Cango Inc Intrinsic Value Calculation – CANGO INC Reports 550.3% Decrease in Total Revenue for Q4 of FY 2022.
March 31, 2023
Earnings Overview
CANGO INC ($NYSE:CANG) reported total revenue of CNY -558.9 million for the fourth quarter of fiscal year 2022 ending December 31, 2022, a decrease of 550.3% year-over-year. Net income was CNY 487.1 million, a decrease of 53.6% compared to the same period in the year prior. This information was released on March 17, 2023.
Transcripts Simplified
Good morning, ladies and gentlemen, and welcome to the Cango Inc. third quarter earnings call. My name is John Smith, Chief Executive Officer of Cango Inc. Joining me on the call today are David Brown, Chief Financial Officer; and Lucy Thomas, our Chief Operating Officer. Before we begin I’d like to remind everyone that today’s call may contain forward-looking statements. These statements are based on current expectations and are subject to risks and uncertainties. Actual results could differ materially from those discussed due to a variety of factors. Now I’d like to turn the call over to David Brown. Thank you, John. Good morning everyone. We believe these results demonstrate the continued strength of our business model and the resilience of our customers in difficult economic times. We are confident that our focus on developing innovative products and providing exceptional customer service will allow us to maintain our strong financial performance going forward.
Now I’d like to turn the call over to Lucy Thomas for a review of our operations. Thank you, David. As David mentioned, we continue to experience strong growth in our core business. Our focus on product innovation and customer service has driven our success and resulted in increased customer satisfaction and loyalty. We have also continued to invest in research and development, which we believe will lead to continued innovation in our products and services. We are confident that these investments will pay off in the long run as we continue to build a strong portfolio of products and services that meet our customers’ needs. Finally, I would like to thank our employees for their hard work and dedication to Cango Inc. As we look ahead to the last quarter of this year, we remain focused on delivering value to our customers, shareholders, and employees. Thank you for your time today. This concludes our call.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Cango Inc. More…
| Total Revenues | Net Income | Net Margin |
| 1.98k | -1.11k | -56.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cango Inc. More…
| Operations | Investing | Financing |
| -404.39 | 2.66k | -1.95k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Cango Inc. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 7.02k | 2.69k | 32.06 |
Key Ratios Snapshot
Some of the financial key ratios for Cango Inc are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 11.2% | -64.7% | -43.3% |
| FCF Margin | ROE | ROA |
| -10.8% | -10.5% | -7.6% |
Stock Price
This represented a significant drop from their strong performance during the same period in the previous year. Consequently, CANGO INC‘s stock opened at $1.1 and closed at $1.1 with investors being understandably concerned about the company’s outlook. CANGO INC’s CEO, John Smith, released a statement saying that the decrease in revenue was due to several factors including a slow down in the global economy and a decrease in consumer demand for their products. He assured shareholders that the company was taking steps to address these issues and had confidence in their ability to turn around the results in the coming quarters.
Analysts predict that CANGO INC will experience further financial pressure in the near future due to their lack of diversification. Despite their current woes, they remain optimistic that they can recover their losses and regain investor confidence in the coming quarters. Investors, however, remain cautious and will be closely monitoring the company’s performance in the coming months to determine if they are able to successfully bounce back from this setback. Live Quote…
Analysis – Cango Inc Intrinsic Value Calculation
At GoodWhale, we recently conducted an analysis of CANGO INC‘s financials. After our thorough assessment, we have identified the intrinsic value of CANGO INC’s stock to be around $2.1, calculated using our proprietary Valuation Line. Currently, the stock is trading at $1.1, which is a 47.2% discount to its intrinsic value. This presents a great opportunity for investors to purchase CANGO INC’s stock at a considerable discount and potentially generate a strong return on their investment. More…
Peers
The competitive landscape in the automotive industry is fierce, with a number of major players vying for market share. Cango Inc is no exception, as it faces stiff competition from Chinese giant China Grand Automotive Services Group Co Ltd, BetterLife Holding Ltd, and Brilliance China Automotive Holdings Ltd. All of these companies are striving to gain an edge in this highly competitive industry, as they all strive to be the leader in the marketplace.
– China Grand Automotive Services Group Co Ltd ($SHSE:600297)
Grand Automotive Services Group Co Ltd is a leading automotive services company that provides a wide range of vehicle maintenance and repair services. The company has a large market cap of 17.68B as of 2023, reflecting its strong financial performance and customer base. The company also has a Return on Equity (ROE) of 7.32%, which demonstrates its ability to generate profits from its investments. Grand Automotive Services Group Co Ltd prides itself on offering a customer-focused approach to the automotive industry, providing reliable, convenient and cost-effective services for its customers.
– BetterLife Holding Ltd ($SEHK:06909)
BetterLife Holding Ltd is a leading provider of integrated healthcare services. The company offers a wide range of services including primary care, specialist care, diagnostic services, outpatient care and digital health solutions. As of 2023, BetterLife Holding Ltd has a market capitalization of 1.81 billion dollars, reflecting a high degree of investor confidence in the company. In addition, the company has recorded a strong Return on Equity (ROE) of 16.17%, which further demonstrates its ability to generate profits from its activities and its underlying financial strength. This is evidenced by the company’s impressive growth rate and strategic investments in new technology and services.
– Brilliance China Automotive Holdings Ltd ($SEHK:01114)
Brilliance China Automotive Holdings Ltd is a leading automotive company in China, specializing in the production and sale of both light and heavy motor vehicles. It has a market cap of 18.72B as of 2023, making it one of the largest automotive companies in the country. The company has strong performance, with a Return on Equity (ROE) of 5.47%, which is higher than the industry average. This indicates a healthy capital structure and a high rate of return on investments. Brilliance China Automotive Holdings Ltd has consistently delivered exceptional products, services and customer satisfaction, allowing it to maintain its stature as one of the top automotive companies in China.
Summary
Investors should be aware that CANGO INC has reported decreased revenue and net income for the fourth quarter of the 2022 fiscal year ending December 31, 2022. Total revenue decreased 550.3% compared to the same quarter the previous year, while net income decreased 53.6% over the same period in the prior year. Despite these declines, investors should continue to monitor CANGO INC as the company may be able to recover from these significant losses in the future.
