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Cango Inc.

Cango Inc.CANGEarnings & Financial Report

NYSE · Financials · Finance Services

Cango Inc. operates an integrated automotive transaction and service platform focused on the Chinese market. It provides new and used vehicle trading support, auto financing facilitation, after-sales service matching, and data-driven solutions for auto dealers, consumers, and industry partners across the entire automotive consumption value chain.

What changed in Cango Inc.'s 20-F — 2023 vs 2024

Top changes in Cango Inc.'s 2024 20-F

857 paragraphs added · 716 removed · 453 edited across 4 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

194 edited+283 added−78 removed572 unchanged
However, the PRC government has promulgated new laws, regulations or relevant drafts and indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. For more detailed information, see “Item 4. Information on the Company—B. Business Overview—Regulations—M&A Rules and Overseas Listings” and “Item 4. Information on the Company—B.
However, the PRC government has promulgated new laws, regulations or relevant drafts and indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. For more detailed information, see “Item 4. Information on the Company—B. Business Overview—Regulations in the PRC —M&A Rules and Overseas Listings” and “Item 4.
Business Overview—Regulations—Regulation Related to Cybersecurity, Internet Information Security and Privacy Protection.” According to these new laws and regulations and the draft laws and regulations if enacted in their current forms, in connection with our future offshore offering activities, we may be required to fulfill filing and reporting procedures with or obtain approval from the CSRC, and may be required to go through cybersecurity review by the PRC authorities.
Business Overview—Regulations in the PRC —Regulation Related to Cybersecurity, Internet Information Security and Privacy Protection.” According to these new laws and regulations and the draft laws and regulations if enacted in their current forms, in connection with our future offshore offering activities, we may be required to fulfill filing and reporting procedures with or obtain approval from the CSRC, and may be required to go through cybersecurity review by the PRC authorities.
The laws and regulations governing the automotive and mobility industries or other industries related to the Group’s business in the PRC are subject to further changes and interpretation.
The laws and regulations governing the automotive and mobility industries or other industries related to the Group’s automotive business in the PRC are subject to further changes and interpretation.
The Group’s business may be subject to a variety of laws and regulations in the PRC governing the automotive and mobility industries. There are uncertainties regarding the interpretation and application of current and future laws and regulations.
The Group’s automotive business may be subject to a variety of laws and regulations in the PRC governing the automotive and mobility industries. There are uncertainties regarding the interpretation and application of current and future laws and regulations.
Business Overview—Regulations—Regulation Related to Intermediation.” Therefore, if the Group fails to provide material information to financial institutions, or if it fails to identify false information received from car buyers or others and in turn provides such information to financial institutions, and in either case if the Group is also found to be at fault, due to failure or deemed failure to exercise proper care, such as to conduct adequate information verification or employee supervision, the Group could be held liable for damage caused to financial institutions as an intermediary pursuant to the PRC Civil Code.
Business Overview—Regulations in the PRC —Regulation Related to Intermediation.” Therefore, if the Group fails to provide material information to financial institutions, or if it fails to identify false information received from car buyers or others and in turn provides such information to financial institutions, and in either case if the Group is also found to be at fault, due to failure or deemed failure to exercise proper care, such as to conduct adequate information verification or employee supervision, the Group could be held liable for damage caused to financial institutions as an intermediary pursuant to the PRC Civil Code.
Currently, our PRC subsidiary may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to us, by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions.
Currently, our PRC subsidiary may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to us, by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions.
Taxation—Certain United States Federal Income Tax Considerations.” For example, if we are or become a PFIC, you may become subject to increased tax liabilities under United States federal income tax laws and regulations, and will become subject to burdensome reporting requirements. See “Item 10. Additional Information—E.
Additional Information—E. Taxation—Certain United States Federal Income Tax Considerations.” For example, if we are or become a PFIC, you may become subject to increased tax liabilities under United States federal income tax laws and regulations, and will become subject to burdensome reporting requirements. See “Item 10. Additional Information—E.
In connection with our previous issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we, our subsidiaries, the consolidated VIEs and consolidated affiliates, (i) have not received any requirement from competent PRC governmental authorities to obtain permissions from the China Securities Regulatory Commission, or the CSRC, (ii) have not received any requirement from competent PRC governmental authorities to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, and (iii) have not received or were denied such requisite permissions by any PRC authority.
In connection with our previous issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we, our subsidiaries, the consolidated VIEs and consolidated affiliates, (i) have not received any requirement from competent PRC governmental authorities to obtain permissions from the CSRC, (ii) have not received any requirement from competent PRC governmental authorities to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, and (iii) have not received or were denied such requisite permissions by any PRC authority.
Political tensions between the United States and China have escalated in recent years due to, among other things, the trade war between the two countries since 2018, the COVID-19 outbreak, the PRC National People’s Congress’ passage of Hong Kong national security legislation, the imposition of U.S. sanctions on certain Chinese officials from China’s central government and the Hong Kong Special Administrative Region by the U.S. government, and the imposition of sanctions on certain individuals from the U.S. by the Chinese government, various executive orders issued by former U.S.
Political tensions between the United States and China have escalated in recent years due to, among other things, the trade war between the two countries since 2018, the COVID-19 outbreak, the PRC National People’s Congress’ passage of Hong Kong national security legislation, the imposition of U.S. sanctions on certain Chinese officials from China’s central government and the Hong Kong Special Administrative Region by the U.S. government, and the imposition of sanctions on certain individuals from the U.S. by the Chinese government, various executive orders issued by the U.S.
In the event of a system outage, malfunction or data loss, the ability to provide services would be materially and adversely affected. The satisfactory performance, reliability and availability of the Group’s technology and underlying network infrastructure are critical to the operations, user service, reputation and ability to attract new and retain existing car buyers and financial institutions.
In the event of a system outage, malfunction or data loss, the ability to provide automotive services would be materially and adversely affected. The satisfactory performance, reliability and availability of the Group’s technology and underlying network infrastructure are critical to the operations, user service, reputation and ability to attract new and retain existing car buyers and financial institutions.
Business Overview—Regulations—Regulation Related to Intermediation.” Although the Group has not been materially affected by fraudulent activities associated with car buyers in the past, there is still a possibility that such fraudulent activities may materially and adversely affect the Group’s business, financial condition and results of operations in the future.
Business Overview—Regulations in the PRC—Regulation Related to Intermediation.” Although the Group has not been materially affected by fraudulent activities associated with car buyers in the past, there is still a possibility that such fraudulent activities may materially and adversely affect the Group’s business, financial condition and results of operations in the future.
Xiaojun Zhang, Mr. Jiayuan Lin and several other beneficial owners of our ordinary shares have completed the SAFE registration pursuant to SAFE Circular 37 in 2018. We have notified substantial beneficial owners of ordinary shares who we know are PRC residents of their filing obligation and other compliance obligations relating to offshore investment.
Xiaojun Zhang, Mr. Jiayuan Lin and several other beneficial owners of our ordinary shares have completed the initial SAFE registration pursuant to SAFE Circular 37 in 2018. We have notified substantial beneficial owners of ordinary shares who we know are PRC residents of their filing obligation and other compliance obligations relating to offshore investment.
Since a significant amount of the Group’s future revenue and cash flow will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize cash generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders, including holders of our ADSs, and may limit our ability to obtain foreign currency through debt or equity financing for our onshore subsidiary and consolidated VIEs. 50 Table of Contents PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using the proceeds of the initial public offering to make loans to our PRC subsidiary and our consolidated VIEs, or to make additional capital contributions to our PRC subsidiary.
Since a significant amount of the Group’s future revenue and cash flow will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize cash generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders, including holders of our ADSs, and may limit our ability to obtain foreign currency through debt or equity financing for our onshore subsidiary and consolidated VIEs. 63 Table of Contents PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using the proceeds of the initial public offering to make loans to our PRC subsidiary and our consolidated VIEs, or to make additional capital contributions to our PRC subsidiary.
If the Group’s new solutions and services do not achieve sufficient market acceptance or provide the expected benefits to platform participants, the Group’s financial condition, results of operations and competitive position will be materially and adversely affected. New solutions and services may also subject the Group to regulatory risks.
If the Group’s new automotive solutions and services do not achieve sufficient market acceptance or provide the expected benefits to platform participants, the Group’s financial condition, results of operations and competitive position will be materially and adversely affected. New automotive solutions and services may also subject the Group to regulatory risks.
The Group has incurred and will continue to incur expenses and consume resources to develop and market new solutions and services for platform participants, including dealers, financial institutions and car buyers. The Group may also develop new solutions and services for other industry participants, such as OEMs and insurance brokers and companies.
The Group has incurred and will continue to incur expenses and consume resources to develop and market new automotive solutions and services for platform participants, including dealers, financial institutions and car buyers. The Group may also develop new automotive solutions and services for other industry participants, such as OEMs and insurance brokers and companies.
Risks Relating to Doing Business in China We are subject to risks and uncertainties relating to doing business in China in general, including, but are not limited to, the following: ● changes and developments in the political and economic policies of the PRC government may materially and adversely affect the Group’s business, financial condition and results of operations and may result in our inability to sustain the Group’s growth and expansion strategies; ● changes and developments in the PRC legal system and the interpretation and enforcement of PRC laws, rules and regulations may subject us to uncertainties; 12 Table of Contents ● the M&A Rules and certain other PRC regulations establish required procedures for acquisitions conducted by foreign investors that could make it more difficult for the Group to grow through acquisitions; ● uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and its implementing rules and how they may impact our business, financial condition and results of operations; and ● PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary or limit our PRC subsidiary’s ability to increase its registered capital or distribute profits.
Risks Relating to Doing Business in China We are subject to risks and uncertainties relating to doing business in China in general, including, but are not limited to, the following: ● changes and developments in the political and economic policies of the PRC government may materially and adversely affect the Group’s business, financial condition and results of operations and may result in our inability to sustain the Group’s growth and expansion strategies; ● changes and developments in the PRC legal system and the interpretation and enforcement of PRC laws, rules and regulations may subject us to uncertainties; ● the M&A Rules and certain other PRC regulations establish required procedures for acquisitions conducted by foreign investors that could make it more difficult for the Group to grow through acquisitions; ● uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and its implementing rules and how they may impact our business, financial condition and results of operations; and ● PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary or limit our PRC subsidiary’s ability to increase its registered capital or distribute profits.
If a lawsuit is brought against us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action, depending on, among other things, the nature of the claims, the judge or justice hearing such claims and the venue of the hearing. 60 Table of Contents Certain judgments obtained against us by our shareholders may not be enforceable.
If a lawsuit is brought against us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action, depending on, among other things, the nature of the claims, the judge or justice hearing such claims and the venue of the hearing. 71 Table of Contents Certain judgments obtained against us by our shareholders may not be enforceable.
Risks Relating to Our Corporate Structure Risks and uncertainties relating to our corporate structure include, but are not limited to, the following: ● we rely on contractual arrangements with our consolidated VIEs and their shareholders to operate the Group’s business, which may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to the Group’s business; ● any failure by our consolidated VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business; ● the shareholders of our consolidated VIEs may have potential conflicts of interest with us, which may materially and adversely affect the Group’s business and financial condition; ● if the PRC government deems that the contractual arrangements in relation to our consolidated VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations; and ● contractual arrangements in relation to our consolidated VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that our consolidated VIEs owe additional taxes, which could negatively affect the Group’s financial condition and the value of your investment.
Risks Relating to Our Corporate Structure Risks and uncertainties relating to our corporate structure include, but are not limited to, the following: ● we rely on contractual arrangements with our consolidated VIEs and their shareholders to operate the Group’s business, which may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to the Group’s business; ● any failure by our consolidated VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business; ● the shareholders of our consolidated VIEs may have potential conflicts of interest with us, which may materially and adversely affect the Group’s business and financial condition; 12 Table of Contents ● if the PRC government deems that the contractual arrangements in relation to our consolidated VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations; and ● contractual arrangements in relation to our consolidated VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that our consolidated VIEs owe additional taxes, which could negatively affect the Group’s financial condition and the value of your investment.
Compliance with existing and future rules, laws and regulations can be costly and if the Group’s practice is deemed to violate any existing or future rules, laws and regulations, it may face injunctions, including orders to cease non-compliant activities, and may be exposed to other penalties as determined by the relevant government authorities as well. 20 Table of Contents The Office of the Leading Group for Specific Rectification against Online Finance Risks and the Office of the Leading Group for Specific Rectification against P2P Online Lending Risks jointly issued the Circular on Regulating and Rectifying Cash Loan Business on December 1, 2017, or Circular 141.
Compliance with existing and future rules, laws and regulations can be costly and if the Group’s practice is deemed to violate any existing or future rules, laws and regulations, it may face injunctions, including orders to cease non-compliant activities, and may be exposed to other penalties as determined by the relevant government authorities as well. 19 Table of Contents The Office of the Leading Group for Specific Rectification against Online Finance Risks and the Office of the Leading Group for Specific Rectification against P2P Online Lending Risks jointly issued the Circular on Regulating and Rectifying Cash Loan Business on December 1, 2017, or Circular 141.
If the Group is unable to satisfy such requirement, it may no longer be able to collaborate with the relevant financial institutions, or become subject to penalties, and the Group’s business, financial condition, results of operations and prospects could be materially and adversely affected. 22 Table of Contents Furthermore, even if the Group successfully changes the arrangements with the financial institutions and only Cango Financing will provide such credit enhancement services in the future, the outstanding guarantee liabilities of a financing guarantee company may not exceed ten times of its net assets as required by the Financing Guarantee Rules.
If the Group is unable to satisfy such requirement, it may no longer be able to collaborate with the relevant financial institutions, or become subject to penalties, and the Group’s business, financial condition, results of operations and prospects could be materially and adversely affected. 21 Table of Contents Furthermore, even if the Group successfully changes the arrangements with the financial institutions and only Cango Financing will provide such credit enhancement services in the future, the outstanding guarantee liabilities of a financing guarantee company may not exceed ten times of its net assets as required by the Financing Guarantee Rules.
If dividends paid to our non-PRC investors, or gains from the transfer of our ADSs or Class A ordinary shares by such investors, are deemed as income derived from sources within the PRC and thus are subject to PRC tax, the value of your investment in our ADSs or Class A ordinary shares may decline significantly. 49 Table of Contents We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies.
If dividends paid to our non-PRC investors, or gains from the transfer of our ADSs or Class A ordinary shares by such investors, are deemed as income derived from sources within the PRC and thus are subject to PRC tax, the value of your investment in our ADSs or Class A ordinary shares may decline significantly. 62 Table of Contents We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies.
As a result of the Group’s business transition, the service fees for the Group’s automotive financing facilitation services have declined in the past and may continue to decline in the future, which may adversely affect the Group’s business, financial condition and results of operations.
As a result of the Group’s business transition, the service fees for the Group’s automotive financing facilitation services have declined in the past and will continue to decline in the future, which may adversely affect the Group’s business, financial condition and results of operations.
If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in the Group’s technology infrastructure are exposed and exploited, the relationships with car buyers, dealers and/or financial institutions could be severely damaged, the Group could incur significant liability and its business and operations could be adversely affected. 29 Table of Contents In addition, PRC government authorities have enacted a series of laws and regulations in regard of cybersecurity, information security, privacy and data protection.
If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in the Group’s technology infrastructure are exposed and exploited, the relationships with car buyers, dealers and/or financial institutions could be severely damaged, the Group could incur significant liability and its business and operations could be adversely affected. 25 Table of Contents In addition, PRC government authorities have enacted a series of laws and regulations in regard of cybersecurity, information security, privacy and data protection.
In addition, registered capital and capital reserve accounts are also restricted from withdrawal in the PRC, up to the amount of net assets held in each operating subsidiary. 48 Table of Contents Limitations on the ability of our consolidated VIEs to make remittance to the wholly-foreign owned enterprise and on the ability of our PRC subsidiary to pay dividends to us could limit our ability to access cash generated by the operations of those entities, including to make investments or acquisitions that could be beneficial to our businesses, pay dividends to our shareholders or otherwise fund and conduct our business.
In addition, registered capital and capital reserve accounts are also restricted from withdrawal in the PRC, up to the amount of net assets held in each operating subsidiary. 61 Table of Contents Limitations on the ability of our consolidated VIEs to make remittance to the wholly-foreign owned enterprise and on the ability of our PRC subsidiary to pay dividends to us could limit our ability to access cash generated by the operations of those entities, including to make investments or acquisitions that could be beneficial to our businesses, pay dividends to our shareholders or otherwise fund and conduct our business.
Failure to collect overdue repayments for the financing transactions facilitated or recover the related car collaterals will have a material adverse effect on the Group’s business operations and financial position. 19 Table of Contents The Group endeavors to ensure its collection and recovery efforts comply with the relevant laws and regulations in the PRC and has established strict policies and implemented measures to ensure that the delinquent asset management personnel do not engage in aggressive or predatory practices.
Failure to collect overdue repayments for the financing transactions facilitated or recover the related car collaterals will have a material adverse effect on the Group’s business operations and financial position. 18 Table of Contents The Group endeavors to ensure its collection and recovery efforts comply with the relevant laws and regulations in the PRC and has established strict policies and implemented measures to ensure that the delinquent asset management personnel do not engage in aggressive or predatory practices.
The SEC, U.S. Department of Justice (“DOJ”) and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies such as the Group, and non-U.S. persons, such as our directors and executive officers in China.
Department of Justice (“DOJ”) and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies such as the Group, and non-U.S. persons, such as our directors and executive officers in China.
Further, if our corporate structure and contractual arrangements are found to be in violation of any existing or future PRC laws or regulations, the relevant regulatory authorities would have discretion in dealing with such violations, including: ● revoking the Group’s business and operating licenses; ● levying fines on the Group; ● confiscating any of the Group’s income that they deem to be obtained through illegal operations; 41 Table of Contents ● shutting down the Group’s services; ● discontinuing or restricting the Group’s operations in China; ● imposing conditions or requirements with which the Group may not be able to comply; ● requiring us to change our corporate structure and contractual arrangements; ● restricting or prohibiting our use of the proceeds from overseas offering to finance our consolidated VIEs’ business and operations; and ● taking other regulatory or enforcement actions that could be harmful to our business.
Further, if our corporate structure and contractual arrangements are found to be in violation of any existing or future PRC laws or regulations, the relevant regulatory authorities would have discretion in dealing with such violations, including: ● revoking the Group’s business and operating licenses; ● levying fines on the Group; ● confiscating any of the Group’s income that they deem to be obtained through illegal operations; ● shutting down the Group’s services; ● discontinuing or restricting the Group’s operations in China; ● imposing conditions or requirements with which the Group may not be able to comply; ● requiring us to change our corporate structure and contractual arrangements; ● restricting or prohibiting our use of the proceeds from overseas offering to finance our consolidated VIEs’ business and operations; and ● taking other regulatory or enforcement actions that could be harmful to our business.
The Group’s financial position could be materially and adversely affected if the tax liabilities of our PRC subsidiary and consolidated VIEs increase, or if they are required to pay late payment fees and other penalties. 42 Table of Contents We may lose the ability to use and enjoy assets held by our consolidated VIEs that are material to business operation if the entity goes bankrupt or becomes subject to a dissolution or liquidation proceeding.
The Group’s financial position could be materially and adversely affected if the tax liabilities of our PRC subsidiary and consolidated VIEs increase, or if they are required to pay late payment fees and other penalties. 55 Table of Contents We may lose the ability to use and enjoy assets held by our consolidated VIEs that are material to business operation if the entity goes bankrupt or becomes subject to a dissolution or liquidation proceeding.
The Group may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management from the Group’s operations, and the Group’s business and operations may be materially and adversely affected. 43 Table of Contents Risks Relating to Doing Business in China Changes and developments in the political and economic policies of the PRC government may materially and adversely affect the Group’s business, financial condition and results of operations and may result in our inability to sustain the Group’s growth and expansion strategies.
The Group may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management from the Group’s operations, and the Group’s business and operations may be materially and adversely affected. 56 Table of Contents Risks Relating to Doing Business in China Changes and developments in the political and economic policies of the PRC government may materially and adversely affect the Group’s business, financial condition and results of operations and may result in our inability to sustain the Group’s growth and expansion strategies.
These uncertainties may impede the Group’s ability to enforce the contracts it has entered into and/or its intellectual property rights and could materially and adversely affect the Group’s business, financial condition and results of operations. 45 Table of Contents The M&A Rules and certain other PRC regulations establish required procedures for acquisitions conducted by foreign investors that could make it more difficult for the Group to grow through acquisitions.
These uncertainties may impede the Group’s ability to enforce the contracts it has entered into and/or its intellectual property rights and could materially and adversely affect the Group’s business, financial condition and results of operations. 58 Table of Contents The M&A Rules and certain other PRC regulations establish required procedures for acquisitions conducted by foreign investors that could make it more difficult for the Group to grow through acquisitions.
If we fail to complete such registrations or obtain such approvals, our ability to use foreign currency, including the proceeds we received from our initial public offering, and to capitalize or otherwise fund operations in China may be negatively affected, which could materially and adversely affect the Group’s liquidity and our ability to fund and expand the Group’s business. 51 Table of Contents Fluctuations in exchange rates could result in foreign currency exchange losses and could materially reduce the value of your investment.
If we fail to complete such registrations or obtain such approvals, our ability to use foreign currency, including the proceeds we received from our initial public offering, and to capitalize or otherwise fund operations in China may be negatively affected, which could materially and adversely affect the Group’s liquidity and our ability to fund and expand the Group’s business. 64 Table of Contents Fluctuations in exchange rates could result in foreign currency exchange losses and could materially reduce the value of your investment.
Furthermore, if China adopts more stringent standards with respect to environmental protection or corporate social responsibilities, the Group may incur increased compliance cost or become subject to additional restrictions in its operations. 44 Table of Contents Furthermore, the PRC government has significant oversight and discretion over the conduct of the Group’s business and may intervene with or influence the Group’s operations as the government deems appropriate to further regulatory, political and societal goals.
Furthermore, if China adopts more stringent standards with respect to environmental protection or corporate social responsibilities, the Group may incur increased compliance cost or become subject to additional restrictions in its operations. 57 Table of Contents Furthermore, the PRC government has significant oversight and discretion over the conduct of the Group’s business and may intervene with or influence the Group’s operations as the government deems appropriate to further regulatory, political and societal goals.
Our historical financial and operating performance may not be indicative of our future prospects and results of operations; 11 Table of Contents ● the Group may not be able to successfully expand or maintain or effectively manage relationships with existing network of dealers; ● OEMs may not continue to participate on Cango platform; ● failure to sell cars owned by the Group or facilitate the sale of cars owned by dealers may have a material and adverse effect on the Group’s business, financial condition and results of operations; ● uncertainties relating to the growth of the Chinese automotive and mobility markets in general could adversely affect the Group’s business and results of operations; ● the Group operates in a market where the credit infrastructure is still at an early stage of development.
Our historical financial and operating performance may not be indicative of our future prospects and results of operations; ● the Group may not be able to successfully expand or maintain or effectively manage relationships with existing network of dealers; ● OEMs may not continue to participate on Cango platform; ● failure to sell cars owned by the Group or facilitate the sale of cars owned by dealers may have a material and adverse effect on the Group’s business, financial condition and results of operations; ● uncertainties relating to the growth of the Chinese automotive and mobility markets in general could adversely affect the Group’s business and results of operations; ● the Group operates in a market where the credit infrastructure is still at an early stage of development.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 61 Table of Contents We have incurred and expect to continue to incur significant costs as a public company, which could lower our profits or make it more difficult to run our business.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 72 Table of Contents We have incurred and expect to continue to incur significant costs as a public company, which could lower our profits or make it more difficult to run our business.
Risks Factors—Risks Relating to Doing Business in China—If the PCAOB determines that it is unable to inspect or investigate completely our auditor at any point in the future, our ADSs may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, as amended, or the HFCA Act, and any such trading prohibition on our ADSs or threat thereof may materially and adversely affect the price of our ADSs and value of your investment.” 5 Table of Contents PRC Licenses, Permissions and Approvals We conduct business operations mainly through the consolidated VIEs and their respective subsidiaries in China.
