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Cango InvestorRoom Cango Inc. Reports Second Quarter 2021 Unaudited Financial Results SHANGHAI , Aug. 19 , 2021 / 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 2021 . Second Quarter 2021 Financial and Operational Highlights • Total revenues were RMB946.7 million ( US $ 146.6 million ) , a 245.5 % increase from RMB274.1 million in the same period of 2020 , meeting the Company's previous guidance range . The increase was mainly driven by the increased amounts of both financing transactions the Company facilitated and car trading transactions in the second quarter of 2021 . • Car trading transactions revenues were RMB522.5 million ( US $ 80.9 million ) , or 55.2 % of total revenues in the second quarter of 2021 . • Automotive financing facilitation revenues were RMB303.3 million ( US $ 47.0 million ) , a 111.2 % increase from RMB143.6 million in the same period of 2020 . • After - market services facilitation revenues were RMB51.9 million ( US $ 8.0 million ) , compared to RMB52.5 million in the same period of 2020 . • The amount of financing transactions the Company facilitated in the second quarter of 2021 was RMB7,789.7 million ( US $ 1,206.5 million ) . The total outstanding balance of financing transactions the Company facilitated was RMB48,637.8 million ( US $ 7,533.0 million ) as of June 30 , 2021 . • M1 + and M3 + overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 1.35 % and 0.69 % , respectively , as of June 30 , 2021 , compared to 1.23 % and 0.54 % , respectively , as of March 31 , 2021 . • The number of dealers covered by the Company was 47,740 as of June 30 , 2021 , compared to 47,017 as of March 31 , 2021 . Mr. Jiayuan Lin , Chief Executive Officer of Cango , commented , " We entered the second quarter with a focus on navigating major challenges primarily associated with the global chip shortage . We are pleased with our second quarter performance , and thanks to solid progress in our car trading transactions business , we delivered a 245.5 % year - over - year growth in total revenues , meeting our previous guidance range . The ongoing chip supply shortage , which has slowed down production and consumption in the entire auto industry , impacted our business to a certain extent and we expect the impact to linger in the second half of 2021 . However , we remain dedicated to advancing key elements of our strategy and believe our solid business fundamentals give us considerable flexibility to navigate uncertain and stressful times . In late May , we launched our B2B service platform ' Cango Haoche ' integrating car information with transactions , logistics , finance and insurance to directly address pain points for car dealers in the lower - tier markets . In addition , we introduced an updated service account of ' Cango Cheshenghuo ' on WeChat also in the second quarter , offering consumers a one - stop service covering purchases , usage and maintenance of cars . With ' Cango Haoche ' and ' Cango Cheshenghuo , ' we have empowered B - end car dealers and served C - end car owners , further enhancing the bond between dealers , users and us . " " Looking ahead , we expect the impact of the supply chain - related challenges in the auto market to remain unresolved in the near term . However , we will closely monitor the situation and adapt accordingly , while staying true to our original goals and upholding our commitment to facilitating easy and enjoyable car purchase experiences for our consumers , " Mr. Lin concluded . Mr. Yongyi Zhang , Chief Financial Officer of Cango , stated , " Our second quarter financial performance was in line with our expectations . Total revenues came in at RMB946.7 million , more than tripling from a year ago . We also recorded a net income of RMB557.7 million in the second quarter . While uncertainty stemming from global chip supply chain disruptions are ongoing , we remain committed to improving our operating efficiency while continually investing in the business to deliver more value to our dealers , partners and users . We fully believe that this will enable us to continue creating value for our shareholders well into the future . " Second Quarter 2021 Financial Results REVENUES Total revenues in the second quarter of 2021 increased by 245.5 % to RMB946.7 million ( US $ 146.6 million ) from RMB274.1 million in the same period of 2020. Revenues from car trading transactions in the second quarter of 2021 were