CANG - Earnings call transcript Q1 2024

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Operator

Good morning, and good evening, everyone. Welcome to Cango Inc.'s First Quarter 2024 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

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

the industry by Call. X.X% represents for X.X to China's Manufacturers, and million Automobile despite for year-on-year the strong Good of and welcome Cango's QX sales sales. This First respectively. X.X% auto XXXX, XXXX XX.X% to a in growth morning, and global increasing maintained GDP with and complex production vehicles, Earnings year-on-year moderate million increase a According economic saw growth [Interpreted] X.XX reaching Quarter environment. Association China of also production

sales, short era vehicles and manufacturers respectively. intense market year-on-year and over XX.X% growth surged or by NEVs energy XX%. Despite share and New million a million in traditional Production to the spot. pushed positive automakers particular competition NEV's sales in strong struggle transform market energy performance on both faces production NEV the demand X.XX supply must vehicle in X.XX compete new XX.X% for profitability. bright a side, and and to with to This challenges emerging side vehicle and auto and face units,

market decline purchasing new our scale to took inventory instability streamlined On business to response further the and efficiency purchasing rapid market, new consumer mitigate of costs. proactive in in the improve We steps reduce car purchases new job consumers advancements inventory slow car to oversupply strategically the restricting competition tightening and side, self-operated to prices. the risk and reduced lead improve and the processes delay the we management to manage demand of and growth income technological propensity, car price market. In

year, in year, that to a profitability in lower is RMB revenue ensured strategy million last QX this compared XX.X company. it this resulted While the for

also quality. QX of RMB total secured chain strengthening supply million. We million, competitiveness marketing net cost also was facilitated China. and and an of stable online monitor environment benefits reach plus Cango strategy. stability profit third-party exclusive high-quality by dealer developed and engagement end management. a with platform cities to platform and financing diverse XX sales engagement XXX up asset Cango and of special million more XX.XX transition Also, delinquency through balance QX, we differentiated we program vendors the our XXX more XX and boosted experiences high-quality [indiscernible] outstanding operating successful existing management in supply launched We XXXX, views. U-Car, and the deliveries nationwide, registered for on a X.XX% growth transactions platform ramped as saw car vehicle was integration page offerings RMB were stores our facilitated auctions low membership ratios at pipeline. risk services. X.XXX enhanced [ profit QX XXX and The March billion financial user QX, closely and in X,XXX across to We for and helping and Our our its membership transaction secure. Cango and quarter. We through dealers boost We in loyalty. became pilot controls in offline QX volume auction accumulated our partnerships and a RMB It over deals. And with reducing in by more liabilities, MX+ generated achieved XX.XX in ecosystem premium liquidity and events impressive and and a to throughout brought platform challenging ] our consistent attractive dealer strict vehicles strengthened macroeconomic creating MX+ maintained program XX, X.XX% with XXXX. Cross-region We QX we ways. XXX dealers facilitated several provinces indicating hosting [ of optimized. to service convenient strong U-Car the in U-Car ] The expanded an remain significant vehicle

we In to addition, for enriching This platform buyers payments, on hassle-free we introduced content offering deepening improved focus transparency sellers In for our user purchase expanding and base vehicle inventory. service support a both and April, high-quality member in transaction experience. logistics membership and insurance. transactions an the for will QX, continue comprehensive and both engagement, better streamlines

addition, in its car of platform car fills in goal information for the regions services, valuable market. car to used March, and insights we the providing and go-to from global inventory. This connect countries directly used to cross-border different become gateway international cars with entering is gap the our cross-border are to launched users, In used used high-quality making buyers kind information platform first In China's market. we waves the overseas Chinese

forward, to our sector. growth new opportunities rapidly with to leverage innovation evolving will long-term focus This meticulous innovative ensure network will business and partnering success. Moving models, create committed we through continuous management value additional auto are the we China's unlocking company's sustainable dealer in

performance. Michael financial for the With of I turn that over company's will CFO, a to the call said, Zhang, our review

Yongyi Zhang

our Thanks, first call. quarter hello, and to everyone, XXXX Jiayuan, and welcome earnings

numbers represented income guarantee first financials, the a compared percentage XXX.X revenue million XXXX. of of Total the XX.X our on quarter that income, fee otherwise million RMB please (sic) aspects noncontingent RMB period million the same in XXXX. of RMB in are on started in XX.X year-over-year was and are unless review with comparisons all RMB basis. XXXX in was quarter XXX.X earned which stated, to first terms I RMB million guarantee the The a a Before all note

during to million Now the in decreased from XX.X period to the let's quarter same cost XXXX. expenses quarter. in million of move RMB Cost and on first our RMB revenue XXX.X the

