SHANGHAI, September 3, 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 second quarter of 2019.

Second Quarter 2019 Financial and Operational Highlights

? Total revenues in the second quarter of 2019 were RMB336.3 million (US$49.0 million), representing a year-over-year increase of 42.3% and outperforming the high end of the Company’s guidance by 6.8%.

? After-market services facilitation revenues in the second quarter of 2019 were RMB35.9 million (US$5.2 million), continuing to serve as an important driver for the Company’s revenue growth.

? Income from operations in the second quarter of 2019 increased by 17.3% to RMB84.3 million (US$12.3 million) from RMB71.8 million in the corresponding period of 2018.

? Net income in the second quarter of 2019 increased by 46.4% to RMB94.6 million (US$13.8 million) from RMB64.6 million in the corresponding period of 2018. Non-GAAP net income in the second quarter of 2019 increased by 66.7% to RMB116.9 million (US$17.0 million) from RMB70.1 million in the corresponding period of 2018.

? The amount of financing transactions the Company facilitated in the second quarter of 2019 totaled RMB6,154.8 million (US$896.6 million). The total outstanding balance of financing transactions the Company facilitated was RMB36,394.0 million (US$5,301.4 million) as of June 30, 2019.

? M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 0.72% and 0.30%, respectively, as of June 30, 2019, as compared to 0.77% and 0.37%, respectively, as of March 31, 2019.

? The number of dealers covered by the Company was 48,367 as of June 30, 2019, as compared to 47,879 as of March 31, 2019.

Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, “Despite the continuing macroeconomic and industry-wide challenges, we maintained our solid growth trajectory with strong financial and operating performances in the second quarter of 2019. During the quarter, our core auto loan facilitation business continued to be a vital growth driver, and we further expanded and refined our after-market services. In addition, we achieved significant breakthroughs in our cooperation with the Industrial and Commercial Bank of China (“ICBC”) in relation to our automotive financing solutions. As a result, our total revenues increased by 42.3% year-over-year to RMB336.3 million in the second quarter of 2019. Going forward, we will continue to augment our leadership in China’s market for automotive financing services by bolstering our core competencies in auto loan facilitation services, expanding our dealership network, developing differentiated products and services, and harnessing our well-developed capabilities in big data and internet technologies.”

Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, “After a strong start in the first quarter of 2019, we continued to deliver healthy performances in the second quarter. Our total revenues increased by 42.3% year-over-year to RMB336.3 million in the second quarter. Our after-market services facilitation business continued to serve as an important growth engine, contributing RMB35.9 million or 10.7% of our total revenues in the second quarter. Our income from operations and net income increased by 17.3% and 46.4% in the second quarter, respectively. Looking ahead, we will continue to invest in expanding our dealership network, optimizing our service quality and efficiency, and advancing our technology through innovation. As we continue to deepen our collaborations with more financial institutions and original equipment manufacturers, we are confident that we will sustain our growth despite the persisting industry challenges.”

Second Quarter 2019 Financial Results

REVENUES

Total revenues in the second quarter of 2019 were RMB336.3 million (US$49.0 million), representing a 42.3% increase from RMB236.3 million in the corresponding period of 2018. This increase was primarily driven by the Company's strategies to rejuvenate growth, increased revenue contribution from its after-market services business, and a significant increase in loan facilitation volume from the Company’s business partnership with ICBC.

Revenues from after-market services facilitation in the second quarter of 2019 were RMB35.9 million (US$5.2 million), compared to RMB12.3 million in the same period of last year.

OPERATING COST AND EXPENSES

Total operating cost and expenses in the second quarter of 2019 were RMB252.0 million (US$36.7 million), compared to RMB164.4 million in the corresponding period of 2018.

? Cost of revenue in the second quarter of 2019 increased by 55.0% to RMB125.8 million (US$18.3 million) from RMB81.2 million in the corresponding period of 2018. The increase was primarily driven by the Company’s business expansion and was in line with the increase in total revenues in the second quarter of 2019. Cost of revenue as a percentage of total revenues in the second quarter of 2019 increased to 37.4% from 34.4% in the corresponding period of 2018. This was primarily due to increases in the amount of incentives paid to employees per individual financing transaction.

? Sales and marketing expenses in the second quarter of 2019 increased by 20.3% to RMB44.5 million (US$6.5 million) from RMB37.0 million in the corresponding period of 2018. The increase was due to increases in travel expenses as a result of the Company’s business expansion and higher share-based compensation expenses. Sales and marketing expenses as a percentage of total revenues in the second quarter of 2019 decreased to 13.2% from 15.7% in the corresponding period of 2018.

? General and administrative expenses were RMB53.4 million (US$7.8 million), or 15.9% of total revenues, in the second quarter of 2019, compared to RMB31.4 million, or 13.3% of total revenue, in the corresponding period of 2018. The increase was mainly due to higher share-based compensation expenses in the second quarter of 2019.

? Research and development expenses in the second quarter of 2019 increased by 29.2% to RMB12.3 million (US$1.8 million) from RMB9.5 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 expanded its business. Research and development expenses as a percentage of total revenues in the second quarter of 2019 decreased to 3.6% from 4.0% in the corresponding period of 2018.

INCOME FROM OPERATIONS

Income from operations was RMB84.3 million (US$12.3million) in the second quarter of 2019, representing a year-over-year increase of 17.3% from RMB71.8 million in the corresponding period of 2018.

NET INCOME

Net income was RMB94.6 million (US$13.8 million) in the second quarter of 2019, representing a year-over-year increase of 46.4% from RMB64.6 million in the corresponding period of 2018. Non-GAAP adjusted net income increased by 66.7% to RMB116.9 million (US$17.0 million) from RMB70.1 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 second quarter of 2019 were both RMB0.60 (US$0.09). Non-GAAP adjusted basic and diluted net income per ADS in the second quarter of 2019 were both RMB0.75 (US$0.11). Each ADS represents two of the Company's Class A ordinary shares.

BALANCE SHEET

As of June 30, 2019, the Company had cash and cash equivalents of RMB1,609.6 million (US$234.5 million), compared to RMB2,178.0 million as of March 31, 2019. The change was due to the fact that the Company invested certain amount of cash in term deposit over three months for better cash-on-cash return.

Business Outlook

For the third quarter of 2019, the Company expects total revenues to be between RMB300 million and RMB325 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.