RMB522.5 million ( US $ 80.9 million ) , continuing to serve as an important revenue contributor . Revenues from automotive financing facilitation and after - market services facilitation in the second quarter of 2021 were RMB303.3 million ( US $ 47.0 million ) and RMB51.9 million ( US $ 8.0 million ) , respectively . OPERATING COST AND EXPENSES Total operating cost and expenses in the second quarter of 2021 were RMB933.5 million ( US $ 144.6 million ) compared to RMB207.4 million in the same period of 2020. This was mainly due to the related costs incurred by car trading transactions business . Primarily as a result of the increase in revenues from car trading transactions , sales and marketing expenses , general and administrative expenses and research and development expenses each decreased as a percentage of total revenues in the second quarter of 2021 , compared to the same period of 2020 . ⚫ Cost of revenue in the second quarter of 2021 increased to RMB697.8 million ( US $ 108.1 million ) from RMB102.8 million in the same period of 2020. As a percentage of total revenues , cost of revenue in the second quarter of 2021 was 73.7 % compared to 37.5 % in the same period of 2020 , and the change was primarily due to an increase in the amount of car trading transactions . For automotive financing facilitation and after - market services facilitation , cost of revenue as a percentage of relevant revenues was around 41.6 % in the second quarter of 2021 . • Sales and marketing expenses in the second quarter of 2021 were RMB60.9 million ( US $ 9.4 million ) compared to RMB42.4 million in the same period of 2020. As a percentage of total revenues , sales and marketing expenses in the second quarter of 2021 was 6.4 % compared to 15.5 % in the same period of 2020 . • General and administrative expenses in the second quarter of 2021 were RMB64.7 million ( US $ 10.0 million ) compared to RMB66.0 million in the same period of 2020. As a percentage of total revenues , general and administrative expenses in the second quarter of 2021 was 6.8 % compared to 24.1 % in the same period of 2020 . • Research and development expenses in the second quarter of 2021 were RMB15.6 million ( US $ 2.4 million ) compared to RMB 12.9 million in the same period of 2020. As a percentage of total revenues , research and development expenses in the second quarter of 2021 was 1.7 % compared to 4.7 % in the same period of 2020 . • Net loss on risk assurance liabilities in the second quarter of 2021 was RMB35.9 million ( US $ 5.6 million ) compared to a net gain of RMB42.9 million in the same period of 2020 . INCOME FROM OPERATIONS Income from operations in the second quarter of 2021 was RMB 13.2 million ( US $ 2.1 million ) , compared to RMB66.7 million in the same period of 2020 . FAIR VALUE CHANGE OF EQUITY INVESTMENT Fair value change of equity investment in the second quarter of 2021 was a gain of RMB603.4 million ( US $ 93.5 million ) compared to nil in the same period of 2020. The gain in the second quarter of 2021 is mainly due to the investment in Li Auto . As of June 30 , 2021 , Cango held 8,000,000 American Depositary Shares of Li Auto . Each American Depositary Share of Li Auto represents two Class A ordinary shares of Li Auto . NET INCOME Primarily due to the fair value change of the Company's investment in Li Auto , net income in the second quarter of 2021 was RMB557.7 million ( US $ 86.4 million ) . Non - GAAP adjusted net income in the second quarter of 2021 was RMB578.3 million ( US $ 89.6 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 ( ADS ) in the second quarter of 2021 were RMB3.85 ( US $ 0.60 ) and RMB3.75 ( US $ 0.58 ) . Non - GAAP adjusted basic and diluted net income per ADS in the second quarter of 2021 were RMB3.99 ( US $ 0.62 ) and RMB3.89 ( US $ 0.60 ) . Each ADS represents two Class A ordinary shares of the Company . BALANCE SHEET As of June 30 , 2021 , the Company had cash and cash equivalents of RMB1,498.9 million ( US $ 232.2 million ) , compared to RMB1,631.0 million as of March 31 , 2021 . As of June 30 , 2021 , the Company had short - term investments of RMB3,127.2 million ( US $ 484.3 million ) , compared to RMB2,627.6 million as of March 31 , 2021 . Business Outlook For the third quarter of 2021 , the Company expects total revenues to be between RMB700 million and RMB750 million . This forecast reflects the Company's current and preliminary views on the market and operational conditions , which are