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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cango Inc | NYSE:CANG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.95 | 1.9799 | 1.93 | 1.93 | 4,696 | 15:00:13 |
☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trade symbol |
Name of each exchange on which registered | ||
American Depositary Shares, each representing two Class A ordinary shares |
CANG |
New York Stock Exchange | ||
Class A Ordinary Shares, par value US$0.0001 per share* |
N/A |
New York Stock Exchange |
* | for trading, but only in connection with the listing on the New York Stock Exchange of American depositary shares. |
Large accelerated filer ☐ |
Accelerated filer ☒ |
Non-accelerated filer ☐ |
Emerging growth company ☒ |
† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
U.S. GAAP ☒ | International Financial Reporting Standards as issued | Other ☐ | ||||||
by the International Accounting Standards Board ☐ |
• | “active dealers” are to dealers which have sold at least one car which is funded by a financing transaction facilitated through Cango platform in the specified period; |
• | “ADSs” are to our American depositary shares, each of which represents two Class A ordinary shares, and “ADRs” are to the American depositary receipts that evidence our ADSs; |
• | “CAGR” are to compound annual growth rate; |
• | “Can Gu Long” are to Can Gu Long (Shanghai) Information Technology Consultation Service Co., Ltd., a company established under the law of the PRC and our wholly-owned subsidiary; |
• | “car buyers” are to individuals who have purchased a car; |
• | “China” and the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Taiwan, the Hong Kong Special Administrative Region and the Macao Special Administrative Region; |
• | “consolidated affiliate” are to a subsidiary of Shanghai Cango; |
• | “dealers” are to points of sale that are licensed to engage in retail automobile transactions; |
• | “Didi Chuxing” are to DiDi Global Inc., a company organized under the laws of the Cayman Islands, and its affiliates; |
• | “exposure at risk” are to the amount of outstanding principal of specified financing transactions as of a specified date; |
• | “financial institutions” are to (i) banks and (ii) financing lease companies licensed by the Ministry of Commerce of the PRC; |
• | “financing transactions” are to loans and financing leases; financing transactions facilitated through Cango platform include financing transactions funded by financial institutions and financing transactions funded by Shanghai Chejia; the “amount of financing transactions” refer to the principal amount of financing transactions facilitated through Cango platform in a specified period; |
• | “lower-tier cities” are to cities in China that are not tier-one and tier-two cities; |
• | “M1+ overdue ratio” are to (i) exposure at risk relating to financing transactions for which any installment payment is 30 to 179 calendar days past due as of a specified date, divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date, excluding amounts of outstanding principal that are 180 calendar days or more past due; |
• | “M3+ overdue ratio” are to (i) exposure at risk relating to financing transactions for which any installment payment is 90 to 179 calendar days past due as of a specified date, divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date, excluding amounts of outstanding principal that are 180 calendar days or more past due; |
• | “MYbank” are to Zhejiang E-Commerce Bank Co., Ltd., a limited liability company established under the laws of the PRC; |
• | “OEMs” are to automotive original equipment manufacturer; |
• | “ordinary shares” are to our Class A ordinary shares, par value US$0.0001 per share, and Class B ordinary shares, par value US$0.0001 per share; |
• | “registered dealers” are to dealers who are registered with Cango platform; |
• | “RMB” or “Renminbi” are to the legal currency of China; |
• | “Shanghai Cango” are to Shanghai Cango Investment and Management Consultation Service Co., Ltd., a company established under the law of the PRC and the Group’s consolidated VIE; the Group primarily conducts its operations through Shanghai Cango and Shanghai Cango’s subsidiaries; |
• | “Shanghai Chejia” are to Shanghai Chejia Financing Lease Co., Ltd. (formerly translated as “Shanghai Autohome Financing Lease Co., Ltd.”), a company organized under the law of the PRC and the Group’s consolidated affiliate; |
• | “the Group” are to Cango Inc., Shanghai Cango and their respective subsidiaries; |
• | “tier-one and tier-two cities” refer to (i) tier-one cities in China, namely Beijing, Shanghai, Guangzhou and Shenzhen and (ii) tier-two cities in China, namely (a) Tianjin and Chongqing, (b) the provincial capital cities except for Guangzhou, Yinchuan, Xining and Lhasa and (c) several prefecture-level cities, namely, Qingdao, Foshan, Dalian, Ningbo, Suzhou, Wuxi, Xiamen, Dongguan and Wenzhou; |
• | “US$,” “U.S. dollars,” or “dollars” are to the legal currency of the United States; |
• | “VIE” are to variable interest entity; |
• | “we,” “us,” “our company” and “our” are to Cango Inc. and/or its subsidiaries, as the context requires; Cango Inc. is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted through contractual arrangements with a VIE based in China, Shanghai Cango, and the subsidiaries of Shanghai Cango; |
• | “WeBank” are to Shenzhen Qianhai WeBank Co., Ltd., a limited liability company established under the laws of the PRC; and |
• | “WP Fintech” are to Warburg Pincus Cango Fintech Investment Company Limited, a British Virgin Islands business company and one of our principal shareholders. |
• | our goal and strategies; |
• | our expansion plans; |
• | our future business development, financial condition and results of operations; |
• | our expectations regarding demand for, and market acceptance of, our solutions and services; |
• | our expectations regarding keeping and strengthening our relationships with dealers, financial institutions, insurance brokers and companies, car buyers and other platform participants; and |
• | general economic and business conditions. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
• | exercise effective control over our consolidated VIE and its subsidiaries; |
• | receive substantially all the economic benefits of our consolidated VIE; and |
• | have an exclusive option to purchase all or part of the equity interests in the equity interest in or all or part of the assets of Shanghai Cango when and to the extent permitted by PRC law. |
For the year ended December 31, 2021 |
||||||||||||||||||||
Parent |
VIE |
Subsidiaries |
Eliminating adjustments |
Consolidated total |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Revenue |
— | 3,921,688 | 28 | — | 3,921,716 | |||||||||||||||
Income from subsidiaries and VIE |
29,055 | — | — | (29,055 | ) | — | ||||||||||||||
Net (loss)/income |
(8,544 | ) | 37,717 | (8,662 | ) | (29,055 | ) | (8,544 | ) |
For the year ended December 31, 2020 |
||||||||||||||||||||
Parent |
VIE |
Subsidiaries |
Eliminating adjustments |
Consolidated total |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Revenue |
— | 2,052,432 | — | — | 2,052,432 | |||||||||||||||
Income from subsidiaries and VIE |
59,992 | — | — | (59,992 | ) | — | ||||||||||||||
Net income/(loss) |
3,369,518 | 399,367 | (339,375 | ) | (59,992 | ) | 3,369,518 |
For the year ended December 31, 2019 |
||||||||||||||||||||
Parent |
VIE |
Subsidiaries |
Eliminating adjustments |
Consolidated total |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Revenue |
— | 1,440,069 | — | — | 1,440,069 | |||||||||||||||
Income from subsidiaries and VIE |
396,273 | — | — | (396,273 | ) | — | ||||||||||||||
Net income/(loss) |
390,914 | 353,559 | 42,714 | (396,273 | ) | 390,914 |
As of December 31, 2021 |
||||||||||||||||||||
Parent |
VIE |
Subsidiaries |
Eliminating adjustments |
Consolidated total |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Cash and cash equivalents |
857,888 | 531,317 | 45,602 | — | 1,434,807 | |||||||||||||||
Restricted cash |
— | 61,293 | — | — | 61,293 | |||||||||||||||
Total current assets |
3,277,922 | 4,430,825 | 1,245,038 | (1,345,855 | ) | 7,607,930 | ||||||||||||||
Investment in subsidiaries |
3,717,140 | — | — | (3,717,140 | ) | — | ||||||||||||||
Total non-current assets |
3,717,140 | 3,301,555 | 165,534 | (3,845,055 | ) | 3,339,174 | ||||||||||||||
Total assets |
6,995,062 | 7,732,380 | 1,410,572 | (5,190,910 | ) | 10,947,104 | ||||||||||||||
Total liabialities |
4,495 | 3,639,399 | 1,345,873 | (1,033,230 | ) | 3,956,537 | ||||||||||||||
Total equity |
6,990,567 | 4,092,981 | 64,699 | (4,157,680 | ) | 6,990,567 | ||||||||||||||
Total liabialities and equity |
6,995,062 | 7,732,380 | 1,410,572 | (5,190,910 | ) | 10,947,104 |
As of December 31, 2020 |
||||||||||||||||||||
Parent |
VIE |
Subsidiaries |
Eliminating adjustments |
Consolidated total |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Cash and cash equivalents |
114,893 | 1,003,740 | 308,267.00 | — | 1,426,900 | |||||||||||||||
Restricted cash |
— | 9,693 | — | — | 9,693 | |||||||||||||||
Total current assets |
4,783,237 | 4,198,149 | 1,549,470 | (1,631,806 | ) | 8,899,050 | ||||||||||||||
Investment in subsidiaries |
3,596,658 | — | — | (3,596,658 | ) | — | ||||||||||||||
Total non-current assets |
3,596,658 | 3,209,332 | 179,705 | (3,738,812 | ) | 3,246,883 | ||||||||||||||
Total assets |
8,379,895 | 7,407,481 | 1,729,175 | (5,370,618 | ) | 12,145,933 | ||||||||||||||
Total liabialities |
4,686.00 | 3,439,852 | 1,639,750 | (1,313,564 | ) | 3,770,724.00 | ||||||||||||||
Total equity |
8,375,209 | 3,967,629 | 89,425.00 | (4,057,054 | ) | 8,375,209 | ||||||||||||||
Total liabialities and equity |
8,379,895 | 7,407,481 | 1,729,175 | (5,370,618 | ) | 12,145,933 |
For the year ended December 31, 2021 |
||||||||||||||||||||
Parent |
VIE |
Subsidiaries |
Eliminating adjustments |
Consolidated total |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Net cash used in operating activities |
(10,186 | ) | (374,887 | ) | (19,318 | ) | — | (404,391 | ) | |||||||||||
Net cash provided by/(used in) investing activities |
2,150,227 | 744,833 | (353,190 | ) | 119,353 | 2,661,223 | ||||||||||||||
Net cash (used in)/provided by financing activities |
(1,391,602 | ) | (554,832 | ) | 119,353 | (119,353 | ) | (1,946,434 | ) | |||||||||||
Effect of exchange rate fluctuation on cash and cash equivalents |
(5,444 | ) | (55 | ) | (9,510 | ) | — | (15,009 | ) | |||||||||||
Net change in cash |
742,995 | (184,941 | ) | (262,665 | ) | — | 295,389 | |||||||||||||
Opening cash balance |
114,893 | 1,891,733 | 308,266 | — | 2,314,892 | |||||||||||||||
Ending cash balance |
857,888 | 1,706,792 | 45,601 | — | 2,610,281 |
For the year ended December 31, 2020 |
||||||||||||||||||||
Parent |
VIE |
Subsidiaries |
Eliminating adjustments |
Consolidated total |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Net cash (used in)/provided by operating activities |
(13,001 | ) | (626,884 | ) | 18,273 | — | (621,612 | ) | ||||||||||||
Net cash provided by/(used in) investing activities |
456,659 | (81,039 | ) | (14,464 | ) | (854,719 | ) | (493,563 | ) | |||||||||||
Net cash (used in)/provided by financing activities |
(310,709 | ) | (71,082 | ) | (853,750 | ) | 854,719 | (380,822 | ) | |||||||||||
Effect of exchange rate fluctuation on cash and cash equivalents |
(19,238 | ) | — | (16,856 | ) | — | (36,094 | ) | ||||||||||||
Net change in cash |
113,711 | (779,005 | ) | (866,797 | ) | — | (1,532,091 | ) | ||||||||||||
Opening cash balance |
1,182 | 2,670,738 | 1,175,063 | — | 3,846,983 | |||||||||||||||
Ending cash balance |
114,893 | 1,891,733 | 308,266 | — | 2,314,892 |
For the year ended December 31, 2019 |
||||||||||||||||||||
Parent |
VIE |
Subsidiaries |
Eliminating adjustments |
Consolidated total |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Net cash (used in)/provided by operating activities |
(2,989 | ) | 405,811 | 20,073 | — | 422,895 | ||||||||||||||
Net cash (used in)/provided by investing activities |
(604,084 | ) | (782,482 | ) | (210,160 | ) | 398,320 | (1,198,406 | ) | |||||||||||
Net cash (used in)/provided by financing activities |
(274,666 | ) | 1,004,220 | 399,314 | (398,320 | ) | 730,548 | |||||||||||||
Effect of exchange rate fluctuation on cash and cash equivalents |
12,397 | — | (880 | ) | — | 11,517 | ||||||||||||||
Net change in cash |
(869,342 | ) | 627,549 | 208,347 | — | (33,446 | ) | |||||||||||||
Opening cash balance |
870,524 | 2,043,189 | 966,716 | — | 3,880,429 | |||||||||||||||
Ending cash balance |
1,182 | 2,670,738 | 1,175,063 | — | 3,846,983 |
A. |
[Reserved] |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• | we have a limited operating history in an emerging and fast growing market. Our historical financial and operating performance may not be indicative of our future prospects and results of operations; |
• | the COVID-19 pandemic has adversely affected, and may continue to adversely affect our results of operations; |
• | we may not be able to effectively manage business growth, control expenses or implement business strategies, in which case the Group may be unable to maintain high quality services or compete effectively; |
• | the Group may not be able to successfully expand or maintain or effectively manage relationships with existing network of dealers; |
• | our success depends on the ability to attract prospective car buyers; |
• | the Group relies on a limited number of financial institutions to fund the financing transactions and any adverse change in the relationships with such financial institutions may materially and adversely impact our business and results of operations; |
• | the Group may fail to maintain relationships with online automotive advertising platforms and to effectively manage such relationships; |
• | OEMs may not continue to participate on Cango platform; |
• | the Group operates in a market where the credit infrastructure is still at an early stage of development. Information received from third parties concerning a prospective car buyer may be outdated, incomplete or inaccurate, which may compromise the accuracy of the Group’s credit assessment; and |
• | the Group relies on credit assessment model and credit assessment team in evaluating credit applications. The current risk management system may not be able to exhaustively assess or mitigate all risks to which the Group is exposed. |
• | we rely on contractual arrangements with our consolidated VIE and its shareholders to operate the Group’s business, which may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to the Group’s business; |
• | any failure by our consolidated VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business; |
• | the shareholders of our consolidated VIE may have potential conflicts of interest with us, which may materially and adversely affect the Group’s business and financial condition; |
• | if the PRC government deems that the contractual arrangements in relation to our consolidated VIE do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations; and |
• | contractual arrangements in relation to our consolidated VIE may be subject to scrutiny by the PRC tax authorities and they may determine that our consolidated VIE owes additional taxes, which could negatively affect the Group’s financial condition and the value of your investment. |
• | changes in the political and economic policies of the PRC government may materially and adversely affect the Group’s business, financial condition and results of operations and may result in our inability to sustain the Group’s growth and expansion strategies; |
• | there are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations, including sudden or unexpected changes in policies, laws and regulations; |
• | the M&A Rules establishes complex procedures for acquisitions conducted by foreign investors that could make it more difficult for the Group to grow through acquisitions; |
• | uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and its implementing rules and how they may impact our business, financial condition and results of operations; and |
• | PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary or limit our PRC subsidiary’s ability to increase its registered capital or distribute profits. |
• | we received a notice of non-compliance with continued listing standards from the NYSE for our ADSs. If we are unable to avoid the delisting of our ADSs from the NYSE, it could have a substantial effect on the trading price and liquidity of our ADSs; |
• | the trading price of our ADSs may be volatile, which could result in substantial losses to you; |
• | if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ADSs and trading volume could decline; |
