Cango Inc. Reports Fourth Quarter and Full Year 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 fourth quarter and full year of 2022
SHANGHAI, March 9, 2023 /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 fourth quarter and full year of 2022.
Fourth Quarter 2022 Financial and Operational Highlights
Full Year 2022 Financial and Operational Highlights
Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "Despite facing numerous headwinds throughout the year, Cango successfully carried out a significant transformation during 2022. Our automotive transaction service platform covering both new and used car markets has taken shape, and excellent market feedback and increasing market demand have already validated its effectiveness.
"Our platform's user base continued to grow with increasing engagement. As of December 31, 2022, 'Cango Haoche,' our new car trading platform, engaged 10,112 dealers, up 58% year-over-year. For full-year 2022, accumulated page views and unique visitors on our 'Cango Haoche' APP exceeded 660,000 and 57,000, respectively. In addition, we further extended our cooperation with OEMs and car suppliers in the fourth quarter, solidifying our strong position with abundant vehicle sources. On the used car front, by leveraging our advantages such as abundant used car sources and one-on-one matching services, we cultivated dealers' platform usage habits and improved their platform stickiness. As of the end of 2022, 'Cango U-Car,' our used car trading platform, had 4,492 registered dealers with increasing stickiness.
"Although some uncertainty lingers on the near-term horizon, as we move through 2023, we will continue to accelerate our digitalization process and further standardize our products and services across the entire transaction chain. Leveraging Cango's valuable market know-how and solid customer base accumulated over the past ten years, we will forge ahead alongside our dealer partners for the next decade and beyond, propelling their footsteps toward success," concluded Mr. Lin.
Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "Our fourth quarter performance once again illustrated the strength and resilience of our strategy and business model. We are confident that our refined operational efficiency and healthy balance sheet have positioned us to fully embrace new opportunities emerging from the automotive industry's broad recovery. Looking ahead, we will continue to invest wisely to advance our capabilities and drive long-term value for our shareholders."
Fourth Quarter 2022 Financial Results
REVENUES
Total revenues in the fourth quarter of 2022 were RMB487.1 million (US$70.6 million) compared with RMB1,050.5 million in the same period of 2021. Revenues from car trading transactions in the fourth quarter of 2022 were RMB431.1 million (US$62.5 million), or 88.5% of total revenues in the fourth quarter of 2022, compared with RMB703.9 million in the same period of 2021.
OPERATING COST AND EXPENSES
Total operating cost and expenses in the fourth quarter of 2022 were RMB698.7 million (US$101.3 million) compared with RMB1,207.6 million in the same period of 2021.
LOSS FROM OPERATIONS
Loss from operations in the fourth quarter of 2022 was RMB211.6 million (US$30.7 million), compared with RMB157.0 million in the same period of 2021.
NET LOSS
Net loss in the fourth quarter of 2022 was RMB558.9 million (US$81.0 million). Non-GAAP adjusted net loss in the fourth quarter of 2022 was RMB539.9 million (US$78.3 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 fourth quarter of 2022 were both RMB4.13 (US$0.60). Non-GAAP adjusted basic and diluted net loss per ADS in the fourth quarter of 2022 were both RMB3.99 (US$0.58). Each ADS represents two Class A ordinary shares of the Company.
BALANCE SHEET
As of December 31, 2022, the Company had cash and cash equivalents of RMB378.9 million (US$54.9 million), compared with RMB745.0 million as of September 30, 2022.
As of December 31, 2022, the Company had short-term investments of RMB1,941.4 million (US$281.5 million), compared with RMB2,698.0 million as of September 30, 2022.
Full Year 2022 Financial Results
REVENUES
Total revenues in the full year of 2022 were RMB1,980.5 million (US$287.1 million) compared with RMB3,921.7 million in the full year of 2021. Revenues from car trading transactions in the full year of 2022 were RMB1,596.3 million (US$231.4 million), or 80.6% of total revenues in the full year of 2022, compared with RMB2,227.2 million in the full year of 2021.
OPERATING COST AND EXPENSES
Total operating cost and expenses in the full year of 2022 were RMB2,927.6 million (US$424.5 million) compared with RMB3,945.0 million in the full year of 2021.
LOSS FROM OPERATIONS
Loss from operations in the full year of 2022 was RMB947.1 million (US$137.3 million), compared with RMB23.2 million in the full year of 2021. This increase in loss from operations was mainly due to loss on risk assurance liabilities and provision for credit losses, as well as the decrease in total revenues and gross profit margin.
NET LOSS
Net loss in the full year of 2022 was RMB1,111.2 million (US$161.1 million). Non-GAAP adjusted net loss in the full year of 2022 was RMB952.7 million (US$138.1 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 ADS in the full year of 2022 were both RMB8.11 (US$1.18). Non-GAAP adjusted basic and diluted net loss per ADS in the full year of 2022 were both RMB6.95 (US$1.01). Each ADS represents two Class A ordinary shares of the Company.
