Cango Inc. divests PRC business operations

SHANGHAI, April 4, 2025 – Cango Inc . (NYSE: NYSE:CANG), a leading company in the prepackaged software services industry with a market capitalization of $423 million and impressive gross profit margins of 55%, has announced the disposal of its business operations in the People’s Republic of China (PRC). According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet. According to a filing with the United States Securities and Exchange Commission, the Shanghai-based firm entered into definitive agreements on April 3, 2025, to sell its PRC business.

The announcement detailed two key documents: Amendment No. 2 to the Sales and Purchase Agreement and the Share Purchase Agreement, both dated April 3, 2025. These agreements outline the terms and conditions under which Cango will divest its Chinese operations.

While the filing did not disclose the financial terms of the agreements or the identity of the purchasing entity, it marks a significant shift in Cango’s business strategy. The move to dispose of its PRC business could indicate a reorganization of the company’s global operations or a refocus on other markets.

The decision to sell comes amid a changing regulatory and business environment in China, which has impacted various technology and software companies. Cango’s divestiture aligns with a broader trend of business realignment by foreign companies operating in China. The company’s stock has shown significant momentum, with InvestingPro reporting a 120% price return over the past six months, despite current trading below its Fair Value. For deeper insights into Cango’s valuation and 15+ additional ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.

This SEC filing confirms that Cango Inc.’s Chief Financial Officer, Yongyi Zhang, has signed off on the report, validating the company’s strategic move. Shareholders and potential investors will be looking closely at how this divestiture will affect Cango’s financial health, which currently shows strong fundamentals with a current ratio of 1.88 and liquid assets exceeding short-term obligations. Analysts tracked by InvestingPro expect both sales and net income growth in the current year, suggesting positive momentum despite the organizational changes.

The information in this article is based on the latest 6-K form submitted by Cango Inc. to the SEC. The form serves as a monthly report for foreign private issuers, providing updates on significant corporate events. The full implications of the divestiture for Cango’s operations and financial outlook remain to be seen, as the company navigates through this transitional phase.

In other recent news, Cango Inc. has agreed to sell its China business to Ursalpha Digital Limited for approximately $351.94 million in cash. The transaction requires shareholder approval and involves separating Cango’s PRC operations from its international businesses, including Bitcoin mining. Additionally, Cango reported an increase in Bitcoin production for March 2025, mining 530.1 Bitcoins compared to 472.7 in February. The company’s deployed hashrate remained steady, while the average operating hashrate showed a slight improvement. In another development, Cango extended the deadline for closing its crypto mining assets acquisition, with the transaction to be settled using shares. This move aligns with Cango’s strategy to conserve cash reserves while expanding in the crypto mining sector. Furthermore, Cango announced its inclusion in the Bitwise Bitcoin Standard Corporations ETF, signifying recognition of its accomplishments in Bitcoin mining. Lastly, Cango received a preliminary non-binding letter of intent for a potential buyout, with a special committee formed to evaluate the proposal.

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