subject to change . The Company's investment in Li Auto and the change in fair value of investment due to the price volatility of the stock may have a significant impact on the Company's third quarter of 2021 financial results . Share Repurchase Program Pursuant to the share repurchase program announced on March 2 , 2021 , we had repurchased 5,397,207 American depositary shares ( " ADSS " ) with cash in the aggregate amount of approximately US $ 48.4 million up to July 31 , 2021 . Conference Call Information The Company's management will hold a conference call on Thursday , August 19 , 2021 , at 9:00 P.M. Eastern Time or Friday , August 20 , 2021 , at 9:00 A.M. Beijing Time to discuss the financial results . Listeners may access the call by dialing the following numbers : International : United States Toll Free : Mainland China Toll Free : + 1-412-902-4272 + 1-888-346-8982 4001-201-203 Hong Kong , China Toll Free : 800-905-945 Conference ID : Cango Inc. The replay will be accessible through August 26 , 2021 , by dialing the following numbers : International : United States Toll Free : Access Code : + 1-412-317-0088 + 1-877-344-7529 10159690 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 , car trading transactions , 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 RMB6.4566 to US $ 1.00 , the noon buying rate in effect on June 30 , 2021 , 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 Emilie Wu The Piacente Group , Inc. Tel : +86 21 6039 8363 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 ) ASSETS : Current assets : Cash and cash equivalents Restricted cash - current Short - term investments Accounts receivable , net Finance lease receivables - current , net Short - term consumer financing receivables , net Financing receivables , net Short - term contract asset Prepayments and other current assets Total current assets Non - current assets : As of December 31 , 2020 RMB As of June 30 , 2021 RMB US $ 1,426,899,576 9,693,008 4,342,356,612 141,594,170 2,035,397,525 1,498,947,545 34,767,022 3,127,171,118 157,050,941 1,717,714,853 232,157,412 5,384,726 484,337,131 24,324,093 266,040,153 23,168 20,105,893 364,618,635 558,360,959 8,899,049,546 43,575,286 714,635,512 887,766,346 8,181,628,623 6,748,952 110,682,946 137,497,498 1,267,172,911 Restricted cash - non - current Goodwill 878,299,140 145,063,857 845,590,108 130,965,231 Property and equipment , net Intangible assets Long - term contract asset 10,311,971 44,887,871 281,374,110 145,063,857 21,032,036 44,683,992 474,407,237 22,467,530 3,257,448 6,920,669 73,476,325 Deferred tax assets 170,951,082 374,774,207 58,045,133 Finance lease receivables - non - current , net 1,454,499,864 1,186,837,807 183,817,769 Other non - current assets Total non - current assets TOTAL ASSETS 261,495,158 3,246,883,053 12,145,932,599 427,327,797 66,184,648 3,519,717,041 545,134,753 11,701,345,664 1,812,307,664 LIABILITIES AND SHAREHOLDERS ' EQUITY Current liabilities : Short - term debts Long - term debts - current Accrued expenses and other current liabilities Risk assurance liabilities Income tax payable 355,816,940 1,228,783,730 324,734,202 460,829,299 87,132,455 2,457,296,626 779,104,385 120,667,903 1,122,603,494 352,398,112 642,664,973 388,784,530 3,285,555,494 173,869,141 54,579,517 99,536,129 60,215,056 508,867,746 Total current liabilities Non - current liabilities : Long - term debts Deferred tax liability Other non - current liabilities Total non - current liabilities Total liabilities 977,791,191 330,765,029 4,870,616 1,313,426,836 3,770,723,462 836,810,348 171,705,298 2,479,512 1,010,995,158 4,296,550,652 129,605,419 26,593,764 384,028 156,583,211 665,450,957 Shareholders ' equity Ordinary shares 204,260 Treasury shares Additional paid - in capital Accumulated other comprehensive income ( 56,419,225 ) 4,591,455,557 ( 115,386,427 ) 204,260 31,636 ( 356,910,505 ) ( 55,278,398 ) 4,624,962,530 716,315,480 ( 147,245,016 ) ( 22,805,349 ) Retained earnings 3,955,354,972 3,283,783,743 508,593,338 Total Cango Inc.'s equity Total shareholders ' equity 8,375,209,137 8,375,209,137 7,404,795,012 1,146,856,707 7,404,795,012 1,146,856,707 TOTAL LIABILITIES AND SHAREHOLDERS ' EQUITY 12,145,932,599 11,701,345,664 1,812,307,664 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 , 2020 RMB 2021 RMB US $ 2020 RMB 2021 RMB US $ Revenues Loan facilitation income and other related income Leasing income 274,054,751 143,604,125 69,275,783 After - market services income Automobile