Cango - Earnings Call - Q4 2020

Transcript

Speaker 4

Good morning and good evening, everyone. Welcome to the Cango fourth quarter and full year 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 the 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 today, as management will make forward-looking statements. With this said, I'm now turning the call over to Mr. Jiayuan Lin, CEO of Cango. Please go ahead, sir.

Speaker 5

Thank you. 大家好，欢迎参加Cango 2020年第四季度及全年财报电话会。

Good morning and good evening, everyone. Welcome to Cango's fourth quarter and full year 2020 earnings call.

回首2020年，年初突如其来的疫情令行业一度停摆。进入下半年后，中国经济形势逐渐好转，车市稳步复苏。这一年，汽车行业倍感压力，同时也在加速转型。随着下沉市场的需求回升及公司各项业务的持续稳步推进，我们非常欣喜地看到下半年公司整体业务出现了明显的反弹。第四季度，公司总收入达到10.97亿元人民币，较我们之前给出的指引上限超出46%。得益于公司有效的成本控制，营运利润继续保持良好的增长态势，在本季度达到了1.98亿元人民币。在净利润方面，由于公司投资理想汽车所带来的公允价值变动的投资收益，本季度录得净利润近16亿人民币。

In 2020, the unexpected pandemic at the beginning of the year brought the industry to a standstill, but China's economy picked up speed in the second half of the year, and the auto market recovered steadily. While immense pressure on the auto industry, it also accelerated its pace of transformation. With the unleashed pent-up demand from the lower-tier markets and continuous progress across our business lines, we are pleased to report that Cango's overall business rebounded significantly during the second half of this year—I mean 2020. As a result, total revenues in the fourth quarter grew to a record RMB 1,097 million, surpassing the high end of our previous guidance range by about 46%. Thanks to our effective cost control initiatives, operating income sustained its growth momentum in the quarter and came in at RMB 198 million.

Net income for the quarter was CNY 1.6 billion, primarily attributable to an investment gain of about CNY 1.5 billion in the auto.

2020年对灿国而言，同样具有里程碑意义。这是公司成立的第十个年头，也标志着灿国迈入新的发展阶段。成立之初，我们正是看到了汽车流通链条上，尤其是下沉市场，未被满足的需求，决心做连接者，致力为消费者提供简单愉悦的购车体验，为汽车流通价值链上的各方创造价值。

The year 2020 marked Cango's 10th anniversary, a significant milestone opening a new chapter of growth for the company. Ten years ago, we founded Cango as we saw unmet demand in the auto transaction value chain, specifically in the lower-tier markets, and this prompted us to create a one-stop platform to connect and empower all parties along the auto value chain while offering an easy and enjoyable car purchasing experience to our customers.

我们以汽车金融服务为切入点，深入布局下沉市场，搭建起覆盖全国近5万家经销商的渠道网络，跻身成为领先的汽车金融服务科技平台。在此坚实的基础上，我们积极向产业链上下游拓展，将业务触角延伸至汽车交易服务和汽车后市场领域，不断向服务好消费者和汽车出行大行业的目标大步迈进。

After originating our business in auto financing, we have also deepened our roots in the lower-tier markets, and today we have a network of nearly 50,000 registered dealers nationwide, making Cango a leading technology-based automotive transaction services platform in China. Building on this solid foundation, we are actively expanding to the upstream and downstream of the industry value chain, extending our reach to the car trading transactions and aftermarket services facilitation segments, pressing forward toward the goal of better serving customers and the auto industry as a whole.

灿国一直在为推动整个行业的发展蓄力，让购车简单愉悦成为消费者首选的购车服务平台是初心，更是我们新十年将无比坚定地为之奋斗的使命愿景。目前，我们的业务版图已涵盖汽车交易服务、汽车贷款促成服务和汽车后市场服务三大领域，通过打造一个服务闭环，连接经销商、主机场、消费者和行业其他参与者，并为之赋能。

We are always looking for ways to further advance the overall development of the industry, and we remain dedicated to our vision and mission, which is to make car purchases easy and enjoyable and become an auto service platform of choice for consumers. As of now, Cango has three main business lines: auto loan facilitation, car trading transactions, and aftermarket services facilitation. Through the development of a complete service ecosystem, we connect and empower dealers, OEMs, consumers, and other industry participants.

