Cango Inc. Reports Second Quarter 2024 Unaudited Financial Results
SHANGHAI, Aug. 29, 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 second quarter of 2024.
Second Quarter 2024 Financial and Operational Highlights
-- Total revenues were RMB45.1 million (US$6.2 million), compared with
RMB675.4 million in the same period of 2023. Income from operations was
RMB47.0 million (US$6.5 million) for the three months ended June 30,
2024, compared with a loss of RMB8.9 million in the same period last
year. Net income was RMB86.0 million (US$11.8 million) for the three
months ended June 30, 2024, an increase of 137.5% from RMB36.2 million
in the same period last year.
-- The total outstanding balance of financing transactions the Company
facilitated was RMB6.2 billion (US$850.0 million) as of June 30, 2024.
Our credit risk exposure has decreased to a lower level, of which only
RMB2.7 billion (US$ 375.0 million) of outstanding balance of loans where
the Company bears credit risks 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 2.93% and 1.57%, respectively, as of
June 30, 2024, compared with 2.87% and 1.51%, respectively, as of March
31, 2024.
-- Total balance of cash and cash equivalents and short-term investments
increased by RMB207.1 million (US$28.5 million) compared with that as of
March 31, 2024.
Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "China's automotive market remained sluggish in the second quarter, presenting significant challenges for the industry. In response to these challenges, we reinforced our financial stability through disciplined expense management and cost-efficiency measures while seizing the used car market's immense potential and opportunities. Over the past quarter, we focused on enhancing the competitiveness of 'Cango U-car' by ensuring a consistent supply of high-quality vehicles, optimizing dealer experiences and supply chain management, and improving the convenience and security of cross-regional deliveries."
"Beyond 'Cango U-car,' we made significant strides in cross-border used car transactions during the quarter. Since its launch in March 2024, our international used car website, Autocango.com, has quickly gained traction among global audiences. We significantly expanded its market coverage as well as its range of product and service offerings in the second quarter. To date, its premium services and vast offering of over 85,000 high-quality used car SKUs have attracted over 180,000 visits with more than 20,000 registered users across 207 countries and regions worldwide. Furthermore, our streamlined, asset-light, and traffic-focused approach enables us to control operating costs while creating value. Ultimately, we aim to position Autocango.com as the premier gateway for exporting Chinese used cars. Moving forward, Cango will continue to deepen its partnership with overseas markets, further optimizing our trading functionality and services to better serve car buyers both in and outside China," concluded Mr. Lin.
Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "Despite market challenges, we maintained robust financial stability through disciplined expense management and cost-efficiency measures. Our net income for the quarter surged by 137.5% compared to the same period last year, and our cash position remains strong. As we enter the second half of the year, we will continue to enforce stringent cost control and risk management strategies, while actively exploring new initiatives leveraging Cango's extensive industry expertise."
Second Quarter 2024 Financial Results
REVENUES
Total revenues in the second quarter of 2024 were RMB45.1 million (US$6.2 million) compared with RMB675.4 million in the same period of 2023. Guarantee income, which represented the fee income earned on the non-contingent aspect of a guarantee, was RMB20.9 million (US$2.9 million) in the second 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 second quarter of 2024 decreased to RMB26.5
million (US$3.7 million) from RMB615.8 million in the same period of
2023. As a percentage of total revenues, cost of revenue in the second
quarter of 2024 was 58.8% compared with 91.2% in the same period of
2023.
-- Sales and marketing expenses in the second quarter of 2024 decreased to
RMB4.0 million (US$0.5 million) from RMB12.2 million in the same period
of 2023.
-- General and administrative expenses in the second quarter of 2024 were
RMB39.2 million (US$5.4 million) compared with RMB36.8 million in the
same period of 2023.
-- Research and development expenses in the second quarter of 2024
decreased to RMB1.7 million (US$0.2 million) from RMB7.7 million in the
same period of 2023.
-- Net gain on contingent risk assurance liabilities in the second quarter
of 2024 was RMB10.3 million (US$1.4 million) compared with a net loss of
RMB1.6 million in the same period of 2023.
-- Net recovery on provision for credit losses in the second quarter of
2024 was RMB63.0 million (US$8.7 million) compared with a net loss of
RMB10.2 million in the same period of 2023.
INCOME FROM OPERATIONS
Income from operations in the second quarter of 2024 was RMB47.0 million (US$6.5 million), compared with a loss of RMB8.9 million in the same period of 2023.
NET INCOME
Net income in the second quarter of 2024 was RMB86.0 million (US$11.8 million). Non-GAAP adjusted net income in the second quarter of 2024 was RMB90.7 million (US$12.5 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 second quarter of 2024 were RMB0.83 (US$0.11) and RMB0.76 (US$0.10), respectively. Non-GAAP adjusted basic and diluted net income per ADS in the second quarter of 2024 were RMB0.87 (US$0.12) and RMB0.80 (US$0.11), respectively. Each ADS represents two Class A ordinary shares of the Company.
