This article was first published on Seeking Alpha on May 18, 2015.
By Sarfaraz A. Khan
Shares of
Kandi Technologies (NASDAQ:KNDI), the Chinese company that makes go-karts,
electronic vehicles, ATVs, UTVs and tricycles, have been getting hammered on
high volume. On Monday, the company released a decent earnings report that
featured modest year-over-year revenue growth and a swing to profit, but shares
have fallen by 27.4% since then, settling at $9.13 when the markets closed on
Friday.
Favorable
business environment
Kandi
initially started with making off-road vehicles but later, with its 50% joint
venture with Geely Automotive (OTCPK:GELYY), one of China's biggest automakers
and the owner of Volvo (OTCPK:VOLVY), Kandi has moved into the EV space and
generated a majority of its 2014 revenues and profits from EV parts and
products. The two companies are producing compact electronic cars, unlike the
bigger ones that are manufactured by Tesla (NASDAQ:TSLA). Moreover, unlike
Tesla that sells its vehicles directly to its customers, Kandi's vehicles are
mainly rented at a fixed hourly rate. The company has built automated garages
in China that can store hundreds of vehicles and work like vending machines.
The company intends to build hundreds of such garages throughout the country's
major cities.
On top of
this, Kandi will begin selling at least two EV models directly to customer this
year. One of these models, the K17 which can accommodate five passengers, is
for the medium-end of the market and will be launched within a couple of weeks.
For a country
like China, where major urban cities are extremely crowded and vehicle
ownership rates are low … read full article at Seeking Alpha.
