KNDI - Earnings call transcript Q2 2022 | Kandi Technologies Group, Inc.

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Operator

Greetings and welcome to Kandi Technologies Second Quarter 2022 Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to the IR Manager, Kewa Luo. ahead. go Please

Kewa Luo

results. everyone. discuss Hello, XXXX. for us covering joining today, Thank results Thank for to the release press Kandi’s issued of the today we you. a you second Earlier quarter

as You can find from press release services. well company’s on Newswire as the the website

that, Chief in then Financial On Hu Officer. with Xiaoming, will are will Chinese, Mr. will and we deliver Mr. today call Officer question-and-answer After Alan remarks which a Mr. translate. I the Hu prepared session. me Executive have Lim, Chief

Before contain of we U.S. the provisions discussion continue, please Act note the XXXX. that Safe forward-looking today’s will Private of Reform under statements Litigation Securities made Harbor

any expressed risks public filings as included statements the does different results unless ahead, under to company’s call company’s today. in inherent update and in any as that, regarding Go the Please U.S. SEC. to during actual the turn expectations not materially call our dollars. Xiaoming. stated, let today Further and over figures these uncertainties assume otherwise note Hu CEO, the and are Forward-looking obligations information involve the With Hu. is required mentioned other law. applicable now uncertainties company all me Mr. The such maybe with the risks forward-looking statements, except from that

Hu Xiaoming

major many these the solid team due to unprecedented despite to Early proud I Thank effort cities, with in COVID China you, chain results Kewa. by second supply occasion. the disruption Hello, in made in to quarter, everyone the waves Kandi’s lockdowns Despite rose in headwinds, environment Shanghai. earnings of especially caused outstanding am was deliver conflict. our Ukraine-Russia and our call and today. the prolonged there welcome conference to by economic team challenges

and our This was the second business We model. the we have impact success effort this the relative flexible refined environment enabled business positive by quarter. in of saw in strategy our continuously harsh

to products growth. find is to of great innovating example category constantly address new the A of emerging are We areas vehicles. off-road

second the golf increased products XXXX, In Monthly demand are we first Our double-digits the half all-electric from production new the quarter is jumped units high. with year-over-year. thrilled XX% by Customers March. our crossovers. in off-road in and vehicle of to X,XXX just revenue introduced

With vehicles, the electrification of intend and so variety as of ATV, off-road develop new trend vehicles to all-electric a we UTV, on. of such

by for We estimate Industry market products will substantial world. a as on. the year vehicles XXXX. the product opportunity new of those the that few goes sources Off-road will years, size next year present XX% around a billion will grow reaching this launch category in a $X.X market

We hard of capture will this soon vehicles introducing share our building growth more marketing to a new work and by ability. distribution and

all-electric near-term in off-road Going believe our sector forward leader. a we make business, adjusting our efforts it by vehicle market can strategically

In addition battery regarding the we equipment in our exchange exchange EV cutting-edge have swapping in battery China. and market service, battery technology

share. by the growth the in are of China are we referring the market COVID battery manufacturers swap competing the health here capture I the What impacting in many market in of in efforts. the EV lack EV Chinese EV waves the growth healthy market, However, in surge order lack mean to China of growth to and is

will We monitor and market dynamics operations moderately. improve

continuously to strategy is as we healthy will still and refine accelerate business our competitive. make China’s and stable. We well Meanwhile, massive vehicle will battery more diversified Kandi electric business as swap the market

Operator, translate the for now English any ahead. me. questions Kewa Let’s and Q&A take start go please session. will

Operator

Instructions] Thank Please first is Harold Investor. from question a ahead. you. [indiscernible], [Operator Our is Private who go

Unidentified Analyst

questions. two have I Hello.

HRQXXXX BEVXX, in car. the Kandi both in future? cable to our rationale temporarily, that Mr. the the back both what been include means Hu Kandi It in the financially China Auto the assembler portal of now to on in highway do in Henghe Kandi the relaunched and significance Kandi speed to can and it cars web having and April, one reported as EV China does this explain of U.S. China that KXX Sorry Kandi’s is seem has with Question

Kewa Luo

Thank you for your question.

what so Let far. me translate you have

Hu Xiaoming

and thank So, Henghe EVs is a question. cooperate your for you use with a the we for trademark brand we basically all Hengrun.

parts mainly that production the is responsible vehicles battery a Hengrun produce enable swap be the with for Hengrun cooperation are take mode, assemble to will our that whole the parts electric motors, Our that and of then we and we vehicle.

