Cango (CANG) 6-K Cango Inc. Reports Second Quarter 2019 Unaudited Financial Results

Exhibit 99.1

CANGO INC. REPORTS SECOND QUARTER 2019 UNAUDITED FINANCIAL RESULTS

SHANGHAI, September 3, 2019, /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 2019.

Second Quarter 2019 Financial and Operational Highlights

• Total revenues in the second quarter of 2019 were RMB336.3 million (US$49.0 million), representing a year-over-year increase of 42.3% and outperforming the high end of the Company’s guidance by 6.8%.

• After-market services facilitation revenues in the second quarter of 2019 were RMB35.9 million (US$5.2 million), continuing to serve as an important driver for the Company’s revenue growth.

• Income from operations in the second quarter of 2019 increased by 17.3% to RMB84.3 million (US$12.3 million) from RMB71.8 million in the corresponding period of 2018.

• Net income in the second quarter of 2019 increased by 46.4% to RMB94.6 million (US$13.8 million) from RMB64.6 million in the corresponding period of 2018.Non-GAAP net income in the second quarter of 2019 increased by 66.7% to RMB116.9 million (US$17.0 million) from RMB70.1 million in the corresponding period of 2018.

• The amount of financing transactions the Company facilitated in the second quarter of 2019 totaled RMB6,154.8 million (US$896.6 million). The total outstanding balance of financing transactions the Company facilitated was RMB36,394.0 million (US$5,301.4 million) as of June 30, 2019.

• M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 0.72% and 0.30%, respectively, as of June 30, 2019, as compared to 0.77% and 0.37%, respectively, as of March 31, 2019.

• The number of dealers covered by the Company was 48,367 as of June 30, 2019, as compared to 47,879 as of March 31, 2019.

Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, “Despite the continuing macroeconomic and industry-wide challenges, we maintained our solid growth trajectory with strong financial and operating performances in the second quarter of 2019. During the quarter, our core auto loan facilitation business continued to be a vital growth driver, and we further expanded and refined our after-market services. In addition, we achieved significant breakthroughs in our cooperation with the Industrial and Commercial Bank of China (“ICBC”) in relation to our automotive financing solutions. As a result, our total revenues increased by 42.3% year-over-year to RMB336.3 million in the second quarter of 2019. Going forward, we will continue to augment our leadership in China’s market for automotive financing services by bolstering our core competencies in auto loan facilitation services, expanding our dealership network, developing differentiated products and services, and harnessing our well-developed capabilities in big data and internet technologies.”

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Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, “After a strong start in the first quarter of 2019, we continued to deliver healthy performances in the second quarter. Our total revenues increased by 42.3% year-over-year to RMB336.3 million in the second quarter. Our after-market services facilitation business continued to serve as an important growth engine, contributing RMB35.9 million or 10.7% of our total revenues in the second quarter. Our income from operations and net income increased by 17.3% and 46.4% in the second quarter, respectively. Looking ahead, we will continue to invest in expanding our dealership network, optimizing our service quality and efficiency, and advancing our technology through innovation. As we continue to deepen our collaborations with more financial institutions and original equipment manufacturers, we are confident that we will sustain our growth despite the persisting industry challenges.”

Second Quarter 2019 Financial Results

REVENUES

Total revenues in the second quarter of 2019 were RMB336.3 million (US$49.0 million), representing a 42.3% increase from RMB236.3 million in the corresponding period of 2018. This increase was primarily driven by the Company’s strategies to rejuvenate growth, increased revenue contribution from its after-market services business, and a significant increase in loan facilitation volume from the Company’s business partnership with ICBC.

Revenues from after-market services facilitation in the second quarter of 2019 were RMB35.9 million (US$5.2 million), compared to RMB12.3 million in the same period of last year.

OPERATING COST AND EXPENSES

Total operating cost and expenses in the second quarter of 2019 were RMB252.0 million (US$36.7 million), compared to RMB164.4 million in the corresponding period of 2018.

• Cost of revenue in the second quarter of 2019 increased by 55.0% to RMB125.8 million (US$18.3 million) from RMB81.2 million in the corresponding period of 2018. The increase was primarily driven by the Company’s business expansion and was in line with the increase in total revenues in the second quarter of 2019. Cost of revenue as a percentage of total revenues in the second quarter of 2019 increased to 37.4% from 34.4% in the corresponding period of 2018. This was primarily due to increases in the amount of incentives paid to employees per individual financing transaction.

