SHANGHAI - Cango Inc . (NYSE: NYSE:CANG), a prominent automotive transaction service provider in China, has announced the launch of a new share repurchase program. Starting April 25, 2024, the company is authorized to buy back up to $50 million of its outstanding American depositary shares (ADSs) and Class A ordinary shares over the ensuing 12 months.
The repurchases will be conducted on the open market at prevailing prices, through privately negotiated transactions, block trades, or other legal methods, conforming to applicable regulations. The exact number of shares to be repurchased and the timing will be subject to market conditions, trading volume, Cango's working capital needs, and overall business environment.
The company's board of directors plans to periodically review and potentially adjust the program's terms and size. The buybacks are intended to be funded from Cango's existing cash reserves.
This new program follows an existing share repurchase initiative, where Cango had repurchased approximately 30.8 million ADSs with about $44.6 million in cash by April 16, 2024. The existing program, which also aimed to repurchase up to $50 million of the company's shares, will continue until its expiration on April 25, 2024.
Cango Inc., founded in 2010, operates an extensive automotive transaction service platform in China, which connects car buyers with dealers, financial institutions, and other industry participants. The Shanghai-headquartered company focuses on leveraging technological innovation and big data analytics to create an ecosystem for automotive supply chains, encompassing auto transactions, financing, and after-market services.
The information in this article is based on a press release statement from Cango Inc.
InvestingPro Insights
Cango Inc.'s recent announcement of its share repurchase program aligns with the company's financial strategy, as reflected in key metrics from InvestingPro. Notably, Cango holds more cash than debt, with liquid assets that exceed short-term obligations, indicating a strong liquidity position to support such buybacks. This is further corroborated by the company's healthy cash reserves, which will fund the repurchase program.
InvestingPro Data reveals that Cango has a market capitalization of $180.1 million and is trading at a low Price / Book multiple of 0.35 as of the last twelve months ending Q4 2023. Despite a decline in revenue growth during the same period, analysts anticipate sales growth in the current year, providing a positive outlook for the company's future performance.
Additionally, the company has experienced a strong return over the last three months, with a 21.82% price total return, which may offer investors confidence in the company's stock value appreciation. However, it's important to note that Cango is not currently profitable, as evidenced by a negative P/E ratio of -31.10.
InvestingPro Tips suggest that Cango's strategy may be focused on enhancing shareholder value, as the company does not pay a dividend, opting instead to reinvest in its business and repurchase shares. With these insights, investors may want to keep a close eye on Cango's upcoming earnings date on May 28, 2024, for further indications of the company's financial health and strategic direction.
For more detailed analysis and additional InvestingPro Tips on Cango Inc., readers can visit https://www.investing.com/pro/CANG. There are a total of 7 InvestingPro Tips available for Cango, which can provide a deeper understanding of the company's financials and market position. To access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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