Cango Inc. Reports Third Quarter 2022 Unaudited Financial Results

SHANGHAI,Nov. 30,2022 --Cango Inc. (NYSE: CANG) ("Cango" or the "Company"),a leading automotive transaction service platform in China,today announced its unaudited financial results for the third quarter of 2022.

Third Quarter 2022 Financial and Operational Highlights

Total revenues were RMB416.4 million (US$58.5 million),compared with RMB800.6 million in the same period of 2021. Car trading transactions revenues were RMB347.2 million (US$48.8 million),or 83.4% of total revenues in the third quarter of 2022,compared with RMB429.2 million in the same period of 2021.

The total outstanding balance of financing transactions the Company facilitated was RMB30,784.0 million (US$4,327.5 million) as of September 30,2022. M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 2.44% and 1.27%,respectively,as of September 30,2022,compared with 2.21% and 1.07%,as of June 30,2022.

"Cango Haoche" platform had engaged 9,350 dealers in China's 31 provinces and 305 cities as of September 30,2022. During the first nine months of 2022,total sales were 12,639 cars,including 7,677 new energy vehicles (NEVs),resulting in an NEV penetration rate exceeding 60%.

Since the "Cango Haoche" APP was launched at the end of the second quarter of this year,it had attracted a total of over 300,000 page views and more than 27,000 unique visitors as of the end of September.

Mr. Jiayuan Lin,Chief Executive Officer of Cango,commented,"Within a complex external operating environment,COVID-19 resurgences continued to affect China's automotive industry. Despite these challenges,we delivered a solid performance in the third quarter with total revenues reaching RMB416.4 million,of which revenues from car trading transactions accounted for over 83.4%. The pandemic's ongoing impact together with favorable policies released in the last two quarters is reshaping the landscape of the domestic automotive industry. In light of evolving market trends and positive regulatory changes,we remained focused on our car trading transactions business and continued to elevate our one-stop platform service capabilities.

"In the third quarter,we made significant strides in upgrading our car transaction-related services for dealers and other automotive industry chain participants. Notably,we enhanced our 'Cango Haoche' APP with refined online product offerings and integrated after-market and financing services. The combination of tailored products and expanded vehicle inventory further improved our service capabilities as well as dealers' experience on our platform,reinforcing their stickiness. Furthermore,building on the success of 'Cango Haoche,' we officially launched our 'Cango U-Car' WeChat mini program,leveraging our long-time strengths to provide dealers with more convenient used car transaction services. As of September 30,'Cango U-Car' had more than 3,000 registered dealers with increasing engagement.

"Looking ahead,given ongoing COVID-19 recurrences and the complex global macroeconomic environment,we will maintain our strategy focused on developing our new and used car businesses in parallel,creating value for OEMs and dealers and making car purchases simple and enjoyable," concluded Mr. Lin.

Mr. Yongyi Zhang,Chief Financial Officer of Cango,stated,"Our third quarter performance showcases the resilience and strength of our car trading transactions business,even in a challenging environment. In addition to the advancements we made in our platform,we implemented additional cost optimization measures and continued our share repurchase programs,underscoring our confidence in Cango's sustainable future. Going forward,we will continue to exercise strict cost discipline and invest selectively as we strive to upgrade our platform and operations to capture growth opportunities in both the new and used car markets."

Third Quarter 2022 Financial Results

REVENUES

Total revenues in the third quarter of 2022 were RMB416.4 million (US$58.5 million) compared with RMB800.6 million in the same period of 2021. Revenues from car trading transactionsin the third quarter of 2022 were RMB347.2 million (US$48.8 million),compared with RMB429.2 million in the same period of 2021.

OPERATING COST AND EXPENSES

Total operating cost and expenses in the third quarter of 2022 were RMB608.8 million (US$85.6 million) compared with RMB839.6 million in the same period of 2021.

Cost of revenue in the third quarter of 2022 decreased to RMB388.7 million (US$54.6 million) from RMB610.5 million in the same period of 2021. As a percentage of total revenues,cost of revenue in the third quarter of 2022 was 93.3% compared with 76.3% in the same period of 2021. The change was primarily due to an increase in car trading transactions' share of total revenues. Car trading transactions normally present a higher cost-revenue ratio,thus pushing up the overall ratio.

Sales and marketing expenses in the third quarter of 2022 decreased to RMB17.9 million (US$2.5 million) from RMB46.8 million in the same period of 2021. As a percentage of total revenues,sales and marketing expenses in the third quarter of 2022 was 4.3% compared with 5.8% in the same period of 2021.

General and administrative expenses in the third quarter of 2022 decreased to RMB57.8 million (US$8.1 million) from RMB64.0 million in the same period of 2021. As a percentage of total revenues,general and administrative expenses in the third quarter of 2022 was 13.9% compared with 8.0% in the same period of 2021.