production the the and So achieve compliance sales in cooperation PLC basically terms to the is in of market. the mainly

financials, the In sales to product. EV the terms of of our impact that increase will

Unidentified Analyst

with Question full to One lot dealership. that compared as limited a EV? There per you. EV, two, not version use an X-door relationship speed is Henghe small Dallas-based a the UTV exactly I grill car HR on about noticed in name being the the China. white small the on U.S. is Chinese Facebook It’s hour sold this is Thank IDrive Marketplace net. that looks car. hour What SX XXX-mile the like the Kandi Kandi’s car by to a XX-mile the has

Hu Xiaoming

Yes.

we market requirements or technical UTV DOT, the are yet that basically issues. from safety especially is in over the basically have Henghe. version full-speed the we not EV we And at Hence, NEV the on met laid those why we only cooperation moment. the cannot So, using the get frame same because in the by out air with offer for bag U.S. U.S.

Unidentified Analyst

Thank you.

$X,XXX considered truck One for how bike, KXX in sale will KXX IDrive be be ever seems a and The both selling in highway the a full to to the also question. primary China Dallas they overall? big electric And a are last seller King with the Sorry, of Trail truck? dealership NEV inventory

Hu Xiaoming

One, entity as and have here, of that’s because sells specific is the the by U.S. other So IDrive there us. other our two some dealer they not those including in One. dealers, And far be may as products products IDrive won’t to Autosports questions are Dallas that’s sales sure, first all about question provided so SC about the of dealers, we

for So, market for we whole that in don’t KXX, too And market, enclosed, fully type. the the the for scale U.S. se. demand. specifically the there the as China, that’s no is per And information designed such UTV have the EV because much the we in of sales

at the moment, we to So yet. don’t plan it to have China this sell

Unidentified Analyst

Thank you.

Kewa Luo

Thank you.

Operator

go Thank The from next much. very you question Please Terry [indiscernible]. is ahead.

Unidentified Analyst

battery Yes, me you has a announced thank to to the release was the you. cover that bit on There that I framework deal been with Hengrun. little Hunan a in tell swap. want back January press Can initial more battery that swap activated?

Hu Xiaoming

and In tax progressing Technology band Henghe orderly HXX, Ministry then relevant working year, manner. completed policies are the the announcements of the Information exemption. the the is subject procedures June So, the such this and as in project an of we to are protection Hengrun HXX, model China, the product already with environmental at Industry has

and we license basically of fulfill China. sales in complete have and comply the So the

Unidentified Analyst

Is and the the vehicle ride exchange? that hailing the XXX,XXX program be for that program battery Okay. Kandi brand used going for is to on

Hu Xiaoming

license the So, sales with for because the is China we platform the channels, have in Hengrun they in and qualifications. and production reason that working are current other

cooperate be with So the that and the brand that the Henghe trademark road. down will we market the Hengrun China brand EVs for the

as the of that will for brand adopt product be sales Henghe now in the Kandi So use in in in we and may Henghe. there again, brand the our right China. Yes, we but will the future timing

Unidentified Analyst

Okay.

what and goes specific Hengrun what and percentage primarily to each partner Finally, services? does contribute and what products

Hu Xiaoming

Yes.

past. in used So, the work model, the for Hengrun we is with with to our cooperation GLE similar as

which are will basically, source of So the to of we then responsible the and parts to assemble it sell and those customers. even customers our and them to EVs Hengrun, to manufacture sell own

the So, whole we steps are different taking in flow.

because are I percentage answered working on no of question. the is there different your Hopefully, we so products And such flows.

Unidentified Analyst

Yes, your it it. does. appreciate Thanks I time. for

Hu Xiaoming

Thank you.

Operator

Michael The Please next of you. Pfeffer ahead. from question Thank Oppenheimer. is go

Michael Pfeffer

such why been million question. and to my With stockpile, massive discount cash the trading stock aggressive isn’t company equity on shareholder price more to buyback? sitting taking share in for Kandi a adding last at and huge year’s $XX capital announced even working and Kandi cash Thanks completing a

Hu Xiaoming

severe So and should the and moment, price conflict lockdown PLC go to we very is that uncertain upcoming whole and company Difficulty] the international the Ukraine, [Technical believes the market, conditions undervalued, concern. huge know from Russia of understated. of uncertain. between military the the management the is want the In plus And share condition At other COVID, cope the that such environment, the the because is to the the the situation. economic situation thanks time. first outbreak and meantime, in resurgence COVID we the We with in through for seriously your economic this there influence of

the pioneer but we situation, economic company’s buybacks planned. strategy to that level. the financial persistent be that’s with a will believes the to and adjustments increase go refinement However, move, light that the we believe price not because to the repurchase that improvement stock management a our do may price, shares definitely of and the as business then on with not good of share the current back our The move reasonable in gradual performance, the

