Earnings call transcript Q4 2022

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Operator

Good morning, and good evening, everyone. Welcome to Cango, Inc.'s Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions] This call is also being broadcast live on the company's IR website.

Joining us today are Mr. Jiayuan Lin, Chief Executive Officer; and Mr. Officer company. Financial Chief Zhang, of the Michael

Following session. remarks, we the Q&A will conduct management's prepared

begin, refer also we be the conference Before I today making company's statement safe call earnings in forward-looking harbor statements. release management which as applies the you to will to the

With I'm the now call Jiayuan to Mr. that CEO ahead, of sir. said, Lin, Cango. turning over Please go

Jiayuan Lin

XXXX Cango's Earnings welcome everyone, to Fourth Quarter Full and Call. Year Hello, and

and disruptions shortages XXXX auto COVID challenging pandemic, create was uncertainties continue year, including significant chain a to headwinds, industry. multiple supply chip in the

In map, addition, stepped China's has profoundly of strong demonstrating challenging political auto and all including Cango road have environment, a economic resilience. progress and turmoils society, complex external impacted worldwide along industry. its this Despite strategic aspects new

transformations Cango in XXXX. significant underwent

transaction the integrated on all-in-one we debut successful with car XXXX. products dealers the of centering the car trading For Cango one-stop June comprehensive into in Haoche following We launched trading array in business, providing mini-program the in car new October, APP specific solution gradually Cango Haoche of standardized sources. an platform our multisystem

of other our the services end U-Car vehicle trading used we developed business, our car APP digital the U-Car car research, functions used online needs For sourcing, dealers. support mini-program U-Car and and May to at transaction transaction Cango the APP Cango services of in as XXXX. launched encompass car Cango such diverse options, online meet

to of new the transformation car has largely feedback service been proposition. a transaction demand and market result, transaction market [indiscernible] the car with our As and established. used covering validity automotive a platform testifies new our into platform service Strong both dealer

XX.X% trading was XXX XX% X.XX total fourth The accounting accounting from were car car XXXX quarter-over-quarter, which, whole revenues. billion. were Revenue RMB million, up over year for transactions RMB was Total revenues billion, from quarter XXX XX% over for Of total XX%. of million, revenue in of up the trading transaction revenues quarter-over-quarter. X.X RMB RMB

a it financing strongly transformation was facilitation platform automotive but to improved pad we primary into launch facilitation focus, by transaction optimizing our financing total of the we XX.X our sheet. Currently, an continuously automotive have billion service and quality as healthy of XXXX. is decreased outstanding of continues balance XX.X XXXX, balance not in automotive from financing facilitated our to business our The billion support resulting assets, as transactions December XX, XX, December of CNY CNY

expect further to the decrease XXXX. over number We

strong the the the transformation to new addition stable and confidence ensuring give reserves exposure, assets fully our In embrace to us world. healthy opportunities cash operation, our post-pandemic ever-decreasing in risk grasp and

Now like more take I details business development. through of to you would our

Now with business. let's the new transactions car begin trading

XXXX, XX, year-on-year. dealers, Cango has up Haoche December of XX% engaged As XX,XXX

X,XXX up quarter. total we During a the cars, from fourth previous quarter, the of sold XX.X%

full year and XXX,XXX sold APP the For the total on XXXX, during views X.X% visitors Haoche the of page cars. full and par with were a industry. respectively. XXXX, accumulated XX,XXX we year Cango XX,XXX, was over Conversion on unique rate Also

