CANG Cango Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

 

 

FORM  6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2024

 

 

Commission File Number: 001-38590

 

 

CANGO INC.

 

 

8F, New Bund Oriental Plaza II

556 West Haiyang Road, Pudong New Area

Shanghai 200124

People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F x           Form 40-F ¨

 

 

 

EXHIBIT INDEX

 

Exhibit 99.1 — Cango Inc. Reports Third Quarter 2024 Unaudited Financial Results

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	CANGO INC.
	By:	/s/ Yongyi Zhang
	Name:	Yongyi Zhang
	Title:	Chief Financial Officer

 

Date: November 6, 2024

 

 

 

Exhibit 99.1

 

Cango Inc. Reports Third Quarter 2024 Unaudited Financial Results

 

SHANGHAI, Nov. 4, 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 third quarter of 2024.

 

Third Quarter 2024 Financial and Operational Highlights

 

·

Total revenues were RMB27.0 million (US$3.8 million), compared with RMB353.6 million in the same period of 2023. Income from operations was RMB35.2 million (US$5.0 million) for the three months ended September 30, 2024, compared with a loss of RMB87.8 million in the same period last year. Net income was RMB67.9 million (US$9.7 million) for the three months ended September 30, 2024, compared with a loss of RMB49.1 million in the same period last year.

 

·

The total outstanding balance of financing transactions the Company facilitated was RMB4.8 billion (US$685.7 million) as of September 30, 2024. Our credit risk exposure has decreased to a lower level, with only RMB1.7 billion (US$ 246.1 million) of outstanding loan balances where the Company bears credit risks that 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 3.17% and 1.76%, respectively, as of September 30, 2024, compared with 2.93% and 1.57%, respectively, as of June 30, 2024.

 

·

Total balance of cash and cash equivalents and short-term investments increased by RMB89.3 million (US$12.7 million) compared with that as of June 30, 2024.

 

Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, “In the third quarter of 2024, our business was primarily focused on the Cango U-car app and AutoCango.com, our international used car platform. We strengthened Cango U-car app’s competitive advantages in vehicle inventory during the quarter by establishing strategic partnerships with numerous used car marketplaces, enabling real-time updates of vehicle listings and ensuring a diverse and abundant supply of vehicles on the Cango U-car app. For AutoCango.com, we have been continuously refining content development and search engine optimization to boost brand exposure and expand our market reach. Since its launch in March 2024, AutoCango.com has grown rapidly, accumulating over 370,000 page views, nearly 60,000 registered users and offering more than 100,000 used car SKUs covering over 65,000 models. Going forward, we will strengthen our data analysis capabilities to gain a deeper understanding of our target markets and user demographics and implement data-based, scientific marketing strategies to propel our balanced global development.”

 

“While steadily advancing our existing business, we are also actively pursuing forward-looking, strategic investment opportunities worldwide. By establishing an international cooperation network, strengthening communication with leading global companies, and actively participating in the collaborative development of overseas projects, we aim to showcase Cango’s strength and vision on a broader stage and create greater value for all of our stakeholders,” concluded Mr. Lin.

 

 

Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, “We are pleased to report another solid quarter thanks to our continued focus on rigorous cost control and robust risk management. As we continue to develop our business and actively explore growth opportunities overseas, we maintain prudent cash management to safeguard our balance sheet. Simultaneously, we remain committed to prudent financial strategies designed to generate long-term value for our shareholders.”

 

Third Quarter 2024 Financial Results

 

REVENUES

 

Total revenues in the third quarter of 2024 were RMB27.0 million (US$3.8 million) compared with RMB353.6 million in the same period of 2023. Guarantee income, which represented the fee income earned on the non-contingent aspect of a guarantee, was RMB14.4 million (US$2.1 million) in the third 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 third quarter of 2024 decreased to RMB23.3 million (US$3.3 million) from RMB304.6 million in the same period of 2023. As a percentage of total revenues, cost of revenue in the third quarter of 2024 was 86.3% compared with 86.1% in the same period of 2023.

