Cango Inc (CANG) 2023 Q1 法說會逐字稿

Good morning, and good evening, everyone. Welcome to Cango Inc.'s First Quarter 2023 Earnings Conference Call. (Operator Instructions) The call is also being broadcast live on the company's IR website. Joining us today are Mr. Jiayuan Lin, Chief Executive Officer; and Mr. Yongyi Zhang, Chief Financial Officer of the company. Following management's prepared remarks, we will conduct the Q&A session.

大家早上好，晚上好。歡迎參加 Cango Inc. 2023 年第一季度收益電話會議。 （操作員說明）該電話會議也在公司的 IR 網站上進行了現場直播。今天加入我們的是首席執行官林嘉源先生；張勇毅先生，公司首席財務官。在管理層準備好發言後，我們將進行問答環節。

Before we begin, I refer you to the safe harbor statement in the company's earnings release, which also applies to the conference call today as management will make forward-looking statements. With that said, I am now turning the call over to Mr. Jiayuan Lin, CEO of Cango. Please go ahead, sir.

在我們開始之前，我請您參閱公司收益發布中的安全港聲明，該聲明也適用於今天的電話會議，因為管理層將做出前瞻性聲明。話雖如此，我現在將電話轉給燦谷首席執行官林嘉源先生。請繼續，先生。

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[Interpreted] Hi, everyone, and welcome to Cango's First Quarter 2023 Earnings Call.

【解讀】大家好，歡迎參加 Cango 2023 年第一季度財報電話會議。

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[Interpreted] Due to a variety of issues, notably COVID-19, the automotive industry remained slow throughout 2022. The macro economy began to show indications of steady recovery in 2023, the first year of a post-pandemic era, [made on a hopeful] basis for a revival in China's auto sector. Despite this encouraging trend, the market remained weak in the first quarter due to constrained consumer spending caused by factors, such as the Spring Festival holiday, the loss of national subsidies and the price war that began in March. According to China Passenger Car Association, retail sales volume of passenger vehicles declined 13.4% year-on-year in the first quarter. We predict the overall passenger vehicle market to remain volatile into 2023, owing to persistent pressure from weaker market demand.

【解讀】受新冠肺炎（COVID-19）等多種因素影響，2022年汽車行業依然低迷。2023年，作為後疫情時代的元年，宏觀經濟開始顯現出穩步復甦的跡象。為中國汽車行業的複興奠定了基礎。儘管這一趨勢令人鼓舞，但由於春節假期、國家補貼取消以及3月份開始的價格戰等因素導致消費者支出受到限制，第一季度市場仍然疲軟。據中國乘用車協會統計，一季度乘用車零售量同比下降13.4%。我們預計，由於市場需求疲軟的持續壓力，整個乘用車市場將在 2023 年之前保持波動。

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[Interpreted] Cango reacted promptly to changing macroeconomic and industry conditions by using our resources and constantly expanding our capacity to capture long-term growth opportunities. Our Cango Haoche and Cango U-Car apps are now fully operational, showcasing our capacity to successfully develop a full-service automotive transaction ecosystem centered on both new and used cars by refining our service capabilities and enhancing our operating skills.

【解讀】燦高對不斷變化的宏觀經濟和行業形勢做出迅速反應，利用我們的資源，不斷擴大我們的能力，以抓住長期增長機會。我們的“Cangohaoche”和“CangoU-Car”應用程序現已全面上線，展示了我們通過完善服務能力和提昇運營技能，成功開發出以新車和二手車為中心的全方位服務汽車交易生態系統的能力。

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[Interpreted] In the first quarter of 2023, our overall revenue was RMB 540 million, down 31% year-on-year but up 11% quarter-on-quarter. Revenues from car trading transactions were RMB 430 million, accounting for 79% of total revenues, reinforcing our position as a strong growth engine. Our company's net income for the first quarter was RMB 78.8 million primarily due to an increase in gain on risk assurance liabilities under newly implemented accounting standards and the reversal of credit impairment loss due to asset quality improvement. The entire outstanding balance of financing transactions we facilitated have reduced from RMB 25.6 billion as of December 31, 2022, to RMB 20.7 billion as of March 31, 2023, with our M1+ and M3+ percentages falling to 2.33% and 1.29%, respectively. We anticipate that the ongoing reduction in our outstanding balance of financing transactions together with our robust balance sheet will provide significant support for Cango's healthy long-term growth prospects.