• | we may not pay additional cash dividends, so you may not receive any return on your investment unless you sell your Class A ordinary shares or ADSs for a price greater than that which you paid for them; and |
• | substantial future sales or perceived potential sales of our ADSs in the public market could cause the price of our ADSs to decline. |
• | offer automotive financing solutions to a growing number of car buyers; |
• | maintain and enhance the relationships and business collaboration with dealers, financial institutions, insurance brokers and companies and other platform participants; |
• | charge competitive service fees to platform participants while driving the growth and profitability of business; |
• | maintain low overdue ratios of financing transactions facilitated through Cango platform; |
• | comply with complex and evolving laws and regulations; |
• | improve operational efficiency; |
• | attract, retain and motivate talented employees, particularly sales and marketing, risk management as well as research and development personnel to support business growth; |
• | enhance technology infrastructure to support business growth and maintain system security and the confidentiality of the information provided and collected across the system; |
• | navigate economic conditions and fluctuations; |
• | successfully implement business strategies and offer new services, such as automobile trading solutions; and |
• | defend the Group against legal and regulatory actions, such as actions involving intellectual property or data privacy claims. |
• | become delinquent in the payment of an outstanding obligation; |
• | defaulted on a pre-existing debt obligation; |
• | taken on additional debt, including pledging the car as collateral for such debt; or |
• | sustained other adverse financial events. |
• | failure to predict market demand accurately and supply solutions and services that meet this demand in a timely fashion; |
• | platform participants may not like, find useful or agree with any changes made; |
• | failure to properly price new solutions and services; |
• | negative publicity about solutions and services or Cango platform’s performance or effectiveness; |
• | failure to seamlessly integrate the Group’s technology system with those of existing or new financial institutions collaborated with; |
• | failure to evaluate credit applications efficiently; |
• | views taken by regulatory authorities that the new solutions and services or platform changes do not comply with PRC laws, rules or regulations applicable to the Group; and |
• | the introduction or anticipated introduction of competing solutions and services by competitors. |
• | maintain the quality and reliability of Cango platform; |
• | maintain and develop relationships with dealers, financial institutions, insurance brokers and insurance companies; |
• | maintain and develop relationships with OEMs; |
• | provide prospective car buyers and existing car buyers with superior experiences; |
• | enhance and improve credit assessment of car buyers; |
• | effectively manage and resolve any complaints of dealers, financial institutions or car buyers; and |
• | effectively protect personal information and privacy of car buyers and any data received from financial institutions. |
• | ability to attract new car buyers; |
• | ability to maintain existing relationships with business partners and establish new relationships with additional business partners, such as dealers, financial institutions and OEMs; |
• | the amount of financing transactions, automobile trading transactions and insurance transactions on Cango platform; |
• | overdue ratios of financing transactions facilitated; |
• | the mix of solutions and services offered; |
• | the amount and timing of the Group’s operating cost and expenses and the maintenance and expansion of existing business, operations and infrastructure; |
• | financial institutions’ willingness and ability to fund financing transactions through Cango platform on reasonable terms; |
• | emphasis on experience of car buyers, instead of near-term growth; |
• | the timing of expenses related to the development or acquisition of technologies or businesses; |
• | proper and sufficient accounting policies with respect to risk assurance liabilities and implementation; |
• | network outages or security breaches; |
• | general economic, industry and market conditions; and |
• | changes in applicable laws and regulations. |
• | the growth in car ownership and the rate of any such growth; |
• | changes in car buyer demographics, tastes and preferences; |
• | changing financing behavior of car buyers; |
• | the selection, price and popularity of cars offered by dealers and OEMs; and |
• | whether alternative channels or business models that better address the needs of car buyers emerge in China. |
• | difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; |
• | inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits, including the failure to successfully further develop the acquired technology; |
• | difficulties in retaining, training, motivating and integrating key personnel; |
• | diversion of management’s time and resources from normal daily operations and potential disruptions to the ongoing businesses; |
• | strain on current liquidity and capital resources; |
• | difficulties in executing intended business plans and achieving synergies from such strategic investments or acquisitions; |
• | difficulties in maintaining uniform standards, controls, procedures and policies within the overall organization; |
• | difficulties in retaining relationships with existing customers, employees and business partners of the acquired business; |
• | risks of entering markets in which we have limited or no prior experience; |
• | regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; |
• | assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; |
• | liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and |
• | unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions. |
• | the composition of our board of directors and, through it, any determinations with respect to our operations, business direction and policies, including the appointment and removal of officers; |
• | any determinations with respect to mergers or other business combinations; |
• | our disposition of substantially all of our assets; and |
• | any change in control. |
• | revoking the Group’s business and operating licenses; |
• | levying fines on the Group; |
• | confiscating any of the Group’s income that they deem to be obtained through illegal operations; |
• | shutting down the Group’s services; |
• | discontinuing or restricting the Group’s operations in China; |
• | imposing conditions or requirements with which the Group may not be able to comply; |
• | requiring us to change our corporate structure and contractual arrangements; |
• | restricting or prohibiting our use of the proceeds from overseas offering to finance our consolidated VIE’s business and operations; and |
• | taking other regulatory or enforcement actions that could be harmful to our business. |
• | regulatory developments affecting us or our industry; |
• | announcements of studies and reports relating to the quality of credit offerings on Cango platform or those of our competitors; |
• | changes in the economic performance or market valuations of other transaction service platforms; |
• | actual or anticipated fluctuations in the Group’s quarterly results of operations and changes or revisions of its expected results; |
• | changes in financial estimates by securities research analysts; |
• | conditions in the markets for car buyers and for financing facilitation services; |
• | announcements by the Group or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; |
• | additions to or departures of our senior management; |
• | fluctuations of exchange rates between the Renminbi and the U.S. dollar; |
• | release or expiry of lock-up or other transfer restrictions on our outstanding shares or ADSs; and |
• | sales or perceived potential sales of additional Class A ordinary shares or ADSs. |
• | at least 75% of our gross income is passive income, or |
• | at least 50% of the value (generally determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income. |
ITEM 4. |
INFORMATION ON THE COMPANY |
A. |
History and Development of the Company |
B. |
Business Overview |
• | B2B transactions non-4S dealers source cars cost-efficiently and help OEMs better address market demands across China, especially in lower-tier cities. As part of the car trade transaction platform, the Group offers dealers a mobile application on which they can search and view car models available on Cango platform and place orders. The Group periodically updates the selection of car models based on new car launches and demands by dealers. When placing an order, a dealer is required to pay a deposit, which represents a percentage of the total purchase price. The Group purchases cars from OEMs based on orders from dealers. Dealers are required to pay purchase prices in full and pick up cars from local warehouses maintained by OEMs or the Group before specific deadlines. If dealers fail to make timely payments, their deposits are forfeited and the Group will seek to sell the relevant cars to other buyers. |
• | B2C transactions |
• | Credit origination |
• | Credit assessment in-depth collaboration with financial institutions and incorporates the credit policies and standards of these financial institutions into its credit assessment system. The Group’s IT system is also highly integrated with financial institutions with which it directly collaborates. As such, the Group provides significant value to facilitate the ultimate credit decision making process of financial institutions by enhancing its efficiency. For example, it only takes less than two hours on average from submission of credit application to credit decision. In some instances, credit decisions can be provided in less than half an hour. |
• | Credit servicing |
• | Delinquent asset management in-person visits, recovery, disposal and legal actions. The Group has established a nationwide network of external counsel to supplement its own resources. The in-house team is also closely involved in each stage of the delinquent asset management process to ensure compliance with the relevant laws and regulations. |
• | Automotive Financing Solutions |
Year ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
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RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Financing transactions funded by third-party financial institutions |
25,969,896 | 92.6 | 27,161,201 | 98.1 | 29,036,779 | 4,556,504 | 96.4 | |||||||||||||||||||||
Financing transactions funded by Shanghai Chejia |
2,084,397 | 7.4 | 536,538 | 1.9 | 1,091,415 | 171,267 | 3.6 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
28,054,293 |
100.0 |
27,697,739 |
100.0 |
30,128,194 |
4,727,771 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
||||||||||||||||||||||||||||||||
March 31, |
June 30, |
September 30, |
December 31, |
March 31, |
June 30, |
September 30, |
December 31, |
|||||||||||||||||||||||||
2020 |
2021 |
|||||||||||||||||||||||||||||||
Number of credit applications |
74,339 | 92,711 | 131,037 | 180,811 | 163,791 | 117,688 | 98,137 | 84,417 | ||||||||||||||||||||||||
Number of financing transactions facilitated |
57,905 | 63,541 | 86,329 | 121,518 | 115,564 | 81,866 | 65,204 | 56,138 |
• | Purchase Facilitation |
As of / in the three months ended |
||||||||||||||||||||||||||||||||
March 31, |
June 30, |
September 30, |
December 31, |
March 31, |
June 30, |
September 30, |
December 31, |
|||||||||||||||||||||||||
2020 |
2021 |
|||||||||||||||||||||||||||||||
Registered dealers at end of period |
45,688 | 44,521 | 46,248 | 48,487 | 47,017 | 47,740 | 47,718 | 45,930 | ||||||||||||||||||||||||
Active dealers (%) |
32.7 | 34.3 | 38.7 | 40.6 | 41.1 | 37.3 | 32.7 | 29.6 |
As of December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Number |
% |
Number |
% |
Number |
% |
|||||||||||||||||||
Tier-one and tier-two cities |
13,536 | 27.5 | 13,014 | 26.8 | 13,400 | 29.2 | ||||||||||||||||||
Lower-tier cities |
35,702 | 72.5 | 35,473 | 73.2 | 32,530 | 70.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
49,238 |
100.0 |
48,487 |
100.0 |
45,930 |
100.0 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Number |
% |
Number |
% |
Number |
% |
|||||||||||||||||||
4S dealers |
9,231 | 18.7 | 9,214 | 19.0 | 9,844 | 21.4 | ||||||||||||||||||
Non-4S dealers |
40,007 | 81.3 | 39,273 | 81.0 | 36,086 | 78.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
49,238 |
100.0 |
48,487 |
100.0 |
45,930 |
100.0 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
• | Self-operated sales model in-house sales team, who will come to the dealer’s store and explain the terms of the automotive financing solutions to the prospective car buyer and offers assistance in completing the credit application. The in-house sales team then uploads the credit application to the Group’s online system for the Group’s credit assessment team to evaluate. |
• | Dealer financial manager model |
• | Sales agent model |
As of December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Number |
% |
Number |
% |
Number |
% |
|||||||||||||||||||
Self-operated sales model |
46,586 | 94.6 | 45,990 | 94.9 | 43,578 | 94.9 | ||||||||||||||||||
Dealer financial manager model |
879 | 1.8 | 1,958 | 4.0 | 2,302 | 5.0 | ||||||||||||||||||
Sales agent model |
1,773 | 3.6 | 539 | 1.1 | 73 | 0.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
49,238 |
100.0 |
48,487 |
100.0 |
45,930 |
100.0 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ending December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Self-operated sales model |
26,030,152 | 92.8 | 25,364,140 | 91.6 | 24,764,261 | 3,886,053 | 82.2 | |||||||||||||||||||||
Dealer financial manager model |
1,555,218 | 5.5 | 2,270,661 | 8.2 | 5,358,832 | 840,918 | 17.8 | |||||||||||||||||||||
Sales agent model |
468,923 | 1.7 | 62,938 | 0.2 | 4,488 | 704 | 0.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
28,054,293 |
100.0 |
27,697,739 |
100.0 |
30,127,581 |
4,727,675 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ending December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Financing transactions funded by third-party financial institutions: |
||||||||||||||||||||||||||||
Direct partnership model |
20,851,684 | 74.4 | 17,248,796 | 62.3 | 24,479,446 | 3,841,359 | 81.3 | |||||||||||||||||||||
Co-partnership model |
5,118,212 | 18.2 | 9,912,405 | 35.8 | 4,557,333 | 715,145 | 15.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total financing transactions funded by third-party financial institutions |
25,969,896 |
92.6 |
27,161,201 |
98.1 |
29,036,779 |
4,556,504 |
96.4 |
|||||||||||||||||||||
Financing transactions funded by Shanghai Chejia |
2,084,397 | 7.4 | 536,538 | 1.9 | 1,091,415 | 171,267 | 3.6 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
28,054,293 |
100.0 |
27,697,739 |
100.0 |
30,128,194 |
4,727,771 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Outstanding principal of financing transactions funded by third-party financial institutions: |
||||||||||||||||||||||||||||
Direct partnership model |
26,734,880 | 66.8 | 29,367,657 | 67.5 | 35,167,521 | 5,518,551 | 75.3 | |||||||||||||||||||||
Co-partnership model |
10,533,733 | 26.3 | 12,311,059 | 28.3 | 9,978,465 | 1,565,839 | 21.4 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total outstanding principal of financing transactions funded by third-party financial institutions |
37,268,613 |
93.1 |
41,678,716 |
95.8 |
45,145,986 |
7,084,390 |
96.7 |
|||||||||||||||||||||
Outstanding principal of financing transactions funded by Shanghai Chejia |
2,763,137 | 6.9 | 1,826,119 | 4.2 | 1,556,068 | 244,181 | 3.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
40,031,750 |
100.0 |
43,504,835 |
100.0 |
46,702,054 |
7,328,571 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• | Insurance Brokers and Companies |
• | Online Automotive Advertising Platforms |
• | OEMs OEM-sponsored subsidy programs. The Group enables collaboration between OEMs and financial institutions to design low-interest financing solutions for car buyers. Cango platform creates significant value for OEMs by helping them extend their sales channels through a vast dealer network, and the Group’s automotive financing solutions make their cars more affordable to prospective car buyers. The Group plans to broaden the offering of subsidized financing solutions through collaboration with foreign and sino-foreign joint venture OEMs as well as national banks. As the financing solutions will be marketed to prospective car buyers with stronger credit profiles, the Group expects to seize new market opportunities while improving credit performance through such strategy. The Group started to significantly expand the number of automobile trading transactions in the third quarter of 2020. In connection with such transactions, the Group purchases cars from OEMs based on orders from dealers and on-sells cars to the relevant dealers, aiming to help OEMs better address market demands across China, especially in lower-tier cities. |
