Good morning and good evening everyone. Welcome to Cango Inc. Fourth Quarter and Full Year 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 Mr. Yongyi 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 earnings release, which also applies to the conference call today, as management will be making forward-looking statements. With that said, I am now turning the call over to Mr. Jiayuan Lin, CEO of Cango. Please go ahead, sir.

Hello, everyone, and welcome to Cango's fourth quarter and full year 2024 earnings call. 2024 was a milestone year for Cango, marking another pivotal transformation and growth phase for the company while ushering in new development opportunities. Since our inception, Cango has navigated multiple challenges, including macroeconomic downturns, the impact of the COVID-19 pandemic, and profound shifts across the automotive industry. Despite the ever-evolving external landscape, we have remained committed to developing key market insights and agile business strategies, ensuring our continued adaptability and resilience. Since 2021, we have systematically reformulated and refined our business structure, placing a strong emphasis on loan collection and personal management for outstanding loans while strategically transitioning our core business from auto financing. Through a series of effective measures, we have mitigated risk within our financing facilitation business, maintaining our competitive edge amid a complex and fast-evolving market landscape. As of the end of 2024, our outstanding loan balance has decreased from a peak of over RMB40 billion to approximately RMB3.9 billion, with M1 plus and M3 plus ratios at 3.24% and 1.78% respectively. At the same time, we have reduced our credit risk exposure not covered by full bad debt allowance or full risk assurance liabilities to RMB1.08 billion. Our cash, cash equivalents, and short-term investments amount to approximately RMB2.52 billion, providing ample liquidity to support the company's sustainable growth and strategic initiatives. Meanwhile, we observed that the approval of Bitcoin ETF in the United States at the beginning of 2024 marked a significant turning point for the cryptocurrency industry. In response, we swiftly initiated the strategic expansion into the cryptocurrency sector. Given this field's immense growth potential, we have further refined our strategic direction, focusing on energy plus computing power as the core of our future development strategy. In November 2024, we made a critical move in our expansion in the cryptocurrency mining sector. On November 6, Cango announced our acquisition of Onrack Bitcoin mining machines with an aggregate hash rate of 50 EH for a total purchase price of $400 million USD. By November 15, we had taken delivery of 32 EH of mining power, massively boosting our effective computing power and making us the third-largest Bitcoin miner globally. In November and December 2024, we successfully mined 363.9 and 569.9 Bitcoins with effective computing powers of 29.8 EH and 30.4 EH respectively. During these two months, our mining machines maintained an average operating hash rate of 93% and 95%, respectively, demonstrating robust operational performance. As of December 2024, our total Bitcoin holdings were 933.8. Driven by the Bitcoin mining business, Cango recorded total net revenue of RMB670 million in the fourth quarter of 2024, representing a year-on-year surge of over 400%. Net income for the fourth quarter was RMB55.89 million. For the full year of 2024, the company achieved total revenue of RMB800 million with a net profit of RMB300 million. While actively pursuing new cryptocurrency ventures, we are also making steady progress in the development of our traditional automotive business. Through a combination of online and offline service models, we provide customers with a convenient and efficient used car trading experience. In addition, Cango's used car export platform is gradually expanding its presence in international markets. Despite facing certain market challenges, we are confident that by continuously optimizing our supply chain management and enhancing service quality, we will strengthen our brand influence in overseas markets and lay a solid foundation for future expansion. Looking ahead, cryptocurrency mining will be a key strategic focus for our business expansion. With the dual drivers of increasing regulatory oversight and technological updates or upgrades, the industry is poised to sustain its structural growth. Cango intends to deepen our engagement in three key areas: steadily expanding computing power to reinforce our competitive edge, optimizing asset operation efficiencies through intelligent management systems, and broadening our value chain by exploring energy-optimized, scalable, and sustainable integrated industry ecosystems. In response to crypto industry fluctuations, we have established a comprehensive market monitoring protocol and a robust policy analysis mechanism to enable agile adjustments to our operational strategies. By implementing a stringent risk control framework and adaptive resource allocation, we can effectively navigate regulatory shifts and market risks while capitalizing on opportunities driven by technological innovation. This approach ensures sustained growth momentum for Cango's continued expansion in the cryptocurrency sector. We would like to take this opportunity to express our gratitude for your continued support and trust. Now I would like to hand over to our CFO, Yongyi Zhang, to share our financial insights for the fourth quarter and full year of 2024.