Risks Factors—Risks Relating to Doing Business in China—If the PCAOB determines that it is unable to inspect or investigate completely our auditor at any point in the future, our ADSs may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, as amended, or the HFCA Act, and any such trading prohibition on our ADSs or threat thereof may materially and adversely affect the price of our ADSs and value of your investment.” PRC Licenses, Permissions and Approvals We conduct business operations mainly through the consolidated VIEs and their respective subsidiaries in China.
New solutions and services must achieve high levels of market acceptance in order for the Group to recoup its investment in developing, acquiring and bringing them to market.
New automotive solutions and services must achieve high levels of market acceptance in order for the Group to recoup its investment in developing, acquiring and bringing them to market.
Furthermore, on March 22, 2024, the Cyberspace Administration of China promulgated the Provisions on Promoting and Standardizing Cross-Border Data Transfer which set forth the circumstances exempted from performing the security assessment or filing procedures for cross-border data transfer and further clarify the thresholds and senarios for data processors to go through these procedures as stipulated under the aforementioned measures.
Furthermore, on March 22, 2024, the Cyberspace Administration of China promulgated the Provisions on Promoting and Standardizing Cross-Border Data Transfer which set forth the circumstances exempted from performing the security assessment or filing procedures for cross-border data transfer and further clarify the thresholds and scenarios for data processors to go through these procedures as stipulated under the aforementioned measures.
See “—Risks Relating to Doing Business in China—Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and its implementing rules, and how they may impact our business, financial condition and results of operations.” If our corporate structure and contractual arrangements are deemed by the relevant regulators having competent authority to be illegal, either in whole or in part, we may lose control of our consolidated VIEs and have to modify such structure to comply with regulatory requirements.
See “—Risks Relating to Doing Business in China—Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and its implementing rules, and how they may impact our business, financial condition and results of operations.” 54 Table of Contents If our corporate structure and contractual arrangements are deemed by the relevant regulators having competent authority to be illegal, either in whole or in part, we may lose control of our consolidated VIEs and have to modify such structure to comply with regulatory requirements.
Risk Factors—Risks Relating to Our Industry and Business—If the Group is unable to safeguard the security of the confidential information of car buyers, dealers or third parties it collaborates with and adapt to the relevant regulatory framework as to protection of such information, the Group’s business and operations may be adversely affected” and “—D.
Risk Factors—Risks Relating to Our Automotive Business—If the Group is unable to safeguard the security of the confidential information of car buyers, dealers or third parties it collaborates with and adapt to the relevant regulatory framework as to protection of such information, the Group’s business and operations may be adversely affected” and “—D.
According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015. 47 Table of Contents Mr.
According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015. 60 Table of Contents Mr.
However, such change in the credit assessment process could lead to an increase in overdue ratios, which would materially and adversely impact the Group’s business and results of operations. 18 Table of Contents If the Group is unable to maintain low overdue ratios for financing transactions facilitated, the Group’s business and results of operations may be materially and adversely affected.
However, such change in the credit assessment process could lead to an increase in overdue ratios, which would materially and adversely impact the Group’s business and results of operations. 17 Table of Contents If the Group is unable to maintain low overdue ratios for financing transactions facilitated, the Group’s business and results of operations may be materially and adversely affected.
Please refer to “Item 4. Information on the Company—B. Business Overview—Regulation—Regulation Related to Financing Lease” for more details. As the governmental authorities may promulgate more laws, regulations or rules, there are uncertainties how these new measures will be interpreted and implemented.
Please refer to “Item 4. Information on the Company—B. Business Overview—Regulations in the PRC —Regulation Related to Financing Lease” for more details. As the governmental authorities may promulgate more laws, regulations or rules, there are uncertainties how these new measures will be interpreted and implemented.
Fluctuations in interest rates could negatively affect the Group’s reported results of operations. The Group charges service fees to financial institutions for facilitating financing transactions. If prevailing market interest rates decline, the operating margins of financial institutions may decrease, which may force the Group to lower the service fees it is able to charge them.
Fluctuations in interest rates could negatively affect the Group’s reported results of operations for automotive business. The Group charges service fees to financial institutions for facilitating financing transactions. If prevailing market interest rates decline, the operating margins of financial institutions may decrease, which may force the Group to lower the service fees it is able to charge them.
The Notification Letter did not affect our business operations and did not conflict with or cause an event of default under any of our material debt or other agreements. 56 Table of Contents The NYSE has accepted our business plan and deemed us to have regained compliance with the NYSE’s continued listing standards.
The Notification Letter did not affect our business operations and did not conflict with or cause an event of default under any of our material debt or other agreements. 67 Table of Contents The NYSE has accepted our business plan and deemed us to have regained compliance with the NYSE’s continued listing standards.
In addition, beginning at the same time, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2023. See “Item 15.
In addition, beginning at the same time, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2024. See “Item 15.
Sales of these registered shares in the form of ADSs in the public market could cause the price of our ADSs to decline significantly. 58 Table of Contents You, as holders of ADSs, may have fewer rights than holders of our Class A ordinary shares and must act through the depositary to exercise those rights.
Sales of these registered shares in the form of ADSs in the public market could cause the price of our ADSs to decline significantly. 69 Table of Contents You, as holders of ADSs, may have fewer rights than holders of our Class A ordinary shares and must act through the depositary to exercise those rights.
In December 2021, the PCAOB made its determinations, or the 2021 determinations, pursuant to the HFCA Act that it was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China or Hong Kong, including our auditor, Ernst & Young Hua Ming LLP.
In December 2021, the PCAOB made its determinations, or the 2021 determinations, pursuant to the HFCA Act that it was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China or Hong Kong, including our former auditor, Ernst & Young Hua Ming LLP, or EY.
Technical hurdles in implementing technological advances may result in the services becoming less attractive to platform participants, which, in turn, may materially and adversely affect the Group’s business, results of operations and prospects. As the Group’s business develops, it may be required to obtain additional license or permits.
Technical hurdles in implementing technological advances may result in the services becoming less attractive, which, in turn, may materially and adversely affect the Group’s business, results of operations and prospects. As the Group’s business develops, it may be required to obtain additional license or permits.
Below please find a summary of the principal risks we face, organized under relevant headings: Risks Relating to Our Industry and Business Risks and uncertainties relating to our business and industry include, but are not limited to, the following: ● we have a limited operating history in an emerging market.
Below please find a summary of the principal risks we face, organized under relevant headings: Risks Relating to Our Automotive Business Risks and uncertainties relating to our automotive business include, but are not limited to, the following: ● we have a limited operating history in an emerging market.
Inability to obtain such approvals or licenses on a timely basis could have an adverse impact on the Group’s business. 21 Table of Contents Shanghai Cango may be deemed to operate financing guarantee business by the PRC regulatory authorities.
Inability to obtain such approvals or licenses on a timely basis could have an adverse impact on the Group’s business. 20 Table of Contents Shanghai Cango may be deemed to operate financing guarantee business by the PRC regulatory authorities.
See “—Risks Relating to Doing Business in China—Changes and developments in the PRC legal system and the interpretation and enforcement of PRC laws, rules and regulations may subject us to uncertainties.” 39 Table of Contents Any failure by our consolidated VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.
See “—Risks Relating to Doing Business in China—Changes and developments in the PRC legal system and the interpretation and enforcement of PRC laws, rules and regulations may subject us to uncertainties.” Any failure by our consolidated VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.
In addition to the above factors, the price and trading volume of our ADSs may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry; ● announcements of studies and reports relating to the quality of service offerings on Cango platform or those of our competitors; ● changes in the economic performance or market valuations of other transaction service platforms; ● actual or anticipated fluctuations in the Group’s quarterly results of operations and changes or revisions of its expected results; ● changes in financial estimates by securities research analysts; ● announcements by the Group or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates between the Renminbi and the U.S. dollar; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares or ADSs; and ● sales or perceived potential sales of additional Class A ordinary shares or ADSs. 57 Table of Contents If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ADSs and trading volume could decline.
In addition to the above factors, the price and trading volume of our ADSs may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry; ● announcements of studies and reports relating to the quality of service offerings on Cango platform or those of our competitors; ● price of crypto assets such as bitcoin; ● changes in the economic performance or market valuations of other transaction service platforms; ● actual or anticipated fluctuations in the Group’s quarterly results of operations and changes or revisions of its expected results; ● changes in financial estimates by securities research analysts; ● announcements by the Group or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates between the Renminbi and the U.S. dollar; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares or ADSs; and ● sales or perceived potential sales of additional Class A ordinary shares or ADSs. 68 Table of Contents If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ADSs and trading volume could decline.
When the consolidated VIEs declare and distribute profits to us, such payments will be subject to withholding tax, which will increase our tax liability and reduce the amount of cash available to our company. 6 Table of Contents Restrictions on Transfer of Funds The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries.
When the consolidated VIEs declare and distribute profits to us, such payments will be subject to withholding tax, which will increase our tax liability and reduce the amount of cash available to our company. Restrictions on Transfer of Funds The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries.
Such regulatory developments, as well as other uncertainties, may adversely affect the growth prospects of China’s automotive and mobility industries, which in turn may have a material adverse impact on our business. The Group operates in a market where the credit infrastructure is still at an early stage of development.
Such regulatory developments, as well as other uncertainties, may adversely affect the growth prospects of China’s automotive and mobility industries, which in turn may have a material adverse impact on our business. 16 Table of Contents The Group operates in a market where the credit infrastructure is still at an early stage of development.
Some of the companies with which the Group competes for experienced employees have greater resources than the Group and may be able to offer more attractive terms of employment. In addition, the Group invests significant time and expenses in training its employees, which increases their value to competitors who may seek to recruit them.
Some of the companies with which the Group competes for experienced employees have greater resources than the Group and may be able to offer more attractive terms of employment. 49 Table of Contents In addition, the Group invests significant time and expenses in training its employees, which increases their value to competitors who may seek to recruit them.
For the years ended December 31, 2021, 2022 and 2023, there were no other material assets transferred, and there were no dividends or distributions between the Company, the Company’s subsidiaries and the consolidated VIEs for the periods presented.
For the years ended December 31, 2022, 2023 and 2024, there were no other material assets transferred, and there were no dividends or distributions between the Company, the Company’s subsidiaries and the consolidated VIEs for the periods presented.
For example, local Beijing governmental authorities adopted regulations and relevant implementing rules in December 2010 to limit the total number of license plates issued to new car purchases in Beijing each year. Local Guangzhou governmental authorities also announced similar regulations, which came into effect in July 2013.
For example, local Beijing governmental authorities adopted regulations and relevant implementing rules in December 2010 and as amended in 2020 to limit the total number of license plates issued to new car purchases in Beijing each year. Local Guangzhou governmental authorities also announced similar regulations, which came into effect in July 2013.
In these cases, the depositary may decide not to distribute such property to you. 59 Table of Contents You may be subject to limitations on transfer of your ADSs. Your ADSs are transferable on the books of the depositary.
In these cases, the depositary may decide not to distribute such property to you. 70 Table of Contents You may be subject to limitations on transfer of your ADSs. Your ADSs are transferable on the books of the depositary.
As a consequence, we cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or ownership by the record holder of the equity interest. All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC.
As a consequence, we cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or ownership by the record holder of the equity interest. 52 Table of Contents All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC.
We are subject to restrictions on currency exchange. All of the Group’s revenue is denominated in Renminbi. Under current PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the SAFE, by complying with certain procedural requirements.
We are subject to restrictions on currency exchange. A substantial portion of the Group’s revenue is denominated in Renminbi. Under current PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the SAFE, by complying with certain procedural requirements.
In addition, these shareholders may breach or cause our consolidated VIEs and their subsidiaries to breach or refuse to renew the existing contractual arrangements with us. Currently, we do not have arrangements to address potential conflicts of interest the shareholders of our consolidated VIEs may encounter.
In addition, these shareholders may breach or cause our consolidated VIEs and their subsidiaries to breach or refuse to renew the existing contractual arrangements with us. 53 Table of Contents Currently, we do not have arrangements to address potential conflicts of interest the shareholders of our consolidated VIEs may encounter.
Inability to make such capital contribution on a timely basis could have an adverse impact on the Group’s business. 23 Table of Contents The Group faces intense competition and it may not be able to compete effectively. The automotive transaction industry in China is large yet competitive.
Inability to make such capital contribution on a timely basis could have an adverse impact on the Group’s business. 22 Table of Contents The Group faces intense competition for its automotive business and it may not be able to compete effectively. The automotive transaction industry in China is large yet competitive.
We may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on terms acceptable to us, or at all. Since inception, the Group has issued equity securities and borrowed from financial institutions to support the growth of the Group’s business.
Risks Relating to Our Business Operations We may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on terms acceptable to us, or at all. Since inception, the Group has issued equity securities and borrowed from financial institutions to support the growth of the Group’s business.
For example, we have adopted policies regarding internal controls and disclosure controls and procedures. We have also incurred additional costs associated with our public company reporting requirements.
We have adopted policies regarding internal controls and disclosure controls and procedures. We have also incurred additional costs associated with our public company reporting requirements.
As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. We may incur substantial share-based compensation expenses.
As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. 50 Table of Contents We may incur substantial share-based compensation expenses.
Information on the Company—B. Business Overview—Regulations— M&A Rules and Overseas Listings.” 46 Table of Contents Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and its implementing rules and how they may impact our business, financial condition and results of operations.
Information on the Company—B. Business Overview—Regulations in the PRC — M&A Rules and Overseas Listings.” 59 Table of Contents Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and its implementing rules and how they may impact our business, financial condition and results of operations.
As a result, the Group’s business and results of operations may be materially and adversely affected. If the Group fails to keep up with the technological developments and implementation of advanced technologies, the Group’s business, results of operations and prospects may be materially and adversely affected.
As a result, the Group’s business and results of operations may be materially and adversely affected. 46 Table of Contents If the Group fails to keep up with the technological developments and implementation of advanced technologies, the Group’s business, results of operations and prospects may be materially and adversely affected.
Following the Statement of Protocol signed between the PCAOB and the China Securities Regulatory Commission and the Ministry of Finance of the PRC in August 2022 and the on-site inspections and investigations conducted by the PCAOB staff in Hong Kong from September to November 2022, the PCAOB Board voted in December 2022 to vacate the previous 2021 determinations, and as a result, our auditor, Ernst & Young Hua Ming LLP, was no longer a registered public accounting firm that the PCAOB was unable to inspect or investigate completely as of the date of our annual report for the fiscal year ended December 31, 2022, or the 2022 annual report, and we were not identified as a SEC-identified issuer in 2023 after we filed the 2022 annual report.
Following the Statement of Protocol signed between the PCAOB and the China Securities Regulatory Commission, or the CSRC, and the Ministry of Finance of the PRC in August 2022 and the on-site inspections and investigations conducted by the PCAOB staff in Hong Kong from September to November 2022, the PCAOB Board voted in December 2022 to vacate the previous 2021 determinations, and as a result, our former auditor, EY, was no longer a registered public accounting firm that the PCAOB was unable to inspect or investigate completely as of the date of our annual report for the fiscal year ended December 31, 2022, or the 2022 annual report, and we were not identified as a SEC-identified issuer in 2023 after we filed the 2022 annual report.
Organizational Structure—Contractual Arrangements among Can Gu Long, the Consolidated VIEs and Their Shareholders.” All of the Group’s revenue is attributed to our consolidated VIEs. These contractual arrangements may not be as effective as direct ownership in providing us with control over our consolidated VIEs.
Organizational Structure—Contractual Arrangements among Can Gu Long, the Consolidated VIEs and Their Shareholders.” A substantial portion of the Group’s revenue is attributed to our consolidated VIEs. These contractual arrangements may not be as effective as direct ownership in providing us with control over our consolidated VIEs.
In connection with the automotive financing facilitation business, the Group provides credit assessment service to financial institutions and the financial institutions make ultimate credit decisions. Under the arrangements with certain financial institutions, the Group is obligated to purchase the relevant financing receivables upon certain specified events of default by car buyers.
In connection with the automotive financing facilitation business, the Group provided credit assessment service to financial institutions and the financial institutions made ultimate credit decisions. Under the arrangements with certain financial institutions, the Group is obligated to purchase the relevant financing receivables upon certain specified events of default by car buyers.
In addition, we have no control over the costs of the services provided by telecommunication service providers which in turn, may affect the costs of data center services. If the prices paid for data center services rise significantly, the Group’s results of operations may be adversely affected. The COVID-19 pandemic adversely affected our results of operations.
In addition, we have no control over the costs of the services provided by telecommunication service providers which in turn, may affect the costs of data center services. If the prices paid for data center services rise significantly, the Group’s results of operations may be adversely affected.
On November 30, 2023, the PCAOB announced that it had completed its inspections on registered public accounting firms headquartered in mainland China and Hong Kong for 2023 with the complete access required under the HFCA Act. As such, we do not expect to be identified as a SEC-identified issuer in 2024 either.
On November 30, 2023, the PCAOB announced that it had completed its inspections on registered public accounting firms headquartered in mainland China and Hong Kong for 2023 with the complete access required under the HFCA Act. As such, we were not identified as a SEC-identified issuer in 2024 either.
The amount of financing transactions facilitated by the Group decreased from RMB2.8 billion in 2022 to RMB1.7 million (US$0.2 million) in 2023. The Group’s loan facilitation income and other related income decreased from RMB146.4 million in 2022 to RMB20.0 million (US$2.8 million) in 2023.
The amount of financing transactions facilitated by the Group decreased from RMB2.8 billion in 2022 to RMB1.7 million in 2023, and further to nil in 2024. The Group’s loan facilitation income and other related income decreased from RMB146.4 million in 2022 to RMB20.0 million in 2023, and further to RMB15.8 million (US$2.2 million) in 2024.
Although the Group may seek damages from the counterparties to the lease agreements, there can be no assurance that it would be able to collect such damages. 33 Table of Contents Failure to fully comply with PRC labor-related laws may expose the Group to potential penalties.
Although the Group may seek damages from the counterparties to the lease agreements, there can be no assurance that it would be able to collect such damages. Failure to fully comply with PRC labor-related laws may expose the Group to potential penalties.
ITEM 3. KEY INFORMATION Our Corporate Structure Cango Inc. is not a Chinese operating company but a Cayman Islands holding company with operations mainly conducted through Shanghai Cango and Shanghai Yungu, or the consolidated VIEs, and their subsidiaries.
ITEM 3. KEY INFORMATION Our Corporate Structure Cango Inc. is not a Chinese operating company but a Cayman Islands holding company with a portion of its operations conducted through Shanghai Cango and Shanghai Yungu, or the consolidated VIEs, and their subsidiaries.
As of December 31, 2023, the Group had not been subject to any material fines or other penalties under any PRC laws or regulations as to its business operations.
As of December 31, 2024, the Group had not been subject to any material fines or other penalties under any PRC laws or regulations as to its automotive business operations.
For the years ended December 31, 2021, 2022 and 2023, the consolidated VIEs and the consolidated affiliates provided capital contributions of RMB200 million, RMB74 million and nil, respectively, to other subsidiaries of the consolidated VIEs.
For the years ended December 31, 2022, 2023 and 2024, the consolidated VIEs and the consolidated affiliates provided capital contributions of RMB74 million, nil and nil, respectively, to other subsidiaries of the consolidated VIEs.
If we are able to identify an appropriate business opportunity, we may not be able to successfully consummate the transaction and, even if we do consummate such a transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such transaction, which may result in investment losses. 34 Table of Contents Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including: ● difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; ● inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits, including the failure to successfully further develop the acquired technology; ● difficulties in retaining, training, motivating and integrating key personnel; ● diversion of management’s time and resources from normal daily operations and potential disruptions to the ongoing businesses; ● strain on current liquidity and capital resources; ● difficulties in executing intended business plans and achieving synergies from such strategic investments or acquisitions; ● difficulties in maintaining uniform standards, controls, procedures and policies within the overall organization; ● difficulties in retaining relationships with existing customers, employees and business partners of the acquired business; ● risks of entering markets in which we have limited or no prior experience; ● regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; ● assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; ● liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and ● unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions.
Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including: ● difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; ● inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits, including the failure to successfully further develop the acquired technology; 48 Table of Contents ● difficulties in retaining, training, motivating and integrating key personnel; ● diversion of management’s time and resources from normal daily operations and potential disruptions to the ongoing businesses; ● strain on current liquidity and capital resources; ● difficulties in executing intended business plans and achieving synergies from such strategic investments or acquisitions; ● difficulties in maintaining uniform standards, controls, procedures and policies within the overall organization; ● difficulties in retaining relationships with existing customers, employees and business partners of the acquired business; ● risks of entering markets in which we have limited or no prior experience; ● regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; ● assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; ● liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and ● unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions.
For the years ended December 31, 2021, 2022 and 2023, the consolidated VIEs and the consolidated affiliates provided loans of RMB365 million, RMB451 million and nil, respectively, to other subsidiaries of the consolidated VIEs.
For the years ended December 31, 2022, 2023 and 2024, the consolidated VIEs and the consolidated affiliates provided loans of RMB451 million, nil and nil, respectively, to other subsidiaries of the consolidated VIEs.
As the Group intends to continue to make investments to support the growth of its business, the Group may require additional capital to pursue its business objectives and respond to business opportunities, challenges or unforeseen circumstances, including developing new solutions and services, further enhance the risk management capabilities, increasing sales and marketing expenditures to improve brand awareness and engage car buyers through expanded online channels, enhancing operating infrastructure and acquiring complementary businesses and technologies.
As the Group intends to continue to make investments to support the growth of its business, the Group may require additional capital to pursue its business objectives and respond to business opportunities, challenges or unforeseen circumstances, including developing new solutions and services, further enhance the risk management capabilities, increasing sales and marketing expenditures to improve brand awareness, enhancing operating infrastructure and acquiring complementary businesses and technologies.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

103 edited+62 added−110 removed241 unchanged
Can Gu Long shall have exclusive and proprietary ownership, rights and interests in any and all intellectual properties arising out of or created during the performance of the exclusive business cooperation agreement.
Can Gu Long shall have exclusive and proprietary ownership, rights and interests in any and all intellectual properties arising out of or created during the performance of the exclusive business cooperation agreement.
The minimum price regulated by PRC law shall be the purchase price.
The minimum price regulated by PRC law shall be the purchase price.
However, the State Council has not promulgated the list of the non-financial institutions with anti-money laundering obligations. 84 Table of Contents The Internet Finance Guidelines jointly released by ten PRC regulatory agencies in July 2015, purport, among other things, to require Internet finance service providers to comply with certain anti-money laundering requirements, including the establishment of a customer identification program, the monitoring and reporting of suspicious transactions, the preservation of customer information and transaction records, and the provision of assistance to the public security department and judicial authority in investigations and proceedings in relation to anti-money laundering matters.
However, the State Council has not promulgated the list of the non-financial institutions with anti-money laundering obligations. 92 Table of Contents The Internet Finance Guidelines jointly released by ten PRC regulatory agencies in July 2015, purport, among other things, to require Internet finance service providers to comply with certain anti-money laundering requirements, including the establishment of a customer identification program, the monitoring and reporting of suspicious transactions, the preservation of customer information and transaction records, and the provision of assistance to the public security department and judicial authority in investigations and proceedings in relation to anti-money laundering matters.
If a car buyer is unable make repayments, the Group may negotiate with the car buyer and settle the outstanding amount by recovering the car collateral. For the financing transactions funded by financial institutions, the Group obtains their authorizations before recovering the car collateral. (5) Disposal .
If a car buyer is unable to make repayments, the Group may negotiate with the car buyer and settle the outstanding amount by recovering the car collateral. For the financing transactions funded by financial institutions, the Group obtains their authorizations before recovering the car collateral. (5) Disposal .
