Cango inc (CANG) Q3 2021 Earnings Call Transcript

Cango inc (NYSE:CANG)
Q3 2021 Earnings Call
Nov 23, 2021, 8:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning and good evening everyone. Welcome to Cango Inc’s Third Quarter 2021 Earnings Conference Call. [Operator Instructions]

Joining us today are Mr. Jiayuan Lin, Chief Executive Officer; and Mr. Michael Zhang, Chief Financial Officer of the company. Following management’s prepared remarks, we will conduct the Q&A session.

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.

Jiayuan Lin — Founder and Chief Executive Officer

[Foreign Speech] Hello, everyone, and welcome to Cango’s third part — third quarter 2021 earnings call.

[Foreign Speech] The ongoing shortage of automotive chips and other key auto components continues to severely restrict global car production and sales in the third quarter. In addition, a resurgence of the COVID-19 pandemic in the Southeast Asia caused a widespread production cuts and temporary shutdowns among global auto makers delivering a serious blow to auto supply in the second half of 2021 toward largest automotive consumer market, the Chinese car market bore the brunt of this disruption. As of the end of the third quarter, domestic car production and sales have declined year-over-year for several consecutive months, given the dual effects of the epidemic and the economic downturn, consumer demand is very weak especially in lower-tier markets and the auto market shows a pattern of weakness in both supply and demand.

[Foreign Speech] The tough market conditions were broadly consistent with our expectations and impacted our third quarter business accordingly. Nevertheless, we achieved total revenues of RMB801 million in the third quarter, beating our guidance. Revenues of our trading transaction business were RMB429 billion — RMB429 million, accounting for nearly 53.6% of total revenues. Revenues from our automotive financing facilitation and aftermarket services facilitation businesses were RMB267 million and RMB43.43 million respectively. In terms of the bottom line, net loss was RMB417 million due to the fair value change of our investment in Li Auto.

[Foreign Speech] Among our three core businesses, the challenging market conditions most directly impacted our automotive financing facilitation business given insufficient car supply, consumers a wait and see attitude and the falling car sales, the company facilitated financing transactions totaling RMB6,211 million in the third quarter, down 20% quarter-over-quarter. The total outstanding balance of Cango facilitated financing transactions was RMB47,955 million as of September 30, 2021. At…