SHANGHAI, June 13, 2024 /PRNewswire/ -- Cangu Group (“CANGU” or the “Company”) (NYSE: CANG), the leading automotive trading service platform in China, today announced unaudited financial results for the first quarter of fiscal year 2024.

2024Financial and operational highlights for the first quarter of the year:

• In the first quarter of 2024, the company's total revenue was RMB 64.42 million (US$8.92 million), compared to RMB 543 million for the same period last year. In the first quarter of 2024, revenue was RMB 74.15 million (US$10.27 million), up 43.1% from RMB 51.83 million in the same period last year. In the first quarter of 2024, net profit was RMB 90,03 million (US$12.47 million), up 14.3% from RMB 78.77 million in the same period last year.
  
• As of March 31, 2024, the cumulative balance of automobile loans facilitated by the company reached RMB 7.6 billion (US$1.1 billion). The M1+ and M3+ overdue rates for all of the company's completed and ongoing auto loans were 2.87% and 1.51%, respectively. As of December 31, 2023, the M1+ and M3+ overdue rates were 2.66% and 1.37%, respectively.
  
• As of March 31, 2024, the total amount of the company's cash and cash equivalents, short-term investments and limited short-term investment subscriptions increased by RMB 153 million (US$21.14 million) compared to December 31, 2023. The improvement in working capital was mainly due to the reduction in working capital for automobile transactions and the positive operating cash flow generated by the recovery of financing receivables and commissions.

Lin Jiayuan, CEO of Canggu, said: “In the first quarter of 2024, China's automotive industry faced many challenges. Traditional car companies have transitioned into the deep-water zone, while emerging car companies are rapidly rising, facing fierce market competition and severe tests of profitability. In response to changes in the industry, Cangu took the initiative to reduce the procurement scale of its own new car business and optimized inventory management, effectively avoiding the risk of falling new car prices. In the first quarter, we completed the integration of the 'Cangu Ucar' platform, and by continuously providing high-quality vehicle sources and optimizing the service experience and supply chain management of car dealers, we recently enhanced the competitive advantage of the Ucar platform.”

“Additionally, we have made some progress in the cross-border trade of used cars. In March of this year, we officially launched a cross-border information exchange platform for used car transactions, building a bridge for global multi-lingual users to understand and understand the Chinese used car market and filling the gap in domestic cross-border used car transaction information services. In the future, we hope to make this platform the preferred gateway for Chinese used cars to go overseas.”

“Looking ahead, we will continue to work to explore new forms of business and expand more opportunities for growth. At the same time, we firmly believe that through continuous innovation and refined management, Cangu will achieve long-term sustainable development in the fierce market competition.”

Zhang Yongyi, Chief Financial Officer of Cangu, said, “In the first quarter of 2024, we achieved positive cash flow for three consecutive quarters and maintained solid cash reserves by optimizing financial strategies, reducing new car inventories, and improving operational efficiency. We are convinced that refined cost control and efficient cash management will drive the long-term sustainable development of Canggu.”

Financial results for the first quarter of 2024:

revenues

In the first quarter of 2024, the company's total revenue was RMB 64.42 million (US$8.92 million), compared to RMB 543 million for the same period last year. In the first quarter of 2024, guaranteed revenue was RMB 30.26 million (US$4.19 million). This revenue was recognized in accordance with ASC326 accounting standards applicable from January 1, 2023. The standard stipulates that non-contingent guaranteed income must be separately listed.

Operating costs and expenses

• In the first quarter of 2024, the company's operating costs were reduced from RMB 481 million in the same period last year to RMB 29.06 million (US$4.02 million). In the first quarter of 2024, operating costs accounted for 45.1% of total revenue, compared to 88.6% in the same period last year.
  
• In the first quarter of 2024, the company's marketing and promotion expenses were reduced from RMB 12.54 million in the same period last year to RMB 3.55 million (US$490,000).
  
• In the first quarter of 2024, the company's management expenses were reduced from RMB 39.8 million in the same period last year to RMB 37.92 million (US$5.25 million).
  
