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Kandi +5.8% after announcing Shanghai EV deliveries

  • Kandi (NASDAQ:KNDI) has delivered 208 EVs for the launch of a Shanghai car-sharing program. The cars were sent to rental stations within Shanghai's Jinshan district for immediate use.
  • Kandi previously announced plans to offer EVs for car-sharing programs in Shanghai, Beijing, and Chengdu, to go with its existing efforts in Hangzhou. The company owns an indirect 9.5% stake in ZZY, the operator of the Shanghai program.
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Comments (8)
  • JosephCortes
    , contributor
    Comments (422) | Send Message
     
    Looking great today!
    18 Aug, 12:52 PM Reply Like
  • Dampflok
    , contributor
    Comments (884) | Send Message
     
    So a. 9.5% interest in 208 cars sold moves the stock by 6%? Unbelievable.
    18 Aug, 12:59 PM Reply Like
  • RockyMtnHiiigh
    , contributor
    Comments (112) | Send Message
     
    Dampflok,
    You are MISSING the BIGGEST reason smart speculative investors should own Kandi stock (and hold it for many years)........ Not only does Kandi own a 9.5% interest in ZZY, the leasing/rental company. It's JV sells ALL of the cars to the rental/leasing company (ZZY).

     

    The MAIN REASON an investor would want to own Kandi stock - is because the JV that they share a 50/50 ownership with Geely sells ALL of the EV's to ZZY. Kandi books 100% of the partially built EVs it sells to the JV, AND books 50% of the Net Income of EV's the JV sells to ZZY.
    In total Kandi gets to book 75% of the Net Income (50% + 25%) of each EV sold into ZZY, the leasing/rental company.

     

    Shanghai's goal is to have 3,000 to 5,000 EVs in this program by the end of 2014. Considering that Kandi only sold approximately 4,000 EVs in all of 2013, Shanghai alone would match Kandi's total sales from last year! Add in the EVs they are selling to the successful leasing and rental programs underway in Hangzhou - and Kandi should show killer growth in 2014. btw - this is before adding in any other markets Kandi is currently developing pilots with.

     

    To learn more about how Kandi's business OPERATES - Look at this excellent article by Cuttail07......
    http://bit.ly/1sWMtHb

     

    For a Great summary of where Kandi's business CURRENTLY is and where it's going - see this excellent summary by Gerald Klein....
    http://seekingalpha.co...

     

    A great summary of Kandi's GROWTH PROSPECTS can be found in Michael Nguyen's article......
    http://seekingalpha.co...

     

    IMO - Kandi Techologies (NASDAQ:KNDI) is TRULY a ONCE IN A LIFETIME STOCK. But, don't take my word for it - do your own DD. If you like what you see then join the many Kandi investors (who have already done rigorous DD) on the private Yahoo Group Forum.

     

    Best of Luck to you, Rich
    18 Aug, 01:48 PM Reply Like
  • Dampflok
    , contributor
    Comments (884) | Send Message
     
    Thanks Rich, I for my part took profit today on my long position, will be able to get back in at some lower price I am sure. By the way, your percentages don't add up.
    18 Aug, 02:02 PM Reply Like
  • RockyMtnHiiigh
    , contributor
    Comments (112) | Send Message
     
    Thanks Dampflok,
    I should have been more clear when explaining Kandi's take on each EV sale.
    Here's a very simple example of how Kandi gets approximately 75% of the Sale of each EV.
    Kandi sells most of an EVs parts to the JV for $10,000. Kandi books 100% of the $10,000.
    The parts Kandi sells become COGS for the JV.
    The JV sells the finished EV to ZZY for $20K. Kandi owns 50% of the JV, so it gets $5,000 of the incremental $10,000.
    In Total Kandi gets to "book" $15,000 of the total Sales Price of $20,000. So 75% of the SP.

     

    Cuttail's explanation is much better though...
    http://bit.ly/1sWMtHb

     

    In this hypothetical example, let us assume that Kandi Technologies sells an EV parts kit for $10,000 to the JV. Let's also assume that after manufacturing this EV, the joint venture company (Kandi Electric Vehicle, whichever provincial plant it is made at) sells this car to the end user for 50% more at $15,000. The end user in our case will be the company ZZY, which is where the cars are currently going, as Kandi does not yet sell to individual private citizens. Government subsidies will be included with an example of $8,000 national PRC subsidy and a $7,000 local subsidy (local subsidies are supposed to more-or-less match the national ones).

