Good morning, and good evening, everyone. Welcome to Cango Inc.'s Third Quarter 2024 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 Ms. Ruiyan, Financial Director of Cango. Following management's prepared remarks, we will conduct a Q&A session. Before I 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. With that said, I am now turning the call to Mr. Jiayuan Lin, CEO of Cango. Please go ahead.

Hello, everyone, and welcome to Cango's third quarter 2024 earnings call. In the third quarter of 2024, Cango's overall business performance remained stable, highlighted by total revenue of RMB26.95 million, operating profit of RMB35.24 million, and a net profit of RMB67.88 million. These solid results were primarily driven by our implementation of stricter cost control and risk management strategies, which significantly improved operational efficiency. For postal management, we reinforced monitoring mechanisms and risk assessments effectively maintaining a low nonperforming loan ratio and ensuring asset quality and stability. As of September 30, our total outstanding loan balance was approximately RMB4.8 billion with M1+ at 3.17% and M3+ at 1.76%. We also reduced our credit risk exposure not fully covered by bad debt allowance for risk assurance liabilities to RMB1.7 billion, and the company's total cash, cash equivalents, and short-term investments amounted to approximately RMB3.8 billion, an increase of RMB89.27 million compared to the end of the previous quarter. In terms of business development, we prioritize driving growth in the Cango U-Car app and our overseas used car operations. By the end of the third quarter, the Cango U-Car app had accumulated a total of 280,000 page views, an increase of 21% from last quarter. We strengthened Cango's competitive advantages in vehicle inventory during the quarter by establishing strategic partnerships with numerous used car marketplaces, enabling real-time updates of vehicle listings and ensuring a diverse and abundant supply of vehicles for Cango U-Car app. Meanwhile, we introduced a rapid vehicle inspection and listing service in close collaboration with professional third-party inspection teams. We conduct thorough background checks and comprehensive vehicle condition assessments for each vehicle and provide buyers with detailed vehicle history reports and inspection data, enhancing transparency in transactions. Additionally, our nationwide logistics network offers buyers a variety of delivery and transport options to better meet diverse customer needs. Our community operations team fosters user engagement through a range of online and offline activities, including exclusive online auctions, on-site visits, and members-only discounts. We also continuously collect and analyze user feedback to refine our service processes, ensuring we consistently improve customer satisfaction. On our used car service, we continued to make significant progress this quarter. Our international used car platform, AutoCango.com, has accumulated over 370,000 page views and nearly 60,000 registered users since its launch in March 2024. The platform now offers more than 100,000 used car SKUs covering over 65,000 different models. To better serve our customers and enhance our brand image, we're continuously optimizing AutoCango.com's content and improving the overall user experience. AutoCango.com's sitemap now posts over 500,000 pages thanks to consistent content updates and technological improvements. This growth reflects our commitment to content development and drives increased user engagement with the information we provide. Our content development efforts have also driven positive changes in search engine optimization; AutoCango.com's visibility in search engine results pages has exceeded 2.41 million impressions and is expected to surpass 4 million by the end of this year. This means that an increasing number of people can find and access our website through search engines, boosting our brand exposure. As we continue to expand into overseas markets, we have already received inquiries from over 130 countries and regions regarding vehicle purchases. Looking ahead, we will continue to focus on enhancing AutoCango.com's quality and functionality to meet the diverse needs of users in different regions. At the same time, we will strengthen our data analysis capabilities to gain a more accurate understanding of the characteristics of our target market and user demographics. Building on this foundation, we will develop data-based scientific marketing strategies aimed at achieving more balanced global growth. In addition to advancing our existing business, we are also actively pursuing forward-looking strategic investment opportunities on a global scale. We will focus on high-quality projects that complement our core competencies of brand technological innovation by establishing an international cooperation network, strengthening communication with leading global companies, and actively participating in the collaborative development of overseas markets or overseas projects. We aim to showcase our company's strength and vision on a broader stage. Now I would like to hand the call over to our Financial Director, Ruiyan, who will share our financial performance for this quarter.

Thanks, Mr. Lin. Hello, everyone. I am Ruiyan, Financial Director of Cango, and welcome to our third quarter 2024 earnings call. Before I 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. Total revenues in the third quarter of 2024 were RMB27.0 million compared with RMB353.6 million in the same period of 2023. Guarantee income, which represented the fee income earned on the noncontingent aspect of a guarantee, was RMB14.4 million in the third quarter of 2024. That was represented separately from the contingent effect of a guarantee pursuant to the adoption of ASC 326 since January 1, 2023. Now let's move on to our cost and expenses during the quarter. Cost of revenue in the third quarter decreased to RMB23.3 million from RMB304.6 million in the same period of 2023. As a percentage of total revenues, cost of revenue in the third quarter of 2024 was 86.3% compared with 86.1% in the same period of 2023. Sales and marketing expenses in the third quarter decreased to RMB3.4 million from RMB9.9 million in the same period of 2023. General and administrative expenses in the third quarter were RMB45.2 million compared with RMB34.7 million in the same period of 2023. Research and development expenses in the third quarter decreased to RMB1.4 million from RMB7.0 million in the same period of 2023. The net gain on contingent risk assurance liabilities in the third quarter was RMB7.1 million compared with a net loss of RMB3.5 million in the same period of 2023. Net recovery on provision for credit losses in the third quarter of 2024 was RMB74.4 million compared with RMB66.9 million in the same period of 2023. We recorded RMB35.2 million in income from operations in the third quarter of 2024 compared with a loss of RMB87.8 million in the same period of 2023. Net income in the third quarter of 2024 was RMB67.9 million. Non-GAAP adjusted net income in the third quarter of 2024 was RMB71.3 million. On a per share basis, basic and diluted net income per ADS in the third quarter of 2024 were 0.66% and 0.60%, respectively. And a non-GAAP adjusted basic and diluted net income per ADS in the same period were RMB0.69 and 0.53 respectively. Moving on to our balance sheet. As of September 30, 2024, the company had cash and cash equivalent of RMB691.8 million compared with RMB949.5 million as of June 30, 2024. As of September 30, 2024, the company had short-term investments of RMB3.1 billion compared with RMB2.7 billion as of June 30, 2024. Looking ahead to the fourth quarter of 2024, we are now predicting our total revenues to be between RMB15 million and RMB17.5 million. Please note that this forecast reflects our current and preliminary views on market and operational conditions, which are subject to change. This concludes our prepared remarks. Operator, we are now ready to take questions.

