Kandi(KNDI) - 2020 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved a profit of $4.1 million in Q2 2020, with gross margins improving to 18.2% compared to 17.4% in the same period of 2019 [6][7] - The company received approximately $70 million from the Jinhua government under a repurchase agreement for the relocation of its Jinhua facilities [17] - Kandi recognized $13.9 million in gain from the disposal of assets related to the Jinhua facility, with the remaining gain expected to be recognized in Q1 2021 [21] Business Line Data and Key Metrics Changes - Kandi's fully automatic intelligent battery change system was delivered to a rideshare operator in Haikou City, with trial operations expected to begin shortly [7] - The American subsidiary, SC Autosports, is preparing to launch EV sales in the U.S., with a virtual launch scheduled for August 18, 2020 [7] Market Data and Key Metrics Changes - The company is focusing on the online car hailing business and EV sales in the U.S. despite decreased customer demand due to COVID-19 [6] - Kandi plans to cooperate with Zhejiang Global and Jinpeng to build an online car hailing platform, aiming to invest in 300,000 electric vehicles over the next five years [25] Company Strategy and Development Direction - Kandi is committed to providing high-quality products with great performance at affordable prices, focusing on the development of its battery swap technology [8] - The company is evaluating the possibility of merging its subsidiaries and exploring options for private equity investments or an IPO [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to bounce back due to focused efforts, despite challenges posed by COVID-19 [6] - The management believes that battery swapping technology will be favored by the government and the market, indicating a positive outlook for the EV industry [78] Other Important Information - Kandi's smart battery swap system has registered more than 20 patents, indicating a strong focus on innovation [31] - The company is exploring additional revenue sources from its partnership with Jinpeng and Ruibo in the rideshare industry [33] Q&A Session Summary Question: Will Kandi raise capital in China's capital market for growth? - Management is evaluating options for potential capital raising, including private equity or IPO for its subsidiaries [11] Question: What is the status of payments owed to Kandi from Jinhua and Geely? - Kandi has received all remaining equity transfer payments from Geely and is making good progress on payments from Jinhua [17] Question: How many K23 vehicles are involved in the recent transaction? - The platform will purchase no less than 56,000 K23 electric vehicles over the next five years, priced at approximately RMB 90,000 each [25] Question: What is the expected revenue from the QBX stations? - The revenue from the QBX stations will be disclosed once sales begin, with each station expected to serve 280 vehicles daily [62] Question: Is Kandi still partnered with DiDi for rideshare? - Kandi is currently targeting third and fourth tier cities with Jinpeng and Ruibo, while DiDi focuses on first and second tier cities [65] Question: What is the expected sales target for Fengsheng? - The sales target for 2020 will be adjusted due to the pandemic, with no confirmed sales plan yet [54]