【解讀】2023年第一季度，我們整體營收為5.4億元人民幣，同比下降31%，但環比增長11%。汽車交易收入4.3億元，佔總收入79%，強勁增長引擎地位。公司一季度淨利潤為7,880萬元，主要是新執行會計準則下風險保證負債收益增加以及資產質量改善導致信用減值損失轉回。截至2023年3月31日，我們促成的融資交易總餘額從2022年12月31日的256億元人民幣減少至207億元人民幣，M1+和M3+佔比分別下降至2.33%和1.29%。我們預計，融資交易餘額的持續減少以及穩健的資產負債表將為 Cango 的健康長期增長前景提供重要支持。

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[Interpreted] Next, I would like to provide some specifics on the significant progress we've achieved with our company.

[解讀]接下來，我想具體介紹一下我們公司所取得的重大進展。

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[Interpreted] Let's begin by discussing the new car trading transactions. The first quarter is typically considered the off-season for automobile sales. And when combined with macroeconomic and industry challenges, the overall market remains subdued. Nevertheless, our new car trading transactions business demonstrated a robust performance in the first quarter, exhibiting enhanced operational capabilities and efficiency. During this period, a total of 3,867 cars were sold on Cango Haoche, maintaining stability compared to Q4 2022. As of March 31, 2023, the total number of dealers participating in Cango Haoche rose to 10,469, marking a 40.8% increase year-on-year. By the end of the first quarter, the Cango Haoche app had accumulated over 877,000 page views and attracted more than 78,000 unique visitors.

【解讀】我們首先來討論一下新車交易。第一季度通常被認為是汽車銷售淡季。再加上宏觀經濟和行業挑戰，整體市場依然低迷。儘管如此，我們的新車交易業務在第一季度表現強勁，運營能力和效率有所增強。期內，燦高好車共售出3,867輛汽車，較2022年第四季度保持穩定。截至2023年3月31日，參與燦高好車的經銷商總數升至10,469家，同比增長40.8% -年。截至第一季度末，“燦果好車”應用累計頁面瀏覽量超過87.7萬次，吸引了超過7.8萬名獨立訪問者。

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[Interpreted] Our distinctive vehicle inventory advantage has been significantly contributed to the success of Cango Haoche, which has been warmly received by dealers since its inception. Leveraging our vehicle inventory, we have concentrated on our commitment to deliver superior service to dealers through a diverse range of high-quality offerings. Since the start of this year, we have further refined our services to accurately address the challenges and unique requirements of small- and medium-sized dealers, equipping them with effective support to grow their business and achieve profitability. In mid-February, Cango Haoche introduced a new membership service. This incentive-based program merges a membership rebate policy with core dealer tiers aiming to boost the repurchase rate of service products and foster dealer engagement.

【解讀】燦哥好車的成功離不開我們獨特的車輛庫存優勢，自推出以來就受到了經銷商的熱烈歡迎。利用我們的車輛庫存，我們致力於通過各種高品質產品為經銷商提供優質服務。今年以來，我們進一步細化服務，精準應對中小經銷商的挑戰和獨特需求，為他們發展業務、實現盈利提供有效支持。 2月中旬，燦果好車推出了新的會員服務。這一基於激勵的計劃將會員返利政策與核心經銷商層級相結合，旨在提高服務產品的回購率並促進經銷商參與。

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[Interpreted] In addition to enhance our online service efficiency, we introduced an intelligent AI customer service on Cango Haoche in April. This 24/7 service has not only significantly improved our service quality for dealers and increased their satisfaction rates but also bolstered our operational capabilities and efficiency. Moreover, Cango Haoche's multi-store model was specifically designed to foster horizontal expansion by attracting more high-quality third-party auto service providers to open online stores. In April, Cango Haoche saw the launch of its first online store by third-party service provider [GL Car Tuning]. We anticipate the introduction of auto accessories boutique stores in the second half of 2023, empowering dealers to better serve and retain customers with a diverse range of products and services.

【解讀】除了提昇在線服務效率外，我們於4月份在燦谷好車上推出了智能AI客服。這種24/7的服務不僅顯著提高了我們對經銷商的服務質量和滿意度，而且還增強了我們的運營能力和效率。此外，燦谷好車的多店模式旨在通過吸引更多優質第三方汽車服務商開設網上商店來促進橫向擴張。 4月，燦高好車首家第三方服務商【GL Car Tuning】線上商城上線。我們預計將於 2023 年下半年推出汽車配件精品店，使經銷商能夠通過多樣化的產品和服務更好地服務和留住客戶。

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[Interpreted] Moving forward, fueled by big data and digitalization, Cango Haoche will persist in deepening its multi-store expansion strategy, welcoming more upstream and downstream participants from the auto transaction value chain to join us. In doing so, we aim to fully actualize resource sharing across the industry by eliminating barriers between small- and medium-sized dealers and automotive service providers and achieving bidirectional or two-way empowerment through digitalized service processes.

