Q4 2020 Cango Inc Earnings Call
Good morning, and good evening, everyone and welcome to the Kangaroo, Inc, 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 on the Fujairah, and then Chief Executive Officer, and Mr. Michael Zhang Chief Finance, All financial Officer of the company. Following management's prepared remarks, we will conduct the Q&A session.
Before we begin Irish day, you to the Safe Harbor statement and the company's earnings release, which also applies to the conference today.
Management will make forward looking statements with this sad and now turning the call over to Mr. Xylem, and Lynn and see a can guy. Please go ahead Sir.
Thank you.
Oh, Oh, pardon me and Joe kind of a harder and harder and the anticipated total junior and Thai baht their hardware and good morning, and good evening, everyone and welcome to tankers fourth quarter and full year its interest sensitive earnings call.
What you saw on and get into total she liked that you shouldn't link hernia, you're talking about June will show up on you know from watching just interest GA on hold right. So.
And when both are true so union and show how are your big on Yati towards chocolate crunching, She's a charter sits on the future of accretion.
<unk> also of course, you're on year with debt sushi and boot teaching well more freezer and changed the candle shop on your uncle Junkie, Yeah, we're tweaking on immediate and that's on top.
Since he took courses on total without on.
And Joe T E and I mean, Pete and Joe will mature chunk gauge what does free and it sounds you're on total five transition is a little.
Don't you you can see you'll show the timber and culture, you and you're going to need one just your thoughts on how that turns on and types of step on cheetah without all of you that your body, you and I mean, b and so it's you need to and from yeah. You'll your closest total dish on she chose Shoretel and the pony and jobs have been doing the total so bungie to allude to that you need one gene and sue and country to country on.
He studied pandemic and it does any of it yet brought interest rates what tends to China's economy picked up speed and a second half of the year and the auto market and recover steadily.
And there's pressure on the auto industry. It also accelerated its pace of transformation, we'd be on be pent up demand from and I know, what's your market and continue on with progress across all business line. We are pleased to report that tangos overall business rebounded significantly due on our second half of this year and.
Oh, and yes, I mean can you tell me as a result total revenue was in the fourth quarter to a record 1090 7 million RMB, surpassing the high end up on a previous guidance range by about 46%. Thanks, a lot. Besides just cost control initiatives operating income sustained its growth momentum and the quarter and came in at 119 8 million.
And RMP net income from the quota was $1 6 billion RMB, primarily attributable to net investment gain of about 1.5 fin and RMP and B O Tel.
Are they on in yen to a chunk of our yeah. We on two youll need somebody to supposed to Tony that these sugar and you until you have built is a town and cool mint and micro machine deposits.
Tony It's a true well. It's also kind of dollar. She told me. He told me and tell US how you won't use and shots and this is how we pay them on to the future Juicy and totally and J Jill and so do you wish on fish or chicken and genzyme.
Yeah, well she's on the auto accounts and there are some of the Gulf I'm talking about Joseph.
But yes, and he can save Mart kinko's 10th anniversary.
Significant milestone opening a new chapter of growth for the company 10 years ago. We found it can go as we saw unmet demand and the auto transaction value chain, specifically and the lower tier market and this prompted us to create and not a one stop platform to connect and empower all parties and on the auto value chain well offering.
And easy and enjoyable car purchasing experience to our customers.
Well money and she's sort of general food and we shared with you soon Luna and Fuji charter, let's just start there and see if we've got a chunk watching is one judging shows on that she thought went wrong G zones are weighted and gender true sort of general cooked food could you pick and pack that suggested that teachers on well Mckinsey show and tell you there and so I'm sure you'll put that John you were true Jaya and Simpson and she said Joey.
So and she's our horses on to you what I shall fool harsh on Pizza hut, She took Fuji and thought Oh, yeah, the mobile top and magic after originated all business and auto financing. We have also deepened our roots and a lower tier market and today, we have a network of nearly 50000 breakfast and due to its nationwide, making can go and beat in <unk>.
Knowledge based automotive transaction and so if you just kept forming China building only solid foundation, we are actively extending to the upstream and downstream of industry Fido Chang extending our reach to the car trading transaction and after market services facilitation segments pressing for price into forward toward our goal of better serving customers.
And the auto industry as a whole.
And kind of who is is that with patent and go hungry as of Friday actually go and go to a J and thank you yeah, So and we shall reach a soldier and they'll go tofu pintar, so pushing goes through on machine. So yes, Joe.
