Changu’s revenue in the first quarter of 2020 may be only half of the same period in 2019.
On March 24, Beijing time, Cangu (NYSE: CANG) announced its unaudited financial results for the fourth quarter of 2019 and the full year of 2019. As a financial service technology platform, Cangu’s main business covers three major areas: automobile loan facilitating services, automobile transaction facilitating services, and automotive aftermarket services.
According to the financial report, in the fourth quarter of 2019, Cangu’s total revenue was 438 million yuan (RMB, the same below), a year-on-year increase of 36.6%, exceeding the management’s previous upper limit of 9.6%. The company’s net profit was 102 million yuan, a year-on-year increase of 96.8%; non-GAAP net profit was 123 million yuan, a year-on-year increase of 87.6%.
Data source: Cangu Financial Report Mapping:
For the full year of 2019, Cangu’s total revenue was 1.440 billion yuan, an increase of 31.9% year-on-year; the annual net profit reached 404 million yuan, an increase of 31.9% year-on-year. Non-GAAP non-GAAP annual net profit was 487 million yuan, an increase of 43.1% year-on-year.
In the fourth quarter of 2019, the automotive aftermarket service supply revenue was 89.6 million yuan, accounting for 20.4% of the fourth quarter revenue, and it is still the main driver of Changu’s revenue growth. This business of Changu is based on Changu’s platform-based operating model and auto finance transaction scenario. It will explore more cross-selling opportunities for other financial products and services based on the original auto financial services, thereby promoting the business of aftermarket service providers expand.
Data source: Cangu Financial Report Mapping:
Changu has a total of 49,238 dealers in the fourth quarter, a decrease compared to the third quarter. The reason is that Changu is optimizing the efficiency of the dealer network, so it removes marketers that do not meet the company’s standards.
In terms of auto loans, Cango increased in the fourth quarter compared with the previous quarter, and the total amount of new auto loans contributed was 9.575 billion yuan.
Data source: Cangu Financial Report Mapping:
In terms of operating costs, marketing and promotion decreased by 17.5% year-on-year compared with the same period of 2018. The reason for the decrease was that Can Gu maintained its own market while ensuring increased revenue; the company’s management expenses were compared with 2018. During the same period, it increased by 26.3%. This increase was mainly due to the increase in share dividends during the quarter. In terms of operating costs and research and development expenses, it was basically the same as in the same period in 2018.
Data source: Cangu Financial Report Mapping:
Tangu CEO Lin Jiayuan said that looking forward to the first quarter of 2020, Tsangu will face greater challenges in the face of the current epidemic, in which revenues from marketers may be interrupted. And in the epidemic situation, people’s demand for cars and personal property control will affect Changu’s income. According to the financial report, Cangu led to about 40,000 loans in January 2020, but compared with more than 70,000 loans in January 2019, there was a significant decrease.
Chan Gu estimates that the company’s total revenue in the first quarter of 2020 will be between 180 million yuan and 210 million yuan.