Cango Inc (CANG) 2024 Q3 法說會逐字稿

Good morning and good evening, everyone. Welcome to Cango,Inc third quarter, 2024 earnings conference call at this time. All participants are in a listen-only mode. This call is also being broadcast live on the company's IR website.

大家早安，晚上好。歡迎參加 Cango,Inc 2024 年第三季財報電話會議。所有參與者都處於只聽模式。本次電話會議也在公司的 IR 網站上進行直播。

Joining us today are Mr Jiayuan Lin, Chief Executive Officer and Miss Reenan Financial Director of Tango.

今天與我們一起出席的還有 Tango 執行長林家元先生和財務總監 Reenan 女士。

Following management's prepared remarks, we will conduct a Q&A session before I 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 to Mr Gia Yunlin CEO of KO. Please go ahead.

在管理階層發表完準備好的發言後，我將在開始之前進行問答環節。我請您參閱公司收益報告中的安全港聲明，該聲明也適用於今天的電話會議，因為管理層將就此發表前瞻性聲明，我現在將電話轉給 KO 首席執行官 Gia Yunlin 先生。請繼續。

Hello everyone and welcome to Cango's third quarter, 2024 earnings call.

大家好，歡迎參加 Cango 2024 年第三季財報電話會議。

In the third quarter of 2024. Kano's overall business performance remains stable highlighted by total revenue of RMB26.95 million. An operating profit of RMB35.24 million and a net profit of RMB67.88 million. These solid results were primarily driven by our implementation of stricter cost control and risk management strategies. Which significantly improved operational efficiency.

2024年第三季。嘉諾公司整體經營績效維持穩定，總營收達2,695萬元人民幣。營業利潤3524萬元，淨利6788萬元。這些穩健的績效主要得益於我們實施更嚴格的成本控制和風險管理策略。這大大提高了營運效率。

Jiayuan let me be MS.

嘉遠讓我當MS。

For post loan management. We reinforced monitoring mechanisms and risk assessments, effectively maintaining a low nonperforming loan ratio and ensuring asset quality and stability. As of September the 60th, our total outstanding loan balance was approximately RMB4.8 billion with M one plus at 3.17% and M three plus at 1.76%. We also reduced our credit risk exposure not fully covered by bad debt allowance for risk assurance liabilities to RMB1.7 billion. The company's total cash cash equivalents and short term investments amounted to approximately RMB3.8 billion. An increase of RMB89.27 million compared to the end of the previous quarter.

用於貸後管理。強化監控機制和風險評估，不良貸款率有效維持在較低水平，確保了資產品質穩定。截至 9 月 60 日，我們未償還貸款餘額約為人民幣 48 億元，其中 M1+ 貸款利率為 3.17%，M3+ 貸款利率為 1.76%。我們將風險保障責任壞帳準備未完全覆蓋的信用風險敞口降至人民幣17億元。該公司的現金現金等價物及短期投資總額約為人民幣38億元。較上季末增加8,927萬元。

So from AP P also with the father just to send you to APPPHEBAPP.

所以從 AP P 也跟爸爸一起只是為了送你去 APPPHEBAPP。

In terms of business development, we prioritize driving growth across the Cango U-Car App and our overseas used car operations. By the end of the third quarter, the Cango U-Car App had accumulated a total of 280,000 page views, an increase of 21% from last quarter. We strengthen Cango's competitive advantages in vehicle inventory during the quarter by establishing strategic partnerships with numerous used car marketplaces, enabling real time updates of vehicle listings and ensuring a diverse and abundant supply of vehicles through Cango U-Car App.

在業務發展方面，我們優先推動Cango U-Car應用程式和海外二手車業務的成長。截至第三季末，燦谷優車App累計訪問量達28萬，季增21%。本季度，我們與眾多二手車市場建立戰略合作夥伴關係，實現車輛清單的即時更新，並透過Cango U-Car App 確保車輛供應的多樣化和充足性，從而增強了Cango 在車輛庫存方面的競爭優勢。

Meanwhile, we introduced a rapid vehicle inspection and listing service in close collaboration with professional third-party inspection teams. We conduct thorough background checks and a comprehensive vehicle condition assessments for each vehicle and provide buyers with detailed vehicle history reports and inspection data enhancing transparency in transactions. Additionally, our nationwide logistics network offers buyers a variety of delivery and transport options to better meet diverse customer needs.

