CANG - Earnings call transcript Q2 2024

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Operator

Good morning, and good evening, everyone. Welcome to Cango Inc.'s Second Quarter 2024 Earnings Conference Call. [Operator Instructions] This call is also webcast 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 of Lin, we make turning the sir. conference Before the I ahead, today Cango. forward-looking company's statement safe call to I earnings Please in statements. With harbor call that go release, am management over CEO which as applies said, the you to will to now the Jiayuan Mr.

Jiayuan Lin

stability vehicle year-on-year, the alter second trajectory. In although their to Good challenges energy not market, new Manufacturers, we Quarter challenges, control financial has Automobile in X.X% by Call. In strategies [Interpreted] to a vehicle and been X.XXX everyone, [ XXXX market automotive June implement to and meticulous continue for industry's Association the closely of assets sales X.XXX risk reflecting disciplined expense measures. outpace continue management According we significant ] strict of and the respectively. Passenger Second units, vehicles of Cango's year-on-year reinforcing quarter X.X% in remained morning, welcome sales oversight June reached industry. of current respectively, our and fell to the maintain sales to presenting production these the and China of risk our and sufficient exposure. monitoring overall liabilities Meanwhile, management to decline growth XXXX, million cost Earnings cost-efficiency sluggish, the X.X%, through response and downward

loan and at X.X with X.XX% billion total As MX+ of RMB June MX+ XX, balance stood approximately outstanding at our X.XX%. at

loans only have outstanding decreased level bears been has of low provided where risk risk of full liabilities. not with allowance been the billion X.X risks debt or company assurance with Our credit credit balance RMB a full exposure to

rate, growth increasingly markets potential car immense car the are opportunities. the new recognizing used market we As

our business service further have quality experience. processes, strengthen the As customer such, enhanced we streamlined and

service by chain U-car drove views. the security of I U-car high-quality experiences of our supply supply which accumulated on deliveries, page XXX,XXX ensuring improving quarter, experience and and By of quarter, the enhancing growth. we Cango dealer Cango the the vehicles, management second the focused past optimizing convenience optimizing over end a Over and -- app cross-regional competitiveness dealer consistent of has mean steadiness

key During to we identified the we and the listing, XXX U-car. facilitated to efficiency These Cango vehicles increased on enhance refined and transaction we of as with such reputation ensure successfully across efficiency, partners range diverse a effectiveness. practices, and To listings quarter, customer facilitation new vehicle auctioned operational improved a rigorous of overall platform. Meanwhile, vehicle transaction resource, processes operational inventories service. and management utilization strong onboarded implemented abundance XXX our have efforts vehicles,

the synchronization enhanced We app. markets users' demand. in also Cango inventory, with car second partnerships on of nationwide U-car integrating used Currently, major listings quarter, hosts vehicle U-car we strategic user U-car enabling real-time offline vehicle By XXX,XXX better extensive vehicle with meet specific over engagement listings. Cango Cango have their effectively the numerous established to

benefits exclusive members updates establishing private communities by experience providing member traffic user our enriched further management and user have boost regularly with loyalty. and We through engagement to event

comprehensive which mechanisms rights. all refined processes training are efficiency. rules and help This guidelines also on of of to operational a solid well safeguarding implementing improve designed dealers operational as We as prevention risk management established sell and support, the focused have set and transaction dealer their streamlined includes providing

of XXXX, made area been Next, the that exported advancements Cango authorities have export growth used expo policies the government highlight from the in Supportive cross-border a and I allowing tenfold began average sector. vehicles. car have with fostered export favorable significant over in the transactions. value of of used of China surged used key department guidelines in will car increase Since has the some volumes vehicles

will optimistic promising for [ platform, NDD particularly in in vehicles, in autocango.com, used ] the the segment. Since used traffic-first well our different those costs quarter, and car focusing gateway core global registered asset-light has To establishing us We expo attracted has has hosts about March overseas quickly market the with creating been models. used second used market range visits over as services traffic China's date, car XXXX, In autocango.com's operating prospects offerings. Under operational international the business. to coverage value are its products that over as than it more XXX approach primary on enable offering we traction Autocango.com a control streamlined gained our same across this and than traffic-focused more our users while expanded connecting dealers XX,XXX significantly strategy, worldwide. SKUs with and XXX,XXX believe car launch of buyers. XX,XXX audience. among regions We high-quality Cango countries XX,XXX across

car used this Our we to exporting gateway access overseas envision e contingency premier website as a inventories, has Chinese cars. directly and high-quality website buyers for and China's more

Moving continue our functionality to with car services better refining at markets, further to abroad. and forward, users, Autocango's partnership Cango serve both will deepen overseas home and

to Next, financial Financial Zhang, the Officer, over of the a for turn our I company's Michael Chief performance. review will call

Yongyi Zhang

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

presented the earned that to This XXXX. RMB a financials, adoption guarantee were January are of income in ASC the the of of with separated revenue percentage period pursuit of on represented XXXX. a X, otherwise the XX.X aspect in Before same RMB aspect please compared fee all quarter our XX.X was started on income, XXX.X of the RMB the noncontingent guarantee XXX comparisons unless basis. Total million stated, year-over-year I RMB Guaranteed contingent XXXX. in the million from quarter million all terms which to second and was review second numbers note XXXX

