Seeking Alpha


Send Message
View as an RSS Feed
View bergerbros' Comments BY TICKER:
Latest  |  Highest rated
  • Kandi Technologies: A Risky Bet Despite Huge Opportunity In The Chinese EV Market [View article]
    Why don't you two short shills start doing something constructive for a living. You forgot to mention that the JV also has about $400 million in current assets, and in China the custom is for banks to only give one year loans and to roll them over has they have been doing for Kandi for over seven years. In the U.S. the vast majority of the current liabilities would be considered long term debt and their current ratio is actually outstanding. The truth is that both the JV and Kandi are in great financial shape and the only reason the stock doesn't reflect it YET is because of the activity of the shorts. Hopefully they will wake up one day and realize this company is the real deal and the big money to be made over the next few years is on the long side,
    Jul 2, 2015. 09:20 AM | 3 Likes Like |Link to Comment
  • Kandi Technologies: A Risky Bet Despite Huge Opportunity In The Chinese EV Market [View article]
    BTW, I just noticed you have published 30 SA articles in20 days---You must be quite an expert on all publicly traded companies
    Jun 20, 2015. 02:04 PM | 21 Likes Like |Link to Comment
  • Kandi Technologies: A Risky Bet Despite Huge Opportunity In The Chinese EV Market [View article]
    You really don't know anything about KNDI, Do you? If you did, you would have known that Prior to 2014, KNDI was building selling and generating revenues for the "whole car". In early 2014, with the start of the Geely KNDI JV, it started phasing out the building of the "whole car" and turned that over to the JV. Since the JV is only 50% owned by KNDI, KNDI by SEC reporting rules cannot "Consolidate" ANY of the revenues to its "Top line revenues" even though the JV last year had revenues of over $215 million. Which you can find on page F-31 of KNDI's 2014 10K filing. This, considerably higher than even the excellent increase you reported. But here-in lies the confusion with KNDI that normally intelligent pundits fail to take into consideration.

    While KNDI slowly shifted over the responsibilities of making and selling the whole cars to the JV which was completed by mid 2014, it did this in exchange for retaining the the "right of first refusal" to provide various parts to include the key items such as the EV motors, Controllers AC, and the batteries packaged into the Battery Management Systems (like TSLA does with the Panasonic batteries) and other parts that equate out to approximately 70% of the wholesale price the JV sells the cars for. (That is why KNDI's revenues last year were approximately 70% of the JV's 215 mil revenues).

    The reason the Gross margin dropped was due to KNDI selling the "parts" at a lower gross margin to the JV to retain that business, but is better off in the long run because it owns half of the JV. As JV profits increase, don't be surprised to ultimately see the "Net Margins",( due to only the 50% share of JV Profits allowed to show on KNDI's books) surpassing the Gross Margins.

    I am sure upon realizing this you would agree; for you or any "pundit" to try to compare 2014 and near term future results to past years Revenues and Gross margins is like trying to compare apples to watermelons.

    As far as competition for the JV is concerned? To date they have none in their primary business model which is called "Micro-bus", a variation of a CarShare program in China. The reason it is called Micro-bus is because is part of the local government Municipal Transit System. That is why, for example, the City of Hangzhou, has the locations and pricing of the KNDI JV CarShare posted on the front page of the Hangzhou MTS website. Regarding other aspects of the business model which includes both private carshare as well as direct consumer sales. KNDI's top selling EV's at least after subsidy are priced at the low end for consumers. After subsides, a consumer can by a four door Panda for as little as $6000 out of pocket. Which is between a 50% to 300% discount to the out of pocket costs of the brands you mentioned.

    I hope all your readers do click on and pay attention to the links you provided in your article. One is a link to a PowerPoint presentation that KNDI recently published and is being used at upcoming Institutional Meetings. Here is that link directly.

    KNDI has forecast a doubling of EV sales for the JV for 2015 to 20-25,000 sales this year on their recent Conference Call. A call last week to IR confirms that they are comfortably on track to reach those numbers. If the JV reaches even the low end of that range, KNDI's 2014 earnings of .39 a share will likely increase 150% around $1.00 a share.

