SHANGHAI, Sept. 4, 2019 /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 2019.
Second Quarter 2019 Financial and Operational Highlights
Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "Despite the continuing macroeconomic and industry-wide challenges, we maintained our solid growth trajectory with strong financial and operating performances in the second quarter of 2019. During the quarter, our core auto loan facilitation business continued to be a vital growth driver, and we further expanded and refined our after-market services. In addition, we achieved significant breakthroughs in our cooperation with the Industrial and Commercial Bank of China ("ICBC") in relation to our automotive financing solutions. As a result, our total revenues increased by 42.3% year-over-year to RMB336.3 million in the second quarter of 2019. Going forward, we will continue to augment our leadership in China's market for automotive financing services by bolstering our core competencies in auto loan facilitation services, expanding our dealership network, developing differentiated products and services, and harnessing our well-developed capabilities in big data and internet technologies."
Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "After a strong start in the first quarter of 2019, we continued to deliver healthy performances in the second quarter. Our total revenues increased by 42.3% year-over-year to RMB336.3 million in the second quarter. Our after-market services facilitation business continued to serve as an important growth engine, contributing RMB35.9 million or 10.7% of our total revenues in the second quarter. Our income from operations and net income increased by 17.3% and 46.4% in the second quarter, respectively. Looking ahead, we will continue to invest in expanding our dealership network, optimizing our service quality and efficiency, and advancing our technology through innovation. As we continue to deepen our collaborations with more financial institutions and original equipment manufacturers, we are confident that we will sustain our growth despite the persisting industry challenges."
Second Quarter 2019 Financial Results
REVENUES
Total revenues in the second quarter of 2019 were RMB336.3 million (US$49.0 million), representing a 42.3% increase from RMB236.3 million in the corresponding period of 2018. This increase was primarily driven by the Company's strategies to rejuvenate growth, increased revenue contribution from its after-market services business, and a significant increase in loan facilitation volume from the Company's business partnership with ICBC.
Revenues from after-market services facilitation in the second quarter of 2019 were RMB35.9 million (US$5.2 million), compared to RMB12.3 million in the same period of last year.
OPERATING COST AND EXPENSES
Total operating cost and expenses in the second quarter of 2019 were RMB252.0 million (US$36.7 million), compared to RMB164.4 million in the corresponding period of 2018.
INCOME FROM OPERATIONS
Income from operations was RMB84.3 million (US$12.3million) in the second quarter of 2019, representing a year-over-year increase of 17.3% from RMB71.8 million in the corresponding period of 2018.
NET INCOME
Net income was RMB94.6 million (US$13.8 million) in the second quarter of 2019, representing a year-over-year increase of 46.4% from RMB64.6 million in the corresponding period of 2018. Non-GAAP adjusted net income increased by 66.7% to RMB116.9 million (US$17.0 million) from RMB70.1 million in the corresponding period of 2018. 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 (ADS) in the second quarter of 2019 were both RMB0.60 (US$0.09). Non-GAAP adjusted basic and diluted net income per ADS in the second quarter of 2019 were both RMB0.75 (US$0.11). Each ADS represents two of the Company's Class A ordinary shares.
BALANCE SHEET
As of June 30, 2019, the Company had cash and cash equivalents of RMB1,609.6 million (US$234.5 million), compared to RMB2,178.0 million as of March 31, 2019. The change was due to the fact that the Company invested certain amount of cash in term deposit over three months for better cash-on-cash return.
Business Outlook
For the third quarter of 2019, the Company expects total revenues to be between RMB300 million and RMB325 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.
