Cango Inc. Reports Fourth Quarter and Full Year 2022 Unaudited Financial Results

SHANGHAI,March 10,2023 --Cango Inc. (NYSE: CANG) ("Cango" or the "Company"),a leading automotive transaction service platform in China,today announced its unaudited financial results for the fourth quarter and full year of 2022.

Fourth Quarter 2022 Financial and Operational Highlights

Total revenues were RMB487.1 million (US$70.6 million),compared with RMB1,050.5 million in the same period of 2021. Car trading transactions revenues were RMB431.1 million (US$62.5 million),or 88.5% of total revenues in the fourth quarter of 2022,compared with RMB703.9 million in the same period of 2021.

The total outstanding balance of financing transactions the Company facilitated was RMB25,581.3 million (US$3,708.9 million) as of December 31,2022. M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 2.61% and 1.38%,respectively,as of December 31,2022,compared with 2.44% and 1.27%,as of September 30,2022.

Full Year 2022 Financial and Operational Highlights

Total revenues were RMB1,980.5 million (US$287.1 million),compared with RMB3,921.7 million in the full year of 2021. Car trading transactions revenues were RMB1,596.3 million (US$231.4 million),or 80.6% of total revenues in the full year of 2022,compared with RMB2,227.2 million in the full year of 2021.

"Cango Haoche" platform had engaged 10,112 dealers in China's 31 provinces and 305 cities as of December 31,2022. During the full year of 2022,total sales were 16,490 cars,including 8,794 new energy vehicles (NEVs),resulting in an NEV penetration rate exceeding 50%.

Since the "Cango Haoche" APP was launched at the end of the second quarter of 2022,it had attracted a total of over 660,000 page views and more than 57,000 unique visitors as of the end of December,2022.

Mr. Jiayuan Lin,Chief Executive Officer of Cango,commented,"Despite facing numerous headwinds throughout the year,Cango successfully carried out a significant transformation during 2022. Our automotive transaction service platform covering both new and used car markets has taken shape,and excellent market feedback and increasing market demand have already validated its effectiveness.

"Our platform's user base continued to grow with increasing engagement. As of December 31,'Cango Haoche,' our new car trading platform,engaged 10,112 dealers,up 58% year-over-year. For full-year 2022,accumulated page views and unique visitors on our 'Cango Haoche' APP exceeded 660,000 and 57,000,respectively. In addition,we further extended our cooperation with OEMs and car suppliers in the fourth quarter,solidifying our strong position with abundant vehicle sources. On the used car front,by leveraging our advantages such as abundant used car sources and one-on-one matching services,we cultivated dealers' platform usage habits and improved their platform stickiness. As of the end of 2022,'Cango U-Car,' our used car trading platform,had 4,492 registered dealers with increasing stickiness.

"Although some uncertainty lingers on the near-term horizon,as we move through 2023,we will continue to accelerate our digitalization process and further standardize our products and services across the entire transaction chain. Leveraging Cango's valuable market know-how and solid customer base accumulated over the past ten years,we will forge ahead alongside our dealer partners for the next decade and beyond,propelling their footsteps toward success," concluded Mr. Lin.

Mr. Yongyi Zhang,Chief Financial Officer of Cango,stated,"Our fourth quarter performance once again illustrated the strength and resilience of our strategy and business model. We are confident that our refined operational efficiency and healthy balance sheet have positioned us to fully embrace new opportunities emerging from the automotive industry's broad recovery. Looking ahead,we will continue to invest wisely to advance our capabilities and drive long-term value for our shareholders."

Fourth Quarter 2022 Financial Results

REVENUES

Total revenues in the fourth quarter of 2022 were RMB487.1million (US$70.6million) compared with RMB1,050.5 million in the same period of 2021. Revenues from car trading transactionsin the fourth quarter of 2022 were RMB431.1 million (US$62.5 million),or 88.5%of total revenues in the fourth quarter of 2022,compared with RMB703.9 million in the same period of 2021.

OPERATING COST AND EXPENSES

Total operating cost and expenses in the fourth quarter of 2022 were RMB698.7 million (US$101.3 million) compared with RMB1,207.6 million in the same period of 2021.