Research and development expenses in the third quarter of 2022 decreased to RMB10.2 million (US$1.4 million) from RMB17.4 million in the same period of 2021. As a percentage of total revenues,research and development expenses in the third quarter of 2022 was 2.4% compared with 2.2% in the same period of 2021.

Net loss on risk assurance liabilities in the third quarter of 2022 was RMB85.0 million (US$11.9 million) compared with RMB55.5 million in the same period of 2021. Net loss on risk assurance liabilities was mainly due to a sequential increase in the default rate since 2021.

LOSS FROM OPERATIONS

Loss from operations in the third quarter of 2022 was RMB192.3 million (US$27.0 million),compared with RMB39.0 million in the same period of 2021.

NET LOSS

Net loss in the third quarter of 2022 was RMB130.3 million (US$18.3 million). Non-GAAP adjusted net loss in the third quarter of 2022 was RMB110.0 million (US$15.5 million). Non-GAAP adjusted net loss excludes the impact of share-based compensation expenses. For further information,see "Use of Non-GAAP Financial Measure."

NET LOSS PER ADS

Basic and diluted net loss per American Depositary Share (ADS) in the third quarter of 2022 were both RMB0.96 (US$0.13). Non-GAAP adjusted basic and diluted net loss per ADS in the third quarter of 2022 were both RMB0.81 (US$0.11). Each ADS represents two Class A ordinary shares of the Company.

BALANCE SHEET

As of September 30,the Company had cash and cash equivalents of RMB745.0 million (US$104.7 million),compared with RMB1,280.7million as of June 30,2022.

As of September 30,the Company had short-term investments of RMB2,698.0 million (US$379.3 million),compared with RMB2,116.2 million as of June 30,2022.

Business Outlook

For the fourth quarter of 2022,the Company expects total revenues to be between RMB450 million and RMB500 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions,which are subject to change.

Share Repurchase Program

Pursuant to the share repurchase program announced on August 19,2021,the Company had repurchased 8,153,114 ADSs with cash in the aggregate amount of approximately US$28.8 million up to August 25,the day on which the program expired.

Pursuant to the share repurchase program announced on April 22,the Company had repurchased 287,530 ADSs with cash in the aggregate amount of approximately US$635,758 up to September 30,2022.

Conference Call Information

The Company's management will hold a conference call on Tuesday,November 29,at 8:00 P.M. Eastern Time or Wednesday,November 30,at 9:00 A.M. Beijing Time to discuss the financial results. Listeners may access the call by dialing the following numbers:

International:

+1-412-902-4272

United States Toll Free:

+1-888-346-8982

Mainland China Toll Free:

4001-201-203

Hong Kong,China Toll Free:

800-905-945

Conference ID:

Cango Inc.

The replay will be accessible through December 6,by dialing the following numbers:

International:

+1-412-317-0088

United States Toll Free:

+1-877-344-7529

Access Code:

9238628

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.cangoonline.com/.

About Cango Inc.

Cango Inc. (NYSE: CANG) is a leading automotive transaction service platform in China connecting car buyers,dealers,financial institutions,and other industry participants. Founded in 2010 by a group of pioneers in China's automotive finance industry,the Company is headquartered in Shanghai and has a nationwide network. Leveraging its competitive advantages in technological innovation and big data,Cango has established an automotive supply chain ecosystem,and developed a matrix of products centering on customer needs for auto transactions,auto financing and after-market services. By working with platform participants,Cango endeavors to make car purchases simple and enjoyable,and make itself customers' car purchase service platform of choice. For more information,please visit: www.cangoonline.com.

Definition of Overdue Ratios

The Company defines "M1+ overdue ratio" as (i) exposure at risk relating to financing transactions for which any installment payment is 30 to 179 calendar days past due as of a specified date,divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date,excluding amounts of outstanding principal that are 180 calendar days or more past due.

The Company defines "M3+ overdue ratio" as (i) exposure at risk relating to financing transactions for which any installment payment is 90 to 179 calendar days past due as of a specified date,excluding amounts of outstanding principal that are 180 calendar days or more past due.

Use of Non-GAAP Financial Measure

In evaluating the business,the Company considers and uses Non-GAAP adjusted net income (loss),a non-GAAP measure,as a supplemental measure to review and assess its operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines Non-GAAP adjusted net income (loss) as net income (loss) excluding share-based compensation expenses. The Company presents the non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. Non-GAAP adjusted net income (loss) enables the management to assess the Company's operating results without considering the impact of share-based compensation expenses,which are non-cash charges. The Company also believes that the use of the non-GAAP measure facilitates investors' assessment of its operating performance.