    As far as KNDI's Balance Sheet is concerned, there has been a temporary increase in Accounts Receivable due to the payment lag in these early stage subsidies between the final sales and the receipt of the generous subsidies you speak of. While the subsidies are not directly paid to KNDI, (The Federal are paid directly to the JV who then discounts the Car price by that amount to the end user. The local subsidies which are approximately equal to the Federal is paid directly to the end user).

    Most of the EVs for last year were sold to leasing companies to include the majority to ZZY a private VC owned Company with KNDI and Geely each also owning a minority 9.5%. As an accommodation to faster sales, the JV has given extended payment terms to ZZY and other leasing Companies which allow a time extension for them to receive their subsidies. In turn, KNDI has given extended terms for the payment of parts sold to the JV relative to the JV extension given to the end user. At the end of last quarter, total subsidies owed to both the JV and Leasing Companies from both Federal and Local Governments total around $150 million.

    Since KNDI is not owed the Subsidies Directly, in theory it is not their place to announce when those subsidies are, or will be paid. Though they did report over $61 million paid to the JV last year. So it is not known whether they will be giving a public report on payment. However, there is some evidence that a portion of the subsidies owed have recently been paid which one would assume the cash would in turn be used to pay the JV and the JV to pay down its debt to KNDI for the parts.

    But the bottom line is that KNDI has said as recently as the Institutional Investor conference it participated in a few weeks ago, that they feel no need to raise any capital other then conventional bank loans anytime in the foreseeable future. So apparently your concern about their balance sheet is not shared by the Company.
    Jun 20, 2015. 01:59 PM | 42 Likes Like |Link to Comment
  • Kandi Technologies: Was Last Week's Sell-Off A Buying Opportunity? [View article]
    Vic138- Excellent observation in your comment. Makes total sense. But don’t forget that Mr. Hu, KNDI CEO last week also said he expects the JV to sell between 20 and 25,000 EV’s this year which is about a double of what they sold last year. But I think you forgot to put up the link to the ZZY Jobs page. Here it is:

    So, bottom line of what you are saying is; Mr. Hu can satisfy the shorts and naysayers here selling more cars right now by digging a deeper cash flow hole, or he can be prudent and throttle back a bit for the next few weeks as he has been doing and run the Company like any intelligent CEO. Obviously he has already chosen the latter.

    BTW, I believe the trailing 4 consecutive quarters of positive GAAP earnings is now around $.75 a share, or less than 12 PE. Makes for a ridiculous PE for a Company who is growing close to 100% annually and forecasting another year of equal or better growth this year.

