Kandi Technologies Group, Inc. Aktie

Greetings, and welcome to Kandi Technologies Group, Inc. First Half 2026 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kewa Luo, Investor Relations. Please go ahead.

Thank you. Hello, everyone, and welcome to Kandi Technologies Group, Inc.'s First Half 2026 Earnings Conference Call. As a reminder, today's call is being recorded. The company's financial and operational highlights were issued in a press release earlier today and are available online. You can access the earnings press release and subscribe to the company's e-mail alerts by visiting the Investor Relations section of our website at ir.kandigroup.com.

Joining us today are Mr. Feng Chen, Chief Executive Officer; and Mr. Alan Lim, Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC.

The company does not assume any obligations to update any forward-looking statements, except as required under applicable laws. Unless otherwise noted, all financial figures discussed today are in U.S. dollars.

I will now turn the call over to our CEO, Mr. Feng Chen, who will deliver his remarks in Chinese, followed immediately by English translation. Mr. Chen, please go ahead.

[Interpreted] Good day, investors and analysts. Welcome to Kandi Technologies Earnings Conference Call for the First Half of 2026. Thank you for your continued interest and support of the company. The first half of 2026 marked a new phase in Kandi's strategic transformation as our new business initiatives began to deliver tangible results. Our battery swapping business, in particular, is gaining commercial traction, showing that our earlier investment and development efforts are paying off. It is now poised to become an important growth driver, growth momentum as our core business also strengthened significantly, driving robust gains in both our top and bottom lines.

Meanwhile, we continue to build out our off-road vehicle dealer network, refine our retail partnership model and refresh and upgrade our product lineup. This financial and operational progress demonstrates that our strategy is driving improvements in operating performance and business fundamentals, reinforcing our confidence in our next phase of growth.

Our first half revenue grew 57.4% year-over-year to $57.1 million. Revenue from our core off-road electric vehicle business increased 59.4% to $54.2 million, including $6.1 million from Rawrr, the electric off-road motorcycle brand we acquired in February 2026. Higher revenue and gross profit, combined with relatively stable operating expenses drove a return to operating profitability and a significant improvement in earnings. Net income rose 452.2% year-over-year to $9.4 million.

As of June 30, our cash and cash equivalents, restricted cash and certificates of deposits totaled $285.7 million, providing a solid financial foundation to support future growth. On our full year 2025 earnings call, I outlined Kandi's store engine strategy, strengthening our core North American off-road electric vehicle businesses while cultivating new growth drivers in energy and intelligent equipment.

On the new driver side, we are advancing our battery swapping equipment and intelligent robotics business, and we broadened our energy solutions for AI data centers by acquiring a controlling stake in Xinchu New Energy. Going forward, we will continue to improve product competitiveness and sales channel efficiency in our core business while tailoring our commercialization efforts for new business to each one stage of development. Over time, this will diversify our revenue base and growth drivers.

Next, I would like to share more details on our first half progress and recent developments across each business as well as our priorities going forward. Let me begin with our new business initiatives. We have made tangible progress in commercializing our battery swapping equipment and are now in volume production. In July, our subsidiary, China Battery Exchange secured its first batch order from CATL Tianjin Energy subsidiary for heavy-duty truck battery swapping station equipment. Just 2 months later, it received another batch order.

These orders demonstrate that our investments in technology and strategic partnerships are beginning to pay off, while also providing visibility for planning, production and deliveries, we expect this business to begin generating meaningful revenue in the second half of this year, emerging as a new growth driver for Kandi. Our entry into the battery swapping equipment business marks an important step in extending Kandi's technology and manufacturing expertise to new energy infrastructure. Looking ahead, our priorities are to fulfill customer orders, improve product quality and delivery efficiency and strengthen our after-sales service capabilities.

We aim to deepen the customer relationships and secure follow-on orders by constantly meeting our project commitments. As we accumulate project delivery experience and scale manufacturing capacity, we will be better positioned to drive sustained growth in this business.

In intelligent robotics, we continue to invest in autonomous quadruped robots, focusing on security patrols, inspections and applications in logistics parks. This business remains in an early R&D stage. Our work is currently centered on aligning development with customer needs, tailoring products to specific use cases and validating their performance in real-world settings. Progress in these areas will guide our decisions on further investment.

Additionally, Xinchu New Energy in which we acquired a controlling stake in the third quarter of this year is expanding its AI data center backup power and energy storage business. In July, Xinchu became an authorized solutions reseller of Schneider Electric. By combining Schneider Electric's established UPS and data center infrastructure products with Xinchu's expertise in energy storage batteries and battery management systems, we can offer data center customers integrated orders overseas.

