CANG - Earnings call transcript Q4 2023

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Operator

Good morning, and good evening, everyone. Welcome to Cango Inc.'s Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. [Operator Instructions] Joining us today are Mr. Jiayuan Lin, Chief Executive Officer; and Mr. Yongyi Zhang, Chief Financial Officer of the company.

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

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

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

Jiayuan Lin

[Interpreted]

of Hello, headwinds. proved to XXXX Earnings Call. everyone, of and welcome face a to resilience year Cango's the Fourth Quarter XXX in be

the on This horizon, confluence While growth a remained long-term caused slowdown. recovery and domestic temporary and factors resulted the international confidence. economic of slower-than-anticipated dampened a consumer in

necessary segment. sector, In wars in norm players larger auto the scenario. a lower-tier automotive shift especially new in operational within and became the energy the sales market particularly challenges, accelerated markets or smaller a the industry. fittest," This landscape the the the the contracted surge steadily, year. fierce of while Price in half traditional vehicle of sparking ones market significant a Dealerships, experienced NEVs "survival share, triggering favored restructuring vehicles faced latter within a, competition in

XX X.X year. by XXX total market Despite revenue for CNY Cango and billion balance in of million financing outstanding The to full billion CNY RMB in year-end. transactions delivered environment of the approximately company strategically QX its total XXXX, a challenging reduced financing facilitated

robust lowering ample at to strict operating respectively, successfully X.XX% and a Our quarterly mitigate X.XX%, rates implemented and market, metrics further. remain backed dynamic financial Cango position maintains measures Cango reserves. cost efficiency and delinquency MX+ stable our by solid MX+ this risk liquidity with expenses. Notably, reducing cash reduction and enhancements, disposure And

and company boasted growth strong for cash is equivalents new of bank businesses held billion XX, shortened fuels December provides our an investment cash, for deposits a RMB of financial cash X.XX the recruited as that of sustainable ventures. as our foundation investments. well exploration springboard As This XXXX, existing and showed in the

steps used lower-tier connects Cango into functions adapt a strategic our aftermarket inventory To This on successfully operational clearing upstream capitalize and This platform, proactive suppliers, our In included single The and to streamline conditions car into we U-Car, took U-Car now our comprehensive new resource cities. car car upgraded move vehicle platform. online Haoche solution. our powerful downstream boosts optimizes market evolving Cango we It marketplace. operations. QX, platforms new as service to dealers efficiency. merged and Cango and app in consolidating industry trends, more providers our allocation

trucks a This transaction throughout that X historical suite vehicle facilitating integrated This and offers delivery, is logistics We scenarios Cango reports, transactions. solutions deals. to services and insurance robust U-Car auctions, of goes inspection, platform beyond vehicle access ecosystem services. provide users facility broker-assisted to full transactions supply of the includes a process, dealer-to-dealer and car online evaluation and main chain financing. used catering

offer new the sellers service introduction within service come comprehensive By collection Our car inspection, distance along cross-regional from traffic upstream a vehicle Cango U-Car included fixed vehicles, the transaction with offering up QX. also stores in X,XXX and offering streamlined generation dealers portion exploring car providing online from end-to-end with XX store secure our of diverse XXX areas: will platform membership services, funnel integrated and verification, U-Car, we cars attracting sourced handle by fees. We our have delivery identified and in engagement transactions. Besides We services innovative primarily Cango of service, leads, range services. By These and converted for lenders. first, of and leveraging vehicles business they successfully guarantees and services. used -- auto third-party with QX. on a used QX, transactions deals simplified potential transaction-related self-operated price stores to expertise management, primarily small leads subscriptions stores. third-party of business are X,XXX significant long including we set We car services sales through repossessed and repossess revenue streams in a these operations facilitating maximizing This purchases rentals, a new management. X financing opportunities key price in collaborations our upstream other used

initially transactions We conversion. customers, now existing financing assets, lead them rates. leads our expanded facilitating CXB platform. boost Secondly, QX customer dealers sources lead between have tradable but conversion individual we We into focused on and in to transform on

we for logistic small transaction support fourthly, provide our BXB facilitation. insurance And dealer-to-dealer expanded sales. Thirdly, have We transactional services.