首先说一下汽车交易服务业务。第四季度，我们的车交易服务业务收入总额达到5.47亿元人民币，占比总收入近50%，已成为公司主营业务收入的重要增长引擎。且我们的汽车交易服务业务正具有正毛利。过去十年，在我们深入下沉市场、构建全国渠道网络的过程中，深刻感知到经销商在车源和供应链效率方面的痛点，以及主机场寻求新销售通路的需求。如今，灿国的渠道网络和地面能力已深入汽车流通毛细血管，有能力打造一个交易服务平台，将下沉汽车市场中的供给与需求有效对接。与此同时，新科技正引领着各个行业的快速迭代，我们所在的汽车出行领域，智能新能源汽车崭露头角，直营直销渐成趋势，也需要灿国这样一个拥有广泛下沉渠道网络且具备规模效应的高效服务平台，来协助其获取和运营下沉市场的流量。通过灿国的车交易服务平台，下沉市场汽车流通领域中的人找货、货找人正变得更简单、更高效。

About our car trading transactions business, in the fourth quarter, this business line generated revenue of RMB 547 million, accounting for about 50% of our total revenue. It has become an important growth driver. It is worth mentioning that our car trading transaction business has positive gross margins. In the past decade, when we were actively exploring lower-tier markets and building a nationwide dealership network, we recognized the difficulties of local dealers and the needs of OEMs looking to expand their sales network and channels. Today, with our strong foothold in the lower-tier markets and service capabilities in auto transactions, we have developed a transaction service platform that effectively connects supply and demand in the lower-tier markets. At the same time, new energy vehicles, in short, NEVs, have emerged as an inevitable future trend as technology leads the rapid transformation of all industries, including the auto industry.

NEV manufacturers, which usually adopt the direct operation and sales model, are actively seeking traffic in the lower-tier markets and professional traffic operation support. Cango's extensive dealership network in the lower-tier markets and efficient service platform puts us in the ideal position to meet their needs. Cango's car trading transactions platform has improved the efficiency and convenience of the car transactions by benefiting both car buyers and car dealers and OEMs.

过去几个季度，围绕车交易服务平台业务的打造，我们在基础能力建设方面取得了长足的进展。首先，在传统经销商网络基础上，通过经纪人模式进一步将客源做细，构建私域流量。第四季度，我们的经纪人模式在车交易服务场景下得到了很好的应用。截至季度末，我们在全国范围内已拥有7,000余位注册经纪人，并为其配置了315个支点经销商。传统经销商渠道叠加经纪人网络的不断拓展、加宽、加深，将极大助力我们进一步深化下沉市场的车交易服务和车后市场服务。其次，我们的物流和供应链运营能力也在不断提高。我们的自建库点叠加区域公司库点，使我们可以更好地解决下沉市场的物流效率问题，缩短物流半径。截至四季度末，我们已与多家基础设施服务商合作建立了约80个前置仓，合计容量共3万余个车位，覆盖全国73个地市，成为我们汽车交易布局中最重要的一环。最后，作为中国科技化汽车服务领域的领先者和引领者，灿国一直致力于大数据和技术创新为核心驱动力。我们搭建科技化的经销商管理系统，为网络中经销商提供涵盖车交易全流程的多层次一体化的引导和服务，赋能车商的同时，极大地提升我们自身的服务能力和效率。

On our car trading connections, I mean, on our car trading transactions platform, we have made solid progress in advancing our service capabilities in the past few quarters. First, in addition to our traditional dealership network, initiatives by our independent sales reps brought in private traffic flow to target more segmented customer groups and did a good job in the fourth quarter. By the end of the fourth quarter, we have had 315 sub-dealers and more than 7,000 independent sales reps across the country. The continuous expansion of our traditional dealership network, plus the private traffic generated by our independent sales reps, will help us deepen our car trading transactions and aftermarket services facilitation businesses in the lower-tier markets. Secondly, we have also greatly improved our logistics and supply chain capabilities. Our self-developed warehouses complement our local partners' warehouses, allowing us to solve the efficiency problem in the lower-tier markets.

