Cango Inc – ADR (NYSE: CANG) stock lost over 0.3% in the pre-market session of August 25th, 2020 post second quarter of FY 20 results despite a decent performance. The company has generated income from operations of RMB 66.7 million in the second quarter of 2020 compared to RMB 84.3 million in the same period last year. The company has reported the net income in the second quarter of 2020 of RMB 70.2 million. At the end of June, 2020, the company had cash and cash equivalents of RMB 2 billion compared to RMB 2.7 billion as of March 31, 2020, mainly due to the payment of dividend in May and the repayment of debt.
CANG in the second quarter of FY 20 has reported the adjusted earnings per share of 9 cents, while the revenue of RMB274.1 million (US$38.8 million) in the second quarter of FY 20 compared to RMB336.3 million in the same period of 2019. Revenues from after-market services facilitation in the second quarter of 2020 grew 46.3% to RMB52.5 million (US$7.4 million) from RMB35.9 million in the same period of 2019, and the increase was driven by the Company’s efforts to cross-sell insurance facilitation services. The company’s total operating cost and expenses in the second quarter of 2020 had fallen to RMB207.4 million (US$29.4 million) compared to RMB252.0 million in the same period of 2019
Moreover, in the second quarter, the overall delinquency has improved, on the back of resumption of economic activities and as well as the debt collection efforts. At the end of of June , 2020, the M1+ overdue ratio has improved to 1.59% from 2% in the previous quarter. On the other hand, some of last quarter’s M1+ delinquencies have moved to the M3+ category, but it is within a reasonable range. For the third quarter of 2020, the company expects the total revenue to be in the range of RMB 300 million and RMB 313 million.
Meanwhile, the Company’s investee, Li Auto Inc. got listed on the Nasdaq Global Select Market on July 30, 2020. Cango currently holds 39,194,413 Class A ordinary shares of Li Auto. The listing is anticipated to increase the liquidity of the Company’s investment in Li Auto, and the change in fair value of investment may have a material effect on the Company’s third quarter financial results.