CANG - Earnings call 3 2023

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Operator

Good morning and good evening, everyone. Welcome to Cango Inc's Third Quarter 2023 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 Yongyi as [Operator the company's safe we begin, call earnings forward-looking you to I refer today conference harbor the which applies Instructions] will also make statements. Before release, to management statement and the

reminder, of being recorded. today's ahead, Cango. am Please said, With Mr. to is call the go turning over conference Jiayuan a that I As now Lin, CEO sir.

Jiayuan Lin

Language] [Foreign

Unknown Executive

to welcome Hello, Third XXXX Earnings and [Interpreted] Call. Quarter Cango's everyone,

Jiayuan Lin

[Foreign Language]

Unknown Executive

demand of economic quarter fully be XXXX, consumer third continue the and Despite of to under production introduction confidence In stimulus ]. strength [Interpreted] recover. to [ both overall has the yet measures,

Jiayuan Lin

[Foreign Language]

Unknown Executive

The [Interpreted] intricate by characterized China market automotive is dynamics. in

pick Although a the has in saw up post-pandemic consumer to resurgence pace. in automobiles, demand era XXXX for slow it been

major overall out In As automotive in of car exports driver decrease auto on new a rolled short, primary in the leading prices. market serving in market energy a retail recovery manufacturers and as quarters, policies sales have purchases, the X growth. with discount to new sustained modest vehicles, the NEVs exhibited first a the result,

Jiayuan Lin

[Foreign Language]

Unknown Executive

towards operational distribution, on-demand alleviate car the profitability transitioned been purchasing have impacted vehicle pricing stress. and On wars. they inventory have dealers accumulation by to Consequently, [Interpreted] severely of an

data Cango, car extends auto value have automotive the earlier highest impact in parties Dealers dealers As level including first the Automobile per of All pressure. of released beyond year, this faced by years. in reported XX% chain, the Association, China the half losses in dealers. recent unprecedented the Indeed,

Jiayuan Lin

[Foreign Language]

Unknown Executive

achieve year-on-year efficiency due RMB last smaller XXX RMB decline year. net the net compared to RMB million to revenues Despite loss million us in impairment, a operating of loss period a provisions and XXXX, of making our goodwill incurring same In the ]. QX financial helped [Interpreted] of total million, a amounted to reduced company's [ XX.XX overall XX.X% XXX

of of balance total at billion X.XX% X.XX%, RMB managed financing XX, and and XX.X to XXXX, rate outstanding As shrink while we of maintaining steady transactions respectively. September MX+ the MX+ to a

Jiayuan Lin

[Foreign Language]

Unknown Executive

we XXX in-depth automobile Since launched of new initiated an gain segment. and beginning, by we provinces multisystem, standardized a into logistics Cango activities, our car network comprehensive mini car introduced and the a To service with transactions and from XX solution a App of warehouses gradually the needs. nearly robust [Interpreted] XXXX, trading have automotive With facilitate all-in-one XX,XXX the Cango for Presently, dealers' across to products we significant offers venturing registered transformation over trading XXXX. have October of our In strived one-stop cities business across the platform, new built understanding in operations Haoche country. program we dealers.

Jiayuan Lin

Language] [Foreign

Unknown Executive

used And of number end to program surpassed XXXX, Cango digital range with transactions, for introduced total wide the of a listings, online features, car used [ the App U-Car dealers. services business U-Car our car needs relation support ] dealers we In May X,XXX. U-Car by auctions, platform a introduces we car on car date, as registered To the [Interpreted] and Cango services, array mini XXXX. used the has used searches, car Cango in launched transaction of to of equipped such market, the

Jiayuan Lin

[Foreign Language]

Unknown Executive

decline we and in understanding the expand the to chain we new The our precise partnerships of a more gaining significant [Interpreted] value buyers. industry our service in market is strengthen reaching As are are continuing saturation new across first-time market. car car dealers, and offerings entire with a China product with

growing and demand upgrades. for used we collection are car Both an as increasing dealers However, trend car ForEx ] replacement business. consumers [ among as well to exploring noticed expand non-ForEx their vehicle a

increasingly becoming boundaries traditional to dealers car channels venturing blurred. the between sale of cars, used new car While are are sales