BALANCE SHEET
-- As of June 30, 2024, the Company had cash and cash equivalents of
RMB949.5 million (US$130.6 million), compared with RMB1.2 billion as of
March 31, 2024.
-- As of June 30, 2024, the Company had short-term investments of RMB2.7
billion (US$376.5 million), compared with RMB2.3 billion as of March 31,
2024.
Business Outlook
For the third quarter of 2024, the Company expects total revenues to be between RMB20 million and RMB25 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 840,838 ADSs with cash in the aggregate amount of approximately US$1.5 million up to August 16, 2024.
Conference Call Information
The Company's management will hold a conference call on Thursday, August 29, 2024, at 9:00 P.M. Eastern Time or Friday, August 30, 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 September 5, 2024 by dialing the following numbers:
International: +1-412-317-0088
United States Toll Free: +1-877-344-7529
Access Code: 2443056
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 RMB7.2672 to US$1.00, the noon buying rate in effect on June 28, 2024, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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
Twitter: https://twitter.com/Cango_Group
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$"), except for number of shares and per share data
?
As of December
31,
2023
As of June 30,
2024
RMB RMB US$
ASSETS:
Current assets:
Cash and cash equivalents 1,020,604,191 949,450,190 130,648,694
Restricted cash - current - bank deposits held for short-term investments 1,670,006,785
Restricted cash - current 14,334,937 13,672,966 1,881,463
Short-term investments 635,070,394 2,735,968,872 376,481,846
Accounts receivable, net 64,791,709 40,068,078 5,513,551
Finance lease receivables - current, net 200,459,435 78,607,773 10,816,790
Financing receivables, net 29,522,035 14,629,276 2,013,055
Short-term contract asset 170,623,200 65,299,784 8,985,549
Prepayments and other current assets 78,606,808 62,519,984 8,603,036
Total current assets 3,884,019,494 3,960,216,923 544,943,984
Non-current assets:
Restricted cash - non-current 583,380,417 489,818,652 67,401,290
Property and equipment, net 8,239,037 7,061,030 971,630
Intangible assets 48,373,192 47,865,203 6,586,471
Long-term contract asset 36,310,769 498,307 68,569
Finance lease receivables - non-current, net 36,426,617 9,937,420 1,367,435
Operating lease right-of-use assets 47,154,944 45,082,195 6,203,516
Other non-current assets 4,705,544 4,056,835 558,239
Total non-current assets 764,590,520 604,319,642 83,157,150
TOTAL ASSETS 4,648,610,014 4,564,536,565 628,101,134
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debts 39,071,500
Long-term debts-current 926,237 715,342 98,434
Accrued expenses and other current liabilities 206,877,626 154,492,866 21,258,925
Deferred guarantee income 86,218,888 35,052,488 4,823,383
Contingent risk assurance liabilities 125,140,991 51,974,769 7,151,966
Income tax payable 311,904,279 314,347,710 43,255,684
Short-term lease liabilities 7,603,380 7,536,210 1,037,017
Total current liabilities 777,742,901 564,119,385 77,625,409
Non-current liabilities:
Long-term debts 712,023 650,253 89,478
Deferred tax liability 10,724,133 10,724,133 1,475,690
Long-term operating lease liabilities 42,228,435 41,861,689 5,760,360
Other non-current liabilities 226,035 142,603 19,623
Total non-current liabilities 53,890,626 53,378,678 7,345,151
Total liabilities 831,633,527 617,498,063 84,970,560
Shareholders' equity
Ordinary shares 204,260 204,260 28,107
Treasury shares (773,130,748) (780,064,771) (107,340,485)
Additional paid-in capital 4,813,679,585 4,745,898,255 653,057,334
Accumulated other comprehensive income 111,849,166 140,576,911 19,344,027
Retained earnings (335,625,776) (159,576,153) (21,958,409)
Total Cango Inc.'s equity 3,816,976,487 3,947,038,502 543,130,574
Total shareholders' equity 3,816,976,487 3,947,038,502 543,130,574
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,648,610,014 4,564,536,565 628,101,134
CANGO INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data)
Three months ended June 30 Six months ended June 30
2023 2024 2023 2024
RMB RMB US$ RMB RMB US$
Revenues 675,430,076 45,079,736 6,203,178 1,218,043,439 109,502,230 15,068,008
