137,580,765
Financing receivables, net
62,296,261
93,389,953
13,128,552
Short-term contract asset
829,940,692
546,425,221
76,815,242
Prepayments and other current assets
982,948,637
860,436,374
120,958,231
Total current assets
7,607,930,351
6,105,489,155
858,296,080
Non-current assets:
Restricted cash - non-current
1,114,180,729
803,007,376
112,884,990
Goodwill
148,657,971
148,657,971
20,898,007
Property and equipment, net
19,545,933
16,020,074
2,252,066
Intangible assets
45,931,544
46,970,305
6,602,981
Long-term contract asset
495,456,805
247,229,955
34,755,037
Deferred tax assets
474,570,361
624,243,828
87,754,808
Finance lease receivables - non-current, net
1,029,262,174
385,740,717
54,226,572
Other non-current assets
11,568,164
10,893,127
1,531,332
Total non-current assets
3,339,173,681
2,282,763,353
320,905,793
TOTAL ASSETS
10,947,104,032
8,388,252,508
1,179,201,873
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debts
579,776,131
208,988,733
29,379,171
Long-term debts—current
938,014,362
730,188,493
102,648,273
Accrued expenses and other current liabilities
719,035,377
428,536,775
60,242,750
Risk assurance liabilities
699,022,914
484,174,938
68,064,235
Income tax payable
481,854,105
328,492,069
46,178,684
Total current liabilities
3,417,702,889
2,180,381,008
306,513,113
Non-current liabilities:
Long-term debts
486,371,672
125,623,636
17,659,891
Deferred tax liability
51,471,040
10,724,133
1,507,575
Other non-current liabilities
991,610
177,848,512
25,001,548
Total non-current liabilities
538,834,322
314,196,281
44,169,014
Total liabilities
3,956,537,211
2,494,577,289
350,682,127
Shareholders' equity
Ordinary shares
204,260
204,260
28,714
Treasury shares
(485,263,213)
(546,266,092)
(76,792,872)
Additional paid-in capital
4,671,769,821
4,803,102,873
675,209,513
Accumulated other comprehensive income
(187,517,110)
110,877,375
15,586,895
Retained earnings
2,991,373,063
1,525,756,803
214,487,496
Total Cango Inc.'s equity
6,990,566,821
5,893,675,219
828,519,746
Total shareholders' equity
6,990,566,821
5,893,675,219
828,519,746
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
10,947,104,032
8,388,252,508
1,179,201,873
CANGO INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data)
Three months ended September 30,
Nine months ended September 30,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
Revenues
800,634,866
416,449,708
58,543,573
2,871,167,788
1,493,335,164
209,929,734
Loan facilitation income and other related income
266,515,911
14,710,212
2,067,929
981,553,412
135,208,426
19,007,300
Leasing income
60,778,371
34,710,562
4,879,534
198,614,442
127,550,654
17,930,787
After-market services income
42,658,080
19,381,025
2,724,541
157,053,595
55,704,269
7,830,782
Automobile trading income
429,200,614
347,247,512
48,815,282
1,523,310,471
1,165,160,983
163,795,738
Others
1,481,890
400,397
56,287
10,635,868
9,710,832
1,365,127
Operating cost and expenses:
Cost of revenue
610,508,451
388,703,295
54,643,044
2,077,342,112
1,348,346,307
189,547,523
Sales and marketing
46,793,061
17,888,406
2,514,712
165,522,339
113,531,814
15,960,050
General and administrative
64,038,373
57,812,378
8,127,135
190,087,348
233,366,364
32,806,124
Research and development
17,423,683
10,172,951
1,430,091
46,656,813
37,516,243
5,273,950
Net loss on risk assurance liabilities
55,504,598
84,952,664
11,942,456
113,147,363
237,018,349
33,319,512
Provision for credit losses
45,373,233
49,259,212