And B agenda, and the wait so from those assuming that you would see that woman and yeah, we'll bundle and you haven't got she said Joe you Fool she thought that if on children for her and she two horses and suddenly your.
From what I saw you go through a few facts.
And it didn't Joseph Tucci top shelf and so so how he or she and I would tell you, though being weighted so from non we're always looking for well for ways to further advance deal from development of industry and.
And we remain dedicated to our vision and mission, which is to make car purchase is easy and enjoyable and become an auto service platform of choice for consumers and self now can go has three main business lines auto loan facilitation.
Trading transactions and after market services facilitation.
Through the development of our complete service ecosystem, we cannot unempowered dealers Oems and consumers and on our industry participants.
So he has really got you so Joey fool you.
The woman does hurt your all your full year with total to look that on.
Walk us through G E and M P.
So on diesel so launching passenger ship and you somewhere closer to India was sold on that somebody else comes on and you can see.
If you're a woman and she said Joe your full year two G. G O two modi.
And yeah. So on my seven new shots and lets just go ginger and what she thought well and lot of course, and we don't some cook on just dotting georgetown's that trulia and Zillow Galena shortly from and the full game digital cytology enjoy seeing shows on the tone of the future.
<unk> total debt she thought one little quick email and only you soon which is on the at home while she goes on you'll know need pads, all you've got Joe you Fool Pinta John on charter she touches on zone, so going to your future you'll shortly.
Yes, it does.
And could you still need human and so it goes on the price with debt that well and we saw that that she's a cushing and she doesn't know she's no longer and she's a download told you on.
And the sharp turns and she says yeah. She all time will tell you go you only Oklahoma finally shots and she thought one law.
And we'll show you and the social for things like share taught you watch your charters just on the day Odell.
Two what I would've told you all you 14 time charter and this is how she told me ultimately doomed Oh, well, it's all good.
Could you and Duncan Gotcha.
And I thought I'll call trading transactions business and the fourth quarter. This business line generated revenue of 547 million RMB accounting for about 50% of our total revenue. It has become an important growth driver. It is worth mentioning that I'll call operating transaction business has positive gross margin and a pause.
Decade, when we were actively exploring though what's your market and building a nationwide dealership network, we recognize the difficulty from local theaters and a need from Oems looking to extend and expand our sales network on channel.
Today without strong footholds, and a lower tier markets and service capabilities and total transaction. We have developed a transaction service, Pat Fogarty, effectively connect supply and demand and the lower tier market and I think.
Time, new energy vehicles, and short and E V have emerged as an inevitable future trend of technology lead the rapid transformation of all industries, including the auto industry.
And UV manufacturers with usually the thought that our operational and sales model and actively seeking traffic and a lower tier market and professional traffic cooperation and support Kankles extensive dealership network and a lower tier markets and efficient service platform puts us in the ideal position to meet any kangols car trading transactions platform I think.
The efficiency and convenience on the car transactions by benefiting both car buyers and car dealers and Oems.
What should you do weighted I'll touch on you for a year with the thoughts all women's that's useful and only chance from me and she thought it sounds all the genes on so as you try and on Chinchillas homes on Laura Chico.
And what do you need you don't watch it junior Puja in Korea and flow sheet go Jan Sue the Odell.
And he said you do what would that change it on Wassa to ensure you fool with Tony and just thought all of whom calling you and you just.
Just that you do more well and ones that jump off on when they're young and old T. J way through to a gene Judah being wage and Patriot somebody should go to debt and he goes out tons on Zhengzhou is on she thought did you are things you don't want to put on pause on Joe Johnson, John you talked to the woman changeable, some pie charts emphasis on that.
So Joe you fool, so let's hope so.
Oh.
She's a woman the audio locally and there again and let me put on Chico walnuts as Jim could you did you are true goes on food, you Sue them and critical and how the J J shot.
Charter this is on the order of shoulder when she saw that would help and you do.
Just as you do more well might you toward yahtzee true Sephora and so what's the agenda where possible changes huh.
Could you lonely on calling somebody and you go to a what we'll guide you on what she said sounds good.
And she said Joe your food you don't.
Don't know that you've won.
So its own growth could you see yourself falling.
And our Union zone.
It just sort of your thoughts on what you heard she's with homes, Inc. Cushing true don't eat well metallurgy on could you have the gene Joseph Bank lending shuttle weighted well or don't you Jos on you go hungry and so Joey I know what's on the Dawson.
