Cango - Earnings Call - Q2 2020

Transcript

Operator (participant)

Good morning and good evening, everyone. Welcome to Cango Inc. second quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. This call is also being broadcast live on the company's IR website. Joining us today are Mr. Jiayuan Lin, Chief Executive Officer, and Mr. Michael Zhang, Chief Financial Officer of the company. Following management's prepared remarks, we will conduct a Q&A session. Before we begin, I refer you to the safe harbor statement in the company's earnings release, which also applies to the conference call today, as management will make forward-looking statements. Please note this call is being recorded. With that, I will now turn the call over to Mr. Jiayuan Lin, CEO of Cango. Please go ahead, sir.

Jiayuan Lin (CEO)

大家好，欢迎参加灿谷2020年二季度财报电话会。

Hello everyone, welcome to Cango's 2020 Q2 earnings call.

今年年初至今，整个行业受新冠疫情影响，市场受到巨大冲击，其中灿谷所在的下沉市场的复苏情况并没有我们预期的理想。此外，受购买力下降的影响，中低端及自主品牌所受到的打击又远大于中高端和合资品牌。虽然受到大环境的不利影响，但是我们在二季度依然坚定地执行公司的既定战略，其中作为我们今年发展重点的保险业务持续发力。

The entire industry has been abruptly and dramatically impacted by COVID-19 since the beginning of 2020. The difficult conditions persisted through the end of the second quarter, and the recovery was slower than our previous expectations. The low and mid-range market segments, as well as domestic brands, were impacted more than the higher-end segment and joint venture brands. Despite the unfavorable conditions, we continue to make meaningful progress in our strategic initiatives. It is worth noting that our insurance facilitation services delivered very strong performance in the second quarter.

具体的从财务表现上看，二季度总收入达到2.7亿元人民币，超过我们之前所给出的预期上限接近10%。其中以保险促成为主的汽车后市场促增业务收入达到5247万元人民币，占比为总收入的19.1%。同时，我们持续优化成本结构，提高运营效率，第二季度毛利率维持在一个健康水平，继续保持稳定。营运利润也转正，这主要归结为公司有效的成本控制以及带后管理提升所带来的资产表现变好，净利润相较于上季度扭亏为盈，达到7023万元人民币。

In Q2, we booked RMB 274.1 million in revenue, exceeding the higher end of the guidance range by approximately 10%. In particular, after-market services revenue grew to RMB 52.5 million, accounting for 19.1% of the total. Thanks to efforts to optimize the cost structure and improve operating efficiency, the gross margin stayed at a healthy level in the second quarter. We also regained positive operating income, mainly attributable to effective cost control and improved asset quality as a result of post-loan management. Overall speaking, our net profit increased to RMB 70.2 million.

在第二季度，我们继续夯实基盘汽车贷款促成业务。同时，我们的汽车后市场促增业务也在本季度交出了亮眼的答卷。这主要归功于我们保险业务的进一步发展以及业务线的进一步扩大。其中，车险作为我们大力推进的一个保险品种，较上季度有大幅提升，共促成交易约18000单，环比增长超一倍。此外，我们的健康险产品在本季度促成交易1万余单，保险业务已经不再是简单的车贷附属业务，而逐渐呈现出巨大的发展潜力。我们计划将此业务逐渐发展成为公司独立的业务线。未来，我们将继续开拓其他优质保险交易渠道及品类，以满足消费者更多元化的需求，并向更高客单价的保险产品延伸。

In the second quarter, we continue to build on our core auto loan facilitation business. The after-market services facilitation also achieved an outstanding performance, mainly fueled by the strong growth of the insurance facilitation business. Particularly, the car insurance business that we have vigorously promoted grew significantly on a sequential basis, completing 18,000 transactions in the second quarter, more than double the previous quarter. In addition, our health insurance products continue to gain in popularity and we recorded more than 10,000 transactions in the second quarter. Insurance facilitation as a whole is no longer a sideline business; instead, it holds promising growth potential as an independent business line. Looking forward, we will continue to explore more channels and categories to meet the increasingly diverse needs of consumers. In addition, we will expand our insurance product portfolio to include those that have higher transaction value.