6,924,750
144,641,366
259,114,042
36,425,675
Total operation cost and expense
839,641,399
608,788,906
85,582,188
2,737,397,341
2,228,893,119
313,332,834
Income (Loss) from operations
(39,006,533)
(192,339,198)
(27,038,615)
133,770,447
(735,557,955)
(103,403,100)
Interest income, net
14,853,381
14,619,894
2,055,232
37,222,389
27,120,865
3,812,591
Net gain (loss) on equity securities
(447,536,895)
4,285,558
602,454
(291,048,883)
(13,303,787)
(1,870,217)
Interest expense
(8,320,463)
(3,107,158)
(436,797)
(9,133,705)
(11,693,127)
(1,643,794)
Foreign exchange gain (loss), net
(51,473)
4,066,308
571,633
(786,605)
7,318,248
1,028,783
Other income
25,465,800
3,775,871
530,804
36,642,145
41,312,897
5,807,675
Other expenses
(107,905)
(964,807)
(135,630)
(6,587,727)
(1,788,017)
(251,355)
Net income (loss) before income taxes
(454,704,088)
(169,663,532)
(23,850,919)
(99,921,939)
(686,590,876)
(96,519,417)
Income tax expenses
38,166,368
39,338,402
5,530,105
(32,749,453)
134,318,905
18,882,253
Net income (loss)
(416,537,720)
(130,325,130)
(18,320,814)
(132,671,392)
(552,271,971)
(77,637,164)
Net income (loss) attributable to Cango Inc.'s shareholders
(416,537,720)
(130,325,130)
(18,320,814)
(132,671,392)
(552,271,971)
(77,637,164)
Earnings (loss) per ADS attributable to ordinary shareholders:
Basic
(2.88)
(0.96)
(0.13)
(0.91)
(4.01)
(0.56)
Diluted
(2.88)
(0.96)
(0.13)
(0.91)
(4.01)
(0.56)
Basic
144,470,649
136,442,760
136,442,760
146,155,678
137,751,682
137,751,682
Diluted
144,470,649
136,442,760
136,442,760
146,155,678
137,751,682
137,751,682
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment
(5,969,745)
141,603,735
19,906,338
(37,828,334)
298,394,485
41,947,633
Total comprehensive income (loss)
(422,507,465)
11,278,605
1,585,524
(170,499,726)
(253,877,486)
(35,689,531)
Total comprehensive income (loss) attributable to Cango Inc.'s shareholders
(422,507,465)
11,278,605
1,585,524
(170,499,726)
(253,877,486)
(35,689,531)
CANGO INC.
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data)
Three months ended September 30,
Nine months ended September 30,
2021
2022
2021
2022
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
RMB
RMB
US$
RMB
RMB
US$
Net income (loss)
(416,537,720)
(130,325,130)
(18,320,814)
(132,671,392)
(552,271,971)
(77,637,164)
Add: Share-based compensation expenses
24,011,050
20,373,774
2,864,100
64,444,353
139,445,782
19,602,978
Cost of revenue
1,512,966
1,318,415
185,340
2,967,623
3,318,808
466,551
Sales and marketing
4,049,203
4,367,008
613,904
11,570,258
11,140,237
1,566,070
General and administrative
17,209,292
13,700,843
1,926,034
46,888,274
122,108,649
17,165,762
Research and development
1,239,589
987,508
138,822
3,018,198
2,878,088
404,595
Non-GAAP adjusted net income (loss)
(392,526,670)
(109,951,356)
(15,456,714)
(68,227,039)
(412,826,189)
(58,034,186)
Net income (loss) attributable to Cango Inc.'s shareholders
(392,526,670)
(109,951,356)
(15,456,714)
(68,227,039)
(412,826,189)
(58,034,186)
Non-GAAP adjusted net income (loss) per ADS-basic
(2.72)
(0.81)
(0.11)
(0.47)
(3.00)
(0.42)
Non-GAAP adjusted net income (loss) per ADS-diluted
(2.72)
(0.81)
(0.11)
(0.47)
(3.00)
(0.42)
Weighted average ADS outstanding—basic
144,470,649
136,442,760
136,442,760
146,155,678
137,751,682
137,751,682
Weighted average ADS outstanding—diluted
144,470,649
136,442,760
136,442,760
146,155,678
137,751,682
137,751,682
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SOURCE Cango Inc.
