INVESTOR PRESENTATION October, 2019 Disclaimer This presentation - - PowerPoint PPT Presentation
INVESTOR PRESENTATION October, 2019 Disclaimer This presentation - - PowerPoint PPT Presentation
INVESTOR PRESENTATION October, 2019 Disclaimer This presentation has been prepared by Cango Inc. (the Company) solely for information purpose and has not been independent ly verified. By viewing or accessing the information contained in
This presentation has been prepared by Cango Inc. (the “Company”) solely for information purpose and has not been independently verified. By viewing or accessing the information contained in this material, the recipient hereby acknowledges and agrees that no representations, warranties or undertakings, express or implied, are made by the Company or any of its directors, shareholders, employees, agents, affiliates, advisors
- r representatives or the underwriters as to, and no reliance should be placed upon, the accuracy, fairness, completeness or correctness of the information or opinions presented or contained in this presentation. None of
the Company or any of its directors, shareholders, employees, agents, affiliates, advisors or representatives or the underwriters accept any responsibility whatsoever (in negligence or otherwise) for any loss howsoever arising from any information presented or contained in this presentation or otherwise arising in connection with the presentation. The information presented or contained in this presentation is subject to change without notice and its accuracy is not guaranteed. Certain statements in this presentation, and other statements that the Company may make, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect the Company’s intent, beliefs or current expectations about the future. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” “anticipates,” “believes,” “confident” or words of similar meaning. These forward-looking statements are not guarantees of future performance and are based on a number of assumptions about the Company’s operations and other factors, many of which are beyond the Company’s control, and accordingly, actual results may differ materially from these forward-looking statements. The Company or any of its affiliates, advisers or representatives or the underwriters has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances. This presentation does not constitute an offer to sell or issue or an invitation or recommendation to purchase or subscribe for any securities of the Company for sale in the United States or anywhere else. No securities of the Company may be sold in the United States without registration with the United States Securities and Exchange Commission (the “SEC”) or an exemption from such registration pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations thereunder. No part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Specifically, these materials do not constitute a “prospectus” within the meaning of the Securities Act. This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company and is qualified in its entirety by reference to the detailed information in the prospectus relating to the proposed offering. The Company has filed a registration statement on Form F-1 with the SEC relating to its securities to be offered in the United States, but the registration statement has not yet become effective. Any public offering of the Company’s securities to be made in the United States will be made solely on the basis of the information contained in the statutory prospectus included in such registration statement. The prospectus contains detailed information about the Company, its subsidiaries, management, the consolidated financial statements and risks and uncertainties associated with its business and industry. Any decision to purchase the Company’s securities in the proposed offering should be made solely on the basis of the information contained in the prospectus relating to the proposed offering. In evaluating our business, we use certain non-GAAP measures as supplemental measures to review and assess our operating performance. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performances, investors should not consider them in isolation, or as a substitute for net income attributable to the Company or other consolidated statement of operations data prepared in accordance with U.S. GAAP. THE INFORMATION CONTAINED IN THIS DOCUMENT IS HIGHLY CONFIDENTIAL AND IS BEING GIVEN SOLELY FOR YOUR INFORMATION AND ONLY FOR YOUR USE IN CONNECTION WITH THIS
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Disclaimer
2
Cango at a Glance
3
Business
- Leading auto transaction service platform connecting dealers, financial institutions, car buyers, and other industry participants.