Michael Pfeffer

a to less XX% one Mr. personally cash comment, up at past the value least with Hu at compared when by discount XX% other both seems at a prices One to company to director. able be than price like to mid-$X to particularly shares half buybacks no-brainer, book other to at buyback and along

made was The the success cash company – at all with is position to Dutch trading On looking year. auction lot that the due Kandi strong the Thanks. and bank? bring auction tension a this of conference tension suggestion a a consider in formal that will ahead explosion something more certainly to would to last cash it Kandi to its call, under into a perfect key that likely tender, time this Dutch revenue remind is positive

Hu Xiaoming

Yes.

believe – buyback I not on rather long-term our and a as We conservative explained we will a that plan business the our operations. and increase earlier, from price in strategy refine be be keep to we a fundamental focus our that because will cash that the or share standpoint. tried So meantime, flow may

to to and and the in current the company would that the and we makes However, tender like if works makes that Dutch explore sense sense if if offer auction, the that see market.

share have of confidence and explore to last shows besides, Hu per that our Mr. other our whether and but we will get future we the more will And and in time price definitely company’s at repurchase and year shares, to to do a around share company’s plan you we later in in have some we took so. repurchased determine parties We the $X have confidence if explore we future. the back Kandi ongoing guys that

Michael Pfeffer

levels. here probably the It’s better half it’s you. buy Well, at Thank much these price.

Hu Xiaoming

Language] [Foreign

Operator

Arthur question Strategies. go of from Porcari Thank next is Corporate Please you. The ahead.

Arthur Porcari

this the with when based Thank you. time Hu. units $XX much? size future Also was what quarter’s a conference year. Can likely years? agreement time Mr. publicly in business explain order that Kandi’s last order million Hu please? sold. if never in in was size cart to QX assume to On quarter’s has as to us huge year and in and shareholders line, also this safe as U.S. Kandi’s along product Kandi’s to the recovered the XX-Q, revenues evening, you today’s XX-Q Mr. at Yet If this possessed revenues product of cart business suppress Kandi expect being in QX with market? and crashing last a PR. stock was order how the the golf freestanding the the was already new from PR, comment announcing reported Though pass on announced surprised unexpected XX-Q, so, total call equally ask would this for question management target almost Good collapsing two-part grow company last disclosed never reached you it’s to golf Could generate back new with at a when everyone’s

Hu Xiaoming

Right.

establish to because always the the to business, adjust new was of had mindset strategy. our fundamental our So we

before in will was plan that mind be our it want it to future. the the definitely we get to [indiscernible] and but in have the announcement materialize we So, will take public, very concrete

pieces March, from the a still the shipment the from of because basically, April May have few carts carts. thousands As from to China to U.S. shipped is of the our however, this start of out for questions, And over with U.S. the deliveries of entity moment. already golf and we year, the we at deliver golf in pieces to majority those dozens of

production month. their now on of few only still we problem the for the the rest a So of no to QX, for recognize per hundreds revenue consistent of pieces golf X,XXX on, entity. to U.S. a it’s over way us But is have carts from

And our for that’s so situation now.

Arthur Porcari

company a we Well, capital, sitting would million start to retail I buying what month million that in per and $XX good to for seems a in here month. sounds like shares, answer, million million a them X,XXX and be that’s you $XXX back number just That’s XXX have $XX quite can a the of what pieces – where $XXX do pretty level, with at should what me ahead you only send those market in right but that go a and on cash put just be debt Kewa that like said. position now, – some that’s

Hu Xiaoming

have smooth Yes, golf sales really future cart we circumstances. bright the good I ideal the target order mean, productions of definitely the we can in definitely, that’s – the and in and achieve

down locked just However, lately. facilities Heico, a our get located there lockdown in is which is

we hold up productions. we deliver terms can of But road, production. that very and good definitely the of the cart our And kind so down performance have golf in some believe impact will

Arthur Porcari

seems calls, to and are the time. between cash increase as like be debt exposure. XXX – Well, analysts Okay. for a at for time have the am up and gross about know, misspoken quarter, find here gained ask the analysts to $XX the I to I – just we quarter, market done moment but cashing there of must a at continuous would $XXX we get disconnect for know is cap. same On the Well, way couple And million like know But the that meant ago, and we a this trying to have we couple company. in retail said going we and past you we during sure million – amount Kandi’s you to us sitting seems again, I not to that’s by that and if actually if have time. each don’t about with it price $XX the All per the million It past every level. anything just And of in it be a to may month, I conference $XXX question said cash do do same I stock million lost went be just XX% seems no trading never better discount we what, seems question trying happen. reality.

