Tuesday, August 09, 2022
Kandi Technologies Group, Inc. (KNDI)
The shift towards off-road vehicles accelerates
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.
Off-road vehicle sales rose 80% as the company continues to shift towards golf carts, go-karts, and ATVS. Off-road vehicle sales carry higher gross margins (10-15%) than other businesses. Management indicates that crossover golf carts delivered from the factory have increased from dozens in March 2022 to more than 2,000/month. Management believes the off-road market could be a $2.2 billion market by 2028, demonstrating 19% annual growth. Kandi plans on introducing new models this fall to stay ahead of demand. Battery sales (following an acquisition earlier this year) were also strong and contributing to profitability.
Kandi is deemphasizing the electric vehicle market and seeing a slow down in scooters/bikes. Management continues to believe the EV market is currently too competitive stating that competitors are losing up to $10,000/vehicle to gain market share. Scooters/bikes sales, which were especially strong during COVID, declined 90% year over year as demand for the product drops….
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*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.