Cost of revenue in the fourth quarter of 2022 decreased to RMB481.7 million (US$69.8 million) from RMB880.7 million in the same period of 2021. As a percentage of total revenues,cost of revenue in the fourth quarter of 2022 was 98.9% compared with 83.8% in the same period of 2021. The change was primarily due to a higher contribution from car trading transactions to total revenues. Car trading transactions normally present a higher cost-revenue ratio,thus pushing up the overall ratio.

Sales and marketing expenses in the fourth quarter of 2022 decreased to RMB19.2 million (US$2.8 million) from RMB73.8 million in the same period of 2021. As a percentage of total revenues,sales and marketing expenses in the fourth quarter of 2022 was 4.0% compared with 7.0% in the same period of 2021.

General and administrative expenses in the fourth quarter of 2022 decreased to RMB66.2 million (US$9.6 million) from RMB86.1 million in the same period of 2021. As a percentage of total revenues,general and administrative expenses in the fourth quarter of 2022 was 13.6% compared with 8.2% in the same period of 2021.

Research and development expenses in the fourth quarter of 2022 decreased to RMB8.4 million (US$1.2 million) from RMB23.6 million in the same period of 2021. As a percentage of total revenues,research and development expenses in the fourth quarter of 2022 was 1.7% compared with 2.2% in the same period of 2021.

Net loss on risk assurance liabilities in the fourth quarter of 2022 was RMB62.8 million (US$9.1 million) compared with RMB84.6 million in the same period of 2021.

LOSS FROM OPERATIONS

Loss from operations in the fourth quarter of 2022 was RMB211.6 million (US$30.7 million),compared with RMB157.0 million in the same period of 2021.

NET LOSS

Net loss in the fourth quarter of 2022 was RMB558.9 million (US$81.0 million). Non-GAAP adjusted net loss in the fourth quarter of 2022 was RMB539.9 million (US$78.3 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 fourth quarter of 2022 were both RMB4.13 (US$0.60). Non-GAAP adjusted basic and diluted net loss per ADS in the fourth quarter of 2022 were both RMB3.99 (US$0.58). Each ADS represents two Class A ordinary shares of the Company.

BALANCE SHEET

As of December 31,the Company had cash and cash equivalents of RMB378.9 million (US$54.9 million),compared with RMB745.0million as of September 30,2022.

As of December 31,the Company had short-term investments of RMB1,941.4 million (US$281.5 million),698.0 million as of September 30,2022.

Full Year 2022 Financial Results

REVENUES

Total revenues in the full year of 2022 were RMB1,980.5 million (US$287.1 million) compared with RMB3,921.7 million in the full year of 2021. Revenues from car trading transactions in the full year of 2022 were RMB1,227.2 million in the full year of 2021.

OPERATING COST AND EXPENSES

Total operating cost and expenses in the full year of 2022 were RMB2,927.6 million (US$424.5 million) compared with RMB3,945.0 million in the full year of 2021.

Cost of revenue in the full year of 2022 decreased to RMB1,830.1 million (US$265.3 million) from RMB2,958.0 million in the full year of 2021. As a percentage of total revenues,cost of revenue in the full year of 2022 was 92.4% compared with 75.4% in the full year of 2021. The change was primarily due to an increase in the amount of car trading transactions.

Sales and marketing expenses in the full year of 2022 decreased to RMB132.8 million (US$19.3 million) from RMB239.3 million in the full year of 2021. As a percentage of total revenues,sales and marketing expenses in the full year of 2022 was 6.7% compared with 6.1% in the full year of 2021.

General and administrative expenses in the full year of 2022 was RMB299.5 million (US$43.4 million) compared with RMB276.2 million in the full year of 2021. As a percentage of total revenues,general and administrative expenses in the full year of 2022 was 15.1% compared with 7.0% in the full year of 2021.

Research and development expenses in the full year of 2022 decreased to RMB46.0 million (US$6.7 million) from RMB70.3 million in the full year of 2021. As a percentage of total revenues,research and development expenses in the full year of 2022 was 2.3% compared with 1.8% in the full year of 2021.

Net loss on risk assurance liabilities in the full year of 2022 was RMB299.9 million (US$43.5 million) compared with RMB197.8 million in the full year of 2021. The change was mainly due to a sequential increase in default rate over 2022.

LOSS FROM OPERATIONS

Loss from operations in the full year of 2022 was RMB947.1 million (US$137.3 million),compared with RMB23.2 million in the full year of 2021. This increase in loss from operations was mainly due to loss on risk assurance liabilities and provision for credit losses,as well as the decrease in total revenues and gross profit margin.