Conference Call Information
The Company's management will hold a conference call on Tuesday, September 3, 2019, at 9:00 P.M. Eastern Time or Wednesday, September 4, 2019, 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 Toll Free: |
800-905-945 |
Conference ID: |
Cango Inc. |
The replay will be accessible through September 10, 2019, by dialing the following numbers:
International: |
+1-412-317-0088 |
United States Toll Free: |
+1-877-344-7529 |
Access Code: |
10134672 |
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 dealers, financial institutions, car buyers, 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 engages car buyers through a nationwide dealer network. The Company's services primarily consist of automotive financing facilitation, automotive transaction facilitation, and after-market services facilitation. By utilizing its competitive advantages in technology, data insights, and cloud-based infrastructure, Cango is able to connect its platform participants while bringing them a premium user experience. Cango's platform model puts it in a unique position to add value for its platform participants and business partners as the automotive and mobility markets in China continue to grow and evolve. 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, 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 as net income 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 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 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 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. 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 RMB6.8650 to US$1.00, the noon buying rate in effect on June 28, 2019, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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
Caesar Cao
Cango Inc.
Tel: +86 21 3183 5088 ext.5521
Email: ir@cangoonline.com
Jack Wang
ICR Inc.
Tel: +1 (646) 405-5056
Email: ir@cangoonline.com
CANGO INC. |
|||||||
As of December 31, |
As of June 30, |
||||||
RMB |
RMB |
US$ |
|||||
ASSETS: |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
2,912,901,189 |
1,609,621,867 |
234,467,861 |
||||
Restricted Cash |
298,900,155 |
586,789,155 |
85,475,478 |
||||
Short-term investments |
265,869,717 |
546,167,864 |
79,558,320 |
||||
Accounts receivable, net |
86,513,830 |
135,437,250 |
19,728,660 |
||||
Financing receivable, net |
5,420,617 |
7,626,277 |
1,110,892 |
||||
Short-term loan principal and financing service fee |
- |
5,759,707 |
838,996 |
||||
Short-term finance leasing receivable, net |
1,123,703,618 |
1,499,097,355 |
218,368,151 |
||||
Prepaid expenses and other current assets |
61,272,518 |
78,004,663 |
11,362,660 |
||||
Total current assets |
4,754,581,644 |
4,468,504,138 |
650,911,018 |
||||
Non-current assets: |
|||||||
Restricted Cash |
668,627,618 |
805,081,110 |
117,273,286 |
||||
Long-term investments |
292,099,059 |
441,534,200 |
64,316,708 |
||||
Equity method investments |
1,448,416 |
- |
- |
||||
Goodwill |
145,063,857 |
145,063,857 |
21,130,933 |
||||
Property and equipment, net |
18,286,218 |
16,720,263 |
2,435,581 |
||||
Intangible assets |
1,693,407 |
33,776,532 |
4,920,107 |
||||
Deferred tax assets |
100,194,993 |
81,593,698 |
11,885,462 |
||||
Long-term finance leasing receivable, net |
1,282,457,409 |
1,577,577,084 |
229,800,012 |
||||
Other non-current assets |
36,687,583 |
9,493,492 |
1,382,883 |
||||
Total non-current assets |
2,546,558,560 |
3,110,840,236 |
453,144,972 |
||||
TOTAL ASSETS |
7,301,140,204 |
7,579,344,374 |
