Cango Inc. (CANG) Reports Q4 EPS of $1.59, Revenues Beat

Cango Inc. (NYSE: CANG) reported Q4 EPS of $1.59, versus $0.00 reported last year. Revenue for the quarter came in at $168.2 million versus the consensus estimate of $87.74 million.

Fourth Quarter 2020 Financial and Operational Highlights

• Total revenues were RMB1,097.4 million (US$168.2 million), a 150.2% increase from RMB438.5 million in the same period of 2019, outperforming the high end of the Company's guidance by 46.3%. The increase was mainly driven by the increased amounts of both financing transactions the Company facilitated and car trading transactions.
• Car trading transactions revenues were RMB546.8 million (US$83.8 million), or 49.8% of total revenues in the fourth quarter of 2020.
• Automotive financing facilitation revenues were RMB398.1 million (US$61.0 million), a 51.8% increase from RMB262.3 million in the same period of 2019.
• The amount of financing transactions the Company facilitated in the fourth quarter of 2020 was RMB10,822.2 million (US$1,658.6 million). The total outstanding balance of financing transactions the Company facilitated was RMB43,504.8 million (US$6,667.4 million) as of December 31, 2020.
• M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 0.98% and 0.42%, respectively, as of December 31, 2020, compared to 1.11% and 0.53%, respectively, as of September 30, 2020.
• The number of dealers covered by the Company was 48,487 as of December 31, 2020, compared to 46,248 as of September 30, 2020. The increase was mainly due to the expansion of 4S dealers and quality dealers in the lower-tier cities following the introduction of the Company's competitive products.

Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "It was a remarkable year for Cango despite the challenging environment due to the Covid-19 outbreak. Fueled by our mission to make car purchases simple and enjoyable, our ongoing efforts to build a one-stop platform that empowers all parties involved in the car transaction value chain has enabled us to navigate challenges and deliver solid results. During the fourth quarter, we achieved outstanding performance across the board including our automotive financing facilitation, car trading transactions and after-market services facilitation businesses. Fourth quarter total revenues came in at RMB1,097.4 million, exceeding the high end of our previous guidance by 46.3%. Robust returns from our investment in Li Auto are already contributing to strong growth in our bottom line, and our deep insights into sector trends make us optimistic about the automotive industry's gradual but pervasive evolution toward new energy vehicles.

"The success we achieved in 2020 stems from our industry know-how and the strong platform we have worked so hard to build over the past decade. Benefitting from our strong foothold in the lower-tier markets, we have seen great synergies across our businesses. In particular, revenues from our car trading transactions business contributed approximately 50% of total revenues in the fourth quarter, becoming an important growth driver for us. With our platform, we aim to connect all participants in the automotive transaction value chain through our closed-loop services with customer experience at the core. During the fourth quarter, we also made significant strides to enhance our service capabilities in terms of traffic generation and operation, supply chain management, as well as technological capabilities.

"Looking back over the last 10 years since Cango was founded, we have grown our business with a passion, always looking toward the future and staying true to our original aspirations even as we weathered obstacles. Moving into the next decade, we believe our vast dealership network, efficient service platform, competitive technological advantages and industry expertise give us a unique edge which will not only benefit our customers by giving them a premium experience and enhanced, comprehensive offerings, but also help accelerate growth of the auto market in China."

Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "Our continuous and steady progress across businesses fueled our top line expansion in the fourth quarter. Total revenues grew to a record level of RMB1.1 billion, up 150.2% year-over-year. As we rolled out more initiatives to effectively optimize overall cost, our operating income maintained its robust growth momentum in the quarter, rising 68.6% year-over-year. With robust returns from our investment in Li Auto, we also expanded our profitability in the fourth quarter, growing net income by over 15 times to RMB1.6 billion. Looking ahead, we remain focused on executing our growth strategy and committed to investing selectively in growth opportunities across all our business lines."

Business Outlook

For the first quarter of 2021, the Company expects total revenues to be between RMB1,000 million and RMB1,050 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.

The Company's investment in Li Auto and the change in fair value of investment due to the price volatility of the stock may have a significant impact on the Company's first quarter of 2021 financial results.

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

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