    May 18, 2015. 12:13 PM | 6 Likes Like |Link to Comment
  • A "Non-Event" Jan. 30th That Could Quickly Spell Bad News For Kandi Technologies Short Sellers. [View instapost]
    Great insight Art--- Also, It looks like the SEC is finally taking action to prevent naked short selling. This has become obvious by looking at the recent NASDAQ Reg Sho list. This past Thursday there were only 17 companies on the list, of which 13 were ETF's or funds. Only 4 companies were on it. A couple of years ago you could find 100 or more companies listed. For those not familiar, this is a list of companies that have been warned by the SEC that they have a finite amount of time to rectify the situation or the broker must buy them in. This might explain why last week on two consecutive days their were about 172,000 and 264,000 shares traded on " market at the close". I believe these were probably shorts evening out the positions that they took while trying to create artificial selling in coordination with the hit piece that was just published.
    Feb 1, 2015. 06:36 PM | 14 Likes Like |Link to Comment
  • Kandi Technologies: Investable Macro Revisited (And Visited) [View article]
    Excellent first hand report Tom. I am also glad you did not dignify the ranting of a confirmed short by responding. You properly described the big picture, let everyone decide for themselves.
    Jan 14, 2015. 02:44 PM | 17 Likes Like |Link to Comment
  • Can Micro-Transport Be A Major Driver For Kandi Technologies? [View article]
    You did an adequate job in defining the possible risks but you forgot the potential rewards. If one would take the time to do some real due diligence on the progress of Kandi over the last few years they would see that it has become the largest per unit producer of EV's in all of China. Mr. Hu, the CEO has come up with several creative new marketing methods which are just in it's infancy. Kandi and the joint venture have or are building over the next couple of years a capacity of between 500,000 and 700,000 cars per year. We all can agree that the Chinese Government is committed to do all that it can to increase the use of EV's in order to overcome pollution, and the lack of oil. Now lets look at the market cap of TSLA--$25 billion. How about UBER and their car share program, also in it's infancy $18 billion. I believe KNDI which is serving the huge and increasing Chinese middle class has as much potential as these two other companies and it's market cap is about $500 million. Sure their are some risks but the potential is incredible. IMHO, you should keep in mind that KNDI has a short interest exceeding 6 million shares and an increasing institutional following. It's no wonder there are those that would rather emphasize the risks.
    Jun 10, 2014. 02:21 PM | 12 Likes Like |Link to Comment
  • Kandi Shareholder Call Indicates Strong Q4 And Promising 2014 [View article]
    This is a terrific update on the current status and future potential of this leading Chinese EV company. I also understand there is an extensive recent research report by a leading U.S. investment banking firm which is predicting a 40% plus gain for Geely in 2014, based largely on their joint venture EV business with KNDI. According to Yahoo Geely has about 9 billion shares outstanding and KNDI has about 37 million shares outstanding. I believe it is just a matter of time before KNDI begins to gain the attention of more institutional investors. It may be beginning now.
    Dec 26, 2013. 09:04 AM | 6 Likes Like |Link to Comment
  • Behind The 'Kandi Machine': China's Sweet EV Solution [View article]
    Muk--that is ridiculous --most of that crazy volume above 7 was day traders--high frequency traders and shorts playing their games. At this price the stock has about doubled this year--maybe the shorts should do some tax loss buying.
    Dec 12, 2013. 09:18 AM | 2 Likes Like |Link to Comment
  • Behind The 'Kandi Machine': China's Sweet EV Solution [View article]
    In the case of KNDI you are buying shares directly in the company--these are not ADR's. Nor are they VEI's. The shares held by American holders are the same as those held by Mr. Hu.
    Dec 10, 2013. 09:20 AM | Likes Like |Link to Comment
  • Behind The 'Kandi Machine': China's Sweet EV Solution [View article]
    Aaron,you have done a fantastic job of confirming the fundamental progress the company is making. I will now bring up a point that I consider will be the Holy Grail in regards to the long term price of the stock--that should please the longs and really concern the shorts. The new president of China has made it very clear that he intends to bring currency convertibility during 2014. Also, he intends to ease listing requirements for private companies on the Chinese exchanges. I believe that some time during the next year, for the first time, Chinese will be able to buy KNDI. With all the local press that the company is getting now, can you imagine what will happen as they roll out, and thier customers realize it is a public company and they can buy the stock. I sure would not want to be short when that starts to happen. If you want further insight into the Chinese thoughts regarding risk--look at Macau.
    Nov 22, 2013. 02:12 PM | 5 Likes Like |Link to Comment
  • Behind The 'Kandi Machine': China's Sweet EV Solution [View article]
    Fantastic article---if it were up to me you would walk up the red carpet to get your Academy Award.--This should help spread the word about the real potential of KNDI, and how far they have come.
    Nov 22, 2013. 11:56 AM | 3 Likes Like |Link to Comment
  • Kandi Technologies: As China Goes, So Goes Kandi [View article]
    As usual Harris--fantastic article--very well researched and written This is a once in a lifetime opportunity you are pointing out and I hope investors take advantage of it.
    Sep 24, 2013. 09:05 AM | 2 Likes Like |Link to Comment
  • Kandi Technologies: Is Kandi's Short Seller A Dead Man Walking? [View article]
    I disagree--in my opinion the real volume is only a very small percentage of the reported volume. When you take away the the substantial buys and sells created by the shorts themselves along with day traders and high frequency traders the resulting volume is a small fraction of that reported. I also believe that each day that passes there are more real buyers then real sellers thus taking more shares out of the market until the stock sells at much higher prices, which in itself could attract more new buyers. Ultimately, if the company continues to progress this is what will happen. Remember, Mr. Hu has said 2013 will be the breakout year.
    Sep 17, 2013. 01:40 PM | 4 Likes Like |Link to Comment
  • Kandi Technologies: Is Kandi's Short Seller A Dead Man Walking? [View article]
    Today CNBC said that 23 firms were fined for short selling violations. Maybe the SEC is finally waking up. Great analysis --hope the regulators keep it up to protect the small investors.
    Sep 17, 2013. 12:30 PM | 8 Likes Like |Link to Comment