OEMs and various suppliers brand sources our by also For while car diversified with have model. established our we new expanding cars, cooperation self-owned vehicle and

prompting develop characteristics we of fourth models of number in Specifically, the sales regional the quarter. in a channels. Furthermore, and Mitsubishi, with FAW and sales increase Dongfeng continue Audi teams on the deep Motor stickiness based steady Group, forged FAW-Volkswagen collaborations to our sources GAC each vehicle market, and

others. services range access supporting intelligent Dealers of several including generation, cannot we With logistics with upgraded of the leads platform, Cango transaction tools respect product services quarter, have service and transactions during dealer services, facilitation financial Haoche the the customer to fourth wide a insurance and products and facilitation experience. services, among addition largely easily efficiency further completed metrics on improving our

platform our are the and of end made year. traction services progress good of have gaining the by All

following launch Cango platform, platform, and enhancing used engagement. our car mid-XXXX, car to our we our new new on continue U-Car of also we mini-program. users focused build leveraging grown the used acquiring as While same platform In time, by advantages the platform sources services, stickiness. matching improve on and our behavior one-on-one abundant the dealers' such and their At increase we our car

of loan We including the and value-adding also transferred the teams to matching were time. registered platform car for and And the and providing conversion car Cango across over viewing, XXXX, one-stop spent in of quarter, dealers rate. dealers established car X,XXX professional services, with service transactions technician number end our improve pick there the up teams customers country further inspection on We fourth car to a on U-Car.

unique XX, services December X functional and modules other visitors and over and U-Car digital dealers support January Cango auctions, accumulated on XX, XXX,XXX [indiscernible] officially the launched with of were evolving mini-program XXXX, vehicle respectively. Cango views online XX,XXX, we services. page car demand APP, searching, transaction In sourcing, U-Car As covering

to improve U-Car its-related and services. continue will we Cango forward, Moving and products

Through connecting sources spanning segment, to standardized car Cango used support the transaction entire customers broad chain. we and efficiently, used for car network funds form and digital U-Car' the services a platform, aim by deep supplemented

used With transaction increased of dealers these profit. truly advantages, circulation efficient Cango streamline promote used process cars can the the operating across car country, cross-regional and

years and them over will resources. engagement services. stickiness car to redouble base platform, and and digitalization, integrating network can used the we standardize efforts Cango's premium move further our their dealer we online our on car ecosystem, a profits to forward, improve off-line to to Through we online advance closed-loop continue this leveraging platform's with standardize developed the services channel Meanwhile, creating transaction provide services. customer them off-line will solid and enable enhance ecosystem XX Going and

to platform. is advantage In propel competitive our that New technologies, Cango XXXX, of information a digital efforts our and building digital R&D digital By essential we service a of transformation. holistically the capabilities. information, an center our to our created business digital part enhance continue and infrastructure integrates improve development sustainable transaction to has proprietary automotive unique intelligent

taken parts is from to an territory transform our scope business financing we our steadily improve increase platform, and as both never automotive and [XG] Cango's integrated we a easy we to expect model has offerings capacity uncharted dual shape framework efficiency through and sea operation transaction and as each function. platform service undergone have of change. leading service our the auto the provider new

them However, achieve once and to never to medium-sized determination company's goals our in products with need. on our markets empower by small- the they and waver, journey and success lower-tier services them to they their providing dealers

services financing ago, our gradually launch an demand Taking XX,XXX and nationwide, worked grown solid larger dealers have build established many more we to to network customers services diversified pad, years A potential, with we we When covering homed between into provide XX and decade in facilitation later, the and business, financing a as on our dealers Cango premium diverse imbalance supply dealers lower-tier huge markets. automotive our consumption the and facilitation ever Cango a a multiple in needs. of partnered small services have and since. closely nearly with the we medium

operating well our with the effective step costs address been to have help efficiency. our lower our We their boundaries needs pushing them dealers unmet to of their solutions every one-stop and refine business services business as as of way, offer to step continuously

easy, car to is goal make enjoyable. ultimate our always, and simple purchases As

the and industry economy auto profound changes. are macro The overall lasting undergoing and

China's and in long-term improving for and the transaction will continue industry. of on we further focus very confident our vision service while expectations challenges have see ahead Although XXXX, mission standardized the automotive in development we future Cango auto to still our ecosystem. high

the development dealer dedicated promoting of our overall industry. and the recovery to we partners, remain with Together

through Next, I will over our turn company's take performance. to you call Michael Zhang, the the will who financial CFO,