Thank you very much. We'll now start the question-and-answer session. The first question comes from Emerson Zhao with Goldman Sachs. Please go ahead.

Thank you to the management for addressing my questions. I have two inquiries. The first is regarding the moderate recovery of the Chinese economy; how does the company perceive the potential effects of the future macroeconomic environment on business? The second question is, what specific measures has the company implemented to ensure the safety and reliability of its used vehicles?

Thank you, Emerson, for your questions. Regarding your first question about China's moderate economic recovery, we believe it will have a positive impact on our business. Improvements in the macroeconomic environment are helping to boost consumer confidence and purchasing power, which in turn stimulates demand growth in the automotive market. Particularly in the used car market, as economic conditions improve, more individuals may feel encouraged to upgrade their vehicles or buy a car for the first time, leading to an increase in used car transactions. We will continue to monitor macroeconomic indicators and market dynamics to respond quickly to any potential economic changes. We believe that by consistently enhancing operational efficiency, strengthening customer experience, and leveraging our digital capabilities, the company can lessen the potential impact of macroeconomic fluctuations on our business. Furthermore, we are actively exploring new growth opportunities and value-added services to adapt to and meet the market's evolving needs. On your second question about ensuring the safety and reliability of used costs, we work with reputable dealers and regularly assess our partners to ensure they provide high-quality vehicles that meet our standards. Each vehicle goes through over 100 professional technical inspections before being listed, covering aspects such as exterior, interior, and mechanical performance. Detailed inspection reports are also provided for every vehicle, including key information such as mileage and condition descriptions for buyers' consideration. We have also established a dedicated team to collect feedback, respond promptly to any complaints, and continuously improve processes to enhance overall service quality. Thank you; that's all from my side.

Thank you. The next question comes from Pingyue Wu with CITIC Securities. Please go ahead.

Thank you. I have two questions for the management. First, how does the company plan to further integrate with overseas markets, and what are the plans for optimizing AutoCango's features and services? My second question is about risk control and management. What measures has Cango implemented regarding cost control and risk management strategies to enhance operational efficiency and strengthen your financial structure, and how will these measures continue to influence the company's future performance?

Thank you for your questions. In response to your first question, we are currently conducting extensive research on international markets and partnering with local organizations to obtain more localized support and resources. For instance, we have analyzed the customs clearance policies of various African nations and formed partnerships with import customs agencies in four countries so far. Our aim is to gradually build a business agency framework in Africa to offer services to prospective clients in important areas like customs clearance and logistics. Furthermore, we intend to actively promote our brand through social media and other channels to improve our international presence. We will also provide multilingual support to guarantee that users around the globe can easily access our services. By early 2025, AutoCango.com will be accessible in 15 languages, which will enhance user experience and broaden our market reach. Regarding functionality improvements, we will introduce a direct sourcing feature for the Chinese used car market on AutoCango.com. We are also enabling online inquiries so that international users can easily get information about the condition and prices of used vehicles, thus enhancing their experience. Lastly, we are committed to cultivating talent with an international outlook and cross-cultural communication skills to bolster our operational capabilities in foreign markets. We plan to recruit international students in Shanghai for internship programs, offering them valuable hands-on experience while bringing fresh perspectives to our team, including global insights. Our goal is to create a diverse and globally competitive team that can better serve clients from various cultural backgrounds and promote the company's globalization efforts. Regarding your second question on cost control and risk management strategies, first on cost control, we have streamlined our business processes, automated approval workflows, and implemented strict budget management systems to ensure responsible spending. We have also adopted cloud computing services to replace outdated IT infrastructure, significantly lowering hardware investment and maintenance costs. Additionally, by establishing long-term relationships with top suppliers, we have secured better pricing terms. We regularly assess supplier performance and discontinue underperforming vendors to lower procurement costs. Moreover, we have strategically optimized workforce allocation and upgraded our training and development programs to enhance the team's expertise and service delivery. Concerning risk management, we have implemented a strong internal control system that clearly defines risk management responsibilities at different levels and improves internal audits to quickly identify and address potential issues. We also keep a close eye on changes in macroeconomic conditions and their effects on our business, ensuring compliance with relevant laws and regulations. We monitor policy and regulatory developments closely and adjust our corporate strategy as needed. The ongoing positive effects of these measures are evident in our financial statements; improvements in the balance sheet, enhanced cash flow, and better profit performance have all established a strong foundation for our strategic development. That is all from my side.

Thank you. That concludes the question-and-answer session. Thank you once again for joining Cango's third quarter 2024 earnings conference call today. Have a great day.

And that closes today's earnings call. Thank you all for joining us.