1,104,055,990 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Short-term borrowings |
660,000,000 |
1,110,000,000 |
161,689,731 |
||||
Long-term debts—current |
467,194,051 |
542,456,711 |
79,017,729 |
||||
Accrued expenses and other current liabilities |
211,458,501 |
215,035,436 |
31,323,443 |
||||
Risk assurance liabilities |
173,210,363 |
196,388,309 |
28,607,183 |
||||
Income tax payable |
53,517,717 |
7,418,417 |
1,080,614 |
||||
Total current liabilities |
1,565,380,632 |
2,071,298,873 |
301,718,700 |
||||
Non-current liabilities: |
|||||||
Long-term borrowings |
472,793,340 |
314,346,370 |
45,789,712 |
||||
Other non-current liabilities |
7,599,404 |
- |
- |
||||
Total non-current liabilities |
480,392,744 |
314,346,370 |
45,789,712 |
||||
Total liabilities |
2,045,773,376 |
2,385,645,243 |
347,508,412 |
||||
Shareholders' equity |
|||||||
Ordinary shares |
204,260 |
204,260 |
29,754 |
||||
Additional paid-in capital |
4,444,078,463 |
4,481,629,026 |
652,822,873 |
||||
Accumulated other comprehensive income |
109,452,996 |
98,390,209 |
14,332,150 |
||||
Accumulated retained earnings |
698,036,438 |
611,766,717 |
89,113,869 |
||||
Total Cango Inc.'s equity |
5,251,772,157 |
5,191,990,212 |
756,298,646 |
||||
Non-controlling interests |
3,594,671 |
1,708,919 |
248,932 |
||||
Total shareholders' equity |
5,255,366,828 |
5,193,699,131 |
756,547,578 |
||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
7,301,140,204 |
7,579,344,374 |
1,104,055,990 |
CANGO INC. |
||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||
2018 |
2019 |
2018 |
2019 |
|||||||||
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Revenues |
236,287,811 |
336,303,754 |
48,988,165 |
485,107,011 |
687,962,259 |
100,213,002 |
||||||
Operating cost and expenses: |
||||||||||||
Cost of revenue |
81,181,330 |
125,824,004 |
18,328,333 |
162,037,069 |
256,630,454 |
37,382,440 |
||||||
Sales and marketing |
36,979,636 |
44,503,534 |
6,482,671 |
71,798,024 |
90,050,914 |
13,117,395 |
||||||
General and administrative |
31,350,545 |
53,418,413 |
7,781,269 |
58,094,590 |
118,182,033 |
17,215,154 |
||||||
Research and development |
9,481,415 |
12,246,050 |
1,783,838 |
15,933,541 |
25,593,854 |
3,728,165 |
||||||
Net loss on risk assurance liabilities |
(4,951,451) |
2,379,706 |
346,643 |
(1,183,503) |
20,230,839 |
2,946,954 |
||||||
Provision for financing receivables |
10,402,370 |
13,672,656 |
1,991,647 |
13,464,113 |
23,695,938 |
3,451,703 |
||||||
Total operating cost and expenses |
164,443,845 |
252,044,363 |
36,714,401 |
320,143,834 |
534,384,032 |
77,841,811 |
||||||
Income from operations |
71,843,966 |
84,259,391 |
12,273,764 |
164,963,177 |
153,578,227 |
22,371,191 |
||||||
Interest income |
18,246,042 |
22,704,386 |
3,307,267 |
26,323,438 |
41,588,934 |
6,058,111 |
||||||
(Loss) income from equity method investments |
937,549 |
(942,312) |
(137,263) |
(1,396,142) |
(926,205) |
(134,917) |
||||||
Interest expense |
(4,712,329) |
(4,712,329) |
(686,428) |
(9,502,055) |
(10,006,574) |
(1,457,622) |
||||||
Foreign exchange loss, net |
10,045,905 |
1,409,293 |
205,287 |
7,422,516 |
122,801 |
17,888 |
||||||
Other income |
(975,669) |
856,340 |
124,740 |
21,046,154 |
21,593,278 |
3,145,416 |
||||||
Other expenses |
(7,091,835) |
(168,717) |
(24,576) |
(7,197,923) |
(1,184,660) |
(172,565) |
||||||
Net income before income taxes |
88,293,629 |
103,406,052 |
15,062,791 |
201,659,165 |
204,765,801 |
29,827,502 |
||||||
Income tax expenses |
(23,677,171) |
(8,819,437) |
(1,284,696) |
(53,016,212) |
(35,808,056) |
(5,216,031) |
||||||
Net income |
64,616,458 |