Michael Zhang

Hello, call. fourth Jiayuan. quarter and Thanks, XXXX year welcome full to everyone, our and earnings

are terms year-over-year all all comparisons and to Before otherwise our RMB on basis. started that review unless in please I note a financials, percentage stated, numbers

total and quarter the of Fourth the our trading performance play revenues role XXX.X fourth model. once XXX.X an of platform. Car continuing million. Our strength illustrate transaction CNY again business were revenues in CNY strategy resilience essential to business our delivered million, quarter and

to XXXX million XXXX. on XXX.X the XXX.X was in the X,XXX.X with of expenses cost of fourth the move from our compared during CNY XXXX CNY XXX.X and the Total million quarter. decreased fourth million quarter CNY and quarter same Cost let's XXXX. period expenses in million revenue of operating period Now to same costs in the CNY in

percentage compared with trading the revenue, ratio. XX.X% XXXX of cost to thus in XX.X% presents a total our fourth normally revenue quarter transaction ratio, a revenues. of overall was XXXX. up same Car As of revenue The higher from to higher period car in primarily total the the due pushing trading transaction cost contribution was change

period Sales CNY million XX.X in the in to of quarter XXXX and marketing from XX.X CNY million same fourth XXXX. expenses the decreased

of quarter revenues, As and a XXXX. of same compared the XXXX X% X% total in fourth in with sales period expenses was marketing the percentage

quarter the the General decreased and in million in from of same XXXX period XX.X XXXX. to CNY administrative CNY XX.X expenses million

a general same the As of compared quarter in and XXXX. percentage total administrative expense the revenues, was period XX.X% X.X% with fourth in

X.X Research XXXX. and XX.X million of to from the quarter CNY same XXXX million development of the decreased in period CNY expenses in fourth

research expenses same X.X% was in X.X% with percentage period a As the the XXXX. compared and of total development revenues, in quarter fourth

in the liability risk XX.X on with XX.X period in CNY fourth million was XXXX. compared loss the Net XXXX quarter assurance CNY same million

share quarter XXX -- period same loss was in CNY We fourth of in in CNY million On per the loss with XXX.X compared quarter per fourth of CNY recorded adjusted and -- the XXX.X X.XX. the fourth in fourth per XXX million. the non-GAAP basis, net loss million. quarter XXXX. the net diluted CNY a XXXX ADS was net adjusted CNY period CNY loss Non-GAAP XXX.X was X.XX was XXXX diluted ADS the loss same operations in from Net XXXX a quarter million XXX in

and net For net CNY the CNY X million. loss was diluted was per CNY operating and billion. and Total XXX.X full were loss Diluted X.XX was X.X our net was year CNY adjusted XXXX, X,XXX.X were per ADS X.XX. non-GAAP adjusted net billion. expenses million, CNY loss total ADS costs loss non-GAAP CNY Net revenues

our to balance on sheet. Moving

XXX December cash September had XX, with equivalents and of cash CNY XXXX. As as XX, of we of compared XXXX, million XXX.X CNY million

December had short-term X.X XXXX, XX, with CNY CNY compared of of as investment X.X billion company of XX, the As September XXXX. billion

preliminary Looking view to XXX CNY reflects XXX our change. to the our and we're on subject total and the forecast XXXX, ahead are operational be this current that between predicting quarter conditions, revenues note Please market million. which to million now CNY first

concludes prepared questions. are This Operator, to ready remarks. we take our now

Operator

Your from Morgan [Operator Shelley comes Wang Stanley. question first Instructions] from

Shelley Wang

I have questions. two

is the facilitation risky have decrease question significant financing company's as has in automotive a first optimized assets. also The observed its Cango business; we

the So how does company's this positively transformation? impact

by car towards trading progress transformation And the transaction company has the the platform. in is Cango substantial appears that disclosed on service based question data second made

is what your So industry peers in -- your other with compared what what compared with are -- are platforms? your industry? dealers And this how your advantages like also advantages

Jiayuan Lin

will questions. I your Shelley, questions. you, take two Thank your two for

assets financing first to So directly question, and generated scale our significantly your the has viability. answer facilitation automotive on even affected the and our larger company's a cash -- could on first impact flow business