- Number of car purchases: 357k in 2018
- Dealer: Over 48,000 registered dealer covering 353 cities
- Funding partners: 13 including ICBC, WeBank, Bank of Shanghai, FAW Auto Finance
- Competitive advantages: technology, data, and cloud-based infrastructure
2018 IPO
- Listed on NYSE. Ticker: CANG
- IPO date: July 26, 2018
- IPO price: USD11 per ADR
- Lock up period: 180 days (till Jan 21, 2019)
- Free float: 3%
Investment Highlights
- Well positioned in China’s auto financing industry where we see high growth potential
- Asset light, highly profitable business model
- Management with sufficient experience in China auto financing industry
- New products and services monetizing the auto value chain
Management: Pioneers in China Auto Financing Industry
- Mr. Yongyi ZHANG
CFO
- Mr. Jiayuan LIN
Founder and CEO
- Mr. Xiaojun ZHANG
Founder and Chairman
4
Leading Technology-enabled Automotive Transaction Service Platform
5
Figures as of December 2018 unless otherwise stated
Who We Are
48,367(2Q19)
Car Dealers
40
Other Industry Participants
1,065,690
Car Buyers
13 (2Q19)
Financial Institutions
Strategic Partners Asset Light Model Strong Profitability Transaction Value Chain Coverage
Our Services and Solutions
Automotive Financing Facilitation
Automotive Transaction Facilitation After-market Services Facilitation
Other Participants Insurance Companies/ Brokers Car Buyers
$
Dealers Financial Institutions Online Platforms Car Buyers
$
Dealers OEM/ Wholesalers Online Platforms Car Buyers
$
A B C
6
Differentiated Business Model
7
Banks and Auto Financial Leasing Companies Auto e-Commerce Companies Powerful Dealership Network Weak Dealer Presence Inefficient Online Leads Conversion Financing to Transaction Value Chain Financing Only Transaction to Financing for Monetization Scalable Platform with 28%+ Net Margin(1) Low Profitability Unproven Profitability Diversified Funding Facilitation with Limited Credit Risk On-balance Sheet Model Full Guarantee Model
Notes:
1.
As of year 2018
Application Submission Time to Approve Identity Verification Signing of Agreement GPS Installment Transaction Closed/Car Pick-up
10+ pages Paper
application form
1 Week
approval time
Onsite
verification at bank’s branch
Paper
signing
Lengthy process
at Specified
Locations Days to Weeks waiting
time Traditional Approach
100%
electronic application Less than 2 Hours approval time on average
Facial recognition
utilization
Electronic
signing
Quick
Installment Onsite Within
Half of a Day
Approach
Value Creation For Platform Participants
Financial Institutions Dealers Car Buyers
Driving Our Own Operating Efficiency
37.5%
Average Operating Margin 2016-2018 8
Transforming the Auto Finance Experience
Notes:
1.
Operating profit over revenue (1)
Expanding Market Share against Industry Headwind with Massive Opportunities Ahead
9
Source: CEIC , China Auto Dealer Association, Oliver Wyman Report Notes:
1.
Market share defined as number of financing transactions facilitated divided by total new and used car sales during the same period
0.99% 1.04% FY2018 2Q19
- 2.7%
- 2.6%
Industry Car Sales Volume YoY Growth Cango Market Share
Expanding Market Share Despite of Industry Headwind (1)
30
provinces
353
cities
Notes:
1.
As of December 31, 2018, calculated by dividing the number of our car dealers as of December 31, 2018 by that of the industry as of December 31, 2017 according to the Oliver Wyman Report.
2.
As of June 30, 2019.
4S dealers 18%
Non-4S dealers 82%
Tier-one and tier- two cities 27%
Lower- tier cities 73%
Features of Our Registered Dealers(1) Strategic Value to Us Gain First-mover Advantage in an Underserved Market Build up Network Effect Access Auto Transaction Value Chain
~48,367
dealers in total
29%
market share of new car dealers Closed Transaction Loop
10
Largest and Deeply Engaged Dealer Network in China
(1) (1) (2) (1)
Car Sourcing Value-added Services After-market Products Leads Generation Sales and Transaction Facilitation
New and used car sourcing for dealers Diversified channels Dealer SaaS Solution Supply Chain Financing Repair & maintenance Insurance products Diverse online traffic to
- ffline dealer networks
Customized financial products for car buyers
Dealers
11
20% YoY Growth
- f number of dealers from
2Q2018 to 2Q2019 Majority of dealers experienced
>30% increase
in auto sales volume
21.5 contracts
per active dealer in 2018
RMB1.31mm
loan origination per active dealer in 2018 46% 59% 89% 91% 92% 2016YE 2017YE 2018YE 1Q2019 2Q2019
Continuously Optimizing Dealer Productivity
% of Self-operated Dealers
Comprehensive Toolkit to Empower Dealers and Grow with Them
51% 51%
SHA: 601229 SHA: 601398
Asset Light Model with Diversified Funding Sources and Limited Risk Exposure
12
Overview of Major Funding Partners Diversified Funding with Limited Risk Exposure
Loan Origination By Funding Partners
FY2018
Notes:
1.