回顾今年第一季度，受疫情影响，一季度预期率整体有所上升。在第二季度，受复工复产及公司加大带后催收力度的影响，预期率表现整体好转。截至2020年6月30日，公司所有已完成并在存续期的汽车贷款的M+预期率由上季度末的2%下降至1.59%。公司资产管理部门正在持续对客户进行催收，其中有部分上季度的预期下签至M3，但这仍在我们认为的合理范围之内。整体来看，二季度预期情况好于一季度，我们对未来资产质量的可控性抱有很大信心。

Moving to our asset quality, in the first quarter, the COVID-19 pandemic led to an uptick in our delinquency rates. However, in the second quarter, the overall delinquency has improved thanks to the resumption of economic activities as well as our debt collection efforts. As of June 30, 2020, the M1+ overdue ratio has improved to 1.59% from 2% in the previous quarter. On the other hand, some of last quarter's M1+ delinquencies have moved to the M3+ category, but it is within a reasonable range. Overall, our customer delinquency has improved considerably in the second quarter compared with the first quarter, and we remain confident in our ability to maintain the quality of our assets going forward.

作为汽车金融服务领域的领头羊，一直以来灿谷独树一帜，坚持将金融风控作为业务拓展的生命线，严格把控风险，不断探索创新的风控管理方式，持续打造安全专业的汽车金融全流程服务，致力于为汽车流通价值链上各方参与者创造价值。与此同时，通过多维度全方位的风控机制、科技赋能带后管理系统，开拓新兴带后管理手段，使得灿谷所促成的汽车金融资产持续具备优异的带后表现。展望未来，我们希望进一步扩大在风控管理方面的优势，同时我们将一如既往地支持所有行业参与者的发展，并为推动行业创新做出更大的贡献。

Since our inception, we have emphasized the importance of risk management and regarded it as the cornerstone of our business development. We strive to create value for all parties in the auto transaction value chain by strictly managing risks, actively exploring innovative risk management methods, and offering safe and professional one-stop auto finance services. With comprehensive risk controls, advanced technologies, and methodologies for post-loan management, Cango facilitated auto loans have been performing well over the years. We will continue to develop our strengths in risk management, remain committed to supporting all industry participants as they evolve and drive innovation in the industry.

在刚刚过去的7月，灿谷在于上海举办的第五届中国汽车金融国际峰会上获颁最佳汽车金融风险管理创新奖。中国汽车金融国际峰会是汽车金融行业广受认可和具标杆性的活动之一。同时，该峰会评选也是中国汽车行业久负盛名的专业金融评选，参与对象涵盖整个汽车金融产业链，包括整车厂、经销商、汽车金融公司、信托、基金、银行等。再由头部金融机构专家组成的评审团的评审下，我们凭借创新的风控管理系统在激烈的竞争中脱颖而出，荣获创新产品奖。这个奖项是对灿谷优异表现的认可，同时也是对我们在风险管理方面不懈努力的肯定。

In July, at the 5th Annual China Auto Finance International Summit in Shanghai, Cango received the Best Auto Finance Risk Management Innovation Award. This summit is one of the most recognized and respected events in the auto finance industry. Candidates were carefully selected from the industry, including OEMs, dealers, auto finance companies, trusts, funds, and banks. After rigorous reviews by a panel of experts from leading financial institutions, Cango stood out from competition with our innovative risk management system and received the Risk Management Innovation Award as a recognition of outstanding performance and relentless efforts in risk management.

今年是灿谷成立十周年。在过去十年里，我们从一家汽车金融公司成长为国内领先的汽车新零售服务平台，成为了为国内数以万计汽车经销商的合作伙伴，累计服务客户超过150万。我们见证了中国汽车金融行业的快速发展和升级转型，更见证了购车者消费习惯和价值观日新月异的十年。站在一个新的起点上，作为中国汽车金融行业的领军者，灿谷将石出新，起新城，秉承以大数据和技术创新为核心驱动力，致力于为客户提供安全、专业、高效的汽车金融科技服务，同时为整个行业的发展助力。

This year, Cango turns anniversary. In the past ten years, we have grown from an auto finance company to a leading automotive transaction service platform in China. We have established partnerships with tens of thousands of auto dealers, serving more than 1.5 million customers. We have participated in the rapid development and transformation of China's auto finance industry and witnessed changing consumer behavior and preferences in the past decade. As a pioneer in the industry, we will always remain true to our vision and values, and we are excited to start a new chapter, leveraging big data and innovative technologies to provide customers with safe, professional, and efficient auto finance services while contributing to the development of the entire industry.