Loan facilitation income and other related income 13,957,481 1,669,748 229,765 16,272,881 15,490,770 2,131,601
Guarantee income 55,875,460 20,906,819 2,876,874 120,004,206 51,166,400 7,040,731
Leasing income 16,645,952 3,341,561 459,814 38,859,633 8,281,273 1,139,541
After-market services income 10,529,314 16,517,025 2,272,818 27,248,790 28,154,813 3,874,231
Automobile trading income 562,758,493 1,469,154 202,162 992,608,136 4,914,194 676,216
Others 15,663,376 1,175,429 161,744 23,049,793 1,494,780 205,688
Operating cost and expenses:
Cost of revenue 615,829,103 26,525,482 3,650,028 1,096,347,083 55,584,350 7,648,661
Sales and marketing 12,153,129 3,985,488 548,421 24,691,691 7,533,761 1,036,680
General and administrative 36,834,735 39,170,818 5,390,084 76,637,265 77,094,349 10,608,535
Research and development 7,748,158 1,670,526 229,872 15,850,521 2,768,631 380,976
Net loss (gain) on contingent risk assurance liabilities 1,556,164 (10,257,113) (1,411,426) (66,392) (25,275,359) (3,478,005)
Provision (net recovery on provision) for credit losses 10,238,843 (62,990,492) (8,667,780) (38,315,257) (129,329,576) (17,796,342)
Total operation cost and expense 684,360,132 (1,895,291) (260,801) 1,175,144,911 (11,623,844) (1,599,495)
(Loss) income from operations (8,930,056) 46,975,027 6,463,979 42,898,528 121,126,074 16,667,503
Interest income 20,718,511 33,754,595 4,644,787 39,499,391 50,258,560 6,915,808
Net gain (loss) on equity securities 4,668,993 (6,004,598) (826,260) 8,401,348 4,979,926 685,261
Interest expense (1,652,610) (3,946,695)
Foreign exchange gain, net 3,820,047 361,803 49,786 2,835,740 493,492 67,907
Other income 3,138,715 4,585,054 630,924 7,598,612 5,417,605 745,487
Other expenses (96,249) (1,300,073) (178,896) (227,134) (1,835,463) (252,568)
Net income before income taxes 21,667,351 78,371,808 10,784,320 97,059,790 180,440,194 24,829,398
Income tax expenses (benefits) 14,559,258 7,651,029 1,052,817 17,931,896 (4,390,571) (604,163)
Net income 36,226,609 86,022,837 11,837,137 114,991,686 176,049,623 24,225,235
Net income attributable to Cango Inc.'s shareholders 36,226,609 86,022,837 11,837,137 114,991,686 176,049,623 24,225,235
Earnings per ADS attributable to ordinary shareholders:
Basic 0.27 0.83 0.11 0.86 1.68 0.23
Diluted 0.26 0.76 0.10 0.82 1.56 0.21
Weighted average ADS used to compute earnings per
ADS attributable to ordinary shareholders:
Basic 133,052,781 104,041,560 104,041,560 133,906,218 104,781,289 104,781,289
Diluted 138,366,712 113,656,131 113,656,131 139,610,743 112,790,662 112,790,662
Other comprehensive income, net of tax
Foreign currency translation adjustment 78,051,511 7,832,817 1,077,831 72,030,932 28,727,745 3,953,069
Total comprehensive income 114,278,120 93,855,654 12,914,968 187,022,618 204,777,368 28,178,304
Total comprehensive income attributable to Cango Inc.'s 114,278,120 93,855,654 12,914,968 187,022,618 204,777,368 28,178,304
shareholders
CANGO INC.
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data
Three months ended June 30 Six months ended June 30
2023 2024 2023 2024
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB RMB US$ RMB RMB US$
Net income 36,226,609 86,022,837 11,837,137 114,991,686 176,049,623 24,225,235
Add: Share-based compensation expenses 11,980,577 4,688,971 645,224 26,039,675 10,406,393 1,431,967
Cost of revenue 728,462 212,617 29,257 1,475,878 467,008 64,262
Sales and marketing 2,345,570 868,477 119,506 5,138,966 1,915,136 263,531
General and administrative 8,376,396 3,382,804 465,490 18,283,664 7,799,176 1,073,203
Research and development 530,149 225,073 30,971 1,141,167 225,073 30,971
Non-GAAP adjusted net income 48,207,186 90,711,808 12,482,361 141,031,361 186,456,016 25,657,202
Net income attributable to Cango Inc.'s shareholders 48,207,186 90,711,808 12,482,361 141,031,361 186,456,016 25,657,202
Non-GAAP adjusted net income per ADS-basic 0.36 0.87 0.12 1.05 1.78 0.24
Non-GAAP adjusted net income per ADS-diluted 0.35 0.80 0.11 1.01 1.65 0.23
Weighted average ADS outstanding-basic 133,052,781 104,041,560 104,041,560 133,906,218 104,781,289 104,781,289
Weighted average ADS outstanding-diluted 138,366,712 113,656,131 113,656,131 139,610,743 112,790,662 112,790,662
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SOURCE Cango Inc.