As of December 31, 2018
2.
Joined in 2018
3.
Joined in July 2018
4.
US$1 = RMB 6.8755; total asset as of Dec 31, 2018, unless otherwise stated
5.
Based on “The Banker” in terms of tier–1 capital in 2018
6.
Based on total assets in 2018 Source: company filings, public news
Total Asset (US$Bn)(4)
295 32 4,032
49% 49%
Remarks
- 76th largest bank in the world(6)
- First private commercial bank in
china backed by
- Largest bank in the world(5)
Type
- Direct Partnership:
Risk-Taking
Jiangnan Rural Commercial Bank
55
- 10th largest rural commercial bank
in China(3)
- Direct Partnership:
Risk-Free
- Co-partnership:
Risk-Taking
- Direct Partnership:
Risk-Taking
Jincheng Bank
13
- Well recognized player in auto financing
- Direct Partnership:
Risk-Free
74 %
Direct Partnership Co-partnership:
9 Financial
institutions led by
More to come…
(2) (1) (3)
50% 8% 42%
Rigorous Dealer Screening Procedure 1 Credit Underwriting 2 Six-stage Delinquent Asset Management 3
Notes:
1.
Exposure at risk relating to financing transactions for which any installment payment is 90 to 180 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 and interest that are over 180 calendar days past due;
2.
During the three months ended December 31, 2018
3.
From the beginning of 2016 to December 31, 2018
Internal Blacklist of Fraudulent Dealers Significant Lawsuits Check Leveraging Third-party Databases On-site Visits 100% GPS Installation
Robust M3+(1) Overdue Ratio by Balance
0.39% 0.34% 0.37%0.37% 0.30%
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Credit Assessment Collateral Registration
Automobiles Required to be Registered with Local Government Authorities Manual Evaluation If Necessary Proprietary Credit Assessment Model Machine Learning Algorithms Proprietary Model Loan Applicant Data Dealer Data Proprietary Data Automated Reminder
1
Live Phone Calls
2
In-person Visits
3
Professional Repossession
4
Disposal
5
Legal Actions
6
70.5%
Repossession Success Rate with Telematics Devices (3)
32.4%
Automatic Approval/Rejection (2)
Robust Risk Management Practices
New Strategic Initiatives: Working with OEMs
14
More national banks and prestigious funding partners to join… Vast dealer network in lower-tier cities
in additional to OEMs’ existing 4S network
Direct funding from banks with low
funding cost
Already experienced in offering such
products
Value Creation Funding partners: diversified loan
portfolio & attractive asset class
OEMs: extend sales channels and
diversified funding support to boost sales
Car buyers: cost-effective and convenient
auto-financing solutions
Cango’s Core Competencies More foreign and sino-foreign joint venture OEMs to come… 24 domestic OEMs partnering with us(1)
Low interest OEM-subsidized and non- subsidized auto financing products for car buyers
Note1: As of December 31, 2018
Auto Insurance Distribution Anti-theft Assurance
New Business Initiatives: Insurance Facilitation
15
Accident Insurance Number of Policy Sales In first half of 2019
162,797 91,058
As % of Total Transactions Facilitated by Cango
87.0% 48.7%
Partner with more insurance companies to facilitate auto insurance distribution
Potential high attachment ratio to auto financing solution Minimal extra customer acquisition cost Highly scalable High profit margin
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NYSE:CANG
Website: ir.cangoonline.com Email: ir@cangoonline.com