展望未来，从整个消费市场大环境来看，消费者观念的升级转变、金融科技、新兴业态的飞速发展，中国汽车金融市场依然具有广大的发展前景。从政策层面而言，政府也在加大对汽车个人消费信贷的支持力度，持续释放汽车消费潜力。对灿谷来说，我们在上层市场的先发优势、覆盖整个产业链的产品和服务，以及和金融机构良好的合作关系，都将有助于我们在目前形势下获得更多的市场份额，并进一步增强公司的竞争力。随着互联网的迅猛发展，数字化服务正成为汽车金融新的发展驱动力之一，我们也在积极地探索线上业务领域，比如电子签约、互联网平台销售等等。

Looking ahead, given the changing consumer behavior, swift growth of fintech, and emergence of new business models, we believe China's auto finance industry has very promising growth prospects. The government has also relaxed conditions for consumer credit applications for car purchases, which have helped unleash higher demand. Cango enjoys first-mover advantages in emerging markets in the lower-tier cities, both comprehensive product and service offerings and deep partnerships with financial institutions. We are in a very strong position to gain market shares and strengthen our competitive advantages. With the rapid development of mobile internet, digital services are becoming one of the new drivers for auto finance, so we are actively advancing our online business with new tools such as e-contracts and online selling.

具体来说，在今年下半年，我们的战略发展重心将集中在以下四个方向：一、继续着力精进以保险促成为主的汽车后市场业务，使其充分发挥收入增长引擎的作用；二、我们将深耕基盘住宅业务，通过创新产品切入更高端的渠道和客群。我们已经组建了专门的团队来进军中高端车市场。另外，值得一提的是，本季度我们再继续为特斯拉在上海的门店、上海的所有门店提供服务，未来也将持续加深在这一领域的拓展；三、我们继续在汽车交易促成业务领域发力。在第二季度，我们组建了专门团队，专注于这一领域。我们预计这一业务在未来几个季度会有更强劲的发展；四、在公司运营方面，我们将继续推进运营效率的提升。在开拓中高端车市场的同时，我们更要提升下层市场的效率。截止二季度末，公司业务网络共涵盖4.45万名注册经销商，我们持续在对经销商结构进行优化调整，淘汰客群质量或流量不达标的经销商，从而提升整体业务效率。

In the second half, we will implement the following four strategic priorities. Firstly, we will continue to develop the after-market services as one of the primary revenue growth drivers. Secondly, for the core auto loan facilitation business, we will continue our efforts to expand into the higher-end segment with innovative product offerings. We have built a dedicated team to develop this segment. It is worth noting that during the second quarter, we served all Tesla stores in Shanghai, and we will further explore the untapped growth potential in this market segment. Thirdly, we will continue to build up the auto transaction facilitation business. In the second quarter, we have assembled a special team focusing on this area, and we expect to see stronger development in the coming quarters. Finally, we will further improve our operating efficiency and optimize our cost structure.

While we are expanding to high-end markets, we believe there is also a big opportunity for us to further improve the efficiency of our lower-tier dealer network. By the end of the second quarter, the number of registered dealers has reduced to 44,500 as we continue to optimize our network efficiency by terminating relationships with dealers that were not up to our standards in terms of operating risks and traffic generation capabilities.

最后，我想说的是，我们将像过去十年那样继续奋力向前，秉持长远的目光，并在未来取得更多的成果。

We will press forward as we have done for the past decade with our eyes set on the long term and plans to achieve more milestones along the way.

接下来，有请我们的首席财务官张永毅来回顾一下公司本季度的财务表现。

With that, I will now turn the call over to our CFO, Michael Zhang, to review our financial performance in the second quarter.

Michael Zhang (CFO)

Thanks, Jiayuan. Hello, everyone, and welcome to our second quarter 2020 earnings call. Before I started to review our financials for the quarter, please note that, unless otherwise stated, all numbers are in RMB terms and all percentage comparisons are on a year-over-year basis. Amidst the COVID-19 pandemic, we generated RMB 274.1 million in total revenue in the second quarter of 2020, outperforming the high end of our previous guidance by approximately 10%. In addition, our after-market service facilitation business continued to serve as an important growth driver, generating RMB 52.5 million in revenues for the second quarter and accounting for approximately 19% of total revenue. Now, let's move on to our cost and expenses during the quarter. Total operating cost and expenses in the second quarter of 2020 were RMB 207.4 million compared to RMB 252 million in the same period of last year.