Are you hopeful soon and it goes on the Tusa do you thought the teaser on walnuts as soon the flow and elite.
Got it.
I will now call trading connections I mean on a car trading transactions platform, we have made solid progress and evolving our service capabilities and this 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 300 on 15th sub dealers and more than 7000, and independent sales reps across the country, but continuous expansion.
And of all traditional dealership network plus a private traffic generated by our independent sales reps will help us deepen our car trading transactions and after market services facilitation businesses in and no one here market.
And I can say we are also 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 problems in the lower tier markets by the end of the fourth quarter. We have had developed approximate day a T warehouses together with several local infrastructure and service providers with a total capacity of more than 30000 parking spaces.
Yes.
Copper and <unk> 73 cities across the country.
It has become an important part of our strategic development to grow our core trading and transactions business last day as a pioneer and leader in China's technology based auto service food Kengo has been committed to.
Committed itself to big data and technological innovation as the core driving force well we are building a technology based on dealership management system to provide multi level integrated guidance and services for our dealers to cover the entire car transaction process. We also greatly improve our service capabilities any fishing.
And see.
So I assume that any woman junkie and your board Jody Tusa and Joe your phone on mute.
Bulk or food guys couldn't once where she and her thoughts on kombucha and sampling to grow.
Those are women and PJ technical could you D. Sushi, a full 19 goes all Ts and.
She joined on Leap two gene J P and power to go just seeing shots and this is I'll put them on the call show that she said you all you Moshe and 'twenty 'twenty. One we will further strengthen our service capabilities copper and more car models and expanding our product offerings and simultaneous de leveraging our technological know how.
And we will continue on empowering auto dealers buying hunting now transaction capabilities, while promoting the up branding so as to develop and efficient and effective car transaction model suitable for the lower tier markets.
And what sort.
So a woman from Yo Yo.
And I'm glad that she sought to debt yield.
And we're challenging pandemic zone.
She's on what maybe you're touching Juno and <unk> go with the symbol door well, what I assumed you time to reaching her cohorts, yet being tupou sushi on Cushings on mute.
This is true almost of the ones and machines and she she said.
The EBIT impact, Joe Ching and torches sounds on Pan France. This is Sam.
She total yeah were.
And so Luke sedan.
Joe Junior and taunt you sound zone, five and do so you can pop.
From guidance all right I'll, just send you do more.
You all day.
So by the sense of we got used to it.
And threw down Suzhou Shanghai.
On India. So it sounds like you are.
Who says Oh, you want them being debt. So you should see that she thought that Linda and yeah.
Judy you also and to do more debt.
E G you push out your answer Bob and Jillian Danielle.
And besides and Cheater Youll sounds is due more to lean down sovereigns and link them some shortage on to <unk>.
And now and things on the Tulsa, what my thoughts and ideas on how the leader and do you mean on leap.
And 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 the products for our target customers, resulting in improved customer service experience and customer base in the fourth quarter, we facilitated 10.82 billion final.
Thank transaction up 13% year on year on automate automotive financing from facilitation revenues were $398 1 million RMB 51, eight per cent from the same period of last year record rents and pre pandemic levels and return it back to the gross check as often.
And the 31st 2020 and a total outstanding balance on financing transactions facilitated by the company reached $43 5 billion RMB about asset quality as of December 31st on to 'twenty, and one plus overdue ratio decreased 2.98% from one point double 11, I mean double one per cent.
So first attempt September 30th 2020, and the and three plus overdue ratio decreased 2.42% from five 3% as of September 30th 2020 and.
In terms of our financial performance, our margins and profitability remained stable as business volume as well.
And the policy and total wafer that she's a horses on you.
Oh, Gee solar without <unk>, shandy, and she's a little while ago.
G suite and so until you can get sold to the channel.
Well, maybe I want to talk to the push towards you and figure.
Gates and go home, Yeah, Tyler I'll, let you think that Yodlee and <unk>.
And quick goes away like Bosch, and yeah, we're teaching Tianjin and Qingdao and job well my feeling that Gee Gee, there since you touched on and Tempe, and kind of a gene therapy.
And do their part.
Oh gosh.
And we're jumping equal job by Hitachi, and Bosch and going through the hot dog Pizza and the outdoor you're on cloud attempting to human and throughput on coach and the future.
