Cango Inc. Reports Fourth Quarter and Full Year 2022 Unaudited Financial Results

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

Ÿ   Total revenues were RMB487.1 million (US$70.6 million), compared with RMB1,050.5 million in the same period of 2021. Car trading transactions revenues 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.

Ÿ   The total outstanding balance of financing transactions the Company facilitated was RMB25,581.3 million (US$3,708.9 million) as of December 31, 2022. M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 2.61% and 1.38%, respectively, as of December 31, 2022, compared with 2.44% and 1.27%, respectively, as of September 30, 2022.

Full Year 2022 Financial and Operational Highlights

Ÿ   Total revenues were RMB1,980.5 million (US$287.1 million), compared with RMB3,921.7 million in the full year of 2021. Car trading transactions revenues 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.

Ÿ   “Cango Haoche” platform had engaged 10,112 dealers in China’s 31 provinces and 305 cities as of December 31, 2022. During the full year of 2022, total sales were 16,490 cars, including 8,794 new energy vehicles (NEVs), resulting in an NEV penetration rate exceeding 50%.

Ÿ   Since the “Cango Haoche” APP was launched at the end of the second quarter of 2022, it had attracted a total of over 660,000 page views and more than 57,000 unique visitors as of the end of December, 2022.

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.

·        Cost of revenue in the fourth quarter of 2022 decreased to RMB481.7 million (US$69.8 million) from RMB880.7 million in the same period of 2021. As a percentage of total revenues, cost of revenue in the fourth quarter of 2022 was 98.9% compared with 83.8% in the same period of 2021. The change was primarily due to a higher contribution from car trading transactions to total revenues. Car trading transactions normally present a higher cost-revenue ratio, thus pushing up the overall ratio.

·        Sales and marketing expenses in the fourth quarter of 2022 decreased to RMB19.2 million (US$2.8 million) from RMB73.8 million in the same period of 2021. As a percentage of total revenues, sales and marketing expenses in the fourth quarter of 2022 was 4.0% compared with 7.0% in the same period of 2021.

·        General and administrative expenses in the fourth quarter of 2022 decreased to RMB66.2 million (US$9.6 million) from RMB86.1 million in the same period of 2021. As a percentage of total revenues, general and administrative expenses in the fourth quarter of 2022 was 13.6% compared with 8.2% in the same period of 2021.  

·        Research and development expenses in the fourth quarter of 2022 decreased to RMB8.4 million (US$1.2 million) from RMB23.6 million in the same period of 2021. As a percentage of total revenues, research and development expenses in the fourth quarter of 2022 was 1.7% compared with 2.2% in the same period of 2021.

·        Net loss on risk assurance liabilities in the fourth quarter of 2022 was RMB62.8 million (US$9.1 million) compared with RMB84.6 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.

·        Cost of revenue in the full year of 2022 decreased to RMB1,830.1 million (US$265.3 million) from RMB2,958.0 million in the full year of 2021. As a percentage of total revenues, cost of revenue in the full year of 2022 was 92.4% compared with 75.4% in the full year of 2021. The change was primarily due to an increase in the amount of car trading transactions.

·        Sales and marketing expenses in the full year of 2022 decreased to RMB132.8 million (US$19.3 million) from RMB239.3 million in the full year of 2021. As a percentage of total revenues, sales and marketing expenses in the full year of 2022 was 6.7% compared with 6.1% in the full year of 2021.

·        General and administrative expenses in the full year of 2022 was RMB299.5 million (US$43.4 million) compared with RMB276.2 million in the full year of 2021. As a percentage of total revenues, general and administrative expenses in the full year of 2022 was 15.1% compared with 7.0% in the full year of 2021.

·        Research and development expenses in the full year of 2022 decreased to RMB46.0 million (US$6.7 million) from RMB70.3 million in the full year of 2021. As a percentage of total revenues, research and development expenses in the full year of 2022 was 2.3% compared with 1.8% in the full year of 2021.

·        Net loss on risk assurance liabilities in the full year of 2022 was RMB299.9 million (US$43.5 million) compared with RMB197.8 million in the full year of 2021. The change was mainly due to a sequential increase in default rate over 2022.

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 was mainly due to loss on risk assurance liabilities and provision for credit losses, as well as the decrease in gross profit margins of automotive financing facilitation and after-market services facilitation businesses.

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.