For violations of these provisions or measures, the competent Chinese authorities may impose administrative regulatory measures, such as orders for correction, warnings, fines, and may pursue legal liability in accordance with law. 90 Table of Contents Furthermore, on February 24, 2023, the CSRC, together with certain other PRC governmental authorities, promulgated the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, or the Revised Confidentiality and Archives Administration Provisions, which took into effect on March 31, 2023.
For violations of these provisions or measures, the competent Chinese authorities may impose administrative regulatory measures, such as orders for correction, warnings, fines, and may pursue legal liability in accordance with law. 98 Table of Contents Furthermore, on February 24, 2023, the CSRC, together with certain other PRC governmental authorities, promulgated the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, or the Revised Confidentiality and Archives Administration Provisions, which took into effect on March 31, 2023.
Funds in the settlement account of capital accounts may be settled and used at the discretion of the account holder. 87 Table of Contents Regulation on Foreign Exchange Registration of Overseas Investment by PRC Residents SAFE issued SAFE Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, that became effective in July 2014, replacing the Circular of the State Administration of Foreign Exchange on Issues Concerning the Regulation of Foreign Exchange in Equity Finance and Return Investments by Domestic Residents through Offshore Special Purpose Vehicles, or SAFE Circular 75.
Funds in the settlement account of capital accounts may be settled and used at the discretion of the account holder. 95 Table of Contents Regulation on Foreign Exchange Registration of Overseas Investment by PRC Residents SAFE issued SAFE Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, that became effective in July 2014, replacing the Circular of the State Administration of Foreign Exchange on Issues Concerning the Regulation of Foreign Exchange in Equity Finance and Return Investments by Domestic Residents through Offshore Special Purpose Vehicles, or SAFE Circular 75.
As a result of these contractual arrangements, we are the primary beneficiary of the consolidated VIEs and their subsidiaries for accounting purposes. We have consolidated their financial results in our consolidated financial statements in accordance with U.S. GAAP.
As a result of these contractual arrangements, we are the primary beneficiary of the consolidated VIEs and their subsidiaries for accounting purposes. We have consolidated their financial results in our consolidated financial statements in accordance with U.S.
In connection with our previous issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we, our subsidiaries, the consolidated VIEs and consolidated affiliates, (i) have not received any requirement from competent PRC governmental authorities to obtain permissions from the China Securities Regulatory Commission, or the CSRC, (ii) have not received any requirement from competent PRC governmental authorities to go through cybersecurity review by the CAC, and (iii) have not received or were denied such requisite permissions by any PRC authority.
In connection with our previous issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we, our subsidiaries, the consolidated VIEs and consolidated affiliates, (i) have not received any requirement from competent PRC governmental authorities to obtain permissions from the CSRC, (ii) have not received any requirement from competent PRC governmental authorities to go through cybersecurity review by the CAC, and (iii) have not received or were denied such requisite permissions by any PRC authority.
On October 23, 2019, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or Circular 28, which was amended in December 2023, which permits non-investment foreign-invested enterprises to use their capital funds to make equity investments in China, with genuine investment projects and in compliance with effective foreign investment restrictions and other applicable laws.
On October 23, 2019, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, which was amended in December 2023, which permits non-investment foreign-invested enterprises to use their capital funds to make equity investments in China, with genuine investment projects and in compliance with effective foreign investment restrictions and other applicable laws.
Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. 88 Table of Contents Regulation Related to Taxation Enterprise Income Tax In March 2007, the National People’s Congress enacted the Enterprise Income Tax Law, which was most recently amended in December 2018, and in December 2007, the State Council promulgated the Implementing Rules of the Enterprise Income Tax Law, which were most recently amended in April 2019.
Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. 96 Table of Contents Regulation Related to Taxation Enterprise Income Tax In March 2007, the National People’s Congress enacted the Enterprise Income Tax Law, which was most recently amended in December 2018, and in December 2007, the State Council promulgated the Implementing Rules of the Enterprise Income Tax Law, which were most recently amended in April 2019.
Risk Factors—Risks Relating to Our Industry and Business—If the Group is unable to safeguard the security of the confidential information of car buyers, dealers or third parties it collaborates with and adapt to the relevant regulatory framework as to protection of such information, the Group’s business and operations may be adversely affected” and “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Automotive Business—If the Group is unable to safeguard the security of the confidential information of car buyers, dealers or third parties it collaborates with and adapt to the relevant regulatory framework as to protection of such information, the Group’s business and operations may be adversely affected” and “Item 3. Key Information—D.
The qualified banks, under the supervision of SAFE, may directly review the applications and conduct the registration. 86 Table of Contents On March 30, 2015, SAFE promulgated the Circular of SAFE on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, or Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises nationwide.
The qualified banks, under the supervision of SAFE, may directly review the applications and conduct the registration. 94 Table of Contents On March 30, 2015, SAFE promulgated the Circular of SAFE on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, or Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises nationwide.
Power of Attorney Pursuant to the power of attorney, each shareholder of Shanghai Yungu has irrevocably authorized Can Gu Long to exercise the following rights relating to all equity interests held by such shareholder in Shanghai Yungu during the term of the power of attorney: to act on behalf of such shareholder as its exclusive agent and attorney with respect to all matters concerning its shareholding in Shanghai Yungu, including without limitation to: (1) attending shareholders’ meetings of Shanghai Yungu; (2) exercising all the shareholder’s rights and shareholder’s voting rights such shareholder is entitled to under the laws of China and Shanghai Yungu’s articles of association, including but not limited to the sale or transfer or pledge or disposition of its shareholding in part or in whole; and (3) designate and appoint on behalf of such shareholder the legal representative, the directors, supervisors, the chief executive officer and other senior management members of Shanghai Yungu.
Power of Attorney Pursuant to the power of attorney, each shareholder of Shanghai Cango has irrevocably authorized Can Gu Long to exercise the following rights relating to all equity interests held by such shareholder in Shanghai Cango during the term of the power of attorney: to act on behalf of such shareholder as its exclusive agent and attorney with respect to all matters concerning its shareholding in Shanghai Cango, including without limitation to: (1) attending shareholders’ meetings of Shanghai Cango; (2) exercising all the shareholder’s rights and shareholder’s voting rights such shareholder is entitled to under the laws of China and Shanghai Cango’s articles of association, including but not limited to the sale or transfer or pledge or disposition of its shareholding in part or in whole; and (3) designate and appoint on behalf of such shareholder the legal representative, the directors, supervisors, the chief executive officer and other senior management members of Shanghai Cango.
The State Intellectual Property Office, formerly known as the Trademark Office of the State Administration for Industry and Commerce, handles trademark registrations and grants a protection term of ten years to registered trademarks. 85 Table of Contents The MIIT promulgated its Administrative Measures on Internet Domain Names in 2017.
The State Intellectual Property Office, formerly known as the Trademark Office of the State Administration for Industry and Commerce, handles trademark registrations and grants a protection term of ten years to registered trademarks. 93 Table of Contents The MIIT promulgated its Administrative Measures on Internet Domain Names in 2017.
Shanghai Cango, one of our consolidated VIEs, currently owns 61.25% equity interest (directly and through Shanghai Wangtian Investment Co., Ltd., its wholly-owned subsidiary) in Shanghai Chejia and Express Group Development Limited, our wholly-owned consolidated subsidiary, owns 38.75% equity interest in Shanghai Chejia. As a result, Shanghai Chejia is the Group’s consolidated affiliate.
Shanghai Cango, one of our consolidated VIEs, currently owns 75% equity interest (directly and through Shanghai Wangtian Investment Co., Ltd., its wholly-owned subsidiary) in Shanghai Chejia and Express Group Development Limited, our wholly-owned consolidated subsidiary, owns 25% equity interest in Shanghai Chejia. As a result, Shanghai Chejia is the Group’s consolidated affiliate.
In the opinion of Fangda Partners, our PRC legal counsel: ● the ownership structures of Can Gu Long and our consolidated VIEs in China do not violate any applicable PRC law, regulation, or rule currently in effect; and 92 Table of Contents ● the contractual arrangements among Can Gu Long, the consolidated VIEs and their shareholders governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect, and do not violate any applicable PRC law, regulation, or rule currently in effect, except that the pledges in respect of the consolidated VIEs’ equity interests would not be deemed validly created until they are registered with the local administration for market regulation.
GAAP. ​ In the opinion of Fangda Partners, our PRC legal counsel: ● the ownership structures of Can Gu Long and our consolidated VIEs in China do not violate any applicable PRC law, regulation, or rule currently in effect; and ● the contractual arrangements among Can Gu Long, the consolidated VIEs and their shareholders governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect, and do not violate any applicable PRC law, regulation, or rule currently in effect, except that the pledges in respect of the consolidated VIEs’ equity interests would not be deemed validly created until they are registered with the local administration for market regulation.
We expect to provide the financial support if and when required with a portion of the proceeds from our initial public offering and proceeds from the issuance of equity or debt securities in the future. D. Facilities The Group’s corporate headquarters are located in Shanghai, China, where it leases approximately 5,592 square meters of office space.
We expect to provide the financial support if and when required with a portion of the proceeds from our initial public offering and proceeds from the issuance of equity or debt securities in the future. 104 Table of Contents D. Facilities The Group’s corporate headquarters are located in Shanghai, China, where it leases approximately 5,592 square meters of office space.
As the result, there can be no assurance that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our company or those conflicts of interest will be resolved in our favor. Furthermore, there remain significant uncertainties regarding the ultimate outcome of arbitration should legal action become necessary.
As the result, there can be no assurance that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our company or those conflicts of interest will be resolved in our favor. 101 Table of Contents Furthermore, there remain significant uncertainties regarding the ultimate outcome of arbitration should legal action become necessary.
Industries not listed in these two catalogues are generally deemed “permitted” for foreign investment unless specifically restricted by other PRC laws. 80 Table of Contents According to the Implementing Rules, the registration of foreign-invested enterprises shall be handled by the SAMR or its authorized local counterparts.
Industries not listed in these two catalogues are generally deemed “permitted” for foreign investment unless specifically restricted by other PRC laws. According to the Implementing Rules, the registration of foreign-invested enterprises shall be handled by the SAMR or its authorized local counterparts.
The agreement may be terminated for cause, such as breach of contract or liquidation or dissolution. The agreement with Bank of Shanghai may also be terminated without cause by 90 days’ written notice. ● Pursuant to the agreements with WeBank, the Group facilitates financing transactions with funding provided by WeBank.
The agreement may be terminated for cause, such as breach of contract or liquidation or dissolution. The agreement with Bank of Shanghai may also be terminated without cause by 90 days’ written notice. 78 Table of Contents ● Pursuant to the agreements with WeBank, the Group facilitates financing transactions with funding provided by WeBank.
Foreign Investment Restriction on VATS According to the 2021 Negative List and the Administrative Regulations on Foreign-Invested Telecommunications Enterprises, which were most recently amended by the State Council on April 7, 2022 and took effect on May 1, 2022 and replaced the previous version afterwards, as for the telecommunications businesses open for foreign investment according to China’s WTO commitment, except as otherwise stipulated by the state, the equity interest of foreign investors in the value-added telecommunications enterprises shall not exceed 50%, except for e-commerce, domestic conferencing, store-and-forward, and call center services.
Foreign Investment Restriction on VATS According to the 2024 Negative List and the Administrative Regulations on Foreign-Invested Telecommunications Enterprises, which were most recently amended by the State Council on April 7, 2022 and took effect on May 1, 2022, as for the telecommunications businesses open for foreign investment according to China’s WTO commitment, except as otherwise stipulated by the state, the equity interest of foreign investors in the value-added telecommunications enterprises shall not exceed 50%, except for e-commerce, domestic conferencing, store-and-forward, and call center services.
Anti-money Laundering Regulation The PRC Anti-money Laundering Law, which became effective in January 2007, sets forth the principal anti-money laundering requirements applicable to financial institutions as well as non-financial institutions with anti-money laundering obligations, including the adoption of precautionary and supervisory measures, establishment of various systems for client identification, retention of clients’ identification information and transactions records, and reports on large transactions and suspicious transactions.
Anti-money Laundering Regulation The PRC Anti-money Laundering Law, which became effective in January 2007 and was last amended in November 2024, sets forth the principal anti-money laundering requirements applicable to financial institutions as well as non-financial institutions with anti-money laundering obligations, including the adoption of precautionary and supervisory measures, establishment of various systems for client identification, retention of clients’ identification information and transactions records, and reports on large transactions and suspicious transactions.
After cars are recovered, the Group stores them in warehouses leased by the Group. The Group conducts on-site visits to ensure these warehouses are suitable for automotive storage and are properly guarded to prevent theft. The Group will then sell the cars. (6) Legal actions .
After cars are recovered, the Group stores them in warehouses leased by the Group. The Group conducts on-site visits to ensure these warehouses are suitable for automotive storage and are properly guarded to prevent theft. The Group will then sell the cars. 79 Table of Contents (6) Legal actions .
We have registered pledges of equity interest of shareholders other than the Taikang Life Insurance Co., Ltd. in Shanghai Cango with the relevant offices of the administration for market regulation in accordance with the PRC Civil Code. 93 Table of Contents Power of Attorney Pursuant to the power of attorney, each shareholder of Shanghai Cango has irrevocably authorized Can Gu Long to exercise the following rights relating to all equity interests held by such shareholder in Shanghai Cango during the term of the power of attorney: to act on behalf of such shareholder as its exclusive agent and attorney with respect to all matters concerning its shareholding in Shanghai Cango, including without limitation to: (1) attending shareholders’ meetings of Shanghai Cango; (2) exercising all the shareholder’s rights and shareholder’s voting rights such shareholder is entitled to under the laws of China and Shanghai Cango’s articles of association, including but not limited to the sale or transfer or pledge or disposition of its shareholding in part or in whole; and (3) designate and appoint on behalf of such shareholder the legal representative, the directors, supervisors, the chief executive officer and other senior management members of Shanghai Cango.
We have registered pledges of equity interest of shareholders in Shanghai Yungu with the relevant offices of the administration for market regulation in accordance with the PRC Civil Code. 103 Table of Contents Power of Attorney Pursuant to the power of attorney, each shareholder of Shanghai Yungu has irrevocably authorized Can Gu Long to exercise the following rights relating to all equity interests held by such shareholder in Shanghai Yungu during the term of the power of attorney: to act on behalf of such shareholder as its exclusive agent and attorney with respect to all matters concerning its shareholding in Shanghai Yungu, including without limitation to: (1) attending shareholders’ meetings of Shanghai Yungu; (2) exercising all the shareholder’s rights and shareholder’s voting rights such shareholder is entitled to under the laws of China and Shanghai Yungu’s articles of association, including but not limited to the sale or transfer or pledge or disposition of its shareholding in part or in whole; and (3) designate and appoint on behalf of such shareholder the legal representative, the directors, supervisors, the chief executive officer and other senior management members of Shanghai Yungu.
The Group continues to explore opportunities to facilitate other after-market services on Cango platform, including additional types of insurance, extended warranties and car customization services. 65 Table of Contents Automotive Financing Facilitation Services The Group provides automotive financing facilitation services primarily by connecting financial institutions and car buyers, leveraging its vast dealer network.
The Group continues to explore opportunities to facilitate other after-market services on Cango platform, including additional types of insurance, extended warranties and car customization services. Automotive Financing Facilitation Services The Group provided automotive financing facilitation services primarily by connecting financial institutions and car buyers, leveraging its vast dealer network.
The current industry entry clearance requirements governing investment activities in the PRC by foreign investors are set out in two categories, namely the Special Entry Management Measures (Negative List) for the Access of Foreign Investment (2021 version), or the 2021 Negative List, as promulgated by the National Development and Reform Commission and the MOFCOM on December 27, 2021 and taking effect on January 1, 2022, and the Encouraged Industry Catalogue for Foreign Investment (2022 version) as promulgated by the National Development and Reform Commission and the MOFCOM on October 26, 2022 and taking effect on January 1, 2023.
The current industry entry clearance requirements governing investment activities in the PRC by foreign investors are set out in two categories, namely the Special Entry Management Measures (Negative List) for the Access of Foreign Investment (2024 version), or the 2024 Negative List, as promulgated by the National Development and Reform Commission and the MOFCOM on September 6, 2024 and taking effect on November 1, 2024, and the Encouraged Industry Catalogue for Foreign Investment (2022 version) as promulgated by the National Development and Reform Commission and the MOFCOM on October 26, 2022 and taking effect on January 1, 2023.
On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security and the General Office of the SAMR jointly issued the Notice on the Measures for Determining the Illegal Collection and Use of Personal Information through Mobile Applications, which aims to provide reference for supervision and administration departments and provide guidance for mobile applications operators’ self-examination and self-correction and social supervision by netizens, and further elaborates the forms of behavior constituting illegal collection and use of the personal information through mobile applications including: (i) failing to publish the rules on the collection and use of personal information; (ii) failing to explicitly explain the purposes, methods and scope of the collection and use of personal information; (iii) collecting and using personal information without the users’ consent; (iv) collecting personal information unrelated to the services it provides and beyond the necessary principle; (v) providing personal information to others without the users’ consent; (vi) failing to provide the function of deleting or correcting the personal information according to the laws or failing to publish information such as ways of filing complaints and reports. 77 Table of Contents On June 10, 2021, the SCNPC promulgated the Data Security Law, which took effect in September 2021.
On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security and the General Office of the SAMR jointly issued the Notice on the Measures for Determining the Illegal Collection and Use of Personal Information through Mobile Applications, which aims to provide reference for supervision and administration departments and provide guidance for mobile applications operators’ self-examination and self-correction and social supervision by netizens, and further elaborates the forms of behavior constituting illegal collection and use of the personal information through mobile applications including: (i) failing to publish the rules on the collection and use of personal information; (ii) failing to explicitly explain the purposes, methods and scope of the collection and use of personal information; (iii) collecting and using personal information without the users’ consent; (iv) collecting personal information unrelated to the services it provides and beyond the necessary principle; (v) providing personal information to others without the users’ consent; (vi) failing to provide the function of deleting or correcting the personal information according to the laws or failing to publish information such as ways of filing complaints and reports.
Specifically, the Group developed Cango U-car app, a mobile application which provides dealers with a one-stop, comprehensive and streamlined used car and new car transaction services. The in-house research and development department comprised 78 employees as of December 31, 2023, including core team members with extensive experience with leading internet and technology companies in China.
Specifically, the Group developed Cango U-car app, a mobile application which provides dealers with a one-stop, comprehensive and streamlined automobile transaction services. The in-house research and development department comprised 15 employees as of December 31, 2024, including core team members with extensive experience with leading internet and technology companies in China.
An insurance brokerage company shall obtain an insurance intermediary licenses before it engages in insurance brokerage business. 82 Table of Contents In accordance with the Regulatory Provisions on Insurance Brokerages, which was promulgated by the CBIRC on February 1, 2018 and took effect on May 1, 2018, or the Insurance Brokerages Provisions, an insurance brokerage company, in order to operate the insurance brokerage business, shall satisfy the relevant statutory requirements with respect to its shareholders, registered capital, business scope, articles of associations, company name, senior management personnel, governance structure, internal control system, feasible business mode, business premise, etc.
In accordance with the Regulatory Provisions on Insurance Brokerages, which was promulgated by the CBIRC on February 1, 2018 and took effect on May 1, 2018, or the Insurance Brokerages Provisions, an insurance brokerage company, in order to operate the insurance brokerage business, shall satisfy the relevant statutory requirements with respect to its shareholders, registered capital, business scope, articles of associations, company name, senior management personnel, governance structure, internal control system, feasible business mode, business premise, etc.
C. Organizational Structure The following diagram illustrates the Group’s corporate structure. The following diagram omits certain entities that are immaterial to the Group’s results of operations, business and financial condition. Except as otherwise specified, equity interests depicted in this diagram are held as to 100%.
The following diagram omits certain entities that are immaterial to the Group’s results of operations, business and financial condition. Except as otherwise specified, equity interests depicted in this diagram are held as to 100%.
Responsibilities of the sales team include sourcing and preliminary review of new dealers, management of relationships with registered dealers and on-the-ground customer support. The sales team also utilizes a sales management system to engage new dealers and monitor existing dealers.
Responsibilities of the sales team include sourcing and preliminary review of new dealers, management of relationships with registered dealers and on-the-ground customer support. The sales team also utilizes a sales management system to engage new dealers and monitor existing dealers. The system maintains a comprehensive list of dealers across China.
Third-party financial institutions fund a major portion of financing transactions that the Group facilitates to car buyers, and the Group also facilitates financing leases funded by Shanghai Chejia. The Group collaborates with third-party financial institutions in facilitating financing transactions and receives service fees from financial institutions for facilitating automotive financing transactions to car buyers.
Third-party financial institutions fund a major portion of financing transactions that the Group facilitated to car buyers, and the Group also facilitated financing leases funded by Shanghai Chejia. The Group collaborated with third-party financial institutions in facilitating financing transactions and received service fees from financial institutions for facilitating automotive financing transactions to car buyers.
The Foreign Investment Law and the Implementing Rules provide that a system of pre-entry national treatment and negative list shall be applied for the administration of foreign investment, where “pre-entry national treatment” means that the treatment given to foreign investors and their investments at market entry stage is no less favorable than that given to domestic investors and their investments, and “negative list” means the special administrative measures for foreign investment’s entry to specific fields or industries, which will be proposed by the competent investment department of the State Council in conjunction with the competent commerce department of the State Council and other relevant departments, and be reported to the State Council for promulgation, or be promulgated by the competent investment department or competent commerce department of the State Council after being reported to the State Council for approval.
The Implementing Rules introduce a see-through principle and further provide that foreign-invested enterprises that invest in the PRC shall also be governed by the Foreign Investment Law and the Implementing Rules. 87 Table of Contents The Foreign Investment Law and the Implementing Rules provide that a system of pre-entry national treatment and negative list shall be applied for the administration of foreign investment, where “pre-entry national treatment” means that the treatment given to foreign investors and their investments at market entry stage is no less favorable than that given to domestic investors and their investments, and “negative list” means the special administrative measures for foreign investment’s entry to specific fields or industries, which will be proposed by the competent investment department of the State Council in conjunction with the competent commerce department of the State Council and other relevant departments, and be reported to the State Council for promulgation, or be promulgated by the competent investment department or competent commerce department of the State Council after being reported to the State Council for approval.
Jiayuan Lin, Tencent Mobility Limited, Shanghai Xiehuai Investment Management L.P., the Taikang Onshore Entities (including Taikang Life Insurance Co., Ltd. and Shandong State-controlled Taikang Phase I Industrial Development Fund Partnership Enterprise (Limited Partnership)) and Shanghai Huaiyuan Investment Management L.P.
(3) Include Shanghai Wangjin Investment Management Co., Ltd. (controlled by Mr. Xiaojun Zhang), Mr. Jiayuan Lin, Tencent Mobility Limited, Shanghai Xiehuai Investment Management L.P., the Taikang Onshore Entities (including Taikang Life Insurance Co., Ltd. and Shandong State-controlled Taikang Phase I Industrial Development Fund Partnership Enterprise (Limited Partnership)) and Shanghai Huaiyuan Investment Management L.P.
For example, the Group launched its car trading transaction platform as a comprehensive tool kit to address dealers’ pain points. Such car trading transaction platform allows dealers to conveniently source cars from Cango platform, serve existing car buyers and engage potential car buyers.
Technology is embedded into the business lines’ operational processes. For example, the Group launched its car trading transaction platform as a comprehensive tool kit to address dealers’ pain points. Such car trading transaction platform allows dealers to conveniently source cars from Cango platform, serve existing car buyers and engage potential car buyers.
Since the Amendment was released only for soliciting public comments at this stage, uncertainties exist with respect to the enactment timetable, final content, interpretation and implementation. 76 Table of Contents Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, issued in 2013, and the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which was issued on May 8, 2017 and took effect on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen’s personal information: (i) providing a citizen’s personal information to specified persons or releasing a citizen’s personal information online or through other methods in violation of relevant national provisions; (ii) providing legitimately collected information relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to a specific person and not recoverable); (iii) collecting a citizen’s personal information in violation of applicable rules and regulations when performing a duty or providing services; or (iv) collecting a citizen’s personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations.
Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, issued in 2013, and the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which was issued on May 8, 2017 and took effect on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen’s personal information: (i) providing a citizen’s personal information to specified persons or releasing a citizen’s personal information online or through other methods in violation of relevant national provisions; (ii) providing legitimately collected information relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to a specific person and not recoverable); (iii) collecting a citizen’s personal information in violation of applicable rules and regulations when performing a duty or providing services; or (iv) collecting a citizen’s personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations.
A financing guarantee company that falls under any of the following circumstances shall be ordered by the competent government authority to make correction within the prescribed time limit; and, where it fails to correct by the prescribed deadline, the financing guarantee company may be subject to penalties including, fines of RMB100,000 to RMB500,000, confiscation of illegal gains if any, being ordered to suspend business for rectification, or being revoked of its permit for financing guarantee business under grave circumstances: (i) where the ratio of the outstanding guarantee liabilities of the financing guarantee company to its net assets is not in compliance with relevant requirements; (ii) where the financing guarantee company provides financing guarantee for its controlling shareholder or actual controller, or where the conditions by which the financing guarantee company provides financing guarantee for other affiliated parties are more favorable than those for providing similar guarantee for non-affiliated parties; (iii) where the financing guarantee company fails to accrue corresponding reserves in accordance with relevant provisions; or (iv) where the financing guarantee company fails to use its proprietary funds pursuant to the applicable governmental provisions on the safety and liquidity of the assets of financing guarantee companies.
A financing guarantee company that falls under any of the following circumstances shall be ordered by the competent government authority to make correction within the prescribed time limit; and, where it fails to correct by the prescribed deadline, the financing guarantee company may be subject to penalties including, fines of RMB100,000 to RMB500,000, confiscation of illegal gains if any, being ordered to suspend business for rectification, or being revoked of its permit for financing guarantee business under grave circumstances: (i) where the ratio of the outstanding guarantee liabilities of the financing guarantee company to its net assets is not in compliance with relevant requirements; (ii) where the financing guarantee company provides financing guarantee for its controlling shareholder or actual controller, or where the conditions by which the financing guarantee company provides financing guarantee for other affiliated parties are more favorable than those for providing similar guarantee for non-affiliated parties; (iii) where the financing guarantee company fails to accrue corresponding reserves in accordance with relevant provisions; or (iv) where the financing guarantee company fails to use its proprietary funds pursuant to the applicable governmental provisions on the safety and liquidity of the assets of financing guarantee companies. 89 Table of Contents With respect to the cooperation on guarantee business between financing guarantee companies and banking financial institutions, as required by the Financing Guarantee Rules, the two parties of such cooperation shall follow the principles of free will, equality, fairness and honesty, being compliant with laws, and prudent operation.
Unless terminated in accordance with the provisions of the exclusive business cooperation agreement or terminated in writing by Can Gu Long, the exclusive cooperation agreement shall remain effective. 95 Table of Contents Exclusive Option Agreement Pursuant to the exclusive option agreement, each of Shanghai Yungu’s shareholders have irrevocably granted Can Gu Long an irrevocable and exclusive right to purchase, or designate one or more persons agreed by the board of directors of Can Gu Long to purchase the equity interests in Shanghai Yungu then held by its shareholders once or at multiple times at any time in part or in whole at Can Gu Long’s sole and absolute discretion to the extent permitted by PRC law.
Exclusive Option Agreement Pursuant to the exclusive option agreement, each of Shanghai Yungu’s shareholders have irrevocably granted Can Gu Long an irrevocable and exclusive right to purchase, or designate one or more persons agreed by the board of directors of Can Gu Long to purchase the equity interests in Shanghai Yungu then held by its shareholders once or at multiple times at any time in part or in whole at Can Gu Long’s sole and absolute discretion to the extent permitted by PRC law.
Insurance intermediaries, like the insurance brokerage companies, shall strengthen the internal control management, prevent business risks, and focus on the rectification based on the following factors: (i) whether the professional insurance intermediary assists an insurance company in maliciously obtaining insurance proceeds by fabricating agency business, etc.; (ii) whether the professional insurance intermediary sells unapproved non-insurance financial products; (iii) whether the professional insurance intermediary grants benefits other than those stipulated in relevant insurance contracts to policyholders, the issued and beneficiaries; and (iv) whether the professional insurance intermediary has filed registration for sales personnel for practice in accordance with relevant regulations, etc.
Insurance intermediaries, like the insurance brokerage companies, shall strengthen the internal control management, prevent business risks, and focus on the rectification based on the following factors: (i) whether the professional insurance intermediary assists an insurance company in maliciously obtaining insurance proceeds by fabricating agency business, etc.; (ii) whether the professional insurance intermediary sells unapproved non-insurance financial products; (iii) whether the professional insurance intermediary grants benefits other than those stipulated in relevant insurance contracts to policyholders, the issued and beneficiaries; and (iv) whether the professional insurance intermediary has filed registration for sales personnel for practice in accordance with relevant regulations, etc. 90 Table of Contents On December 7, 2020, the CBIRC promulgated the Regulatory Measures for Online Insurance Business, or the Online Insurance Measures, which took effect on February 1, 2021.
Other Platform Partners ● Insurance Brokers and Companies : The Group is able to provide access to a large number of car buyers for insurance brokers and companies, making Cango a natural and highly efficient partner for them to promote their insurance products.
Other Platform Partners The Group is able to provide access to a large number of car buyers for insurance brokers and companies, making Cango a natural and highly efficient partner for them to promote their insurance products. The insurance products currently offered through Cango platform are related to accident insurances, automotive insurances and other automotive related insurance services.
The purpose was to obtain the insurance brokerage license to enhance after-market services facilitation business. The Group completed three rounds of equity financing prior to the completion of our initial public offering. The first round of equity financing was completed in July 2017, and investors included Warburg Pincus Financial Global Ltd. and Primavera.
The purpose was to obtain the insurance brokerage license to enhance after-market services facilitation business. The Group completed three rounds of equity financing prior to the completion of our initial public offering. The first round of equity financing was completed in July 2017, including Primavera and another investor.
Risk Factors —Risks Relating to Our Industry and Business—Shanghai Cango may be deemed to operate financing guarantee business by the PRC regulatory authorities.” Regulation Related to Insurance Brokerage Business According to the Measures for the Administration of Licenses of Banking and Insurance Institutions promulgated by the CBIRC on April 28, 2021 and effective on July 1, 2021 and the PRC Insurance Law promulgated by the SCNPC in June 1995 and most recently amended in April 2015, an insurance brokerage company is an entity that, in the interest of the applicant, provides intermediary services between the applicant and the insurer for the conclusion of an insurance contract and receives a commission in accordance with relevant laws.
Regulation Related to Insurance Brokerage Business According to the Measures for the Administration of Licenses of Banking and Insurance Institutions promulgated by the CBIRC on April 28, 2021 and effective on July 1, 2021 and the PRC Insurance Law promulgated by the SCNPC in June 1995 and most recently amended in April 2015, an insurance brokerage company is an entity that, in the interest of the applicant, provides intermediary services between the applicant and the insurer for the conclusion of an insurance contract and receives a commission in accordance with relevant laws.
When a financing guarantee company provides financing guarantee for other affiliated parties, the conditions shall not be more favorable than those for providing similar guarantee for non-affiliated parties.
Furthermore, a financing guarantee company shall not provide financing guarantee for its controlling shareholder and actual controller. When a financing guarantee company provides financing guarantee for other affiliated parties, the conditions shall not be more favorable than those for providing similar guarantee for non-affiliated parties.
The Group has been in compliance with the regulations and policies that have been issued by the CAC to the date of this annual report in all material respects. 79 Table of Contents Regulation Related to VATS License Among all of the applicable laws and regulations, the Telecommunications Regulations of the People’s Republic of China, or the Telecom Regulations, promulgated by the PRC State Council in September 25, 2000 and amended on July 29, 2014 and February 6, 2016 respectively, is the primary governing law, and sets out the general framework for the provision of telecommunications services by domestic PRC companies.
Regulation Related to VATS License Among all of the applicable laws and regulations, the Telecommunications Regulations of the People’s Republic of China, or the Telecom Regulations, promulgated by the PRC State Council in September 25, 2000 and amended on July 29, 2014 and February 6, 2016 respectively, is the primary governing law, and sets out the general framework for the provision of telecommunications services by domestic PRC companies.
(6) Includes two subsidiaries that are wholly-owned by Shanghai Chejia, which primarily engages in providing financing leases to car buyers.
(5) Primarily involved in the operation of the Group’s automobile trading. (6) Includes two subsidiaries that are wholly-owned by Shanghai Chejia, which primarily engages in providing financing leases to car buyers.
Furthermore, the automobile trading solutions are powered by the Group’s technology platform, aiming to maximize efficiencies. As a comprehensive tool kit to address dealers’ pain points, Cango U-car app allows dealers to conveniently find suitable cars, serve existing car buyers and engage potential car buyers.
The automobile trading solutions are powered by the Group’s technology platform, aiming to maximize efficiencies. As a comprehensive tool kit to address dealers’ pain points, Cango U-car app and AutoCango.com allow dealers to conveniently find suitable cars, serve existing car buyers and engage potential car buyers. The Group offers both car sourcing and transaction facilitation services for used car transactions.
Shanghai Cango is consolidated with the Group’s results of operations for accounting purposes, but it is not an entity in which we own equity interest. (4) Includes 15 subsidiaries that are majority owned by Shanghai Cango.
Shanghai Cango is consolidated with the Group’s results of operations for accounting purposes, but it is not an entity in which we own equity interest. (4) Includes three subsidiaries that are majority owned by Shanghai Cango. These subsidiaries are primarily involved in providing automotive financing facilitation services and after-market services.
Funding for such financing solutions is provided by either third-party financial institutions or Shanghai Chejia, which is the Group’s consolidated affiliate. The Group made a business transition in 2022 to scale down its automotive financing facilitation services. Currently, the Group cooperates with third-party financial institutions to fund existing loans facilitated through Cango platform.
Funding for such financing solutions was provided by either third-party financial institutions or Shanghai Chejia, which is the Group’s consolidated affiliate. The Group made a business transition in 2022 to scale down its business. Currently, the Group ceases entering into new contracts for its automotive financing facilitation services.
Risk Factors—Risks Relating to Doing Business in China—Changes and developments in the PRC legal system and the interpretation and enforcement of PRC laws, rules and regulations may subject us to uncertainties.” Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in China or the rights of our shareholders to receive dividends and other distributions from us.
Risk Factors—Risks Relating to Doing Business in China—Changes and developments in the PRC legal system and the interpretation and enforcement of PRC laws, rules and regulations may subject us to uncertainties.” Regulations in the PRC This section sets forth a summary of the most significant rules and regulations that affect our business activities in China or the rights of our shareholders to receive dividends and other distributions from us. 82 Table of Contents Regulation Related to Financing Lease The Administrative Measures of Supervision on Financing Lease Enterprises, or the Administrative Measures, was formulated by the MOFCOM and became effective on October 1, 2013.
The outstanding guarantee liabilities of a financing guarantee company vis-à-vis the same guaranteed party shall not exceed 10% of the net assets of the financing guarantee company, while the outstanding guarantee liabilities of a financing guarantee company vis-à-vis the same guaranteed party and its affiliated parties shall not exceed 15% of its net assets. 81 Table of Contents Furthermore, a financing guarantee company shall not provide financing guarantee for its controlling shareholder and actual controller.
The outstanding guarantee liabilities of a financing guarantee company vis-à-vis the same guaranteed party shall not exceed 10% of the net assets of the financing guarantee company, while the outstanding guarantee liabilities of a financing guarantee company vis-à-vis the same guaranteed party and its affiliated parties shall not exceed 15% of its net assets.
For example, on July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-border Data Transfer, which came into effect on September 1, 2022.
The PRC regulatory authorities have also enhanced the supervision and regulation on cross-border data transmission. For example, on July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-border Data Transfer, which came into effect on September 1, 2022.
Furthermore, according to the Announcement on Relevant Policies for Deepening Value-added Tax Reform jointly promulgated by the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs, which became effective on April 1, 2019, the taxable goods previously subject to VAT rates of 16% and 10% respectively become subject to lower VAT rates of 13% and 9% respectively starting from April 1, 2019. 89 Table of Contents Furthermore, on September 1, 2023, the Standing Committee of the National People’s Congress of China released the second draft version of the Value Added Tax Law of the People’s Republic of China, or the Draft VAT Law.
Furthermore, according to the Announcement on Relevant Policies for Deepening Value-added Tax Reform jointly promulgated by the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs, which became effective on April 1, 2019, the taxable goods previously subject to VAT rates of 16% and 10% respectively become subject to lower VAT rates of 13% and 9% respectively starting from April 1, 2019. 97 Table of Contents Furthermore, on December 25, 2024, the SCNPC released the Value-Added Tax Law of the PRC, which will become effective from January 1, 2026.
A financing lease company shall report, according to the requirements of the MOFCOM, the relevant data in a timely and truthful manner through the National Financing Lease Company Management Information System.
According to the Administrative Measures, the MOFCOM and the provincial-level commerce authorities are in charge of the supervision and administration of financing lease enterprises. A financing lease company shall report, according to the requirements of the MOFCOM, the relevant data in a timely and truthful manner through the National Financing Lease Company Management Information System.
In April 2018, the MOFCOM transferred the duties to make rules on the operation and supervision of financing lease companies to the China Banking and Insurance Regulatory Commission, or the CBIRC , which was merged into the National Financial Regulatory Administration.
In April 2018, the MOFCOM transferred the duties to make rules on the operation and supervision of financing lease companies to the China Banking and Insurance Regulatory Commission, or the CBIRC, which was merged into the National Financial Regulatory Administration. 83 Table of Contents In May 2020, the CBIRC promulgated the Interim Measures for the Supervision and Administration of Financial Leasing Companies, or the New Administrative Measures, which aim to strengthen the regulation of financing lease companies.
Nevertheless, WeBank continues to fund existing loans facilitated through Cango platform and performs relevant obligations. Financing Leases Shanghai Chejia funds financing leases with its own capital as well as debt financing provided by Bank of Shanghai and several other institutions. The financing leases are recorded on Shanghai Chejia’s balance sheet as financing lease receivables.
Financing Leases Shanghai Chejia funds financing leases with its own capital as well as debt financing provided by Bank of Shanghai and several other institutions. The financing leases are recorded on Shanghai Chejia’s balance sheet as financing lease receivables.
This agreement will remain effective until all equity interests of Shanghai Cango held by its shareholders have been transferred or assigned to Can Gu Long or its designated person(s). 94 Table of Contents Contractual Arrangements with Shanghai Yungu and Its Shareholders Equity Interest Pledge Agreements Pursuant to the equity interest pledge agreements, each shareholder of Shanghai Yungu, has pledged all of such shareholder’s equity interest in Shanghai Yungu as a security interest, as applicable, to respectively guarantee Shanghai Yungu and its shareholders’ performance of their obligations under the relevant contractual arrangement, which include the exclusive business cooperation agreement, exclusive option agreement and power of attorney.
Contractual Arrangements with Shanghai Yungu and Its Shareholders Equity Interest Pledge Agreements Pursuant to the equity interest pledge agreements, each shareholder of Shanghai Yungu, has pledged all of such shareholder’s equity interest in Shanghai Yungu as a security interest, as applicable, to respectively guarantee Shanghai Yungu and its shareholders’ performance of their obligations under the relevant contractual arrangement, which include the exclusive business cooperation agreement, exclusive option agreement and power of attorney.
However, the PRC government has promulgated new laws, regulations or relevant drafts and indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. For more detailed information, see “—Regulations—M&A Rules and Overseas Listings” and “—Regulations—Regulation Related to Cybersecurity, Internet Information Security and Privacy Protection” below.
However, the PRC government has promulgated new laws, regulations or relevant drafts and indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.
If car buyers are interested in purchasing a new car, disposing a used car or after-market services such as insurance products, the Group will further communicate with them in offering such services.
The Group places phone calls or provides notifications to car buyers regarding additional value-added services or after-market services through its mobile application. If car buyers are interested in purchasing a new car, disposing a used car or after-market services such as insurance products, the Group will further communicate with them in offering such services.
Such division expands the scope of insurance sales practices to include, among others, activities such as creating an environment for the conclusion of insurance contracts, preparing conditions and soliciting insurance contract counterparties.
Such division expands the scope of insurance sales practices to include, among others, activities such as creating an environment for the conclusion of insurance contracts, preparing conditions and soliciting insurance contract counterparties. The measures explicitly prohibit any other entities or individuals other than insurance companies, insurance intermediaries or insurance sales personnel from conducting any insurance sales practices.
Please see “Item 3—Key Information—Risks Relating to Our Industry and Business— Failure to sell cars owned by the Group or facilitate the sale of cars owned by dealers may have a material and adverse effect on the Group’s business, financial condition and results of operations.” As of December 31, 2023, 1,801 dealers registered on Cango U-car app for automobile trading solutions.
Please see “Item 3—Key Information—Risks Relating to Our Automotive Business—Failure to sell cars owned by the Group or facilitate the sale of cars owned by dealers may have a material and adverse effect on the Group’s business, financial condition and results of operations.” For the year ended December 31, 2024, the automobile trading business generated minimal revenue compared with the years before.
In addition, the Data Security Law provides a national security review procedure for those data activities which may affect national security and imposes export restrictions on certain data and information. We may be required to make further adjustments to our business practices to comply with this law.
In addition, the Data Security Law provides a national security review procedure for those data activities which may affect national security and imposes export restrictions on certain data and information.
The measures explicitly prohibit any other entities or individuals other than insurance companies, insurance intermediaries or insurance sales personnel from conducting any insurance sales practices. 83 Table of Contents Regulations Related to Used Automobiles Transaction Business On August 29, 2005, the MOFCOM, the Ministry of Public Security, the SAIC, and State Administration of Taxation together promulgated the Measures for the Administration of the Circulation of Used Automobiles, which were amended on September 14, 2017.
Regulations Related to Used Automobiles Transaction Business On August 29, 2005, the MOFCOM, the Ministry of Public Security, the SAIC, and State Administration of Taxation together promulgated the Measures for the Administration of the Circulation of Used Automobiles, which were amended on September 14, 2017.
Nevertheless, MYbank continues to fund existing loans facilitated through Cango platform and performs relevant obligations. ● Pursuant to the agreement with Bank of Shanghai, the Group receives service fees for industry information services, auto finance business services, management services for personal consumption loans, and other services.
Although the agreement with MYbank expired in June 2023, MYbank continues to perform relevant obligations for the outstanding loan balances. ● Pursuant to the agreement with Bank of Shanghai, the Group receives service fees for industry information services, auto finance business services, management services for personal consumption loans, and other services.
Furthermore, banking financial institutions shall not carry out cooperation on guarantee business with any company that does not hold the approval or license to operate financing guarantee business. In connection with the Group’s automotive financing facilitation business, the Group provides credit assessment service to financial institutions to assist them in making ultimate credit decisions.
Furthermore, banking financial institutions shall not carry out cooperation on guarantee business with any company that does not hold the approval or license to operate financing guarantee business.
Please see “Item 3—Key Information—Risks Relating to Our Industry and Business— Failure to sell cars owned by the Group or facilitate the sale of cars owned by dealers may have a material and adverse effect on the Group’s business, financial condition and results of operations.” As of December 31, 2023, 1,801 dealers registered on Cango U-car app for automobile trading solutions.
Please see “Item 3—Key Information—Risks Relating to Our Automotive Business—Failure to sell cars owned by the Group or facilitate the sale of cars owned by dealers may have a material and adverse effect on the Group’s business, financial condition and results of operations.” After-market Services Facilitation The Group facilitates the sale of insurance policies and other after-market services for car buyers.
The Group has registered 12 trademarks in the PRC, including “CANGO Management 灿谷管理 .” The Group is the registered holder of 29 domain names in the PRC, such as cangoonline.com. The Group has 92 registered software copyrights relating to its mobile applications. Seasonality The Group experiences seasonality in its business, reflecting car buyers’ purchase patterns.
The Group has registered 19 trademarks in the PRC, including “CANGO Management 灿谷管理 .” The Group is the registered holder of 39 domain names in the PRC, such as cangoonline.com. The Group has 93 registered software copyrights and two patents relating to its mobile applications.
The table below sets forth a breakdown of the total amount of financing transactions funded by third-party financial institutions and Shanghai Chejia, both in absolute amount and as a percentage of the total amount facilitated, in the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ending December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Financing transactions funded by third-party financial institutions: 29,036,779 96.4 2,763,008 97.3 1,686 238 100.0 Financing transactions funded by Shanghai Chejia 1,091,415 3.6 75,819 2.7 — — — Total 30,128,194 100.0 2,838,827 100.0 1,686 238 100.0 ​ The table below sets forth a breakdown of the total outstanding principal of financing transactions funded by third-party financial institutions and Shanghai Chejia, both in absolute amount and as a percentage of the total outstanding amount facilitated, as of the date presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Outstanding principal of financing transactions funded by third-party financial institutions: 45,145,986 96.7 24,752,810 96.8 9,634,444 1,356,983 96.6 Outstanding principal of financing transactions funded by Shanghai Chejia 1,556,068 3.3 828,444 3.2 337,115 47,482 3.4 Total 46,702,054 100.0 25,581,254 100.0 9,971,559 1,404,465 100.0 ​ 69 Table of Contents Terms of Cooperation with Financial Institutions ● Pursuant to the agreements with MYbank, the Group collaborates with MYbank to facilitate financing transactions funded by a major commercial bank for car buyers.
The table below sets forth a breakdown of the total outstanding principal of financing transactions funded by third-party financial institutions and Shanghai Chejia, both in absolute amount and as a percentage of the total outstanding amount facilitated, as of the date presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Outstanding principal of financing transactions funded by third-party financial institutions: 24,752,810 96.8 9,634,444 96.6 3,790,130 519,246 97.4 Outstanding principal of financing transactions funded by Shanghai Chejia 828,444 3.2 337,115 3.4 100,593 13,781 2.6 Total 25,581,254 100.0 9,971,559 100.0 3,890,723 533,027 100 ​ Terms of Cooperation with Financial Institutions ● Pursuant to the agreements with MYbank, the Group collaborates with MYbank to facilitate financing transactions funded by a major commercial bank for car buyers.
A foreign-invested financing lease company that undergoes such changes shall go through approval and other procedures according to the relevant provisions.
A foreign-invested financing lease company that undergoes such changes shall go through approval and other procedures according to the relevant provisions. A financing lease company shall, within five business days after registering such changes, log into the National Financing Lease Company Management Information System to modify the above information.
Our ADSs, each representing two of our Class A ordinary shares, have been listed on the New York Stock Exchange since July 26, 2018 under the symbol “CANG.” 63 Table of Contents B. Business Overview Overview Who We Are The Group is a leading technology-enabled automotive transaction service platform in China, connecting dealers, OEMs, car buyers and other industry participants.
Our ADSs, each representing two of our Class A ordinary shares, have been listed on the New York Stock Exchange since July 26, 2018 under the symbol “CANG.” 74 Table of Contents B. Business Overview Overview Who We Are The Group primarily operates a leading crypto mining business.
In 2022 and 2023, the amount of financing leases funded by Shanghai Chejia was RMB75.8 million and nil, respectively. As of December 31, 2022 and 2023, the outstanding principal of financing leases funded by Shanghai Chejia was RMB828.4 million and RMB337.1 million (US$47.5 million), respectively. Car Buyers Cango platform mainly facilitates after-market services such as insurance products to car buyers.
As of December 31, 2023 and 2024, the outstanding principal of financing leases funded by Shanghai Chejia was RMB337.1 million and RMB100.6 million (US$13.8 million), respectively. Car Buyers Cango platform mainly facilitates after-market services such as insurance products to car buyers. The Group remains in contact with many car buyers even after their automotive loans or financing leases are repaid.