And so if you touch on Bosch and so as you hold on to the channel. So don't Boston, Yeah, well, that's usually turns on.
Well me, telling you bought share you with fossil Kolkata, yeah, Yeah, and so I'll tell you.
Geez, you catch what she's a ratio for volume for the ankle and the horses on food and Don.
Our after market services facilitation revenue and the fourth quarter was 74 and 76 million RMB.
Tony supporting total revenue growth, while the auto insurance premium reform and the fourth quarter and put some pressure on the overall insurance industry and may potentially impact henkels insurance business and 2021 as a response, we are actively operating our traditional offerings and exploring new products looking ahead, we will extend.
And 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 accounts 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.
Cheng and dig deep into after market services, such as auto repair and maintenance services.
She forgot from here just as you do more hungry you forgot a chunk or true pouches superb boxes <unk> zone so called.
Bolt on pin pad towards on so this is due to well maybe you should see and Georgetown and sheet on thoughts on the corridor.
Bumping process and she goes on those true yeah, it's usually turns on.
So could you just tell me the Chooser Joshua woman juncture, and you put that Golden Peanut butter, you was on portrait truly ghost towns and going by the Swiss on Kornienko.
So from a in terms of on dealership networks audience.
I've had a total of 48004 hundred on 87 registered dealers nationwide during the quarter. We started to work with some dealers now what do you look groups and so on expanded for us Ddos with more customers pursuing high and Brian We will further our efforts in this market segment I help kengo gain additional market.
Yeah.
Total apio equation sung <unk>, so we shall face those future profile and that's how you thought they're touching on credit so Joe your time P and Q4.
This is G. Total core talk on its own bond Zhengzhou, she's on bulk or you actually see on Yahoo. That's on what she saw the old ones, you'll hear from father, she's searching on four times each year.
The answer to descend your long haul from what she took Jin Yoon Jin Jiang and see.
George Utah General Foods on.
Education on how work I'll always recognized and rewarded kangol always put customers first and also differentiate it auto financing products and services and the fourth quarter. We won numerous important industry awards among them for seven and you're in a row Kengo was awarded the innovative auto finance services and the prices.
The award by China Automobile dealers Association and for the third year in a row Kengo was awarded the best Auto Finance service provider by the China Automobile go to engine Award.
And so I won't share the India will mature on tissue, you'll walk away from reaching equal town couture cheese Celgene on food and you does that sound zone, one judging she's searching Jos on the sheet.
And you don't want law her phone and for the two entities.
And you can get weighted on Joe you push off its a huge hotel and you can come from prototyping to fool generally you don't go towards share.
She and the Union and suddenly you catch.
Pushing chisholm shooters beaches, you'd go with Columbia.
Going from 'twenty to 'twenty, one and we remain committed to our customer centric value proposition rely on on the extensive experience in auto financing services are powerful and it will go with nearly 50000 dealers and bridge industry resources, we will continue to be thought up and provide a wide range of high quality products and services.
Centered around auto transactions and customer demos, and iras and default devote ourselves to making car purchases easy and enjoyable for customers and our.
New journey has just begun and I would like to conclude with the Chinese saying, we're on areas of Liberty I was away.
And so Youll show on this or she's had when somebody a week last week, which of course at that point you do that's how we got here with that I will now turn the call over to our CFO and Michael John to review, our financial performance and even with more detail.
Okay.
Thanks, Joe Hello, everyone and welcome to our fourth quarter and full year 2020 earnings call.
Before I started to review our financials. Please note that unless otherwise stated all numbers already RMB terms and all percentage comparisons on.
On a year over year basis.
Our continuous and steady progress across business fueled top line, especially and in the fourth quarter with total revenue is coming at $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 T.
Moving transaction increased to approximately 50% of total revenues.
Business is becoming an important revenue contributor.
Revenue is from automotive financing facilitation and off market service facilitation were $398 1 billion and a $76 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 or.
899 billion compared to 328 million and the same period of 2019 the.
The increase was mainly due to the related costs incurred by the car trading transaction business.
And as a result of the increase in revenue is from car trading transaction.
Sales and marketing expenses.
And <unk> 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.
Total revenue in the fourth quarter of 2020 increased two seven times at 23 eight.
<unk> 8 million from $157 2 million in the same period of 2019 and.
As a percentage of total revenue total revenue in the fourth quarter was <unk> 66 per cent compared to 35, 9% and the same period of 2019 and the change was primarily due to an increase in your mouth.