Thanks, Jiayuan. Hello, everyone, and welcome to our fourth quarter and full year 2024 earnings call. Before I start 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. Total revenue in the fourth quarter of 2024 was RMB668 million compared with RMB130.2 million in the same period of 2023. The significant year-over-year increase was primarily driven by the new crypto mining business launched in November 2024. Revenue from the Bitcoin mining business in the fourth quarter of 2024 was RMB653 million, with a total of 933.8 Bitcoins mined and held as of the end of 2024. Revenue from automotive trading-related income in the fourth quarter of 2024 was RMB15 million compared with RMB130.2 million in the same period of 2023. Now let's move on to our cost and expenses during the quarter. Total operating costs and expenses in the fourth quarter of 2024 were RMB645.5 million compared with RMB159.1 million in the same period of 2023. Cost of revenue in the fourth quarter of 2024 increased to RMB550.5 million from RMB110.9 million in the same period of 2023. The year-over-year increase was primarily driven by the cost of the new crypto mining business. As a percentage of total revenues, the cost of revenue in the fourth quarter of 2024 was 82.4% compared with 85.1% in the same period of 2023. Sales and marketing expenses in the fourth quarter of 2024 decreased to RMB2.2 million from RMB4.4 million in the same period of 2023. As a percentage of total revenues, sales and marketing expenses in the fourth quarter of 2024 were 0.3% compared with 3.4% in the same period of 2023. General and administrative expenses in the fourth quarter of 2024 increased to RMB127.9 million from RMB45.6 million in the same period of 2023. As a percentage of total revenues, general and administrative expenses in the fourth quarter of 2024 were 19.1%, compared with 35% in the same period of 2023. Research and development expenses in the fourth quarter of 2024 decreased to RMB1.3 million from RMB7.3 million in the same period of 2023. As a percentage of total revenues, research and development expenses in the fourth quarter of 2024 were 0.2% compared with 5.6% in the same period of 2023. Net loss on contingent risk assurance liability in the fourth quarter of 2024 was RMB4.6 million compared with RMB22.2 million in the same period of 2023. Net recovery on provision for credit losses in the fourth quarter of 2024 was RMB66.1 million compared with RMB31.2 million in the same period of 2023. We recorded RMB22.5 million in income from operations in the fourth quarter of 2024, compared with a loss from operations of RMB28.9 million in the same period of 2023. Net income in the fourth quarter of 2024 was RMB55.9 million compared with a net loss of RMB103.8 million in the same period of 2023. Non-GAAP adjusted net income in the fourth quarter of 2024 was RMB59.2 million compared with a non-GAAP adjusted net loss of RMB99.2 million in the same period of 2023. On a per-share basis, basic and diluted net income per ADS in the fourth quarter of 2024 were RMB0.54 and RMB0.48 respectively, and non-GAAP adjusted basic and diluted net income per ADS in the same period were RMB0.57 and RMB0.51 respectively. For the full year of 2024, our total revenues were RMB804.5 million. Revenues from the Bitcoin mining business were RMB653 million, with a total of 933.8 Bitcoins mined and held as of the end of 2024. Revenues from automotive trading-related income were RMB151.5 million. Total operating costs and expenses were RMB625.6 million. Net income was RMB299.8 million, and non-GAAP adjusted net income was RMB316.9 million. Basic and diluted net income per ADS was RMB2.88 and RMB2.57, respectively. Non-GAAP adjusted basic and diluted net income per ADS was RMB3.04 and RMB2.72 respectively. Moving on to our balance sheet. As of December 31, 2024, the company had cash and cash equivalents of RMB1.3 billion compared with RMB691.8 million as of September 30, 2024. As of December 31, 2024, the company had short-term investments of RMB1.2 billion compared with RMB3.1 billion as of September 30, 2024. Looking ahead to the first quarter of 2025, as part of our continued commitment to growth and scaling our capabilities, we are targeting a substantial increase in our hash rate over the coming months. We are on track to grow our deployed hash rate to approximately 50 EH before the end of this quarter. This increase is expected to be driven by the closing of our share-settled acquisition of Bitcoin mining assets, positioning us to strengthen our competitive advantage and increase operational efficiency. This concludes our prepared remarks. Operator, we are now ready to take questions.