Jiayuan Lin

Language] [Foreign

Unknown Executive

the [Interpreted] demand, market In and light have changing some to made of strategy. our we trends adjustments

across offer both allow and platform new to end-to-end is dealers integrated into This used Cango upgrade car U-Car To for a and to Cango on goal platform. integration the resources achieve service country. our enhance Cango us focus this, operational will efficiency. the significantly Haoche offerings our Our the U-Car comprehensive we have on

vehicle to Moving services forward, third-party will beyond we our more stores. multi-store and expand more platform. a self-operated aim model and This stores to welcoming develop our ecosystem include insurance by sources,

have our [ generation as now, serve offerings valuable of joined is companies dealers As services, customers. to Their continually supply regional allow our ultimately improve logistics providers refine downstream and already community. enabling chain our ] some car better highly end it and service feedback us to

Jiayuan Lin

Language] [Foreign

Unknown Executive

including [Interpreted] XX,XXX cars, brands including the X,XXX cars, third [ X,XXX In total new XX auto the across X models XXXX, a XX months ] sold XX quarter of energy we During of of at first car vehicle sold we vehicles. series. XXXX, new

Cango the XXX In reached of doubling used transaction nearly ] the quarter auction third the U-Car terms quarter-over-quarter. of cars, in volume XXXX, platform on [

also facilitated transactions, XX% quarter-over-quarter. XXX We marking a over increase

Jiayuan Lin

Language] [Foreign

Unknown Executive

we are fostering As closed-loop synergies management a supply online and building improve greater [Interpreted] across services self-reinforcing, and ecosystem. continue online chain offline while our to operations, we

strategic and In addition our we accelerating service and remain business. to digitalization leveraging advanced to to technologies upgrades, empower committed

dedicated technological services big fully our on optimizing data we With processes. standardizing and the and to innovation, our focus are

in Award. product, operations. efficiency. turn, goal a innovations increased Digital the to testament Innovation achieve implemented This achieve is digital is partners have Guard, our to CDI Product September, Asset enabling XXXX productivity AI our the operational In we won to innovative our ultimate that excellence, recognition business Our and heightened digital across

Jiayuan Lin

[Foreign Language]

Unknown Executive

and to power products classify technologies and we to will our digital partners future, of launch tailored big [Interpreted] services specific their In needs. dealer accurately value-added more data and the leverage the

to explore profitability refining expansion our competitive required momentum to new we we car areas edges, growth the secure the that are opportunities, we continuously will actively ever-evolving core navigate markets potential operations, the strengthening business Additionally, used including environment. abroad. our elevating and can business sustained confident By seek into

Jiayuan Lin

Language] [Foreign

Unknown Executive

for company's financial the of [Interpreted] Next, a performance. our I review Michael will Zhang, hand over CFO, to

Yongyi Zhang

everyone, Thanks, welcome our Jiayuan. earnings XXXX to call. third quarter and Hello,

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

Our the total total Among from car CNY were XXX.X were XX.X% business of CNY revenues revenues. quarter the or trading transaction XXX.X million. third them, for million revenues

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

CNY XXXX in in the decreased XX.X% expenses of period compared quarter third million XXXX. the the a X.X with million XXXX period quarter total XXXX. As was percentage XX.X% of revenues, CNY cost same and in same marketing Sales revenue the XX.X from to third in

XXXX. As in a compared period of the the X.X% XX.X same XX.X were expenses quarter with from total XXXX. and same percentage CNY in sales quarter third period million and revenues, X.X% to in XXXX third million XXXX administrative expenses marketing in General CNY the decreased

XXXX percentage a XX.X% in same revenues, the expenses As X.X% quarter total XXXX. of period in general were administrative the with compared and third

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

goodwill goodwill the loss CNY associated quarter collections Net financing was the historical is the were impairment XX.X in downturn. in receivables. As million. loss third the million. in Impairment due third for of of a on million. compared losses with forecast the The third of risk positive the quarter percentage X.X to from development prevailing credit third was XXXX provision with conditions total was XXX.X the X% XXXX liability and quarter expenses the trend primarily revenues, contingent XXXX recovery of and CNY XXXX. on CNY for impact in was current in same profit provision based from XXXX X.X% market research The the assurance quarter recovery Net period

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

sheet. Moving our balance to on

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

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

conditions, which we and million. Looking concludes XXXX, CNY total reflects revenues our subject our we our change. ahead be the ready to and XXX preliminary the remarks. of questions. are Please to on fourth Operators, CNY now forecast million are current that operational this note prepared and to view market predicting XXX between now This to are quarter take

Operator

comes first [ from Peng today's Securities with Instructions] [Operator And Yu ]. question CIC

Unknown Analyst

[Interpreted] translate this market plan My Let And what's year? will is we the My quarter war the first second the my me question is between the about auto how about dividend for next question. about And do OEMs XXXX. will year? think what our for question fourth about price continue?

