Cango Inc – ADR (NYSE: CANG) stock lost over 8.4% on 15th November, 2019 (As of 10:30 am GMT-5; Source: Google finance). CANG in the third quarter of FY 19 has reported the adjusted earnings per share of 13 cents, missing the analysts’ estimates for the adjusted earnings per share of 18 cents.
The company reported 21.5% increase in the Non-GAAP net income in the third quarter of 2019 to RMB146.0 million (US$20.4 million) from RMB120.2 million in the corresponding period of 2018. At the end of September 2019, the Company had generated cash and cash equivalents of RMB1,851.2 million (US$259.0 million), compared to RMB1,609.6 million as of June 30, 2019. Income from operations has increased by 17.8% to RMB89.7 million (US$12.6 million) in the third quarter of 2019, from RMB76.2 million in the corresponding period of 2018.
Meanwhile, the amount of financing transactions the Company facilitated in the third quarter of 2019 were of total RMB5,769.4 million (US$807.2 million). The total outstanding balance of financing transactions the Company facilitated was RMB36,500.5 million (US$5,106.6 million) at the end of September 2019.
The company had reported the adjusted revenue growth of 23.2 percent to $49.1 million in the third quarter of FY 19. It has outperformed the high end of the Company’s guidance by 8.1%. The revenues from after-market services facilitation in the third quarter of 2019 were of RMB40.7 million (US$5.7 million), compared to RMB39.0 million in the same period of last year.
Moreover, the company’s cost of revenue in the third quarter of 2019 had risen by 10.5% to RMB125.4 million (US$17.5 million) from RMB113.5 million in the corresponding period of 2018. As a percentage of total revenues, the cost of revenue has declined to 35.7% in the third quarter of 2019 from 39.8% in the corresponding period of 2018. Therefore, the Company’s gross profit margin has expanded to 64.3% in the third quarter of 2019 from 60.2% in the corresponding period of 2018, further due to the increased economies of scale as well as the effectiveness of the Company’s cost control initiatives. Sales and marketing expenses in the third quarter of 2019 have fallen by 1.9% to RMB47.6 million (US$6.7 million) from RMB48.5 million in the corresponding period of 2018.
For the fourth quarter of 2019, the Company expects total revenues to be in the range of RMB380 million and RMB400 million.