By the end of the fourth quarter, we have developed approximately 80 warehouses together with several local infrastructure service providers, with a total capacity of more than 30,000 parking spaces covering 73 cities across the country. This has become an important part of our strategic development to grow our car trading transactions business. Lastly, as a pioneer and leader in China's technology-based auto service field, Cango has committed itself to big data and technological innovation as the core driving force. While we are building a technology-based dealership management system to provide multilevel integrated guidance and services for our dealers to cover the entire car transaction process, we also greatly improved our service capabilities and efficiency.

在新的一年里，我们将进一步着力提升交易服务能力，包括覆盖更广车型和打造更多元产品组合。同时，我们凭借灿国科技力持续赋能经销商，提升其交易能力，促进其品牌化，逐步构建适应下沉市场特点的高效的汽车交易模式。

In 2021, we will further strengthen our service capabilities, covering more car models and expanding our product offerings. Simultaneously, leveraging our technological know-how, we will continue empowering auto dealers by enhancing their transaction capabilities while promoting their branding, so as to develop an efficient and effective car transaction model suitable for the lower-tier markets.

此外，第四季度，作为我们主要业务板块的汽车助贷业务强劲反弹回升。随着我们与大型金融机构的深入合作，我们不断升级产品和客户体验，并逐步实现客群上移。第四季度，公司完成新增汽车贷款额108.2亿元，较去年同期上涨13%。汽车助贷业务收入4.0亿元，较去年同期上涨51.8%。重回增长轨道，截至四季度末，再贷余额累计达到435亿元。与此同时，资产质量持续向好。截至2020年12月31号，公司所有已完成并在存续期的汽车贷款的M1+预期率，由上季度末的1.11%进一步下降至0.98%。M3预期率由上季度末的0.53%下降至0.42%。在业务量增长的同时，我们保持了良好的利润率和盈利能力。

In the fourth quarter, our auto loan facilitation business rebounded strongly during the quarter. With in-depth cooperation with large financial institutions, we upgraded and launched advanced products for our target customers, resulting in improved customer service experience and customer base. In the fourth quarter, we facilitated RMB 10.82 billion financing transactions, up 13% year on year. Our automotive financing facilitation revenues were RMB 398.1 million, up 51.8% from the same period of last year, recovering to pre-pandemic levels and returning back to the growth track. As of December 31, 2020, the total outstanding balance of financing transactions facilitated by the company reached RMB 43.5 billion. About asset quality, as of December 31, 2020, the M1+ overdue ratio decreased to 0.98% from 1.11% as of September 30, 2020, and the M3+ overdue ratio decreased to 0.42% from 0.53% as of December 31, 2020.

In terms of our financial performance, our margins and profitability remain stable as business volumes grew.

最后，以保险促成为主的汽车后市场业务共计收入达到7,076万元人民币，继续形成对营业收入的驱动。我们也关注到四季度的车险费改给整个行业带来了一定的压力，预计会对公司未来保险业务推进产生潜在影响。我们正在积极地升级传统产品并探索新产品，以变化应对变化。同时，我们将进一步加大与大型保险公司的合作，推出更加多样化的产品组合以满足不同客群的需求。同时继续加强保险直销团队的建设，带动保险业务的持续增长。此外，我们也将以保险业务为抓手，撮合产业链上下游业务，继续开拓汽车维修服务、保养服务等更多元的后市场服务品种。

Finally, our aftermarket services facilitation revenues in the fourth quarter were RMB 70.76 million, strongly supporting total revenue growth. While the auto insurance premium reform in the fourth quarter put some pressure on the overall insurance industry and may potentially impact Cango's insurance business in 2021, as a response, we are actively upgrading our traditional offerings and exploring new products. Looking ahead, we will extend our cooperation with large insurance companies and introduce more diversified product offerings to meet the needs of different customer segments, while also expanding our key account sales team to drive the sustainable growth of our insurance business. In addition, backed by our insurance business, we will continuously help match the upstream and downstream businesses of the auto value chain and dig deep into aftermarket services such as auto repair and maintenance services.