Non-GAAP adjusted net income (loss) is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as analytical tools. One of the key limitations of using Non-GAAP adjusted net income (loss) is that it does not reflect all items of expense that affect the Company's operations. Share-based compensation expenses have been and may continue to be incurred in the business and are not reflected in the presentation of Non-GAAP adjusted net income (loss). Further,the non-GAAP measure may differ from the non-GAAP information used by other companies,including peer companies,and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure,all of which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.

Reconciliations of Cango's non-GAAP financial measure to the most comparable U.S. GAAP measure are included at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated,all translations from RMB to US$ were made at the rate of RMB7.1135 to US$1.00,the noon buying rate in effect on September 30,in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB,as the case may be,at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things,the "Business Outlook" section and quotations from management in this announcement,contain forward-looking statements. Cango may also make written or oral forward-looking statements in its periodic reports to the SEC,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Statements that are not historical facts,including statements about Cango's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: Cango's goal and strategies; Cango's expansion plans; Cango's future business development,financial condition and results of operations; Cango's expectations regarding demand for,and market acceptance of,its solutions and services; Cango's expectations regarding keeping and strengthening its relationships with dealers,car buyers and other platform participants; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Cango's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release,and Cango does not undertake any obligation to update any forward-looking statement,except as required under applicable law.

Investor Relations Contact

Yihe Liu

Cango Inc.

Tel: +86 21 3183 5088 ext.5581

Email: ir@cangoonline.com

Twitter: https://twitter.com/Cango_Group

Emilie Wu

The Piacente Group,Inc.

Tel: +86 21 6039 8363

Email: ir@cangoonline.com

CANGO INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET

(Amounts in Renminbi ("RMB") and US dollar ("US$"),except for number of shares and per share data）

As of December 31,2021

As of September 30,2022

RMB

RMB

US$

ASSETS:

Current assets:

Cash and cash equivalents

1,434,806,922

744,956,280

104,724,296

Restricted cash - current

61,293,114

52,870,726

7,432,449

Short-term investments

2,598,935,704

2,698,017,297

379,281,268

Accounts receivable,net

223,544,396

130,712,532

18,375,277

Finance lease receivables - current,net

1,414,164,625

978,680,772

137,580,765

Financing receivables,net

62,296,261

93,389,953

13,128,552

Short-term contract asset

829,940,692

546,425,221

76,815,242

Prepayments and other current assets

982,948,637

860,436,374

120,958,231

Total current assets

7,607,930,351

6,105,489,155

858,080

Non-current assets:

Restricted cash - non-current

1,114,180,729

803,007,376

112,884,990

Goodwill

148,657,971

148,971

20,898,007

Property and equipment,net

19,545,933

16,020,074

2,252,066

Intangible assets

45,931,544

46,970,305

6,602,981

Long-term contract asset

495,456,805

247,229,955

34,755,037

Deferred tax assets

474,570,361

624,243,828

87,754,808

Finance lease receivables - non-current,029,262,174

385,740,717

54,226,572

Other non-current assets

11,568,164

10,893,127

1,531,332

Total non-current assets

3,339,173,681

2,282,763,353

320,905,793

TOTAL ASSETS

10,947,104,032

8,388,508

1,179,201,873

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term debts

579,776,131

208,988,733

29,379,171

Long-term debts—current

938,014,362

730,188,493

102,648,273

Accrued expenses and other current liabilities

719,035,377

428,536,775

60,242,750

Risk assurance liabilities

699,022,914

484,174,938

68,064,235

Income tax payable

481,854,105

328,492,069

46,178,684

Total current liabilities

3,417,702,889

2,381,008

306,513,113

Non-current liabilities:

Long-term debts

486,371,672

125,623,636

17,659,891

Deferred tax liability

51,471,040

10,133

1,507,575

Other non-current liabilities

991,610

177,848,512

25,001,548

Total non-current liabilities

538,834,322

314,196,281

44,169,014

Total liabilities

3,537,211

2,494,577,289

350,682,127

Shareholders' equity

Ordinary shares

204,260

204,260

28,714

Treasury shares

(485,263,213)

(546,266,092)

(76,792,872)

Additional paid-in capital

4,671,769,821

4,803,102,873

675,209,513

Accumulated other comprehensive income

(187,517,110)

110,877,375

15,586,895

Retained earnings

2,991,373,063

1,525,756,803

214,487,496

Total Cango Inc.'s equity

6,990,566,821

5,675,219

828,519,746

Total shareholders' equity

6,746

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

10,873

CANGO INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

(Amounts in Renminbi ("RMB") and US dollar ("US$"),except for number of shares and per share data)