that reputation you are been to years got can we got right what something for Kewa. do mean, you they they that’s have that’s I is world. X say, to then, in Blue paid for? All if getting still mean, now, stocks that few is the paid things since Shirt feeling I X anyway, if now. gone that my on supposedly have So more a I pass getting great But down or a happened

Hu Xiaoming

Alright.

we production try scale So, as your we frustrations course, in EV understand will, our market. as of China expand and to simple sales

have the about conditions vehicle articles production with in competitors, EV have Each to sell a will update pickup loss market. they doesn’t make they It may over occupancy of us. China have to they may the in dollars was for sell, XXs of burn order will some loss. they may to those may heard in that is still them, you healthy – few However, shares, heard about of they XXXXs car you market spent Well, the that just in occupy that billions – our RMB. China U.S. to companies, market and sense

or definitely the so to not of However, over with those the companies. we with compete a enough cash is have million cash

be or the to manner, Definitely, do moment, to our we more the So, until our in orderly unwise, production and it much expand make plan. becomes we for will the and and in then bring wait can sense will more doesn’t at healthy so, But that’s no market the just money only scale. when sales go a reason.

for would and the be wait timing to production. sales more there we rather conservative until So, better expand is us and

Arthur Porcari

okay. Alright. Well, anyway,

carts. to one as me haven’t why? only release Why answered managed some out overall the its made. this business should would the Very have conditions So, best and reported still really about yet based golf in keep just you year. you the balance in in market year, based on press and past, golf back had do year. – financial release with of this talked economic have the we It every I The you January was looks secret, current unique this Kandi cart we XX-Q spite both actually put now out likelihood, the kept And quarter, half, this XX to whole the to it on the thing and you based best one like ever, first what put year company, XX condition XXth. press way yet, of comments on in mean nothing

a So, to policy. is be this new just going

You putting will pass just am are questions that going are you just out amazing. and I start press few going done. on, to short got go to It’s dark a I again? I releases or more and

Hu Xiaoming

rather Okay. in plan find it’s I market. that period adjust we our transition EV and hope us for strategy compete you the our to to understand work a still

hopefully if witnessed transition But the So, make encounter future. sought course, to are and hopefully, we them of us and that such not to we cannot we we in stay the of fruitfulness again have can And show investors satisfied, we enjoy that the period. or stay. certain shareholders confidence

Arthur Porcari

Okay.

with shares go back quick Just wins million. that when XXXX million company to sure At way it was and think the XX.X million don’t peak, year, of now. am probably of a is I all he happy couple what I to $XX know, this had seeing. Mr. he If in together I is Hu the started, worth, stock. he not $XX I

paid stock to, closer probably more price, He at the $XX has already stock stock and bought. today’s it’s has got $X today stock worth know more and the at or I he has I don’t is for $XX million he has million. look million You five he know

to hasn’t tariff He great can’t not done in great bandwagon, well I But that buy I he carts, with frustrated. this, most a of job off a anticipate of with undervalued but company last just and golf yes, in have a questions much golf China that’s how bikes restrictions Kandi’s my this stock to certainly off-road an bikes, one year? So, business. of last a on this in How of opportunity the to going couple maybe be has people go alive piece year’s the estimate does for in deal. lifting does this gave management is business and Maybe world power happy getting carts, why sales an the done next and the and off-road business got these. an he on much to to here. effect that’s electric U.S. market total expected is feel the are have safe of NEV the opinion, this sports, and And electric revenues? keeping out contribute And

Hu Xiaoming

First about there questions is tariff charge of no because no our on export, there to China the or there tariff, a imposed such is tax all tariff then but rebate, is for only on the our exporter.

shipping tariff government, the all For U.S. XX% the charge import. the of U.S., the to they

rate. So, under price adjusted accordingly. existing any our to according our market the also determined be the down the future the U.S. the road, adjustments sales tax sales in is existing conditions, there price will is If tariff,

then company’s COVID, sales to level or impact question because of change the cart expect there be no uncertain, conflict market is be the sales about resurgence golf for significant the rate. the tax as Russia the revenue our there other well Well, the of impact the XXXX. basically lockdown a tariff than is significant adjustments estimation. golf this in increase similar from And of the second our cart we that the the forecasts. but So, year, ATVs, to such upon to That’s whole between of and sales of as the Ukraine, definitely will the

