Cango Inc. (CANG) Reports Q4 EPS of $0.05, Revenues Miss

Cango Inc. (NYSE: CANG) reported Q4 EPS of $0.05. Revenue for the quarter came in at $46.7 million versus the consensus estimate of $80.49 million.

• Total revenues in the fourth quarter of 2018 were RMB321.1million (US$46.7 million), representing an increase of 12.6% from the third quarter of 2018, outperforming the high end of the management guidance by 8.8%.
• The number of dealers covered by the Company stood at 46,565 as of December 31, 2018, representing an increase of 5% from the end of third quarter of 2018.
• M1+ and M3+ overdue ratios for all financing transactions which the Company facilitated and remained outstanding were 0.74% and 0.37%, respectively as of December 31, 2018, as compared to 0.83% and 0.36%, respectively as of September 30, 2018.
• After-market services facilitation revenues in the fourth quarter of 2018 increased to RMB43 million (US$6.3 million) from RMB39 million in the third quarter of 2018, continuing to contribute stable revenues.

"We concluded an eventful 2018 with a solid performance in the fourth quarter," commented Mr. Jiayuan Lin, Chief Executive Officer of Cango. "Our total revenues continued its sequential growth, reaching RMB321.1 million in the fourth quarter of 2018, which further demonstrated the resilience of our business model despite a challenging macroeconomic environment in China. Such growth was driven by our effort to consistently optimize the quality and efficiency of our automotive financing facilitation service offerings, as well as maintain a satisfying attach rate of our after-market services by successfully executing our cross-selling strategies."

Mr. Lin continued, "Going forward, we will remain committed to strengthening our core competencies by expanding and penetrating our nationwide dealership network while improving its efficiency, accelerating the development of our after-market services business to unlock the full monetization potential, and deepening collaborations with our partners to further diversify our revenue streams. Looking into 2019, we are confident that our leadership in the Chinese automotive transaction service industry will facilitate sustainable long-term growth."

Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "The initiatives that we have implemented to rejuvenate our growth have continued to yield results during the fourth quarter. Our total revenues increased by 12.6% to RMB 321.1 million in the fourth quarter of 2018 from RMB285.2 million in previous quarter, exceeding the high end of our previous guidance range. Revenues from after-market services facilitation, in particular, continued to increase to RMB43 million in the fourth quarter from RMB39 million in the previous quarter. To accelerate the growth of our after-market services facilitation business, we have completed the acquisition of a licensed insurance brokerage firm. This acquisition will enable us to expand our after-market service offerings and propel our growth in the coming quarters."

Business Outlook

For the first quarter of 2019, the Company expects total revenues to be between RMB310 million and RMB330 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.

For earnings history and earnings-related data on Cango Inc. (CANG) click here.

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