Cango Shares Jump 8% on Financing Growth Amid Weak Auto Market
Cango Inc. (NYSE: CANG) saw its shares spring up 8% on Friday on news of improved revenue and income for the third quarter.
The Shanghai-based auto marketplace reported after markets closed Thursday that it enjoyed 23% year-over-year increase in revenue in the three months through September, which was $49.1 million. That exceeded the company's guidance by 8%, Cango said.
Net income was $17.1 million, or 11 cents per American depositary share, at a 15% growth from the third quarter of 2018, Cango said.
The results, unexpectedly positive despite the suffering auto market in China, sent the company's shares to $6.80 apiece on Friday.
On its marketplace, Cango connects auto dealers and financing providers with vehicle buyers. As of September 30, the platform covered 49,400 dealers nationwide, according to the report.
Cango said it facilitated $807.2 million in financing transactions on its platform during the third quarter through its partnerships with financial institutions including the Industrial and Commercial Bank of China (ICBC), the world's largest bank by assets. Auto loans are the core growth driver for Cango, the company said.
Cango has received backing from giants like Tencent Holdings Ltd., ride-hailing company Didi Chuxing, Warburg Pincus Financial Global Ltd., and Taikang Life Insurance. In its partnership with Didi, Cango supplies the car-sharing giant with vehicles, as well as auto financing and insurance.
In a call with analysts on Friday, Cango's chief executive, said the company has facilitated the supply of 327 cars for licensed Didi drivers and continues to provide them with "a complete suite of auto solutions, including car sourcing, auto financing, insurance products and operator licensing."
Asked about the regulatory environment in China's financing sector, Yin said, "The regulators actually are very much in favor of this loan facilitation business […] The publication of series of new regulatory documentation, in fact, helped raise the threshold of this loan facilitation industry."
Cango became publicly traded in New York in July 2018, raising $44 million for 4 million ADSs.
As of September, Cango had $259 million in cash and cash equivalents, according to the statement.
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