Arthur Porcari

the and to for you, just fine great a record who be seems have sure a It of it, on Thank coming seen low you record see but stock, with that the be job the U.S. advantage what up very year company, next happens dealers recently. going well as the like product later. enough Okay. smart you this quarter, all Well, it’s could a it we line. which that it as to with be is price added we year opportunity a huge Well, take be will to its but this to would looks talk those have like me own. from for and for much are to anyway. Thank in been great pain new what each may

Hu Xiaoming

next take Operator, question. you. the can Thank we

Operator

you. Thank

Our a is is from Batterman, next question investor. private go who ahead. Frank Please

Unidentified Analyst

or country of Yes. Kandi highway there any you. Is oral any agreement Mr. Thank legal the Chinese law for that written or prohibits [indiscernible]? exporting Hu. and including Good brief capable evening from cars USA

Hu Xiaoming

met have because The main of standard the in our EVs U.S. we that we the by offer reason requirements product DoT. that space foot is the requirements not not have safety airbag

of been none no fulfilled a market, the self-ratification matter has rather mechanism process. is even product – fact, that based EVs requirement though the U.S. one the in As such of over has China

something in standards, that trouble happened, like written right region. the such airbag oral it we prohibit there yet is then safety the sure the take the China all U.S. in agreement We because we full EU but by had U.S. met of are documents can the in current to order. doing standard, we can picking standard EVs fulfill didn’t or is just sell than we first way or U.S. do world, make if the us higher so, to that and Even the offer such speed to are market. we if – to in we not the rest However, have big though no the or

Unidentified Analyst

you. have and third a I one. second Thank then question do Okay.

them the only the and besides sellable Second airbag KXX the Is highway legal here U.S.? KXX the be in needed in the that question, to are other for to that needed make U.S. thing modifications is

Hu Xiaoming

requirements. the technical DoT. standards pretty the is are obstacle fulfilled and than requirements Yes. that the Other of rest request airbag safety the really The the much by we big major

Unidentified Analyst

high are Very devoted my needed of Kandi’s Okay. quickly and sell why has for to climate and seems to take bring that best resources question, the And in in advantage devoted this to not to United Kandi world. of new this opportunity this airbag DoT me the vehicles good. the done? resources has prices, design changes? gasoline to Why the that’s standards highway we changes whatever inexpensive final It Thank up to to whatever we needed is technology. States not And you. have vehicles brand engineers [indiscernible] getting to due haven’t the the use some my final incorporate question.

Hu Xiaoming

So, the thanks a such similar is one China industrial well tackle issues the past just standard the whole standards. in in to even airbag U.S., for we being matter company it EU, drivers. concern those it’s of and single that question, of have than China together whole in is then higher different and And skill But requirements such we the issue. because and able your set not as suggestions. But for EU, that in passengers, to of safety the basically we rather the country would mentioned tackle work the size much as have the to different tackle, level

second the tried NEV in moment. and the the best the on will the will sales our of the And though on to so. we very to different hard guess occupancy timeline the at U.S. improve NEV in country are that the of to we Meantime, the being focus market. market can’t But half we market the until our determined models terms in U.S. at year, boosted wait we to more in the So, trying level we launch the in be China. improve standard have moment, I But whole do

So, NEV, the our be we the but definitely requirements now will meantime. work in focus on will safety

Unidentified Analyst

and understand other that technology the achieve to electric with China, in for the you the vehicles their all very that in be vehicles, that what for but to the at for seems And are resources in to manufacturing fact point. and to your I am gasoline engineers you difficult companies it have saying. you is are are this considering China manufacturing this should not It seem that. much. just you that on issue the sorry, I Thank reason plants, time. airbag solved export no U.S. comment Thank all

Hu Xiaoming

you. Yes. Thank

any been U.S. thanks your But again has So, we even sold guess the is think I China your one market concern. by to the vehicle for there yet. gasoline don’t companies question and

So, basically China that to all applies based from the automotive companies.

Operator

comments. very you gentlemen, unfortunately for like and Ladies hand that And some Kewa all to to questions. for back we Luo Thank is have much. would I time the closing

Kewa Luo

for Thank call. you. Thank you again conference attending today’s

earnings If you us IR have next in Shirt on free November. company. Blue you e-mail concludes call any forward call more updating questions, our via or our feel to look This contact We to our for today.

Bye-bye. You all you. Thank disconnect. may now

Kandi Technologies (KNDI) 8 Aug 222022 Q2 Earnings call transcript