And that's all car trading transactions well.
Automotive financing and facilitation and after market services facilitation cost of revenue as a percentage of rather than revenues was around 30 per cent in the fourth quarter of 2020.
Sales and marketing expenses in the fourth quarter of 2020.
Were $65 8 million compared to $55 2 million in the same period 2019.
As a percentage of total revenue sales and marketing expenses in the fourth quarter of two solid and 20.
One six per cent compared to 12, 6% and the same period of 2019.
General and administrative expenses in the fourth quarter of 2020, we're not a point point and 1 million compared to $66 1 million in the same period 2019.
And to do with total revenue general and administrative expenses in the fourth quarter on 2028.
And eight two per cent compared to $15 one per cent of in the same period of 2019.
Research and development expenses, Inc. Fourth quarter, 2020 were 23 million compared to 18, four and 6 million and the same period of 2019 as a percentage of total revenue research and development expenses in the fourth quarter of 2020 was $2 one per cent compared to four 2%.
And the same period of 2019.
Net gain on risk assurance liabilities and the fourth quarter of 2020 was $18 8 million compared to a net loss of $6 5 million and the same period of 2019 net.
Net gain on risk assurance liabilities was mainly due to a sequential decrease and default rate since the third quarter of 2020.
We recorded income from operations of $198.4 million in the fourth quarter of 2020 compared to $117 7 billion and the same period of 2019.
Net income in the fourth quarter of 2020 was $1568 5 million non-GAAP adjusted net income and the fourth quarter of two some incentive was 1000 588 million.
On a per share basis diluted net income per ABS in the fourth quarter of 2020 was $10 four and diluted non-GAAP adjusted net income for ABS in the same period was 10.53.
For the full year 2020, our total net revenues increased by 42 five per cent.
$2 1 billion.
Total operating cost and expenses were $1 7 billion net income was $3 4 billion and non-GAAP. Adjusted net income was $3 5 billion diluted net income per avs and diluted.
Non-GAAP adjusted net income for ABS was 22.17, and a 22.69, respectively in 2020.
Moving onto our balance sheet as of December 31st 2020, we had cash and cash equivalents of one 1400 and.
And $26 9 million compared to $1423 3 million as of September 32, Salt and 'twenty.
As of December 31st 2020, the company had a short term investment.
$4 3 billion compared to $1 1 billion as of September 32020, the increase was mainly due to the change in fair value of the company's investment in the auto and the company's reclassification of such investment from long term investments and short term investments.
Looking ahead to the first quarter of 2021, we expect our total revenue to be between 1000 billion and 1000 and $15 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.
And it will take questions.
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 and 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.
And go a volatile mccollough share more color and should any nationality and Shankles suggested and you all you got that on something that.
Our survey on thermal ones and Johnson value. So we go share quantity woman and seeing that you've got your share.
<unk> joins us on line.
And also trigger on you the chartwell and Beth I should say, we ended up neutral each of women and so she went and had no cash, but youll emotional quadro jumped on it sounds like they do Josh I'll want to teach on chicken.
A woman chances are true.
And as you can see and Josh on them keep on line.
And a lot of attach it Oh, Yeah go you shallower and shallower with Janus and that you know with just your thinking on Masha Joshua J quite apart from sort of punch on guacamole might come on what's wrong with them and they all go to beautiful.
And I got your question is you have to ensure that that and I think that that's one and then beyond that.
And I'll call the competitive class.
And just a push agenda as you go and how much is that just your phone and a follow on from Chad Wilkins and bought call Chaco and disarm goes on Falcon and should.
And in Guangzhou, and Utah, and California, and Telecom partnership and Jackie and put your Alco book larger chunk, which was just seemed Appalachia. Louis Pinkham notch Yamaha partnership and will turn on that come to them and sugar to drink that corn and she told me on me all right.
Joe moved downwards, and then they go to call that cut.
First of all.
Graduation, and so the management on yet another year of strong performance and I'm sure. He Wang from Morgan Stanley and so I have three questions. The first question is on the car trading transactions business line. What is your outlook on it. This is in 2020. One for example, how many cards do you expect to complete.
Completely precipitation interest you tend to want and also some dealers maybe they may be able to get cars direct day, finally, oh and yes, so what kind of value do you generate whereas your car trading transaction services to the dealers and my second question is about the independent sales Rep model how.