【解讀】未來，在大數據和數字化的推動下，燦谷好車將繼續深化多店擴張戰略，歡迎更多汽車交易價值鏈上下游參與者加入。我們的目標是通過數字化服務流程，消除中小經銷商與汽車服務商之間的壁壘，實現雙向或雙向賦能，充分實現全行業的資源共享。

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[Interpreted] Now let's shift our focus to used cars. Building on the success of the Cango U-Car mini program, which was introduced in May last year, the Cango U-Car app was launched in early January this year. The app operates in tandem with the mini program, providing a seamless experience. Both the app and the mini program have been specifically designed to offer comprehensive technology-driven services that are more secure, reliable, diverse and efficient for used car dealers and individual used car owners alike. By refining these services, we have been able to better understand and cater to the unique needs of various industry players, offering a one-stop solution for all their requirements.

【解讀】現在我們把焦點轉移到二手車上。繼去年5月推出的Cango U-Car小程序取得成功的基礎上，今年1月初，Cango U-Car應用程序正式上線。該應用程序與小程序協同運行，提供無縫體驗。該應用程序和小程序均經過專門設計，旨在為二手車經銷商和個人二手車車主提供更安全、可靠、多樣化和高效的全面技術驅動服務。通過完善這些服務，我們能夠更好地了解和滿足不同行業參與者的獨特需求，為他們的所有要求提供一站式解決方案。

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[Interpreted] Powered by our enhanced used car transaction services and optimized digital capabilities, Cango U-Car now provides a range of functions, including historic vehicle condition reports, vehicle appraisals, online options, online car searches, used car listings, self-operated used car inventory repurchases and [dollar] services such as logistics, financing and insurance. By the end of the first quarter of 2023, our network has included nearly 6,000 registered used car dealers across 179 cities in 21 -- I mean, in 29 provinces nationwide. The accumulated page views and total unique visitors on the Cango U-Car app and mini program reached over 513,000 and 26,000, respectively, by the end of the first quarter of 2023.

【解讀】基於強化的二手車交易服務和優化的數字化能力，Cango U-Car現已提供歷史車況報告、車輛評估、在線選車、在線找車、二手車列表、自營等一系列功能。二手車庫存回購和物流、融資和保險等[美元]服務。截至 2023 年第一季度末，我們的網絡已包括全國 29 個省份 21 個省份 179 個城市的近 6,000 家註冊二手車經銷商。截至2023年第一季度末，Cango U-Car應用和小程序的累計頁面瀏覽量和總獨立訪問量分別超過513,000和26,000。

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[Interpreted] Maintaining a stable and abundant inventory as well as a transparent pricing structure are crucial for used car dealers. Thanks to our extensive dealer network across lower-tier cities and decades of industry experience, we have ample sources of high-quality used cars, such as trading from our auto financing customers and repossessed cars from our asset management department. These represent unique advantages for our used car transaction services and specifically address one of primarily challenges for used car dealers. In addition to overdue customers, Cango has potential inventory of approximately 20,000 used cars from customers whose payments ended normally each month. Powered by our enhanced capabilities in used car acquisition and transaction conversion, these potential inventory sources along with repossessed cars will further strengthen the competitive edge of Cango U-Car in terms of used car resources.

【解讀】保持穩定充裕的庫存以及透明的定價結構對於二手車經銷商來說至關重要。得益於我們遍布低線城市的廣泛經銷商網絡和數十年的行業經驗，我們擁有充足的優質二手車來源，例如汽車金融客戶的交易和資產管理部門的回收汽車。這些代表了我們二手車交易服務的獨特優勢，並專門解決了二手車經銷商面臨的主要挑戰之一。除了逾期客戶外，Cango 還擁有大約 20,000 輛二手車的潛在庫存，這些庫存來自每月正常付款的客戶。憑藉我們增強的二手車收購和交易轉化能力，這些潛在的庫存來源以及回收的汽車將進一步增強Cango U-Car在二手車資源方面的競爭優勢。

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[Interpreted] In April this year, Cango U-Car successfully obtained its online auction qualification with upgraded auction services in addition to auctioning individual and repossessed vehicles. All registered dealers nationwide can now list their used cars for B2B auction through our platform. As far as we know, this capability is the first of its kind available in the market. In other words, we can now provide all small- and medium-sized used car dealers with additional technology-enabled sales channel, enabling them to achieve better prices and faster inventory turnover.

