SHANGHAI, Nov. 14, 2019 /PRNewswire/ -- Cango, Inc. (NYSE: CANG) ("Cango" or the "Company"), a leading automotive transaction service platform in China, today announced its unaudited financial results for the third quarter of 2019.

Third Quarter 2019 Financial and Operational Highlights

? Total revenues in the third quarter of 2019 were RMB351.3 million (US$49.1 million), representing a year-over-year increase of 23.2% and outperforming the high end of the Company's guidance by 8.1%.

? After-market services facilitation revenues in the third quarter of 2019 were RMB40.7 million (US$5.7 million), continuing to serve as an important driver for the Company's revenue growth.

? Income from operations in the third quarter of 2019 increased by 17.8% to RMB89.7 million (US$12.6 million) from RMB76.2 million in the corresponding period of 2018.

? Net income in the third quarter of 2019 increased by 14.9% to RMB122.1 million (US$17.1million) from RMB106.3 million in the corresponding period of 2018. Non-GAAP net income in the third quarter of 2019 increased by 21.5% to RMB146.0 million (US$20.4 million) from RMB120.2 million in the corresponding period of 2018.

? The amount of financing transactions the Company facilitated in the third quarter of 2019 totaled RMB5,769.4 million (US$807.2 million). The total outstanding balance of financing transactions the Company facilitated was RMB36,500.5 million (US$5,106.6 million) as of September 30, 2019.

? M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 0.85% and 0.33%, respectively, as of September 30, 2019, as compared to 0.72% and 0.30%, respectively, as of June 30, 2019.

? The number of dealers covered by the Company continued to grow sequentially, reaching 49,396 as of September 30, 2019, compared to 48,367 as of June 30, 2019.

Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "In the face of adverse market conditions and industry-wide challenges, we remained focused on executing our growth strategies in the third quarter. Accordingly, we further expanded our dealership coverage, optimized our service offerings, and leveraged our industry partnerships to deliver a robust financial performance. In particular, we continued to hone our core competencies in the auto financing market through our auto loan facilitation services. Our burgeoning dealership network and highly efficient direct coverage model also enabled us to enhance the operating capacities of our partnered dealers, further improving both our service quality and efficiency in turn.

Additionally, we focused on accelerating the development of our after-market services, which have become an integral component of our long-term growth strategy. Going forward, we expect the near-term headwinds and macroeconomic slowdown to persist throughout the first half of 2020. Nonetheless, we are confident in the strength of the foundation we have built through our leadership in the auto financing market as well as strategic partnerships with some of China’s largest financial institutions and original equipment manufacturers (OEMs).”

Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "In the face of difficult macroeconomic conditions and the contraction of China’s auto market, we maintained our strong growth momentum to deliver solid financial results in the third quarter of 2019. Our total revenues increased by 23.2% year over year to RMB351.3 million in the third quarter. Our after-market services facilitation business continued to serve as an important growth engine, contributing RMB40.7 million or 11.6% of our total revenues in the third quarter. More importantly, we also expanded our profitability as a result of the increased economies of scale as well as the successful implementation of our cost control initiatives. Our income from operations and net income increased, by 17.8% and 14.9% to RMB89.7 million and RMB122.1 million, respectively, in the third quarter of 2019. Going forward, we plan to continue investing in the expansion of our geographic footprint, refinement of our service offerings, and development of cutting-edge technology. We will forge ahead and strengthen our ties with additional financial institutions and OEMs, further propelling our growth trajectory in spite of the challenging macroeconomic situation.”

Third Quarter 2019 Financial Results

REVENUES

Total revenues in the third quarter of 2019 were RMB351.3 million (US$49.1 million), representing a 23.2% increase from RMB285.2 million in the corresponding period of 2018. Revenues from after-market services facilitation in the third quarter of 2019 were RMB40.7 million (US$5.7 million), compared to RMB39.0 million in the same period of last year.

OPERATING COST AND EXPENSES

Total operating cost and expenses in the third quarter of 2019 were RMB261.6 million (US$36.6 million), compared to RMB209.0 million in the corresponding period of 2018.