• Sales and marketing expenses in the second quarter of 2019 increased by 20.3% to RMB44.5 million (US$6.5 million) from RMB37.0 million in the corresponding period of 2018. The increase was due to increases in travel expenses as a result of the Company’s business expansion and higher share-based compensation expenses. Sales and marketing expenses as a percentage of total revenues in the second quarter of 2019 decreased to 13.2% from 15.7% in the corresponding period of 2018.

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• General and administrative expenses were RMB53.4 million (US$7.8 million), or 15.9% of total revenues, in the second quarter of 2019, compared to RMB31.4 million, or 13.3% of total revenue, in the corresponding period of 2018. The increase was mainly due to higher share-based compensation expenses in the second quarter of 2019.

• Research and development expenses in the second quarter of 2019 increased by 29.2% to RMB12.3 million (US$1.8 million) from RMB9.5 million in the corresponding period of 2018. The increase was a result of increased investments in the Company’s research and development projects as it expanded its business. Research and development expenses as a percentage of total revenues in the second quarter of 2019 decreased to 3.6% from 4.0% in the corresponding period of 2018.

INCOME FROM OPERATIONS

Income from operations was RMB84.3 million (US$12.3million) in the second quarter of 2019, representing a year-over-year increase of 17.3% from RMB71.8 million in the corresponding period of 2018.

NET INCOME

Net income was RMB94.6 million (US$13.8 million) in the second quarter of 2019, representing a year-over-year increase of 46.4% from RMB64.6 million in the corresponding period of 2018.Non-GAAP adjusted net income increased by 66.7% to RMB116.9 million (US$17.0 million) from RMB70.1 million in the corresponding period of 2018.Non-GAAP adjusted net income excludes the impact of share-based compensation expenses. For further information, see “Use ofNon-GAAP Financial Measure.”

NET INCOME PER ADS

Basic and diluted net income per American Depositary Share (ADS) in the second quarter of 2019 were both RMB0.60 (US$0.09).Non-GAAP adjusted basic and diluted net income per ADS in the second quarter of 2019 were both RMB0.75 (US$0.11). Each ADS represents two of the Company’s Class A ordinary shares.

BALANCE SHEET

As of June 30, 2019, the Company had cash and cash equivalents of RMB1,609.6 million (US$234.5 million), compared to RMB2,178.0 million as of March 31, 2019. The change was due to the fact that the Company invested certain amount of cash in term deposit over three months for bettercash-on-cash return.

Business Outlook

For the third quarter of 2019, the Company expects total revenues to be between RMB300 million and RMB325 million. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.

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Conference Call Information

The Company’s management will hold a conference call on Tuesday, September 3, 2019, at 9:00 P.M. Eastern Time or Wednesday, September 4, 2019, 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
China Toll Free:	4001-201-203
Hong Kong Toll Free:	800-905-945
Conference ID:	Cango Inc.

The replay will be accessible through September 10, 2019, by dialing the following numbers:

International:	+1-412-317-0088
United States Toll Free:	+1-877-344-7529
Access Code:	10134672

A live and archived webcast of the conference call will also be available at the Company’s investor relations website athttp://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, automotive transaction facilitation, 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.

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Use ofNon-GAAP Financial Measure

In evaluating the business, the Company considers and usesNon-GAAP adjusted net income, anon-GAAP measure, as a supplemental measure to review and assess its operating performance. The presentation of thenon-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 definesNon-GAAP adjusted net income as net income excluding share-based compensation expenses. The Company presents thenon-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 arenon-cash charges. The Company also believes that the use of thenon-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. Thisnon-GAAP financial measure has limitations as analytical tools. One of the key limitations of usingNon-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 ofNon-GAAP adjusted net income. Further, thenon-GAAP measure may differ from thenon-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling thenon-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’snon-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 RMB6.8650 to US$1.00, the noon buying rate in effect on June 28, 2019, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

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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

Caesar Cao

Cango Inc.

Tel: +86 21 3183 5088 ext.5521

Email:ir@cangoonline.com

Jack Wang

ICR Inc.

