Why Kandi Technologies Group's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Kandi Technologies Group (NASDAQ: KNDI  ) jumped 28% today after the company announced new charging stations.

So what: The company plans to build 30 "pure EV smart vertical parking and charging facilities" in Hangzhou City by the end of the year. The company plans to then sell 5,000 to 10,000 pure EVs in the city within a year after that -- big plans for a very small company that makes primarily ATVs and go-karts.  

Now what: These are big plans for a small electric vehicle player and I'd be very cautious buying into the hype. The company had just $14.7 million in sales last quarter, which was only up slightly from a year ago, and I want to see profits and more history before jumping in. A123 Systems came with similar grandiose plans a few years ago and investors who bought in ended up losing their shirts.

Interested in more info on Kandi Technologies? Add it to your Watchlist by clicking here.


Read/Post Comments (10) | Recommend This Article (6)

Comments from our Foolish Readers

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  • Report this Comment On June 17, 2013, at 8:16 PM, Tgar13 wrote:

    Do some due diligence and write back.

    You will see that the company is methodically

    Developing relationships with the Central State

    Electric Company, Various cities and states

    And Geely.....these are well laid out plans

    From a very connected CEO

    I give them more than a 50% chance at executing

    Them

  • Report this Comment On June 17, 2013, at 8:49 PM, Florascapes wrote:

    The CEO of KNDI did not say they were building the charging stations but that Hangzhou City is building the charging stations. KANDI is just supplying the vehicles which will create a mini mass transit system with an ultimate 100,000 EV supplied by Kandi. He further stated that other cities are looking to do the same. This is huge for KNDI and this is why the stock popped. Ultimately a very versatile and cheap mass transit system.

  • Report this Comment On June 17, 2013, at 10:35 PM, Tgar13 wrote:

    http://www.chinaautoreview.com/pub/CARArticle.aspx?ID=9089

    Read This.....the writing is on the wall for wholesale changes in Chinese ICE automobiles.....Growth is in electric

    The middle class is demanding clean air and a transportation solution.....and the government is heeding their call

  • Report this Comment On June 17, 2013, at 10:42 PM, Tgar13 wrote:

    https://medium.com/innovation-in-transportation/84411d1d73da

    Read This ........Kandi's relationship with the State Grid will serve as an effective Barrier to Entry in the Chinese Municipal Electric Vehicle Transportation Industry

  • Report this Comment On June 18, 2013, at 6:00 AM, bnorthup wrote:

    The details of this article are slightly flawed.... The vertical parking garage/ charging station will only UTILIZE Kandi vehicles. The garage itself is actually BUILT by the city of Hangzhou. The huge state sponsored electric utility (State Grid) will control when each vehicle battery comes onto and loads the electric grid. The batteries are thus all the same and standard. This whole inter-related system is very complex and if you want to be knowledgeable about it please join the yahoo user group KANDI, which is free and is an investor group that closely follows the events and history of this company.

  • Report this Comment On June 18, 2013, at 6:42 AM, antikoolaid wrote:

    I agree with both this article's and Tom Konrad's article cautioning on Kandi. Plenty of Chinese reverse merger stocks have been pumped up and then later collapsed when the so called promises of profitability never materialize or turn out to be false.

    The same people touting big expectations for this company were also the ones expecting it to have big orders last year-which of course never happened. They even think that a jv with Geely is a guarantee of success when the last company that had a major jv with Geely went bankrupt!

    Government EV subsidies have been around before in China, and they were a total flop. But I guess promoters of this stock also forgot to mention that. Many municipalities in China are near bankrupt themselves, so it is no wonder they are slow to build the supporting EV infrastructure and start a new subsidy program.

    The electricity used by the State Grid comes from dirty coal fired power stations, so there will not be a big net increase in clean air.

    There is an endless list of other risks to this company, masked by a group of people who prefer to spend their time berating others who make some very valid points about why investors should be cautious. That alone should be making readers very worried.

  • Report this Comment On June 18, 2013, at 7:33 AM, bestwaytoriches wrote:

    Stay clear of this Pump and dump. For the last 5 yrs

    KNDI has put out story after story of sales and the results of units sold after 5 yr equals 200. This EV golf cart has been on sale in china for 5 yr no mass adoption has ever taken place. Top speed 25MPH

    is not safe for high way traffic. Five yrs of flat revenue bears this out. I'm not saying the stock won't follow these over the top stories. But No one is going to tell you when the gig is up and the balloon fall from the sky.

  • Report this Comment On June 18, 2013, at 8:36 AM, captainccs wrote:

    >>>and I want to see profits <<<

    You can find them in the company's 10Ks and 10Qs, you know, in the SEC filings.

    The company has a profitable legacy business.

  • Report this Comment On June 18, 2013, at 9:13 AM, corstrat wrote:

    Amazing how stupid some of these ignorant commentors are in thinking they can outright lie when posting comments. like this bestway to the poorhouse posted above. All he had to do is check out KNDI's SEC filings and he would have realized that in the Companies sec 10K, the Company sold 2903 EV's in Q4 alone which is more than TSLA did.

    Additonally, the author here is also totally clueless in that all KNDI has to do is provide the cars for this project. The parking garage, ZIP car like concept has the ciites building and owning the garages and EVs which are all made for KNDI's EVs. So cash is not a problem, though KNDI as of its last SEC filing has some $40 million dollars in Cash and available credit facilities available and is quite profitable.

  • Report this Comment On June 19, 2013, at 2:35 PM, Tgar13 wrote:

    http://mobile.bloomberg.com/news/2013-06-19/capital-of-chine...

    Read This!

    It seems that the Chinese Cities are resorting to

    Limiting internal combustion engine cars....

    I think this is a long term trend that will play

    Into a more rapid adoption of low speed EV

    When rented via Vertical Parking Garages the

    State can use the stored unused capacity to

    Stabilize the Grid in order to decrease firing up

    More coal at the plant

    An added benefit of KNDI's close relationship

    With the State Grid

    Again this stock KNDI is a long term rec IMO

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