Do you manage risks and for this model for example, how do you verify the ability to repay the notes by the customers and how do you make sure that and those are indeed used to buy a car and my third question is more on the macro economy. So do you see the credit supply tightening in the Ah <unk> and a new.
And how well that Oh, I'm I mean based on your observation on how real that impacts the demand for auto loans do you already see you know a less demand for auto loans because of the tightening tightening credit supply.
Oh, just surely well I'll put it on your debt the single and two to a diesel ones, you're quite true Joy Junior Entangle your chip and our Union.
And she and the other you choose just sit down and one adult onetime change used to tell you.
And as you on changing the look our attention and you don't need the changes when which took them will go.
On the you wouldn't be and to the shirts and shoes on the free search engine and Georgetown.
And that's what's on the meal. She thought was shown to just on so did you have what you told them all on time and day to day until I see more you some quarters are starting to step into a.
So she is short and it sits on the faithful.
Peaceful transfer and she was on Tonya, you bulk or two on two of our and didn't cinquecento Sushi and answer I'll go which internally as you go in there and true up our shoulder.
So just from the tone and the woman and talk with the charts and let you tell you.
And what you've done.
On to choose on what you told you told US that you can pay talk only and therefore female and she goes on to what you told me on quadrant on the show Docs and your so putting Tiffany T Golar Gulf on the Charlotte John deal and she knows on Tampa compared on a change on some of the joy and the only cause you mean on leap whaler and one more quick and change your book dozens locally and they're going to hold off for now.
Shot uses Honda.
And.
And so it just sort of do you go to a jury though.
Okay.
I'm sorry, your three questions first of all about the Oh look for our car trading transaction in 2021 so a week, it's about locked in 2020 one for the whole year, we well you know facilitate 45000 to 50000 car trading transactions and.
And about the second part of your first question and that is what kind of value do we offer to the dealers well, we mainly targets. The non also rise students and the lower tier cities. So far these types of dealers and they don't really have very solid solid supply of our cards from the.
Oh, yes, because they used to get they'll cost both day from the Cartwright us and you know.
Lodge for I, suppose so for them and they have quite a lot of tough challenges and ensuring the supply and all of their costs. For example, the supply of cars is not very steady and reliable and sometimes it's difficult for them to authenticate the source of cost and the prices on not theory, a competitive and a market and.
And the whole supply chain is inefficient.
Okay.
Pocket and these difficulties we over various values to the lower tier city now authorized dealers.
Because we centralized and sourcing of costs from Oems and we also provide a supplementary and complementary supply chain services to these dealers and our services are able to help the adidas to streamline the whole process of car sourcing and these actually not only help.
The dealers, but also is very valuable to different parties and the supply chain. It reduces the cost of operation for the dealers and also improves our ability to complete deals as well as their profitability. So in the future. We will continue to improve our logistics and logistics service capability.
So as to pet and empower the dealer partners.
Oh total once you acquire a regime change it and most of the shelter from John Holmes.
Uh huh.
Well, the changing and more so towards the hostess on her true joy for the year was a woman to change it on Ouachita sort of slowdown here in Q2 from me you'll mail from you.
Hong Kong.
And after each ginger and on to answer the Churchill and.
Eat well, Mr Young from where you've got changing and that sounds good and sugar powder lordosis on T. J does suncorp total shithole city telephone being paid and that got us.
Some other change yet on that.
Toyota Inc. Good and change it on the June on the Trulia dosing or concern.
She won't quarter, Chicago, Boston and show you the doses you well.
No change and you know most of the share their phone from.
Belgium switching Gen two range.
And Oh, it's Oh, yeah, she was a woman shirts and shoes on and that she celgene and yet not Ya Qin said he thought she agenda changes on a more.
Sure.
J J and June shipping.
Oh, your simple question and risk control for the independent sales Rep model well.
The aftermarket services business line and car trading and transaction didn't line well our independent sales reps day I'm, mostly are helping the company to generate and operated traffic. So there is not much risk exposure to the company on these two business lines and then about auto loan transaction business line.
And strictly managing and monitoring the qualification as well as the outage and let the eligibility of each and every sales rep and we are looking to be a recommendation and and we also review their authorization levels as well that's how they conduct in person visits.
So we have a very strict authorization level setup for all these independent sales reps. In addition, we control the supply of costs for our supply of course to the independent and sales were up in terms of the auto loan facilitation business, so and because we have strict.