Tel: +1 (646)405-5056

Email:ir@cangoonline.com

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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, 2018		As of June 30, 2019
	RMB		RMB		US$
ASSETS:
Current assets:
Cash and cash equivalents		2,912,901,189		1,609,621,867		234,467,861
Restricted Cash		298,900,155		586,789,155		85,475,478
Short-term investments		265,869,717		546,167,864		79,558,320
Accounts receivable, net		86,513,830		135,437,250		19,728,660
Financing receivable, net		5,420,617		7,626,277		1,110,892
Short-term loan principal and financing service fee receivables, net		—		5,759,707		838,996
Short-term finance leasing receivable, net		1,123,703,618		1,499,097,355		218,368,151
Prepaid expenses and other current assets		61,272,518		78,004,663		11,362,660
Total current assets		4,754,581,644		4,468,504,138		650,911,018
Non-current assets:
Restricted Cash		668,627,618		805,081,110		117,273,286
Long-term investments		292,099,059		441,534,200		64,316,708
Equity method investments		1,448,416		—		—
Goodwill		145,063,857		145,063,857		21,130,933
Property and equipment, net		18,286,218		16,720,263		2,435,581
Intangible assets		1,693,407		33,776,532		4,920,107
Deferred tax assets		100,194,993		81,593,698		11,885,462
Long-term finance leasing receivable, net		1,282,457,409		1,577,577,084		229,800,012
Othernon-current assets		36,687,583		9,493,492		1,382,883
Totalnon-current assets		2,546,558,560		3,110,840,236		453,144,972
TOTAL ASSETS		7,301,140,204		7,579,344,374		1,104,055,990
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings		660,000,000		1,110,000,000		161,689,731
Long-term debts—current		467,194,051		542,456,711		79,017,729
Accrued expenses and other current liabilities		211,458,501		215,035,436		31,323,443
Risk assurance liabilities		173,210,363		196,388,309		28,607,183
Income tax payable		53,517,717		7,418,417		1,080,614
Total current liabilities		1,565,380,632		2,071,298,873		301,718,700
Non-current liabilities:
Long-term borrowings		472,793,340		314,346,370		45,789,712
Othernon-current liabilities		7,599,404		—		—
Totalnon-current liabilities		480,392,744		314,346,370		45,789,712
Total liabilities		2,045,773,376		2,385,645,243		347,508,412
Shareholders’ equity
Ordinary shares		204,260		204,260		29,754
Additionalpaid-in capital		4,444,078,463		4,481,629,026		652,822,873
Accumulated other comprehensive income		109,452,996		98,390,209		14,332,150
Accumulated retained earnings		698,036,438		611,766,717		89,113,869
Total Cango Inc.’s equity		5,251,772,157		5,191,990,212		756,298,646
Non-controlling interests		3,594,671		1,708,919		248,932
Total shareholders’ equity		5,255,366,828		5,193,699,131		756,547,578
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		7,301,140,204		7,579,344,374		1,104,055,990