trading income Others 52,472,658 6,228,508 2,473,677 946,746,211 146,632,316 303,346,685 46,982,419 64,708,395 10,022,054 51,866,024 522,544,976 4,280,131 8,033,024 80,931,911 662,908 520,052,725 263,332,523 143,557,538 101,528,861 7,601,416 4,032,387 2,070,532,922 320,684,714 715,037,501 110,745,207 137,836,071 21,348,089 114,395,515 1,094,109,857 9,153,978 17,717,609 169,456,038 1,417,771 Operating cost and expenses : Cost of revenue Sales and marketing 102,817,046 42,437,952 General and administrative 66,040,192 697,786,112 108,073,307 60,885,719 9,429,997 64,658,358 10,014,304 Research and development 12,901,613 15,638,883 2,422,155 Net ( gain ) loss on risk assurance liabilities ( 42,928,191 ) Provision for credit losses 26,119,771 Total operation cost and expense 207,388,383 35,903,834 5,560,796 58,636,181 9,081,588 933,509,087 144,582,147 193,414,759 88,212,181 123,451,858 25,458,298 33,957,484 70,214,542 534,709,122 1,466,833,661 118,729,278 18,388,824 227,183,605 126,048,975 19,522,500 29,233,130 4,527,635 57,642,765 8,927,727 99,268,133 15,374,676 1,897,755,942 293,924,967 Income ( Loss ) from operations 66,666,368 Interest and investment income Fair value change of equity investment Interest expense Foreign exchange gain ( loss ) , net Other income Other expenses Net income before income taxes Income tax expenses Net income Less : Net income attributable to non - controlling interests Net income attributable to Cango Inc.'s shareholders Earnings per ADS attributable to ordinary shareholders : 21,675,128 13,237,124 2,050,169 4,128,041 639,352 603,413,645 93,456,873 ( 14,656,397 ) 50,808,295 172,776,980 26,759,747 22,369,008 156,488,012 3,464,518 24,236,907 ( 369,637 ) ( 234,274 ) 621,774 ( 36,284 ) ( 938,526 ) ( 145,359 ) 7,317,072 ( 527,390 ) 7,568,769 1,172,253 ( 193,817 ) ( 30,018 ) ( 581,495 ) 95,383,315 626,980,962 97,106,986 56,184,238 ( 25,152,250 ) ( 69,243,099 ) ( 10,724,390 ) ( 20,639,459 ) 70,231,065 557,737,863 86,382,596 ( 1,736,923 ) ( 3,439,945 ) 25,790,703 ( 813,242 ) ( 735,132 ) ( 125,955 ) ( 113,857 ) 11,176,345 1,730,995 ( 6,479,822 ) ( 1,003,597 ) 354,782,149 ( 70,915,821 ) ( 10,983,462 ) 54,948,758 35,544,779 3,646,196 283,866,328 43.965,296 70,231,065 557,737,863 86,382,596 31,898,583 283,866,328 43,965,296 Basic Diluted 0.47 0.47 3.85 3.75 0.60 0.58 0.21 0.21 1.93 1.89 0.30 0.29 Weighted average ADS used to compute earnings per ADS attributable to ordinary shareholders : Basic Diluted 150,605,540 150,819,440 144,829,122 144,829,122 148,579,948 148,579,948 150,789,465 151,899,153 147,012,155 147,012,155 150,005,282 150,005,282 Other comprehensive ( loss ) income , net of tax Foreign currency translation adjustment Total comprehensive income Total comprehensive income attributable to Cango Inc.'s shareholders ( 5,444,800 ) ( 42,140,854 ) ( 6,526,787 ) 23,229,550 ( 31,858,589 ) ( 4,934,267 ) 64,786,265 64,786,265 515,597,009 79,855,809 515,597,009 79,855,809 58,774,329 55,128,133 252,007,739 39,031,029 252,007,739 39,031,029 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 , 2020 ( Unaudited ) 2021 2020 2021 RMB ( Unaudited ) ( Unaudited ) RMB US $ ( Unaudited ) RMB ( Unaudited ) RMB ( Unaudited ) US $ Net income 70,231,065 557,737,863 86,382,596 35,544,779 283,866,328 43,965,296 Add : Share - based compensation expenses 22,096,880 Cost of revenue Sales and marketing 905,973 4,706,635 General and administrative 15,335,232 Research and development 1,149,040 20,522,138 783,983 4,004,166 14,987,159 746,830 3,178,474 121,424 620,166 2,321,215 45,415,178 40,433,303 6,262,321 1,862,024 1,454,657 225,298 9,673,432 31,518,128 7,521,055 29,678,982 1,164,863 4,596,689 115,669 2,361,594 1,778,609 275,471 Non - GAAP adjusted net income 92,327,945 578,260,001 89,561,070 Less : Net income attributable to non - controlling interests Net income attributable to Cango Inc.'s shareholders 92,327,945 578,260,001 89,561,070 80,959,957 3,646,196 77,313,761 324,299,631 50,227,617 324,299,631 50,227,617 Non - GAAP adjusted net income per ADS - basic Non - GAAP adjusted net income per ADS - diluted 0.61 0.61 3.99 3.89 0.62 0.60 0.51 0.51 2.21 2.16 0.34 0.33 Weighted average ADS outstanding - basic Weighted average ADS outstanding - diluted 150,605,540 150,819,440 144,829,122 144,829,122 150,789,465 147,012,155 147,012,155 148,579,948 148,579,948 151,899,153 150,005,282 150,005,282 SOURCE Cango Inc. http://ir.cangoonline.com/2021-08-19-Cango-Inc-Reports-Second-Quarter-2021-Unaudited-Financial-Results