• In the first quarter of 2024, the company's R&D expenses were reduced from RMB 8.1 million in the same period last year to RMB 1.1 million (US$150,000).
  
• In the first quarter of 2024, the return of the company's contingent risk guarantee liabilities was RMB 15.02 million (US$2.08 million). The reversal was mainly confirmed as a result of the release of risk-guaranteed liabilities or contingent liabilities.
  
• Credit reserves were restored to RMB 66.34 million (US$9.19 million) in the first quarter of 2024. The main reason for the recovery was the positive impact of accounts receivable.

Operating profit

In the first quarter of 2024, the company's operating profit was RMB 74.15 million (US$10.27 million), an increase of 43.1% over RMB 51.83 million in the same period last year.

net profit

In the first quarter of 2024, the company's net profit was RMB 90,003 million (US$12.47 million). The company's non-GAAP net profit for the first quarter of 2024 was RMB 95.74 million (US$13.26 million). The non-GAAP net loss excludes the impact of equity incentive fees. For more relevant information, please refer to the statement on “Non-US GAAP Financial Standards” in the original English text.

American Depositary Receipts per share (ADS) Net profit

In the first quarter of 2024, the company's basic and diluted net profit per share of American Depositary Receipts (ADS) was RMB 0.85 ($0.12) and RMB 0.80 ($0.11), respectively, while non-GAAP basic and diluted ADS net profit per share was RMB 0.91 ($0.13) and RMB 0.85 ($0.12), respectively. Each ADS share is equivalent to two Class A common shares.

balance sheet

As of March 31, 2024, the company held a total of RMB 1,156 billion (US$160 million) in cash and cash equivalents. As of December 31, 2023, the company held a total of RMB 1,021 billion in cash and cash equivalents.

As of March 31, 2024, the company held a total short-term investment of RMB 2,322 million (US$322 million). As of December 31, 2023, the company held a total of RMB635 million in short-term investments. The change was mainly due to the transfer of RMB 1,670 billion from the restricted cash account after the company completed the short-term investment subscription process on December 31, 2023.

Performance expectations

The company expects total revenue for the second quarter of 2024 to be between RMB 35 million and RMB 45 million. This guideline only represents the company's current and initial expectations of the market and operating conditions, which may change in the future.

Stock repurchase plan

According to the share repurchase plan announced by the company on April 23, 2024, as of May 31, 2024, the company had used cash to repurchase 360,858 American Depositary Receipts, totaling approximately US$578,975.

Earnings Conference Call Information

The Cangu 2024 first quarter financial results conference call will be held on Wednesday, June 12, 2024 at 9 p.m. EST, or on Thursday, June 13, 2024 at 9 a.m. Beijing time. The numbers to listen to the conference call are as follows:

Investors can replay the conference call until June 19, 2024 by calling the following numbers:

In addition, investors can also listen to the live broadcast and recording of the conference call through Cangu's Investor Relations website ().

About Canggu

Cangu Group (NYSE: CANG) was founded in 2010 and is headquartered in Shanghai, and its business covers the whole country. Using auto loans as an entry point, Cangu has built a broad channel network deeply rooted in low-tier cities and county markets, extended its business to the fields of automobile trading and automobile aftermarket, and established a service platform covering the entire value chain of automobile distribution. Cangu Group has long focused on providing users with safe, professional and efficient services related to technological automobile transactions. In the future, it will adhere to big data and technological innovation as the core driving force, continuously improve the automotive supply chain service ecosystem, and enrich the user-centered product matrix around car transactions, car finance, and aftermarket services. Work with partners to make car buying simple and enjoyable, and create the preferred car shopping service platform for consumers. For more information, please log in.

Article translation disclaimer

The original version of this notice is officially authorized and the only legally binding version. If there are any inconsistencies or differences in meaning between the Chinese translated version and the original version, the original version shall prevail. The Canggu Group and related organizations and individuals do not guarantee the translated version, nor are they responsible for direct or indirect losses caused by inaccurate translations.

For investor inquiries, please contact:

Yoo Ee-hyuk
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