EX-99.1 2 tm2423109d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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

 

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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 shareholders   114,278,120    93,855,654    12,914,968    187,022,618    204,777,368    28,178,304 

 

 

 

 

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