渠道覆盖方面，截至四季度末，灿国已覆盖全国48,487家汽车经销商。在高端品牌拓展上，第四季度我们与一些经销商集团达成合作，高端品牌4S经销商的数量也持续增长。伴随着客群上移的趋势，接下来我们将进一步在高端品牌业务上布局，助力公司抢占更大的市场空间和份额。

In terms of our dealership network, by the end of the quarter, we have had a total of 48,487 registered dealers nationwide. During the quarter, we started to work with some dealer groups and further expanded four 4S dealers. With more customers pursuing high-end brands, we will further our efforts in this market segment and help Cango gain additional market share.

付诸必有回响，灿国长期坚持从消费者需求出发，带来差异化的车金融和车交易产品及服务。在第四季度斩获多个业内重磅奖项，其中包括连续第二年获得中国汽车流通协会颁发的汽车金融服务创新企业，以及连续第三年荣获中国汽车金引擎奖最佳汽车金融服务商。

Dedication and hard work are always recognized and rewarded. Cango always puts customers' needs first and offers differentiated auto financing products and services. In the fourth quarter, we won numerous important industry awards. Among them, for the second year in a row, Cango was awarded the Innovative Auto Finance Services Enterprises Award by China Automobile Dealers Association. For the third year in a row, Cango was awarded the Best Auto Finance Service Provider by the China Automobile Golden Engine Award.

展望新的一年，我们将继续以用户为中心，依托灿国在汽车金融服务领域的实在深耕，5万家汽车经销商的渠道网络和丰富的行业资源及经验，围绕汽车交易和消费者需求场景提供更丰富的产品及服务，致力让购车简单愉悦。新的一年蒸腾已开启，初心赤诚，行至必至，与各位共勉。

Going into 2021, we remain committed to our customer-centric value proposition. Relying on our extensive experience in auto financing services, a powerful network of nearly 50,000 dealers, and rich industry resources, we will continue to develop and provide a wide range of high-quality products and services centered around auto transactions and customer demand scenarios, and devote ourselves to making car purchases easy and enjoyable for customers. Our new journey has just begun, and I would like to conclude with the Chinese saying, "Where there is a will, there is a way.

接下来，有请我们的首席财务官张永毅来回顾一下公司在本季度的财务表现。

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

Speaker 3

Thanks, Jiayuan. Hello everyone, and welcome to our fourth quarter and the full year 2020 earnings call. Before I started to review our financials, please note that unless otherwise stated, all numbers are in RMB terms, and all percentage comparisons are on a year-over-year basis. Our continuous and steady progress across business fueled top-line expansion in the fourth quarter, with total revenues coming at RMB 1.1 billion, once again outperforming our previous guidance range. Notably, we saw a shift in our revenue streams during the quarter, as contributions from our car trading transactions increased to approximately 50% of total revenues. This business is becoming an important revenue contributor. Revenues from automotive financing facilitation and aftermarket service facilitation were RMB 398.1 million and RMB 70.8 million, respectively, in the fourth quarter. Now let's move on to our costs and expenses during the quarter.

Total operating costs and expenses in the fourth quarter of 2020 were RMB 899 million compared to RMB 320.8 million in the same period of 2019. The increase was mainly due to the related costs incurred by the car trading transaction business. Primarily as a result of the increase in revenues from car trading transaction sales and marketing expenses, general and administrative expenses, and research and development expenses, each decreased as a percentage of total revenue in the fourth quarter of 2020, compared to the same period of 2019. Cost of revenue in the fourth quarter of 2020 increased to RMB 723.8 million from RMB 157.2 million in the same period of 2019. As a percentage of total revenue, cost of revenue in the fourth quarter was 66% compared to 35.9% in the same period of 2019, and the change was primarily due to an increase in the amount of car trading transactions.