Thank you. Please press star then two. We'll pause for just a moment to assemble our roster. And today's first question comes from Pingyue Wu with CITIC Securities. Please go ahead.

Hey, Jiayuan Lin. The first question is, what are the company's expectations for future growth? And my second question is, what's the company's strategic direction? Will we continue to do automotive business after that transformation? Thank you.

Thank you for your questions. On your first question on our expectation for future growth, well, first of all, on Bitcoin mining, let's use our 32 EH cash-settled hash rates as a basis for a conservative calculation. Based on this basis, we forecast an annual production of around 6,000 Bitcoins. We are in the final stage of a share-based transaction to acquire an additional 18 EH of hash rate. So upon completion and delivery, our total computing power will reach 50 EH, significantly increasing our projected annual Bitcoin production. In the first half of 2025, we will prioritize the integration and optimization of our existing hash rate to ensure maximum efficiency. In the second half, we will pursue the hash rate expansion strategy, actively seeking valuable assets to increase our overall capacity. On traditional auto trading business, we expect to escrow 1,500 used cars in 2025, with a total value of $15 million USD. On your second question about strategic direction, our primary focus is on expanding our mining operations and maintaining an industry-leading position in computing power. This is not just about numbers or rankings. More importantly, we believe the economies of scale will help create significant opportunities for business growth, enhance our ability to attract top-tier talents, and strengthen our market competitiveness and industry standing. While expanding our mining operations, we will also optimize our existing facilities to maximize both efficiency and profitability. We remain committed to investing in and actively exploring new opportunities along the value chain as well as sourcing sustainable lower-cost energy solutions. Additionally, we will continue to hold Bitcoins to further optimize our financial model. Meanwhile, we will continue to drive progress in our automotive-related business, especially used car exports, aiming to become a leading gateway for China's used car exports. That's all from me. Thank you.

Thank you. And our next question comes from Emerson Zhao with Goldman Sachs. Please go ahead.

Thank you, management, for taking my question. I have three questions. So my first question is on why did you decide on going into the Bitcoin mining or cryptocurrency mining industry? Could you give us more color on the reasons? And the second question is, will your Bitcoin transactions be under regulation? And my third question is, does the company have any plan to sell your Bitcoin holdings?

Thank you for your questions. I will take all of your three questions together. So why did we decide to go into this industry? Well, we entered the Bitcoin mining sector based on our positive outlook on Bitcoin's future potential. Over the past few years, we have been proactively exploring strategic opportunities for business transformation. Since 2021, we have steadily scaled back our loan facilitation business and systematically exited this sector, which substantially boosted our liquidity. As we researched and got involved in energy-related projects such as PV power stations and new energy storage systems, we identified Bitcoin mining as an effective solution for balancing grid loads and utilizing surplus electricity, especially amidst the global surge in computing power demand driven by advancements in artificial intelligence. So we decided to seize the opportunity and acquire Bitmain Onrack mining machines in November 2024, which gave us industry-leading computing power capacity and quickly established our strong presence in the sector. About our transaction regulation, the $400 million transaction was conducted entirely offshore and is not subject to regulation by Chinese authorities. Throughout the process, we have maintained close engagement with regulators. Also, about our future plan for our Bitcoin holdings, given our optimistic outlook on the future of Bitcoin and cryptocurrency, our strategy for the foreseeable future is to mine and hold. This will also help optimize our financial model. However, we remain open to adjusting our holdings based on market conditions to enhance revenue and manage leverage.

Thank you. And our next question comes from Lin Ching with Meng Ching Securities. Please go ahead.

Thank you, management, for taking my questions. I have several questions. My first question is that as a participant in this new industry, what is your expectation for Bitcoin prices? And also, could you give us more color on your strategy for your Bitcoin mining business? My second question is, what do you see as the competitive edges of Cango in Bitcoin mining, and do you see others joining the drive to mine Bitcoins in the future? And my next question is about your mining rig maintenance and also mining farm management. So how do you do that, and what's your plan for the future?

