Cango to Terminate ADR Program, Expanding Access to U.S. Institutional Investors

Core Insights - Cango's termination of its ADR program and transition to a direct listing on the NYSE represents a significant shift in its capital-market strategy, reflecting its evolution from auto finance to cryptocurrency mining [1][2] Group 1: Strategic Shift - The termination of the ADR program and the direct listing are part of a broader strategic evolution following the divestment of Cango's auto-finance business for US$351.9 million, marking a decisive shift to compute-power operations [1] - The direct listing simplifies Cango's market structure, enhancing its correlation with U.S. mining indices and potentially increasing its inclusion in specialized mining ETFs [2] Group 2: Institutional Participation - The move to a direct listing removes barriers for institutional investors, as approximately 62% of U.S. long-only funds restrict holdings of non-directly-listed securities, thus broadening Cango's investor base [3] - The potential increase in institutional ownership is illustrated by BitDeer's experience, where ownership rose from 12% to 27% after migrating to a U.S. board [3] Group 3: Operational Performance - In September, Cango demonstrated operational resilience with a production decline of only 7.1% despite an 8.3% increase in Bitcoin's network hash rate and a 7.1% rise in mining difficulty, outperforming the industry average decline of ~12% [4] - Cango's operational capacity of 44.85 EH/s resulted in an 89.7% utilization rate, nearly matching that of industry leader Marathon Digital [4] Group 4: Valuation Metrics - Cango's shares are currently trading at approximately US$4.37 per ADS, with a market capitalization of US$796 million, while projected revenues for 2025 and 2026 are US$609 million and US$850 million, respectively [5] - The company's P/S multiples of 1.6× for 2025E and 1.2× for 2026E are significantly lower than peer averages, indicating potential for a structural re-rating following the direct listing [5]