 

·

Sales and marketing expenses in the third quarter of 2024 decreased to RMB3.4 million (US$0.5 million) from RMB9.9 million in the same period of 2023.

 

·

General and administrative expenses in the third quarter of 2024 were RMB45.2 million (US$6.4 million) compared with RMB34.7 million in the same period of 2023.

 

·

Research and development expenses in the third quarter of 2024 decreased to RMB1.4 million (US$0.2 million) from RMB7.0 million in the same period of 2023.

 

·

Net gain on contingent risk assurance liabilities in the third quarter of 2024 was RMB7.1 million (US$1.0 million) compared with a net loss of RMB3.5 million in the same period of 2023.

 

·

Net recovery on provision for credit losses in the third quarter of 2024 was RMB74.4 million (US$10.6 million) compared with RMB66.9 million in the same period of 2023.

 

INCOME FROM OPERATIONS

 

Income from operations in the third quarter of 2024 was RMB35.2 million (US$5.0 million), compared with a loss of RMB87.8 million in the same period of 2023.

 

 

NET INCOME

 

Net income in the third quarter of 2024 was RMB67.9 million (US$9.7 million). Non-GAAP adjusted net income in the third quarter of 2024 was RMB71.3 million (US$10.2 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 third quarter of 2024 were RMB0.66 (US$0.09) and RMB0.60 (US$0.09), respectively. Non-GAAP adjusted basic and diluted net income per ADS in the third quarter of 2024 were RMB0.69 (US$0.10) and RMB0.63 (US$0.09), respectively. Each ADS represents two Class A ordinary shares of the Company.

 

BALANCE SHEET

 

·

As of September 30, 2024, the Company had cash and cash equivalents of RMB691.8 million (US$98.6 million), compared with RMB949.5 million as of June 30, 2024.

 

·

As of September 30, 2024, the Company had short-term investments of RMB3.1 billion (US$439.3 million), compared with RMB2.7 billion as of June 30, 2024.

 

Business Outlook

 

For the fourth quarter of 2024, the Company expects total revenues to be between RMB15.0 million and RMB17.5 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 996,640 ADSs with cash in the aggregate amount of approximately US$1.7 million up to September 30, 2024.

 

Conference Call Information

 

The Company's management will hold a conference call on Monday, November 4, 2024, at 8:00 P.M. Eastern Time or Tuesday, November 5, 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.

 

 

The replay will be accessible through November 11, 2024 by dialing the following numbers:

 

International:	+1-412-317-0088
United States Toll Free:	+1-877-344-7529
Access Code:	8025630

 

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.

 

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 RMB7.0176 to US$1.00, the noon buying rate in effect on September 30, 2024, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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.

 

Investor Relations Contact

 

Yihe Liu

Cango Inc.

Tel: +86 21 3183 5088 ext.5581

Email: ir@cangoonline.com

 

Helen Wu

Piacente Financial Communications

Tel: +86 10 6508 0677

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）

 