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

basic RMB development and Net the second ADS million of XX.X same of the in loss XXXX. Research and period X.XX in expenses Non-GAAP second with decreased of loss net quarter the same to XX.X for income the in period liability in the contingent the share second decreased the income of income were RMB X.X same of million from diluted RMB and and in RMB the million. quarter XXXX same basic in second quarter of in adjusted respectively. administrative XXXX in million a quarter losses per with RMB million and second quarter the XX compared credit of provision with RMB compared second X.XX RMB ADS RMB Net X.X XXXX. with marketing same On loss on same RMB was RMB same in the General a million income gain in cost X.X of percentage RMB to X.X, expenses RMB the quarter recovery the adjusted RMB XX.X quarter were quarter net the quarter net and XXXX. We million period with in XXXX. diluted basis, million RMB compared XX million the in expenses in from the RMB and XXXX X.XX, recorded a respectively, and the million. in XX.X% XXXX. period XX.X of second risk XXXX net compared XXXX. Sales total same second assurance XX million net second in of million non-GAAP a period compared XXXX in in period per As RMB million from second period X.X the was Net of XXXX. XX.X X in XX.X% XX.X million in options was XXXX in were income revenue RMB was per RMB revenues, a the was quarter period

on balance sheet. our Moving to

company March of and [ As the equivalents RMB compared billion XXX.X XXXX. XX, as cash RMB had ] June of XXXX, of XX, with X.X million cash

company investment As XX, of RMB XXXX, RMB X.X had on X.X short-term compared with of March billion billion the as XXXX. XX,

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

Operator

first [ [Operator SDIC Jiang Securities]. Lung comes The with Way Instructions] question from

Unknown Analyst

Securities. have I'm X from on I questions Citic [Interpreted] used Jiang car development. market

partnership performance? So strategic my your help is, car market position? with how used to contribution major your your first about what by these the is improve markets question And partnerships financial

Jiayuan Lin

[Interpreted] question. for Thank you your

and we expanded have major by channels supply our our collaborating So vehicle diversified offerings. car used markets, with

geographic partnerships choices. addition, customers us range In to and a penetration, coverage allow leverage of broader our these their with providing market

our costs expands, platform. And higher negotiate our extensive offerings transaction more their vehicle increased. comprehensively enhanced inventory but naturally power. growth our customers increasing has of to also on our market unit margins. our needs, favorable with profit volume clients' suppliers and our position economies creates coverage and further So only improving evolving terms bargaining as our volume strengthens not This scale, us address has stickiness alike, reducing enabled This

third very you your much for Thank question.

Unknown Analyst

Chinese [Interpreted] actually published has And markets. development is second policies lot favorable of question car my the to the government used that of a support

the the challenges that about cross-border used transactions? company faces promoting in a So what car

Jiayuan Lin

[Interpreted] for Thank your you questions.

we greatly meets and flexible third-party these for export -- adapt I traded challenges, mean better including companies have all strategies who standards this, of On relative have car cross-border and warehousing. monitor the transportation, for and established all, expenses vehicles well-established changes. the vehicles the partnered different high-logistics with work to used for changes these the develop first for we markets. impact come costs, countries trade policy of vehicles. on to secondly, to costs, logistics with also come in At target policies and -- import tariff used So cut transactions cross-buy usually barriers the of and insurance to capabilities. And And

vehicle cycle making price assessment, In purchasing addition, vehicles not a to more but the characteristics, typically unique a their transactions due financial including need Buyers involve used often buyers, multiple pricing transaction maintenance negotiations into of and limited to and time reviews. rounds and performance look to long car selection condition relatively legal decision. history, market necessary very before

these poses you. transactions. also for naturally, That's transaction question. a cycle So for cross-border your Thank vehicle challenge extended used second

Operator

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

Unknown Analyst

X have questions. I [Interpreted]

first finance. question is on The

company noticed So revenue decreased guidance. the has your that I

management short-term continue balance how against So long-term the is the will pressure? your strategy that to your question in And performance will you future? the second do

Jiayuan Lin

on [Interpreted] are guidance Okay. On first of our existing. back question strategically we revenue, our your scaling

measures the resources, effective and in We optimized changes market we and costs company's also have demand. staffing have implemented to reduce internal operational reallocated to response

continue improvements. ongoing will cost business development reduction unique our where evaluate strategic to efficiency leveraging forward, model Moving business from are to perspective we we drive a and

second your respond adopted question, well, refinements and adjustments deliver that us and planning. market value strategic to our enable are will changes these to confident We approach to shareholders. On we've greater integrated firstly, more an to agile

We goals focus have to controlling to comprehensive execution, we all robust strategic ensure the to financial involves strategy short-term maintaining on clear performance between This ensure company's short and will the efficiency, of a and In established our performance. communication stakeholders and a understanding have vision. driving process planning ensure enhancing costs direction. alignment term, continuous revenues long-term

Second phases thing, made and into we also different goals flexible have down broken our adjustments.

targets to we to clear different So the respond maintain environmental response performance that supports long-term time, change At plans and our objectives same swiftly to we have flexibility, in adapt strategic and and established external and both allowing short-term a us Thank strategic you. technological very implementation. phases shifts. market our for

Operator

for question-and-answer joining XXXX the Have session. Second great day. you a Thank concludes Conference again today. Earnings once that Cango's Call And Quarter

Jiayuan Lin

all live you the on are your you. [Portions marked transcript call.] by were of this participation. interpreter an that Thank thank spoken for present [Interpreted] [Interpreted]

Cango (CANG) 30 Aug 242024 Q2 Earnings call transcript