CANG.US

The Latest: Car-trading platform operator Cango Inc. (CANG.US) announced a plan last Friday to buy back up to $50 million worth of its American depositary shares (ADSs).

Looking Up: The announcement comes after the expiration of a similar $50 million repurchase plan launched a year earlier. Cango only ended up buying back $5.7 million under that plan, meaning the program cost it relatively little despite the much larger size of the authorization. 

Take Note: Cango is rapidly burning cash as it transforms from its previous business model as a car financier to a provider of services for new and used car trading. Thus, some might say it should conserve its cash to keep funding its operations until it becomes profitable again.

Digging Deeper: Cango begin its life as a car financier, but two years ago began a transformation to operating a platform for car-trading services. It currently offers such services on its Haoche app for new cars, and its U-Car platform for used cars. The company’s annual report released on Wednesday in the U.S. shows Cango lost 1.1 billion yuan ($159 million) in 2022, up sharply from a 8.5 million yuan loss a year earlier. The company had 2.32 billion yuan in cash, cash equivalents and short-term investments at the end of last year, compared with 4.03 billion yuan a year earlier.

Market Reaction: Cango’s shares rose as much as 7.8% the day of the announcement last Friday, and closed up 2.6%. But the stock has given back all of the gains since then, and currently trades near the lower end of its 52-week range.

Reporting by Doug Young

To subscribe to Bamboo Works weekly free newsletter, click here

Recent Articles

an Illustration of McKinsey weighing China exit

McKinsey Weighs China Exit, and Shenzhen Rescues Vanke

Some partners at U.S. consulting giant McKinsey are questioning the wisdom of staying in China. What's driving their doubt, and what would a withdrawal signify? And Shenzhen rescues struggling developer Vanke. What is the city demanding in return for its assistance?
Huawei stages improbable comeback

Huawei rings up improbable comeback as revenue soars

The Shenzhen-based telecoms giant said its revenue rose 22% in 2024, showing that years of U.S. sanction have failed to contain its rise Key Takeaways: Huawei reported its second-highest annual…
Sands China’s revenue growth losing momentum in the fourth quarter amid gaming revenue weakness in Macao

Lady luck looks away from Sands China

The casino operator’s revenue declined in last year’s fourth quarter as the Macao gaming sector’s post-pandemic rebound lost steam Key Takeaways: Sands China reported its revenue fell 5% year-on-year in…