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Kandi Technologies Group, Inc. (KNDI) – Kandi results move to the positive on shift to off-road vehicles

Consumer
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Wednesday, November 09, 2022

Kandi Technologies Group, Inc. (KNDI), headquartered in Jinhua Economic Development Zone, Zhejiang Province, is engaged in the research, development, manufacturing, and sales of various vehicular products. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”), formerly, Zhejiang Kandi Vehicles Co., Ltd.) and its subsidiaries including Zhejiang Kandi Smart Battery Swap Technology Co., Ltd, and SC Autosports, LLC (d/b/a Kandi America), the wholly-owned subsidiary of Kandi in the United States, and its wholly-owned subsidiary, Kandi America Investment, LLC. Zhejiang Kandi Technologies has established itself as one of China’s leading manufacturers of pure electric vehicle parts and off-road vehicles.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Kandi reports positive earnings. 2022-3Q net income was $1.1 million or $0.01 per share up from ($7.9 million) or ($0.10) and surpassing our ($2.4 million) or ($0.03) estimate. Positive results reflect improved results for off-road vehicles (UTVs, Golf Carts, etc.). Off-road vehicles reported revenues of $21.7 million versus $6.8 million last year and our $7.5 million estimate. Kandi began emphasizing off-road vehicles last spring. Kandi golf carts can now be found at Lowes Corporation in addition to licensed dealers. The company continues to develop new models including cross over UTV-golf cart vehicles.

Positive net income comes despite operating income losses. Operating income for the third quarter was ($2.2 million) versus ($9.0 million). The difference between operating income and net income can be explained by positive interest and other income as well as negative tax expense. The company reported $210 million in cash or approximately $2.75 per share at the end of the quarter positively contributing to interest income. The company believes it is prudent to maintain a large cash position to fund research and development as markets develop. That said, it has authorized a share repurchase program which we believe it will utilize if its share price drops below $2.50 per share.


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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

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