同時，我們與第三方專業偵測團隊緊密合作，推出了車輛快速偵測及掛牌服務。我們對每輛車進行徹底的背景調查和全面的車輛狀況評估，並向買家提供詳細的車輛歷史報告和檢查數據，以提高交易的透明度。此外，我們遍佈全國的物流網絡為買家提供各種配送和運輸選擇，以更好地滿足多樣化的客戶需求。

Our community operations team fosters user engagement through a range of online and offline activities including exclusive online options on site visits and members only discounts. We also continuously collect and analyze user feedback to refine our service processes ensuring we consistently improve customer satisfaction.

我們的社區營運團隊透過一系列線上和線下活動促進用戶參與，包括現場訪問的獨家線上選項和會員專屬折扣。我們也不斷收集和分析使用者回饋，以改善我們的服務流程，確保持續提高客戶滿意度。

Also auto dotcom to the GPV two WZJP sku H1.

也可自動將 dotcom 連接至 GPV two WZJP sku H1。

On our used car export service where we continue to make significant progress. This quarter, our international used car platform, auto Kle dotcom has accumulated over 370,000 page views and nearly 60,000 registered users since its launch in March 2024. The platform now offers more than 100,000 used car sku S covering over 65,000 different models to better serve our customers and enhance our brand image. We are continuously optimizing Kle auto kle.com's content and improving the overall user experience. Auto Kle dotcom site map now boasts over 500,000 pages. Thanks to consistent content updates and technological improvements. This growth reflects our commitment to content development and drives increased user engagement with information we provide.

我們在二手車出口服務方面持續取得重大進展。本季度，我們的國際二手車平台 auto Kle dotcom 自 2024 年 3 月上線以來，累計頁面瀏覽量超過 370,000 次，註冊用戶近 60,000 名。該平台目前提供超過 100,000 個二手車 SKU，涵蓋超過 65,000 種不同型號，以更好地服務我們的客戶並提升我們的品牌形象。我們正在不斷優化Kle auto kle.com 的內容並提高整體使用者體驗。Auto Kle dotcom 網站地圖現在擁有超過 500,000 頁。得益於持續的內容更新和技術改進。這種成長反映了我們對內容開發的承諾，並推動了用戶對我們所提供資訊的參與度的提高。

So our content development efforts have also driven positive changes in search engine optimization, auto kle.com's visibility in search engine results pages or SP in short, has exceeded 2.41 million impressions and it is added to surpass 4 million by the end of this year. This means that an increasing number of people can find and access our website through search engines, boosting our brand exposure as we continue to expand into overseas markets, we have already received inquiries from over 130 countries and regions regarding vehicle purchases.

因此，我們的內容開發工作也推動了搜尋引擎優化的積極變化，auto kle.com 在搜尋引擎結果頁面（簡稱SP）中的可見性已超過241 萬次展示，並且到今年年底將超過400 萬次。這意味著越來越多的人可以透過搜尋引擎找到並造訪我們的網站，從而提升我們的品牌知名度，隨著我們繼續拓展海外市場，我們已經收到來自130 多個國家和地區的汽車購買諮詢。

Looking ahead, we will continue to focus on enhancing auto Cango .coms quality and functionality to meet the diverse needs of users in different regions. At the same time, we will strengthen our data analysis capabilities to gain a more accurate understanding of the characteristics of our target market and user demographics. Building on this foundation, we will develop databased scientific marketing strategies in depth, achieving more balanced global growth.

展望未來，我們將持續致力於提升汽車購網的品質與功能，滿足不同地區使用者多樣化的需求。同時，我們將加強數據分析能力，以更準確地了解目標市場和用戶人口統計的特徵。在此基礎上，我們將深度製定資料庫化的科學行銷策略，以實現更均衡的全球成長。

While advancing our existing business, we are also actively pursuing forward-looking strategic investment opportunities on a global scale. We will focus on high quality projects that complement our core competencies of brain technological innovation by establishing an international cooperation network, strengthening communication with leading global companies and actively participating in the collaborative development of overseas markets or overseas projects. We aim to showcase our company's strength and vision on a broader stage.