Three months ended September 30,

Nine months ended September 30,

2021

2022

2021

2022

RMB

RMB

US$

RMB

RMB

US$

Revenues

800,634,866

416,449,708

58,543,573

2,871,167,788

1,493,335,164

209,929,734

Loan facilitation income and other related income

266,515,911

14,710,212

2,067,929

981,553,412

135,208,426

19,300

Leasing income

60,778,371

34,562

4,879,534

198,614,442

127,550,654

17,787

After-market services income

42,658,080

19,025

2,541

157,053,595

55,704,269

7,830,782

Automobile trading income

429,200,614

347,247,512

48,282

1,523,310,471

1,165,160,983

163,795,738

Others

1,481,890

400,397

56,287

10,635,868

9,832

1,365,127

Operating cost and expenses:

Cost of revenue

610,508,451

388,703,295

54,643,044

2,077,342,112

1,348,346,307

189,547,523

Sales and marketing

46,793,061

17,888,406

2,514,712

165,522,339

113,814

15,960,050

General and administrative

64,038,373

57,812,378

8,127,135

190,087,348

233,366,364

32,124

Research and development

17,423,683

10,172,951

1,430,091

46,656,813

37,516,243

5,273,950

Net loss on risk assurance liabilities

55,504,598

84,952,664

11,942,456

113,147,363

237,018,349

33,319,512

Provision for credit losses

45,233

49,259,212

6,924,750

144,641,366

259,042

36,675

Total operation cost and expense

839,399

608,788,906

85,582,188

2,737,397,341

2,228,119

313,332,834

Income (Loss) from operations

(39,006,533)

(192,198)

(27,615)

133,770,447

(735,557,955)

(103,403,100)

Interest income,net

14,853,381

14,619,894

2,055,232

37,222,389

27,120,865

3,591

Net gain (loss) on equity securities

(447,895)

4,285,558

602,454

(291,048,883)

(13,303,787)

(1,217)

Interest expense

(8,320,463)

(3,107,158)

(436,797)

(9,133,705)

(11,693,127)

(1,794)

Foreign exchange gain (loss),net

(51,473)

4,066,308

571,633

(786,605)

7,318,248

1,028,783

Other income

25,465,800

3,775,871

530,804

36,642,145

41,312,897

5,807,675

Other expenses

(107,905)

(964,807)

(135,630)

(6,587,727)

(1,017)

(251,355)

Net income (loss) before income taxes

(454,088)

(169,663,532)

(23,850,919)

(99,921,939)

(686,590,876)

(96,417)

Income tax expenses

38,166,368

39,338,402

5,530,105

(32,749,453)

134,905

18,882,253

Net income (loss)

(416,720)

(130,325,130)

(18,814)

(132,392)

(552,271,971)

(77,637,164)

Net income (loss) attributable to Cango Inc.'s shareholders

(416,164)

Earnings (loss) per ADS attributable to ordinary shareholders:

Basic

(2.88)

(0.96)

(0.13)

(0.91)

(4.01)

(0.56)

Diluted

(2.88)

(0.96)

(0.13)

(0.91)

(4.01)

(0.56)

Weighted average ADS used to compute earnings (loss) per ADS attributable

to ordinary shareholders:

Basic

144,470,649

136,442,760

136,760

146,155,678

137,751,682

137,682

Diluted

144,682

Other comprehensive (loss) income,net of tax

Foreign currency translation adjustment

(5,969,745)

141,603,735

19,906,338

(37,828,334)

298,394,485

41,633

Total comprehensive income (loss)

(422,465)

11,278,605

1,585,524

(170,499,726)

(253,486)

(35,689,531)

Total comprehensive income (loss) attributable to Cango Inc.'s shareholders

(422,531)

CANGO INC.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(Amounts in Renminbi ("RMB") and US dollar ("US$"),

2021

2022

2021

2022

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

RMB

RMB

US$

Net income (loss)

(416,164)

Add: Share-based compensation expenses

24,011,050

20,774

2,864,100

64,444,353

139,445,782

19,978

Cost of revenue

1,512,966

1,415

185,340

2,967,623

3,808

466,551

Sales and marketing

4,049,203

4,367,008

613,904

11,258

11,140,237

1,070

General and administrative

17,292

13,700,843

1,926,034

46,274

122,108,649

17,762

Research and development

1,239,589

987,508

138,822

3,198

2,878,088

404,595

Non-GAAP adjusted net income (loss)

(392,526,670)

(109,951,356)

(15,714)

(68,227,039)

(412,826,189)

(58,034,186)

Net income (loss) attributable to Cango Inc.'s shareholders

(392,186)

Non-GAAP adjusted net income (loss) per ADS-basic

(2.72)

(0.81)

(0.11)

(0.47)

(3.00)

(0.42)

Non-GAAP adjusted net income (loss) per ADS-diluted

(2.72)

(0.81)

(0.11)

(0.47)

(3.00)

(0.42)

Weighted average ADS outstanding—basic

144,649

136,760

136,760

146,678

137,682

137,682

Weighted average ADS outstanding—diluted

144,682

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