For automotive financing facilitation and aftermarket service facilitation, cost of revenue as a percentage of relevant revenues was around 30% in the fourth quarter of 2020. Sales and marketing expenses in the fourth quarter of 2020 were RMB 65.8 million compared to RMB 55.2 million in the same period of 2019. As a percentage of total revenue, sales and marketing expenses in the fourth quarter of 2020 were 6% compared to 12.6% in the same period of 2019. General and administrative expenses in the fourth quarter of 2020 were RMB 91.1 million compared to RMB 120.1 million in the same period of 2019. As a percentage of total revenue, general and administrative expenses in the fourth quarter of 2020 were 8.2% compared to 15.1% in the same period of 2019. Research and development expenses in the fourth quarter of 2020 were RMB 23 million compared to RMB 18.6 million in the same period of 2019.

As a percentage of total revenue, research and development expenses in the fourth quarter of 2020 were 2.1% compared to 4.2% in the same period of 2019. Net gain on risk assurance liabilities in the fourth quarter of 2020 was RMB 18.8 million compared to a net loss of RMB 6.5 million in the same period of 2019. Net gain on risk assurance liabilities was mainly due to a sequential decrease in default rate since the third quarter of 2020. We recorded income from operations of RMB 198.4 million in the fourth quarter of 2020 compared to RMB 117.7 million in the same period of 2019. Net income in the fourth quarter of 2020 was RMB 1,568.5 million. Non-GAAP adjusted net income in the fourth quarter of 2020 was RMB 1,588 million.

On a per-share basis, diluted net income per ADS in the fourth quarter of 2020 was RMB 10.4, and diluted non-GAAP adjusted net income per ADS in the same period was RMB 10.53. For the full year of 2020, our total net revenues increased by 42.5% to RMB 2.1 billion. Total operating costs and expenses were RMB 1.7 billion. Net income was RMB 3.4 billion, and non-GAAP adjusted net income was RMB 3.5 billion. Diluted net income per ADS and diluted non-GAAP adjusted net income per ADS was RMB 22.17 and RMB 22.69, respectively, in 2020. Moving on to our balance sheet, as of December 31, 2020, we had cash and cash equivalents of RMB 1,426.9 million compared to RMB 1,423.3 million as of September 30, 2020. As of December 31, 2020, the company had a short-term investment of RMB 4.3 billion compared to RMB 1.1 billion as of September 30, 2020.

The increase was mainly due to the change in fair value of the company's investment in Li Auto, and the company's reclassification of such investment from long-term investment to short-term investment. Looking ahead to the first quarter of 2021, we expect our total revenues to be between RMB 1,000 million and RMB 1,050 million. Please note that this forecast reflects our current and preliminary view on the market and operational conditions, which are subject to change. This concludes our prepared remarks. Operator, we are now ready to take questions.

Speaker 4

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Shelley Wang from Morgan Stanley. Please go ahead.

Speaker 2

各位管理层好，我是摩根士丹利的Shelley。首先恭喜，就是又一个非常强劲的业绩。那我这边有三个问题想请教一下。第一个是关于我们新的这个车交易业务，想请问一下，就管理层，我们2021年对车交易业务的展望大概是怎么样？就比如说预期我们能做几万台。那这个业务模式的话，就相较于经销商问主机场直接拿车，我们这些车交易服务就是给经销商能提供哪些额外的价值？然后第二个也是想问一下，我们这个新的业务就是代理经纪人模式，主要是这一块的话怎么做风险管控，因为他们不算我们的员工。就比如说去核实那些，比如说大家的贷款能力在，然后贷的款是不是真的是用来买车，在这些方面的话我们怎么去做风险管控？然后第三个的话可能是偏宏观一点，也想请教一下管理层的看法，就是感觉今年不知道会不会就整个信贷会稍微偏紧一点。那这样的话，就是目前来看对我们这个汽车贷款的需求有没有影响，就到目前的情况来看。谢谢。