Jiayuan Lin

Language] [Foreign

Unknown Executive

fourth your next the you quarter, questions. on were boosted quarter growth, saw passenger sales Day Thank for auto by slowdown and National shopping In for the for your our retail Day volume in first next outlook third festival. the much for To holiday the year. very [Interpreted] and Singles' we answer a question quarter the vehicles sales and market

quarter-over-quarter the promotions, strong discounts a driving with end volumes. is increase approaching to the expect year continue sales in As we market sales strong

next year, thoughts perspectives. from And like well, to share for would I for outlook our X my

will First, is new Car according that Association, outperform Passenger vehicles the to data. to we continue think China CPCA, energy

already driven for their and and to NEVs next effective market by incentive continue And reached national throughout regional is expected largely governments. rate the policies As penetration of end year of has XX.X%. growth more momentum September, targeted

to Secondly, expect we it car market, on the to continue grow. used

volume X we market, to value, ]. [ our car and China first [ the billion exceeded year, this total sales growth market million months gross GMV, used $X total used RMB great -- with XX potential. ] the expect a is of still XXX market close market about This has For car trillion

Jiayuan Lin

[Foreign Language]

Unknown Executive

actively ] ways, second your Meanwhile, million. question dividends On nearly April improving well, the program. been stock our [Interpreted] distributed payment, has repurchase company investors, Cango in cash dividend [ XXX has including since totaling USD our various since value share about XXXX, rewarding the IPO,

will ahead, efficiency. remain capital and management to financial prudent Looking continue enhance allocation Cango regarding

value. prioritize and shareholder value, We high areas ROI creating in investments will long-term with

Operator

And Emerson our next question ] Zhou from Sachs. comes [ with Goldman

Unknown Analyst

Language] [Foreign

Unknown Executive

this [Interpreted] dealers' lower-tier platform? Cango ]? the of in is Haoche question markets on had lifted? is, after the the U-Car Cango is The And the and question operational platform the improved pandemic merge you been environment what second restrictions has behind first the elaborate rationale Could [ the

Jiayuan Lin

Language] [Foreign

Unknown Executive

your On question third based cities. [Interpreted] market, in are primarily Cango's lower-tier tier the customers first fourth on and tier well,

ForEx So XX% close we in switched to of their have down And deeply day. According dealers stores operating data, the [ down are an loss. dealers or in China medium than on merged even ] over car others years. lower-tier and of a dealers felt greater the They X auto used staying shut either the average, half at every now have in having markets survive about to More businesses afloat. the transactions. are XX XXXX. Small changes past with to difficulty CPCA's

north, Furthermore, in streaming cars are higher and region south new to [ the same consumer than as as charging higher other for a and live classes. compared also penetration example, such channels, the is with region. below selling class to NEV's stations. well luxury sales Some ] X time, from At e-commerce. are better differs markets NEV more also cities volume sales in as demand rate trying is and

Jiayuan Lin

[Foreign Language]

Unknown Executive

integrate that demand primarily [ noticed is saturation. upgrades. Our years. while is new [Interpreted] replacement insights gained into China's ] car On a for noticeable rising an and looking first-time for X trend buyers, to is over there platform and our decision U-Car car cars consumers additional vehicle Cango upward decline the the consumption, deep market new Cango in there based on near offerings past Haoche market is We in

car is ] On integrated. channels the car car area dealers the a the boundary and car used new used blurred channels traditional sales [ the begun distribution response ForEx their between and This increasingly own to because in have establishing needs. are becoming now changing side, used sales dealers consumer

but better now we purchase why X Cango so while also platform. platforms, integrating trading cars that's efficiency, will on we can that platforms, our Haoche and to the This U-Car Cango serve dealers. cars us enable same So integration, used their not customers are only the improve our operational will new greatly believe, in car

my think all I side. that's from

Operator

like management no ladies I'd turn And closing and there back gentlemen, it questions. remarks. for to to are further

Jiayuan Lin

[Foreign Language]

Unknown Executive

for That us. concludes for you all call. today's your all joining you earnings Thank Thank [Interpreted] support.

Operator

This concludes today's presentation. all attending conference call. you. you Thank for We thank today's

have You may now day. disconnect your a lines, and wonderful

Cango (CANG) 28 Nov 232023 Q3 Earnings call transcript