Cango Inc – ADR (NYSE: CANG) stock rose 0.20% though the company in the second quarter of FY 18 has reported the Non-GAAP adjusted net income of RMB70.1 million (US$10.6 million), compared to RMB109.5 million in the same period last year. Non-GAAP adjusted net income per ADS was RMB0.48(US$0.08) in the second quarter of 2018, and RMB0.48(US$0.08) on a diluted basis. As of June 30, 2018, the company had cash and cash equivalents of RMB3,121.4 million (US$471.7 million), compared with RMB803.3 million as of December 31, 2017.

For the third quarter of 2018, the company expects total revenues to be between RMB270 million and RMB290 million.

During the second quarter of 2018, the company delivered 11.6% fall in the total revenues to RMB236.3 million (US$35.7 million) in the second quarter of 2018 from RMB267.3 million in the corresponding period of 2017. The decrease was primarily due to a change in our dealer coverage model as well as conditions in the automotive market. After-market services facilitation revenues in the second quarter of 2018 were RMB12.3 million (US$1.9 million) compared to RMB6.7 million in the same period of last year, with insurance facilitation services as the key growth driver.

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

Additionally, for the second quarter of 2018, cost of revenue in the second quarter of 2018 decreased by 8.0% to RMB81.2 million (US$12.3 million) from RMB88.3 million in the corresponding period of 2017. Sales and marketing expenses in the second quarter of 2018 increased to RMB36.9 million (US$5.59 million) from RMB13.6 million in the corresponding period of 2017. The Company expects its sales and marketing expenses as a percentage of total revenue to decrease in the future due to economies of scale.