First of all, congratulations to the management on yet another year of strong performance. I'm Shelley Wang from Morgan Stanley. I have three questions. The first question is on the car trading transactions business line. What is your outlook for the business in 2021? For example, how many cars do you expect to complete facilitation in 2021? Also, some dealers, they may be able to get cars directly from Li Auto EMS. What kind of value do you generate with your car trading transaction service to the dealers? My second question is about the independent sales rep model. How do you manage risks for this model? For example, how do you verify the ability to repay the loans by the customers, and how do you make sure that the loans are indeed used to buy cars? My third question is more on the macroeconomy.

Do you see the credit supply tightening in the new year, and how will that, I mean, based on your observation, how will that impact the demand for auto loans? Do you already see less demand for auto loans because of a tightening credit supply?

Speaker 3

好，谢谢 Shelley。我来回答你的三个问题。就第一个问题关于车交易，今年碳股预期2021年全年的预期是4.5万台到5万台，前提是在有正向现金流的正向利润率的前提下，我们持这个目标。然后因为我们面对的是下层市场的非授权经销商，一般来说他们没有渠道向主机场直接获取车源，过往他们的车源都来自于贸易商或者是大型4S店。因此这些下层市场的非授权经销商痛点就包括车源缺乏稳定性和真实性、拿车价格无竞争力，以及供应链缺乏效率。所以这是他们的痛点。那我们碳股的价值就在于通过极单集产向主机场获取车源，同时提供配套供应链服务，避免了经销商在获取车源过程中的较多环节。这不仅提高了各方的效率，降低了经销商成本，更带动了经销商的交易能力和盈利能力。未来我们会更进一步整合供应链，更好地赋能下级市场的非授权经销商。这是第一个车交易的问题。

Okay, Shelley, I will answer your three questions. First of all, about the outlook for our car trading transaction in 2021. We expect that in 2021, for the whole year, we will facilitate 45,000-50,000 car trading transactions. About the second part of your first question, that is what kind of value do we offer to the dealers? We mainly target the non-authorized dealers in the lower-tier cities. For these types of dealers, they don't really have very solid supply of cars from the OEMs because they used to get their cars mostly from the car traders and large 4S stores. For them, they have quite a lot of challenges in ensuring the supply of their cars.

For example, the supply of cars is not very steady and reliable, and sometimes it's difficult for them to authenticate the source of cars, and their prices are not very competitive in the market, and the whole supply chain is inefficient. Targeting these difficulties, we offer various values to the lower-tier city non-authorized dealers because we centralize the sourcing of cars from OEMs, and we also provide supplementary and complementary supply chain services to these dealers. Our services are able to help the dealers to streamline the whole process of car sourcing. This actually not only helps the dealers, but also is very valuable to different parties in the supply chain. It reduces the cost of operation for the dealers and also improves their ability to complete deals as well as their profitability.

In the future, we will continue to improve our logistics service capability so as to better empower the dealer partners.

第二个问题关于经纪人模式下的风险控制。我们的经纪人模式在从事后市场和车交易服务的业务时，我们的经纪人模式主要做的是流量运营，这方面业务没有风险敞口。那对于经纪人从事的车金融业务，一，我们是严控每一个经纪人的上限资格。他的流程是从推荐到审核，再到实地走访，并配置上报的权限。然后所有个人经纪人的金融的车源都是由公司来提供或者是撮合，以保证交易的真实性。目前经纪人模式下的风控标准和进见都源于我们的2S业务，也就是我们下层市场的汽车金融业务。那现在一段时间的经纪人模式下的代后质量接近于平均水平。

My second question with control for the independent sales rep model. For the aftermarket services business line and car trading transaction business line, our independent sales reps, they are mostly helping the company to generate and operate traffic. There is not much risk exposure to the company on these two business lines. About auto loan transaction business line, we are strictly managing and monitoring the qualification as well as the eligibility of each and every sales rep. We are looking to their recommendation, and we also review their authorization levels as well as how they conduct in-person visits. We have a very strict authorization level setup for all these independent sales reps. In addition, we control the supply of cars to the independent sales reps in terms of the auto loan facilitation business.