在推動現有業務的同時，我們也在全球範圍內積極尋求前瞻性的策略投資機會。我們將聚焦與本院腦科技創新核心競爭力相契合的優質項目，建立國際合作網絡，加強與全球領導企業的溝通交流，並積極參與海外市場或海外項目的合作開發。我們的目標是在更廣闊的舞台上展示公司的實力和願景。

Now, I would like to hand the call over to our financial director Chen, who will share our financial performance for this quarter.

現在，我想把電話交給我們的財務總監陳，他將分享我們本季的財務表現。

Thanks Missling. Hello everyone. I am Brian Sun Financial Director of Congo and welcome to our third quarter, 2024 earnings call before I 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.

謝謝 Missling。大家好。我是剛果財務長 Brian Sun，在回顧我們的財務狀況之前，歡迎參加我們的 2024 年第三季財報電話會議。請注意，除非另有說明，所有數字均以人民幣計算，所有百分比比較均為同比。

Total revenues in the third quarter of 2024 were RMB27.0 million compared with RMB353.6 million in the same period of 2023 guarantee income, which represented the fee income earned. On the noncontingent aspect of a guarantee was RMB14.4 million in the third quarter of 2024.

2024 年第三季的總收入為人民幣 2,700 萬元，而 2023 年同期的擔保收入為人民幣 3.536 億元，代表所賺取的費用收入。2024 年第三季的非或有擔保金額為 1,440 萬元。

This was represented separately from the contingent aspect of a guarantee pursuant to the adoption of AC 326 since January 1st 2023.

根據 2023 年 1 月 1 日起採用的 AC 326，這與擔保的或有方面是分開的。

Now let's move on to our cost and expenses during the quarter, cost of revenue in the third quarter decreased to RMB23.3 million from RMB304.6 million in the same period of 2023.

現在讓我們來看看本季的成本和費用，第三季的收入成本從 2023 年同期的 3.046 億元下降至 2,330 萬元。

As a percentage of total revenue cost of revenue in the third quarter of 2024 was 86.3% compared with 86.1% in the same period of 2023 sales and marketing expenses in the third quarter decreased to RMB3.4 million from RMB9.9 million in the same period of 2023 general and administrative expenses in the third quarter were RMB45.2 million compared with RMB34.7 million in the same period of 2023 research and development expenses in the third quarter decreased to RMB1.4 million from RMB7.0 million in the same period of 2023 net gain on contingent risk assurance liabilities in the third quarter was RMB7.1 million compared with a net loss of RMB3.5 million in the same period of 2023 net recovery on provision for credit losses in the third quarter of 2024 was RMB74.4 million compared with RMB66.9 million in the same period of 2023 we recorded RMB35.2 million in income from operations in the third quarter of 2023,2024 compared with a loss of RMB87.8 million in the same period of 2023 net income in the third quarter of 2024 was RMB67.9 million. Non-Gaap adjusted net income in the third quarter of 2024 was RMB71.3 million on a per share basis. Basic and diluted net income per ad in the third quarter of 2024 were 0.66 and 0.60 respectively. And the non-GAAP adjusted basic and diluted net income per ad in the same period were 0.69 and 0.53 respectively.

2024 年第三季度，收入成本佔總收入的百分比為 86.3%，而 2023 年同期為 86.1%。第三季的一般及行政開支為人民幣4,520 萬元，而2023 年同期為人民幣3,470 萬元；第三季的研發開支從2023 年同期的人民幣700 萬元降至人民幣140 萬元。季度或有風險擔保負債淨收益為人民幣710 萬元，而2023 年同期淨虧損為人民幣350 萬元。收入3,520 萬元人民幣，而2023 年同期的淨利為8,780 萬元。2024年第三季非公認會計準則調整後每股淨利為7,130萬元。2024年第三季每則廣告基本淨收入和稀釋淨收入分別為0.66和0.60。而同期非美國通用會計準則調整後每股基本淨利和稀釋淨利分別為0.69和0.53。

Moving on to our balance sheet. As of September 30,2024 the company had cash and cash equivalent of RMB691.8 million compared with RMB949.5 million as of June 30 2024.