Thank you for your questions. Let me answer your questions one by one. For your first question, we anticipate that Bitcoin may trade between $90,000 to $120,000 in 2025, driven by factors such as increased institutional adoption, regulatory approvals, and strategic reserves. However, Bitcoin's future price is naturally subject to inherent volatility and uncertainty. We have secured industry-leading computing power capacity through the two Bitcoin mining machine acquisitions we've announced. As such, we've already established a strong foothold in the sector and a solid foundation for future expansion up and down the digital economy value chain. On your second question, Cango has been a prominent player in the industry for many years, boasting strong expertise and a strong talent pool. Since 2021, we have comprehensively reevaluated our business model and began restructuring to capitalize on new strategic growth opportunities. Since then, our increasing involvement in energy-related projects such as PV power stations and new energy storage systems has become a key part of our evolution. As AI advancements drove surging global demand for computing power, we gradually refined our transformation strategy to focus on energy plus computing power. We have conducted in-depth research into digital currencies and closely examined projects tied to energy and computing power. This gave us a solid understanding of the industry and strengthened our confidence in pursuing larger-scale transactions. Of course, as the regulatory landscape and market conditions change, we are seeing an increasing number of companies exploring growth opportunities in the crypto mining sector. However, the crypto industry presents high barriers to entry, including the need for substantial capital investment and comprehensive operational readiness. These are crucial factors that any potential new player must carefully evaluate. On your third question, we currently manage and operate our mining rigs in partnership with Bitmain. Our overall operations and machine performance are solid, with both average operating hash rate and coin production at a highly competitive level within the industry. Moving forward, as our computing capacity continues to expand, we plan to gradually build our in-house operational capabilities and establish a dedicated operations team.

Thank you. And our next question comes from Sean Tung with Guo Chiang Securities. Please go ahead.

Thank you. I have a question on the 2025 hash rate target. Could you share with us what is your hash rate target for 2025? And what are the current energy efficiency and electricity cost figures? What are the company's plans for optimizing these?

Thank you for the question. When we complete our second acquisition, we will be the second-largest Bitcoin mining company by computing power, closely trailing Mara, the current industry leader. If more suitable mining assets become available, we remain open to expanding our portfolio through additional acquisitions. Currently, the average energy consumption of our mining machines is 21.6 joules per TH. As our mining operations are spread across five countries, electricity costs vary due to regional cost variations. Overall, our mining cost mainly consists of hosting fees, which include electricity and equipment depreciation. The government has announced plans to expand traditional energy projects, which is expected to put downward pressure on overall energy prices. We will also negotiate for lower electricity costs as we renew our IDC contracts. At the same time, we are actively exploring more cost-effective energy solutions, including potential energy projects in the Middle East and Australia. Thank you.

The second question is on the average mining cost per Bitcoin. Could you give us a more detailed description of your mining farms and mining rigs?

With mining operations spread across five countries, our electricity costs fluctuate based on local grid rates. The average cost to mine Bitcoins, excluding depreciation of mining machines, was $67,769.9 per Bitcoin in the fourth quarter. We currently operate over 138,000 machines, primarily from the S90 series, with nearly 90% being water-cooled units. Approximately 40% of these machines are located in the United States, distributed across multiple states, including South Carolina, Arkansas, and Oklahoma. The remainder are spread across East Africa, Oman, Paraguay, and Canada, forming a diversified global footprint. Thank you.

Thank you. My last question is on cash flow. After these strategic transactions, will there still be enough cash flow to support your business expansion?

We thoroughly assessed our cash flow position before moving forward with this strategic acquisition. While the total transaction value was $400 million USD, only $256 million USD will be settled in cash, with the remainder executed through a stock-for-stock acquisition. Even after completing this transaction, we still have sufficient cash and liquidity to support our operations. We are closely monitoring our cash flow to ensure that we have ample liquidity to address various scenarios. We are also actively exploring ways to enhance capital efficiency and ensure we optimize our use of financial resources. Thank you.

Thank you. My last question is about the price volatility of Bitcoins. Will this kind of volatility have a big impact on your performance?

Our strategy is to mine and hold Bitcoin, as we view Bitcoin's price fluctuations as largely short-term and are optimistic about its long-term value. We are very confident that Bitcoin will positively impact the company's performance in the long run. At the same time, from a financial security and liquidity perspective, we will maintain substantial capital reserves to manage potential price volatility. Thank you.

Thank you. And that concludes the question and answer session. Thank you once again for joining Cango's fourth quarter and full year 2024 earnings conference call today. Have a great day, and you may now disconnect your lines. Thank you.