We expect the business to make meaningful revenue contribution this year as AI computing infrastructure continues to expand globally, we will build out our integrated solutions to meet demand for highly reliable backup power and energy storage, cultivate customer relationships and drive order conversion, further developing this new revenue stream. Turning to our core business, that is the North American off-road electric vehicle market with a portfolio spanning UTVs, golf carts and other electric off-road products. In the first half, average monthly sales through our U.S. dealer network doubled year-over-year, reflecting strong sales momentum.

This growth was driven by greater contributions from existing dealers and the addition of new partners. Looking ahead, we will deepen collaboration with existing dealers, add high-quality new partners and align these efforts with upcoming product launches to broaden our reach and improve sales performance. On the product side, we continue to clear inventory of slow selling models and old models in the first half. We expect to complete the transition to an all-new Kandi product lineup in the fourth quarter. We are closely coordinating inventory optimization, new product launches and sales channel upgrades to provide our dealers and retail partners with a more competitive product mix and help drive core business growth in 2027.

Rawrr is already contributing to our revenue, and we continue to deepen its post-acquisition integration with the group. Amid intense price competition in the electric off-road motorcycle market, we are preserving Rawrr's premier brand positioning, focusing on product performance, rider experience and brand equity to differentiate the business and support sustainable growth.

We are integrating Kandi Group's R&D, manufacturing and supply chain capabilities with Rawrr's brand assets and distribution network to develop products and respond to U.S. market demand more efficiently. We are also broadening Rawrr's product offering and strengthening channel coordination to drive sales growth across its existing network of more than 300 dealer partners. In the first half, Rawrr continued to expand its team and refine its operating system while building brand equity through professional recent events, trade shows and social media campaigns.

Rawrr is also advancing development of an all-new product lineup with launches planned for 2027. This year, we are concentrating on managing the inventory transition, preparing for new launches and optimizing our sales channels. As the benefits of integration materialize, we are confident we can convert these product and channel strengths into revenue increases and make Rawrr a stronger growth driver for our North American business.

In short, we have 4 priorities for the second half of this year. First, scale battery swapping equipment deliveries and support Xinchu New Energy in winning additional overseas orders. Second, sustain sales momentum in our North American off-road electric vehicle business while refining our sales channels and refreshing the Kandi product lineup. Third, strengthen Rawrr's team, supply chain and distribution network in preparation for its new product launches in 2027. Fourth, continue developing intelligent robotic solutions tailored to real-world applications. We remain confident about our outlook for 2027. We expect a significant upgrade to Kandi's product portfolio, new on product launches and revenue contributions from our emerging businesses to drive stronger growth.

At the same time, we will maintain a disciplined approach to capital allocation, evaluating investments in new businesses, acquisitions and capacity expansion based on commercial progress, expected payback period and associated risks and returns and aligning the pace of investment with business needs to optimize capital efficiency.

The management team and I are fully committed to strategic execution, converting the momentum in our core business and opportunities across our new business into sustainable growth and long-term value for our shareholders.

Now let me turn the call over to our CFO, Alan Lim, who will provide details on our first half 2026 financial performance. Thank you.

Thank you, Mr. Chen, and Kewa. I'm Alan Lim, CFO of Kandi Technologies, and thanks, everyone, for joining us today. I will go over the financial results for the first half of 2026.

Regarding the income statement, the net revenues were $57.1 million for the current period, up from 57.4% from $36.3 million for the same period in 2025, mainly due to an increase of sales of off-road vehicles compared to the prior year-end period as well as the additional revenue contributed by our new acquired entity, Rawrr, a subsidiary in the company acquired in February 2026. The cost of goods sold was $32.3 million in the current period, up 62.3% from $90.9 million for the same period of 2025. The increase was primarily due to the corresponding increase in sales. The gross profit was $28.8 million in the current period compared with $16.4 million for the same period of 2025.

The gross margin was 43%. It was comparable to 45.2% for the same period of 2025. The total operating expenses were $19.3 million, up 5.3% from $18.3 million for the same period of 2025. There's a breakdown of different expenses. The R&D expenses were $2.4 million, a decrease of 3.5% from $2.5 million for the same period of 2025. Regarding the selling expenses, the total amount was $5.8 million, up 10% from $4.5 million for the same period of 2025. The increase reflected the higher sales activities.

The G&A expenses were $11.9 million, up 5.4% from $11.3 million for the same period of 2025. The income from operations was $5.5 million in the current period compared with the loss from operations of $1.9 million for the same period of 2025. The net income increased 452.3% to $9.4 million from $1.7 million for the same period of 2025. The increase was primarily driven by the higher net revenues and gross profit, while the operating expenses remained relatively stable and controllable.

The basic and diluted net income attributed to the company's shareholders per share were $0.10 compared with $0.02 for the same period of 2025. Turning to our balance sheet. Our financial position remains strong. As of June 30, 2026, the company had cash and cash equivalents, restricted cash and certificates of deposits totaling $285.7 million compared with $211.9 million as of December 31, 2025. The working capital was $189.5 million as of June 30, 2026.