(1) | After receiving the credit application from a car buyer, the Group utilizes its credit assessment system to perform the initial evaluation. To assist financial institutions in making ultimate credit decisions, the Group refers qualified credit applications to such financial institutions, which perform independent credit assessment. |
(2) | After the credit application is approved, the car buyer enters into a loan agreement with the financial institution. The car buyer is required to make the down payment to the dealer. On behalf of the car buyer, the financial institution pays the purchase price of the car, net of the down payment, to the dealer. |
(3) | The car buyer is required to pledge the car as collateral in favor of the financial institution. The pledge is registered with local government authorities. |
(4) | The financial institution pays the Group service fees. A dealer may receive commissions from the Group or the relevant financial institution, depending on the arrangement among the Group, the dealer and the relevant financial institution. |
(5) | In the form of automatic payments, the car buyer repays principal and interest in installments to the financial institution. The financial institution’s security interest in the collateral is released upon the full repayment of the loan. |
(1) | Prospective car buyers submit lease applications to the Group, and it processes these applications by utilizing its credit assessment system. |
(2) | After the Group approves a lease application, the car buyer enters into a lease agreement with Shanghai Chejia, and Shanghai Chejia is identified as the lessor. The car buyer is required to make the down payment to the dealer. Shanghai Chejia funds the remainder of the purchase price to the dealer. The car is then delivered to the car buyer, who temporarily obtains title to the car. |
(3) | The car buyer is contractually required to transfer the title to Shanghai Chejia. In order to simplify the transaction process, Shanghai Chejia does not require the car buyer to register the transfer with the government authorities. |
(4) | In addition, Shanghai Chejia requires the car buyer to pledge the car as collateral for the car buyer’s payment obligations under the lease. |
(5) | The car buyer is required to designate a bank account for repayments and authorize automatic lease payments from such account. The payments are made in monthly installments. Shanghai Chejia has the right to recover the collateral in the event of default. |
(6) | Upon the expiration of the lease term, Shanghai Chejia transfers the title back to the car buyer, and its security interest in the collateral is also released. |
• | Down payments |
• | Principal |
• | Interest rate |
• | Installments |
• | Prepayment |
• | Late payment penalty fee |
(1) | Automated reminders |
(2) | Live phone calls |
(3) | In-person visitsin-person visits when it determines such measures are warranted. Around 50 members of the Group’s delinquent asset management team are responsible for this task. We view the visits as opportunities to collect repayments as well as to investigate the status of the collateral. |
(4) | Recovery |
(5) | Disposal on-site visits to ensure these warehouses are suitable for automotive storage and are properly guarded to prevent theft. The Group will then sell the cars. |
(6) | Legal actions |
• | Integration with financial institutions |
• | Mobile applications |
• | Credit assessment and data security in-house research and development team based on current car buyer base. The Group is in the process of developing a control platform to monitor credit risk on a real-time basis. To prevent identity theft, the Group utilizes facial recognition technology, through which an applicant’s image can be compared in real time with the photo stored at the National Citizen Identity Information Center of the Ministry of Public Security. The Group stores its data and transmit it to financial institutions in an encrypted form. The Group has also created controls to limit employee access to such information and monitor access. |
• | Car trade transaction platform |
C. |
Organizational Structure |
(1) | Investors in our ADSs hold equity interest in Cango Inc., which does not conduct operations. |
(2) | Include Shanghai Wangjin Investment Management Co., Ltd. (controlled by Mr. Xiaojun Zhang), Mr. Jiayuan Lin, Warburg Pincus Financial Global Ltd., Tencent Mobility Limited, Shanghai Xiehuai Investment Management L.P., the Taikang Onshore Entities (including Taikang Life Insurance Co., Ltd. and Shandong State-controlled Taikang Phase I Industrial Development Fund Partnership Enterprise (Limited Partnership)) and Shanghai Huaiyuan Investment Management L.P. (of which Shouyan Xu is the general partner) respectively hold 15.6%, 15.8%, 21.1%, 12.5%, 8.4%, 6.3% and 5.2% of equity interests in Shanghai Cango. The remaining equity interests in Shanghai Cango are held by nine other shareholders. Shanghai Cango is consolidated with the Group’s results of operations for accounting purposes, but it is not an entity in which we own equity interest. |
(3) | Includes 25 subsidiaries that are majority owned by Shanghai Cango. These subsidiaries are located in various cities across China and are primarily involved in providing automotive financing facilitation services to financial institutions and car buyers. |
(4) | Primarily involved in the operation of the Group’s automobile trading, including purchasing cars from OEMs to facilitate the sales of such cars to registered dealers. One subsidiary, Shanghai Quanpin Insurance Brokerage Co., Ltd., wholly owns Fushun Insurance Brokerage Co., Ltd., which operates the Group’s insurance brokerage business. |
(5) | Includes 28 subsidiaries that are wholly-owned by Shanghai Chejia, which primarily engages in providing financing leases to car buyers. Shanghai Cango, our consolidated VIE, currently owns 61.25% equity interest (directly and through Shanghai Wangtian Investment Co., Ltd., its wholly-owned subsidiary) in Shanghai Chejia and Express Group Development Limited, our wholly-owned consolidated subsidiary, owns 38.75% equity interest in Shanghai Chejia. As a result, Shanghai Chejia is the Group’s consolidated affiliate. |
• | exercise effective control over our consolidated VIE and its subsidiaries; |
• | receive substantially all the economic benefits of our consolidated VIE; and |
• | have an exclusive option to purchase all or part of the equity interests in the equity interest in or all or part of the assets of Shanghai Cango when and to the extent permitted by PRC law. |
• | the ownership structures of Can Gu Long and our consolidated VIE in China do not violate any applicable PRC law, regulation, or rule currently in effect; and |
• | the contractual arrangements among Can Gu Long, Shanghai Cango and its shareholders governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect, and do not violate any applicable PRC law, regulation, or rule currently in effect, except that the pledges in respect of Shanghai Cango’s equity interests would not be deemed validly created until they are registered with the local administration for market regulation. |
D. |
Facilities |
ITEM 4A. |
UNRESOLVED STAFF COMMENTS |
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. |
Operating Results |
For the Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Number of financing transactions facilitated |
390,140 | 329,293 | 318,772 | |||||||||
Number of B2B and B2C transactions |
118 | 4,999 | 23,166 |
As of / For the Year Ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Outstanding principal of financing transactions facilitated |
40,031,750 | 43,504,835 | 46,702,054 | 7,328,571 | ||||||||||||
Amount of financing transactions facilitated |
28,054,293 | 27,697,739 | 30,128,194 | 4,727,771 |
As of |
||||||||||||||||||||||||||||||||||||||||||||||||
March |
June |
September |
December |
March |
June |
September |
December |
March |
June |
September |
December |
|||||||||||||||||||||||||||||||||||||
31, |
30, |
30, |
31, |
31, |
30, |
30, |
31, |
31, |
30, |
30, |
31, |
|||||||||||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||||||||||||||||||||||
(%) |
||||||||||||||||||||||||||||||||||||||||||||||||
M1+ overdue ratio |
0.77 | 0.72 | 0.85 | 0.85 | 2.00 | 1.59 | 1.11 | 0.98 | 1.23 | 1.35 | 1.58 | 1.62 | ||||||||||||||||||||||||||||||||||||
M3+ overdue ratio |
0.37 | 0.30 | 0.33 | 0.40 | 0.56 | 0.84 | 0.53 | 0.42 | 0.54 | 0.69 | 0.76 | 0.86 |
As of / For the Year Ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Balance at the beginning of the period |
173,210 | 259,952 | 460,829 | 72,314 | ||||||||||||
Fair value of risk assurance liabilities upon the inception of new loans |
166,911 | 348,921 | 443,832 | 69,647 | ||||||||||||
Performed risk assurance liabilities |
(114,427 | ) | (150,313 | ) | (403,388 | ) | (63,300 | ) | ||||||||
Net loss/(gain) on risk assurance liabilities |
34,258 | 2,268 | 197,750 | 31,031 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at the closing of the period |
259,952 | 460,829 | 699,023 | 109,692 | ||||||||||||
|
|
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||||||||||||||
2017 |
2018 |
2019 |
2020 |
2021 |
||||||||||||||||||||
(Unaudited) RMB |
(Unaudited) RMB |
(Unaudited) RMB |
(Unaudited) RMB |
(Unaudited) RMB |
(Unaudited) US$ |
|||||||||||||||||||
(in thousands, except for share and per share data) |
||||||||||||||||||||||||
Net income (loss) |
349,057 | 306,924 | 404,859 | 3,373,420 | (8,544 | ) | (1,341 | ) | ||||||||||||||||
Add: ESOP Expenses (1) |
— | 33,411 | 82,266 | 78,755 | 87,635 | 13,752 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjusted net income |
349,057 |
340,335 |
487,125 |
3,452,175 |
79,091 |
12,411 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Less: Net income attributable to the non-controlling interest shareholders |
8,048 | 4,232 | 13,945 | 3,902 | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjusted net income attributable to Cango Inc.’s ordinary shareholders |
341,010 |
336,103 |
473,180 |
3,448,273 |
79,091 |
12,411 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjusted net income per ADS-basic (2) |
2.70 |
2.41 |
3.13 |
22.95 |
0.55 |
0.09 |
||||||||||||||||||
Adjusted net income per ADS-diluted (2) |
2.70 |
2.39 |
3.12 |
22.69 |
0.54 |
0.08 |
||||||||||||||||||
Weighted average ADS outstanding—basic |
63,574,601 | 139,578,372 | 151,208,676 | 150,242,430 | 144,946,453 | 22,745,261 | ||||||||||||||||||
Weighted average ADS outstanding—diluted |
126,415,858 | 140,436,903 | 151,641,829 | 151,950,322 | 146,867,997 | 23,046,794 |
(1) | ESOP Expenses are allocated in operating cost and expenses as follows: |
For the year ended December 31, |
||||||||||||||||||||||||
2017 |
2018 |
2019 |
2020 |
2021 |
||||||||||||||||||||
(Unaudited) RMB |
(Unaudited) RMB |
(Unaudited) RMB |
(Unaudited) RMB |
(Unaudited) RMB |
(Unaudited) US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Cost of revenue |
— | 1,370 | 3,373 | 3,075 | 4,928 | 773 | ||||||||||||||||||
Sales and marketing |
— | 7,117 | 17,523 | 16,003 | 15,311 | 2,403 | ||||||||||||||||||
General and administrative |
— | 23,187 | 57,093 | 55,591 | 63,035 | 9,892 | ||||||||||||||||||
Research and development |
— | 1,737 | 4,278 | 4,085 | 4,361 | 684 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
ESOP Expenses |
— | 33,411 |
82,266 |
78,755 |
87,635 |
13,752 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(2) | Each ADS represents two Class A ordinary shares. |
Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Automobile trading income |
11,414 | 0.8 | 624,774 | 30.4 | 2,227,172 | 349,492 | 56.8 | |||||||||||||||||||||
Loan facilitation income and other related income |
913,837 | 63.5 | 891,837 | 43.5 | 1,233,556 | 193,572 | 31.5 | |||||||||||||||||||||
Leasing income |
300,078 | 20.8 | 286,079 | 13.9 | 251,295 | 39,434 | 6.4 | |||||||||||||||||||||
After-market services income |
205,998 | 14.3 | 241,193 | 11.8 | 193,787 | 30,409 | 4.9 | |||||||||||||||||||||
Others |
8,742 | 0.6 | 8,549 | 0.4 | 15,906 | 2,496 | 0.4 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
1,440,069 |
100.0 |
2,052,432 |
100.0 |
3,921,716 |
615,403 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Operating cost and expenses: |
||||||||||||||||||||||||||||
Cost of revenue |
539,267 | 37.4 | 1,098,121 | 53.5 | 2,958,010 | 464,176 | 75.4 | |||||||||||||||||||||
Sales and marketing |
192,811 | 13.4 | 195,894 | 9.5 | 239,333 | 37,557 | 6.1 | |||||||||||||||||||||
General and administrative |
236,551 | 16.4 | 265,691 | 12.9 | 276,179 | 43,339 | 7.0 | |||||||||||||||||||||
Research and development |
57,406 | 4.0 | 62,596 | 3.0 | 70,279 | 11,028 | 1.8 | |||||||||||||||||||||
Net loss/(gain) on risk assurance liabilities |
34,258 | 2.4 | 2,268 | 0.1 | 197,750 | 31,031 | 5.1 | |||||||||||||||||||||
Provision for credit losses |
56,479 | 3.9 | 109,565 | 5.3 | 203,415 | 31,920 | 5.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
1,116,772 |
77.5 |
1,734,135 |
84.5 |
3,944,966 |
619,051 |
100.6 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Cost of revenue: |
||||||||||||||||||||||||||||
Cost of vehicle |
11,176 | 0.8 | 619,227 | 30.2 | 2,210,715 | 346,909 | 56.4 | |||||||||||||||||||||
Commission to car dealerships |
158,101 | 11.0 | 117,986 | 5.7 | 375,703 | 58,956 | 9.6 | |||||||||||||||||||||
Leasing interest expense |
116,966 | 8.1 | 132,323 | 6.4 | 119,693 | 18,782 | 3.1 | |||||||||||||||||||||
Staff cost |
72,999 | 5.1 | 73,975 | 3.6 | 105,771 | 16,598 | 2.7 | |||||||||||||||||||||
Staff incentive |
98,173 | 6.8 | 84,047 | 4.1 | 61,895 | 9,713 | 1.6 | |||||||||||||||||||||
Others |
81,852 | 5.7 | 70,563 | 3.4 | 84,233 | 13,218 | 2.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
539,267 |
37.4 |
1,098,121 |
53.5 |
2,958,010 |
464,176 |
75.4 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Automobile trading income |
11,414 | 0.8 | 624,774 | 30.4 | 2,227,172 | 349,492 | 56.8 | |||||||||||||||||||||
Loan facilitation income and other related income |
913,837 | 63.5 | 891,837 | 43.5 | 1,233,556 | 193,572 | 31.5 | |||||||||||||||||||||
Leasing income |
300,078 | 20.8 | 286,079 | 13.9 | 251,295 | 39,434 | 6.4 | |||||||||||||||||||||
After-market services income |
205,998 | 14.3 | 241,193 | 11.8 | 193,787 | 30,409 | 4.9 | |||||||||||||||||||||
Others |
8,742 | 0.6 | 8,549 | 0.4 | 15,906 | 2,496 | 0.4 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues |
1,440,069 |
100.0 |
2,052,432 |
100.0 |
3,921,716 |
615,403 |
100.0 |
|||||||||||||||||||||
Operating cost and expenses: |
||||||||||||||||||||||||||||
Cost of revenue |
539,267 | 37.4 | 1,098,121 | 53.5 | 2,958,010 | 464,176 | 75.4 | |||||||||||||||||||||
Sales and marketing |
192,811 | 13.4 | 195,894 | 9.5 | 239,333 | 37,557 | 6.1 | |||||||||||||||||||||
General and administrative |
236,551 | 16.4 | 265,691 | 12.9 | 276,179 | 43,339 | 7.0 | |||||||||||||||||||||
Research and development |
57,406 | 4.0 | 62,596 | 3.0 | 70,279 | 11,028 | 1.8 | |||||||||||||||||||||
Net loss on risk assurance liabilities |
34,258 | 2.4 | 2,268 | 0.1 | 197,750 | 31,031 | 5.1 | |||||||||||||||||||||
Provision for credit losses |
56,479 | 3.9 | 109,565 | 5.3 | 203,415 | 31,920 | 5.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating cost and expenses |
1,116,772 |
77.5 |
1,734,135 |
84.5 |
3,944,966 |
619,051 |
100.6 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from operations |
323,296 |
22.5 |
318,297 |
15.5 |
(23,250 |
) |
(3,648 |
) |
(0.6 |
) | ||||||||||||||||||
Interest income |
51,574 | 3.6 | 34,901 | 1.7 | 26,373 | 4,139 | 0.7 | |||||||||||||||||||||
Loss from equity method investments |
(926 | ) | (0.1 | ) | — | — | — | — | — | |||||||||||||||||||
Net gain (loss) on equity securities |
86,012 | 6.0 | 3,353,381 | 163.4 | (12,992 | ) | (2,039 | ) | (0.3 | ) | ||||||||||||||||||
Interest expense |
(13,458 | ) | (0.9 | ) | (2,759 | ) | (0.1 | ) | (14,481 | ) | (2,272 | ) | (0.4 | ) | ||||||||||||||
Foreign exchange gain (loss), net |
5,141 | 0.4 | (8,848 | ) | (0.4 | ) | 1,351 | 212 | 0.0 | |||||||||||||||||||
Other income, net |
41,300 | 2.9 | 49,139 | 2.4 | 41,912 | 6,577 | 1.1 | |||||||||||||||||||||
Other expenses |
(5,121 | ) | (0.4 | ) | (838 | ) | (0.0 | ) | (6,606 | ) | (1,037 | ) | (0.2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income before income taxes |
487,819 |
33.9 |
3,743,274 |
182.4 |
12,308 |
1,931 |
0.3 |
|||||||||||||||||||||
Income tax expenses |
(82,960 | ) | (5.8 | ) | (369,854 | ) | 18.0 | (20,853 | ) | (3,272 | ) | (0.5 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) |