94,586,615 |
13,778,095 |
148,642,953 |
168,957,745 |
24,611,471 |
||||||
Less: Net incomeattributable to the noncontrolling |
164,843 |
3,047,624 |
443,936 |
4,099,150 |
1,200,254 |
174,837 |
||||||
Net income attributable to Cango Inc.'s |
64,451,615 |
91,538,991 |
13,334,159 |
144,543,803 |
167,757,491 |
24,436,634 |
||||||
Accretion of Series C Preferred Shares |
6,991,289 |
- |
- |
6,991,289 |
- |
- |
||||||
Net income attributable to Cango Inc.'s ordinary |
57,460,326 |
91,538,991 |
13,334,159 |
137,552,514 |
167,757,491 |
24,436,634 |
||||||
Net income per ADS (Note 1): |
||||||||||||
Basic |
0.44 |
0.60 |
0.09 |
1.07 |
1.11 |
0.16 |
||||||
Diluted |
0.44 |
0.60 |
0.09 |
1.05 |
1.11 |
0.16 |
||||||
ADSs used in net income per ADS computation |
||||||||||||
Basic |
130,053,500 |
151,404,946 |
151,404,946 |
128,244,728 |
151,404,946 |
151,404,946 |
||||||
Diluted |
131,667,341 |
151,404,946 |
151,404,946 |
130,443,925 |
151,404,946 |
151,404,946 |
||||||
Other comprehensive income, net of tax |
||||||||||||
Unrealized losses on available-for-sale securities |
78,147 |
(108,594) |
(15,818) |
156,131 |
(146,801) |
(21,384) |
||||||
Reclassification of losses to net income |
- |
(276,843) |
(40,327) |
- |
(276,843) |
(40,327) |
||||||
Foreign currency translation adjustment |
43,890,855 |
31,329,909 |
4,563,716 |
43,890,855 |
(10,639,143) |
(1,549,766) |
||||||
Total comprehensive income |
108,585,460 |
125,531,087 |
18,285,666 |
192,689,939 |
157,894,958 |
22,999,994 |
||||||
Total comprehensive income attributable to Cango |
108,420,617 |
122,483,463 |
17,841,730 |
188,590,789 |
156,694,704 |
22,825,157 |
||||||
Note 1: Each ADS represents two ordinary shares. |
CANGO INC. |
||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||
2018 |
2019 |
2018 |
2019 |
|||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||
Net income |
64,616,458 |
94,586,615 |
13,778,094 |
148,642,953 |
168,957,745 |
24,611,471 |
||||
Add: Share-based compensation expenses |
5,467,240 |
22,273,101 |
3,244,443 |
5,467,240 |
37,550,563 |
5,469,856 |
||||
Cost of revenue |
224,157 |
913,198 |
133,022 |
224,157 |
1,539,574 |
224,264 |
||||
Sales and marketing |
1,164,522 |
4,744,170 |
691,066 |
1,164,522 |
7,998,269 |
1,165,079 |
||||
General and administrative |
3,794,264 |
15,457,530 |
2,251,643 |
3,794,264 |
26,060,087 |
3,796,080 |
||||
Research and development |
284,297 |
1,158,203 |
168,711 |
284,297 |
1,952,633 |
284,433 |
||||
Non-GAAP adjusted net income |
70,083,698 |
116,859,716 |
17,022,537 |
154,110,193 |
206,508,308 |
30,081,327 |
||||
Less: Net income attributable to the noncontrolling interest |
164,843 |
3,047,624 |
443,936 |
4,099,150 |
1,200,254 |
174,837 |
||||
Non-GAAP adjusted net income attributable to |
69,918,855 |
113,812,092 |
16,578,601 |
150,011,043 |
205,308,054 |
29,906,490 |
||||
Accretion of Series C Preferred Shares |
6,991,289 |
- |
- |
6,991,289 |
- |
- |
||||
Non-GAAP adjusted net income attributable to |
62,927,566 |
113,812,092 |
16,578,601 |
143,019,754 |
205,308,054 |
29,906,490 |
||||
Non-GAAP adjusted net income per ADS-basic (Note 1) |
0.48 |
0.75 |
0.11 |
1.12 |
1.36 |
0.20 |
||||
Non-GAAP adjusted net income per ADS-diluted (Note 1) |
0.48 |
0.75 |
0.11 |
1.10 |
1.36 |
0.20 |
||||
Weighted average ADS outstanding—basic |
130,053,500 |
151,404,946 |
151,404,946 |
128,244,728 |
151,404,946 |
151,404,946 |
||||
Weighted average ADS outstanding—diluted |
131,667,341 |
151,404,946 |
151,404,946 |
130,443,925 |
151,404,946 |
151,404,946 |
||||
Note 1: Each ADS represents two ordinary shares. |