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    Stock Alert for Kandi Technologies Corp. (KNDI)

    Kandi Technologies Corp. (KNDI) is engaged in the design, development, manufacture and commercialization of all-terrain vehicles, go-karts, and specialized automobile related products for the People’s Republic of China (PRC) and global export markets. Sales are made to dealers in Asia, North America, Europe and Australia. KNDI also focuses on the manufacture and sale of the COCO electric vehicle (EV), an all-electric super mini-car for neighborhood driving and commuting. The convertible and hardtop models of the COCO EV are available in the United States and other countries, while the Chinese government has approved the sale of Kandi EVs in China since 2010. 

    Share Statistics (27-Dec-11) FY2009 FY2010 % Chg Q32010 Q32011 % Chg
    Symbol KNDI Revenue, $Mn 33.83 42.88 26.8% 10.48 10.31 -1.6%
    Current price $4.04 Gross marg. 24.3% 22.4% -7.8% 22.3% 22.6% 1.3%
    52wk Range: $1.68-$5.43 Oper. margin 7.5% 5.5%
    Avg Vol (3m): 73,891 Net margin 3.0% -2.2% 173.3% -16.4% 3.7% -122.6%
    Market Cap. 110.88M
    Shares Outstanding 27.44M EPS, $ 0.05 -0.04 -180.0% -0.08 0.01 -112.5%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of KNDI spiked as much as 18% to $4.19 in Tuesday trade, extending gains for the fifth day in a row.  The stock saw trading volume hit over 631 K shares during the session, versus the 10-day average 111.90 K. Shares closed the session at $4.04, above the 50-day and 200-day moving averages of $3.01 and $2.46, respectively.

    KNDI shares have gained 29.9% in the last five days and 38.4% in the last month.  Year-to-date, the stock is down 22.9%.

    Based in Jinhua, China, KNDI claims to be a leader in the production of popular off-road vehicles (ORVs), including go-karts and a variety of other specialty vehicles. It is said to rank among the leading Chinese manufacturers of all-terrain vehicles (ATVs) and specialized utility vehicles (UTVs).

    An additional major company focus has been on the manufacture and sales of highly economical and all-electric super-mini cars for neighborhood driving and commuting. In late 2009, Kandi introduced the COCO LSV, a battery powered two-seater super-mini automobile designed for low-speed neighborhood driving. The Company has since made significant strides toward its strategic objective of becoming a world leader in electric vehicle (EV) manufacturing and related services, with a particular focus on expanding its domestic market in China.

    Just recently, the Company, together with State Grid, demonstrated the Express-Battery technology at the China International Electric Vehicle and Charging Equipment & Storage Technology Exhibition.  The event was sponsored by the China Electricity Council (CEC) in Haikou City, Hainan Province. According to the Company’s release, the Express Battery-Changing technology represents the most advanced and efficient battery change solution in China.

    The new business model of vehicle and battery separation with an express battery change system developed by the KNDI is well recognized by the industry and provides a solid foundation for the further development of a pure electric vehicle industry in China, the Company said in a statement.

    Chinese government delegates, executives and engineers from China’s major electricity companies, upstream and downstream EV-related industries and experts from various institutions attended this exceptional exhibition in an indoor and outdoor space of about 10,000 square meters containing 500 booth.

    “We are extremely pleased and honored that the State Grid demonstrated our KD5011XXYEV in conjunction with their battery change equipment and battery charging system in their booth at the Exhibition, commented KNDI chairman and CEO Xiaoming Hu.  “The exhibition and demonstration helped introduce the electric vehicle’s proven technology and Kandi’s new business model to more audiences and will also provide us valuable feedback from industry experts and consumers.”

    Source: http://pr-usa.net/index.php?option=com_content&task=view&id=1019726&Itemid=29

    Financial Summary

    KNDI reported revenues of $10.31 million for the third quarter ended September 30, 2011, compared with $10.48 million in the same period last year. Gross margins increased 0.3% during the latest quarter.

    GAAP net income in the third quarter was $0.38 million, or $0.01 per diluted share, compared to a net loss of $1.72 million, or ($0.08) per diluted share, in the same period last year.

    Non-GAAP adjusted net income, excluding effects from convertible notes, stock awards and the change of the fair value of derivatives was $0.72 million, compared with $1.40 million in the 2010 period.

    A working capital surplus of $18.94 million was achieved at quarter-end, improved from a reported working capital surplus of $3.04 million as of September 30, 2010.

    Cash, cash equivalents and restricted cash totaled $28.24 million at quarter-end, which equates to $0.98 per fully diluted share, a 12.3% increase from $25.15 million at the end of 2010.

    Source: http://kandi.investorroom.com/index.php?s=43&item=43

    Financial Strength (27-Dec-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.19 1.14 1.14 0.77
    Current Ratio (MRQ) 1.36 1.33 1.40 1.14
    LT Debt to Equity (MRQ) 0.00 70.53 60.71 107.47
    Total Debt to Equity (MRQ) 82.02 116.96 100.58 144.82
    Interest Coverage (TTM) 1.33 0.01 0.35 26.95

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    KNDI is above the upper Bollinger Band, implying that it is currently extended from its recent trend. Be aware, however, that a cross outside of the Bollinger Bands can sometimes be a signal of trend strength and not, necessarily, trend reversal.

    The MACD for KNDI currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Dec-27-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Spartan Motors Inc. SPAR 5.06 169.91M 63.25 20.24 0.40 0.36
    Amerigon Inc. ARGN 14.03 325.08M n/a 19.22 0.91 0.64
    Auto Manufacturers – Major Median       7.33 n/a 0.43 n/a
    Kandi Technologies Corp. KNDI 4.04 110.88M n/a n/a n/a n/a

    Source: Thomson Financial

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