If you believe in the future of electric vehicles (EVs), you should take a serious look at Kandi Technologies Group Inc (NASDAQ:KNDI) stock. Sure, it doesn’t have a CEO as charismatic as Tesla Motors Inc’s (NASDAQ:TSLA) Elon Musk. However, the company still has a shot at dominating one of the biggest markets for electric cars.
Major Action Ahead for KNDI Stock
For those not in the know, Kandi designs, develops, and manufactures electric vehicles and electric vehicle parts. The company is based in Jinhua, China.
China could become the world’s largest market for electric cars. In 2016, total sales in China are expected to be between 220,000 and 250,000 vehicles. That would put China ahead of the U.S., which is expected to have 180,000 EV sales for the year. (Source: “China Forecast to Become World’s Biggest Electric Car Market,” Reuters, December 6, 2015.)
Growth in China’s EV market has been nothing less than phenomenal. In the first 10 months of 2015, sales of electric cars surged 290% year-over-year.
All of that is good for Kandi, because the growing adoption of electric vehicles in China helped to grow the company’s business. In the third quarter of 2015, electric vehicle parts sales increased 35% year-over-year. Kandi Electric Vehicles Group (of which Kandi Technologies owns 50%) increased its EV product sales by 208% year-over-year to 6,004 units. (Source: “Kandi Technologies Reports Third Quarter 2015 Financial Results,” Kandi Technologies Group Inc, November 9, 2015; http://ir.kandivehicle.com/file/Index?KeyFile=31793539.)
Note that Kandi has also partnered with some heavyweights in China. The company will work with Geely, Alibaba, ZTE, Uber China, and Minsheng Bank to create a “Car-Share 4.0” connected EV ecosystem. (Source: “Kandi Technologies Signs Manifesto to Promote Electric Vehicles,” Kandi Technologies Group Inc, November 11, 2015.)
Of course, growth prospects will need to be reflected in the company’s financials. Kandi is scheduled to report earnings on Monday, March 14 before market open.
Last time the company reported, Kandi’s quarterly revenue grew 14.3% year-over-year to $50.5 million. However, its bottom line deteriorated, from $13.5 million in third-quarter 2014 to just $2.3 million in Q3 2015. The decline in earnings was mainly due to changes in stock-based compensation and in the fair value of financial derivatives.
The Bottom Line on KNDI Stock
Most recently, investors have become rather bullish on KNDI stock. In the last 30 days, the stock surged 23% from $6.24 to $7.67. If Kandi’s earnings turn out to be great, there could be another big move in Kandi stock.