coverage, Our insurance ] work of insurance clients. work regional injury as insurance key for and nonauto auto teams like [ including and comprehensive QX, offers options

financing. standardized used At our Cango technological understand combined digital leads on intelligent tool, AI efficient transaction a expertise hinges we superior to circulation. a In for aims experience services, we U-Car, optimize the user with This matching QX, streamlined strong powerful auto platform, network foundation. car central to our leveraging vehicle customer for inventory, and create and deployed nationwide resource

rates offering to vision steadfast, small across to them and overall by leader become goal revenue and to success. costs Ultimately, the offer especially chain. remain conditions. diversify top-notch an and remains dedicated We operating products we and streams, is refining dealerships. empowering challenging entire automotive services our during industry reduce Furthermore, help Cango's enhance value their continuously services market that survival

world's Cango a as U-Car's potential We our [ in manufacturer the car a cars, step our of vast market. fierce just mine used largest competition is growth exporters. ] see pool market, possesses used the overall auto online good consumer, marketplace accessible significant unlike within for in strategy. burgeoning China, China's the and X domestic

market. reliable competitive translates policies Additionally, transparent used higher and This more are a are fostering regulated car government that more internationally. into quality vehicles

export core is is delivery and and each new with platform XXX caters with countries. these inventory position perfect brings China's our used over new international secure leading security of experience, million market. platform, dealers the emerging to with of combined specifically easy intuitive advantage find competitive a and earnings Cango, or SKUs. being a this a resources, launched integrating pool experience Recognizing XXXX XX,XXX export to supply prices used international By making partnering venture. with the this today's actively offline advantage access exchange its network, car it ensuring chain Leveraging auto the it easier opportunity Transparency, AI compelling Leveraging parts in both search service cars us logistics efficiency buyers. China's prioritizes ensuring dealers exceeded AutoCango. car car market our Furthermore, the network to vehicles prices with a This exporter evolving used upward on and growing information platform Leveraging AutoCango China's market, U.S.-listed company, a extensive auto as online developing vehicles, cater to ever are auto in X top weekly. used to China's shipped with used empowers than information access used trading www.autocango.com keep global world's Cango gain robust vehicles constantly vast launched AutoCango, cross-border customer's XXXX user March needs. platform, to significant to which efficient was in international the projected manufacturing potential, globally. approximately we've domestic reach, market. and in pursuing trend as users and car of a nation, exciting added auto China's and within for presents capital and broader early well-developed platform. This exchange edge at an comprehensive X,XXX of technology, interaction, car. Furthermore, our cutting the position

and a goal overseas for users, for cars providing of a to the with We from are buyers, all secure go-to committed seamless used experience high-quality becoming platform China. seeking ultimate

we current our market, auto the industry In are to Cango's potential platform experience. the on remain position within we leveraging and our and end-to-end to auto bullish service pioneering the innovation acknowledging long-term the of committed AI market enhance solidifying XXXX, user complexities, strength digital and model. of transaction While China's

value initiatives As us dealer significant will the new By offerings dynamic become introducing and technology-driven China's create working allow in our services along automotive to products by key well across and our player expanding these partners, a as with entire value chain. landscape.

over Chief performance. Michael review hand the a to Financial company's Officer, our financial I'll of for Zhang, Now

Yongyi Zhang

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

to start the all and million financials, in terms our CNY please XXX.X comparisons in guarantee a quarter on RMB the of CNY with income, XXXX. of percentage income same unless million in represents are I numbers fee note year-over-year review fourth Before all basis. Total which that on earned noncontingent period XXXX quarter. a a $XX.X otherwise the are fourth compared stated, were was million, aspect Guarantee the in revenue XXX.X

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

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

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

expenses CNY and percentage million in and same quarter development million XX.X% to XX% XXXX. fourth in in XXXX X.X in same period a from administrative period were revenues, As total quarter CNY the fourth decreased the X.X of with in expense general XXXX. Research compared

recorded XXX.X adjusted the in the of CNY same X.X% per were for compared development XXXX total XX.X loss same were primarily respectively. risk quarter quarter were period compared CNY basis, per losses both fourth of collections basic non-GAAP basic was loss million. in XX.X Net CNY X.XX, Non-GAAP positive fourth million were diluted of in assurance fourth recovery and CNY in the the impact quarter million. CNY on in both was X.X% and fourth in loss receivables. We XXXX net in due CNY in ADS expenses with X.XX, the XXXX million. in the quarter million loss And On same diluted share Net XXXX.Net ADS in provisions recovery respectively. the net and a credit XXXX. XXX.X CNY liability from CNY the fourth percentage a the financing to was fourth The operations loss million. of adjusted As of research the were with loss per contingent fourth in quarter period quarter quarter net XX.X XX.X period on revenues,

billion. X.X X.X Net year Total net was net million, operating our X.XX diluted ADS full CNY adjusted Basic of income and the CNY were income per CNY loss XXXX, was X.XX. XX.X total loss was billion. diluted basic million. non-GAAP and non-GAAP and was X, net per CNY For CNY X.X income CNY respectively. costs CNY were net Non-GAAP and adjusted adjusted were net both expenses revenue ADS

our sheet. on Moving balance to

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

CNY XX, of XXXX, the the a of CNY X.X deposit investment short-term restricted while XXX.X million, had December company had As company billion. Current held bank for short-term cash. of investment

XX, As CNY of the short-term of a investment billion. had XXXX, September company X.X

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

Operator

comes [ first ]. Your from question Pingyue Goldman Wu, Instructions] [Operator from Sachs

Goldman Your comes Zhao Emerson next from question from Sachs.