This was in line with the decrease in the company's sales volume. Cost of revenue in the second quarter of 2020 decreased by 18.3% to RMB 102.8 million, from RMB 125.8 million in the same period of last year. As a percentage of total revenue, cost of revenue in the second quarter of 2020 was 37.5% compared to 37.4% in the same period of 2019. Sales and marketing expenses in the second quarter of 2020 were RMB 42.4 million compared to RMB 44.5 million in the same period of last year. As a percentage of total revenue, sales and marketing expenses in the second quarter of 2020 increased to 15.5%, from 13.2% in the same period of last year. General and administrative expenses in the second quarter of 2020 were RMB 66 million compared to RMB 53.4 million in the same period of 2019.

As a percentage of total revenue, general and administrative expenses in the second quarter of 2020 increased to 24.1%, from 15.9% in the same period of last year. Research and development expenses in the second quarter of 2020 were RMB 12.9 million compared to RMB 12.2 million in the same period of last year. As a percentage of total revenue, research and development expenses in the second quarter of 2020 increased to 4.7%, from 3.6% in the same period of 2019. Net gain on risk assurance liability in the second quarter of 2020 was RMB 42.9 million compared with a net loss of RMB 76.9 million in the first quarter of 2020. Net gain on risk assurance liability was mainly due to a decrease in the delinquent loan balance and default rate.

We recorded income from operations of RMB 66.7 million in the second quarter of 2020 compared with RMB 84.3 million in the same period of last year. Net income in the second quarter of 2020 was RMB 70.2 million. Non-GAAP adjusted net income in the second quarter of 2020 was RMB 92.3 million. On a per-share basis, our diluted net income per ADS in the second quarter of 2020 was RMB 0.47, and our diluted non-GAAP adjusted net income per ADS in the same period was RMB 0.61. Moving on to our balance sheet, as of June 30, 2020, we have cash and cash equivalents of RMB 2 billion compared to RMB 2.7 billion as of March 31, 2020, mainly due to the dividend paid in May and the repayment of debts. Looking ahead to the third quarter of 2020, we expect our total revenue to be between RMB 300 million and RMB 330 million.

Please note that these forecasts reflect our current and preliminary view on the market and operational conditions, which are made in consideration of uncertainties in the market caused by the COVID-19 outbreak and are therefore subject to change. This concludes our prepared remarks. Operator, we are now ready to take questions.

Operator (participant)

We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Our first question will come from Shelley Wang with Morgan Stanley.

Shelley Wang (VP of Equity Research)

driver? Thank you.

I have three questions, and from Morgan Stanley, the first one is about the Q3 performance. Actually, we are seeing the Chinese auto market turn for the better starting from now, and we are also seeing strong growth in sales for some Chinese brands such as Changan and Great Wall. My question is that how will this trend help with our business in Q3? The second question is about overdue ratio. We do see that the overdue ratio for the second quarter improved. However, it still remained at a level higher than the level of last year. If overdue ratio continues to improve, will that generate more gain for risk assurance liabilities? The third question is about the longer-term growth strategy. Right now, we have covered 45,000 dealers. What about your growth expectation in two or three years' time?

How many dealers do you expect to cover? What are the new growth drivers for the longer term? Are you going to cover more foreign stores? Are you going to work with more auto brands? I mean, what is the longer-term growth strategy for the business?

Jiayuan Lin (CEO)

好，Shelley，我回答第一个问题。后面两个问题有些FO的张永毅先生的回答。就是，呃，汽车一些汽车著名品牌的复苏对仓股的影响，对仓股来说，目前我们的预估是跟二季度的复苏速度差不多，因为相比一二线城市，仓股更擅长的低线城市的需求端并没有得到显著改善。呃，但是这些4S店的那个销量恢复，对，呃，他们主要靠的是4S店的场景销售，对我们的那个业务量会有一定的帮助，但有限。

Thank you, Shelley, for your questions. I will take your first question, and then our CFO will answer the next two questions. About your question on the impact of the growth of Chinese brands' sales on our business. We see that the recovery trend is similar to what we have observed in the second quarter. Actually, compared with the first and second-tier cities, there is no significant improvement in demand in the lower-tier cities yet. Actually, Cango is the strongest in those lower-tier markets. Also, for the growth in sales of these Chinese brands, they are mainly attributable to the sales in the foreign stores. There is some support to our business, but limited indeed.