Business Outlook
For the first quarter of 2023, 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
Pursuant to the share repurchase program announced on April 22, 2022, the Company had repurchased 2.4 million ADSs with cash in the aggregate amount of approximately US$5.2 million up to December 31, 2022.
Conference Call Information
The Company's management will hold a conference call on Thursday, March 9, 2023, at 8:00 P.M. Eastern Time or Friday, March 10, 2023, 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 March 16, 2023, by dialing the following numbers:
International:
+1-412-317-0088
United States Toll Free:
+1-877-344-7529
Access Code:
4879650
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 RMB6.8972 to US$1.00, the noon buying rate in effect on December 30, 2022, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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$"), except for number of shares and per share data）
As of December 31, 2021
As of December 31, 2022
RMB
RMB
US$
ASSETS:
Current assets:
Cash and cash equivalents
1,434,806,922
378,917,318
54,937,847
Restricted cash - current
61,293,114
152,688,510
22,137,753
Short-term investments
2,598,935,704
1,941,432,848
281,481,304
Accounts receivable, net
223,544,396
266,836,951
38,687,721
Finance lease receivables - current, net
1,414,164,625
799,438,656
115,907,710
Financing receivables, net
62,296,261
73,818,025
10,702,608
Short-term contract asset
829,940,692
500,389,654
72,549,680
Prepayments and other current assets
982,948,637
1,356,822,028
196,720,702
Total current assets
7,607,930,351
5,470,343,990
793,125,325
Non-current assets:
Restricted cash - non-current
1,114,180,729
750,877,306
108,866,976
Goodwill
148,657,971
148,657,971
21,553,380
Property and equipment, net
19,545,933
14,689,988
2,129,848
Intangible assets
45,931,544
48,317,878
7,005,434
Long-term contract asset
495,456,805
173,457,178
25,148,927
Deferred tax assets
474,570,361
62,497,781
9,061,326
Finance lease receivables - non-current, net
1,029,262,174
260,049,967
37,703,701
Operating lease right-of-use assets
-
80,726,757
11,704,280
Other non-current assets
11,568,164
6,633,517
961,770
Total non-current assets
3,339,173,681
1,545,908,343
224,135,642
TOTAL ASSETS
10,947,104,032
7,016,252,333
1,017,260,967
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debts
579,776,131
349,299,134
50,643,614
Long-term debts—current
938,014,362
565,143,340
81,938,082
Accrued expenses and other current liabilities
719,035,377
890,836,699
129,159,184
Risk assurance liabilities
699,022,914
402,303,421
58,328,513
Income tax payable
481,854,105
313,406,680
45,439,697
Short-term lease liabilities
-
9,913,073
1,437,260
Total current liabilities
3,417,702,889
2,530,902,347
366,946,350
Non-current liabilities:
Long-term debts
486,371,672
75,869,353
11,000,022
Deferred tax liability
51,471,040
10,724,133
1,554,853
Long-term operating lease liabilities
-
76,533,208
11,096,272
Other non-current liabilities
991,610
314,287
45,567
Total non-current liabilities
538,834,322
163,440,981
23,696,714
Total liabilities
3,956,537,211
2,694,343,328
390,643,064
Shareholders' equity
Ordinary shares
204,260
204,260
29,615
Treasury shares
(485,263,213)
(559,005,216)
(81,048,138)
Additional paid-in capital
4,671,769,821
4,805,240,472
696,694,379
Accumulated other comprehensive income
(187,517,110)
66,359,902
9,621,281
Retained earnings
2,991,373,063
9,109,587
1,320,766
Total Cango Inc.'s equity
6,990,566,821
4,321,909,005
626,617,903
Total shareholders' equity
6,990,566,821
4,321,909,005
626,617,903
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
10,947,104,032
7,016,252,333
1,017,260,967
CANGO INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data)
For the three months ended
For the years ended
December 31, 2021
December 31, 2022
December 31, 2021
December 31, 2022
RMB
RMB
US$
RMB
RMB
US$
Revenues
1,050,548,618
487,118,297
70,625,514
3,921,716,406
1,980,453,461
287,138,761
Loan facilitation income and other related income
252,002,800
11,220,332
1,626,795
1,233,556,212
146,428,758
21,230,174
Leasing income
52,680,663
27,971,392
4,055,471
251,295,105
155,522,046
22,548,577
After-market services income
36,733,261
15,752,500
2,283,898
193,786,856