Shanghai Yungu is consolidated with the Group’s results of operations for accounting purposes, but it is not an entity in which we own equity interest. Shanghai Yungu is primarily involved in operating the Cango U-car app. (3) Include Shanghai Wangjin Investment Management Co., Ltd. (controlled by Mr. Xiaojun Zhang), Mr.
Zhipeng Song is a director of the Group and Meng Xu is an employee of the Group. Shanghai Yungu is consolidated with the Group’s results of operations for accounting purposes, but it is not an entity in which we own equity interest. Shanghai Yungu is primarily involved in operating the Cango U-car app.
Currently, the Group’s automobile trading solutions are accessible primarily through Cango U-car app. The Group primarily provides dealers with streamlined used car transaction services, consisting of car sourcing and transaction facilitation services.
The Group primarily provides dealers with streamlined used car transaction services, consisting of car sourcing and transaction facilitation services.
The Group may also in the future face competition from new entrants that will increase the level of competition. We anticipate that more established companies, including technology companies that possess large, existing user bases, substantial financial resources, sophisticated technological capabilities and established distribution channels may also enter the market in the future.
We anticipate that more established companies, including technology companies that possess large, existing user bases, substantial financial resources, sophisticated technological capabilities and established distribution channels may also enter the market in the future. 81 Table of Contents The crypto assets industry is a highly competitive and rapidly changing industry.
Enterprises which fail to make filing as required shall be dealt with in accordance with the laws and regulations, and the competent commerce departments shall impose restrictions in the pilot demonstration work, and may give warnings, etc.
Enterprises which fail to make filing as required shall be dealt with in accordance with the laws and regulations, and the competent commerce departments shall impose restrictions in the pilot demonstration work, and may give warnings, etc. 91 Table of Contents Regulations Related to Online and Mobile Commerce On August 31, 2018, the SCNPC promulgated the E - commerce Law, which came into effect on January 1, 2019.
The Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities.
On June 10, 2021, the SCNPC promulgated the Data Security Law, which took effect in September 2021. The Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities.
Shanghai Chejia, the Group’s proprietary financing lease subsidiary, utilizing own capital to fund financing leases to car buyers, has obtained the approval to operate financing lease business as issued by the MOFCOM. 75 Table of Contents Regulation Related to Intermediation An intermediation contract under the PRC Civil Code is a contract whereby an intermediary presents to its client an opportunity for entering into a contract or provides the client with other intermediary services in connection with the conclusion of a contract, and the client pays the intermediary service fees.
Regulation Related to Intermediation An intermediation contract under the PRC Civil Code is a contract whereby an intermediary presents to its client an opportunity for entering into a contract or provides the client with other intermediary services in connection with the conclusion of a contract, and the client pays the intermediary service fees.
If an information service provider violates these measures, the Ministry of Public Security and the local security bureaus may revoke its operating license and shut down its websites.
If an information service provider violates these measures, the Ministry of Public Security and the local security bureaus may revoke its operating license and shut down its websites. 84 Table of Contents On November 7, 2016, the SCNPC issued the Cybersecurity Law, which came into effect on June 1, 2017.
Regulation Related to Financing Guarantee Companies The State Council promulgated the Regulations on the Administration of Financing Guarantee Companies on August 2, 2017, and on April 2, 2018, the CBIRC, together with several other governmental authorities, jointly adopted four supporting rules of the Administration of Financing Guarantee Companies, which was amended in June 2021: (i) the Administrative Measures for the Financing Guarantee Business Permit, (ii) Measures for Measuring the Outstanding Amount of Financing Guarantee Liabilities, (iii) Administrative Measures for the Asset Percentages of Financing Guarantee Companies and (iv) Guidelines on Business Cooperation between Banking Financial Institutions and Financing Guarantee Companies, or the Four Supporting Measures of the Financing Guarantee Rules.
In regions approved to carry out the pilot program, restrictions on foreign equity ratios will be removed for internet data centers (IDC), content delivery networks (CDN), internet service providers (ISP), online data processing and transaction processing, information releasing platforms and delivery services included in information services (excluding the operation of internet news information, online publishing, online audio and video, and internet culture), as well as information protection and processing services. 88 Table of Contents Regulation Related to Financing Guarantee Companies The State Council promulgated the Regulations on the Administration of Financing Guarantee Companies on August 2, 2017, and on April 2, 2018, the CBIRC, together with several other governmental authorities, jointly adopted four supporting rules of the Administration of Financing Guarantee Companies, which was amended in June 2021: (i) the Administrative Measures for the Financing Guarantee Business Permit, (ii) Measures for Measuring the Outstanding Amount of Financing Guarantee Liabilities, (iii) Administrative Measures for the Asset Percentages of Financing Guarantee Companies and (iv) Guidelines on Business Cooperation between Banking Financial Institutions and Financing Guarantee Companies, or the Four Supporting Measures of the Financing Guarantee Rules.
Exclusive Business Cooperation Agreement Under the exclusive business cooperation agreement, Shanghai Cango appoints Can Gu Long as its exclusive services provider to provide Shanghai Cango with comprehensive technical support, consulting services and other services during the term of the exclusive business cooperation agreement.
During the period that such shareholders remains a shareholder of Shanghai Cango, the power of attorney shall be irrevocable and continuously effective and valid from the date of execution of the power of attorney. 102 Table of Contents Exclusive Business Cooperation Agreement Under the exclusive business cooperation agreement, Shanghai Cango appoints Can Gu Long as its exclusive services provider to provide Shanghai Cango with comprehensive technical support, consulting services and other services during the term of the exclusive business cooperation agreement.
Pursuant to the Personal Information Protection Law, “personal information” refers to any kind of information related to an identified or identifiable individual as electronically or otherwise recorded and exclude anonymized information. The processing of personal information includes the collection, storage, use, processing, transmission, provision, disclosure and deletion of personal information.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law, which took effect on November 1, 2021. Pursuant to the Personal Information Protection Law, “personal information” refers to any kind of information related to an identified or identifiable individual as electronically or otherwise recorded and exclude anonymized information.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The non-GAAP financial measures have limitations as analytical tools, and when assessing the Group’s operating performance, cash flows or its liquidity, investors should not consider them in isolation, or as a substitute for net income, cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP.
The non-GAAP financial measures have limitations as analytical tools, and when assessing the Group’s operating performance, cash flows or its liquidity, investors should not consider them in isolation, or as a substitute for net income, cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S.
Before January 1, 2023, the non-contingent aspect of risk assurance liabilities was reduced over the term of the arrangement, which the Group recognized as gain on risk assurance liabilities, as it was released from the risk assurance obligation on a loan-by-loan basis based on car buyers’ repayments.
Before January 1, 2023, the non-contingent aspect of risk assurance liabilities was reduced over the term of the arrangement, which the Group recognized as gain on risk assurance liabilities, as it was released from the risk assurance obligation on a loan-by-loan basis based on car buyers’ repayments.
The Group conducts its operations primarily through its subsidiary, consolidated VIEs and their subsidiaries in China. As a result, Cango Inc.’s ability to pay dividends depends upon dividends paid by its PRC subsidiary.
The Group conducts its operations primarily through its subsidiaries, consolidated VIEs and their subsidiaries in China. As a result, Cango Inc.’s ability to pay dividends depends upon dividends paid by its PRC subsidiary.
Risk Factors—Risks Relating to Our Industry and Business —We may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on terms acceptable to us, or at all.” The Group’s ability to manage its working capital, including receivables and other assets and accrued expenses and other liabilities, may materially affect the Group’s financial condition and results of operations.
Risk Factors—Risks Relating to Our Business Operations—We may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on terms acceptable to us, or at all.” The Group’s ability to manage its working capital, including receivables and other assets and accrued expenses and other liabilities, may materially affect the Group’s financial condition and results of operations.
If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. 105 Table of Contents Results of Operations The following tables set forth a summary of the Group’s consolidated results of operations for the periods presented, in absolute amount and as a percentage of its total revenues.
If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. 114 Table of Contents Results of Operations The following tables set forth a summary of the Group’s consolidated results of operations for the periods presented, in absolute amount and as a percentage of its total revenues.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2023 that are reasonably likely to have a material effect on the Group’s total net revenues, income, profitability, liquidity or capital reserves, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material effect on the Group’s total net revenues, income, profitability, liquidity or capital reserves, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
China’s automotive industry, especially the automotive transaction industry, may be affected by, among other factors, the general economic conditions in China and the growth of disposable income. With the expansion of China’s automotive industry, dealers, financial institutions, OEMs and other industry participants have been utilizing technology-enabled automotive transaction service platforms to solve their pain points and capture market opportunities.
The automotive industry in China and globally, especially the automotive transaction industry, may be affected by, among other factors, the general economic conditions and the growth of disposable income. With the expansion of automotive industry, dealers, financial institutions, OEMs and other industry participants have been utilizing technology-enabled automotive transaction service platforms to solve their pain points and capture market opportunities.
The Group does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to the Group or engages in leasing, hedging or product development services with the Group. 111 Table of Contents Holding Company Structure Cango Inc. is a holding company with no material operations of its own.
The Group does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to the Group or engages in leasing, hedging or product development services with the Group. 120 Table of Contents Holding Company Structure Cango Inc. is a holding company with no material operations of its own.
The Group will provide PAS, such as tracking through telematics devices in the automobiles; and sending short-message-service (“SMS”) payment reminder to borrowers, throughout the terms of the loans. In addition, for certain arrangements, the Group provides risk assurance on the principal and accrued interest repayments of the defaulted loans to various financial institutions.
The Company will provide PAS, such as tracking through telematics devices in the automobiles; and sending short-message-service (“SMS”) payment reminder to borrowers, throughout the terms of the loans. In addition, for certain arrangements, the Company provides risk assurance on the principal and accrued interest repayments of the defaulted loans to various financial institutions.
The Group acts as a principal in which the Group purchases vehicles from suppliers which are vehicle manufacturers or their first-tier car dealerships and sells the vehicles to customers which are other car dealerships and records revenue on a gross basis if it obtains control over the specified goods and services before they are transferred to the customers.
The Company acts as a principal in which the Company purchases vehicles from suppliers which are vehicle manufacturers or their first-tier car dealerships and sells the vehicles to customers which are other car dealerships and records revenue on a gross basis if it obtains control over the specified goods and services before they are transferred to the customers.
The Group determined that it is not the legal lender or legal borrower in the loan origination and repayment process, respectively. Therefore, the Group does not record loan receivables and payable arising from the loans between borrowers and financial institutions on its consolidated balance sheet. The Group determines its customers to be both the financial institutions and borrowers.
The Company determined that it is not the legal lender or legal borrower in the loan origination and repayment process, respectively. Therefore, the Company does not record loan receivables and payable arising from the loans between borrowers and financial institutions on its consolidated balance sheet. The Company determines its customers to be both the financial institutions and borrowers.
We mitigate these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance. The following table reconciles the non-GAAP financial measures in the years presented to the most directly comparable financial measure calculated and presented in accordance with U.S.
GAAP. 110 Table of Contents We mitigate these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance. The following table reconciles the non-GAAP financial measures in the years presented to the most directly comparable financial measure calculated and presented in accordance with U.S.
Material Cash Requirements The Group’s material cash requirements as of December 31, 2023 and any subsequent interim period primarily include its short-term loans, long-term debt obligations, capital commitment obligations, operating lease commitment obligations, as well as capital expenditures and repurchase of shares. See “—Capital Expenditures” and “Item 16E.
Material Cash Requirements The Group’s material cash requirements as of December 31, 2024 and any subsequent interim period primarily include its short-term loans, long-term debt obligations, capital commitment obligations, operating lease commitment obligations, as well as capital expenditures and repurchase of shares. See “—Capital Expenditures” and “Item 16E.
The remaining transaction price is then allocated to the loan facilitation services and PAS on a relative standalone selling price basis. The Group does not have observable price for the loan facilitation services and PAS because the services are not provided separately. As a result, the estimation of standalone selling price involves significant judgement.
The remaining transaction price is then allocated to the loan facilitation services and PAS on a relative standalone selling price basis. The Company does not have observable price for the loan facilitation services and PAS because the services are not provided separately. As a result, the estimation of standalone selling price involves significant judgement.
The Group’s cash and cash equivalents consist of cash, investments in interest bearing demand deposit accounts, time deposits, and highly liquid investments with original maturities within three months from the date of purchase and are stated at cost which approximates their fair value.
The Group’s cash, investments in interest bearing demand deposit accounts, time deposits, and highly liquid investments with original maturities within three months from the date of purchase are stated at cost which approximates their fair value.
The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring the promised services to the customer, net of value-added tax. The transaction price includes variable service fees which are contingent on the borrower making timely repayments.
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised services to the customer, net of value-added tax. The transaction price includes variable service fees which are contingent on the borrower making timely repayments.
The remainder was funded by either (i) financial institutions from which the Group is obligated to purchase the relevant financing receivables upon certain specified events of default by car buyers or (ii) Shanghai Chejia, the Group’s consolidated affiliate. We monitor credit performance based on M1+ overdue ratio and M3+ overdue ratio.
The remainder was funded by either (i) financial institutions from which the Group is obligated to purchase the relevant financing receivables upon certain specified events of default by car buyers or (ii) Shanghai Chejia, the Group’s consolidated affiliate. 108 Table of Contents We monitor credit performance based on M1+ overdue ratio and M3+ overdue ratio.
Automobile trading transaction When providing car trading services, the Group evaluates if it is a principal or an agent in a transaction to determine whether revenues should be recorded on a gross or net basis.
Automobile trading transaction When providing car trading services, the Company evaluates if it is a principal or an agent in a transaction to determine whether revenues should be recorded on a gross or net basis.
In these periods, such capital expenditures were mainly used for purchases of property and equipment and intangible assets. The Group will continue to make capital expenditures to meet the expected growth of its business.
In these periods, such capital expenditures were mainly used for purchases of property and equipment and intangible assets and the purchases of mining machines. The Group will continue to make capital expenditures to meet the expected growth of its business.
When the Group acts as an agent, revenue is recorded on a net basis when the Group does not obtain control over the specified goods and services before they are transferred to the customers.
When the Company acts as an agent, revenue is recorded on a net basis when the Company does not obtain control over the specified goods and services before they are transferred to the customers.
The revenue generated from sale of vehicles is recognized at a point in time when the control of the vehicles is transferred from the Group to the customers when the vehicles are delivered and their titles are passed on to the customers.
The revenue generated from sale of vehicles is recognized at a point in time when the control of the vehicles is transferred from the Company to the customers when the vehicles are delivered and their titles are passed on to the customers.
The Group recognizes any increase in allowance for financing receivables as provision for credit losses for the relevant period. 104 Table of Contents Impairment Loss from Goodwill Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business.
The Group recognizes any increase in allowance for financing receivables as provision for credit losses for the relevant period. Impairment Loss from Goodwill Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business.
Comparison of Year Ended December 31, 2022 and Year Ended December 31, 2021 For a discussion of the Group’s results of operations for the year ended December 31, 2022 compared with the year ended December 31, 2021, see “Item 5. Operating and Financial Review and Prospects—A.
Comparison of Year Ended December 31, 2023 and Year Ended December 31, 2022 For a discussion of the Group’s results of operations for the year ended December 31, 2023 compared with the year ended December 31, 2022, see “Item 5. Operating and Financial Review and Prospects—A.
Once the borrower is independently approved by the financial institutions, the financial institutions will directly fund the borrower’s automobile purchase and the Group will earn a loan facilitation fee from the financial institution and borrowers.
Once the borrower is independently approved by the financial institutions, the financial institutions will directly fund the borrower’s automobile purchase and the Company will earn a loan facilitation fee from the financial institution and borrowers.
The Group considers the loan facilitation service, PAS and risk assurance services as separate services, of which the risk assurance service is accounted for in accordance ASC 460, Guarantees (“ASC 460”).
The Company considers the loan facilitation service, PAS and risk assurance services as separate services, of which the risk assurance service is accounted for in accordance ASC 460, Guarantees (“ASC 460”).
The Group will continue to make efforts to ensure that it is compliant with the existing laws, regulations and governmental policies relating to the automotive industry and to comply with new laws and regulations or changes under existing laws and regulations that may arise in the future.
The Group will continue to make efforts to ensure that it is compliant with the existing laws, regulations and governmental policies and to comply with new laws and regulations or changes under existing laws and regulations that may arise in the future.
Adjustments for changes in working capital primarily consisted of (i) a decrease in other current and non-current assets of RMB1,164.5 million (US$164.0 million), primarily due to the decrease of advance payments to suppliers of automobile trading businesses upon the delivery of goods, (ii) a decrease in contract assets of RMB466.8 million (US$65.8 million), primarily due to the loan facilitation service fees collected in 2023, (iii) a decrease in financing receivables of RMB264.7million (US$37.3 million) due to the positive impact of the collection activities and (iv) a decrease in accounts receivables of RMB202.0 million (US$28.4 million).
Adjustments for changes in working capital primarily consisted of (i) a decrease in other current and non-current assets of RMB1,164.5 million, primarily due to the decrease of advance payments to suppliers of automobile trading businesses upon the delivery of goods, (ii) a decrease in contract assets of RMB466.8 million, primarily due to the loan facilitation service fees collected in 2023, (iii) a decrease in financing receivables of RMB264.7million due to the positive impact of the collection activities and (iv) a decrease in accounts receivables of RMB202.0 million.
The Group estimates the standalone selling price of the loan facilitation and PAS using the expected cost plus a margin approach.
The Company estimates the standalone selling price of the loan facilitation and PAS using the expected cost plus a margin approach.
Finance lease services The Group provides automobile finance lease services to individual borrowers. Financing lease income is recognized using the effective interest method.
Finance lease services The Company provides automobile finance lease services to individual borrowers. Financing lease income is recognized using the effective interest method.
Cost of Revenue The Group’s cost of revenue consists of (i) cost of vehicle, (ii) cost for staff responsible for risk management and delinquent asset management, (iii) leasing interest expense, (iv) commission paid to car dealerships, (v) incentive fee to sales staff, (vi) outsourcing fee in connection with repayment collection and (vii) others.
Cost of Revenue The Group’s cost of revenue consists of (i) cost of mining service (including depreciations), (ii) cost of vehicle, (iii) cost for staff responsible for risk management and delinquent asset management, (iv) leasing interest expense, (v) commission paid to car dealerships, (vi) incentive fee to sales staff, (vii) outsourcing fee in connection with repayment collection and (viii) others.
The Group makes the assessment of whether the estimate of variable consideration is constrained. Any subsequent changes in the transaction price will be allocated to the performance obligations on the same basis as at contract inception. The Group first allocates the transaction price to the risk assurance liabilities at fair value in accordance with ASC 460.
The Company makes the assessment of whether the estimate of variable consideration is constrained. Any subsequent changes in the transaction price will be allocated to the performance obligations on the same basis as at contract inception. 123 Table of Contents The Company first allocates the transaction price to the risk assurance liabilities at fair value in accordance with ASC 460.
After purchasing such financing receivables, security interest in the collateral is also transferred to the Group. We refer to such arrangement to purchase financing receivables from financial institutions as risk assurance obligation. 100 Table of Contents The Group incurs risk assurance liabilities in connection with these risk assurance obligation.
After purchasing such financing receivables, security interest in the collateral is also transferred to the Group. We refer to such arrangement to purchase financing receivables from financial institutions as risk assurance obligation. The Group incurs risk assurance liabilities in connection with these risk assurance obligation.
For arrangements involving risk assurance liabilities, financial institutions make corresponding deductions from the Group’s deposit account when borrowers are delinquent in their installment repayments and/or when loans are required to be repurchased by the Group after a specified delinquency period. Such restricted cash is not available to fund the Group’s general liquidity needs.
Financial institutions make corresponding deductions from the Group’s deposit account when borrowers are delinquent in their installment repayments and/or when loans are required to be repurchased by the Group after a specified delinquency period. Such restricted cash is not available to fund the Group’s general liquidity needs.
The Group recognized foreign exchange gain of RMB5.9 million and RMB1.1 million (US$0.2 million) in 2022 and 2023, respectively, primarily due to the fluctuation of the foreign exchange rate of U.S. dollars against RMB in both years. Other income .
The Group recognized foreign exchange gain of RMB1.1 million and RMB1.7 million (US$0.2 million) in 2023 and 2024, respectively, primarily due to the fluctuation of the foreign exchange rate of U.S. dollars against RMB in both years. Other income .
Financing Activities Net cash used in financing activities was RMB1,193.8 million (US$168.1million) in 2023, primarily due to repayment of borrowings of RMB1,177.7 million (US$165.9 million) and payment to repurchase treasury shares of RMB246.9 million (US$34.8 million), which was partially offset by proceeds from borrowings of RMB228.1 million (US$32.1 million).
Net cash used in financing activities was RMB1,193.8 million in 2023, primarily due to repayment of borrowings of RMB1,177.7 million and payment to repurchase treasury shares of RMB246.9 million, which was partially offset by proceeds from borrowings of RMB228.1 million.
Liquidity and Capital Resources The Group’s primary sources of liquidity have been issuance of equity securities, borrowings from trusts and banks and cash provided by operating activities, which have historically been sufficient to meet its working capital and substantially all of its capital expenditure requirements. In 2021, net cash used in operating activities was RMB404.4 million.
Liquidity and Capital Resources The Group’s primary sources of liquidity have been issuance of equity securities, borrowings from trusts, banks and other third-parties and cash provided by operating activities, which have historically been sufficient to meet its working capital and substantially all of its capital expenditure requirements. In 2022, net cash used in operating activities was RMB567.4 million.
Recent Accounting Pronouncements Please see Note 2 to the Group’s consolidated financial statements included elsewhere in this annual report. C. Research and Development The Group has focused on and will continue to invest in its technology system, which supports all key aspects of Cango platform and is designed to optimize for scalability and flexibility.
Recent Accounting Pronouncements Please see Note 2 to the Group’s consolidated financial statements included elsewhere in this annual report. C. Research and Development The Group has focused on and will continue to invest in its technology system, which is designed to optimize for scalability and flexibility.
The cost of revenue as a percentage of the Group’s total revenues decreased from 92.4% to 88.8% during the same period, primarily due to a lower share of revenue contribution from car trading transactions, which normally present a higher cost-revenue ratio. ● Sales and marketing .
The cost of revenue as a percentage of the Group’s total revenues decreased from 88.8% to 78.2% during the same period, primarily due to a lower share of revenue contribution from car trading transactions, which normally presents a higher cost-revenue ratio. ● Sales and marketing .
Investing Activities Net cash provided by investing activities was RMB2,124.7 million (US$299.3 million) in 2023, primarily due to (i) maturities of held-to-maturity investment of RMB5,541.6 million (US$780.5 million), (ii) repayments of finance lease receivables of RMB822.0 million (US$115.8 million) and (iii) proceeds from sale or redemption of other short-term investments, net of RMB567.2 million (US$79.9 million), which was partially offset by purchases of held-to-maturity investment of RMB4,805.0 million (US$676.8 million).
Net cash provided by investing activities was RMB2,124.7 million in 2023, primarily due to (i) maturities of held-to-maturity investment of RMB5,541.6 million, (ii) repayments of finance lease receivables of RMB822.0 million and (iii) proceeds from sale or redemption of other short-term investments, net of RMB567.2 million, which was partially offset by purchases of held-to-maturity investment of RMB4,805.0 million.
PAS revenue recognized in the years ended December 31, 2021, 2022 and 2023 is RMB41.6 million, RMB23.4 million and RMB14.1 million (US$2.0 million), respectively. The loan facilitation services and PAS are recorded as Loan facilitation income and other related income in the consolidated statements of comprehensive (loss) income.
PAS revenue recognized in the years ended December 31, 2022, 2023 and 2024 was RMB23.4 million, RMB14.1 million and RMB4.0 million (US$0.6 million), respectively. The loan facilitation services and PAS are recorded as loan facilitation income and other related income in the consolidated statements of comprehensive income (loss).