繼續我們的資產負債表。截至 2024 年 9 月 30 日，公司現金及現金等價物為人民幣 6.918 億元，而截至 2024 年 6 月 30 日為人民幣 9.495 億元。

As of September 30 2024 the company had short term investments of RMB3.1 billion compared with RMB2.7 billion as of June 30 2024.

截至 2024 年 9 月 30 日，該公司的短期投資為人民幣 31 億元，而截至 2024 年 6 月 30 日為人民幣 27 億元。

Looking ahead to the fourth quarter of 2024 we are now predicting our total revenues to be between 15 RMB million and RMB17.5 million. Please note that this forecast reflects our current and preliminary views on market and operational conditions which are subject to change.

展望 2024 年第四季度，我們預測總收入將在 1,500 萬元人民幣至 1,750 萬元人民幣之間。請注意，此預測反映了我們對市場和營運條件的當前和初步看法，這些看法可能會發生變化。

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

我們的準備好的演講到此結束。接線員，我們現在可以回答問題了。

Thank you very much. We will now begin the question and answer session to ask a question. You may press star then one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys to withdraw your question. You may press star. Then two at this time, we will pause momentarily to assemble our roster.

非常感謝。我們現在開始問答環節來問一個問題。您可以在電話鍵盤上按星號，然後按一。如果您使用的是揚聲器電話，請拿起聽筒，然後按下按鍵撤回您的問題。您可以按星號。然後，在這個時候，我們會暫停一會兒，整理我們的名冊。

Today's first question comes from Emerson Zhao with Goldman Sachs. Please go ahead.

今天的第一個問題來自高盛的 Emerson Zhao。請繼續。

Yeah.

是的。

How would you go on the Amazon? What you mentioned on the call or the one for the time? That way that you can, that they are going to which also is the call?

你會怎麼遊覽亞馬遜？您在通話中提到了什麼或當時提到了什麼？這樣你就可以，他們要去哪裡也是打電話？

Should the should the.

應該應該。

Thank you management for taking my questions. I have two questions. The first question is that considering the model recovery of the Chinese economy, how does the company view the potential impact of the future macroeconomic environment on it on your business? And the second question is what specific vehicle quality assurance measures has the company taken to ensure the safety and reliability of used costs?

感謝管理層回答我的問題。我有兩個問題。第一個問題，考慮到中國經濟的模式復甦，公司如何看待未來宏觀經濟環境對貴公司業務的潛在影響？第二個問題，公司採取了哪些具體的車輛品質保障措施來確保二手車的安全可靠？

Amazon Hong Guan.

亞馬遜紅管。

Thank you Emerson for your questions. On your first question, China's moderate economic recovery. Well, we believe positively impact our business. The improvements in the macroeconomic environment helps boost consumer confidence and purchasing power which in and stimulate the amount of growth in the automotive market specifically for the used car market. As economic conditions improve more people may be inclined to upgrade their vehicle, upgrade their vehicles or purchase a car for the first time. This will drive an increase in used car transactions.

感謝艾默生提出的問題。關於第一個問題，中國經濟溫和復甦。嗯，我們相信這會對我們的業務產生正面影響。宏觀經濟環境的改善有助於增強消費者信心和購買力，從而刺激汽車市場特別是二手車市場的成長。隨著經濟條件的改善，越來越多的人可能傾向於升級他們的車輛、升級他們的車輛或首次購買汽車。這將推動二手車交易的成長。

So. and we will continue to monitor macroeconomic indicators and market dynamics to respond quickly to potential economic changes. We believe that by consistency, enhancing operational efficiency and strengthening customer experience and leveraging our digital capabilities. The company can mitigate the potential impact of macroeconomic fluctuations on our business. In addition, we are actively exploring new growth opportunities and value adding services to adapt, to meet the market's evolving needs.