CNY of from XX, billion of December to The decreased transactions total of XXXX. XX.X facilitated outstanding billion as financing as XX.X balance we CNY December XX, XXXX,

freed-up further of XXXX, number expect We to and expansion self-owned over our flow cash inventory. plan the we a decrease vehicle to in invest

On new question, to a used transactions shape to. for with both data currently, platforms your taken second have generating car us and lot and and of car refer -- are our

Once our That's In car that smoothly, will the be next holistically capabilities processes and you. our shows data new trading improve steps behind addition business logic the running profitability. and business. support required transformation, capacity validating and operations from model to all transaction fully Thank up scale and our the me. to this to

Operator

Goldman John from comes [ph] question [Operator next Instructions] from Sachs. Your Li

Unidentified Analyst

Thank you to management. questions this for giving me to the ask opportunity

So I have two questions.

automotive question outlook what auto in is is more on is, platform could XXXX? the you And used detail? what your car outlook transaction the business for for XXXX? first second your in is us current color question market in And development China's of give your service The specifically, the

Jiayuan Lin

two your John. you, take questions. I will Thank

we backlog of On the demand the policies will have released. demand, pandemic and created actually believe car gradually years for consumer purchases on this a X pent-up demand first side, of be question,

Of level of course, subject the and this policy economic recovery support. is to overall

new lithium decreased have models Furthermore, to supply beginning On NEVs NEV, enjoy the supply of costs as fallen. will from many the side, vehicle the year energy production brands traditional an taxes. launched new at prices battery exemption also vehicle have continue and purchase car

more see to XXXX. expect we XXXX, with in compared So market transactions auto

searching, vehicle On car used online of car the our evaluation, your historical we launched an business, second auctions, digital car range online at of condition other used reports, question U-Car XXXX, Cango vehicle services. on start listing functions, including covering exceptional APP and

on were end users U-Car. the of there As of registered Cango XXXX, X,XXX

page accumulated Cango XXXX, As XX, were of December XXX,XXX over U-Car views XX,XXX, mini-program visitors respectively. and unique on and the

over We expect of the to time. transactions on platform a pick up number

as sold by also leveraging same those sources, examples, you by the car some At cars. cars come time, some give used our come those these to of abundant advantages the the such repossessed consumers and from used

Of course, we own have our also cars.

taking advantage improve one-on-one groomed matching have dealer's sources and these we their behavior used platform by successfully car and platform So the stickiness. of abundant usage services,

We have also fourth inspection, car services transfers, car with and professional one-stop customers car technician quarter, service et country loan and value-adding the the such across providing teams established dealers viewing, teams as in car cetera.

Operator

comes question [indiscernible]. next from Lee Your from Brent

Unidentified Analyst

question Chinese. a in directly I'll just ask

in How will advantage company the is only sources question and abandoned this the is future? advantages. My one strongest consolidate the leverage of company's car

Jiayuan Lin

Lee, you, your Thank question. for

that is our car car one of platform. new absolutely advantages car You used strongest are sources and our service right in

is through the markets. and to We our our car transaction more With car provide increase needs better trading customer stickiness the to and of to diversified individual in use to can car dealers goal a platform. services encourage customers hope sources we business. car Our other experience in advantages on service a better leverage vehicle meet customers lower-tier our supply, buyers

our new with further the step OEMs. efforts collaboration FAW-Volkswagen well, Audi. Motor, we will up with and on deep quarter, Dongfeng the explore and built fourth so develop car and And Mitsubishi, our FAW In we GAC sources, collaborations partnerships to

for platform also became sales important new Mitsubishi's model. Outlander most GAC the We

used car advantage lot well, to of On repossessed of access a cars. we historically, this have having sources,

business. this you. and So will use we car in Thank further scale the to leverage future, as a our grow up used

Operator

Thank you.

at further questions call for We time. the I closing have management will back no remarks. this hand to

Jiayuan Lin

you. you us. today's Thank call. for That all joining closes Thank

Cango (CANG) 9 Mar 232022 Q4 Earnings call transcript