【解讀】今年4月，燦谷優車成功獲得網上拍賣資質，拍賣服務升級，除拍賣個人車輛和追債車輛外，還升級了拍賣服務。全國所有註冊經銷商現在都可以通過我們的平台列出他們的二手車進行 B2B 拍賣。據我們所知，這種功能在市場上尚屬首次。換句話說，我們現在可以為所有中小型二手車經銷商提供額外的技術支持的銷售渠道，使他們能夠獲得更好的價格和更快的庫存周轉。

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[Interpreted] Vehicle inspection plays an important role in improving the used car transaction experience. We have [now] established in-house technician teams to not only improve our capabilities but also offer professional services to dealers and consumers, including vehicle condition checks, pricing and license verifications. In April of this year, we entered into a group level partnership with China Grand Auto to provide a suite of professional aftersales services for all its used cars.

【解讀】車輛檢驗對於提升二手車交易體驗有著重要作用。我們現在已經建立了內部技術團隊，不僅可以提高我們的能力，還可以為經銷商和消費者提供專業服務，包括車輛狀況檢查、定價和許可證驗證。今年4月，我們與廣匯汽車建立了集團級合作夥伴關係，為其所有二手車提供一整套專業的售後服務。

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[Interpreted] Going forward, we will continue to accelerate digitalization and enhance our differentiated services in lower-tier markets. These efforts will provide the foundation for Cango's sustainable growth. We remain committed to standardizing our offerings and deepening our penetration across the automotive value chain powered by big data and technological innovation. We will continue strengthening our competitive advantages across the supply chain, covering car transactions, aftermarket services and building a closed loop ecosystem. With these initiatives, Cango is well positioned for resilience as we strengthen our place in China's automotive industry evolution powered by digital technology.

【解讀】未來，我們將繼續加快數字化進程，增強低線市場的差異化服務。這些努力將為Cango的可持續增長奠定基礎。我們仍然致力於標準化我們的產品，並深化我們在大數據和技術創新驅動下的汽車價值鏈的滲透。我們將繼續強化整個供應鏈的競爭優勢，涵蓋汽車交易、後市場服務以及構建閉環生態系統。通過這些舉措，隨著我們在數字技術推動下的中國汽車行業發展中鞏固自己的地位，Cango 已做好了恢復能力的準備。

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[Interpreted] Next, I will turn the call over to our Chief Financial Officer, Michael Zhang, for a review of the company's financial performance.

[解讀]接下來，我將把電話轉給我們的首席財務官張明，讓他回顧一下公司的財務業績。

Thanks, Jiayuan. Hello, everyone, and welcome to our first quarter 2023 earnings call. Before I started to review our financials, please note that unless otherwise stated, all numbers are in RMB terms and all percentage comparisons are on a year-over-year basis. Our total revenues for the first quarter was CNY 542.6 million, among which car trading transactions business delivered revenues of CNY 429.8 million, further demonstrating its solid position as our major revenue drivers.

謝謝嘉源。大家好，歡迎參加我們的 2023 年第一季度財報電話會議。在我開始審查我們的財務數據之前，請注意，除非另有說明，所有數字均以人民幣計算，所有百分比比較均以同比為基礎。第一季度總收入為5.426億元人民幣，其中汽車交易業務實現收入4.298億元人民幣，進一步彰顯了其作為我們主要收入驅動力的穩固地位。

Now let's move on to our cost and expenses during the quarter. Total operating cost and expenses in the first quarter of 2023 were CNY 490.8 million compared with CNY 976.8 million in the same period 2022. Cost of revenue in the first quarter of 2023 decreased to CNY 480.5 million from CNY 687 million in the same period 2022. As a percentage of total revenues, cost of revenue in the first quarter of 2023 was 88.6% compared with 87.2% in the same period 2022. Sales and marketing expenses in the first quarter of 2023 decreased to CNY 12.5 million from CNY 53.8 million in the same period 2022. As a percentage of total revenues, sales and marketing expenses in the first quarter of 2023 was 2.3% compared with 6.8% in the same period 2022.

現在讓我們繼續討論本季度的成本和支出。 2023年第一季度的總運營成本和費用為人民幣4.908億元，而2022年同期為人民幣9.768億元。2023年第一季度的收入成本從2022年同期的人民幣6.87億元下降至人民幣4.805億元。按佔總收入的比例計算，2023 年第一季度的收入成本為 88.6%，而 2022 年同期為 87.2%。2023 年第一季度的銷售和營銷費用從 2023 年第一季度的 5,380 萬元下降至 1,250 萬元。 2022 年同期。2023 年第一季度銷售和營銷費用佔總收入的百分比為 2.3%，而 2022 年同期為 6.8%。

General and administrative expenses in the first quarter of 2023 decreased to CNY 39.8 million from CNY 50.9 million in the same period 2022. As a percentage of total revenues, general and administrative expenses in the first quarter of 2023 was 7.3% compared with 6.5% in the same period 2022. Research and development expenses in the first quarter of 2023 decreased to CNY 8.1 million from CNY 14.5 million in the same period of 2022. As a percentage of total revenues, research and development expenses in the first quarter of 2023 was 1.5% compared with 1.8% in the same period 2022.