404,859 |
28.1 |
3,373,420 |
164.4 |
(8,544 |
) |
(1,341 |
) |
(0.2 |
) | ||||||||||||||||||
Less: Net income attributable to the non-controlling interest shareholders |
13,945 | 1.0 | 3,902 | 0.2 | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) attributable to Cango Inc.’s ordinary shareholders |
390,914 |
27.1 |
3,369,518 |
164.2 |
(8,544 |
) |
(1,341 |
) |
(0.2 |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• | Cost of revenue |
• | Sales and marketing |
• | General and administrative |
• | Research and development |
• | Net loss on risk assurance liabilities |
• | Provision for credit losses |
B. |
Liquidity and Capital Resources |
Year Ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Summary Consolidated Cash Flow Data: |
||||||||||||||||
Net cash provided by/(used in) operating activities |
422,895 | (621,612 | ) | (404,390 | ) | (63,457 | ) | |||||||||
Net cash (used in)/provided by investing activities |
(1,198,406 | ) | (493,563 | ) | 2,661,223 | 417,604 | ||||||||||
Net cash provided by/(used in) financing activities |
730,548 | (380,822 | ) | (1,946,434 | ) | (305,438 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of the year |
3,880,429 | 3,846,983 | 2,314,892 | 363,257 | ||||||||||||
Cash, cash equivalents and restricted cash at end of the year |
3,846,983 | 2,314,892 | 2,610,281 | 409,610 |
Payment due by period |
||||||||||||||||||||||||
Total |
Less than 1 Year |
1 – 3 Years |
3 – 5 Years |
More than 5 Years |
||||||||||||||||||||
RMB |
US$ |
RMB |
||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Short-term debt obligations |
1,558,954 | 244,634 | 1,558,954 | — | — | — | ||||||||||||||||||
Long-term debt obligations |
544,855 | 85,500 | 29,956 | 514,899 | — | — | ||||||||||||||||||
Capital commitment obligations |
376 | 59 | 376 | — | — | — | ||||||||||||||||||
Operating lease commitment obligations |
119,257 | 18,714 | 15,710 | 27,998 | 26,919 | 48,630 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
2,223,442 | 348,907 | 1,604,996 | 542,897 | 26,919 | 48,630 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
C. |
Research and Development |
D. |
Trend Information |
E. |
Critical Accounting Policies and Estimates |
• | Identify the contract(s) with a customer; |
• | Identify the performance obligations in the contract; |
• | Determine the transaction price; |
• | Allocate the transaction price to the performance obligations in the contract; and |
• | Recognize revenue when (or as) the entity satisfies a performance obligation. |
• | probability of default. |
• | loss given default. |
• | macroeconomic factors. |
• | margin rate. |
Assumption |
Percent Change |
Increase/(Decrease) | ||
Probability of default (lifetime) | +/- 5% | RMB1,404/RMB(1,404) | ||
Loss given default | +/- 5% | RMB1,404/RMB(1,404) | ||
Margin rate | +/- 5% | RMB41/RMB(41) |
ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. |
Directors and Senior Management |
Name |
Age |
Position/Title | ||
Xiaojun Zhang |
50 | Co-founder | ||
Jiayuan Lin |
53 | Co-founder, | ||
Langlang Zhou |
41 | Director | ||
Yongyi Zhang |
49 | Chief financial officer and director | ||
Xiaoyu Liu |
39 | Director | ||
Zhipeng Song |
37 | Director | ||
Chi Ming Lee |
69 | Independent director | ||
Dongsheng Zhou |
54 | Independent director | ||
Rong Liu |
73 | Independent director |
B. |
Compensation |
Name |
Position |
Ordinary Shares Underlying Option Awards |
Option Exercise Price (US$)** |
Grant Date |
Option Expiration Date | |||||||||
Xiaojun Zhang |
Chairman | 7,739,960 | |
1.7951 1.7951 |
|
May 25, 2018 February 15, 2019 |
May 24, 2028 February 14, 2029 | |||||||
1.7951 | October 15, 2020 | October 14, 2030 | ||||||||||||
Jiayuan Lin |
Chief executive officer and director | 7,837,460 | |
1.7951 1.7951 |
|
May 25, 2018 February 15, 2019 |
May 24, 2028 February 14, 2029 | |||||||
1.7951 | October 15, 2020 | October 14, 2030 | ||||||||||||
Yongyi Zhang |
Chief financial officer and director | * | |
1.7951 1.7951 |
|
May 25, 2018 February 15, 2019 |
May 24, 2028 February 14, 2029 | |||||||
1.7951 | October 15, 2020 | October 14, 2030 | ||||||||||||
Zhipeng Song |
Director | * | |
1.7951 1.7951 |
|
May 25, 2018 February 15, 2019 |
May 24, 2028 February 14, 2029 | |||||||
1.7951 | October 15, 2020 | October 14, 2030 |
* | Less than 1% of our outstanding shares. |
** | In March 2021, we adjusted the option exercise price to US$1.2951 per share due to the cash dividend paid in April 2021. |
C. |
Board Practices |
• | conducting and managing the business of our company; |
• | representing our company in contracts and deals; |
• | appointing attorneys for our company; |
• | select senior management such as managing directors and executive directors; |
• | providing employee benefits and pension; |
• | managing our company’s finance and bank accounts; |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and |
• | exercising any other powers conferred by the shareholders meetings or under our third amended and restated memorandum and articles of association. |
• | selecting the independent auditor; |
• | pre-approving auditing and non-auditing services permitted to be performed by the independent auditor; |
• | annually reviewing the independent auditor’s report describing the auditing firm’s internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors and all relationships between the independent auditor and our company; |
• | setting clear hiring policies for employees and former employees of the independent auditors; |
• | reviewing with the independent auditor any audit problems or difficulties and management’s response; |
• | reviewing and, if material, approving all related party transactions on an ongoing basis; |
• | reviewing and discussing the annual audited financial statements with management and the independent auditor; |
• | reviewing and discussing with management and the independent auditors major issues regarding accounting principles and financial statement presentations; |
• | reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments; |
• | discussing earnings press releases with management, as well as financial information and earnings guidance provided to analysts and rating agencies; |
• | reviewing with management and the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the Group’s financial statements; |
• | discussing policies with respect to risk assessment and risk management with management, internal auditors and the independent auditor; |
• | timely reviewing reports from the independent auditor regarding all critical accounting policies and practices to be used by our company, all alternative treatments of financial information within U.S. GAAP that have been discussed with management and all other material written communications between the independent auditor and management; |
• | establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; |
• | annually reviewing and reassessing the adequacy of our audit committee charter; |
• | such other matters that are specifically delegated to our audit committee by our board of directors from time to time; |
• | meeting separately, periodically, with management, internal auditors and the independent auditor; and |
• | reporting regularly to the full board of directors. |
• | reviewing, evaluating and, if necessary, revising our overall compensation policies; |
• | reviewing and evaluating the performance of our directors and senior officers and determining the compensation of our senior officers; |
• | reviewing and approving our senior officers’ employment agreements with us; |
• | setting performance targets for our senior officers with respect to our incentive compensation plan and equity-based compensation plans; |
• | administering our equity-based compensation plans in accordance with the terms thereof; and |
• | such other matters that are specifically delegated to the remuneration committee by our board of directors from time to time. |
• | selecting and recommending to the board nominees for election by the shareholders or appointment by the board; |
• | reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
• | making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and |
• | advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. |
D. |
Employees |
Function |
Number of Employees |
% of Total |
||||||
Sales and marketing |
1,216 | 51.7 | ||||||
Operations |
423 | 18.0 | ||||||
Risk management |
373 | 15.9 | ||||||
General administration |
173 | 7.4 | ||||||
Research and development |
166 | 7.0 | ||||||
|
|
|
|
|||||
Total |
2,351 | 100.0 | ||||||
|
|
|
|
E. |
Share Ownership |
• | each of our directors and executive officers; and |
• | each person known to us to own beneficially 5.0% or more of our ordinary shares. |
Ordinary Shares Beneficially Owned |
||||||||||||||||
Class A ordinary shares |
Class B ordinary shares |
Percentage of total outstanding ordinary shares |
Percentage of aggregate voting power** |
|||||||||||||
Directors and Executive Officers:* |
||||||||||||||||
Xiaojun Zhang (1) |
2,920,048 | 38,275,787 | 14.7 | 46.1 | ||||||||||||
Jiayuan Lin (2) |
5,662,655 | 34,702,890 | 14.4 | 42.0 | ||||||||||||
Langlang Zhou |
— | — | — | — | ||||||||||||
Yongyi Zhang |
*** | — | *** | *** | ||||||||||||
Xiaoyu Liu |
— | — | — | — | ||||||||||||
Zhipeng Song |
*** | — | *** | *** | ||||||||||||
Chi Ming Lee |
— | — | — | — | ||||||||||||
Dongsheng Zhou |
— | — | — | — | ||||||||||||
Rong Liu |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Directors and Executive Officers as a Group |
9,932,357 | 72,978,677 | 29.1 | 87.9 | ||||||||||||
Principal Shareholders: |
||||||||||||||||
Lin Entities (3) |
2,741,607 | 34,702,890 | 13.5 | 41.9 | ||||||||||||
WP Fintech (4) |
53,431,124 | — | 19.3 | 3.2 | ||||||||||||
Eagle Central Holding Limited (5) |
— | 38,275,787 | 13.8 | 46.0 | ||||||||||||
Tencent Mobility Limited (6) |
25,223,898 | — | 9.1 | 1.5 | ||||||||||||
Didi Chuxing (7) |
28,376,116 | — | 10.2 | 1.7 | ||||||||||||
Taikang Offshore Entities (8) |
16,217,006 | — | 5.8 | 1.0 |
* | The business address for our directors and executive officers is 8F, New Bund Oriental Plaza II, 556 West Haiyang Road, Pudong New Area, Shanghai 200124, People’s Republic of China. |
** | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class. In respect of all matters subject to a shareholders’ vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 20 votes, voting together as one class. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. |
*** | Less than 1% of our total outstanding shares. |
(1) | Represents (i) 38,275,787 Class B ordinary shares that are held by Eagle Central Holding Limited, or Eagle Central, and (ii) 2,920,048 Class A ordinary shares that Mr. Xiaojun Zhang has the right to acquire upon exercise of the options within 60 days. Eagle Central is a limited liability company established in the British Virgin Islands that is controlled by Mr. Xiaojun Zhang. Eagle Central is further described in footnote 5 below. |
(2) | Represents (i) 1 Class A ordinary share that is held by Medway Brilliant Holding Limited, or Medway Brilliant, (ii) 34,702,890 Class B ordinary shares that are held by Traveler Enterprise Limited, or Traveler Enterprise, (iii) 2,741,606 Class A ordinary shares represented by ADSs that are beneficially owned by Traveler Enterprise, and (iv) 2,921,048 Class A ordinary shares that Mr. Jiayuan Lin has the right to acquire upon exercise of the options within 60 days. Medway Brilliant is a limited liability company established in the British Virgin Islands that is wholly owned by Mr. Jiayuan Lin. Traveler Enterprise is a limited liability company established in the British Virgin Island. Mr. Jiayuan Lin is the beneficial owner of the shares held by Medway Brilliant and Traveler Enterprise in our company. Medway Brilliant and Traveler Enterprise are further described in footnote 3 below. |
(3) | Represents (i) 1 Class A ordinary share that is held by Medway Brilliant, (ii) 34,702,890 Class B ordinary shares that are held by Traveler Enterprise, and (iii) 2,741,606 Class A ordinary shares represented by ADSs that are beneficially owned by Traveler Enterprise. Medway Brilliant is a limited liability company established in the British Virgin Islands that is wholly owned by Mr. Jiayuan Lin. The registered address of Medway Brilliant is the offices of Sertus Incorporations (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands. Traveler Enterprise is a limited liability company established in the British Virgin Islands. Traveler Enterprise is controlled by Traveler Trust, a trust established under the laws of Guernsey. Mr. Jiayuan Lin is the settlor of Traveler Trust, and Mr. Lin and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr. Lin has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Traveler Enterprise in our company. The registered address of Traveler Enterprise is Ritter House, Wickhams Cay II, Road Town, Tortola VG1110, British Virgin Islands. |
(4) | Represents 53,431,124 Class A ordinary shares that are beneficially owned by Warburg Pincus Cango Fintech Investment Company Limited, a British Virgin Islands business company (“WP Fintech”). Information regarding beneficial ownership is reported as of January 31, 2020, based on the information contained in the Schedule 13G filed by WP Fintech with SEC on February 10, 2020. The direct parents of WP Fintech are (i) Warburg Pincus Private Equity XII, L.P., a Delaware limited partnership (“WP XII”), (ii) Warburg Pincus Private Equity XII-B, L.P., a Delaware limited partnership (“WP XII-B”), (iii) Warburg Pincus Private Equity XII-D, L.P., a Delaware limited partnership (“WP XII-D”), (iv) Warburg Pincus Private Equity XII-E, L.P., a Delaware limited partnership (“WP XII-E”), (v) WP XII Partners, L.P., a Delaware limited partnership (“WP XII Partners”), (vi) Warburg Pincus XII Partners, L.P., a Delaware limited partnership (“Warburg Pincus XII Partners” and, together with WP XII, WP XII-B, WP XII-D, WP XII-E and WP XII Partners, the “WP XII Funds”), (vii) Warburg Pincus China (Cayman), L.P., a Cayman Islands limited partnership (“WPC Cayman”), and (viii) Warburg Pincus China Partners (Cayman), L.P., a Cayman Islands limited partnership (“Warburg Pincus China Cayman Partners” and, together with WPC Cayman, the “WPC Cayman Funds”). Warburg Pincus XII, L.P., a Delaware limited partnership (“WP XII GP”), is the general partner of the WP XII Funds. WP Global LLC, a Delaware limited liability company (“WP Global”), is the general partner of WP XII GP. Warburg Pincus Partners II, L.P., a Delaware limited partnership (“WPP II”), is the managing member of WP Global. Warburg Pincus Partners GP LLC, a Delaware limited liability company (“WPP GP”), is the general partner of WPP II. Warburg Pincus & Co., a New York general partnership (“WP”), is the managing member of WPP GP. Warburg Pincus (Cayman) China GP, L.P., a Cayman Islands limited partnership (“WPC Cayman GP”), is the general partner of the WPC Cayman Funds. Warburg Pincus (Cayman) China GP LLC, a Delaware limited liability company (“WPC Cayman GP LLC”), is the general partner of WPC Cayman GP. Warburg Pincus Partners II (Cayman), L.P., a Cayman Islands exempted limited partnership (“WPP II Cayman”), is the managing member of WPC Cayman GP LLC. Warburg Pincus (Bermuda) Private Equity GP Ltd., a Bermuda exempted company (“WP Bermuda”), is the general partner of WPP II Cayman. Investment and voting decisions with respect the Class A ordinary shares held by the Warburg Pincus entities are made by a committee comprised of three or more individuals and all members of such committee disclaim beneficial ownership of the shares held by the Warburg Pincus entities. The address of the Warburg Pincus entities is 450 Lexington Avenue, New York, New York 10017, U.S.A. |
(5) | Eagle Central is a limited liability company established in the British Virgin Islands that is controlled by Mr. Xiaojun Zhang. The registered address of Eagle Central is the offices of Sertus Incorporations (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola VG1110, British Virgin Islands. |
(6) | Represents 25,223,898 Class A ordinary shares represented by ADSs that are beneficially owned by Tencent Mobility Limited. Information regarding beneficial ownership is based on the information contained in the Schedule 13G reported as of December 31, 2021 and filed by Tencent Mobility Limited with SEC on February 10, 2022. Tencent Mobility Limited is a limited liability company established in Hong Kong. Tencent Mobility Limited is wholly owned by Tencent Holdings Limited, a public company listed on the Hong Kong Stock Exchange. The registered address of Tencent Mobility Limited is 29/F, Three Pacific Place, No.1 Queen’s Road East, Wanchai, Hong Kong. |
