The Brazilians - widely tipped as favourites to lift the trophy - crashed out of the tournament at the FNB Stadium.
"It's hurting too much, I don't want to lie because what is very unfortunate is that I still believe our team were the better side on the day," Mngqithi said.
"But unfortunately, that doesn't count when you don't put the ball in the back of the net.
"In the Champions League, unlike in the PSL, if you make one or two stupid mistakes you get punished.
"The goals we conceded were all very bad goals, so it hurts because we know that our team is better than what we delivered.
"Probably 70% of the team did not perform to their fullest potential and we did not take our chances."
Masandawana will now turn their attention to the league where they can successfully defend their DStv Premiership crown with a point in their next encounter.