所以。我們將繼續監測宏觀經濟指標和市場動態，以便對潛在的經濟變化做出快速反應。我們相信，透過一致性，可以提高營運效率、增強客戶體驗並利用我們的數位能力。公司可以減輕宏觀經濟波動對我們業務的潛在影響。此外，我們正在積極探索新的成長機會和增值服務，以適應市場不斷變化的需求。

On your second question, how we are ensuring the safety and reliability of used cars. Well, we collaborate with reputable dealers and regularly assess our partners to ensure they provide high quality vehicles that meet our standards. Each vehicle undergoes over 100 professional technical inspections before being listed covering areas such as exterior, interior and mechanical performance.

關於第二個問題，我們如何保障二手車的安全性和可靠性。我們與信譽良好的經銷商合作，並定期評估我們的合作夥伴，以確保他們提供符合我們標準的高品質車輛。每輛車在上牌前都要經過100多項專業技術檢查，涵蓋外觀、內裝和機械性能等方面。

So a detailed inspection report is also provided for each vehicle including but not limited to key information such as mileage and condition descriptions for buyers reference. We have also established a dedicated team to gather feedback, respond promptly to any complaints and continuously improve processes to enhance overall service quality.

因此，也為每輛車提供了詳細的檢查報告，包括但不限於里程和狀況描述等關鍵信息，供買家參考。我們還成立了專門的團隊來收集回饋，及時回應任何投訴，並不斷改進流程以提高整體服務品質。

Thank you. That's all from my side.

謝謝。我的發言就這些。

Thank you.

謝謝。

The next question comes from Pingyue Wu with CITIC securities. Please go ahead.

下一個問題來自中信證券的吳平月。請繼續。

Here u Shenu also Cana Fitz who is the main.

這裡還有 Shenu，還有主角 Cana Fitz。

Thank you. I have two questions for the management and the first question is how does the company plan to further integrate with your overseas market? And what are the plans for optimizing auto Cango's features and services? My second question is on risk control and management. What measures have can go taken in terms of cost control and risk management strategies to improve operational efficiency and improve your financial structure? And how will these measures continue to impact the company's future performance?

謝謝。我有兩個問題想問管理階層，第一個問題是公司計劃如何進一步融入海外市場？那麼，對於 auto Cango 的功能和服務有哪些最佳化計畫呢？第二個問題是關於風險控制和管理。在成本控制和風險管理策略方面，可以採取哪些措施來提高營運效率並改善財務結構？這些舉措又將如何持續影響公司未來的業績？

Thank you for your questions. On your first question. We are currently conducting comprehensive research on overseas markets and actively engaging with local partners to secure more localized support and resources. For example, we have thoroughly examined the customs clearance policies of various African countries and established import customs clearance agency partnerships in four nations. To date. Our next step is to gradually develop a business agency framework in Africa in depth, providing services to potential clients in key areas such as customs clearance and logistics among others.

感謝您的提問。關於你的第一個問題。目前我們正在對海外市場進行全面研究，並積極與當地合作夥伴合作，以獲得更多在地化的支援和資源。例如，我們深入研究了非洲各國的清關政策，並在四個國家建立了進口清關代理合作關係。迄今為止。下一步我們將逐步深入建立在非洲的業務代理架構，並在清關、物流等重點領域為潛在客戶提供服務。

Additionally, we plan to actively showcase our brand image through social media and other platforms to enhance our international feasibility. We also offer Multilingual support to ensure that users worldwide can seamlessly access our services. By early 2025 auto Kle dotcom will be available in 15 languages. Further improving user experience and expanding our market reach.

此外，我們計劃透過社群媒體和其他平台積極展示我們的品牌形象，以增強我們的國際可行性。我們還提供多語言支持，以確保全球用戶能夠無縫存取我們的服務。到 2025 年初，auto Kle dotcom 將提供 15 種語言版本。進一步改善用戶體驗並擴大我們的市場範圍。

UHA Yu from auto Kengo Jian Kai B.

UHA Yu，作者：Kengo Jian Kai B.

We also.