		As of December 31, 2023				As of September 30, 2024
		RMB				RMB				US$
ASSETS:
Current assets:
Cash and cash equivalents			1,020,604,191				691,818,800				98,583,390
Restricted cash - current - bank deposits held for short-term investments			1,670,006,785				-				-
Restricted cash - current - others			14,334,937				12,816,134				1,826,284
Short-term investments			635,070,394				3,082,865,458				439,304,813
Accounts receivable, net			64,791,709				25,529,710				3,637,955
Finance lease receivables - current, net			200,459,435				47,126,581				6,715,484
Financing receivables, net			29,522,035				8,535,562				1,216,308
Short-term contract asset			170,623,200				55,923,363				7,969,015
Prepayments and other current assets			78,606,808				29,955,505				4,268,625
Total current assets			3,884,019,494				3,954,571,113				563,521,874
Non-current assets:
Restricted cash - non-current			583,380,417				461,367,450				65,744,336
Property and equipment, net			8,239,037				6,586,202				938,526
Intangible assets			48,373,192				47,634,678				6,787,887
Long-term contract asset			36,310,769				448,353				63,890
Finance lease receivables - non-current, net			36,426,617				9,761,388				1,390,987
Operating lease right-of-use assets			47,154,944				42,815,154				6,101,111
Other non-current assets			4,705,544				4,104,803				584,930
Total non-current assets			764,590,520				572,718,028				81,611,667
TOTAL ASSETS			4,648,610,014				4,527,289,141				645,133,541
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debts			39,071,500				-				-
Long-term debts—current			926,237				649,300				92,525
Accrued expenses and other current liabilities			206,877,626				130,806,077				18,639,717
Deferred guarantee income			86,218,888				20,638,251				2,940,927
Contingent risk assurance liabilities			125,140,991				33,692,222				4,801,103
Income tax payable			311,904,279				311,235,998				44,350,775
Short-term lease liabilities			7,603,380				8,015,363				1,142,180
Total current liabilities			777,742,901				505,037,211				71,967,227
Non-current liabilities:
Long-term debts			712,023				470,216				67,005
Deferred tax liability			10,724,133				10,724,133				1,528,177
Long-term operating lease liabilities			42,228,435				39,375,249				5,610,928
Other non-current liabilities			226,035				140,038				19,955
Total non-current liabilities			53,890,626				50,709,636				7,226,065
Total liabilities			831,633,527				555,746,847				79,193,292
Shareholders’ equity
Ordinary shares			204,260				204,260				29,107
Treasury shares			(773,130,748	)			(782,800,080	)			(111,548,119	)
Additional paid-in capital			4,813,679,585				4,747,032,306				676,446,692
Accumulated other comprehensive income			111,849,166				98,802,836				14,079,291
Accumulated deficit			(335,625,776	)			(91,697,028	)			(13,066,722	)
Total Cango Inc.’s  equity			3,816,976,487				3,971,542,294				565,940,249
Total shareholders' equity			3,816,976,487				3,971,542,294				565,940,249
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			4,648,610,014				4,527,289,141				645,133,541

 

 