2023年第一季度的一般及管理費用從2022年同期的5,090萬元人民幣減少至3,980萬元人民幣。佔總收入的百分比，2023年第一季度的一般及管理費用為7.3%，而2023年第一季度的一般及管理費用為6.5%。 2022年同期研發費用由2022年同期的1450萬元下降至2023年第一季度的810萬元。2023年第一季度研發費用佔總收入的比例為1.5 %，而 2022 年同期為 1.8%。

Net gain on contingent risk assurance liabilities in the first quarter of 2023 was CNY 1.6 million. The gain was recognized due to the release of obligations from the contingent aspect of the risk assurance liabilities. Net recovery on provision for credit losses in the first quarter of 2023 was CNY 48.6 million. The recovery was primarily due to the positive impact from the collections of financial receivables.

2023年第一季度或有風險保證負債淨收益為160萬元人民幣。該收益是由於風險保證負債或有方面的義務解除而確認的。 2023年第一季度信用損失撥備淨收回額為4,860萬元人民幣。回升主要是由於財務應收賬款催收的積極影響。

We recorded income from operations of CNY 51.8 million in the same -- in the first quarter of 2023 compared with a loss of CNY 189.1 million in the same period 2022. Net income in the first quarter of 2023 was CNY 78.8 million. Non-GAAP adjusted net income in the first quarter of 2023 was CNY 92.8 million. On a per share basis, basic and diluted net income per ADS in the first quarter 2023 was CNY 0.58 and CNY 0.56, respectively. And non-GAAP adjusted basic and diluted net income per ADS in the same period was CNY 0.69 and CNY 0.66, respectively.

2023 年第一季度，我們實現營業收入 5180 萬元人民幣，而 2022 年同期虧損 1.891 億元人民幣。2023 年第一季度淨利潤為 7880 萬元人民幣。 2023年第一季度非美國通用會計準則調整後淨利潤為9280萬元人民幣。按每股計算，2023年第一季度每股ADS基本淨利潤和稀釋淨利潤分別為0.58元人民幣和0.56元人民幣。同期非美國通用會計準則調整後每股美國存託股基本淨利潤和稀釋淨利潤分別為人民幣0.69元和人民幣0.66元。

Moving on to our balance sheet. As of March 31, 2023, we had cash and cash equivalents of CNY 696.6 million compared with CNY 378.9 million as of December 31, 2022. As of March 1 -- March 31, 2023, the company had a short-term investment of CNY 2 billion compared with CNY 1.9 billion as of December 31, 2022. Looking ahead to the second quarter of 2023, we are now predicting our total revenues to be between CNY 600 million and CNY 650 million. Please note that this forecast reflects our current and preliminary view on market and operational conditions, which are subject to change.

繼續我們的資產負債表。截至2023年3月31日，我們的現金及現金等價物為人民幣6.966億元，而截至2022年12月31日為人民幣3.789億元。截至2023年3月1日至3月31日，公司擁有人民幣短期投資截至 2022 年 12 月 31 日，這一數字為 20 億元人民幣，而截至 2022 年 12 月 31 日為 19 億元人民幣。展望 2023 年第二季度，我們預計總收入將在 6 億元人民幣至 6.5 億元人民幣之間。請注意，這一預測反映了我們對市場和運營狀況的當前初步看法，這些看法可能會發生變化。

This concludes our prepared remarks. Operator, we are now ready to take questions.

我們準備好的發言到此結束。接線員，我們現在準備好回答問題。

(Operator Instructions) Your first question comes from [Stanley Wang] from Morgan Stanley.

（操作員指令）您的第一個問題來自摩根士丹利的[Stanley Wang]。

(foreign language)

（外語）

[Interpreted] I have 2 questions. The first question is that beginning this year, many OEMs suggested their strategies. What do you think of structural opportunities for NEVs, new energy vehicles, and also internal combustion engine vehicles, in short ICEVs? My second question is that the overdue ratios of Cango's financing facilitation business dropped. Is this a sign of reduced credit risk in the market and gradual economic recovery?

[解釋]我有2個問題。第一個問題是，從今年開始，很多主機廠提出了自己的策略。您如何看待新能源汽車、新能源汽車以及內燃機汽車（簡稱ICEV）的結構性機會？第二個問題，燦谷融資便利化業務逾期率有所下降。這是否是市場信用風險降低、經濟逐步復甦的跡象？

(foreign language)

（外語）

[Interpreted] Thank you for your questions. About the first question, the automotive industry was sluggish in the first quarter. According to China Passenger Car Association, retail sales of passenger vehicles decreased 13.4% year-on-year and consumer demand began slowing since late 2022 as incentives ended. The impact of China VI-b emission standards and industry-wide price competition further constrained consumer spending.