So that concludes my remarks. I will now hand the call back to Kewa for any final comments. Thank you, everyone.

Thank you once again for joining us today. If you have any further questions, please reach out using the contact information provided on our website. We appreciate your time and interest in Kandi Technologies. This concludes today's conference call. You may now disconnect.

Ladies and gentlemen, thank you for your participation. You may now disconnect your lines or log off the webcast, and enjoy the rest of your day.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Greetings. Welcome to Kandi Technologies Full Year 2025 Financial Results Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to Kewa Luo, IR Director. Thank you. You may begin.

Thank you. Hello, everyone, and welcome to Kandi Technologies Group Full Year 2025 Earnings Conference Call. As a reminder, today's call is being recorded. The company's financial and operational highlights were issued in our press release earlier today and available online. You can access the earnings press release and subscribe to the company's e-mail alerts by visiting the Investor Relations section of our website at ir.kandigroup.com.

Joining us today are Mr. Feng Chen, Chief Executive Officer; and Mr. Alan Lim, Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable laws. Unless otherwise noted, all financial figures discussed today are in U.S. dollars.

I will now turn the call over to our CEO, Mr. Feng Chen, who will deliver his remarks in Chinese, followed immediately by English translation. Mr. Chen, please go ahead.

[Interpreted] Good day, investors and analysts. Welcome to Kandi Technologies Earnings Conference Call for the full year 2025. Thank you for your continued interest in and support of us. 2025 was a pivotal year for Kandi. The past 2 years have been defined by a challenging macro backdrop marked by evolving geopolitical, shifting trade policies and uneven demand across our end markets, which weighed on our operating performance. We are clear-eyed about near-term revenue dynamics.

At the same time, we are encouraged by what our team delivered beneath the surface, meaningful improvements in operating quality, a stronger cash flow profile and a materially healthier balance sheet. In 2025, our gross margin improved to 42.6%, up from 30.8% in 2024. We generated $96.8 million in net cash from operating activities and ended with $211.9 million in cash on hand. These results reflect our commitment to high-quality earnings, more sustainable cash flows and stronger returns on invested capital.

Over the past 18 months, one of my key priorities as CEO together with the management team has been to review and reassess Kandi's business boundaries, growth trajectory and long-term overall direction amid the opportunities presented by technological innovation and industrial upgrading we are placing even greater emphasis on focused execution, disciplined capital allocation and the consistent delivery of major milestones.

Beginning in 2026, Kandi is entering new phase of growth. Our strategy will be anchored around 2 core engines. Our first engine is the off-road electric vehicle business centered on the North American market and spanning UTVs golf cars, electric off-road products and others. This business represents Kandi's core franchise, underpinning stable cash flows and a well-established go-to-market distribution network.

In the first quarter this year, the overall core business remained stable with continued progress in distribution channel expansion. Our dealer network continues to scale with a notable improvement in per dealer sales performance, further broadening our market coverage and brand presence in key markets and laying a solid foundation for full year growth.

In addition, as we enter 2026, we are actively advancing our North American UTV business across 4 dimensions: next-generation model development, enhanced product experience, improved channel efficiency and strengthened supply chain capabilities. We have set internal sales targets, meaningfully above historical levels and have engaged an external automotive design team with proven mass production experience to help design our next-generation UTV products.

Our ambition goes beyond simply selling more units. We are focused on boosting Kandi's product, competitiveness across the North American outdoor recreation and low-carbon mobility market. In December 2025, we signed an agreement to acquire Rawrr, a premium U.S.-based electric off-road vehicle motorcycle brand. With Rawrr now part of the Kandi family, our goal is to establish premier electric off-road motorcycles as a meaningful new growth category within our North American product portfolio by 2026.

We see strong synergies between Rawrr and Kandi's existing North American distribution network, supply chain and product lineup. As we advance the integration, our primary priorities will be brand alignment, channel coordination, supply chain optimization and product development aiming to ensure this acquisition translates into meaningful, measurable revenue contribution rather than a transaction of paper.

Our second engine comprises emerging battery swapping equipment and intelligent robotics business. Battery swapping equipment represents our most important breakthrough opportunity in 2026. In August 2025, our subsidiary, China Battery Exchange was qualified as a battery swap equipment supplier within CATL's supply chain, securing its first order for heavy truck battery swap stations equipment.

In January 2026, China Battery Exchange entered into a 3-year strategic cooperation agreement with CATL's subsidiary covering the mass production and delivery of heavy truck battery swap station equipment. Based on our current order visibility and a production schedule, we are confident in achieving meaningful revenue growth in 2026.