Shelley，就第一个问题我想再补充一点，就是说，呃，就刚才提到的长安跟这个长城的这样的一个品牌的一个销量复苏，呃，确实我们也观察到了，呃，确实，而且对我们的整个的业务量实际上在二季度末已经产生了一个比较积极的一个影响。呃，但是呢，就我们也关注到，因为实际上在我们所，呃，专注的这个下沉市场，其实更大的问题在于这个需求端，也就是消费者的购买力，目前看起来还存在一个比较长时间的需要恢复的一个周期吧。所以我们的理解是说，呃，品牌的这样的一些，包括国产品牌的这样的强势品牌的这样的一种复苏，会对我们的三季度，包括未来的这个业务量，会带来一个非常积极正面的影响。但是可能它所需要的这样的一个，呃，就是说在我们业务量的这样的一个，呃，体现的话呢，呃，一定程度上也取决于整个下沉市场的消费者购买力的这样的一个复苏的这样的一个，呃，一个力度吧。

I'd like to add some points to the first question. Yes, we also observed the recovery in sales for Chinese brands such as Changan Automobile and Great Wall Motor. We also are seeing positive contribution by this recovery to our business growth in the second quarter. Actually, by the end of the second quarter, we already saw this positive impact. However, as we said earlier, Cango focused mostly on the lower-tier markets. In these lower-tier markets, I think it will still take some time for the demand to recover. In particular, we need to see a stronger rebound in the purchasing power of the consumers. Yes, indeed, we expect to see a positive contribution to our business growth in Q3 and in the longer term from the recovery of the Chinese auto brands and other brands as well.

Indeed, for the real impact on our business to happen, we still need to see the better purchasing power in the lower-tier cities.

第二个问题，关于我们的这个代后逾期对我们这个，就是供应价，risk assurance的，给我们risk assurance的这个影响。我们也看到了就是说整个二季度，基于我们的，整个代后管理的这样的，包括代后推售的这个力量的加强，我们的在，整个的一个代后的一个逾期表现有了一个非常明显的一个提升。包括我们，整个M1的这样的一个，M1+的这样的一个整个overdue ratio也出现了一个比较，大幅的一个下降吧。这个也代表了我们知道在三季度初，实际上这样的一种代后数据的转好的趋势，还在继续的过程中。也就是说只要我们的这个整个一个代后数据的表现持续转好的话，我们是，有机会，确认这样的一个就是我们在这个，risk assurance的这样的一个，这样的一个gain。那么这个也是基于我们在一季度，因为当时的一个疫情的状态下，我们对整个的一个代后资产进行了一个比较，审慎的这样的一个，补提的拨备的这样的一个补提的动作。那么同时基于整个后续的一个整个的一个供复产以及我们自身的这样的一个代后管理的加强，所以我们发现，或者说我们也看到就是我们整个的一个，这个资产质量在持续转好。那么在这个过程当中，我们是有机会把，之前所计提的这样的一些，就是，比较大额的这样的一个，就是，拨备的话，在一定的这个情况下予以这个转回，确认为，后续的这样的一个gain。

About your second question, that is the overdue ratio improvement and its impact on the gains in the risk assurance liabilities item. In the second quarter, thanks to our post-loan management, in particular our debt collection efforts, we have seen an improvement in our overdue ratio. Actually, some overdue ratios, in particular, the M1+ ratio, have dropped significantly over the second quarter. This is mainly attributable, as I said earlier, to our post-loan management efforts. That is why in the second quarter we have recognized about RMB 40 million gains in the changes in the fair value of the risk assurance liabilities. Starting from early Q3, we are seeing continuing improvements in these post-loan management metrics. If this trend continues, we actually do see an opportunity to recognize more gains in the risk assurance liabilities.

In Q1, when the pandemic was at its peak, Cango, in fact, aggressively made more provisions for our assets. That is why you are seeing, you know, higher provisions in our Q3 on our books. Thanks to a resumption of economic activities and also thanks to our post-loan management efforts, we are seeing better asset quality in the second quarter and throughout early Q3. With this trend going on, we expect to see, you know, lower provisions in the future, and we could reverse some of the provisions that we made earlier and recognize them as gains in our risk assurance liabilities.