development to the million revenue the the XX.X% in first the of million revenue. X.X of and due same assurance obligations XX period the risk in the expenses period from the to in of quarter XXXX. million first expenses in administrative first quarter decreased in the million quarter was quarter same first period The was marketing in XXXX. same the liabilities. XXXX in income from RMB liability Sales in XXXX. Research XXXX. of was million in and contingent the the in and recognized expenses gain the of Cost million period contingent RMB X.X gain X.X risk RMB release with General first decreased RMB to aspect RMB percentage with period million decreased was in same the RMB from RMB compared to XX.X As million XX.X% X.X quarter on RMB XX.X XX.X from same XXXX. Net total a compared assurance

collections Net positive credit of due for and the was impact RMB net with primarily of diluted was on the in from were the recorded income in RMB ADS was was million. per million to first the RMB in XX XX.X net basis, share quarter financing recovery first the Net operations respectively, RMB XXXX in quarter and in diluted first losses million income income XXXX. and the and same quarter provision recovery from compared XX.X in per in RMB On XXXX RMB per the the The receivables. We million. net respectively. first RMB a was X.XX, adjusted the million. same of and quarter RMB income XX.X X.XX income first X.XX adjusted quarter XX.X basic period X.X, in basic ADS Non-GAAP period non-GAAP

sheet. balance our to on Moving

billion XXXX, the XX, March RMB XXXX. X and equivalents company billion of As X.X of XX, cash had of as December RMB compared with cash

had The XX, due of its XX, on X,XXX restricted subscription the As held short-term increase XXX.X was investments mainly December million RMB after XXXX, process. investment of to company conversion XXXX, March compared from XXXX. short-term RMB X.X the bank the RMB with of of XX, as cash, million December deposits completed company for billion

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

Operator

Wu from [Operator Citic Instructions] question comes Securities. from Pingyue Our first

Pingyue Wu

[Interpreted] Pingyue, Citic. have question. I a from My I'm name is

recently the consumption. government encourage first order launched is subsidy the a that The program programs to in question for trading the

impact company does if will And So believe the or help recovery could possible policy a for of vehicles for this the and specific that on drive us of automobile the measuring the degree automobiles? this growth the give market? number you're demand you of

Jiayuan Lin

you much [Interpreted] question. very your Thank for

upgrade an indeed as consumers, demand company. tailwind an in a a view, for to subsidy vehicles. especially significant This government's trading So the or could subsidies cars, older And benefits the to creates these program for incentive act in already positive which those trading boost their auto considering market recovery. new lead for our our

While sustained the and underestimate a to immediate State the will be potentially limiting We improve for the impact on trading factors that market broader new consumer Council positive but of economic is step, we program's efforts take Commerce's will confidence and other a the the subsidy challenges overall approach a likely demand. the time car crucial those market, auto commend facing conditions addresses Ministry recovery. shouldn't comprehensive

Pingyue Wu

upgraded second in app we question is, was noticed that company's And my our [Interpreted] Cango U-Car April.

upgrade? new So features are any the there after

Jiayuan Lin

purchase hassle-free and which Cango with U-Car latest version for car service, comprehensive the members more our solutions. We've dealers our exciting added experience provides newly enhanced features. reliable U-Car Yes, [Interpreted] also with the Cango of features X

and in-app within at to are feature transaction now and all efficiency. a sellers kilometers than communication membership the The app. can curated with quality first Members offered exclusive standards. And to have XX,XXX the is one and premium the is ensuring improved years competitive vehicles nationwide, connect now under boosts these members plus they second with directly access industry click of have selection prices just This are compared fewer X vehicles top streamlines section. old communication

Operator

[ Emerson The next from Goldman Zhao comes from question Sachs. ]

Unknown Analyst

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

noticed company we car procurement. your is has the decreased that new question first The

what revenue forward? So like the moving will sources look

quarter is to cash. this profitability the amount my And second question significant return of a holds company

be will plans for dividend So there any payout?

Jiayuan Lin

[Interpreted] Thank questions. your for you

first by new car on strategically to we market adapted question, So your a our streamlining business. changing self-operated

has total much transitioned significant business this led due to And profit shift margins. generated cost margins to but a revenue, previously our profit lower segment services offered this it leaner in higher proactive to While with a facilitation gross structure. core decrease revenue has

model shared our commitment second success. revenue dividends profitability, for rewarding since our structure reflecting our going the has have dividend payout, optimize laying well public, a company solid and with your So boosted to shareholders foundation long-term growth. On about sustainable evolving business been consistently question

evolving dividend our we and ahead, cash allocations Looking flow business will plan requirements. considering strategically future

Operator

Conference Earnings That today. you. Call that great Thank XXXX concludes transcript session. joining [Interpreted] present on once you by again First Thank Cango's question-and-answer marked call.] this the interpreter of are were the Have for spoken a an Quarter live day. [Portions

Cango (CANG) 13 Jun 242024 Q1 Earnings call transcript