Kandi Technologiescontinues to gain speed in China. The maker of electric cars, ATVs, and go-karts posted modest growth in its latest quarter, rattling off its fourth consecutive period of profitability along the way.
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Revenue clocked in at $43.8 million for the first quarter. This was a sequential dip from the seasonally potent holiday quarter, but it was still good for a 9% year-over-year advance.
Kandi originally carved out a reasonable living manufacturing ATVs and go-karts, but its model has taken a big step up since it teamed up with Geely Automotive in a joint venture to make electric cars in China. The joint venture sold 1,670 units, up 37% from the 1,215 vehicles that it sold during the first three months of last year.
The balance of the year should get even better. Kandi expects the joint venture to sell 20,000 vehicles this year, nearly double the 10.935 units it sold last year. More than half of those cars will go to its growing and thriving car-sharing business whereby Chinese drivers can rent its vehicles by the hour. In a country like China -- where auto ownership remains low -- the Zipcar-like model has plenty of potential.
However, Kandi's also making some major headway in cranking out cars for direct purchase by consumers. Its product line continues to evolve. It announced during Monday morning's conference call that the five-seater K17 model is set to hit the market next month. The smaller two-seater K12 model will follow later this year.
Kandi's growth has also been kind to its bottom line. It posted a profit of $0.13 a share during this year's first quarter, reversing a year-ago loss. This is the fourth time in a row that Kandi has come through with a quarterly profit,accordingtoS&P Capital IQdata.
How did Kandi's performance hold up relative to Wall Street expectations? That question doesn't have an answer, since there are no major analysts following the growing company and publishing top- and bottom-line targets. It's hard to imagine things staying that way if Kandi continues to achieve profitable growth. We do know how the market itself reacted: Kandi shares opened 1% higher on the news, but slipped into the red minutes into the trading day.
Kandi doesn't appear to be running into theresistancethatTesla Motorshas experienced in its push to make a splash in the world's most populous nation. Then again, Tesla's gunning for the high-end of the market, while Kandi is gunning for the entry-level market in electric vehicles. It also helps that Kandi is creating its own growth by expanding car-sharing programs to other Chinese provinces.
Another key difference between Kandi and Tesla is that China's air pollution woes find it subsidizing purchases of electric vehicles made by Chinese companies. That makes Kandi's already cheap rides even more affordable.
It's a healthy climate for Kandi, and the SECwinding downits investigation in February with the regulatory agency's Enforcement Division recommending no action be taken against Kandi can only help. Kandi sees the growth in car sales accelerating through 2015 with margins widening along the way. It's a good place to be for Kandi, even if major Wall Street analysts aren't there just yet.
The article Kandi Technologies Earnings: Electric Cars in China originally appeared on Fool.com.
Rick Munarriz owns shares of Kandi Technologies. The Motley Fool recommends Kandi Technologies and Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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