     

    To summarize we have these players in our little thought experiment:

     

    Kandi Technologies: sells EV parts kit for $10,000.
    Kandi Electric Vehicles (The Joint Venture aka 'JV'): Buys EV parts kit for $10,000 and sells completed EV for $15,000.
    ZZY Company (End User): Buys the car for use/rental project.
    National Government: Subsidizes $8,000 for produced EVs with sales agreement.
    Local Government: Subsidizes end user $7,000 on purchase of EV.
    How do all of these players come together? This all begins with Kandi Technologies (through Zhejiang Kandi Vehicles), who will sell its parts directly to the JV for the up-front cost of $10,000. Therefore they gain $10,000 of revenue. This will be the predominant source of revenue for Kandi Technologies in the EV-related business. The JV then manufactures this EV through the kit it just purchased. On production and sale of the EV, the national government subsidizes $8,000, paid directly to the manufacturer (JV). (This national government subsidy is theoretically paid quarterly and in advance per Chinese briefings, with reconciliation between the manufacturer and government at the end of each fiscal year. However, the subsidies are currently being paid in a retroactive fashion, and the JV recently received its first subsidy in the amount of $31.8 million for vehicles produced in 2013 and Q1 2014). http://bit.ly/1oV1KmM The amount of the national subsidy for low-speed EVs is publicized to Chinese end-users. They know that the JV is provided $8,000 for the car, so when the JV sells the completed EV to ZZY for $15,000, this $8,000 dollars is subtracted from the sale price. Now ZZY is charged $7,000 for the completed EV as opposed to $15,000 because the national government has assumed part of the cost.
    18 Aug, 04:09 PM Reply Like
  • RockyMtnHiiigh
    , contributor
    Comments (112) | Send Message
     
    For those of you who are looking to get a better understanding of Kandi's businesses. I would recommend starting with......

     

    Michael Nguyen's well researched article "Kandi Technologies - Focus On Growth"
    http://seekingalpha.co...

     

    Here are Michael's updates on the CarShare and Leasing businesses....

     

    Kandi Car-Share Update

     

    In June, I mentioned in an article ChinaEV.org reported that there were twenty-three Car-Share locations in operation, including seven multi-level smart garages and sixteen flat locations. Also reported was Kandi JV was in the process of signing contracts with as many as twenty high-end hotels in Hangzhou to add Car-Share stations. Car sharing demand in Hangzhou has picked up tremendously after the city imposed internal combustion engine (NYSE:ICE) license place restrictions in March and since then, each month the chance to win a car plate becomes slimmer.

     

    Kandi's press release dated July 30 confirmed that "At present, ZZY has a total of 50 stations within the Hangzhou Car-Share network, including on-street stations, high-end hotel EV charging/parking stations, and smart vertical charging/parking garages." This came after the company affirmed that it has full support from Hangzhou's government to roll out a total of 100,000 cars in Hangzhou alone over the next four to five years as originally planned. Reporter Chen Xiaobo of Xinhua Hangzhou reported on August 3rd that Kandi JV is building 40 Smart garages and 100 flat sites in Hangzhou this year.

     

    Meanwhile, Kandi is entering the pilot program of the City of Wuhan with its pilot Car-Share program. In addition, the on-going discussion between Geely (OTCPK:GELYF) and Chengdu Mayor for over a year now is finally making good progress, as reported by China News.

     

    All eyes will be on Kandi for the upcoming earning release on August 11, not only for its second quarter revenue and earnings report, but also for any hint on its Car-Share pilot progress in Shanghai, in which the company will deliver 3000-5000 EVs to the city by the end of this year.

     

    Kandi Group Leasing Update

     

    As I reported in June, Kandi JV launched its group leasing program on May 28, when it delivered 707 PEVs to Xiangshan community residents who signed up for the three-year, effectively free government subsidized lease. In addition to residential communities, Kandi has been quickly adding enterprises to its long lease listing. To date, more than 2,000 cars have been delivered to various communities and corporations, with a waiting list of more than 1,400 residents and growing. In order to meet growing demands, Kandi requires a minimum of 100 EVs per community, and each group entity is now responsible for its own charging facility, but ZZY still provides each group entity with a maintenance service team for any technical support.

     

    With the new government's mandate requiring that electric cars must make up at least 30 percent of government vehicle purchases by 2016, it is anticipated that Kandi will begin enjoying increasing demands for its EVs from government entities soon.
    18 Aug, 04:15 PM Reply Like
  • i_am_seeker_2
    , contributor
    Comments (671) | Send Message
     
    How many cars can they produce each quarter?
    18 Aug, 04:25 PM Reply Like
  • yexiaodan
    , contributor
    Comments (8) | Send Message
     
    What I read about KNDI seems perfect stock to hold, but why the rating in Fidelity site is so low? Very barish, 0.1 point?,
    19 Aug, 08:11 PM Reply Like
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