NET LOSS

Net loss in the full year of 2022 was RMB1,111.2 million (US$161.1 million). Non-GAAP adjusted net loss in the full year of 2022 was RMB952.7 million (US$138.1 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 ADS in the full year of 2022 were both RMB8.11 (US$1.18). Non-GAAP adjusted basic and diluted net loss per ADS in the full year of 2022 were both RMB6.95 (US$1.01). Each ADS represents two Class A ordinary shares of the Company.

Business Outlook

For the first quarter of 2023,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 April 22,the Company had repurchased 2.4 million ADSs with cash in the aggregate amount of approximately US$5.2 million up to December 31,2022.

Conference Call Information

The Company's management will hold a conference call on Thursday,March 9,2023,at 8:00 P.M. Eastern Time or Friday,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 March 16,by dialing the following numbers:

International:

+1-412-317-0088

United States Toll Free:

+1-877-344-7529

Access Code:

4879650

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 RMB6.8972 to US$1.00,the noon buying rate in effect on December 30,in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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 December 31,2022

RMB

RMB

US$

ASSETS:

Current assets:

Cash and cash equivalents

1,434,806,922

378,917,318

54,937,847

Restricted cash - current

61,293,114

152,688,510

22,137,753

Short-term investments

2,598,935,704

1,941,432,848

281,481,304

Accounts receivable,net

223,544,396

266,836,951

38,687,721

Finance lease receivables - current,net

1,414,164,625

799,438,656

115,907,710

Financing receivables,net

62,296,261

73,818,025

10,702,608

Short-term contract asset

829,940,692

500,389,654

72,549,680

Prepayments and other current assets

982,948,637

1,356,822,028

196,720,702

Total current assets

7,607,930,351

5,470,343,990

793,125,325

Non-current assets:

Restricted cash - non-current

1,114,180,729

750,877,306

108,866,976

Goodwill

148,657,971

148,971

21,553,380

Property and equipment,net

19,545,933

14,689,988

2,129,848

Intangible assets

45,931,544

48,317,878

7,005,434

Long-term contract asset

495,456,805

173,457,178

25,148,927

Deferred tax assets

474,570,361

62,497,781

9,061,326

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

260,049,967

37,703,701

Operating lease right-of-use assets

-

80,726,757

11,704,280

Other non-current assets

11,568,164

6,633,517

961,770

Total non-current assets

3,339,173,681

1,908,343

224,135,642

TOTAL ASSETS

10,947,104,032

7,016,252,333

1,017,260,967

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term debts

579,776,131

349,299,134

50,643,614

Long-term debts—current

938,014,362

565,143,340

81,938,082

Accrued expenses and other current liabilities

719,035,377

890,699

129,159,184

Risk assurance liabilities

699,022,914

402,303,421

58,328,513

Income tax payable

481,854,105

313,406,680

45,439,697

Short-term lease liabilities

-

9,913,073

1,437,260

Total current liabilities

3,417,889

2,530,902,347

366,946,350

Non-current liabilities:

Long-term debts

486,371,672

75,869,353

11,022

Deferred tax liability

51,471,040

10,724,133

1,554,853

Long-term operating lease liabilities

-

76,533,208

11,096,272

Other non-current liabilities

991,610

314,287

45,567

Total non-current liabilities

538,834,322

163,440,981

23,696,714

Total liabilities

3,956,537,211

2,694,328

390,064

Shareholders' equity

Ordinary shares

204,260

204,260

29,615

Treasury shares

(485,263,213)

(559,216)

(81,048,138)

Additional paid-in capital

4,671,769,821

4,805,240,472

696,379

Accumulated other comprehensive income

(187,517,110)

66,359,902

9,621,281

Retained earnings

2,991,373,063

9,109,587

1,320,766

Total Cango Inc.'s equity

6,990,566,821

4,321,909,005

626,617,903

Total shareholders' equity

6,903

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

10,967

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)

For the three months ended

For the years ended

December 31,2021

December 31,2022

December 31,2022

RMB

RMB

US$

RMB

RMB

US$

Revenues

1,050,548,618

487,118,297

70,625,514

3,921,716,406

1,980,453,461

287,138,761

Loan facilitation income and other related income

252,002,800

11,220,332

1,626,795

1,233,556,212

146,428,758

21,230,174

Leasing income

52,680,663

27,971,392

4,055,471

251,295,105

155,522,046

22,577

After-market services income

36,733,261

15,752,500

2,283,898

193,786,856

71,769

10,360,258

Automobile trading income

703,861,083

431,145,715

62,510,253

2,227,171,554

1,596,306,698

231,442,716

Others

5,270,811

1,028,358

149,097

15,906,679

10,739,190

1,557,036

Operating cost and expenses:

Cost of revenue

880,667,760

481,743,466

69,846,237

2,958,009,872

1,830,089,773

265,338,075

Sales and marketing

73,810,746

19,247,674

2,790,650

239,333,085

132,779,488

19,251,216

General and administrative

86,092,093

66,178,999

9,595,053

276,179,441

299,363

43,429,995

Research and development

23,268

8,599

1,224,062

70,278,081

45,842

6,663,406

Net loss (gain) on risk assurance liabilities

84,603,086

62,845,054

9,111,676

197,750,449

299,863,403

43,476,107

Provision for credit losses and other assets

58,773,728

60,245,674

8,734,802

203,415,094

319,716

46,302,806

Total operation cost and expense

1,207,681

698,466

101,480

3,944,966,022

2,927,585

424,461,605

Income (Loss) from operations

(157,020,063)

(211,585,169)

(30,676,966)

(23,249,616)

(947,124)

(137,322,844)

Interest income,net

7,623,469

16,611,787

2,408,483

26,471

43,732,652

6,340,639

Net gain (loss) on equity securities

259,584,974

3,493,202

506,467

(12,522)

(9,585)

(1,422,401)

Interest expense

(5,347,490)

(5,116,136)

(741,770)

(14,195)

(16,809,263)

(2,114)

Foreign exchange gain (loss),net

2,005

(1,400,017)

(202,983)

1,351,400

5,918,231

858,063

Other income

5,269,444

10,753,821

1,559,157

41,911,589

52,066,718

7,965

Other expenses

(18,106)

(677,955)

(98,294)

(6,605,833)

(2,465,972)

(357,532)

Net income (loss) before income taxes

112,233

(187,920,467)

(27,906)

12,308,294

(874,511,343)

(126,792,224)

Income tax expenses

11,896,807

(371,015,445)

(53,183)

(20,852,646)

(236,540)

(34,772)

Net income (loss)

124,127,040

(558,912)

(81,038,089)

(8,352)

(1,883)

(161,996)

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

124,996)

Earnings (loss) per ADS attributable to ordinary shareholders:

Basic

0.88

(4.13)

(0.60)

(0.06)

(8.11)

(1.18)

Diluted

0.87

(4.13)

(0.60)

(0.06)

(8.11)

(1.18)

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

attributable to ordinary shareholders:

Basic

141,358,210

135,444

135,444

144,453

137,042,445

137,445

Diluted

142,105,618

135,445

Other comprehensive (loss) income,net of tax

Foreign currency translation adjustment

(34,349)

97,086,262

14,076,185

(72,130,683)

253,012

36,808,707

Total comprehensive income (loss)

89,824,691

(461,849,650)

(66,961,904)

(80,675,035)

(857,330,871)

(124,301,289)

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

shareholders

89,289)

CANGO INC.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(Amounts in Renminbi ("RMB") and US dollar ("US$"),2022

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

RMB

RMB

US$

Net income (loss)

124,996)

Add: Share-based compensation expenses

23,190,482

19,738

2,765,867

87,634,835

158,520

22,983,605

Cost of revenue

1,959,861

841,248

121,969

4,484

4,160,056

603,150

Sales and marketing

3,740,843

3,551,173

514,872

15,311,101

14,691,410

2,054

General and administrative

16,147,170

13,780,228

1,997,944

63,444

135,888,877

19,035

Research and development

1,342,608

904,089

131,081

4,806

3,782,177

548,364

Non-GAAP adjusted net income (loss)

147,522

(539,859,174)

(78,272,222)

79,090,483

(952,685,363)

(138,126,391)

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

147,391)

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

1.04

(3.99)

(0.58)

0.55

(6.95)

(1.01)

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

1.04

(3.99)

(0.58)

0.54

(6.95)

(1.01)

Weighted average ADS outstanding—basic

141,210

135,444

135,444

144,453

137,445

137,445

Weighted average ADS outstanding—diluted

142,618

135,444

146,867,997

137,445

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