(7) | Represents (i) 4,740,480 Class A ordinary shares held by Links Advance Holdings Limited and (ii) 23,635,636 Class A ordinary shares held by DiDi Sunshine Investments L.P. Information regarding beneficial ownership is reported as of December 31, 2019, based on the information contained in the Schedule 13G filed by Didi Chuxing with SEC on February 13, 2020. Links Advance Holdings Limited is controlled by Didi Chuxing. DiDi Sunshine Investments L.P. is an exempted limited partnership organized in the Cayman Islands. Its general partner is a wholly-owned subsidiary of Didi Chuxing. The general partner exercises the voting rights with respect to the shares held by the limited partnership. The general partner disclaims beneficial ownership of our shares except to the extent of its pecuniary interest in the limited partnership. According to the information contained in the Schedule 13G filed by Galactic Gain Limited with SEC on February 13, 2020, Galactic Gain Limited is a limited partner of DiDi Sunshine Investments L.P. and indirectly holds the 23,635,636 Class A ordinary shares. Galactic Gain Limited is an exempted company incorporated under the laws of the Cayman Islands, which is wholly owned by Boyu Capital Fund III, L.P. Boyu Capital Fund III, L.P. is a limited partnership organized under the laws of the Cayman Islands, of which Boyu Capital General Partner III, L.P. is the general partner. Boyu Capital General Partner III, L.P. is a limited partnership organized under the laws of the Cayman Islands, of which Boyu Capital General Partner III, Ltd. is the general partner. Boyu Capital General Partner III, Ltd. is an exempted company incorporated under the laws of the Cayman Islands, which is wholly owned by Boyu Capital Group Holdings Ltd. Boyu Capital Group Holdings Ltd. is an exempted company incorporated under the laws of the Cayman Islands, of which XYXY Holdings Ltd. is the controlling shareholder. XYXY Holdings Ltd. is a company incorporated under the laws of the British Virgin Islands, which is wholly owned by Xiaomeng Tong. The registered address of Galactic Gain Limited is at the office of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. |
(8) | Represents (i) 8,108,503 Class A ordinary shares that are beneficially owned by Magic Spark Inc., a limited liability company established in the Cayman Islands, and (ii) 8,108,503 Class A ordinary shares that are beneficially owned by TK Autolink Inc., a limited liability company established in the Cayman Islands. Information regarding beneficial ownership is reported as of December 31, 2019, based on the information contained in the Schedule 13G filed by Taikang Offshore Entities with SEC on February 12, 2020. Magic Spark Inc. is wholly owned by Taikang Life Insurance Co., Ltd., which in turn is wholly owned by Taikang Insurance Group Inc. TK Autolink Inc. is indirectly controlled by Shandong State-controlled Taikang Phase I Industrial Development Fund Partnership Enterprise (Limited Partnership) (“Shandong Fund”). Beijing Taikang Investment Co., Ltd. is one of the two general partners of Shandong Fund. Beijing Taikang Investment Co., Ltd. is indirectly controlled by Taikang Insurance Group Inc. Each of Taikang Life Insurance Co., Ltd. and Taikang Insurance Group Inc. is an insurance company established in the PRC. The registered address of Magic Spark Inc. is Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1-1002, Cayman Islands. The registered address of TK Autolink Inc. is 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1 – 1002, Cayman Islands. |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. |
Major Shareholders |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
ITEM 8. |
FINANCIAL INFORMATION |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
ITEM 9. |
THE OFFER AND LISTING |
A. |
Offering and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
ITEM 10. |
ADDITIONAL INFORMATION |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is subject to United States federal income taxation regardless of its source; or |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person. |
• | a dealer in securities or currencies; |
• | a financial institution; |
• | a regulated investment company; |
• | a real estate investment trust; |
• | an insurance company; |
• | a tax-exempt organization; |
• | a person holding our ADSs or Class A ordinary shares as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle; |
• | a trader in securities that has elected the mark-to-market |
• | a person liable for alternative minimum tax; |
• | a person who owns or is deemed to own 10% or more of our stock by vote or value; |
• | a person required to accelerate the recognition of any item of gross income with respect to our ADSs or Class A ordinary shares as a result of such income being recognized on an applicable financial statement; |
• | a partnership or other pass-through entity for United States federal income tax purposes; or |
• | a person whose “functional currency” is not the U.S. dollar. |
• | at least 75% of our gross income is passive income, or |
• | at least 50% of the value (generally determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income. |
• | the excess distribution or gain will be allocated ratably over your holding period for the ADSs or Class A ordinary shares, |
• | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and |
• | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year for individuals or corporations, as applicable, and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
F. |
Dividends and Paying Agents |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
A. |
Debt Securities |
B. |
Warrants and Rights |
C. |
Other Securities |
D. |
American Depositary Shares |
Service |
Fees | |
• Issuance of ADSs (e.g., an issuance of ADS upon a deposit of Class A ordinary shares, upon a change in the ADS(s)-to Class A ordinary share(s) ratio, or for any other reason), excluding ADS issuances as a result of distributions of Class A ordinary shares) |
Up to U.S. 5¢ per ADS issued | |
• Cancelation of ADSs (e.g., a cancelation of ADSs for delivery of deposited property, upon a change in the ADS(s)-to Class A ordinary share(s) ratio, or for any other reason) |
Up to U.S. 5¢ per ADS canceled | |
• Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements) |
Up to U.S. 5¢ per ADS held | |
• Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs |
Up to U.S. 5¢ per ADS held | |
• Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off) |
Up to U.S. 5¢ per ADS held | |
• ADS Services |
Up to U.S. 5¢ per ADS held on the applicable record date(s) established by the depositary bank |
• | taxes (including applicable interest and penalties) and other governmental charges; |
• | the registration fees as may from time to time be in effect for the registration of Class A ordinary shares on the share register and applicable to transfers of Class A ordinary shares to or from the name of the custodian, the depositary bank or any nominees upon the making of deposits and withdrawals, respectively; |
• | certain cable, telex and facsimile transmission and delivery expenses; |
• | the expenses and charges incurred by the depositary bank in the conversion of foreign currency; |
• | the fees and expenses incurred by the depositary bank in connection with compliance with exchange control regulations and other regulatory requirements applicable to Class A ordinary shares, ADSs and ADRs; and |
• | the fees and expenses incurred by the depositary bank, the custodian, or any nominee in connection with the servicing or delivery of deposited property. |
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. |
CONTROLS AND PROCEDURES |
ITEM 16. |
[RESERVED] |
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. |
CODE OF ETHICS |
ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
For the Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
(In thousands of US dollars) |
||||||||
Audit Fees (1) |
1,085 | 1,310 | ||||||
Tax Fees |
— | — | ||||||
|
|
|
|
|||||
All Other Fees |
— | — | ||||||
|
|
|
|
|||||
Total |
1,085 | 1,310 | ||||||
|
|
|
|
(1) | Audit fees include the aggregate fees billed in each of the fiscal period listed for professional services rendered by our independent public accountant for the audit of annual financial statements, review of quarterly financial statements and services related to our initial public offering. |
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
Period |
Total Number of ADSs Purchased (1) |
Average Price Paid per ADS (2) |
Approximate Dollar Value of ADSs that May Yet Be Purchased Under the Programs (3) |
|||||||||
March 1, 2021 through March 31, 2021 |
4,189,888 | $ | 9.14 | US$ | 11.7 million | |||||||
April 1, 2021 through April 30, 2021 |
1,207,319 | $ | 8.33 | US$ | 1.6 million | |||||||
August 1, 2021 through August 31, 2021 |
340,840 | $ | 4.27 | US$ | 50.2 million | |||||||
September 1, 2021 through September 30, 2021 |
1,634,308 | $ | 4.26 | US$ | 43.2 million | |||||||
October 1, 2021 through October 31, 2021 |
1,042,685 | $ | 4.29 | US$ | 38.8 million | |||||||
November 1, 2021 through November 30, 2021 |
738,469 | $ | 4.30 | US$ | 35.6 million | |||||||
December 1, 2021 through December 31, 2021 |
1,347,419 | $ | 3.01 | US$ | 31.5 million | |||||||
January 1, 2022 through January 31, 2022 |
539,824 | $ | 3.24 | US$ | 29.8 million | |||||||
February 1, 2022 through February 28, 2022 |
57,351 | $ | 3.17 | US$ | 29.6 million | |||||||
March 1, 2022 through March 31, 2022 |
430,904 | $ | 2.55 | US$ | 28.5 million | |||||||
Total |
11,529,007 | $ | 6.20 | US$ | 28.5 million |
(1) | All of our ADSs purchased were pursuant to publicly announced plans or programs. |
(2) | Each of our ADSs represents two Class A ordinary shares. |
(3) | We announced a share repurchase program in March 2021, under which we may repurchase up to US$50 million worth of our outstanding ADSs and/or Class A ordinary shares over a period of twelve months. We announced another share repurchase program in August 2021, under which we may repurchase up to US$50 million worth of our outstanding ADSs and/or Class A ordinary shares over a period of twelve months. The repurchases have been, and will be, through various means, including open market transactions, privately negotiated transactions, block trades or any combination thereof. The repurchases have been, and will be, effected in compliance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and our insider trading policy. The number of ADSs repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions. |
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G. |
CORPORATE GOVERNANCE |
ITEM 16H. |
MINE SAFETY DISCLOSURE |
ITEM 16I. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 17. |
FINANCIAL STATEMENTS |
ITEM 18. |
FINANCIAL STATEMENTS |
ITEM 19. |
EXHIBITS |
* | Filed herewith |
** | Furnished herewith |
CANGO INC. | ||
By | /s/ Xiaojun Zhang | |
Name: | Xiaojun Zhang | |
Title: | Chairman |
PAGE(S) |
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F-2 |
||||
F-3 |
||||
F-6 |
||||
F-8 |
||||
F-10 |
||||
F-12 |
As of December 31, | ||||||||||||||||
2020 | 2021 | |||||||||||||||
Notes | RMB | RMB | US$ | |||||||||||||
ASSETS |
||||||||||||||||
Current assets |
||||||||||||||||
Cash and cash equivalents |
1,426,899,576 | 1,434,806,922 | 225,152,516 | |||||||||||||
Restricted cash – current |
9,693,008 | 61,293,114 | 9,618,227 | |||||||||||||
Short-term investments |
3 | 4,342,356,612 | 2,598,935,704 | 407,829,725 | ||||||||||||
Accounts receivable, net of allowance of RMB nil and RMB nil (US$ nil) as of December 31, 2020 and 2021, respectively |
4 | 141,594,170 | 223,544,396 | 35,078,994 | ||||||||||||
Finance lease receivables - current, net of allowance of RMB18,097,313 and RMB25,274,933 (US$3,966,189) as of December 31, 2020 and 2021, respectively |
6 | 2,035,397,525 | 1,414,164,625 | 221,913,289 | ||||||||||||
Short-term consumer financing receivables, net of allowance of RMB2,304,639 and RMB nil (US$ nil) as of December 31, 2020 and 2021, respectively |
23,168 | — | — | |||||||||||||
Financing receivables, net of allowance of RMB16,265,330 and RMB50,492,700 (US$7,923,406) as of December 31, 2020 and 2021, respectively |
20,105,893 | 62,296,261 | 9,775,643 | |||||||||||||
Short-term contract asset |
364,618,635 | 829,940,692 | 130,235,805 | |||||||||||||
Prepayments and other current assets |
7 | 558,360,959 | 982,948,637 | 154,246,091 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Total current assets |
8,899,049,546 |
7,607,930,351 |
1,193,850,290 |
|||||||||||||
|
|
|
|
|
|
|||||||||||
Non-current assets |
||||||||||||||||
Restricted cash - non-current |
878,299,140 | 1,114,180,729 | 174,839,270 | |||||||||||||
Goodwill |
5 | 145,063,857 | 148,657,971 | 23,327,680 | ||||||||||||
Property and equipment, net |
10,311,971 | 19,545,933 | 3,067,183 | |||||||||||||
Intangible assets |
8 | 44,887,871 | 45,931,544 | 7,207,662 | ||||||||||||
Long-term contract asset |
281,374,110 | 495,456,805 | 77,747,984 | |||||||||||||
Deferred tax assets |
15 | 170,951,082 | 474,570,361 | 74,470,446 | ||||||||||||
Finance lease receivables - non-current, net of allowance of RMB5,629,107 and RMB6,941,826 (US$1,089,324) as of December 31, 2020 and 2021, respectively |
6 | 1,454,499,864 | 1,029,262,174 | 161,513,695 | ||||||||||||
Other non-current assets |
261,495,158 | 11,568,164 | 1,815,297 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total non-current assets |
3,246,883,053 |
3,339,173,681 |
523,989,217 |
|||||||||||||
|
|
|
|
|
|
|||||||||||
TOTAL ASSETS |
12,145,932,599 |
10,947,104,032 |
1,717,839,507 |
|||||||||||||
|
|
|
|
|
|
As of December 31, |
||||||||||||||||
2020 |
2021 |
|||||||||||||||
Notes |
RMB |
RMB |
US$ |
|||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||
Current liabilities |
||||||||||||||||
Short-term debts (including short-term debts of the consolidated VIE without recourse to the Company of RMB355,816,940 and RMB579,776,131 (US$90,979,527) as of December 31, 2020 and December 31, 2021, respectively) |
9 | 355,816,940 | 579,776,131 | 90,979,527 | ||||||||||||
Long-term debts – current (including long-term debts – current of the consolidated VIE without recourse to the Company of RMB1,228,783,730 and RMB938,014,362 (US$147,194,922) as of December 31, 2020 and December 31, 2021, respectively), (including RMB401,761,874 and RMB nil (US$ nil) from consolidated trusts and ABSs as of December 31, 2020 and 2021, respectively) |
9 | 1,228,783,730 | 938,014,362 | 147,194,922 | ||||||||||||
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to the Company of RMB312,104,057 and RMB714,521,503 (US$112,124,016) as of December 31, 2020 and December 31, 2021, respectively), (including RMB59,187 and RMB nil (US$ nil) from consolidated trusts and ABSs as of December 31, 2020 and 2021, respectively) |
10 | 324,734,202 | 719,035,377 | 112,832,342 | ||||||||||||
Risk assurance liabilities (including risk assurance liabilities of the consolidated VIE without recourse to the Company of RMB460,829,299 and RMB699,022,914 (US$109,691,949) as of December 31, 2020 and December 31, 2021, respectively) |
11 | 460,829,299 | 699,022,914 | 109,691,949 | ||||||||||||
Income tax payable (including income tax payable of the consolidated VIE without recourse to the Company of RMB87,132,455 and RMB209,977,036 (US$32,949,979) as of December 31, 2020 and December 31, 2021, respectively) |
87,132,455 | 481,854,105 | 75,613,424 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total current liabilities |
2,457,296,626 |
3,417,702,889 |
536,312,164 |
|||||||||||||
|
|
|
|
|
|
|||||||||||
Non-current liabilities |
||||||||||||||||
Long-term debts (including long-term debts of the consolidated VIE without recourse to the Company of RMB977,791,191 and RMB486,371,672 (US$76,322,329) as of December 31, 2020 and December 31, 2021, respectively) |
9 | 977,791,191 | 486,371,672 | 76,322,329 | ||||||||||||
Deferred tax liability (including deferred tax liability of the consolidated VIE without recourse to the Company of RMB12,523,538 and RMB10,724,126 (US$1,682,849) as of December 31, 2020 and December 31, 2021, respectively) |
15 | 330,765,029 | 51,471,040 | 8,076,929 | ||||||||||||
Other non-current liabilities (including other non-current liabilities of the consolidated VIE without recourse to the Company of RMB4,870,616 and RMB991,610 (US$155,606) as of December 31, 2020 and December 31, 2021, respectively) |
4,870,616 | 991,610 | 155,605 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total non-current liabilities |
1,313,426,836 |
538,834,322 |
84,554,863 |
|||||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities |
3,770,723,462 |
3,956,537,211 |
620,867,027 |
|||||||||||||
|
|
|
|
|
|
|||||||||||
Commitments and contingencies |
19 |
As of December 31, |
||||||||||||||||
2020 |
2021 |
|||||||||||||||
Notes |
RMB |
RMB |
US$ |
|||||||||||||
