INVESTOR PRESENTATION October, 2019 Disclaimer This presentation - - PowerPoint PPT Presentation

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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


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October, 2019

INVESTOR PRESENTATION

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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

  • PRESENTATION. THE INFORMATION CONTAINED HEREIN MAY NOT BE COPIED, REPRODUCED, REDISTRIBUTED, OR OTHERWISE DISCLOSED, IN WHOLE OR IN PART, TO ANY OTHER PERSON IN ANY
  • MANNER. Any forwarding, distribution or reproduction of this presentation in whole or in part is unauthorized.

By viewing, accessing or participating in this presentation, participants hereby acknowledge and agree to keep the contents of this presentation and these materials confidential. Participants agree not to remove these materials, or any materials provided in connection herewith, from the conference room where such documents are provided. Participants agree further not to photograph, copy or otherwise reproduce this presentation in any form or pass on this presentation to any other person for any purpose, during the presentation or while in the conference room. Participants must return this presentation and all other materials provided in connection herewith to the Company upon completion of the presentation. By viewing, accessing or participating in this presentation, participants agree to be bound by the foregoing limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws.

Disclaimer

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Cango at a Glance

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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
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Management: Pioneers in China Auto Financing Industry

  • Mr. Yongyi ZHANG

CFO

  • Mr. Jiayuan LIN

Founder and CEO

  • Mr. Xiaojun ZHANG

Founder and Chairman

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Leading Technology-enabled Automotive Transaction Service Platform

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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

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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

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Differentiated Business Model

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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

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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)

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Expanding Market Share against Industry Headwind with Massive Opportunities Ahead

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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)

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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

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Largest and Deeply Engaged Dealer Network in China

(1) (1) (2) (1)

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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

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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

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51% 51%

SHA: 601229 SHA: 601398

Asset Light Model with Diversified Funding Sources and Limited Risk Exposure

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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%

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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

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New Strategic Initiatives: Working with OEMs

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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

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Auto Insurance Distribution Anti-theft Assurance

New Business Initiatives: Insurance Facilitation

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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