The Group determines revenue recognition through the following steps: ● Identify the contract(s) with a customer; ● Identify the performance obligations in the contract; ● Determine the transaction price; ● Allocate the transaction price to the performance obligations in the contract; and 112 Table of Contents ● Recognize revenue when (or as) the entity satisfies a performance obligation.
The Company determines revenue recognition through the following steps: ● Identify the contract(s) with a customer; ● Identify the performance obligations in the contract; ● Determine the transaction price; ● Allocate the transaction price to the performance obligations in the contract; and ● Recognize revenue when (or as) the entity satisfies a performance obligation.
Comparison of Year Ended December 31, 2023 and Year Ended December 31, 2022 Revenues .
Comparison of Year Ended December 31, 2024 and Year Ended December 31, 2023 Revenues .
The table below sets forth M1+ overdue ratio and M3+ overdue ratio for all financing transactions which the Group facilitated and remained outstanding as of the specified dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ March June September December March June September December March June September December ​ ​ 31, 30, 30, 31, 31, 30, 30, 31, 31, 30, 30, 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ (%) M1+ overdue ratio 1.23 1.35 1.58 1.62 1.76 2.21 2.44 2.61 2.33 2.12 2.42 2.66 M3+ overdue ratio 0.54 ​ 0.69 ​ 0.76 ​ 0.86 ​ 0.80 ​ 1.07 ​ 1.27 ​ 1.38 ​ 1.29 ​ 1.09 ​ 1.24 ​ 1.37 ​ Risk Assurance Liabilities Under the arrangements with certain financial institutions, the Group is obligated to purchase the relevant financing receivables upon certain specified events of default by car buyers.
The table below sets forth M1+ overdue ratio and M3+ overdue ratio for all financing transactions which the Group facilitated and remained outstanding as of the specified dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ March June September December March June September December March June September December ​ ​ 31, 30, 30, 31, 31, 30, 30, 31, 31, 30, 30, 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ (%) M1+ overdue ratio 1.76 2.21 2.44 2.61 2.33 2.12 2.42 2.66 2.87 2.93 3.17 3.24 M3+ overdue ratio 0.80 ​ 1.07 ​ 1.27 ​ 1.38 ​ 1.29 ​ 1.09 ​ 1.24 ​ 1.37 ​ 1.51 ​ 1.57 ​ 1.76 ​ 1.78 ​ Risk Assurance Liabilities Under the arrangements with certain financial institutions, the Group is obligated to purchase the relevant financing receivables upon certain specified events of default by car buyers.
Under the arrangements with certain financial institutions, the Group is obligated to purchase the relevant financing receivables upon certain specified events of default by car buyers. As of December 31, 2023, deferred guarantee income and contingent risk assurance liabilities related to such arrangement were RMB211.4 million (US$29.8 million).
Under the arrangements with certain financial institutions, the Group is obligated to purchase the relevant financing receivables upon certain specified events of default by car buyers. As of December 31, 2024, deferred guarantee income and contingent risk assurance liabilities related to such arrangement were RMB43.0 million (US$5.9 million).
Credit Performance Metrics As of December 31, 2023, the total outstanding balance of financing transactions for which the Group is not obligated to bear credit risk was RMB1.9 billion (US$0.3 billion), representing 18.6% of the total outstanding balance of financing transactions facilitated.
Credit Performance Metrics As of December 31, 2024, the total outstanding balance of financing transactions for which the Group is not obligated to bear credit risk was RMB1.6 billion (US$0.2 billion), representing 41.1% of the total outstanding balance of financing transactions facilitated.
The Group’s research and development expenses as a percentage of the Group’s total revenues decreased from 2.3% in 2022 to 1.8% in 2023. ● Net loss on contingent risk assurance liabilities. The Group’s net loss on contingent risk assurance liabilities was nil and RMB25.6 million (US$3.6 million) in 2022 and 2023, respectively.
The Group’s research and development expenses as a percentage of the Group’s total revenues decreased from 1.8% in 2023 to 0.7% in 2024. ● Net loss (gain) on contingent risk assurance liabilities. The Group’s net loss on contingent risk assurance liabilities was RMB25.6 million in 2023 and the gain was RMB27.8 million (US$3.8 million) in 2024.
For 2) after-market car recovery and disposal services income, it mainly refers to delinquent asset management income for car recovery and disposal services, which is recognized at the point of time when the Group delivers the relevant service. Income Taxes The Group recognizes income taxes under the liability method.
For after-market car recovery and disposal services income, it mainly refers to delinquent asset management income for car recovery and disposal services, which is recognized at the point of time when the company delivers the relevant service.
As of December 31, 2023, the Group had short-term investments of RMB635.1 million (US$89.4 million), primarily consisting of time deposits and structured deposits investments with original maturities of three months or more but less than one year and marketable securities with readily determinable fair value.
As of December 31, 2024, the Group had short-term investments of RMB1,231.2 million (US$168.7 million), primarily consisting of time deposits and structured deposits investments with original maturities of three months or more but less than one year and marketable securities with readily determinable fair value.
As of December 31, 2023, the maximum potential undiscounted future payment the Group would be required to make was RMB4,855.9 million (US$683.9 million). Other than the above, the Group has not entered into any other commitments to guarantee the payment obligations of any third parties.
As of December 31, 2024, the maximum potential undiscounted future payment the Group would be required to make was RMB820.5 million (US$112.4 million). Other than the above, the Group has not entered into any other commitments to guarantee the payment obligations of any third parties.
For the after-market services, the Group earns fixed service fee for facilitating the sale of different kinds of insurance products, such as accident insurances, automotive insurances and other automotive related insurance services.
The Group receives sales revenue and fee income for its automobile trading solutions. For the after-market services, the Group earns fixed service fee for facilitating the sale of different kinds of insurance products, such as accident insurances, automotive insurances and other automotive related insurance services.
The Group aims to enhance the speed in processing and aggregating dealers’ orders for its car sourcing services and improve the efficiency in matching selling dealers and buying dealers for its transaction facilitation services.
The Group will continue to invest in technologies to improve service quality and user experience. The Group aims to enhance the speed in processing and aggregating dealers’ orders for its car sourcing services and improve the efficiency in matching selling dealers and buying dealers for its transaction facilitation services.
At the inception of each financing transaction for which the Group has risk assurance obligation, it recognizes the non-contingent aspect at fair value.
Net Loss on Risk Assurance Liabilities / Net Loss on Contingent Risk Assurance Liabilities Risk assurance liabilities consist of a non-contingent aspect and a contingent aspect. At the inception of each financing transaction for which the Group has risk assurance obligation, it recognizes the non-contingent aspect at fair value.
Operating Results—Year Ended December 31, 2022 Compared to Year Ended December 31, 2021” in 2022 annual report. B.
Operating Results—Year Ended December 31, 2023 Compared to Year Ended December 31, 2022” in 2023 annual report. B.
Funding for such financing solutions is provided by either third-party financial institutions or Shanghai Chejia, which is the Group’s consolidated affiliate. Based on its observation of the market, the Group made a business transition in 2022 to scale down its automotive financing facilitation services. Currently, the Group cooperates with third-party financial institutions to fund existing loans facilitated through Cango platform.
Funding for such financing solutions was provided by either third-party financial institutions or Shanghai Chejia, which is the Group’s consolidated affiliate. Based on its observation of the market, the Group made a business transition in 2022 to scale down its automotive financing facilitation services. Currently, the Group ceases entering into new contracts for its automotive financing facilitation services.
As of December 31, 2023, the Group had cash and cash equivalents of RMB1,020.6 million (US$143.7 million), as compared to cash and cash equivalents of RMB378.9 million as of December 31, 2022.
As of December 31, 2024, the Group had cash and cash equivalents of RMB1,289.6 million (US$176.7 million), as compared to cash and cash equivalents of RMB1,020.6 million as of December 31, 2023.
Net cash used in financing activities was RMB2,990.2 million in 2022, primarily due to distribution to shareholders of RMB1,871.1 million, repayment of borrowings of RMB1,705.2 million, and payment to repurchase treasury shares of RMB105.8 million, which was partially offset by proceeds from borrowings of RMB684.8 million.
Net cash used in financing activities was RMB2,990.2 million in 2022, primarily due to distribution to shareholders of RMB1,871.1 million, repayment of borrowings of RMB1,705.2 million, and payment to repurchase treasury shares of RMB105.8 million, which was partially offset by proceeds from borrowings of RMB684.8 million. 119 Table of Contents Capital Expenditures The Group made capital expenditures of RMB4.6 million, RMB1.8 million and RMB935.1 million (US$128.1 million) in 2022, 2023 and 2024, respectively.
The Group also owns used cars from cars disposed by individual car buyers who have used the Group’s automotive financial services in the past, as well as cars used as collaterals and later collected and disposed by financial institutions.
The Group owns used cars from cars disposed by individual car buyers who have used the Group’s automotive financial services in the past, as well as cars used as collaterals and later collected and disposed by financial institutions. The transaction facilitation services connect dealers looking for cars with dealers wishing to supply cars.
While new laws and regulations or changes to existing laws and regulations could make current business operations more difficult or expensive, or result in changes to solutions and services offerings and hence the ability to price solutions, these events could also provide new product and market opportunities. 98 Table of Contents Ability to Retain Existing Dealers and Engage New Dealers The Group’s ability to retain existing dealers it collaborates with and engage new dealers is important for the Group’s business.
While new laws and regulations or changes to existing laws and regulations could make current business operations more difficult or expensive, or result in changes to solutions and services offerings and hence the ability to price solutions, these events could also provide new product and market opportunities.
General and Administrative General and administrative expenses consist primarily of compensation related to accounting and finance, legal, human resources and other administrative personnel, professional service fee as well as rent for office spaces related to various administrative activities.
General and Administrative General and administrative expenses consist primarily of compensation related to accounting and finance, legal, human resources and other administrative personnel, professional service fee as well as rent for office spaces related to various administrative activities. 112 Table of Contents Research and Development Research and development expenses consist primarily of compensation related to research and development personnel, depreciation and amortization of equipment and costs of data center services.
The table below sets forth the movement of risk assurance liabilities in the periods presented. ​ ​ ​ ​ ​ ​ ​ As of / For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ ​ RMB ​ RMB ​ ​ (in thousands) Balance at the beginning of the period 460,829 699,023 Fair value of risk assurance liabilities upon the inception of new loans 443,832 45,521 Performed risk assurance liabilities (403,388) (642,104) Net loss on risk assurance liabilities 197,750 299,863 Balance at the closing of the period 699,023 402,303 ​ Due to the adoption of ASC 326 as of January 1, 2023, risk assurance liabilities are presented separately into deferred guarantee income which represents the non-contingent portion of risk assurance liabilities, and contingent risk assurance liabilities in which the movement during the year ended December 3l, 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of /For the Year Ended December 31, ​ ​ ​ ​ ​ ​ Contingent risk assurance ​ ​ Deferred guarantee income ​ liabilities ​ ​ 2023 ​ 2023 ​ RMB US$ RMB ​ US$ ​ (in thousands) Balance at the beginning of the period 298,306 42,016 ​ 103,997 14,648 Adjustment due to the adoption of ASC 326 — — 302,407 42,593 Fair value of risk assurance liabilities upon the inception of new loans 34 5 — — Performed risk assurance liabilities — — (306,895) (43,225) Net recovery on provision for credit losses — — 25,632 3,610 Recognized as guarantee income (212,121) (29,877) — — Balance at the closing of the period 86,219 12,144 125,141 17,626 ​ Risk assurance liabilities consist of a non-contingent aspect and a contingent aspect.
The table below sets forth the movement of risk assurance liabilities during the year ended December 31, 2022. ​ ​ ​ ​ ​ As of/For the Year Ended December 31, ​ ​ 2022 ​ ​ RMB ​ (in thousands) Balance at the beginning of the period ​ 699,023 Fair value of risk assurance liabilities upon the inception of new loans 45,521 Performed risk assurance liabilities (642,104) Net loss on risk assurance liabilities 299,863 Balance at the closing of the period 402,303 ​ Due to the adoption of ASC 326 as of January 1, 2023, risk assurance liabilities are presented separately into deferred guarantee income which represents the non-contingent portion of risk assurance liabilities, and contingent risk assurance liabilities in which the movement during the years ended December 31, 2023 and December 3l, 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ As of/For the Year Ended December 31, ​ ​ Deferred guarantee ​ Contingent risk ​ ​ income ​ assurance liabilities ​ ​ 2023 ​ 2023 ​ RMB RMB ​ ​ (in thousands) Balance at the beginning of the period ​ 298,306 103,997 Adjustment due to the adoption of ASC 326 — 302,407 Fair value of risk assurance liabilities upon the inception of new loans ​ 34 — Performed risk assurance liabilities — (306,895) Net recovery on provision for credit losses — 25,632 Recognized as guarantee income (212,121) — Balance at the closing of the period 86,219 125,141 ​ 109 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of /For the Year Ended December 31, ​ ​ ​ ​ ​ ​ Contingent risk assurance ​ ​ Deferred guarantee income ​ liabilities ​ ​ 2024 ​ 2024 ​ RMB US$ RMB US$ ​ (in thousands) Balance at the beginning of the period 86,219 11,812 ​ 125,141 17,144 Performed risk assurance liabilities — — (66,150) (9,062) Net recovery on provision for credit losses — — (27,801) (3,809) Recognized as guarantee income (74,431) (10,197) — — Balance at the closing of the period 11,788 1,615 31,190 4,273 ​ Risk assurance liabilities consist of a non-contingent aspect and a contingent aspect.
Loan facilitation services and PAS The Group entered into non-risk assured and risk assured facilitation arrangements with various financial institutions. Borrowers that pass the Group’s credit assessment are recommended to the financial institutions.
Loan facilitation income and post-origination administrative services (“PAS”) The Company entered into non-risk assured and risk assured facilitation arrangements with various financial institutions. Borrowers that pass the Company’s credit assessment are recommended to the financial institutions.
Ability to Perform Credit Assessment and Delinquent Asset Management Effectively In offering the automotive financing facilitation services, the quality of the Group’s risk management efforts and the credit performance of loans facilitated by Cango platform affects its reputation and results of operations.
Currently, the Group ceases entering into new contracts for its automotive financing facilitation services. 107 Table of Contents Ability to Perform Delinquent Asset Management Effectively The quality of the Group’s risk management efforts and the credit performance of loans facilitated by Cango platform affects its reputation and results of operations.
In automotive financing, the Group charges financial institutions service fee based on a percentage of the principal amount of the relevant financing transactions. 97 Table of Contents Key Factors Affecting Our Results of Operations Solution and Service Offerings and Pricing The Group’s revenue depends on its ability to improve existing solutions and services, continue identifying evolving business needs, refine collaboration models with business partners and provide value-added services.
Key Factors Affecting Our Results of Operations Solution and Service Offerings and Pricing of Automotive Business The Group’s revenue from automotive business depends on its ability to improve existing solutions and services, continue identifying evolving business needs, refine collaboration models with business partners and provide value-added services.
According to those impairment tests, the Group did not record any impairment loss in 2022 and recorded an impairment loss on goodwill of RMB148.7 million (US$20.9 million) in 2023 as the financial performance of the automobile trading solutions and automotive financing facilitation services continued to fall below forecasts. Please see “—Item E. Critical Accounting Policies and Estimates—Goodwill” for details.
According to those impairment tests, the Group recorded an impairment loss on goodwill of RMB148.7 million and nil in 2023 and 2024, respectively, as the financial performance of the automobile trading solutions and automotive financing facilitation services continued to fall below forecasts. Please see “—Item E.
GAAP, which is net income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2019 2020 2021 2022 ​ 2023 ​ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) ​ ​ RMB ​ RMB ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands, except for share and per share data) ​ Net income (loss) 404,859 ​ 3,373,420 ​ (8,544) ​ (1,111,208) (37,873) (5,334) ​ Add: ESOP Expenses (1) 82,266 ​ 78,755 ​ 87,635 ​ 158,523 38,491 5,421 ​ Adjusted net income (loss) 487,125 ​ 3,452,175 ​ 79,091 ​ (952,685) 618 87 ​ Less: Net income attributable to the non-controlling interest shareholders 13,945 ​ 3,902 ​ — ​ — — — ​ Adjusted net income (loss) attributable to Cango Inc.’s ordinary shareholders 473,180 ​ 3,448,273 ​ 79,091 ​ (952,685) 618 87 ​ Adjusted net income (loss) per ADS-basic (2) 3.13 ​ 22.95 ​ 0.55 ​ (6.95) 0.01 — ​ Adjusted net income (loss) per ADS-diluted (2) 3.12 ​ 22.69 ​ 0.54 ​ (6.95) — ​ — ​ Weighted average ADS outstanding—basic 151,208,676 ​ 150,242,430 ​ 144,946,453 ​ 137,042,445 121,524,393 121,524,393 ​ Weighted average ADS outstanding—diluted 151,641,829 ​ 151,950,322 ​ 146,867,997 ​ 137,042,445 126,940,244 126,940,244 ​ (1) ESOP Expenses are allocated in operating cost and expenses as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2019 2020 2021 2022 ​ 2023 ​ ​ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) ​ ​ RMB ​ RMB ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Cost of revenue 3,373 3,075 4,928 4,160 2,187 308 Sales and marketing 17,523 ​ 16,003 ​ 15,311 ​ 14,691 7,716 1,087 General and administrative 57,093 ​ 55,591 ​ 63,035 ​ 135,889 26,833 3,779 Research and development 4,278 ​ 4,085 ​ 4,361 ​ 3,782 1,755 247 ESOP Expenses 82,266 ​ 78,755 ​ 87,635 ​ 158,523 38,491 5,421 (2) Each ADS represents two ordinary shares. 102 Table of Contents Components of Results of Operations Revenues The Group’s revenues mainly consist of automobile trading income, loan facilitation income and other related income, guarantee income, leasing income, after-market services income and others.
GAAP, which is net income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 2021 2022 2023 ​ 2024 ​ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) ​ ​ RMB ​ RMB ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands, except for share and per share data) ​ Net income (loss) 3,373,420 ​ (8,544) ​ (1,111,208) ​ (37,873) 299,815 41,074 ​ Add: ESOP Expenses (1) 78,755 ​ 87,635 ​ 158,523 ​ 38,491 17,115 2,345 ​ Adjusted net income (loss) 3,452,175 ​ 79,091 ​ (952,685) ​ 618 316,930 43,419 ​ Less: Net income attributable to the non-controlling interest shareholders 3,902 ​ — ​ — ​ — — — ​ Adjusted net income (loss) attributable to Cango Inc.’s ordinary shareholders 3,448,273 ​ 79,091 ​ (952,685) ​ 618 316,930 43,419 ​ Adjusted net income (loss) per ADS-basic (2) 22.95 ​ 0.55 ​ (6.95) ​ 0.01 3.04 0.42 ​ Adjusted net income (loss) per ADS-diluted (2) 22.69 ​ 0.54 ​ (6.95) ​ — 2.72 ​ 0.37 ​ Weighted average ADS outstanding—basic 150,242,430 ​ 144,946,453 ​ 137,042,445 ​ 121,524,393 104,098,809 104,098,809 ​ Weighted average ADS outstanding—diluted 151,950,322 ​ 146,867,997 ​ 137,042,445 ​ 126,940,244 116,516,361 116,516,361 ​ (1) ESOP Expenses are allocated in operating cost and expenses as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 2021 2022 2023 ​ 2024 ​ ​ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) ​ ​ RMB ​ RMB ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Cost of revenue 3,075 4,928 4,160 2,187 1,720 236 Sales and marketing 16,003 ​ 15,311 ​ 14,691 ​ 7,716 2,904 398 General and administrative 55,591 ​ 63,035 ​ 135,889 ​ 26,833 12,234 1,676 Research and development 4,085 ​ 4,361 ​ 3,782 ​ 1,755 257 35 ESOP Expenses 78,755 ​ 87,635 ​ 158,523 ​ 38,491 17,115 2,345 (2) Each ADS represents two ordinary shares.
The following table sets forth components of the Group’s cost of revenue, both in absolute amount and as a percentage of the Group’s total revenues, for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 2022 ​ 2023 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of vehicle 2,210,715 ​ 56.4 ​ 1,580,779 ​ 79.8 1,294,946 182,389 76.1 Staff cost 105,771 ​ 2.7 ​ 105,613 ​ 5.3 87,602 12,338 5.1 Leasing interest expense (1) 119,693 ​ 3.1 ​ 61,129 ​ 3.1 13,017 1,833 0.8 Commission to car dealerships 375,703 ​ 9.6 ​ 26,757 ​ 1.4 — — — Staff incentive 61,895 ​ 1.6 ​ — ​ — — — — Outsourcing fee ​ 254 ​ * ​ 10,475 ​ 0.5 ​ 32,241 ​ 4,542 ​ 1.9 Others 83,979 ​ 2.1 ​ 45,337 ​ 2.3 84,057 11,839 4.9 Total 2,958,010 ​ 75.4 ​ 1,830,090 ​ 92.4 1,511,863 212,941 88.8 (1) Leasing interest expense refers to interest expense on borrowings by the Group that are directly used to fund finance lease receivables. * less than 0.1% 103 Table of Contents Sales and Marketing Sales and marketing expenses consist primarily of compensation related to sales staff but exclude incentives paid to them.
The following table sets forth components of the Group’s cost of revenue, both in absolute amount and as a percentage of the Group’s total revenues, for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 2023 ​ 2024 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of mining service ​ — ​ — ​ — ​ — ​ 461,126 ​ 63,174 ​ 57.3 Cost of mining service - depreciations ​ — ​ — ​ — ​ — ​ 84,232 ​ 11,540 ​ 10.5 Cost of vehicle 1,580,779 ​ 79.8 ​ 1,294,946 ​ 76.1 6,066 831 0.8 Staff cost 105,613 ​ 5.3 ​ 87,602 ​ 5.1 57,978 7,943 7.2 Leasing interest expense (1) 61,129 ​ 3.1 ​ 13,017 ​ 0.8 226 31 — Commission to car dealerships 26,757 ​ 1.4 ​ — ​ — (13,593) (1,862) (1.7) Staff incentive — ​ — ​ — ​ — — — — Outsourcing fee ​ 10,475 ​ 0.5 ​ 32,241 ​ 1.9 ​ 24,320 ​ 3,332 ​ 3 Others 45,337 ​ 2.3 ​ 84,057 ​ 4.9 9,024 1,236 1.1 Total 1,830,090 ​ 92.4 ​ 1,511,863 ​ 88.8 629,379 86,225 78.2 (1) Leasing interest expense refers to interest expense on borrowings by the Group that are directly used to fund finance lease receivables. * less than 0.1% Sales and Marketing Sales and marketing expenses consist primarily of compensation related to sales staff but exclude incentives paid to them.
Net cash used in operating activities was RMB404.4 million in 2021, primarily due to net loss of RMB8.5 million, adjusted for (i) deferred income tax benefit of RMB582.9 million, (ii) provision for credit losses of RMB203.4 million, (iii) loss on risk assurance liabilities of RMB197.8 million, (iv) share-based compensation expense of RMB87.6 million, and (v) changes in working capital.
Net cash used in operating activities was RMB567.4 million in 2022, primarily due to net loss of RMB1,111.2 million, adjusted for (i) deferred income tax expense of RMB371.3 million, (ii) provision for credit losses of RMB319.4 million, (iii) loss on risk assurance liabilities of RMB299.9 million, (iv) share-based compensation expense of RMB158.5 million, and (v) changes in working capital.
In addition, the collaborations with dealers may be affected by factors beyond the Group’s control, such as the overall automotive and mobility markets, general economic conditions and the regulatory environment.
Ability to Retain Existing Dealers The Group’s ability to retain existing dealers it collaborates with is important for the Group’s business. The collaborations with dealers may be affected by factors beyond the Group’s control, such as the overall automotive and mobility markets, general economic conditions and the regulatory environment.
In 2022, net cash used in operating activities was RMB567.4 million. In 2023, net cash provided by operating activities was RMB1,026.0 million (US$144.5 million).