Shareholders’ equity |
||||||||||||||||
Class A Ordinary shares (par value of US$0.0001 per share; 420,674,280 shares authorized as of December 31, 2020 and 2021, respectively; 227,831,213 shares issued and 224,771,083 shares outstanding as of December 31, 2020; 229,831,213 shares issued and 206,506,455 shares outstanding as of December 31, 2021) |
20 |
154,483 |
154,483 |
24,242 |
||||||||||||
Class B Ordinary shares (par value of US$0.0001 per share; 79,325,720 shares authorized as of December 31, 2020 and 2021, respectively; 74,978,677 shares issued and outstanding as of December 31, 2020; 72,978,677 shares issued and outstanding as of December 31, 2021) |
20 |
49,777 |
49,777 |
7,811 |
||||||||||||
Treasury shares |
21 |
(56,419,225 |
) |
(485,263,213 |
) |
(76,148,387 |
) | |||||||||
Additional paid-in capital |
4,591,455,557 |
4,671,769,821 |
733,102,630 |
|||||||||||||
Accumulated other comprehensive loss |
(115,386,427 |
) |
(187,517,110 |
) |
(29,425,526 |
) | ||||||||||
Retained earnings |
3,955,354,972 |
2,991,373,063 |
469,411,710 |
|||||||||||||
|
|
|
|
|
|
|||||||||||
Total Cango Inc.’s equity |
8,375,209,137 |
6,990,566,821 |
1,096,972,480 |
|||||||||||||
|
|
|
|
|
|
|||||||||||
Total shareholders’ equity |
8,375,209,137 |
6,990,566,821 |
1,096,972,480 |
|||||||||||||
|
|
|
|
|
|
|||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
12,145,932,599 |
10,947,104,032 |
1,717,839,507 |
|||||||||||||
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||
Notes | RMB | RMB | RMB | US$ | ||||||||||||||||
Revenues |
||||||||||||||||||||
Automobile trading income |
11,414,382 | 624,773,721 | 2,227,171,554 | 349,491,817 | ||||||||||||||||
Loan facilitation income and other related income |
913,836,623 | 891,836,601 | 1,233,556,212 | 193,571,888 | ||||||||||||||||
Leasing income |
300,078,043 | 286,079,245 | 251,295,105 | 39,433,686 | ||||||||||||||||
After-market services income |
205,998,075 | 241,193,243 | 193,786,856 | 30,409,386 | ||||||||||||||||
Others |
8,741,702 | 8,548,942 | 15,906,679 | 2,496,105 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Revenues |
1,440,068,825 |
2,052,431,752 |
3,921,716,406 |
615,402,882 |
||||||||||||||||
Operating cost and expenses |
||||||||||||||||||||
Cost of revenue |
12 | 539,267,417 | 1,098,120,749 | 2,958,009,872 | 464,176,297 | |||||||||||||||
Sales and marketing |
192,811,348 | 195,893,662 | 239,333,085 | 37,556,584 | ||||||||||||||||
General and administrative |
236,551,077 | 265,691,411 | 276,179,441 | 43,338,581 | ||||||||||||||||
Research and development |
57,405,921 | 62,596,195 | 70,278,081 | 11,028,164 | ||||||||||||||||
Net loss on risk assurance liabilities |
34,257,754 | 2,268,180 | 197,750,449 | 31,031,361 | ||||||||||||||||
Provision for credit losses and other assets |
56,478,959 | 109,564,631 | 203,415,094 | 31,920,267 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total operating cost and expense |
1,116,772,476 |
1,734,134,828 |
3,944,966,022 |
619,051,254 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations |
323,296,349 |
318,296,924 |
(23,249,616 |
) |
(3,648,372 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Interest income |
51,574,467 | 34,901,335 | 26,373,471 | 4,138,573 | ||||||||||||||||
Loss from equity method investments |
(926,205 | ) | — | — | — | |||||||||||||||
Net gain (loss) on equity securities |
13 | 86,011,918 | 3,353,381,213 | (12,991,522 | ) | (2,038,654 | ) | |||||||||||||
Interest expense |
(13,457,818 | ) | (2,758,629 | ) | (14,481,195 | ) | (2,272,414 | ) | ||||||||||||
Foreign exchange gain (loss), net |
5,141,112 | (8,848,354 | ) | 1,351,400 | 212,064 | |||||||||||||||
Other income, net |
14 | 41,300,464 | 49,139,337 | 41,911,589 | 6,576,843 | |||||||||||||||
Other expenses |
(5,121,054 | ) | (838,115 | ) | (6,605,833 | ) | (1,036,599 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income before income taxes |
487,819,233 |
3,743,273,711 |
12,308,294 |
1,931,441 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income tax expenses |
15 | (82,960,493 | ) | (369,853,650 | ) | (20,852,646 | ) | (3,272,235 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
404,858,740 |
3,373,420,061 |
(8,544,352 |
) |
(1,340,794 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Less: Net income attributable to non-controlling interests |
13,944,848 | 3,902,214 | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) attributable to Cango Inc.’s shareholders |
390,913,892 |
3,369,517,847 |
(8,544,352 |
) |
(1,340,794 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||
Notes | RMB | RMB | RMB | US$ | ||||||||||||||||
Earnings per Class A and Class B ordinary share: |
||||||||||||||||||||
Basic |
16 | 1.29 | 11.21 | (0.03 | ) | (0.00 | ) | |||||||||||||
Diluted |
16 | 1.29 | 11.09 | (0.03 | ) | (0.00 | ) | |||||||||||||
Earnings per ADS (2 ordinary shares equal 1 ADS): |
||||||||||||||||||||
Basic |
16 | 2.59 | 22.43 | (0.06 | ) | (0.01 | ) | |||||||||||||
Diluted |
16 | 2.58 | 22.18 | (0.06 | ) | (0.01 | ) | |||||||||||||
Weighted average shares used to compute earnings per Class A and Class B share: |
||||||||||||||||||||
Basic |
16 | 302,417,352 | 300,484,860 | 289,892,905 | 289,892,905 | |||||||||||||||
Diluted |
16 | 303,283,658 | 303,900,645 | 289,892,905 | 289,892,905 | |||||||||||||||
Other comprehensive income (loss), net of tax |
||||||||||||||||||||
Unrealized loss on available-for-sale |
(146,801 | ) | — | — | — | |||||||||||||||
Reclassification of losses to net loss |
(276,843 | ) | — | — | — | |||||||||||||||
Foreign currency translation adjustment |
10,401,386 | (234,817,165 | ) | (72,130,683 | ) | (11,318,878 | ) | |||||||||||||
Total comprehensive income (loss), net of tax |
414,836,482 |
3,138,602,896 |
(80,675,035 |
) |
(12,659,672 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income attributable to non-controlling interests |
13,944,848 | 3,902,214 | — | — | ||||||||||||||||
Total comprehensive income (loss) attributable to Cango Inc.’s shareholders |
400,891,634 |
3,134,700,682 |
(80,675,035 |
) |
(12,659,672 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
Attributable to Cango Inc. |
||||||||||||||||||||||||||||||||||||
Class A and Class B |
Accumulated |
(Accumulated |
||||||||||||||||||||||||||||||||||
Ordinary Shares |
Additional |
other |
deficit) |
Total |
Non- |
Total |
||||||||||||||||||||||||||||||
Number of |
Treasury |
paid-in |
comprehensive |
Retained |
Cango Inc.’s |
controlling |
shareholders’ |
|||||||||||||||||||||||||||||
Shares |
Amount |
shares |
capital |
income |
earnings |
(deficit) equity |
interests |
(deficit) equity |
||||||||||||||||||||||||||||
Balance at January 1, 2019 |
302,809,892 |
204,260 |
— |
4,444,078,463 |
109,452,996 |
698,036,438 |
5,251,772,157 |
3,594,671 |
5,255,366,828 |
|||||||||||||||||||||||||||
Adjustments due to the adoption of ASC 606 |
— | — | — | — | — | 17,585,853 | 17,585,853 | — | 17,585,853 | |||||||||||||||||||||||||||
Repurchase of ordinary shares |
(863,112 | ) | — | (20,638,881 | ) | — | — | — | (20,638,881 | ) | — | (20,638,881 | ) | |||||||||||||||||||||||
Retirement of ordinary shares |
(1 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Liquidation of subsidiaries’ equity from non-controlling interest holders |
— | — | — | — | — | — | — | (574,212 | ) | (574,212 | ) | |||||||||||||||||||||||||
Stock-based compensation (note 18) |
— | — | — | 82,265,991 | — | — | 82,265,991 | — | 82,265,991 | |||||||||||||||||||||||||||
Net income |
— | — | — | — | — | 390,913,892 | 390,913,892 | 13,944,848 | 404,858,740 | |||||||||||||||||||||||||||
Other comprehensive income (loss) |
— | — | — | — | 9,977,742 | — | 9,977,742 | — | 9,977,742 | |||||||||||||||||||||||||||
Dividends to shareholders |
— | — | — | — | — | (254,027,215 | ) | (254,027,215 | ) | (3,154,555 | ) | (257,181,770 | ) | |||||||||||||||||||||||
Balance at December 31, 2019 |
301,946,779 |
204,260 |
(20,638,881 |
) |
4,526,344,454 |
119,430,738 |
852,508,968 |
5,477,849,539 |
13,810,752 |
5,491,660,291 |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Cango Inc. |
||||||||||||||||||||||||||||||||||||
Class A and Class B |
Accumulated |
(Accumulated |
||||||||||||||||||||||||||||||||||
Ordinary Shares |
Additional |
other |
deficit) |
Total |
Non- |
Total |
||||||||||||||||||||||||||||||
Number of |
Treasury |
paid-in |
comprehensive |
Retained |
Cango Inc.’s |
controlling |
shareholders’ |
|||||||||||||||||||||||||||||
Shares |
Amount |
shares |
capital |
income |
earnings |
(deficit) equity |
interests |
(deficit) equity |
||||||||||||||||||||||||||||
Balance at December 31, 2019 |
301,946,779 |
204,260 |
(20,638,881 |
) |
4,526,344,454 |
119,430,738 |
852,508,968 |
5,477,849,539 |
13,810,752 |
5,491,660,291 |
||||||||||||||||||||||||||
Repurchase of ordinary shares |
(2,797,032 | ) | — | (49,219,318 | ) | — | — | — | (49,219,318 | ) | — | (49,219,318 | ) | |||||||||||||||||||||||
Exercise of share options |
600,014 | — | 13,438,974 | (6,745,258 | ) | — | — | 6,693,716 | — | 6,693,716 | ||||||||||||||||||||||||||
Retirement of ordinary shares |
(1 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Purchase of subsidiaries’ equity from non-controlling interest holders |
— | — | — | (6,898,467 | ) | — | — | (6,898,467 | ) | (17,245,533 | ) | (24,144,000 | ) | |||||||||||||||||||||||
Liquidation of subsidiaries’ equity from non-controlling interest holders |
— | — | — | — | — | — | — | (467,433 | ) | (467,433 | ) | |||||||||||||||||||||||||
Stock-based compensation (note 18) |
— | — | — | 78,754,828 | — | — | 78,754,828 | — | 78,754,828 | |||||||||||||||||||||||||||
Net income |
— | — | — | — | — | 3,369,517,847 | 3,369,517,847 | 3,902,214 | 3,373,420,061 | |||||||||||||||||||||||||||
Other comprehensive income (loss) |
— | — | — | — | (234,817,165 | ) | — | (234,817,165 | ) | — | (234,817,165 | ) | ||||||||||||||||||||||||
Dividends to shareholders |
— | — | — | — | — | (266,671,843 | ) | (266,671,843 | ) | — | (266,671,843 | ) | ||||||||||||||||||||||||
Balance at December 31, 2020 |
299,749,760 |
204,260 |
(56,419,225 |
) |
4,591,455,557 |
(115,386,427 |
) |
3,955,354,972 |
8,375,209,137 |
— |
8,375,209,137 |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Repurchase of ordinary shares |
(21,001,856 | ) | — | (444,401,172 | ) | — | — | — | (444,401,172 | ) | — | (444,401,172 | ) | |||||||||||||||||||||||
Exercise of share options |
737,228 | — | 15,557,184 | (7,320,571 | ) | — | — | 8,236,613 | — | 8,236,613 | ||||||||||||||||||||||||||
Stock-based compensation (note 18) |
— | — | — | 87,634,835 | — | — | 87,634,835 | — | 87,634,835 | |||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | (8,544,352 | ) | (8,544,352 | ) | — | (8,544,352 | ) | ||||||||||||||||||||||||
Other comprehensive income (loss) |
— | — | — | — | (72,130,683 | ) | — | (72,130,683 | ) | — | (72,130,683 | ) | ||||||||||||||||||||||||
Dividends to shareholders |
— | — | — | — | — | (955,437,557 | ) | (955,437,557 | ) | — | (955,437,557 | ) | ||||||||||||||||||||||||
Balance at December 31, 2021 |
279,485,132 |
204,260 |
(485,263,213 |
) |
4,671,769,821 |
(187,517,110 |
) |
2,991,373,063 |
6,990,566,821 |
— |
6,990,566,821 |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of December 31, 2021, in US$ |
32,053 |
(76,148,387 |
) |
733,102,630 |
(29,425,526 |
) |
469,411,710 |
1,096,972,480 |
— |
1,096,972,480 |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income (loss) |
404,858,740 | 3,373,420,061 | (8,544,352 | ) | (1,340,794 | ) | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
Depreciation and amortization |
10,466,942 | 9,544,137 | 8,514,969 | 1,336,184 | ||||||||||||
Share-based compensation expense |
82,265,991 | 78,754,828 | 87,634,835 | 13,751,819 | ||||||||||||
Loss on risk assurance liabilities |
34,257,754 | 2,268,180 | 197,750,449 | 31,031,361 | ||||||||||||
Provision for credit losses and other assets |
56,478,959 | 109,564,631 | 203,415,094 | 31,920,267 | ||||||||||||
Loss on equity method investment |
926,205 | — | — | — | ||||||||||||
Fair value change of derivative instruments |
3,289,676 | (3,289,676 | ) | 5,346,389 | 838,965 | |||||||||||
Net (gain) loss on equity securities |
(41,581,818 | ) | (3,315,475,734 | ) | 27,278,116 | 4,280,532 | ||||||||||
Investment income |
(32,516,817 | ) | — | — | — | |||||||||||
Loss on disposal of property and equipment |
45,639 | 79,756 | 78,221 | 12,275 | ||||||||||||
Unrealized foreign exchange (gain) loss, net |
(5,141,112 | ) | 8,848,354 | (1,351,400 | ) | (212,064 | ) | |||||||||
Deferred income tax (benefit) expense |
(9,034,211 | ) | 248,151,964 | (582,913,268 | ) | (91,471,812 | ) | |||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
(56,086,171 | ) | 6,968,776 | (78,030,840 | ) | (12,244,742 | ) | |||||||||
Financing receivables |
(39,987,198 | ) | (83,186,886 | ) | (217,252,025 | ) | (34,091,583 | ) | ||||||||
Contract assets |
23,104,124 | (613,648,965 | ) | (679,404,752 | ) | (106,613,431 | ) | |||||||||
Other current and non-current assets |
(56,811,099 | ) | (694,994,714 | ) | (180,898,244 | ) | (28,386,882 | ) | ||||||||
Risk assurance liabilities |
52,484,356 | 198,608,646 | 40,443,166 | 6,346,415 | ||||||||||||
Other current and non-current liabilities |
(4,124,725 | ) | 52,774,440 | 773,542,811 | 121,385,744 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) operating activities |
422,895,235 |
(621,612,202 |
) |
(404,390,831 |
) |
(63,457,746 |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flows from investing activities: |
||||||||||||||||
Repayments of finance lease receivables |
1,358,838,393 | 1,839,778,206 | 2,112,046,802 | 331,426,231 | ||||||||||||
Origination of finance lease receivables |
(2,071,721,858 | ) | (2,256,358,577 | ) | (1,091,415,329 | ) | (171,266,881 | ) | ||||||||
Proceeds from collection of short-term consumer financing receivables |
25,140,348 | 12,248,145 | — | — | ||||||||||||
Origination of short-term consumer financing receivables |
(39,716,300 | ) | — | — | — | |||||||||||
Purchase of held-to-maturity investment |
(210,499,840 |
) |
(1,115,661,108 |
) |
(2,342,226,408 |
) |
(367,546,434 |
) | ||||||||
Maturities of held-to-maturity investment |
— |
658,209,985 |
1,158,122,796 |
181,734,739 |
||||||||||||
Purchase of other short-term investment, net |
(107,837,789 |
) |
— |
— |
— |
|||||||||||
Proceeds from sale or redemption of other short-term investments, net |
— |
361,366,081 |
2,841,860,867 |
445,949,983 |
||||||||||||
Proceeds from available for sale financial assets |
179,351,253 | 12,182,947 | — | — | ||||||||||||
Proceeds from third party loans |
26,743,400 | — | — | — | ||||||||||||
Proceeds from long-term investments |
90,521,295 | — | — | — | ||||||||||||
Disposal of equity method investments |
100,000 | — | — | — | ||||||||||||
Disposal of property and equipment and intangible assets |
8,475 | 31,840 | 51,241 | 8,041 | ||||||||||||
Purchase of long-term investments |
(406,307,000 | ) | — | — | — | |||||||||||
Purchases of property and equipment and intangible assets |
(43,025,999 | ) | (5,360,566 | ) | (18,922,066 | ) | (2,969,285 | ) | ||||||||
Payment for acquiring subsidiary, net of cash acquired |
— | — | 1,705,083 | 267,565 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash (used in) provided by investing activities |
(1,198,405,622 |
) |
(493,563,047 |
) |
2,661,222,986 |
417,603,959 |
||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Cash flows from financing activities: |
||||||||||||||||
Payment to repurchase treasury shares |
(20,638,881 | ) | (49,219,318 | ) | (444,401,172 | ) | (69,736,241 | ) | ||||||||
Liquidation of subsidiaries |
(574,212 | ) | (467,433 | ) | — | — | ||||||||||
Proceeds from borrowings |
2,695,357,550 | 3,369,740,855 | 1,546,736,325 | 242,716,682 | ||||||||||||
Proceeds from exercise of share options |
— | 6,693,716 | 8,236,613 | 1,292,504 | ||||||||||||
Purchase of subsidiary’s equity from non-controlling interest holder |
— | (24,144,000 | ) | — | — | |||||||||||
Repayment of borrowings |
(1,686,482,435 | ) | (3,416,211,500 | ) | (2,101,568,517 | ) | (329,781,960 | ) | ||||||||
Distribution to shareholders |
(257,114,132 | ) | (267,214,749 | ) | (955,437,557 | ) | (149,929,002 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) financing activities |
730,547,890 |
(380,822,429 |
) |
(1,946,434,308 |
) |
(305,438,017 |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
11,516,258 | (36,093,321 | ) | (15,008,806 | ) | (2,355,209 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash |
(33,446,239 |
) |
(1,532,090,999 |
) |
295,389,041 |
46,352,987 |
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at beginning of the year |
3,880,428,962 | 3,846,982,723 | 2,314,891,724 | 363,257,026 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at the end of the year |
3,846,982,723 |
2,314,891,724 |
2,610,280,765 |
409,610,013 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets |
||||||||||||||||
Cash and cash equivalents |
2,002,314,688 | 1,426,899,576 | 1,434,806,922 | 225,152,516 | ||||||||||||
Restricted cash – current |
970,993,759 | 9,693,008 | 61,293,114 | 9,618,227 | ||||||||||||
Restricted cash – non-current |
873,674,276 | 878,299,140 | 1,114,180,729 | 174,839,270 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows |
3,846,982,723 |
2,314,891,724 |
2,610,280,765 |
409,610,013 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Supplemental disclosures of cash flow information: |
||||||||||||||||
Cash paid for income taxes |
78,203,607 | 101,878,045 | 209,044,264 | 32,803,607 | ||||||||||||
Cash paid for interest |
154,589,750 | 139,952,105 | 134,173,921 | 21,054,816 |
1. |
ORGANIZATION |
Entity |
Date of incorporation | Place of incorporation | Percentage of legal ownership by the Company |
Principal activities | ||||||||||
Subsidiaries |
||||||||||||||
Cango Group Limited (“Cango HK”) |
October 31, 2017 | Hong Kong (“HK”) | 100 | % | Investment holding | |||||||||
Express Group Development Limited (“Express Limited”) |
June 30, 2016 | K | 100 | % | Investment holding | |||||||||
Can Gu Long (Shanghai) Information Technology Consultation Service Co., Ltd. (“Cangulong” or Wholly Foreign Owned Enterprise “WFOE”) |
January 25, 2018 | C | 100 | % | Investment holding | |||||||||
VIE |
||||||||||||||
Shanghai Cango Investment and Management Consultation Service Co., Ltd. (“Shanghai Cango”) |
August 30, 2010 | C | Nil | Provision of automotive financing facilitation, automobile trading transaction and aftermarket service facilitation. |
1. |
ORGANIZATION - CONTINUED |
(1) | Power of Attorney Agreements: |
(2) | Exclusive Option Agreement: |
(3) | Exclusive Business Cooperation Agreement: |
1. |
ORGANIZATION - CONTINUED |
(4) | Equity Pledge Agreement |
1) | Financial support undertaking letter |
2) | Resolutions of the sole director of Cango Inc. (the “Resolutions”) |
1. |
ORGANIZATION - CONTINUED |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Cash and cash equivalents |
1,003,740,459 | 531,317,393 | 83,375,293 | |||||||||
Other current assets |
3,194,408,176 | 3,899,508,069 | 611,917,909 | |||||||||
|
|
|
|
|
|
|||||||
Total current assets |
4,198,148,635 |
4,430,825,462 |
695,293,202 |
|||||||||
|
|
|
|
|
|
|||||||
Finance lease receivables—non-current |
1,454,499,864 | 1,029,262,174 | 161,513,695 | |||||||||
Other non-current assets |
1,754,832,407 | 2,272,293,047 | 356,572,364 | |||||||||
|
|
|
|
|
|
|||||||
Total non-current assets |
3,209,332,271 |
3,301,555,221 |
518,086,059 |
|||||||||
|
|
|
|
|
|
|||||||
Total assets |
7,407,480,906 |
7,732,380,683 |
1,213,379,261 |
|||||||||
|
|
|
|
|
|
|||||||
Short-term debts |
355,816,940 | 579,776,131 | 90,979,527 | |||||||||
Other current liabilities |
2,088,849,541 | 2,561,535,815 | 401,960,866 | |||||||||
|
|
|
|
|
|
|||||||
Total current liabilities |
2,444,666,481 |
3,141,311,946 |
492,940,393 |
|||||||||
|
|
|
|
|
|
|||||||
Long-term debts |
977,791,191 | 486,371,672 | 76,322,329 | |||||||||
Other non-current liabilities |
17,394,154 | 11,715,736 | 1,838,455 | |||||||||
|
|
|
|
|
|
|||||||
Total non-current liabilities |
995,185,345 |
498,087,408 |
78,160,784 |
|||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
3,439,851,826 |
3,639,399,354 |
571,101,177 |
|||||||||
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Revenues |
1,440,068,825 | 2,052,431,752 | 3,921,688,104 | 615,398,441 | ||||||||||||
Net income |
353,558,726 | 399,366,632 | 37,717,411 | 5,918,685 |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Net cash provided by (used in) operating activities |
405,810,921 | (626,884,394 | ) | (374,886,851 | ) | (58,827,928 | ) | |||||||||
Net cash (used in) provided by investing activities |
(782,481,722 | ) | (81,038,760 | ) | 744,832,757 | 116,880,513 | ||||||||||
Net cash provided by (used in) financing activities |
1,004,220,135 | (71,082,260 | ) | (554,832,190 | ) | (87,065,278 | ) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
— | — | (55,087 | ) | (8,644 | ) |
1. |
ORGANIZATION - CONTINUED |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Finance lease receivables – current |
605,746,128 | — | — | |||||||||
Other current assets |
224,309 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total current assets |
605,970,437 |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
Finance lease receivable – non-current |
101,206,823 | — | — | |||||||||
Total non-current assets |
101,206,823 |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
Total assets |
707,177,260 |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
Long-term debts—current |
401,761,874 | — | — | |||||||||
Other current liabilities |
59,187 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total current liabilities |
401,821,061 |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
Long-term borrowings |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total non-current liabilities |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
401,821,061 |
— |
— |
|||||||||
|
|
|
|
|
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
• | Identify the contract(s) with a customer; |
• | Identify the performance obligations in the contract; |
• | Determine the transaction price; |
• | Allocate the transaction price to the performance obligations in the contract; and |
• | Recognize revenue when (or as) the entity satisfies a performance obligation. |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
Category |
Estimated Useful Life | Estimated Residual Value | ||
Office and electronic equipment |
3-5 years |
5% | ||
Motor vehicles |
4 years | 5% | ||
Leasehold improvements |
of the expected life of | |||
leasehold improvements or the lease term | Nil |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED |
1) | Information about the nature of the transactions and the related accounting policy used to account for the transactions |
2) | The line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item |
3) | Significant terms and conditions of the transactions, including commitments and contingencies |
3. |
SHORT-TERM INVESTMENTS |
As of December 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
Debt securities: |
||||||||||||
Held-to-maturity |
584,229,003 | 1,803,362,875 | 282,986,987 |
|||||||||
Equity securities: |
||||||||||||
Marketable wealth management products |
71,584,410 |
330,857,592 |
51,918,777 |
|||||||||
Marketable investment in Li Auto |
3,686,543,199 |
464,715,237 |
72,923,961 |
|||||||||
Total short-term investments |
4,342,356,612 |
2,598,935,704 |
407,829,725 |
|||||||||
4. |
ACCOUNTS RECEIVABLE, NET |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Accounts receivable |
141,594,170 | 223,544,396 | 35,078,994 | |||||||||
Less: Allowance for doubtful accounts |
— | — | — | |||||||||
Accounts receivable, net |
141,594,170 | 223,544,396 | 35,078,994 | |||||||||
5. |
GOODWILL |
As of December 31, |
||||||||
RMB |
US$ |
|||||||
Balance at December 31, 2019 |
145,063,857 | 20,837,119 | ||||||
Balance at December 31, 2020 |
145,063,857 | 22,232,009 | ||||||
Goodwill acquired |
3,594,114 | 563,995 | ||||||
Balance at December 31, 2021 |
148,657,971 | 23,327,680 | ||||||
6. |
FINANCE LEASE RECEIVABLES, NET |
6.1 | Finance lease receivables consists of the following: |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Finance lease receivables |
3,848,670,074 | 2,716,511,586 | 426,279,946 | |||||||||
Add: |
390,796 | 388,585 | 60,977 | |||||||||
Less: |
(335,437,061 | ) | (241,256,613 | ) | (37,858,426 | ) | ||||||
Less: |
(23,726,420 | ) | (32,216,759 | ) | (5,055,513 | ) | ||||||
Total finance lease receivables, net |
3,489,897,389 |
2,443,426,799 |
383,426,984 |
|||||||||
Finance lease receivables—current |
2,035,397,525 | 1,414,164,625 | 221,913,289 | |||||||||
Finance lease receivables—non-current |
1,454,499,864 | 1,029,262,174 | 161,513,695 |
6.2 | The following table presents the future minimum lease payments to be received: |
2022 | 2023 | 2024 | 2025 | 2026 | Total | |||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||
Finance lease receivables |
1,519,798,191 | 896,477,696 | 249,411,737 | 33,033,582 | 17,790,380 | 2,716,511,586 | ||||||||||||||||||
US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||
Finance lease receivables |
238,489,500 | 140,676,913 | 39,138,144 | 5,183,690 | 2,791,699 | 426,279,946 |
6.3 | The following table presents the aging of finance lease receivables principal as of December 31, 2020 and 2021: |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Aging of finance lease receivables principal: |
||||||||||||
Current |
3,423,777,666 | 2,366,189,534 | 371,306,770 | |||||||||
1-30 days past due |
68,919,540 | 90,969,086 | 14,275,035 | |||||||||
31-60 days past due |
7,515,295 | 6,290,856 | 987,173 | |||||||||
61-90 days past due |
5,260,689 | 3,656,847 | 573,839 | |||||||||
91-120 days past due |
3,678,200 | 3,868,995 | 607,130 | |||||||||
121-150 days past due |
2,570,865 | 2,201,790 | 345,509 | |||||||||
151-180 days past due |
1,901,554 | 2,466,450 | 387,041 | |||||||||
3,513,623,809 | 2,475,643,558 | 388,482,497 | ||||||||||
6.4 | Movement of allowance for finance lease receivables is as follows: |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Balance at the beginning of the year |
19,088,837 | 23,726,420 | 3,723,193 | |||||||||
Additions |
36,282,049 | 25,839,117 | 4,054,721 | |||||||||
Charge-offs |
(31,644,466 | ) | (17,348,778 | ) | (2,722,401 | ) | ||||||
|
|
|
|
|
|
|||||||
Balance at the end of the year |
23,726,420 |
32,216,759 |
5,055,513 |
|||||||||
|
|
|
|
|
|
7. |
PREPAYMENTS AND OTHER CURRENT ASSETS |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Prepayments for vehicles |
403,116,119 | 712,544,814 | 111,813,830 | |||||||||
Vehicles and telematics devices |
54,725,824 | 131,722,840 | 20,670,188 | |||||||||
Deposits held by third-parties |
18,171,682 | 48,176,225 | 7,559,901 | |||||||||
Other receivables from third parties |
10,461,282 | 33,092,696 | 5,192,966 | |||||||||
Accrued input value-added tax |
26,623,275 | 22,922,301 | 3,597,009 | |||||||||
Prepaid expenses |
14,331,513 | 9,977,021 | 1,565,612 | |||||||||
Interest receivables |
4,889,508 | 5,655,031 | 887,398 | |||||||||
Loan to suppliers |
1,573,800 | — | — | |||||||||
Others |
24,467,956 | 18,857,709 | 2,959,187 | |||||||||
|
|
|
|
|
|
|||||||
558,360,959 |
982,948,637 |
154,246,091 |
||||||||||
|
|
|
|
|
|
8. |
INTANGIBLE ASSETS |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Finite-lived intangible asset: |
||||||||||||
Software |
4,164,764 | 5,796,893 | 909,659 | |||||||||
Less: Accumulated amortization |
(2,368,396 | ) | (2,956,852 | ) | (463,995 | ) | ||||||
|
|
|
|
|
|
|||||||
Total finite-lived intangible asset |
1,796,368 | 2,840,041 | 445,664 | |||||||||
|
|
|
|
|
|
|||||||
Indefinite-lived intangible asset: |
||||||||||||
License* |
43,091,503 | 43,091,503 | 6,761,998 | |||||||||
|
|
|
|
|
|
|||||||
Total infinite-lived intangible asset |
43,091,503 | 43,091,503 | 6,761,998 | |||||||||
|
|
|
|
|
|
|||||||
44,887,871 | 45,931,544 | 7,207,662 | ||||||||||
|
|
|
|
|
|
As of December 31, | ||||||||||||||||||||
2022 | 2023 | 2024 | 2025 | 2026 | ||||||||||||||||
RMB | RMB | RMB | RMB | RMB | ||||||||||||||||
Software |
638,471 | 335,489 | 329,697 | 328,671 | 270,141 | |||||||||||||||
US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
Software |
100,190 | 52,646 | 51,737 | 51,576 | 42,391 |
* | The Company acquired Fushun Insurance Brokerage Co., Ltd in 2019. The acquisition met the “substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets” criteria and is not considered a business combination in accordance with ASC Topic 805. |
9. |
SHORT-TERM AND LONG-TERM DEBTS |
Name |
Fixed annual rate (%) | Term | As of December 31, 2020 | |||||||||||||
RMB | ||||||||||||||||
Short-term borrowings |
3.40%-6.80% |
-12 months |
355,816,940 |
Name |
Fixed annual rate (%) | Term | As of December 31, 2021 | |||||||||||||
RMB | US$ | |||||||||||||||
Short-term borrowings |
3.75%-6.5% |
-12 months |
579,776,131 | 90,979,527 |
Name |
Fixed annual rate (%) | Term | As of December 31, 2020 | |||||||||||||
RMB | ||||||||||||||||
Securitization debt payables (i) |
4.73%-6.00% |
18-20 months |
401,761,874 | |||||||||||||
Co-financing debt payables (ii) |
5.50%-6.60% |
24- 36 months |
1,697,757,491 | |||||||||||||
Long-term borrowings |
4.75%-6.00% |
36 months | 107,055,556 | |||||||||||||
2,206,574,921 |
||||||||||||||||
Name |
Fixed annual rate (%) | Term | As of December 31, 2021 | |||||||||||||
RMB | US$ | |||||||||||||||
Co-financing debt payables (ii) |
5.50%-6.60% |
24-36 months |
954,444,171 | 149,773,118 | ||||||||||||
Long-term borrowings |
4.45%-6.00% |
15- 36 months |
469,941,863 | 73,744,133 | ||||||||||||
1,424,386,034 |
223,517,251 |
|||||||||||||||
(i) | In the ordinary course of business, the Company transfers finance leases to certain Funding Partners. The Company periodically securitizes its finance lease receivables through the transfer of those assets to a securitization vehicle. The securitization vehicle then issues debt securities to third-party investors and the company held all subordinated tranches. However, in accordance with ASC 860 Transfers and Servicing the finance leases |
(ii) | The Company provides consumer loans to borrowers through commercial banks. The Company is required to make scheduled payments to the commercial banks regardless of borrower repayments. |
Payment due by period | ||||||||||||||||
Less than 1 year | 1 - 2 years | 2 -3 years |
Total | |||||||||||||
As of December 31, 2020 (RMB) |
||||||||||||||||
Long-term debts – non-current |
62,363,881 | 663,503,529 | 368,390,299 | 1,094,257,709 | ||||||||||||
As of December 31, 2021 (RMB) |
||||||||||||||||
Long-term debts – non-current |
29,956,101 | 490,167,979 | 24,730,673 | 544,854,753 | ||||||||||||
As of December 31, 2021 (US$) |
||||||||||||||||
Long-term debts – non-current |
4,700,766 | 76,918,052 | 3,880,782 | 85,499,600 |
10. |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
As of December 31, |
||||||||||||||||
2020 |
2021 |
|||||||||||||||
Notes |
RMB |
RMB |
US$ |
|||||||||||||
Short-term contract liability |
113,860,926 | 325,857,410 | 51,134,138 | |||||||||||||
Notes Payable |
i | — | 123,803,438 | 19,427,461 | ||||||||||||
Customer advances |
ii | 23,032,980 | 77,811,758 | 12,210,363 | ||||||||||||
Payable to dealers |
37,610,651 | 50,680,407 | 7,952,862 | |||||||||||||
Payable to employees |
66,058,774 | 34,285,667 | 5,380,169 | |||||||||||||
Deposit due to third-parties |
19,105,683 | 18,891,289 | 2,964,455 | |||||||||||||
Other tax payables |
26,851,725 | 16,494,783 | 2,588,391 | |||||||||||||
Accrued professional service fees |
4,630,000 | 8,697,657 | 1,364,852 | |||||||||||||
Derivative financial liability |
— | 5,346,389 | 838,965 | |||||||||||||
Payable to suppliers |
5,090,553 | 4,003,912 | 628,301 | |||||||||||||
Interest payable |
1,237,131 | 2,667,405 | 418,574 | |||||||||||||
Others |
27,255,779 | 50,495,262 | 7,923,811 | |||||||||||||
324,734,202 | 719,035,377 | 112,832,342 | ||||||||||||||
(i) | In the ordinary course of business, the Company uses non-interest bearing bank acceptance drafts to settle payment with the automobile suppliers. The balance of restricted cash deposited as collateral for such notes payable was RMB nil and RMB51,793,630 (US$8,127,551) as of December 31, 2020 and 2021, respectively . The aggregate amoun ts of unused lines of cred it fo r notes payable was RMB38 million and RM B921 millio n (US$ 145 million) as of December 31, 2020 and 2021, respectively. |
(ii) |
Customer advances relate to automobile customer’s deposit balances that are paid before a purchase contract is executed . |
11. |
RISK ASSURANCE LIABILITIES |
As of December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Balance at the beginning of the year |
259,952,473 | 460,829,299 | 72,314,173 | |||||||||
Fair value of risk assurance liabilities upon the inception of new loans |
348,921,174 | 443,831,604 | 69,646,863 | |||||||||
Performed risk assurance liabilities |
(150,312,528 | ) | (403,388,438 | ) | (63,300,448 | ) | ||||||
Net loss on risk assurance liabilities |
2,268,180 | 197,750,449 | 31,031,361 | |||||||||
Balance at the end of the year |
460,829,299 | 699,022,914 | 109,691,949 | |||||||||
12. |
COST OF REVENUE |
For the years ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Cost of vehicle |
11,176,116 | 619,227,148 | 2,210,715,054 | 346,909,433 | ||||||||||||
Commission to car dealerships |
158,100,562 | 117,985,878 | 375,702,902 | 58,955,984 | ||||||||||||
Leasing interest expense |
116,965,519 | 132,322,922 | 119,692,726 | 18,782,401 | ||||||||||||
Staff cost |
72,999,170 | 73,975,397 | 105,771,335 | 16,597,831 | ||||||||||||
Staff incentive |
98,173,090 | 84,046,881 | 61,894,967 | 9,712,671 | ||||||||||||
Others |
81,852,960 | 70,562,523 | 84,232,888 | 13,217,977 | ||||||||||||
