FAST NEWS: Cango announces new $50 million share repurchase plan

The Latest: Car trading platform operator Cango Inc. (CANG.US) on Tuesday announced a new program to purchase up to $50 million worth of its American depositary shares (ADS) on the open market over the next 12 months.

Looking Up: Based on Cango’s latest market value of about $180 million, the share repurchase could boost its stock price by eventually removing up to 28% of its shares from the market.

Take Note: The company purchased $44.6 million worth of its shares under a similar $50 million repurchase plan a year ago. Since announcing the plan, its stock price has risen about 14%.

Digging Deeper: Cango started out as an auto financier, but later shifted gears and now operates a car-trading platform. The company has become relatively cautious recently due to a slowdown in China’s car market that has pushed many companies into the red as a result of stiff competition. Cango is also relatively cash-rich, with 3.3 billion yuan ($455 million) in cash and short-term investments at the end of last year. Aside from the two share buybacks worth a collective $100 million and two previous ones each worth $50 million, the company has also returned some of its cash to shareholders through two large special dividends in 2022.

Market Reaction: Cango shares fell 0.8% in Tuesday trading after the announcement. The stock now trades in the middle of its 52-week range.

The Bamboo Works offers a wide-ranging mix of coverage on U.S.- and Hong Kong-listed Chinese companies, including some sponsored content. For additional queries, including questions on individual articles, please contact us by clicking here.

To subscribe to Bamboo Works weekly free newsletter, click here

Reporting by Doug Young