In 2023, net cash provided by operating activities was RMB1,026.0 million. In 2024, net cash used in operating activities was RMB429.5 million (US$58.8 million).
The Group’s research and development expenses were RMB70.3 million, RMB46.0 million and RMB30.1 million (US$4.2 million) in 2021, 2022 and 2023, respectively. D.
The Group’s research and development expenses were RMB46.0 million, RMB30.1 million and RMB5.5 million (US$0.8 million) in 2022, 2023 and 2024, respectively. D.
The following table sets forth components of the Group’s revenues, both in absolute amount and as a percentage of the total revenues, for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 2022 ​ 2023 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues: ​ ​ ​ ​ ​ ​ ​ Automobile trading income 2,227,172 56.8 1,596,307 80.6 1,309,634 184,458 77.0 Loan facilitation income and other related income 1,233,556 ​ 31.5 ​ 146,429 ​ 7.4 19,962 2,812 1.2 Guarantee income — ​ — ​ — ​ — 212,121 29,877 12.5 Leasing income 251,295 ​ 6.4 ​ 155,522 ​ 7.9 57,431 8,089 3.4 After-market services income ​ 193,787 ​ 4.9 ​ 71,457 ​ 3.6 ​ 65,388 ​ 9,210 ​ 3.8 Others 15,906 ​ 0.4 ​ 10,739 ​ 0.5 37,383 5,265 2.1 Total 3,921,716 ​ 100.0 ​ 1,980,453 ​ 100.0 1,701,919 239,710 100.0 ​ Operating Cost and Expenses The Group’s operating cost and expenses consist of cost of revenue, sales and marketing expenses, general and administrative expenses, research and development expenses, net loss on contingent risk assurance liabilities, net loss on risk assurance liabilities, provision (net recovery on provision) for credit losses and impairment loss from goodwill.
After-market services income relates to the facilitation of sale of insurance policies and delinquent asset management services. 111 Table of Contents The following table sets forth components of the Group’s revenues, both in absolute amount and as a percentage of the total revenues, for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 2023 ​ 2024 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues: ​ ​ ​ ​ ​ ​ ​ Bitcoin mining income ​ — ​ — ​ — ​ — ​ 652,986 ​ 89,459 ​ 81 Automobile trading income 1,596,307 80.6 1,309,634 77.0 6,285 861 1 Loan facilitation income and other related income 146,429 ​ 7.4 ​ 19,962 ​ 1.2 15,776 2,161 2 Guarantee income — ​ — ​ 212,121 ​ 12.5 74,431 10,197 9 Leasing income 155,522 ​ 7.9 ​ 57,431 ​ 3.4 11,535 1,580 2 After-market services income ​ 71,457 ​ 3.6 ​ 65,388 ​ 3.8 ​ 41,228 ​ 5,648 ​ 5 Others 10,739 ​ 0.5 ​ 37,383 ​ 2.1 2,248 308 — Total 1,980,453 ​ 100.0 ​ 1,701,919 ​ 100.0 804,489 110,214 100 ​ Operating Cost and Expenses The Group’s operating cost and expenses consist of cost of revenue, sales and marketing expenses, general and administrative expenses, research and development expenses, net loss on contingent risk assurance liabilities, net loss on risk assurance liabilities, provision (net recovery on provision) for credit losses and impairment loss from goodwill.
The Group’s net recovery on provision for credit losses was RMB136.5 million (US$19.2 million) in 2023 compared to a provision for credit losses of RMB 319.4 million in 2022. The recovery was primarily due to the positive impact from the collections of financing receivables . ● Impairment loss from goodwill.
The Group’s net recovery on provision for credit losses was RMB269.9 million (US$37.0 million) in 2024 compared to RMB136.5 million in 2023. The increase in recovery was primarily due to the positive impact from the collections of financing receivables. ● Impairment loss from goodwill. The Group provided a full impairment loss of goodwill of RMB148.7 million in 2023.
Transaction Volume Metrics The Group regularly reviews a number of transaction volume metrics, including the following metrics, to monitor transaction volume, identify trends, formulate financial projections and make strategic decisions.
Whether and how quickly the Group can do so will have a significant impact on its financial performance. Transaction Volume Metrics The Group regularly reviews a number of transaction volume metrics, including the following metrics, to monitor transaction volume, identify trends, formulate financial projections and make strategic decisions.
The Group’s credit agreements do not contain any material debt covenants. 108 Table of Contents We believe that the Group’s current cash, cash equivalents, restricted cash and short-term investments and anticipated cash flows from operating activities will be sufficient to meet its anticipated working capital requirements, capital expenditures and debt repayment in the ordinary course of business for at least the next 12 months.
There is no loan-to-value limit for the first twelve months since the inception of such agreement and there is no expiration date indicated in such agreement. 117 Table of Contents We believe that the Group’s current cash, cash equivalents, restricted cash and short-term investments and anticipated cash flows from operating activities will be sufficient to meet its anticipated working capital requirements, capital expenditures and debt repayment in the ordinary course of business for at least the next 12 months.
Ability to Compete Effectively The Group’s business and results of operations depend on its ability to compete effectively. The competitive position may be affected by, among other things, service quality and ability to price solutions and services competitively. The Group will continue to invest in technologies to improve service quality and user experience.
The ability to collect repayments and recover car collaterals in a cost-effective way may affect the Group’s results of operations. Ability to Compete Effectively The Group’s business and results of operations depend on its ability to compete effectively. The competitive position may be affected by, among other things, service quality and ability to price solutions and services competitively.
For anti-theft package services, the Group first allocates the fair value of indemnification service under ASC 460 and then allocates the remaining consideration to the after-market service of anti-theft telematic devises installment.
After-market insurance facilitation service income for personal accident insurance and automobile insurance is recognized at the point of time when facilitation services are completed. For anti-theft package services, the Company first allocates the fair value of indemnification service under ASC 460 and then allocates the remaining consideration to the after-market service of anti-theft telematic devises installment.
Such services were accessible primarily through two apps: Cango Haoche app, which was launched in 2022 and provided new car transaction services, and Cango U-car app, which was launched in January 2023 and provided used car transaction services.
Such services were accessible primarily through two platforms: Cango U-car app, which was launched in January 2023 and provided used car transaction services, and AutoCango.com, which was launched in March 2024 and provided used car information to overseas dealers.
The Group has extensive, technology-enabled service offerings that cover key components of the automotive transaction value chain, including pre-sale automobile trading solutions and post-sale after-market services facilitation. To a lesser extent, the Group also provides during-sale automotive financing facilitation.
Automotive Business The Group has extensive, technology-enabled service offerings that cover key components of the automotive transaction value chain, including pre-sale automobile trading solutions and post-sale after-market services facilitation. Automobile Trading Solutions The Group enables automobile trading transactions among platform participants by providing car sourcing and transaction facilitation services.
We believe that these transaction volume metrics are useful to investors because they are frequently used by analysts, investors and other interested parties to evaluate companies in the automotive transaction industry. 99 Table of Contents The tables below set forth the transaction volume metrics in the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 Number of financing transactions facilitated 318,772 30,983 27 Number of automobile trading transactions 23,166 16,418 12,695 ​ The table below sets forth a breakdown for the outstanding principal and amount of financing transactions facilitated in the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of / For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Outstanding principal of financing transactions facilitated 46,702,054 25,581,254 9,971,559 1,404,465 Amount of financing transactions facilitated 30,128,194 2,838,827 1,686 238 ​ We define “financing transactions” as loans and financing leases.
The tables below set forth the transaction volume metrics in the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 Number of financing transactions facilitated 30,983 27 — Number of automobile trading transactions 16,418 12,695 69 ​ The table below sets forth a breakdown for the outstanding principal and amount of financing transactions facilitated in the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of / For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Outstanding principal of financing transactions facilitated 25,581,254 9,971,559 3,890,723 533,027 Amount of financing transactions facilitated 2,838,827 1,686 — — ​ We define “financing transactions” as loans and financing leases.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 2022 ​ 2023 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands) Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Automobile trading income 2,227,172 ​ 56.8 ​ 1,596,307 ​ 80.6 1,309,634 184,458 77.0 Loan facilitation income and other related income 1,233,556 ​ 31.5 ​ 146,429 ​ 7.4 19,962 2,812 1.2 Guarantee income — ​ — ​ — ​ — 212,121 29,877 12.5 Leasing income 251,295 ​ 6.4 ​ 155,522 ​ 7.9 57,431 8,089 3.4 After-market services income 193,787 ​ 4.9 ​ 71,457 ​ 3.6 65,388 9,210 3.8 Others 15,907 ​ 0.4 ​ 10,739 ​ 0.5 37,383 5,265 2.1 Total revenues 3,921,716 ​ 100.0 ​ 1,980,453 ​ 100.0 1,701,919 239,710 100.0 Operating cost and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenue 2,958,010 ​ 75.4 ​ 1,830,090 ​ 92.4 1,511,863 212,941 88.8 Sales and marketing 239,333 ​ 6.1 ​ 132,779 ​ 6.7 38,922 5,482 2.3 General and administrative 276,179 ​ 7.0 ​ 299,545 ​ 15.1 156,966 22,108 9.2 Research and development 70,279 ​ 1.8 ​ 45,959 ​ 2.3 30,114 4,241 1.8 Net loss on contingent risk assurance liabilities — ​ — ​ — ​ — 25,632 3,610 1.5 Net loss on risk assurance liabilities 197,750 ​ 5.1 ​ 299,863 ​ 15.1 — — — Provision (net recovery on provision) for credit losses 203,415 ​ 5.2 ​ 319,360 ​ 16.1 (136,485) (19,224) (8.0) Impairment loss from goodwill — ​ — ​ — ​ — 148,658 20,938 8.7 Total operating cost and expenses 3,944,966 ​ 100.6 ​ 2,927,597 ​ 147.8 1,775,670 250,098 104.3 Income (loss) from operations ​ (23,250) ​ (0.6) ​ (947,143) ​ (47.8) ​ (73,751) ​ (10,388) ​ (4.3) Interest income ​ 26,373 ​ 0.7 ​ 43,733 ​ 2.2 ​ 79,165 ​ 11,150 ​ 4.6 Net (loss) gain on equity securities (12,992) ​ (0.3) ​ (9,811) ​ (0.5) 24,093 3,393 1.4 Interest expense (14,481) ​ (0.4) ​ (16,809) ​ (0.8) (4,100) (577) (0.2) Foreign exchange gain, net 1,351 ​ ​ * 5,918 ​ 0.3 1,099 155 0.1 Other income 41,912 ​ 1.1 ​ 52,067 ​ 2.6 30,702 4,324 1.8 Other expenses (6,606) ​ (0.2) ​ (2,466) ​ (0.1) (1,625) (229) (0.1) Net income (loss) before income taxes 12,308 ​ 0.3 ​ (874,511) ​ (44.2) 55,583 7,829 3.3 Income tax expenses (20,853) ​ (0.5) ​ (236,697) ​ (12.0) (93,457) (13,163) (5.5) Net (loss) (8,544) ​ (0.2) ​ (1,111,208) ​ (56.1) (37,873) (5,334) (2.2) Net (loss) attributable to Cango Inc.’s ordinary shareholders (8,544) ​ (0.2) ​ (1,111,208) ​ (56.1) (37,873) (5,334) (2.2) * less than 0.1%.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands) Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bitcoin mining income ​ — ​ — ​ — ​ — ​ 652,986 ​ 89,459 ​ 81.2 Automobile trading income ​ 1,596,307 ​ 80.6 ​ 1,309,634 ​ 77.0 6,285 861 0.8 Loan facilitation income and other related income ​ 146,429 ​ 7.4 ​ 19,962 ​ 1.2 15,776 2,161 2.0 Guarantee income ​ — ​ — ​ 212,121 ​ 12.5 74,431 10,197 9.3 Leasing income ​ 155,522 ​ 7.9 ​ 57,431 ​ 3.4 11,535 1,580 1.4 After-market services income ​ 71,457 ​ 3.6 ​ 65,388 ​ 3.8 41,228 5,648 5.1 Others ​ 10,739 ​ 0.5 ​ 37,383 ​ 2.1 2,248 308 0.3 Total revenues ​ 1,980,453 ​ 100.0 ​ 1,701,919 ​ 100.0 804,489 110,214 100 Operating cost and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenue ​ 1,830,090 ​ 92.4 ​ 1,511,863 ​ 88.8 629,380 86,225 78.2 Sales and marketing ​ 132,779 ​ 6.7 ​ 38,922 ​ 2.3 13,099 1,795 1.6 General and administrative ​ 299,545 ​ 15.1 ​ 156,966 ​ 9.2 250,164 34,271 31.1 Research and development ​ 45,959 ​ 2.3 ​ 30,114 ​ 1.8 5,467 749 0.7 Net loss (gain) on contingent risk assurance liabilities ​ — ​ — ​ 25,632 ​ 1.5 (27,801) (3,809) (3.5) Net loss on risk assurance liabilities ​ 299,863 ​ 15.1 ​ — ​ — — — — Provision (net recovery on provision) for credit losses ​ 319,360 ​ 16.1 ​ (136,485) ​ (8.0) (269,865) (36,971) (33.5) Impairment loss from goodwill ​ — ​ — ​ 148,658 ​ 8.7 — — — Change in fair value of bitcoin collateral - loss ​ — ​ — ​ — ​ — ​ 25,151 ​ 3,446 ​ 3.1 Total operating cost and expenses ​ 2,927,597 ​ 147.8 ​ 1,775,670 ​ 104.3 625,595 85,706 77.8 (Loss) income from operations ​ (947,143) ​ (47.8) ​ (73,751) ​ (4.3) ​ 178,894 ​ 24,508 ​ 22.2 Interest income ​ 43,733 ​ 2.2 ​ 79,165 ​ 4.6 ​ 106,318 ​ 14,565 ​ 13.2 Net investment income (loss) ​ (9,811) ​ (0.5) ​ 24,093 ​ 1.4 8,789 1,204 1.1 Interest expense ​ (16,809) ​ (0.8) ​ (4,100) ​ (0.2) (659) (90) (0.1) Foreign exchange gain, net ​ 5,918 ​ 0.3 ​ 1,099 ​ 0.1 1,651 226 0.2 Other income ​ 52,067 ​ 2.6 ​ 30,702 ​ 1.8 8,262 1,132 1.0 Other expenses ​ (2,466) ​ (0.1) ​ (1,625) ​ (0.1) (2,118) (289) (0.3) Net (loss) income before income taxes ​ (874,511) ​ (44.2) ​ 55,583 ​ 3.3 301,137 41,256 37.4 Income tax expenses ​ (236,697) ​ (12.0) ​ (93,457) ​ (5.5) (1,322) (182) (0.2) Net (loss) income ​ (1,111,208) ​ (56.1) ​ (37,873) ​ (2.2) 299,815 41,074 37.3 Net (loss) income attributable to Cango Inc.’s ordinary shareholders ​ (1,111,208) ​ (56.1) ​ (37,873) ​ (2.2) 299,815 41,074 37.3 * less than 0.1%.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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A director will cease to be a director if, among other things, the director (i) dies, or becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors; (ii) is found to be or becomes of unsound mind; (iii) resigns his office by notice in writing to the company; or (iv) without special leave of absence from our board, is absent from six consecutive board meetings and our directors resolve that his office be vacated.
A director will cease to be a director if, among other things, the director (i) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors; (ii) becomes of unsound mind or dies; (iii) resigns his office by notice in writing to the company; or (iv) without special leave of absence from our board, is absent from six consecutive board meetings and our directors resolve that his office be vacated.
GAAP that have been discussed with management and all other material written communications between the independent auditor and management; ● establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● such other matters that are specifically delegated to our audit committee by our board of directors from time to time; ● meeting separately, periodically, with management, internal auditors and the independent auditor; and ● reporting regularly to the full board of directors. 122 Table of Contents Compensation Committee Our compensation committee consists of Xiaojun Zhang, Jiayuan Lin and Dongsheng Zhou.
GAAP that have been discussed with management and all other material written communications between the independent auditor and management; ● establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● such other matters that are specifically delegated to our audit committee by our board of directors from time to time; ● meeting separately, periodically, with management, internal auditors and the independent auditor; and ● reporting regularly to the full board of directors. 130 Table of Contents Compensation Committee Our compensation committee consists of Xiaojun Zhang, Jiayuan Lin and Dongsheng Zhou.
The nominating and corporate governance committee will be responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. 123 Table of Contents D.
The nominating and corporate governance committee will be responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. 131 Table of Contents D.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 120 Table of Contents Duties of Directors Under Cayman Islands law, our directors have a fiduciary duty to our company, including a duty of loyalty, a duty to act honestly, and a duty to act in good faith in what they consider to be in our best interests.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 128 Table of Contents Duties of Directors Under Cayman Islands law, our directors have a fiduciary duty to our company, including a duty of loyalty, a duty to act honestly, and a duty to act in good faith in what they consider to be in our best interests.
Zhou has served as the academic co-chair of SEPC, a joint executive training program with Harvard Business School and the School of Economics and Management at Tsinghua University. From 2007 to 2012, Dr. Zhou served as the associate dean in charge of the alumni relationships of China Europe International Business School. From 1997 to 2002, Dr.
Zhou has served as the academic co-chair of SEPC, a joint executive training program with China Europe International Business School, Harvard Business School and the School of Economics and Management at Tsinghua University. From 2007 to 2012, Dr. Zhou served as the associate dean in charge of the alumni relationships of China Europe International Business School.
The share options were not granted under (and have no impact on the share reserve under), but is governed by, the terms and conditions of the share incentive plan, except otherwise provided under the applicable share option grant agreements. C. Board Practices Our board of directors consisted of seven directors as of December 31, 2023.
The share options were not granted under (and have no impact on the share reserve under), but is governed by, the terms and conditions of the share incentive plan, except otherwise provided under the applicable share option grant agreements. C. Board Practices Our board of directors consisted of seven directors as of December 31, 2024.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management Directors and Executive Officers The following table sets forth information regarding our directors and executive officers as of December 31, 2023.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management Directors and Executive Officers The following table sets forth information regarding our directors and executive officers as of December 31, 2024.
Our audit committee consists solely of independent directors. 121 Table of Contents The audit committee oversees our accounting and financial reporting processes and the audits of our financial statements.
Our audit committee consists solely of independent directors. 129 Table of Contents The audit committee oversees our accounting and financial reporting processes and the audits of our financial statements.
Lee is a fellow member of the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants. Dongsheng Zhou has served as our director since July 25, 2018. Dr. Zhou is a professor of marketing and chair of the marketing department at China Europe International Business School, where he has worked since 2002. Since 2006, Dr.
Lee is a fellow member of the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants. Dongsheng Zhou has served as our director since July 25, 2018. Dr. Zhou is a professor of marketing at China Europe International Business School, where he has worked since 2002. From 2006 to 2017, Dr.
Certain options previously granted were subsequently forfeited pursuant to the terms of the share incentive plan. ​ 119 Table of Contents The table below summarizes outstanding options held by our directors and executive officers as of March 31, 2024 under the share incentive plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ Underlying Option Exercise ​ ​ Option Name Position Option Awards Price (US$)** Grant Date Expiration Date Xiaojun Zhang ​ Chairman 1,667,000 0.2951 ​ May 25, 2018 ​ May 24, 2028 ​ ​ ​ 1,670,732 0.2951 ​ February 15, 2019 ​ February 14, 2029 ​ ​ ​ 1,895,130 0.2951 ​ October 15, 2020 ​ October 14, 2030 ​ ​ ​ 2,506,098 0.2951 ​ May 1, 2021 ​ April 30, 2031 ​ ​ ​ 28,000 0.2951 ​ August 1, 2022 ​ July 31, 2032 Jiayuan Lin ​ Chief executive officer and director 1,688,000 0.2951 ​ May 25, 2018 ​ May 24, 2028 ​ ​ ​ 1,670,732 0.2951 ​ February 15, 2019 ​ February 14, 2029 ​ ​ ​ 1,992,630 0.2951 ​ October 15, 2020 ​ October 14, 2030 ​ ​ ​ 2,506,098 0.2951 ​ May 1, 2021 ​ April 30, 2031 Yongyi Zhang ​ Chief financial officer and director * 0.2951 ​ May 25, 2018 ​ May 24, 2028 ​ ​ ​ * 0.2951 ​ February 15, 2019 ​ February 14, 2029 ​ ​ ​ * 0.2951 ​ October 15, 2020 ​ October 14, 2030 ​ ​ ​ * 0.2951 ​ May 1, 2021 ​ April 30, 2031 Zhipeng Song ​ Director * 0.2951 ​ May 25, 2018 ​ May 24, 2028 ​ ​ ​ * 0.2951 ​ February 15, 2019 ​ February 14, 2029 ​ ​ ​ * 0.2951 ​ October 15, 2020 ​ October 14, 2030 ​ ​ ​ * 0.2951 ​ May 1, 2021 ​ April 30, 2031 * The shares underlying the outstanding options held by each of these directors and executive officers represent less than 1% of our total outstanding shares. ** The option exercise price has been adjusted to US$0.2951 due to the payments of cash dividends to our shareholders.
Certain options previously granted were subsequently forfeited pursuant to the terms of the share incentive plan. 127 Table of Contents The table below summarizes outstanding options held by our directors and executive officers as of February 28, 2025 under the share incentive plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ Underlying Option Exercise ​ ​ Option Name Position Option Awards Price (US$)** Grant Date Expiration Date Xiaojun Zhang ​ Chairman 1,667,000 0.2951 ​ May 25, 2018 ​ May 24, 2028 ​ ​ ​ 1,670,732 0.2951 ​ February 15, 2019 ​ February 14, 2029 ​ ​ ​ 1,895,130 0.2951 ​ October 15, 2020 ​ October 14, 2030 ​ ​ ​ 2,506,098 0.2951 ​ May 1, 2021 ​ April 30, 2031 ​ ​ ​ 28,000 0.2951 ​ August 1, 2022 ​ July 31, 2032 ​ ​ ​ ​ 12,906 ​ 0.2951 ​ December 23, 2024 ​ December 22, 2034 Jiayuan Lin ​ Chief executive officer and director 1,688,000 0.2951 ​ May 25, 2018 ​ May 24, 2028 ​ ​ ​ 1,670,732 0.2951 ​ February 15, 2019 ​ February 14, 2029 ​ ​ ​ 1,992,630 0.2951 ​ October 15, 2020 ​ October 14, 2030 ​ ​ ​ 2,506,098 0.2951 ​ May 1, 2021 ​ April 30, 2031 ​ ​ ​ ​ 1,672,034 ​ 0.2951 ​ January 2, 2025 ​ January 2, 2035 Yongyi Zhang ​ Chief financial officer and director * 0.2951 ​ May 25, 2018 ​ May 24, 2028 ​ ​ ​ * 0.2951 ​ February 15, 2019 ​ February 14, 2029 ​ ​ ​ * 0.2951 ​ October 15, 2020 ​ October 14, 2030 ​ ​ ​ * 0.2951 ​ May 1, 2021 ​ April 30, 2031 Zhipeng Song ​ Director * 0.2951 ​ May 25, 2018 ​ May 24, 2028 ​ ​ ​ * 0.2951 ​ February 15, 2019 ​ February 14, 2029 ​ ​ ​ * 0.2951 ​ October 15, 2020 ​ October 14, 2030 ​ ​ ​ * 0.2951 ​ May 1, 2021 ​ April 30, 2031 * The shares underlying the outstanding options held by each of these directors and executive officers represent less than 1% of our total outstanding shares. ** The option exercise price has been adjusted to US$0.2951 due to the payments of cash dividends to our shareholders.
We have entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we may agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
Under these agreements, we may agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
Medway Brilliant and Traveler Enterprise are further described in footnote 3 below. 125 Table of Contents (3) Represents (i) 1 Class A ordinary share that is held by Medway Brilliant, (ii) 34,702,890 Class B ordinary shares that are held by Traveler Enterprise, and (iii) 2,741,606 Class A ordinary shares represented by ADSs that are beneficially owned by Traveler Enterprise.