Because we have strict control over the source of the cars, we are able to ensure the authenticity of the transactions. Thirdly, we are also adopting more stringent risk control measures on these independent sales reps than for our lower-tier city fine auto loan facilitation business. So far, if you look at the loan service management, in fact, the quality of the loan service management is close to the average level of the company.

第三个问题，对于宏观性信贷政策对我们业务的影响。这个问题一从政策层面来看，扩大线箱消费，稳定增加汽车等大众消费被写入了2020年国务院政府工作报告。所以从宏观政策上来说，对我们的业务是个利好。而且从现阶段来看，信贷收紧并没有对我们产生直接的影响。车市的景气度对我们的基础业务会是一个更直接的影响。

I'll answer your third question, the macro credit policies impact on our business. If you look at the central government policies, for example, the 2021 State Council work report, it has been clearly proposed that measures will be taken to drive consumption in the rural areas of China and in the counties and smaller cities of China, as well as to increase the supply of cars, as well as to increase the demand for cars steadily. Definitely, the macro policies are in favor of companies like Cango. Also, so far, based on observation, the tightening credit supply has not really directly impacted on our business. Instead, the performance of the car market as a whole is a more direct factor impacting on our fundamental business.

我的回答完毕了。

That's all from me. Thank you.

Speaker 2

非常清楚，谢谢。

Speaker 4

Thank you. Your next question comes from Derek Su from Goldman Sachs. Please go ahead.

Speaker 1

嗨，恭喜你好。我是来自高盛的 Derek。首先，公司获得了四季度这么强劲的一个增长。其实我想了解的是公司目前和资金方的一个合作情况，就是未来在利率、资金成本以及利润率方面有怎样的一个展望。谢谢。

Thank you. I'm Derek Su from Goldman Sachs. Congratulations for your strong performance in the fourth quarter. My question is about your partnership with the funding partners. What is your outlook for TIC rate and what is your outlook for interest rate, the cost of funding, etc.?

Speaker 3

这个问题由我们的 CFO Michael Zhang 来回答好吗？

I will invite Michael Zhang, our CFO, to answer this question.

Speaker 1

谢谢。首先谢谢你的问题。从我们的目前的情况看，因为我们从我们的整个的一个策略来讲的话，我们实际上一直以来就在不断地扩大我们的资金合作方的这样的一个范围。同时的话，也会接入更多的规模更大，然后更优质的这样一些金融资源。所以从我们的目前的一个状态看，我们可以明显地看到说我们的整体的从资金端的价格保持着一个稳中趋降的这样的一个趋势。这一方面的话，使得我们可以更好地打造在对客，在整个的一个获客端的话，能够有一个更有竞争力的这样的一个产品。同时的话，在这个基础上，我们也可以保持我们的一个稳定的这样的一个 TIC rate，就是一个我们的一个服务的一个费率。我们理解是说在未来的这个一个预期的过程中的话，我们认为这样的一个状态应该可以延续。谢谢。

Thank you, Derek, for your question. Our strategy has always been to expanding the range of funding partners we have. We want to work with more and larger and higher quality funding partners. We have been working very hard to keep the cost of our fund, we have been working very hard to keep the cost of our funding steady and even decrease. With this, we will be able to offer more competitive products to our customers, thereby helping our customer acquisition strategy. We have been able to keep our TIC rate steady and stable. I mean, you probably understand the TIC rate is the fee paid by the bank to us. For the future, we believe we will be able to keep our cost of funding steady and also our TIC rate steady as well.

好的，非常清楚，谢谢。

Thank you.

Speaker 4

Thank you. We have no further questions at this time. I will now hand the call back to management for closing remarks.

Speaker 3

谢谢大家来参加我们的四季度的财报电话会。非常感谢大家。

Thank you for joining us on this earnings call. Thank you all for your participation and your support. That concludes today's earnings call. Thank you.