SHANGHAI, May 29, 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 first quarter of 2019.

First Quarter 2019 Financial and Operational Highlights

? Total revenues in the first quarter of 2019 were RMB351.7 million (US$52.4 million), representing a year-over-year increase of 41.3% and outperforming the high end of the Company’s guidance by 6.6%.

? After-market services facilitation revenues in the first quarter of 2019 were RMB39.8 million (US$5.9 million), continuing to contribute stable revenues.

? The amount of financing transactions the Company facilitated in the first quarter of 2019 totaled RMB6,555 million (US$976.7 million). The total outstanding balance of financing transactions the Company facilitated was RMB35,748 million (US$5,326.6 million) as of March 31, 2019.

? M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 0.77% and 0.37%, respectively, as of March 31, 2019, as compared to 0.74% and 0.37%, respectively, as of December 31, 2018.

? The number of dealers covered by the Company was 47,879 as of March 31, 2019, as compared to 46,565 as of December 31, 2018.

Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, “In the first quarter of 2019, our strong financial and operating performances were marked by our better-than-expected revenue growth and the continued expansion of our dealership network. During the quarter, we continued to focus on strengthening our core competencies in auto loan facilitation services, accelerating the development of our after-market services, and expanding our collaborations with strategic partners. As a result, our total revenues increased by 41.3% year over year to RMB351.7 million in the first quarter. Such growth is a testament to our steady optimization of our automotive financing facilitation service offerings, which has helped to improve both our operational efficiency and service quality. It also speaks to our success in implementing cross-selling strategies to meet the targeted attach rate for our after-market services. Going forward, we plan to continue leveraging our capabilities in data analytics, technology innovation, and customized service offerings to sustain our growth while further cementing our market leadership in the Chinese automotive transaction space.”

Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, “We started 2019 with a solid financial performance in the first quarter. Our total revenues increased by 41.3% year over year to RMB351.7 million in the first quarter. Our after-market services facilitation business continued contributing revenues of RMB39.8 million in the first quarter, or 11.3% of our total revenues. Looking ahead, we will continue to invest in expanding our dealership network as well as improving the quality and efficiency of our services. As we continue establishing new partnerships with financial institutions and original equipment manufacturers (OEMs) to further enhance our service offerings, we are confident that our strong market position will allow us to navigate among the obstacles of this year’s macroeconomic uncertainties.”

First Quarter 2019 Financial Results

REVENUES

Total revenues in the first quarter of 2019 were RMB351.7 million (US$52.4 million), representing a 41.3% increase from RMB248.8 million in the corresponding period of 2018. The increase was primarily driven by the Company's strategies to rejuvenate growth and the increased contribution from its after-market services business.

Revenues from after-market services facilitation in the first quarter of 2019 were RMB39.8 million (US$5.9 million), compared to RMB4.4 million in the same period of last year.

OPERATING COST AND EXPENSES

Total operating cost and expenses in the first quarter of 2019 were RMB282.3 million (US$42.1 million), compared to RMB155.7 million in the corresponding period of 2018.

? Cost of revenue in the first quarter of 2019 increased by 61.8% to RMB130.8 million (US$19.5 million) from RMB80.9 million in the corresponding period of 2018. Cost of revenue as a percentage of total revenues in the first quarter of 2019 increased to 37.2% from 32.5% in the corresponding period of 2018. This was primarily due to increases in the average amount of commissions paid to dealers per individual financing transaction.

? Sales and marketing expenses in the first quarter of 2019 increased by 30.8% to RMB45.5 million (US$6.8 million) from RMB34.8 million in the corresponding period of 2018. The increase was due to increases in staff compensation. Sales and marketing expenses as a percentage of total revenues in the first quarter of 2019 decreased to 13.0% from 14.0% in the corresponding period of 2018.

? General and administrative expenses were RMB64.8 million (US$9.7 million), or 18.4% of total revenues, in the first quarter of 2019, compared to RMB26.7 million, or 10.7% of total revenue, in the corresponding period of 2018. The increase was mainly driven by increases in staff compensation including share-based compensation expenses as the Company expanded its business.

? Research and development expenses in the first quarter of 2019 increased to RMB13.3 million (US$2.0 million) from RMB6.5 million in the corresponding period of 2018. Research and development expenses as a percentage of total revenues in the first quarter of 2019 increased to 3.8% from 2.6% in the corresponding period of 2018. The increase was mostly due to the expansion of the Company's research and development team, as well as increases in their salaries and benefits.

NET INCOME

Net income was RMB74.4 million (US$11.1 million) in the first quarter of 2019, compared to RMB84.0 million in the corresponding period of 2018. Non-GAAP adjusted net income was RMB89.6 million (US$13.4 million), compared to RMB84.0 million in the corresponding period of 2018, representing a year-over-year increase of 6.7%. 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 first quarter of 2019 were both RMB0.50 (US$0.08). Non-GAAP adjusted basic and diluted net income per ADS in the first quarter of 2019 were both RMB0.60 (US$0.09). Each ADS represents two of the Company's Class A ordinary shares.

BALANCE SHEET

As of March 31, 2019, the Company had cash and cash equivalents of RMB2,178.0 million (US$324.5 million), compared to RMB2,912.9 million as of December 31, 2018.

Business Outlook

For the second quarter of 2019, the Company expects total revenues to be between RMB290 million and RMB315 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.