The battery swap equipment business represents more than an incremental revenue stream for Kandi. It demonstrates a remarkable extension of our footprint from low-carbon mobility products into the broader new energy infrastructure sector. Looking ahead, our priorities are centered on execution on heavy truck battery swap station order deliveries, ramping up our mass delivery capacity and capturing emerging commercial opportunities across ports, mining operations and long-haul freight applications.

On the intelligence robotics business front, our focus is on the deployment of autonomous quadruped robots in security, patrol and logistics park environment. We have entered a strategic partnership agreement with Hawk Robo Systems LLC to form a joint venture, KH robotics through which we are developing localized testing, validation and commercial operation capabilities in North America. We expect to complete the first functional demo by approximately June 2026, followed by field testing and initial pilot deployments in the second half of the year. This business remains at an early stage of deployment rather than providing near-term revenue guidance. We will evaluate and communicate progress through clearly defined product milestones and real-world use case validation.

Regarding supply chain capabilities, we will continue to build out our global footprint, anchored by core R&D and manufacturing in Mainland China with flexible capacity in Taiwan and local assembly and front-end distribution network in the United States. The architecture provides meaningful structural insulation against geopolitical uncertainty and trade volatility while also enabling us to respond more quickly and effectively to evolving demand in the North American market.

In sum, looking ahead to 2026. We are focused on 4 clear priorities. First, restoring sales momentum and advancing product upgrade across our UTV and low-carbon mobility lineup in the North America. Second, successfully integrating Rawrr and translating the acquisition into tangible revenue contribution. Third, advancing the battery swaps equipment business from initial order delivery to large-scale deliveries. And fourth, advancing our intelligent robotics business through the completion of functional demo followed by field testing and initial pilot deployment.

At the same time, we will maintain a disciplined approach to capital allocation. Our cash positions are not a justification for indiscriminate expansion, but rather it means to preserve flexibility in an uncertain environment. Any future investments in new business initiatives, acquisitions or capacity expansion must be guided by long-term shareholder returns and will be rigorously evaluated against clear benchmarks, including commercial progress, cash payback cycles and risk-adjusted returns.

Today, Kandi has a clear platform structure, a focused dual engine strategy, a resilient global supply chain and a solid cash position. I firmly believe that with this core competencies and strategic positioning in place. We are well equipped to translate our vision of manufacturing joy driving the future into tangible long-term value for shareholders.

Now let me turn the call over to our CFO, Alan Lim who will provide details on our full year 2025 financial performance. Thank you.

Thank you, Mr. Chen and Kewa, and thank you, everyone, for joining us today. I will go over our financial results for 2025. The net revenues were $87.4 million, a decrease of 31.5% from $127.6 million for 2024, primarily due to reduced demand for EV products in the PLC market and fewer sales of crossover golf carts and other vehicle models.

Ongoing trade uncertainties, including the potential tariffs and trade restrictions, together with persistent inflation and elevated interest rates, adversely affected consumer demand for higher price migration of vehicles, which in turn impacted sales to the Kandi's major retail customers and distributors. The cost of goods sold was $50.1 million, a decrease of 43.2% from $88.6 million for 2024. The decrease was primarily due to the corresponding decrease in sales. The gross profit was $37.3 million compared with $39.3 million for 2024. Gross margin was 42.6%, up from 30.8% for 2024. The improvement in gross margin was primarily driven by increased sales of the previously impacted inventory.

The total operating expenses were $91.5 million, a decrease of 12.6% from $108.1 million for 2024. The factors, including the research and development expenses were $7.6 million, up 52.6% from $5.8 million for 2024, mainly due to the completion of research and development projects during the current period.

Secondly, the selling and market expenses were $16.7 million, a decrease of 21.5% from $21.2 million for 2024. The decrease was mainly due to the decreases in trade expenses and commission expenses, in line with the decrease in revenue. The general administrative expenses were for $54.4 million, a decrease of 5.7% from $ 57.7 million for 2024. The decrease was mainly due to the decreased depreciation and amortization in the current period following the material impairment of long-lived assets provisioned in 2024. The loss from operations was $57.2 million, compared with $68.8 million for 2024. The net loss for the current year was $95.6 million, compared with $51.0 million for 2024. The decrease in net loss was primarily attributed to the higher other expenses resulting from the anti-dumping building expenses and increased litigation costs, compared to the prior year.

The basic and diluted net loss attributable to the company's shareholders per share were $1.12 compared with basic and diluted net loss per share of $0.59 for 2024.

Turning to our balance sheet. Our financial position remains healthy and stable. As of December 31, 2025, the company had cash and cash equivalents, the restricted cash and certificates of deposit totaling $211.9 million, compared with $126.3 million as of December 31, 2024.

That concludes my remarks. I will now hand the call back to Kewa for any final comments. Thank you.

Thank you once again for joining us today. If you have any further questions, please reach out using the contact information provided on our website. We appreciate your time and interest in Kandi Technologies.

This concludes today's conference call. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]