[解釋]謝謝您的提問。關於第一個問題，一季度汽車行業不景氣。中國乘聯會數據顯示，自2022年底以來，隨著激勵政策的結束，乘用車零售量同比下降13.4%，消費需求開始放緩。國六b排放標準和全行業價格競爭的影響進一步限制了消費者支出。

(foreign language)

（外語）

[Interpreted] Although NEV sales soared in Q4 2022, NEV penetration exceeded 30%. The CPCA forecasts NEV penetration may reach 36% nationwide in 2023. At the recent Shanghai auto show, over 100 of the more than 150 new models launched were NEVs.

【解讀】雖然2022年第四季度新能源汽車銷量猛增，但新能源汽車滲透率超過30%。乘聯會預測，2023年全國新能源汽車滲透率將達到36%。在最近的上海車展上，推出的150多款新車型中，有100多款是新能源汽車。

(foreign language)

（外語）

[Interpreted] In addition, government campaigns encouraging rural NEV purchases and expanding charging stations there indicate lower-tier markets over huge opportunity and potential for NEV sales growing trend.

【解讀】此外，政府鼓勵農村新能源汽車購買和擴大農村充電站的舉措表明，低線市場蘊藏著巨大的機遇，新能源汽車銷量呈增長趨勢。

(foreign language)

（外語）

[Interpreted] For ICEVs, the announcement in May that some ICEVs received a grace period under the China VI-b emission standards mitigated some of the sales pressure for automakers.

【解讀】對於內燃機車來說，5月份宣布部分內燃機車享受國六b排放標準寬限期，緩解了車企的部分銷售壓力。

(foreign language)

（外語）

[Interpreted] As of the end of first quarter, the total outstanding balance of financing transactions we facilitated RMB 20.7 billion with our M1+ and M3+ ratios down to 2.33% and 1.29%, respectively, and our overdue ratios decreasing quarter-over-quarter. Overdue ratios dropped mainly because we strengthened our collection efforts of nonperforming assets, leading to a decrease in value of numerator and denominator for calculation where the loans were prepaid.

【解讀】截至一季度末，融資交易餘額合計207億元，M1+、M3+比率分別下降至2.33%、1.29%，逾期率環比下降。逾期率下降的主要原因是本行加大了不良資產清收力度，導致預付貸款計算分子和分母值下降。

(foreign language)

（外語）

[Interpreted] By the end of March, our existing customers had already been paying -- made payments for around 2 years with an average of 14 months remaining on their prepayment contracts. This led to our lower overdue ratios from this customer cohort.

[解讀] 截至 3 月底，我們的現有客戶已付款約 2 年，預付款合同平均還剩 14 個月。這導致我們該客戶群體的逾期率較低。

(foreign language)

（外語）

[Interpreted] While our outstanding balance of financing transactions continues to decrease, our risk exposures have been shrinking. The credit cycle and risk exposure of the entire market remain unclear. Therefore, we will remain cautious and prudent.

【解讀】在融資交易餘額持續下降的同時，我們的風險敞口也在不斷縮小。整個市場的信貸週期和風險暴露仍不明朗。因此，我們將保持謹慎、審慎的態度。

Your next question comes from (inaudible) from Goldman Sachs.

您的下一個問題來自（聽不清）高盛。

(foreign language)

（外語）

[Interpreted] I have 2 questions as well. The first question is that the price war that began in March weighed on the whole industry. Could you please provide some color around where the market is heading and your next move for vehicle inventory? And the second question is that in addition to car trading transactions business, could you shed some light on the development of your other value-added services?

[解釋]我也有2個問題。第一個問題是，3月份開始的價格戰給整個行業帶來了壓力。您能否提供一些關於市場走向以及您對車輛庫存的下一步行動的信息？第二個問題，除了汽車交易交易業務之外，您能否介紹一下你們其他增值業務的發展情況？

(foreign language)

（外語）

[Interpreted] Thank you for your questions. On your first question, China's automotive industry growth began moderating in 2019. With the pandemic impact, recovery had been unstable and sluggish. The highly anticipated rebound has yet to materialize in the first half of 2023. According to the National Bureau of Statistics and Ministry of Finance, in April, retail sales of automotive consumer goods were RMB 362 billion, down 15.1% quarter-over-quarter. Collected vehicle purchase tax was RMB 21.3 billion, down 9.7% quarter-over-quarter. And China Automobile Dealers Association data show that from January to April, the retail passenger vehicle sales was about 5.895 million, down 1.3% year-on-year. In summary, the auto market still faces considerable downward pressure with little evidence of recovery so far.