第三个问题的话，我们的这个未来的增长策略在这个渠道端的话，我们会继续的这个拓展我们的整个一个渠道的一个覆盖数量。目前来讲的话呢，我们所做的工作一方面是对原有的下沉市场的二级网络店的这样的一个渠道进行进一步的优化，把一些这个不符合我们的一些服务标准和相对活跃度较低的这样的一些这个经销商逐步的这个进行相应的一些清理，使得我们的这个在下沉市场的运营端的这个效率进一步得到提升。同时的话呢，我们也组建了这个对高端品牌4S店渠道的这样的一个这个拓展团队。那么在接下来的这个时间段内的话呢，我们会积极的并且大力的投入资源来拓展我们在4S店渠道的这样的一个这个覆盖面。那么我们预计的话呢，在未来的三年的话，我们使得我们的整个的一个覆盖的这个渠道的数量，我们预计会达到差不多6万家左右。那么这个当中的话呢，4到4.5万家左右的这个对应的话应该是我们的传统的这个下沉市场的二级网络店。那么剩余的这个1.5万家，我们理解应该是对应的是高端品牌的这个4S店。这是我们的一个对渠道的这样的一个总体的一个布局的考虑。

About your third question on our future growth strategy, let me first of all talk about the Changan side. We will continue to explore opportunities to increase our dealer partners in the next few years. First of all, we will continue to optimize our relationship with the non-foreign stores in the lower-tier cities. As you heard earlier, we are now gradually terminating partnerships with those dealers who do not meet our standards on service level and also on traffic generation capabilities. These are all efforts by us to improve the operating efficiency in the lower-tier city networks. On the other hand, we are also working on building relationships with foreign stores of the higher-end brands. We have established a dedicated team to develop this market segment.

We are actively exploring this new channel, and we are investing heavily to expand our relationships with the foreign stores. Overall speaking, in the next three years, we expect the number of dealers who work with us to increase to about 60,000, 45,000 of which will be the non-foreign stores in the lower-tier cities, and about 15,000 of which will be foreign stores of the higher-end brands.

在此基础上呢，我们也会通过提供更多的产品和服务来提高我们的这个整个经销商合作伙伴的这样的一个活跃度。因为除了单纯的这个覆盖的渠道数量以外，那么单店的这个活跃度以及它的产出也会对我们整个的一个业务量带来一个非常直接的一个影响。所以这个也是我们下一阶段会主要的这样的一个工作的一个努力的一个方向。

In addition, we will further improve our product and service offerings with our dealers in order to improve the productivity as well as traffic generation activities of our dealers. We should not just look at the number of dealers we are working with, it's also very important for us to improve the personal activity and also personal productivity because these metrics will have a direct bearing on our business growth. These are some of the priorities we are going to work on in the near future.

在这个我们的基础的这个车贷业务以外的话呢，其实我们在过往比较花的大的一个投入吧，在拓展我们的这个车后的这样的一个市场的服务。那么这个当中的话呢，我们也看到了这块的整个业务收入对整个的一个我们的一个这个营收带来的一个影响是越来越大。同时的话呢，我们也可以看到就是特别在这个车后市场的服务的当中的这个我们的保险促成业务，那么它的整个的一个对我们整体业务的贡献度也是一个处在一个快速上升的这么一个状态中。那么我们也看到了这样的一个包括像保险促成业务的话呢，是有可能成为我们未来的一个非常核心的一个独立的业务来呈现出来吧。

Thirdly, the core business of Cango has been the auto loan facilitation business. At the same time, we are investing heavily to grow our aftermarket business. Actually, as you can see from our results, the contribution from this business to our revenue has increased quite significantly. Also, in the aftermarket business line, the insurance facilitation business has performed outstandingly. You can see that the contribution by this insurance facilitation business to our revenue has grown significantly. We expect that actually, we expect this insurance facilitation business to grow into a core and an independent business line of Cango in the future.

此外的话呢，我们也组建了一个我们的这个汽车交易的这样的一个专业团队。从基于我们前期的这样的一些业务的这样的一些推动，包括一些布局吧，那我们预计的话呢，整个汽车交易的这样的一些业务对我们三季度乃至于以后季度的这样的一个整体的一个我们的一个业务发展，包括业务收入都会产生一个积极和一个比较积极的这样的一个影响吧。

In addition, we have also set up a dedicated team to grow our auto transaction facilitation business. Thanks to our efforts and investment, we expect the auto transaction facilitation business to make a positive contribution to our business as well as to our revenue growth in the third quarter and in the following quarters.

谢谢。

Thank you.

Operator (participant)

Again, if you have a question, please press star and then one. We have no further questions at this time. I will hand the call back to management for closing remarks.

Jiayuan Lin (CEO)

好，谢谢大家。那我们的电话会议就到此结束。谢谢大家。

Thank you all for your participation. That closes today's early call.

Operator (participant)

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.