Cango Newsletter 20231011

CANGO NEWSLETTER

Cango (NYSE: CANG) is a leading automotive transaction service platform in China, connecting dealers, financial institutions, car buyers, and other industry participants. Follow us on Twitter (https://twitter.com/Cango_Group) for updates.

Below please find our latest Cango newsletter. Our goal is to share the most newsworthy articles in today’s macro economy, auto industry, as well as our recent developments. Below please find the abstract and news link for more details.

Macro Economy

1. China’s MIIT Seeks Public Comments on Proposed Measures to Boost Private Participation in Telecom Sector

China’s Ministry of Industry and Information Technology (MIIT) is seeking public comments on the Exposure Draft of the Opinions on Administration Innovation and Business Environment Optimization for the Telecommunications Sector (the “Draft”). The Draft states that the telecommunications sector will be further opened for wider involvement by more parties. As part of the orderly, progressive opening up of the telecommunications sector, there will be trial runs in certain areas such as free trade zones to expand the opening up of value-added telecommunications services. Greater engagement with private capital will be boosted across the board, higher participation from private enterprises in telecommunications reselling and other such businesses will be encouraged, and more support for service innovation will be granted. The Draft indicates that the access standards for the satellite internet industry will be adjusted in steps. Relevant channels and activities will be progressively broadened for greater involvement by more private enterprises across the telecommunications sector. [Link]

2. China’s Central Bank to Further Reform Mobile Payment

The People’s Bank of China (PBOC) recently issued a major policy document on multiple reforms in the mobile payment field, mainly to advance the development of digital currency, strengthen payment security, and encourage competition and innovation. Starting October 1, the People’s Bank of China (PBOC) has launched and begun to vigorously promote its digital currency. As a result, more payment channels based on digital currency are expected to be rolled out to complement traditional QR code payments. E-CNY, the legal digital currency issued by the PBOC, is a legal tender with value. This digital currency is equivalent to banknotes, only more convenient. Furthermore, the issuance of E-CNY is market-oriented, meaning the amount in circulation is essentially determined by public demand. [Link]

3. “Super Golden Week” Ends while A Full Consumption Recovery is Yet to Come

China’s eight-day “Super Golden Week” saw highways packed with cars, landmarks swarmed with massive crowds, and the movie box office racking up billions in revenue as the country emerged from three years of pandemic restrictions and consumers’ pent-up demand took wing. Despite the holiday queues, certain analysts point out that a full consumption turnaround is yet to come, and policy support remains much needed for further economic rebound in the fourth quarter. According to data on the first post-pandemic “Golden Week,” there were indeed signs of a strong recovery in consumption, but the recovery was uneven among industries. [Link]

Automobile Market

1. BYD Opens Its Premium Sub-Brand Yangwang’s First Store in China

BYD made a major move with its premium sub-brand, Yangwang, by opening China’s first Yangwang store in Shanghai on September 27 at No. 27 on the Bund, directly facing the Oriental Pearl TV Tower, Shanghai’s top landmark. The area also boasts the world’s first Maybach Atelier at the Bund Finance Center. Located within the exotic building clusters in the Bund of Shanghai, Yangwang's store attracted many tourists for visits during the National Day holiday. In an interview with Jiemian News, a salesperson said that the staff felt like tour guides during the holiday, leading no less than 20 groups of visitors around the store each day. [Link]

2. Hycan Unveils First Electric MPV

Hycan’s first electric MPV, V09, will hit the market on October 13. Hycan V09 marks “the first mass produced MPV model worldwide that comes standard with an 800V high-voltage system.” It is available in five trim levels, priced from RMB320,000 to RMB460,000. V09 is considered the make-or-break model for Hycan, a substantial challenge given the brand’s flagging reputation. Hycan’s sales have been consistently sluggish up to this point, with total vehicle deliveries of less than 20,000 in 2022. For 2023, official delivery data has been released only for the months since April, and as of August, Hycan’s monthly deliveries were 4,193, 3,132, 2,675, 1,647 and 1,011, respectively. With these metrics, Hycan needs to brace for a tough battle ahead in competing with other emerging auto brands. [Link]

For more information, please contact Yihe Liu at liuyihe@cangoonline.com