[解釋]謝謝您的提問。關於第一個問題，2019年中國汽車工業增速開始放緩，受疫情影響，復甦不穩定、緩慢。備受期待的反彈在2023年上半年尚未實現。國家統計局、財政部數據顯示，4月份，汽車消費品零售額3620億元，環比下降15.1%。徵收車輛購置稅213億元，環比下降9.7%。而中國汽車流通協會數據顯示，1-4月，乘用車零售銷量約為589.5萬輛，同比下降1.3%。綜上所述，汽車市場仍面臨較大下行壓力，且目前尚無復蘇跡象。

(foreign language)

（外語）

[Interpreted] Despite improvement in supply and demand, recovery on the demand side was too moderate for the new supply. Against this backdrop and coupled with the withdrawal of subsidies, Wuhan started a price war as production capacity resumed amidst weak consumer demand. The inappropriate intervention by nonmarket participants exacerbated the situation. The price war disrupted market order and impacted the used car market as well. Lower prices ultimately hindered rather than help the situation.

【解讀】儘管供需有所改善，但需求端的複蘇對於新增供給而言過於溫和。在此背景下，加上補貼取消，武漢在消費需求疲軟的情況下，產能恢復，打響了價格戰。非市場參與者的不當乾預加劇了局勢。價格戰擾亂了市場秩序，也影響了二手車市場。較低的價格最終阻礙而不是幫助了這種情況。

(foreign language)

（外語）

[Interpreted] Early this year, we reduced inventory in anticipation of China's VI-b emission standards. This proved a very wise decision, safeguarding us from auto market disruptions and losses. In the second half, we will maintain a low inventory level, enhance service and product functions, further refine our business management and upgrade the dealer experience as well as improved operational efficiency.

【解讀】今年年初，我們因預期國六b排放標準而減少了庫存。事實證明，這是一個非常明智的決定，保護了我們免受汽車市場的干擾和損失。下半年，我們將保持低庫存水平，增強服務和產品功能，進一步細化業務管理，升級經銷商體驗，提高運營效率。

(foreign language)

（外語）

[Interpreted] On your second question, in addition to revenues from car sales, our services and products mainly aim to enhance the dealer experience. We hope these services will empower dealers, attract more small- and medium-sized dealers to our platform and generate more traffic.

【解讀】關於你的第二個問題，除了汽車銷售收入之外，我們的服務和產品主要是為了提升經銷商的體驗。我們希望這些服務能夠為經銷商賦能，吸引更多的中小經銷商加入我們的平台，產生更多的流量。

(foreign language)

（外語）

[Interpreted] Going forward, we will leverage big data and technological innovations to refine our products, to refresh our service portfolio and offer more accessible and diversified functions as well as to improve the dealer experience. And we believe that these will more effectively support small- and medium-sized dealers across lower-tier markets.

【解讀】未來，我們將利用大數據和科技創新，完善產品、更新服務、提供更便捷、更多元化的功能，提升經銷商體驗。我們相信，這些將更有效地支持低線市場的中小型經銷商。

Your next question comes from (inaudible) from CITIC Securities.

你的下一個問題來自中信證券（聽不清）。

(foreign language)

（外語）

[Interpreted] I'm from CITIC Securities. I have 2 questions. The first question is that, yes, indeed, in March and April, the car market has not been performing very well. However, in May, based on data, we have seen some pickups in both the traffic to the stores as well as car purchases. So what about in the lower-tier markets? Have you observed any similar demand recovery in the lower-tier markets? And that's my first question. And the second question is about the used car market. Well, based on what I have heard, I understand that the company mainly provides services and customers for used car purchases. Do I understand that in the right way? And also, what about -- could you give us more color on your plans for your used car business? And what are your thoughts on the used car market?

[解讀]我是中信證券的。我有 2 個問題。第一個問題是，是的，確實在3、4月份，汽車市場的表現並不是很好。然而，根據數據，5月份，我們看到商店的客流量和汽車購買量都有所回升。那麼低線市場又如何呢？您是否觀察到低線市場有類似的需求復蘇？這是我的第一個問題。第二個問題是關於二手車市場的。嗯，根據我的了解，我了解到該公司主要是提供二手車購買的服務和客戶。我的理解正確嗎？另外，您能給我們更多關於您的二手車業務計劃的信息嗎？您對二手車市場有何看法？

(foreign language)

（外語）

[Interpreted] Thank you for your 2 questions. Let me take on the first question first. Overall economic indicators and total financing show little improvement in April and May. So recovery in lower-tier markets have just begun. Public data show that Tier 3 and Tier 4 city household disposable income was 17% to 18% below national average and rural household disposable income was 40% net of urban levels.

