Company: Cango Inc.
Symbol: CANG
Description: They are a leading automotive transaction service platform in China connecting dealers, financial institutions, car buyers and other industry participants.
Trade Date: 7/26
Shares: 12.5 million ADSs
Price Range: $10.00-$12.00
Underwriter(s):Morgan Stanley, BofA Merrill Lynch, Goldman Sachs (Asia)
Co-Manager(s); China Merchants Securities (HK), Guotai Junan Securities (Hong Kong) Limited
Terms Added: 7-16-18
Business: According to the Oliver Wyman Report, they cover the largest number of new car dealers in China, and the outstanding balance of financing transactions they facilitated was the largest among automotive transaction service platforms in China as of December 31, 2017. As of March 31, 2018, their platform connected 37,667 registered dealers, 11 third-party financial institutions and 29 other industry participants, including OEMs, online advertising platforms and insurance brokers and companies, and had served 734,336 car buyers cumulatively since inception. Their platform model puts them in a unique position to add value for their platform participants and business partners as the mobility market in China continues to grow and evolve.
They have extensive, technology-enabled service offerings along the automotive value chain, which enable them to attract more participants to their platform and enhance engagement of existing participants. Their services primarily consist of: (1) automotive financing facilitation, (2) automotive transaction facilitation and (3) after-market service facilitation. They generate substantially all of their revenue from service fees for providing automotive financing facilitation, and to a lesser degree from service fees and other income from providing automotive transaction facilitation and after-market services facilitation.
Financials: They have experienced strong growth in their results of operations. Their revenues increased by 142.3% from RMB434.3 million in 2016 to RMB1,052.2 million (US$167.7 million) in 2017. Their revenues increased by 27.5% from RMB195.1 million in the three months ended March 31, 2017 to RMB248.8 million (US$39.7 million) in the same period in 2018. Their net income increased by 161.5% from RMB133.5 million in 2016 to RMB349.1 million (US$55.7 million) in 2017. Their net income increased by 13.1% from RMB74.3 million in the three months ended March 31, 2017 to RMB84.0 million (US$13.4 million) in the same period in 2018.
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