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Kandi Ready To Rocket, And Its 2015 Q3 Valuation

Summary

Kandi Technologies is #1 in Pure EV Sales in China for 2014 and 2015 to date. Its K11 Panda is #1 in EV Model Sales in China for September.

Kandi leads a consortium to promote Internet-connected EVs, applying cutting-edge technologies including wireless charging, driverless cars, artificial intelligence, and car-share management via smart integration in the cloud.

Consortium members include Kandi, Alibaba, Uber China, ZTE, Minsheng Bank, Geely and ZZY. Member businesses are industry giants with a combined market cap of well over $300 billion.

Kandi beats Tesla on growth rate, profitability and prospects, and is not yet in the spotlight.

If the market valued Tesla on the same basis as Kandi, its PPS would drop from $219.08 to $38.66 (November 11 values). Therefore, big gains in Kandi’s PPS are inevitable.

For a comprehensive explanation of Kandi Technologies's (NASDAQ:KNDI) business and extraordinary prospects, see my 2015 Q2 Seeking Alpha Article, Kandi Simply Explained, And Its Valuation

2015 EV Sales

Kandi is poised to double EV (Electric Vehicle) sales in 2015, making it 2 years in a row. Top line guidance is 22,000 EVs. Q1, Q2 and Q3 sales total 12,120, leaving 9,880 to be achieved in Q4. October sales of one model, the K11 Panda, has since been reported at 4,581. Kandi currently has 3 models in production and a 4th is expected to start production this month. It is certain that total October sales will well exceed half the Q4 guidance. It appears inevitable that Kandi will beat top-line guidance.

Source: The Company's Form 10Q and 10K filings at sec.gov and 2015 Q3 Earnings Report

Valuation - Based on TTM Sales

A) The Gargantuan Disconnect

  • Price over sales (P/S) valuation is a standard method of valuing high growth stocks and normally the PPS assigned by the market will be in the ballpark of the P/S valuation - but not so for Kandi stock, which is extremely undervalued.
  • The cause of the gargantuan disconnect between PPS and reasonable value is the preponderance of retail investors combined with the presence of an institutional short. Contrary to common belief it is primarily the retail investor that is manipulated by the short, not the stock price. Many retail investors are easily...

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