Unknown Analyst

questions. [Interpreted] I'm Emerson I X have Sachs. from Goldman

and these First has on question the the strategic some third what holds we substantial My before the noticed is the question, And issue dividends. a are Mobility. dividends we U-Car cash that -- with share second entered in Caocao distribute progress? integration? a company currently question management Can after differences that position Cango while company noticed is company partnership details the

Jiayuan Lin

for Emerson, questions. [Interpreted] Thank your you,

and shared provides it with trading platform, And experiences. The a Cango first greener smarter, aftermarket Mobility question, travel leading Caocao automotive mobility domestic services. a while is is powerhouse and users healthier in

Currently, network lower-tier China's working extensive jointly on us together inventory system in both and markets. the vehicle are from back-end vast development. will teams pursue program opportunities Our enable and high-growth, parties business IT to

of record Cango's front confidence second regular We unfold. On as further in trajectory. everyone updates going developments question, will provide to solidify they since in with long-term growth keep public, of established shareholders consistent we've the a latest rewarding to dividends your track

maintain will to U-Car dividend used prudent flow to sourcing prior we position a stand-alone car approach, switches facilitating our question, ensure overall functions your hosting policy. On integration, This a dividend and and transactions. further plans, business like carefully car a auctions. strategic third sustainable For plans, platform to considering cash factors online as environment vehicles, included dedicated Cango

integration, Cango our third-party new featuring in generation has platform insurance used car comprehensive services. and the the car Following marketplace U-Car evolved both beyond traffic sales sellers the offering

this a experience. dynamic continue Thank third-party more ecosystem are by enriching even vendors, We to more user fostering expanding you. committed and integrating

Operator

Your next question Securities. from Citic Pingyue from comes Wu

Pingyue Wu

[Interpreted] I'm from Citic Pingyue X have Securities. questions. I

the What first The working export market share considered and is has for your some company My outlook with question business. on management automotive the used car XXXX? question KOLs? could insights XXXX is, provide the And second for progress? about

Jiayuan Lin

automotive first part towards your year series by reductions into and persist market some the price of the Thank [Interpreted] was start time. the XXXX, question, by This of car launched built manufacturers. your despite momentum a you On in early We latter promotional to activities these accelerated sluggish anticipate the questions. for XXXX. for

XXXX However, resulted from penetration AAV outlook. XX% by in NEV the XX% over as rate pressure reach surging in has to conventional the expected competition supply the as XX% within segment various has and industry the and XXXX segment. players the well intense years throughout for is intensifying is chain. XXXX This shift rose margin rapid in to vehicle the been fuel competition XXXX. within

absorbing are significant contracting vehicles growth, experiencing market gasoline-powered manufacturers losses. currently remain rapidly. their while traditional are share While sales robust profitable. NEVs is

as export AutoCango, contrasting we presents dynamic launched on second bridges substantial car market. in used these XXXX, the used market. On we exchange kind for Auto cross-border of car your platform question, overall pressure business Cango first cost potential. our March vast buyers dealers cars. So the pool the to with its and specifically customer vehicle information left-hand securities the gap secure business long-term information by in experience are partnership and to firstly, meet in foreign easy all with efficiency world's discovery, align targeting And smooth of AutoCango buyers, auto a streamlines We access empowers emerging enhancing with to needs. Powered throughout Chinese transparency, secondly, market, AutoCango our ensuring across used position largest dealers the economies. Leveraging markets clear process, models services international following auto partnerships, by open and entire ventures the quality connecting with prioritizes domestic the drive platform opportunities car China's a experience, used for precisely interaction criteria: parties user transaction involved. On AI innovative transparent user structures. its search technology, evolving efficiency profitability. that growth prioritize and

Thank we ensure time assessments efficient you. to However, allocation, conduct defined regular within frames. resource

Operator

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

Jiayuan Lin

your an that participation. [Foreign call.] earnings Language] by for all this [Interpreted] Thank That transcript spoken you of on were today's live the marked interpreter closes call. [Portions [Interpreted] present are

Cango (CANG) 12 Mar 242023 Q4 Earnings call transcript