[解釋]謝謝你的2個問題。我先回答第一個問題。 4月和5月總體經濟指標和融資總額改善不大。因此，低線市場的複蘇才剛剛開始。公開數據顯示，三四線城市家庭可支配收入比全國平均水平低17%至18%，農村家庭可支配收入比城市水平低40%。

(foreign language)

（外語）

[Interpreted] According to CADA data, [51%] of dealers reported declining transactions and 36.5% reported flat transactions and only 12.5% reported increased transactions.

【解讀】CADA數據顯示，51%的經銷商成交量下降，36.5%的經銷商成交量持平，僅12.5%的經銷商成交量增加。

(foreign language)

（外語）

[Interpreted] Well, based on our first-line -- frontline experience, in lower-tier markets, many dealers closed stores, while remaining dealers saw much lower sales volumes than expected. Our sales team interacting with the clients noted that consumers mostly postponed car purchases.

【解讀】嗯，根據我們一線一線的經驗，在低線市場，很多經銷商都關店了，而剩下的經銷商銷量比預期要低很多。我們的銷售團隊在與客戶的互動中發現，消費者大多推遲了購車。

(foreign language)

（外語）

[Interpreted] On your second question on used car market, well, the recent new car price war pushed the prices to all-time lows, causing rare but substantial depreciation in used car values. It has also impacted the used car market. The new car price war has led to a 5% drop in average used car prices in March and also 1.56 million used car trades nationwide in March, up 7.4% quarter-over-quarter, a [lower] rate than in previous years.

【解讀】關於你提到的第二個問題，二手車市場，嗯，最近的新車價格戰將價格推至歷史最低點，導致二手車價值出現罕見但大幅的貶值。這也對二手車市場產生了影響。新車價格戰導致3月份二手車均價下降5%，3月份全國二手車交易量156萬輛，環比增長7.4%，增幅低於往年。

(foreign language)

（外語）

[Interpreted] All in all, the used car market is rapidly expanding due to favorable government policies encouraging used car businesses and also growth in the new car market increasing the supply of used cars. Despite COVID-19's negative impact, the used car market saw steady growth overall. We believe the used car market will maintain sustainable long-term growth due to government policy support and also increasing supply of used cars as the new car market expands.

【解讀】總而言之，由於政府鼓勵二手車業務的利好政策以及新車市場的增長增加了二手車的供應，二手車市場正在迅速擴大。儘管受到 COVID-19 的負面影響，二手車市場總體仍保持穩定增長。我們相信，由於政府政策的支持以及隨著新車市場的擴大二手車供應的增加，二手車市場將保持可持續的長期增長。

(foreign language)

（外語）

[Interpreted] And at Cango, we launched Cango U-Car app in Q1, and this app offered -- has been offering vehicle condition reports, evaluations, online auctions, car searches, listings, inventory purchases and also logistics and financing and insurance services. By the end of Q1, our dealer network included nearly 6,000 used car dealers in 179 cities across 29 provinces. Cango U-Car saw monthly active users above 35%, transactions doubling monthly from January and also 513,000 accumulated page views and 26,000 total unique visitors.

[解讀]在 Cango，我們在第一季度推出了 Cango U-Car 應用程序，該應用程序提供了 - 一直提供車輛狀況報告、評估、在線拍賣、汽車搜索、列表、庫存購買以及物流和融資和保險服務。截至第一季度末，我們的經銷商網絡包括遍布 29 個省份 179 個城市的近 6,000 家二手車經銷商。 Cango U-Car 的月活躍用戶超過 35%，每月交易量較 1 月份翻倍，累計頁面瀏覽量達 513,000 次，獨立訪客總數達 26,000 人次。

(foreign language)

（外語）

[Interpreted] And in April, Cango U-Car obtained online auction qualifications, and we also upgraded the auction services. Now this upgrade allows individuals and repossessed vehicles to be auctioned and the all registered dealers nationwide to list used cars for B2B auctions. Thank you.

【解讀】而在4月份，燦谷優車獲得了網上拍賣資格，我們也升級了拍賣服務。現在，此升級允許拍賣個人和收回的車輛，並允許全國所有註冊經銷商列出二手車進行 B2B 拍賣。謝謝。

We have no further questions at this time. I'll hand the call back to management for closing remarks.

目前我們沒有進一步的問題。我會將電話轉交給管理層以供結束語。

(foreign language)

（外語）

[Interpreted] Thank you all for your participation. That closes today's earnings call.

【解讀】感謝大家的參與。今天的財報電話會議到此結束。

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. .

謝謝。我們今天的會議到此結束。感謝您的參與。您現在可以斷開連接。 。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。]