UPDATE: Cango Inc. (CANG) Reports Q2 EPS of $0.07 on Revenues of $35.7M

(Updated - August 30, 2018 4:33 PM EDT)

Cango Inc. (NYSE: CANG) reported Q2 EPS of $0.07. Revenue for the quarter came in at $35.7 million.

• Total revenues in the second quarter of 2018 were RMB236.3 million (US$35.7 million).
• Net income in the second quarter of 2018 was RMB64.6 million (US$9.8 million). Net income per ADS in the second quarter of 2018 was RMB0.44 (US$0.07). Each ADS represents two of the Company's Class A ordinary shares.
• The number of dealers covered by the Company increased to 40,282 as of June 30, 2018, representing a year-over-year increase of 62.0%.
• M1+ and M3+ overdue ratios for all financing transactions which the Company facilitated and remained outstanding were 0.92% and 0.46%, respectively as of June 30, 2018, as compared to 1.09% and 0.46%, respectively as of March 31, 2018.

Mr. Jiayuan Lin, Chief Executive Officer of Cango, stated, "During the second quarter of 2018, we executed three strategic initiatives to combat the near-term headwind in the macroeconomic environment and the automotive sector. First, along with our efforts to continuously expand and optimize our dealer coverage, we started implementing our proprietary SaaS management system and supply chain financing solutions among our dealers to enable them to conveniently source cars, manage inventory, and improve their sales performance. Secondly, we have launched our strategic partnerships with ICBC and Didi. Thirdly, we further diversified our revenue streams by expanding our after-market services, which now mainly involve facilitating the sale of insurance policies.

Looking ahead, we will continue to enhance our cooperation with ICBC and Didi, as well as further increase the market penetration of our insurance facilitation services. As we expand our dealer network, optimize our dealer coverage, innovate our products and services, and expand our strategic partnerships, we are well-positioned to capitalize on emerging opportunities and generate sustainable shareholder value."

Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "Although weak new car sales, aggressive subsidies from Original Equipment Manufacturers ("OEMs") and the transition of our dealer coverage model have caused a year-over-year decline in our revenues in second quarter of 2018, our business remains highly profitable and our free cash flow positive. Furthermore, we have allocated more resources to improve the conversion rate of our after-market services, through strengthening our self-reinforcing platform and further expansion of our dealer coverage. Our after-market services can be cross-sold with our financing facilitation services, with minimum incremental labor and system costs and expenses, resulting in high profit margins and generating great return on our investment. The progress we have achieved in our after-market services initiatives combined with our nationwide and well-penetrated dealer network validates our promising monetization potential. We are well positioned to implement our growth strategies in the second half of 2018."

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

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