So sales of cars were able to ensure the authenticity of the transactions and Thursday, and we are also are adopting a more stringent.
Risk control measures on these independent sales reps that are for ROE and lower tier.
City Fine auto loan facilitation business, and so but so far the.
If you look out to the no service management and in fact, the quality of the non service management and Ts close till the average level of nickel on the company.
Designs and when do you and they'll.
Go home question, Qingdao and to do it with me here with a union shop simple ones, you know you're talking to somebody like on a quota share and Joe and shove it when things and judge she total toddler and shove it by share all the olive garden and Yeah, Oh, Yeah sung from Guangzhou, Paul Gong physical home Kwanzaa, and so it sounds like so two and the year, we should go to U haul jets from shouldn't yet on.
Like on Qingtai, Celgene and being able to amortize interest you the union.
Our total that you can share due to them Doug Dietrich.
So you can come to your range.
I thought I also question the macro credit policies impact on our business well and if you look at T. A government central government policies are and for example attention and send you want they council.
Report it has been clearly proposed knott's measures will be taken to drive consumption and a rural areas of China, and the new countries and smaller cities of China and that's.
Well, let us to incur.
And increase the supply of cars as well as to increase the demand for cars and steadily so definitely the macro policies are in favor of our comps.
Companies like Henkel and.
And also so far based on observation the credit on the tightening credit supply has not really directly impacted on our business and is that the performance of the car market as a whole has is a more direct factor on impacting.
Impacting on our fundamental business.
Well I'll put it on one Peter.
Net loss per share for me. Thank you.
Okay.
Yes.
Okay.
Thank you and your next question comes from Derek <unk> from Goldman Sachs. Please go ahead.
And Nichols.
Where should I think also on the Derrick actually isn't going to.
And you do from a chunk and that you get from God excuse me who's having their own theatres soup and simple.
Okay, and then finally, he goes to the switching from the way line and say it leads into them, but you do from here.
And she said.
Thank you and I'm director from Goldman Sachs. Congratulations on your strong performance in the fourth quarter and my question is about your partnership with the founding partners and so what is your outlook for take rates and what is your outlook for interest rate cost of funding etcetera.
And I don't want to you and let's see here for Michael Tung lock with a hammer. So on line five to Michael John Our CFO to answer this question.
But there is a.
So what you hear and you don't want to yeah.
That's a woman would share that you're glad you can go on kind of the way women are at home and that's got a soda and I jumped on a woman and she just I E.
But then that you quote that I wanted to dig and switching.
Switching switching costs all found on telling me go forward. So long as you don't find a true cheered who can do the Quinn will conduct a hold on.
And Youll see the job that you do and see it certainly not with all of them and they'll take a just.
And as you go towards that kind of a book he should be on the condos small woman, that's and that's you got it.
<unk> done that you could chocolate and bots.
So there you go and go on true Jonestown, Inc.
Patricia and what do you want me up on this one because you go how that thoughts on.
So I think that you guys and good.
And what could wind up on the NIM.
In Germany that you're on your time peak and once you don't want on those as you can see so much on the woman and you create butsu them and then you've got.
Oh, what do and that you're on day, you've got to take quick Juicy you call them and they got food or you got.
Got you got you got you got paid.
And what Milijas short debt, so so will our debt.
You've got you got you should have questions on the final and really challenge that you've got.
John Do you got you got you got you got drunk and got cleat.
Sure.
And she said.
And thank you Derrick for your question well on our strategy has always been to extending the range of our founding partners. We have we want to work with more and larger and higher quality funding partners. So we have been working very hard to keep the cost of our fact that tuna.
Well, we have been working very hard to keep the cost of all funding Ah study and even decrease and.
And with this and we want we want be able to offer and a more competitive products to our customers, thereby helping our customer acquisition strategy. So where we have also we have been able to keep politics writers studied on a stable.
I mean, you put you'll probably understand on the take rate as the Oh fee paid by the bank to us so far.
For the future and we believe we'll be able to keep our cost of funding study and also I'll take rates as well.
And that's N and pizza.
Thank you.
Okay.
Thank you we have no further questions at this time I will now hand, the call back to management for closing remarks.
Okay.
Sure sure sure just on July 10 year on women than OCA.
So did you do that how about your hallway because on gotcha gotcha. Thank you for doing joining us on this earnings call. Thank you all for your participation and support.
So that concludes today's earnings call and thank you.
Hum.
[music].