71,456,769
10,360,258
Automobile trading income
703,861,083
431,145,715
62,510,253
2,227,171,554
1,596,306,698
231,442,716
Others
5,270,811
1,028,358
149,097
15,906,679
10,739,190
1,557,036
Operating cost and expenses:
Cost of revenue
880,667,760
481,743,466
69,846,237
2,958,009,872
1,830,089,773
265,338,075
Sales and marketing
73,810,746
19,247,674
2,790,650
239,333,085
132,779,488
19,251,216
General and administrative
86,092,093
66,178,999
9,595,053
276,179,441
299,545,363
43,429,995
Research and development
23,621,268
8,442,599
1,224,062
70,278,081
45,958,842
6,663,406
Net loss (gain) on risk assurance liabilities
84,603,086
62,845,054
9,111,676
197,750,449
299,863,403
43,476,107
Provision for credit losses and other assets
58,773,728
60,245,674
8,734,802
203,415,094
319,359,716
46,302,806
Total operation cost and expense
1,207,568,681
698,703,466
101,302,480
3,944,966,022
2,927,596,585
424,461,605
Income (Loss) from operations
(157,020,063)
(211,585,169)
(30,676,966)
(23,249,616)
(947,143,124)
(137,322,844)
Interest income, net
7,623,469
16,611,787
2,408,483
26,373,471
43,732,652
6,340,639
Net gain (loss) on equity securities
259,584,974
3,493,202
506,467
(12,991,522)
(9,810,585)
(1,422,401)
Interest expense
(5,347,490)
(5,116,136)
(741,770)
(14,481,195)
(16,809,263)
(2,437,114)
Foreign exchange gain (loss), net
2,138,005
(1,400,017)
(202,983)
1,351,400
5,918,231
858,063
Other income
5,269,444
10,753,821
1,559,157
41,911,589
52,066,718
7,548,965
Other expenses
(18,106)
(677,955)
(98,294)
(6,605,833)
(2,465,972)
(357,532)
Net income (loss) before income taxes
112,230,233
(187,920,467)
(27,245,906)
12,308,294
(874,511,343)
(126,792,224)
Income tax expenses
11,896,807
(371,015,445)
(53,792,183)
(20,852,646)
(236,696,540)
(34,317,772)
Net income (loss)
124,127,040
(558,935,912)
(81,038,089)
(8,544,352)
(1,111,207,883)
(161,109,996)
Net income (loss) attributable to Cango Inc.'s shareholders
124,127,040
(558,935,912)
(81,038,089)
(8,544,352)
(1,111,207,883)
(161,109,996)
Earnings (loss) per ADS attributable to ordinary shareholders:
Basic
0.88
(4.13)
(0.60)
(0.06)
(8.11)
(1.18)
Diluted
0.87
(4.13)
(0.60)
(0.06)
(8.11)
(1.18)
Basic
141,358,210
135,295,444
135,295,444
144,946,453
137,042,445
137,042,445
Diluted
142,105,618
135,295,444
135,295,444
144,946,453
137,042,445
137,042,445
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment
(34,302,349)
97,086,262
14,076,185
(72,130,683)
253,877,012
36,808,707
Total comprehensive income (loss)
89,824,691
(461,849,650)
(66,961,904)
(80,675,035)
(857,330,871)
(124,301,289)
Total comprehensive income (loss) attributable to Cango Inc.'s
shareholders
89,824,691
(461,849,650)
(66,961,904)
(80,675,035)
(857,330,871)
(124,301,289)
CANGO INC.
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data)
For the three months ended
For the years ended
December 31, 2021
December 31, 2022
December 31, 2021
December 31, 2022
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
RMB
RMB
US$
RMB
RMB
US$
Net income (loss)
124,127,040
(558,935,912)
(81,038,089)
(8,544,352)
(1,111,207,883)
(161,109,996)
Add: Share-based compensation expenses
23,190,482
19,076,738
2,765,867
87,634,835
158,522,520
22,983,605
Cost of revenue
1,959,861
841,248
121,969
4,927,484
4,160,056
603,150
Sales and marketing
3,740,843
3,551,173
514,872
15,311,101
14,691,410
2,130,054
General and administrative
16,147,170
13,780,228
1,997,944
63,035,444
135,888,877
19,702,035
Research and development
1,342,608
904,089
131,081
4,360,806
3,782,177
548,364
Non-GAAP adjusted net income (loss)
147,317,522
(539,859,174)
(78,272,222)
79,090,483
(952,685,363)
(138,126,391)
Net income (loss) attributable to Cango Inc.'s shareholders
147,317,522
(539,859,174)
(78,272,222)
79,090,483
(952,685,363)
(138,126,391)
Non-GAAP adjusted net income (loss) per ADS-basic
1.04
(3.99)
(0.58)
0.55
(6.95)
(1.01)
Non-GAAP adjusted net income (loss) per ADS-diluted
1.04
(3.99)
(0.58)
0.54
(6.95)
(1.01)
Weighted average ADS outstanding—basic
141,358,210
135,295,444
135,295,444
144,946,453
137,042,445
137,042,445
Weighted average ADS outstanding—diluted
142,105,618
135,295,444
135,295,444
146,867,997
137,042,445
137,042,445
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SOURCE Cango Inc.