Medway Brilliant and Traveler Enterprise are further described in footnote 3 below. 133 Table of Contents (3) Represents (i) 1 Class A ordinary share that is held by Medway Brilliant, (ii) 34,702,890 Class B ordinary shares that are held by Traveler Enterprise, and (iii) 2,730,370 Class A ordinary shares represented by ADSs that are beneficially owned by Traveler Enterprise.
Specifically, each executive officer has agreed not to (i) approach financial institutions, dealers or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent.
Specifically, each executive officer has agreed not to (i) approach financial institutions, dealers or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent. 126 Table of Contents We have entered into indemnification agreements with each of our directors and executive officers.
Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. *** Less than 1% of our total outstanding shares. (1) Represents (i) 38,275,787 Class B ordinary shares that are held by Eagle Central Holding Limited, or Eagle Central, and (ii) 12,012,128 Class A ordinary shares that Mr.
Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. *** Less than 1% of our total outstanding shares. (1) Represents (i) 38,275,787 Class B ordinary shares that are held by Eagle Central Holding Limited, or Eagle Central, and (ii) 13,139,342 Class A ordinary shares that Mr.
Employees As of December 31, 2021, 2022 and 2023, the Group had a total of 2,351, 827 and 632 employees, respectively. The decrease in the Group’s employees in 2023 was primarily due to the organizational restructuring for business transitions.
Employees As of December 31, 2022, 2023 and 2024, the Group had a total of 827, 632 and 217 employees, respectively. The decrease in the Group’s employees in 2024 was primarily due to the organizational restructuring for business transitions.
Xiaojun Zhang, our co-founder and chairman, and Mr. Jiayuan Lin, our co-founder, director and chief executive officer. The administrators will determine the provisions and terms and conditions of each equity award.
Jiayuan Lin, our co-founder, director and chief executive officer. The administrators will determine the provisions and terms and conditions of each equity award.
Zhou received a bachelor’s degree in science from the University of Science and Technology of China in 1990 and a doctor of philosophy degree from the faculty of commerce and business administration at the University of British Columbia in 1997. Rong Liu has served as our director since July 2019. Mr. Liu has decades of experience in the automotive industry.
Zhou received a bachelor’s degree in science from the University of Science and Technology of China in 1990 and a doctor of philosophy degree from the faculty of commerce and business administration at the University of British Columbia in 1997. 125 Table of Contents Rong Liu has served as our director since July 2019. Mr.
Song served as an assistant general manager of our company. From 2012 to 2014, he served a regional manager of Anji Leasing Co., Ltd. From 2010 to 2012, he served as an account manager of SAIC-GMAC Automotive Finance Co., Ltd. Mr.
From 2012 to 2014, he served a regional manager of Anji Leasing Co., Ltd. From 2010 to 2012, he served as an account manager of SAIC-GMAC Automotive Finance Co., Ltd. Mr.
Compensation Compensation In 2023, we and our subsidiaries and consolidated VIEs paid aggregate cash compensation of approximately RMB20.4 million (US$2.9 million) to our directors and executive officers as a group. We did not pay any other cash compensation or benefits in kind to our directors and executive officers.
Compensation Compensation In 2024, we and our subsidiaries and consolidated VIEs paid aggregate cash compensation of approximately RMB67.9 million (US$9.3 million) to our directors and executive officers as a group. We did not pay any other cash compensation or benefits in kind to our directors and executive officers.
The amended and restated voting agreement provides that they shall reach a consensus before exercising their voting rights with respect to our shares. As of March 31, 2024, the co-founders collectively exercised 91.8% of the aggregate voting power of our issued and outstanding share capital.
The amended and restated voting agreement provides that they shall reach a consensus before exercising their voting rights with respect to our shares. As of February 28, 2025, the co-founders collectively exercised 91.7% of the aggregate voting power of our issued and outstanding share capital.
He served as a deputy chief accountant and executive director of the finance department of SAIC Group Co., Ltd. from December 2004 to May 2013. From March 2004 to December 2004, he served as a deputy chief accountant and manager of the finance department of Shanghai Automotive Industry Corporation (Group) Corp.
Liu has decades of experience in the automotive industry. He served as a deputy chief accountant of the finance department of SAIC Group Co., Ltd. from December 2004 to May 2013. From March 2004 to December 2004, he served as a deputy chief accountant and manager of the finance department of Shanghai Automotive Industry Corporation (Group) Corp.
The maximum number of ordinary shares that may be subject to equity awards pursuant to the share incentive plan is 27,845,526 initially. Additional ordinary shares may be reserved for issuance of equity awards as determined by our board of directors. 118 Table of Contents Administration The share incentive plan is jointly administered by Mr.
The maximum number of ordinary shares that may be subject to equity awards pursuant to the share incentive plan is 27,845,526 initially. Additional ordinary shares may be reserved for issuance of equity awards as determined by our board of directors. Administration The share incentive plan is jointly administered by Mr. Xiaojun Zhang, our co-founder and chairman, and Mr.
(2) Represents (i) 1 Class A ordinary share that is held by Medway Brilliant Holding Limited, or Medway Brilliant, (ii) 34,702,890 Class B ordinary shares that are held by Traveler Enterprise Limited, or Traveler Enterprise, (iii) 2,741,606 Class A ordinary shares represented by ADSs that are beneficially owned by Traveler Enterprise, and (iv) 12,086,254 Class A ordinary shares that Mr.
(2) Represents (i) 1 Class A ordinary share that is held by Medway Brilliant Holding Limited, or Medway Brilliant, (ii) 34,702,890 Class B ordinary shares that are held by Traveler Enterprise Limited, or Traveler Enterprise, (iii) 2,730,370 Class A ordinary shares represented by ADSs that are beneficially owned by Traveler Enterprise, and (iv) 14,882,970 Class A ordinary shares that Mr.
Galactic Gain Limited is an exempted company incorporated under the laws of the Cayman Islands, which is wholly owned by Boyu Capital Fund III, L.P. Boyu Capital Fund III, L.P. is a limited partnership organized under the laws of the Cayman Islands, of which Boyu Capital General Partner III, L.P. is the general partner.
Boyu Capital General Partner III, L.P., a limited partnership organized under the laws of the Cayman Islands, is the general partner of Boyu Capital Fund III, L.P. Boyu Capital General Partner III, Ltd., an exempted company incorporated under the laws of the Cayman Islands, is the general partner of Boyu Capital General Partner III, L.P.
Mr. Zhang has also served as a chairman and general manager of Shanghai Chejia since 2016. Prior to co-founding our company, Mr. Zhang served as a director and general manager of SAIC-GMAC Automotive Finance Co., Ltd. from 2004 to 2013. From 1999 to 2004, Mr. Zhang served as a deputy general manager of Shanghai Automobile Group Finance Company.
Mr. Zhang has also served as a chairman and general manager of Shanghai Chejia since 2016. Prior to co-founding our company, Mr. Zhang founded the first automotive financing company in China, the SAIC-GMAC Automotive Finance Co., Ltd., and served as its director and general manager from 2004 to 2013. From 1999 to 2004, Mr.
Lin worked in SAIC General Motors Corporation Limited as a manager of tax and insurance in the finance department and a manager of finance support in the marketing department. From 1991 to 1997, Mr.
Lin served as a director of the sales department of SAIC-GMAC Automotive Finance Co., Ltd. From 1997 to 2003, Mr. Lin worked in SAIC General Motors Corporation Limited as a manager of tax and insurance in the finance department and a manager of finance support in the marketing department. From 1991 to 1997, Mr.
Name Age Position/Title Xiaojun Zhang ​ 52 ​ Co-founder and chairman Jiayuan Lin ​ 55 ​ Co-founder, director and chief executive officer Yongyi Zhang ​ 51 ​ Chief financial officer and director Zhipeng Song ​ 39 ​ Director Chi Ming Lee ​ 71 ​ Independent director Dongsheng Zhou ​ 56 ​ Independent director Rong Liu ​ 75 ​ Independent director ​ Xiaojun Zhang is our co-founder and has served as our chairman since 2014.
Name Age Position/Title Xiaojun Zhang ​ 53 ​ Co-founder and chairman Jiayuan Lin ​ 56 ​ Co-founder, director and chief executive officer Yongyi Zhang ​ 52 ​ Chief financial officer and director Zhipeng Song ​ 40 ​ Director Chi Ming Lee ​ 72 ​ Independent director Dongsheng Zhou ​ 57 ​ Independent director Rong Liu ​ 76 ​ Independent director ​ 124 Table of Contents Xiaojun Zhang is our co-founder and has served as our chairman since 2014.
As required by PRC regulations, the Group participates in various government statutory employee benefit plans, including social insurance, namely pension insurance, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance, and housing funds.
The Group plans to hire additional experienced and talented employees to assist the development of the Group’s new business. As required by PRC regulations, the Group participates in various government statutory employee benefit plans, including social insurance, namely pension insurance, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance, and housing funds.
From April 1990 to March 2004, he served as a manager assistant and deputy manager of Shanghai Automotive Industry Corporation (Group) Corp. He currently serves as an independent director at Kehua Holdings Co., Ltd., Kuangda Technology Group Co., Ltd., Shanghai Jialeng Songzhi Automobile Air Conditioning Co., Ltd. and Shanghai Jingzhi Industrial Co., Ltd.
From April 1990 to March 2004, he served as a manager assistant and deputy manager of Shanghai Automotive Industry Corporation (Group) Corp. He currently serves as an independent director at Kuangda Technology Group Co., Ltd., Shanghai Jingzhi Industrial Co., Ltd, Shanghai Lianming Machinery Co., Ltd. and Hubei Shengtong Technology Co., Ltd. In 1999, Mr.
(5) Represents 25,223,898 Class A ordinary shares in the form of ADSs that are beneficially owned by Tencent Mobility Limited. Information regarding beneficial ownership is based on the information contained in the Schedule 13G reported as of December 31, 2021 and filed by Tencent Mobility Limited with SEC on February 10, 2022.
(5) Represents 21,171,534 Class A ordinary shares in the form of ADSs that are beneficially owned by Tencent Mobility Limited. Information regarding beneficial ownership is based on the information contained in the Amendment No. 2 to the Schedule 13G reported as of December 31, 2024 and filed on February 10, 2025.
A copy of the Clawback Policy has been filed herewith as Exhibit 97.1. In the year ended December 31, 2023, we were not required to prepare an accounting restatement that required recovery of erroneously awarded compensation pursuant to the Clawback Policy, nor were there any outstanding balance as of December 31, 2023 of erroneously awarded compensation to be recovered.
In the year ended December 31, 2024, we were not required to prepare an accounting restatement that required recovery of erroneously awarded compensation pursuant to the Clawback Policy, nor were there any outstanding balance as of December 31, 2024 of erroneously awarded compensation to be recovered. 134 Table of Contents
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option or other right or the conversion of any other security. 124 Table of Contents As of March 31, 2024, the total number of ordinary shares outstanding is 208,729,976, comprising 135,751,299 Class A ordinary shares and 72,978,677 Class B ordinary shares. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ of total ​ Percentage ​ ​ Class A ​ Class B ​ outstanding ​ of aggregate ​ ordinary shares ordinary shares ordinary shares voting power** Directors and Executive Officers:* Xiaojun Zhang (1) 12,012,128 38,275,787 22.8 48.4 Jiayuan Lin (2) 14,827,861 34,702,890 22.4 44.1 Yongyi Zhang *** — *** *** Zhipeng Song *** — *** *** Chi Ming Lee — — — — Dongsheng Zhou — — — — Rong Liu — — — — Directors and Executive Officers as a Group 28,015,505 72,978,677 43.2 91.8 Principal Shareholders: ​ ​ ​ ​ Lin Entities (3) 2,741,607 34,702,890 17.9 43.7 Eagle Central Holding Limited (4) — 38,275,787 18.3 48.0 Tencent Mobility Limited (5) 25,223,898 — 12.1 1.6 Didi Chuxing (6) 28,376,116 — 13.6 1.8 Taikang Offshore Entities (7) 16,217,006 — 7.8 1.0 * The business address for our directors and executive officers is 8F, New Bund Oriental Plaza II, 556 West Haiyang Road, Pudong New Area, Shanghai 200124, People’s Republic of China. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option or other right or the conversion of any other security. 132 Table of Contents As of February 28, 2025, the total number of ordinary shares outstanding is 207,576,228, comprising 134,597,551 Class A ordinary shares and 72,978,677 Class B ordinary shares. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ of total ​ Percentage ​ ​ Class A ​ Class B ​ outstanding ​ of aggregate ​ ordinary shares ordinary shares ordinary shares voting power** Directors and Executive Officers:* Xiaojun Zhang (1) 13,139,342 38,275,787 23.3 48.4 Jiayuan Lin (2) 17,613,341 34,702,890 23.5 44.2 Yongyi Zhang *** — *** *** Zhipeng Song *** — *** *** Chi Ming Lee — — — — Dongsheng Zhou — — — — Rong Liu — — — — Directors and Executive Officers as a Group 31,974,956 72,978,677 44.3 91.9 Principal Shareholders: ​ ​ ​ ​ Lin Entities (3) 2,730,370 34,702,890 18.0 43.7 Eagle Central Holding Limited (4) — 38,275,787 18.4 48.0 Tencent Mobility Limited (5) 21,171,534 — 10.2 1.3 Xiaomeng Tong (6) 23,635,636 — 11.4 1.5 * The business address for our directors and executive officers is 8F, New Bund Oriental Plaza II, 556 West Haiyang Road, Pudong New Area, Shanghai 200124, People’s Republic of China. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
The business address for all of our executive officers and directors is 8F, New Bund Oriental Plaza II, 556 West Haiyang Road, Pudong New Area, Shanghai 200124, People’s Republic of China. 117 Table of Contents B.
Liu completed a graduate program in international economy at China Eastern Normal University. The business address for all of our executive officers and directors is 8F, New Bund Oriental Plaza II, 556 West Haiyang Road, Pudong New Area, Shanghai 200124, People’s Republic of China. B.
Zhou served as an assistant professor in the department of marketing and on the business faculty at the City University of Hong Kong. Dr.
From 1997 to 2002, Dr. Zhou served as an assistant professor and associate professor in the school of marketing at the City University of Hong Kong. Dr.
Granted Options As of March 31, 2024, options to purchase 23,999,068 Class A ordinary shares were outstanding under the share incentive plan.
Granted Options As of February 28, 2025, options to purchase 28,559,344 Class A ordinary shares were outstanding under the share incentive plan.
Boyu Capital General Partner III, L.P. is a limited partnership organized under the laws of the Cayman Islands, of which Boyu Capital General Partner III, Ltd. is the general partner. Boyu Capital General Partner III, Ltd. is an exempted company incorporated under the laws of the Cayman Islands, which is wholly owned by Boyu Capital Group Holdings Ltd.
Boyu Capital Group Holdings Ltd., an exempted company incorporated under the laws of the Cayman Islands, holds 100% of the outstanding shares of Boyu Capital General Partner III, Ltd. Boyu Group, LLC, a limited liability company incorporated under the laws of the Cayman Islands, holds 100% of the outstanding shares of Boyu Capital Group Holdings Ltd.
Zhang received a bachelor’s degree in finance from Shanghai University of Finance and Economics in 1992, a master’s degree in business administration from Peking University in 2003 and completed China Senior Executive Program at Harvard Business School in 2018, thereby attaining alumni status. Jiayuan Lin is our co-founder and has served as our director and chief executive officer since 2010.
Zhang received a bachelor’s degree in finance from Shanghai University of Finance and Economics in 1992, a master’s degree in business administration from Peking University in 2003 and took executive development courses at Harvard Business School in 2009 and 2018, thereby attaining alumni status.
Lin worked in the Pudong branch of Bank of China as a staff member in the finance department, deputy manager of the audit division and deputy manager of the credit division. Mr.
Lin worked in the finance department of Pudong branch of Bank of China, serving as deputy manager of the audit division and then deputy manager of the credit division. Mr. Lin received a bachelor’s degree in economics, with specialization in investment management, from Shanghai University of Finance and Economics in 1991. Mr.
The following table sets forth the breakdown of the Group’s employees as of December 31, 2023 by function: ​ ​ ​ ​ ​ ​ Number of ​ Function ​ Employees ​ % of Total Sales and marketing 73 11.6 Operations 172 27.2 Risk management 219 34.7 General administration 90 14.2 Research and development 78 12.3 Total 632 100.0 ​ As of December 31, 2023, 290 of the Group’s employees were based in Shanghai.
The following table sets forth the breakdown of the Group’s employees as of December 31, 2024 by function: ​ ​ ​ ​ ​ ​ Number of ​ Function ​ Employees ​ % of Total Sales and marketing 13 6.0 Operations 42 19.4 Risk management 71 32.7 General administration 76 35.0 Research and development 15 6.9 Total 217 100.0 ​ As of December 31, 2024, 150 of the Group’s employees were based in Shanghai.
Zhang served as an executive director of Zhongde Securities Co., Ltd. from 2010 to 2018. From 2001 to 2010, Mr. Zhang served as a senior manager of China Galaxy Securities Co., Ltd. From 1997 to 2001, Mr. Zhang served as a deputy manager of Shanghai Stock Exchange. From 1995 to 1997, Mr.
Zhang served as a senior manager of China Galaxy Securities Co., Ltd. From 1997 to 2001, Mr. Zhang served as a deputy manager of Shanghai Stock Exchange. From 1995 to 1997, Mr. Zhang served as an auditor of Arthur Anderson (Shanghai Office). Mr. Zhang received a bachelor’s degree in international accounting from Shanghai University of Finance and Economics in 1995.
Prior to co-founding our company, Mr. Lin served as an assistant general manager of Shanghai Automobile Group Finance Company from 2007 to 2010. From 2003 to 2007, Mr. Lin served as a director of the sales department of SAIC-GMAC Automotive Finance Co., Ltd. From 1997 to 2003, Mr.
Jiayuan Lin is our co-founder and has served as our director and chief executive officer since 2010. Prior to co-founding our company, Mr. Lin served as an assistant general manager of Shanghai Automobile Group Finance Company from 2007 to 2010, and was responsible for automotive finance management. From 2003 to 2007, Mr.
From 1992 and 1998, Mr. Zhang served as a financial supervisor of People’s Bank of China, Shanghai Branch. Mr.
Zhang served as a deputy general manager of Shanghai Automobile Group Finance Company. From 1992 and 1998, Mr. Zhang worked in the financial regulatory department of People’s Bank of China. Mr.
(6) Represents (i) 4,740,480 Class A ordinary shares held by Links Advance Holdings Limited and (ii) 23,635,636 Class A ordinary shares held by DiDi Sunshine Investments L.P. Information regarding beneficial ownership is reported as of December 31, 2019, based on the information contained in the Schedule 13G filed by Didi Chuxing with SEC on February 13, 2020.
(6) Represents 23,635,636 Class A ordinary shares held by Galactic Gain Limited in the form of ADSs. Information regarding beneficial ownership is reported as of December 31, 2024, based on the information contained in the Amendment No. 2 to the Schedule 13G filed on February 11, 2025.
Zhang served as an auditor of Arthur Anderson (Shanghai Office). Mr. Zhang received a bachelor’s degree in international accounting from Shanghai University of Finance and Economics in 1995. Zhipeng Song has served as a director of our company since 2018. Mr. Song has also served as a vice president of Shanghai Chejia since 2016. From 2014 to 2015, Mr.
Mr. Zhang took executive development courses at Harvard Business School in 2019, thereby attaining alumni status. Zhipeng Song has served as a director of our company since 2018. Mr. Song has also served as a vice president of Shanghai Chejia since 2016. From 2014 to 2015, Mr. Song served as an assistant general manager of our company.
Boyu Capital Group Holdings Ltd. is an exempted company incorporated under the laws of the Cayman Islands, of which XYXY Holdings Ltd. is the controlling shareholder. XYXY Holdings Ltd. is a company incorporated under the laws of the British Virgin Islands, which is wholly owned by Xiaomeng Tong.
XYXY Holdings Ltd., a company incorporated under the laws of the British Virgin Islands, is the controlling shareholder of Boyu Group, LLC. Xiaomeng Tong holds 100% of the outstanding shares in XYXY Holdings Ltd. In May 2018, our co-founders Mr. Xiaojun Zhang and Mr. Jiayuan Lin entered into a voting agreement, which was amended and restated in June 2019.
Lin received a bachelor’s degree in economics, with specialization in investment management, from Shanghai University of Finance and Economics in 1991. 116 Table of Contents Yongyi Zhang has served as our chief financial officer since 2018 and director since 2018. Prior to joining our company, Mr.
Lin took executive development courses at Harvard Business School in 2019, thereby attaining alumni status. Yongyi Zhang has served as our chief financial officer since 2018 and director since 2018. Prior to joining our company, Mr. Zhang served as an executive director of Zhongde Securities Co., Ltd. from 2010 to 2018. From 2001 to 2010, Mr.
Each of our directors will hold office until his or her successor takes office or until his or her earlier death, resignation or removal or the expiration of his or her term as provided in the written agreement with our company, if any.
Each of our directors will hold office until his or her successor is elected or appointed or his or her office is otherwise vacated.
Removed
He also serves as a supervisor at Yangzhou Dongsheng Auto Parts Co., Ltd. In 1999, Mr. Liu completed a graduate program in international economy at China Eastern Normal University.
Added
Galactic Gain Limited is an exempted company incorporated under the laws of the Cayman Islands. Boyu Capital Fund III, L.P., a limited partnership organized under the laws of the Cayman Islands, holds 100% of the outstanding shares of Galactic Gain Limited.
Removed
The Group plans to hire additional experienced and talented employees in areas such as big data analytics, marketing and operations, risk management and sales as the Group expands its business.
Added
A copy of the Clawback Policy has been filed herewith as Exhibit 97.1.
Removed
Links Advance Holdings Limited is controlled by Didi Chuxing. DiDi Sunshine Investments L.P. is an exempted limited partnership organized in the Cayman Islands. Its general partner is a wholly-owned subsidiary of Didi Chuxing. The general partner exercises the voting rights with respect to the shares held by the limited partnership.
Removed
The general partner disclaims beneficial ownership of our shares except to the extent of its pecuniary interest in the limited partnership.
Removed
According to the information contained in the Schedule 13G filed by Galactic Gain Limited with SEC on February 13, 2020, Galactic Gain Limited is a limited partner of DiDi Sunshine Investments L.P. and indirectly holds the 23,635,636 Class A ordinary shares.
Removed
The registered address of Galactic Gain Limited is at the office of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
Removed
(7) Represents (i) 8,108,503 Class A ordinary shares in the form of ADSs that are beneficially owned by Magic Spark Inc., a limited liability company established in the Cayman Islands, and (ii) 8,108,503 Class A ordinary shares in the form of ADSs that are beneficially owned by TK Autolink Inc., a limited liability company established in the Cayman Islands.
Removed
Information regarding beneficial ownership is reported as of December 31, 2019, based on the information contained in the Schedule 13G filed by Taikang Offshore Entities with SEC on February 12, 2020. Magic Spark Inc. is wholly owned by Taikang Life Insurance Co., Ltd., which in turn is wholly owned by Taikang Insurance Group Inc.
Removed
TK Autolink Inc. is indirectly controlled by Shandong State-controlled Taikang Phase I Industrial Development Fund Partnership Enterprise (Limited Partnership) (“Shandong Fund”). Beijing Taikang Investment Co., Ltd. is one of the two general partners of Shandong Fund. Beijing Taikang Investment Co., Ltd. is indirectly controlled by Taikang Insurance Group Inc.
Removed
Each of Taikang Life Insurance Co., Ltd. and Taikang Insurance Group Inc. is an insurance company established in the PRC. The registered address of Magic Spark Inc. is Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1-1002, Cayman Islands.
Removed
The registered address of TK Autolink Inc. is 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1 – 1002, Cayman Islands. 126 Table of Contents In May 2018, our co-founders Mr. Xiaojun Zhang and Mr. Jiayuan Lin entered into a voting agreement, which was amended and restated in June 2019.

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