我們也是。

In terms of functionality improvement, we are introducing a direct sourcing feature for the Chinese used car market on, on the auto kle.com. We are also enabling online queries but to allow overseas users to quickly access information on the condition and prices of used vehicles for enhancing use experience.

在功能改進方面，我們在 auto kle.com 上推出了針對中國二手車市場的直接採購功能。我們也開設了線上查詢功能，讓海外用戶也能快速了解二手車狀況和價格信息，提升使用體驗。

What you see.

你所看到的。

Last but not least, we are dedicated to developing talent with an international perspective and cross cultural communication skills to enhance our operational operational capabilities in overseas markets. We plan to recruit international students in Shanghai for internship programs, providing them with valuable practical experience while infusing over. I mean, while infusing our team with fresh blood and including a global insights. Our goal is to create a diverse and globally competitive team that can better serve clients from various cultural backgrounds and advance the company's globalization efforts.

最後，我們致力於培養具有國際視野和跨文化溝通能力的人才，以提升我們在海外市場的營運能力。我們計劃在上海招募國際學生進行實習項目，為他們提供寶貴的實務經驗，同時注入新的活力。我的意思是，同時為我們的團隊注入新血並納入全球洞察力。我們的目標是創造一個多元化、具有全球競爭力的團隊，更好地服務來自不同文化背景的客戶，並推動公司的全球化進程。

So what Lin Jiayuan.

那又怎麼樣？

On your second question on cost control and risk management strategies? Well, firstly, on cost control, we have streamlined our business processes, automated approval workflows and enforced the strict budget management systems to ensure disciplined spending. We also leverage cloud computing services to replace legacy it infrastructure significantly reducing hardware investments and maintenance costs. In addition, by fostering long term partnerships with top tier suppliers, we have secured more favorable pricing terms. We conduct regular performance evaluations and phase out underperforming suppliers to minimize procurement costs. Moreover, we have strategically optimized workforce allocation and upgraded our training and development programs to elevate the team's expertise and service quality.

關於成本控制和風險管理策略的第二個問題？首先，在成本控制方面，我們簡化了業務流程、實現了審批流程自動化，並實施了嚴格的預算管理系統，以確保有紀律的支出。我們也利用雲端運算服務來取代傳統的IT基礎設施，大幅減少硬體投資和維護成本。此外，透過與頂級供應商建立長期合作夥伴關係，我們獲得了更優惠的定價條件。我們定期進行績效評估，逐步淘汰表現不佳的供應商，以最大限度地降低採購成本。此外，我們還策略性地優化了勞動力配置，升級了培訓和發展計劃，以提高團隊的專業知識和服務品質。

In terms of risk management, we have established a robust internal control system that clearly defines risk management ownership at various levels and strengthen internal audits to promptly identify and rectify potential issues. Additionally, we closely monitor changes in the macroeconomic conditions and their impact on our business, ensuring that all operations comply with relevant laws and regulations. And we follow closely to the developments in policies and regulations and adjusting our corporate strategy as necessary.

在風險管理方面，我們建立健全內部控制制度，明確各級風險管理責任，加強內部審計，及時發現並修正潛在問題。此外，我們密切關注宏觀經濟條件的變化及其對我們業務的影響，確保所有營運符合相關法律法規。我們密切關注政策法規的發展，並根據需要調整我們的公司策略。

The sustained positive impact of these measures is reflected in the company's financial statements. Improvements in the balance sheet, improved cash flow and enhanced profit performance have all laid a solid foundation for the company's netha of strategic development.

這些舉措的持續正面影響反映在公司的財務報表中。資產負債表的改善、現金流量的改善以及獲利表現的提升都為公司未來的策略發展奠定了堅實的基礎。

That is all from my side.

我這邊就說這麼多。

Thank you.

謝謝。

That concludes the question and answer session. Thank you. Once again for joining Cango's third quarter, 2024 earnings conference call today. Have a great day.

問答環節到此結束。謝謝。再次感謝參加今天 Cango 2024 年第三季財報電話會議。祝你有美好的一天。

That closes today's earning call. Thank you all for joining us.

今天的收益電話會議到此結束。感謝大家加入我們。