? Cost of revenue in the third quarter of 2019 increased by 10.5% to RMB125.4 million (US$17.5 million) from RMB113.5 million in the corresponding period of 2018. As a percentage of total revenues, cost of revenue decreased to 35.7% in the third quarter of 2019 from 39.8% in the corresponding period of 2018. As a result, the Company’s gross profit margin expanded to 64.3% in the third quarter of 2019 from 60.2% in the corresponding period of 2018, further demonstrating the increased economies of scale as well as the effectiveness of the Company’s cost control initiatives.

? Sales and marketing expenses in the third quarter of 2019 decreased by 1.9% to RMB47.6 million (US$6.7 million) from RMB48.5 million in the corresponding period of 2018. As a percentage of total revenues, sales and marketing expenses decreased to 13.5% in the third quarter of 2019 from 17.0% in the corresponding period of 2018. The decrease was a result of the Company’s efforts to maintain stable sales and marketing expenses while growing its revenues concurrently.

? General and administrative expenses were RMB52.3 million (US$7.3 million), or 14.9% of total revenues, in the third quarter of 2019, compared to RMB40.7 million, or 14.3% of total revenues, in the corresponding period of 2018. The increase was mainly due to higher share-based compensation expenses in the third quarter of 2019.

? Research and development expenses in the third quarter of 2019 increased to RMB13.2 million (US$1.8 million) from RMB10.8 million in the corresponding period of 2018. The increase was a result of increased investments in the Company's research and development projects as it grew its total revenues. As a percentage of total revenues, research and development expenses remained stable at 3.8% in the third quarter of 2019 compared to the corresponding period of 2018.

INCOME FROM OPERATIONS

Income from operations was RMB89.7 million (US$12.6 million) in the third quarter of 2019, representing a year-over-year increase of 17.8% from RMB76.2 million in the corresponding period of 2018.

NET INCOME

Net income was RMB122.1 million (US$17.1 million) in the third quarter of 2019, representing a year-over-year increase of 14.9% from RMB106.3 million in the corresponding period of 2018. Non-GAAP adjusted net income increased by 21.5% to RMB146.0 million (US$20.4 million) from RMB120.2 million in the corresponding period of 2018. Non-GAAP adjusted net income excludes the impact of share-based compensation expenses. For further information, see "Use of Non-GAAP Financial Measure."

NET INCOME PER ADS

Basic and diluted net income per American Depositary Share (ADS) in the third quarter of 2019 were both RMB0.78 (US$0.11). Non-GAAP adjusted basic and diluted net income per ADS in the third quarter of 2019 were both RMB0.94 (US$0.13). Each ADS represents two of the Company's Class A ordinary shares.

BALANCE SHEET

As of September 30, 2019, the Company had cash and cash equivalents of RMB1,851.2 million (US$259.0 million), compared to RMB1,609.6 million as of June 30, 2019.

Business Outlook

For the fourth quarter of 2019, the Company expects total revenues to be between RMB380 million and RMB400 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.

Notice of Annual General Meeting

The Company will hold its annual general meeting of shareholders (the "AGM") at 18F, Building 2, Youyou Century Plaza, 428 Yang Gao Nan Lu, Shanghai, China, on December 23, 2019 at 10:00 A.M. Beijing Time. No proposal will be submitted to shareholders for approval at the AGM. Instead, the AGM will serve as an open forum for shareholders and holders of the Company's ADSs to discuss the Company's affairs with management. The chairman of the AGM will conduct and lead the AGM and may accept questions from shareholders at his sole and absolute discretion.

The board of directors of the Company has fixed the close of business on November 25, 2019 (Eastern Standard Time) as the record date (the "Record Date") for determining the shareholders entitled to receive notice of and attend the AGM or any adjournment or postponement thereof.

Holders of record of the ordinary shares, par value US$0.0001 per share, of the Company (the "Ordinary Shares"), at the close of business on the Record Date are entitled to attend the AGM and any adjournment or postponement thereof in person.

The notice of the annual general meeting is available on the Company's website at ir.cangoonline.com. The Company filed its annual report on Form 20-F for the fiscal year ended December 31, 2018, with the U.S. Securities and Exchange Commission (the "SEC") April 25, 2019, U.S. Eastern Time. The annual report can be accessed on the Company's investor relations website at ir.cangoonline.com or the SEC's website at www.sec.gov. The Company will also provide a hard copy of its annual report containing its audited consolidated financial statements, free of charge, to its shareholders and American Depositary Share holders upon request.