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 September 30,												Nine months ended September 30,
		2023				2024								2023				2024
		RMB				RMB				US$				RMB				RMB				US$
Revenues			353,638,119				26,953,433				3,840,833				1,571,681,558				136,455,663				19,444,776
Loan facilitation income and other related income			11,345,343				819,779				116,818				27,618,224				16,310,549				2,324,235
Guarantee income			50,006,711				14,414,947				2,054,114				170,010,917				65,581,347				9,345,267
Leasing income			11,298,293				2,057,631				293,210				50,157,926				10,338,904				1,473,282
After-market services income			14,116,184				7,956,088				1,133,733				41,364,974				36,110,901				5,145,762
Automobile trading income			263,821,645				1,202,198				171,312				1,256,429,781				6,116,392				871,579
Others			3,049,943				502,790				71,646				26,099,736				1,997,570				284,651
Operating cost and expenses:
Cost of revenue			304,638,147				23,260,308				3,314,567				1,400,985,230				78,844,658				11,235,274
Sales and marketing			9,854,441				3,375,602				481,019				34,546,132				10,909,363				1,554,572
General and administrative			34,682,695				45,196,454				6,440,443				111,319,960				122,290,803				17,426,300
Research and development			6,990,685				1,424,250				202,954				22,841,206				4,192,881				597,481
Net loss (gain) on contingent risk assurance liabilities			3,541,506				(7,110,545	)			(1,013,245	)			3,475,114				(32,385,904	)			(4,614,954	)
Net recovery on provision for credit losses			(66,945,232	)			(74,429,953	)			(10,606,183	)			(105,260,489	)			(203,759,529	)			(29,035,501	)
Impairment loss from goodwill			148,657,971				-				-				148,657,971				-				-
Total operation cost and expense			441,420,213				(8,283,884	)			(1,180,445	)			1,616,565,124				(19,907,728	)			(2,836,828	)
(Loss) income from operations			(87,782,094	)			35,237,317				5,021,278				(44,883,566	)			156,363,391				22,281,604
Interest income			19,481,911				25,742,760				3,668,314				58,981,302				76,001,320				10,830,101
Net gain on equity securities			7,038,386				2,237,825				318,888				15,439,734				7,217,751				1,028,521
Interest expense			(153,088	)			-				-				(4,099,783	)			-				-
Foreign exchange (loss) gain, net			(489,215	)			(1,414,569	)			(201,574	)			2,346,525				(921,077	)			(131,252	)
Other income			21,806,106				3,053,224				435,081				29,404,718				8,470,829				1,207,083
Other expenses			(141,358	)			(216,395	)			(30,836	)			(368,492	)			(2,051,858	)			(292,387	)
Net (loss) income before income taxes			(40,239,352	)			64,640,162				9,211,151				56,820,438				245,080,356				34,923,670
Income tax (expenses) benefits			(8,847,190	)			3,238,963				461,549				9,084,706				(1,151,608	)			(164,103	)
Net (loss) income			(49,086,542	)			67,879,125				9,672,700				65,905,144				243,928,748				34,759,567
Net (loss) income attributable to Cango Inc.’s shareholders			(49,086,542	)			67,879,125				9,672,700				65,905,144				243,928,748				34,759,567
(Losses) earnings per ADS attributable to ordinary shareholders:
Basic			(0.45	)			0.66				0.09				0.52				2.34				0.33
Diluted			(0.45	)			0.60				0.09				0.50				2.16				0.31
Weighted average ADS used to compute earnings per ADS attributable to ordinary shareholders:
Basic			109,587,726				103,486,998				103,486,998				125,710,975				104,346,709				104,346,709
Diluted			109,587,726				113,911,629				113,911,629				131,630,583				112,853,015				112,853,015
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment			7,806,144				(41,774,075	)			(5,952,758	)			79,837,076				(13,046,330	)			(1,859,087	)
Total comprehensive (loss) income			(41,280,398	)			26,105,050				3,719,942				145,742,220				230,882,418				32,900,480
Total comprehensive (loss) income attributable to Cango Inc.’s shareholders			(41,280,398	)			26,105,050				3,719,942				145,742,220				230,882,418				32,900,480

 

 

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 September 30,												Nine months ended September 30,
		2023				2024								2023				2024
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
		RMB				RMB				US$				RMB				RMB				US$
Net (loss) income			(49,086,542	)			67,879,125				9,672,700				65,905,144				243,928,748				34,759,567
Add: Share-based compensation expenses			7,857,905				3,407,729				485,597				33,897,580				13,814,122				1,968,497
Cost of revenue			444,748				170,312				24,269				1,920,626				637,320				90,817
Sales and marketing			1,608,169				635,874				90,611				6,747,135				2,551,010				363,517
General and administrative			5,427,332				2,569,932				366,212				23,710,996				10,369,108				1,477,586
Research and development			377,656				31,611				4,505				1,518,823				256,684				36,577
Non-GAAP adjusted net (loss) income			(41,228,637	)			71,286,854				10,158,297				99,802,724				257,742,870				36,728,064
Net (loss) income attributable to Cango Inc.’s shareholders			(41,228,637	)			71,286,854				10,158,297				99,802,724				257,742,870				36,728,064
Non-GAAP adjusted net (loss) income per ADS-basic			(0.38	)			0.69				0.10				0.79				2.47				0.35
Non-GAAP adjusted net (loss) income per ADS-diluted			(0.38	)			0.63				0.09				0.76				2.28				0.33
Weighted average ADS outstanding—basic			109,587,726				103,486,998				103,486,998				125,710,975				104,346,709				104,346,709
Weighted average ADS outstanding—diluted			109,587,726				113,911,629				113,911,629				131,630,583				112,853,015				112,853,015

 

 

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