What's happening: Shares of Kandi Technologies Group (NASDAQ:KNDI) were down 9.8% as of 11:30 a.m. Monday after the China-based electric-car manufacturer released second-quarter results.

Why it's happening: On one hand, Kandi Technologies' quarterly revenue climbed 45.5% year over year to $48 million, including an 168% increase in sales of electric vehicle (EV) parts to $46.6 million under its joint venture with Geely Automotive. On the other hand, based on generally accepted accounting principles, Kandi's net income simultaneously plunged more than 50% to $5.4 million, or $0.12 per diluted share, down from $11.2 million, or $0.27 per share, in the same year-ago period. For that, Kandi investors can primarily thank the negative effects of stock-based compensation and financial derivatives.

For perspective, there are no analyst estimates available to which investors can compare Kandi's performance. But to management's credit, Kandi CEO Hu Xiaoming noted the results were in line with their own expectations. Note that Kandi's joint venture also sold 4,466 electric vehicles during the quarter, an increase of 8.1% year over year, and last month announced a new deal to provide Zhejiang Shi Kong Electric Vehicle with 4,000 Kandi brand EVs by the end of 2015. In addition, after only just receiving its 2014 subsidies from the Chinese government in early July, Kandi expects to receive its 2015 subsidies "in the coming months," which should bolster its cash flow in the current quarter.

Finally, Kandi offered current-quarter guidance for revenue of $49 million to $51 million -- the midpoint of which represents roughly 13% year-over-year growth -- driven by the delivery of 5,500 to 6,500 EV products during the quarter. For the full year 2015, Kandi expects to deliver 20,000 to 25,000 EV products. In the end, while Kandi Technologies' net income may have suffered a steep decline in Q2 given its lumpy business in these early stages, it appears poised to enjoy stronger growth on the road ahead.

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