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,
	2018 RMB			2019						2018 RMB			2019
				RMB			US$						RMB			US$
Revenues		236,287,811			336,303,754			48,988,165			485,107,011			687,962,259			100,213,002
Operating cost and expenses:
Cost of revenue		81,181,330			125,824,004			18,328,333			162,037,069			256,630,454			37,382,440
Sales and marketing		36,979,636			44,503,534			6,482,671			71,798,024			90,050,914			13,117,395
General and administrative		31,350,545			53,418,413			7,781,269			58,094,590			118,182,033			17,215,154
Research and development		9,481,415			12,246,050			1,783,838			15,933,541			25,593,854			3,728,165
Net loss on risk assurance liabilities		(4,951,451	)		2,379,706			346,643			(1,183,503	)		20,230,839			2,946,954
Provision for financing receivables		10,402,370			13,672,656			1,991,647			13,464,113			23,695,938			3,451,703
Total operating cost and expenses		164,443,845			252,044,363			36,714,401			320,143,834			534,384,032			77,841,811
Income from operations		71,843,966			84,259,391			12,273,764			164,963,177			153,578,227			22,371,191
Interest income		18,246,042			22,704,386			3,307,267			26,323,438			41,588,934			6,058,111
(Loss) income from equity method investments		937,549			(942,312	)		(137,263	)		(1,396,142	)		(926,205	)		(134,917	)
Interest expense		(4,712,329	)		(4,712,329	)		(686,428	)		(9,502,055	)		(10,006,574	)		(1,457,622	)
Foreign exchange loss, net		10,045,905			1,409,293			205,287			7,422,516			122,801			17,888
Other income		(975,669	)		856,340			124,740			21,046,154			21,593,278			3,145,416
Other expenses		(7,091,835	)		(168,717	)		(24,576	)		(7,197,923	)		(1,184,660	)		(172,565	)
Net income before income taxes		88,293,629			103,406,052			15,062,791			201,659,165			204,765,801			29,827,502
Income tax expenses		(23,677,171	)		(8,819,437	)		(1,284,696	)		(53,016,212	)		(35,808,056	)		(5,216,031	)
Net income		64,616,458			94,586,615			13,778,095			148,642,953			168,957,745			24,611,471
Less: Net income attributable to the noncontrolling interest shareholders		164,843			3,047,624			443,936			4,099,150			1,200,254			174,837
Net income attributable to Cango Inc.’s shareholders		64,451,615			91,538,991			13,334,159			144,543,803			167,757,491			24,436,634
Accretion of Series C Preferred Shares		6,991,289			—			—			6,991,289			—			—
Net income attributable to Cango Inc.’s ordinary shareholders		57,460,326			91,538,991			13,334,159			137,552,514			167,757,491			24,436,634
Net income per ADS(Note 1):
Basic		0.44			0.60			0.09			1.07			1.11			0.16
Diluted		0.44			0.60			0.09			1.05			1.11			0.16
ADSs used in net income per ADS computation (Note 1):
Basic		130,053,500			151,404,946			151,404,946			128,244,728			151,404,946			151,404,946
Diluted		131,667,341			151,404,946			151,404,946			130,443,925			151,404,946			151,404,946
Other comprehensive income, net of tax
Unrealized losses onavailable-for-sale securities		78,147			(108,594	)		(15,818	)		156,131			(146,801	)		(21,384	)
Reclassification of losses to net income		—			(276,843	)		(40,327	)		—			(276,843	)		(40,327	)
Foreign currency translation adjustment		43,890,855			31,329,909			4,563,716			43,890,855			(10,639,143	)		(1,549,766	)
Total comprehensive income		108,585,460			125,531,087			18,285,666			192,689,939			157,894,958			22,999,994
Total comprehensive income attributable to Cango Inc.’s shareholders		108,420,617			122,483,463			17,841,730			188,590,789			156,694,704			22,825,157

Note1: Each ADS represents two ordinary shares.

CANGO INC.

RECONCILIATIONS OF GAAP ANDNON-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,
	2018		2019				2018		2019
	(Unaudited) RMB		(Unaudited) RMB		(Unaudited) US$		(Unaudited) RMB		(Unaudited) RMB		(Unaudited) US$
Net income		64,616,458		94,586,615		13,778,094		148,642,953		168,957,745		24,611,471
Add: Share-based compensation expenses		5,467,240		22,273,101		3,244,443		5,467,240		37,550,563		5,469,856
Cost of revenue		224,157		913,198		133,022		224,157		1,539,574		224,264
Sales and marketing		1,164,522		4,744,170		691,066		1,164,522		7,998,269		1,165,079
General and administrative		3,794,264		15,457,530		2,251,643		3,794,264		26,060,087		3,796,080
Research and development		284,297		1,158,203		168,711		284,297		1,952,633		284,433
Non-GAAP adjusted net income		70,083,698		116,859,716		17,022,537		154,110,193		206,508,308		30,081,327
Less: Net income attributable to the noncontrolling interest shareholders		164,843		3,047,624		443,936		4,099,150		1,200,254		174,837
Non-GAAP adjusted net income attributable to Cango Inc.’s shareholders		69,918,855		113,812,092		16,578,601		150,011,043		205,308,054		29,906,490
Accretion of Series C Preferred Shares		6,991,289		—		—		6,991,289		—		—
Non-GAAP adjusted net income attributable to Cango Inc.’s ordinary shareholders		62,927,566		113,812,092		16,578,601		143,019,754		205,308,054		29,906,490
Non-GAAP adjusted net income per ADS-basic (Note 1)		0.48		0.75		0.11		1.12		1.36		0.20
Non-GAAP adjusted net income per ADS-diluted (Note 1)		0.48		0.75		0.11		1.10		1.36		0.20
Weighted average ADS outstanding—basic		130,053,500		151,404,946		151,404,946		128,244,728		151,404,946		151,404,946
Weighted average ADS outstanding—diluted		131,667,341		151,404,946		151,404,946		130,443,925		151,404,946		151,404,946

Note1: Each ADS represents two ordinary shares.