539,267,417 | 1,098,120,749 | 2,958,009,872 | 464,176,297 | |||||||||||||
13. |
NET GAIN (LOSS) ON EQUITY SECURITIES, NET |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Unrealized gain on equity securities still held at the reporting date |
41,581,818 | 3,315,475,734 | 45,804,034 | 7,187,652 | ||||||||||||
Net gain ( loss) on equity securities sold during the period |
44,430,100 | 37,905,479 | (58,795,556 | ) | (9,226,306 | ) | ||||||||||
86,011,918 | 3,353,381,213 | (12,991,522 | ) | (2,038,654 | ) | |||||||||||
14. |
OTHER INCOME, NET |
For the years ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Government subsidy |
36,769,550 | 35,888,591 | 35,384,908 | 5,552,664 | ||||||||||||
Others |
4,530,914 | 13,250,746 | 6,526,681 | 1,024,179 | ||||||||||||
41,300,464 | 49,139,337 | 41,911,589 | 6,576,843 | |||||||||||||
15. |
INCOME TAXES |
For the years ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Cayman Islands |
(5,359,465 | ) | 3,309,525,351 | (37,599,025 | ) | (5,900,107 | ) | |||||||||
Hong Kong |
18,479,616 | (14,414,430 | ) | (14,883,394 | ) | (2,335,529 | ) | |||||||||
China |
474,699,082 | 448,162,790 | 64,790,713 | 10,167,077 | ||||||||||||
Total profit before income taxes |
487,819,233 |
3,743,273,711 |
12,308,294 |
1,931,441 |
||||||||||||
15. |
INCOME TAXES - CONTINUED |
For the years ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Current income tax expense |
91,994,704 | 121,701,686 | 603,765,914 | 94,744,047 | ||||||||||||
Deferred income tax (benefit) expense |
(9,034,211 | ) | 248,151,964 | (582,913,268 | ) | (91,471,812 | ) | |||||||||
Total income tax expense |
82,960,493 | 369,853,650 | 20,852,646 | 3,272,235 | ||||||||||||
For the years ended December 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
Non-current deferred tax assets |
||||||||||||
Risk assurance liabilities |
223,500,138 | 276,221,432 | 43,345,170 | |||||||||
Provision for credit losses |
55,584,637 | 194,973,439 | 30,595,587 | |||||||||
Contract assets |
— | 7,495,619 | 1,176,226 | |||||||||
Customer advances |
5,687,968 | 5,552,404 | 871,293 | |||||||||
Donation |
125,000 | — | — | |||||||||
Fair value change on derivative instruments |
— | 1,336,597 | 209,741 | |||||||||
Net operating loss carry-forward |
65,558,135 | 16,959,870 | 2,661,374 | |||||||||
Less: valuation allowance |
(7,148,961 | ) | (16,959,870 | ) | (2,661,374 | ) | ||||||
Non-current deferred tax assets, net |
343,306,917 | 485,579,491 | 76,198,017 | |||||||||
Non-current deferred tax liabilities |
||||||||||||
Acquisition of insurance brokerage license |
(10,724,126 | ) | (10,724,126 | ) | (1,682,849 | ) | ||||||
Unrealized gain on long-term investment |
(11,009,130 | ) | (11,009,130 | ) | (1,727,573 | ) | ||||||
Contract assets |
(162,308,288 | ) | — | — | ||||||||
Withholding tax |
(319,079,320 | ) | (40,746,914 | ) | (6,394,080 | ) | ||||||
Non-current deferred tax liabilities |
(503,120,864 | ) | (62,480,170 | ) | (9,804,502 | ) | ||||||
15. |
INCOME TAXES - CONTINUED |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Income before provision of income tax |
487,819,233 | 3,743,273,711 | 12,308,294 | 1,931,441 | ||||||||||||
PRC statutory income tax rate |
25 | % | 25 | % | 25 | % | 25 | % | ||||||||
Income tax at statutory tax rate |
121,954,808 | 935,818,428 | 3,077,074 | 482,860 | ||||||||||||
Tax rate differential |
(36,157,163 | ) | (852,831,321 | ) | 5,070,813 | 795,721 | ||||||||||
Over-accrued EIT for previous years |
(39,664,283 | ) | — | — | — | |||||||||||
Impact of tax rate change |
36,367,754 | (35,511,678 | ) | — | — | |||||||||||
Utilization of net operating loss carry-forward |
(9,708,887 | ) | — | — | — | |||||||||||
Non-deductible expenses |
22,277,780 | 19,219,052 | 19,443,641 | 3,051,132 | ||||||||||||
Research and development super-deduction |
(9,961,515 | ) | (10,970,775 | ) | (10,177,551 | ) | (1,597,080 | ) | ||||||||
Non-taxable income |
(3,587,542 | ) | (982,266 | ) | — | — | ||||||||||
Change in valuation allowance |
1,439,541 | (2,412,144 | ) | 9,894,006 | 1,552,585 | |||||||||||
Withholding tax |
— | 317,524,354 | (6,455,337 | ) | (1,012,983 | ) | ||||||||||
Income tax expenses |
82,960,493 | 369,853,650 | 20,852,646 | 3,272,235 | ||||||||||||
16. |
EARNINGS PER SHARE (“EPS”) |
For the years ended December 31, | ||||||||||||||||||||||||||||||||
Basic EPS: |
2019 | 2020 | 2021 | |||||||||||||||||||||||||||||
Class A Ordinary | Class B Ordinary | Class A | Class B | |||||||||||||||||||||||||||||
Shares | Shares | Ordinary Shares | Ordinary Shares | Class A Ordinary Shares | Class B Ordinary Shares | |||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||||||
Numerator: |
||||||||||||||||||||||||||||||||
Net income (loss) attributable to Cango Inc’s shareholders |
289,646,757 | 101,267,135 | 2,513,009,017 | 856,508,830 | (6,374,737 | ) | (1,000,334 | ) | (2,169,615 | ) | (340,460 | ) | ||||||||||||||||||||
Denominator: |
||||||||||||||||||||||||||||||||
Number of shares used for Basic EPS computation (millions of shares) |
224.07 | 78.34 | 224.10 | 76.38 | 216.28 | 216.28 | 73.61 | 73.61 | ||||||||||||||||||||||||
Basic EPS |
1.29 | 1.29 | 11.21 | 11.21 | (0.03 | ) | (0.00 | ) | (0.03 | ) | (0.00 | ) | ||||||||||||||||||||
16. |
EARNINGS PER SHARE (“EPS”) - CONTINUED |
For the years ended December 31, | ||||||||||||||||||||||||||||||||
Diluted EPS: |
2019 | 2020 | 2021 | |||||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||||||||||||||||||
Ordinary Shares | Ordinary Shares | Ordinary Shares | Ordinary Shares | Class A Ordinary Shares | Class B Ordinary Shares | |||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||||||
Numerator: |
||||||||||||||||||||||||||||||||
Net income (loss) attributable to ordinary shareholders |
289,937,256 | 100,976,636 | 2,522,647,912 | 846,869,935 | (6,374,737 | ) | (1,000,334 | ) | (2,169,615 | ) | (340,460 | ) | ||||||||||||||||||||
Reallocation of net income as a result of conversion of Class B to Class A shares |
100,976,636 | — | 846,869,935 | — | (2,169,615 | ) | (340,460 | ) | — | — | ||||||||||||||||||||||
Net income (loss) attributable to ordinary shareholders for diluted EPS |
390,913,892 | 100,976,636 | 3,369,517,847 | 846,869,935 | (8,544,352 | ) | (1,340,794 | ) | (2,169,615 | ) | (340,460 | ) | ||||||||||||||||||||
Denominator: (millions of shares) |
||||||||||||||||||||||||||||||||
Number of shares used for basic EPS computation |
224.07 | 78.34 | 224.10 | 76.38 | 216.28 | 216.28 | 73.61 | 73.61 | ||||||||||||||||||||||||
Weighted average effect of dilutive securities: |
||||||||||||||||||||||||||||||||
Conversion of Class B to Class A ordinary shares |
78.34 | — | 76.38 | — | 73.61 | 73.61 | — | — | ||||||||||||||||||||||||
Adjustments for dilutive share options |
0.87 | — | 3.42 | — | — | — | — | — | ||||||||||||||||||||||||
Number of shares used for diluted EPS computation |
303.28 | 78.34 | 303.90 | 76.38 | 289.89 | 289.89 | 73.61 | 73.61 | ||||||||||||||||||||||||
Diluted EPS |
1.29 | 1.29 | 11.09 | 11.09 | (0.03 | ) | (0.00 | ) | (0.03 | ) | (0.00 | ) | ||||||||||||||||||||
Earnings per share – ADS: |
||||||||||||||||||||||||||||||||
Denominator used for earnings per ADS – basic |
112.04 | 112.05 | 108.14 | 108.14 | ||||||||||||||||||||||||||||
Denominator used for earnings per ADS – diluted |
151.64 | 151.95 | 144.95 | 144.95 | ||||||||||||||||||||||||||||
Earnings per ADS – basic |
2.59 |
22.43 |
(0.06 |
) |
(0.01 |
) |
||||||||||||||||||||||||||
Earnings per ADS – diluted |
2.58 |
22.18 |
(0.06 |
) |
(0.01 |
) |
17. |
FAIR VALUE MEASUREMENTS |
Level 1 | – | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||
Level 2 | – | Include observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. | ||
Level 3 | – | Unobservable inputs which are supported by little or no market activity. |
As of December 31, 2020 | ||||||||||||||||
Active market | Observable input | Non-observable input |
||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Asset: |
||||||||||||||||
Short-term investment |
3,686,543,199 | 655,813,413 | — | 4,342,356,612 |
17. |
FAIR VALUE MEASUREMENTS – CONTINUED |
As of December 31, 2021 | ||||||||||||||||
Active market | Observable input | Non-observable input |
||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Asset: |
||||||||||||||||
Short-term investment |
464,715,237 | 2,134,220,467 | — | 2,598,935,704 | ||||||||||||
Liability: |
||||||||||||||||
Derivative financial liability |
— | 5,346,389 | — | 5,346,389 |
As of December 31, 2021 | ||||||||||||||||
Active market | Observable input | Non-observable input |
||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Assets: |
||||||||||||||||
Short-term investment |
72,923,961 | 334,905,764 | — | 407,829,725 | ||||||||||||
Liability: |
||||||||||||||||
Derivative financial liability |
— | 838,965 | — | 838,965 |
18. |
SHARE-BASED COMPENSATION |
As of May 25, 2018, | As of February 15, 2019, | As of October 15, 2020, | As of May 1, 2021, | |||||||||||||
(date of inception) | (date of inception) | (date of inception) | (date of inception) | |||||||||||||
Batch 1 | Batch 2 | Batch 3 | Batch 4 | |||||||||||||
Risk-free interest rate (%) |
2.93 | 2.66 | 0.74 | 0.74 | ||||||||||||
Volatility (%) |
38.70 | 38.70 | 37.60 | 38.00 | ||||||||||||
Expected exercise multiple |
2.80 | 2.30 | 2.30 | 2.30 | ||||||||||||
Dividend yield |
Nil | Nil | Nil | Nil | ||||||||||||
Expected life (in years) |
10.00 | 10.00 | 10.00 | 10.00 | ||||||||||||
Exercise price (US$) |
1.7951 | 1.7951 | 1.7951 | 1.2951 | ||||||||||||
Fair value of ordinary shares (RMB) |
37.82 | 26.80 | 19.03 | 21.72 |
18. |
SHARE-BASED COMPENSATION - CONTINUED |
Weighted | ||||||||||||||||
Number of | average exercise | Weighted average | Aggregate Intrinsic | |||||||||||||
options | price | Grant date fair value | Value | |||||||||||||
RMB | RMB | RMB | ||||||||||||||
Balance, May 25, 2018 (date of inception) |
— |
— |
— |
— |
||||||||||||
Granted |
5,569,105 | 12 | 38 | |||||||||||||
Balance, December 31, 2018 |
5,569,105 |
12 |
38 |
83,277,751 |
||||||||||||
Granted |
5,569,105 | 12 | 27 | |||||||||||||
Exercised |
— | — | — | |||||||||||||
Forfeited |
(311,213 | ) | — | 34 | ||||||||||||
Balance, December 31, 2019 |
10,826,997 |
12 |
32 |
209,536,040 |
||||||||||||
Granted |
8,353,658 | 12 | 19 | |||||||||||||
Exercised |
(600,014 | ) | 12 | 38 | ||||||||||||
Forfeited |
(69,914 | ) | 12 | 24 | ||||||||||||
Balance, December 31, 2020 |
18,510,727 |
12 |
26 |
205,922,073 |
||||||||||||
Granted |
8,454,422 | 8 | 22 | |||||||||||||
Exercised |
(737,228 | ) | 11 | 30 | ||||||||||||
Forfeited |
(281,151 | ) | 9 | 22 | ||||||||||||
Balance, December 31, 2021 |
25,946,770 |
8 |
25 |
45,454,271 |
||||||||||||
Vested or expected to vest at December 31, 2021 |
24,030,153 |
8 |
26 |
|||||||||||||
Exercisable at December 31, 2021 |
4,816,748 |
8 |
33 |
|||||||||||||
For the year s |
||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Cost of revenue |
3,372,908 | 3,075,317 | 4,927,484 | 773,230 | ||||||||||||
Sales and marketing |
17,522,654 | 16,003,486 | 15,311,101 | 2,402,646 | ||||||||||||
General and administrative |
57,092,589 | 55,590,630 | 63,035,444 | 9,891,637 | ||||||||||||
Research and development |
4,277,840 | 4,085,395 | 4,360,806 | 684,306 | ||||||||||||
82,265,991 | 78,754,828 | 87,634,835 | 13,751,819 | |||||||||||||
19. |
COMMITMENTS AND CONTINGENCIES |
RMB | US$ | |||||||
Year ending December 31: |
||||||||
2022 |
15,710,485 | 2,465,318 | ||||||
2023 |
14,124,342 | 2,216,417 | ||||||
2024 |
13,873,588 | 2,177,069 | ||||||
2025 |
13,459,582 | 2,112,102 | ||||||
2026 |
13,459,582 | 2,112,102 | ||||||
2027 and after |
48,629,836 | 7,631,082 | ||||||
Total |
119,257,415 | 18,714,090 | ||||||
20. |
ORDINARY SHARES |
21. |
TREASURY SHARES |
22. |
RESTRICTED NET ASSETS |
23. |
SUBSEQUENT EVENTS |
24. |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY |
As of December 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
ASSETS |
||||||||||||
Current assets |
||||||||||||
Cash and cash equivalents |
114,892,815 | 857,888,496 | 134,621,425 | |||||||||
Short-term investments |
4,045,157,224 | 1,679,107,862 | 263,488,664 | |||||||||
Short-term amounts due from related parties |
619,608,050 | 738,960,885 | 115,959,088 | |||||||||
Other current assets |
3,578,607 | 1,964,886 | 308,333 | |||||||||
Total Current assets |
4,783,236,696 |
3,277,922,129 |
514,377,510 |
|||||||||
Non-current assets |
||||||||||||
Investments in subsidiaries, VIE and VIE’s subsidiaries |
3,596,657,570 | 3,717,140,362 | 583,300,439 | |||||||||
Total non-current assets |
3,596,657,570 | 3,717,140,362 | 583,300,439 | |||||||||
Total assets |
8,379,894,266 |
6,995,062,491 |
1,097,677,949 |
|||||||||
LIABILITIES |
||||||||||||
Current liabilities |
||||||||||||
Other current liabilities |
4,685,129 | 4,495,670 | 705,469 | |||||||||
Total current liabilities |
4,685,129 |
4,495,670 |
705,469 |
|||||||||
Total liabilities |
4,685,129 |
4,495,670 |
705,469 |
|||||||||
Shareholders’ equity |
||||||||||||
Class A Ordinary shares (par value of US$0.0001 per share; 420,674,280 shares authorized as of December 31, 2020 and 2021, respectively; 227,831,213 shares issued and 224,771,083 shares outstanding as of December 31, 2020; 229,831,213 shares issued and 206,506,455 shares outstanding as of December 31, 2021) |
154,483 | 154,483 | 24,242 | |||||||||
Class B Ordinary shares (par value of US$0.0001 per share; 79,325,720 shares authorized as of December 31, 2020 and 2021, respectively; 74,978,677 shares issued and outstanding as of December 31, 2020; 72,978,677 shares issued and outstanding as of December 31, 2021) |
49,777 | 49,777 | 7,811 | |||||||||
Treasury shares |
(56,419,225 | ) | (485,263,213 | ) | (76,148,387 | ) | ||||||
Additional paid-in capital |
4,591,455,557 | 4,671,769,821 | 733,102,630 | |||||||||
Accumulated other comprehensive loss |
(115,386,427 | ) | (187,517,110 | ) | (29,425,526 | ) | ||||||
Retained earnings |
3,955,354,972 | 2,991,373,063 | 469,411,710 | |||||||||
Total shareholders’ equity |
8,375,209,137 |
6,990,566,821 |
1,096,972,480 |
|||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
8,379,894,266 |
6,995,062,491 |
1,097,677,949 |
|||||||||
24. |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - CONTINUED |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
General and administrative |
(10,164,242 |
) |
(11,854,536 |
) |
(10,079,685 |
) |
(1,581,723 |
) | ||||||||
Interest Income |
4,831,112 |
1,889,711 |
4,440,117 |
696,751 |
||||||||||||
Foreign exchange loss |
(26,334 |
) |
(706,543 |
) |
(390,858 |
) |
(61,334 |
) | ||||||||
Net gain (loss) on equity securities |
— |
3,315,475,734 |
(27,278,116 |
) |
(4,280,532 |
) | ||||||||||
Income from equity method investments |
396,273,356 |
59,992,497 |
29,054,673 |
4,559,312 |
||||||||||||
Other income |
— |
4,725,168 |
1,928,027 |
302,550 |
||||||||||||
Other expense |
— |
(4,184 |
) |
(6,218,510 |
) |
(975,818 |
) | |||||||||
Net income (loss) before income taxes |
390,913,892 |
3,369,517,847 |
(8,544,352 |
) |
(1,340,794 |
) | ||||||||||
Income tax expense |
— |
— |
— |
— |
||||||||||||
Net income (loss) |
390,913,892 |
3,369,517,847 |
(8,544,352 |
) |
(1,340,794 |
) | ||||||||||
Other comprehensive income (loss), net of tax |
9,977,742 |
(234,817,165 |
) |
(72,130,683 |
) |
(11,318,878 |
) | |||||||||
Total comprehensive income (loss), net of tax |
400,891,634 |
3,134,700,682 |
(80,675,035 |
) |
(12,659,672 |
) | ||||||||||
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Net income (loss) |
390,913,892 |
3,369,517,847 |
(8,544,352 |
) |
(1,340,794 |
) | ||||||||||
Net gain (loss) on equity securities |
— |
(3,315,475,734 |
) |
27,278,116 |
4,280,532 |
|||||||||||
Share of profit in subsidiaries, VIE and VIE’s subsidiaries |
(396,273,356 |
) |
(59,992,497 |
) |
(29,054,673 |
) |
(4,559,312 |
) | ||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Net cash used in operating activities |
(2,989,082 |
) |
(13,000,544 |
) |
(10,185,710 |
) |
(1,598,361 |
) | ||||||||
Net cash (used in) provided by investing activities |
(604,084,150 |
) |
456,658,680 |
2,150,227,042 |
337,417,544 |
|||||||||||
Net cash used in financing activities |
(274,666,096 |
) |
(310,709,163 |
) |
(1,391,602,116 |
) |
(218,372,739 |
) | ||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
12,397,093 |
(19,238,574 |
) |
(5,443,535 |
) |
(854,209 |
) | |||||||||
Net (decrease) increase in cash and cash equivalents and restricted cash |
(869,342,235 |
) |
113,710,399 |
742,995,681 |
116,592,235 |
|||||||||||
Cash and cash equivalents and restricted cash at beginning of the year |
870,524,651 |
1,182,416 |
114,892,815 |
18,029,190 |
||||||||||||
Cash and cash equivalents and restricted cash at end of the year |
1,182,416 |
114,892,815 |
857,888,496 |
134,621,425 |
||||||||||||
1 Year Cango Chart |
1 Month Cango Chart |
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