Image source: Kandi Technologies Group.
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Kandi Technologies Group (NASDAQ: KNDI) saw its second-quarter sales jump after it received certain tax exemption approvals for its electronic vehicles by the Chinese government, but subsidy delays could cause auto parts manufacturer to miss its full-year targets.
Kandi Technologies results: The raw numbers
Data source: Kandi Technologies Q2 2016 earnings press release.
What happened with Kandi Technologies this quarter?
Total revenue rose 15.1% year over year to $55.2 million, with electric vehicle (EV) parts sales up 15.4% to $53.8 million.
Kandi Electric Vehicles Group Co. -- a joint venture in which Kandi Technologies Group has a 50% stake -- sold 7,200 EV products in the second quarter, a 61.9% increase compared to the year-ago period.
"After more than three months of waiting, the JV Company finally obtained the approval for a purchase tax exemption for its 'Global Hawk' EV products and had a positive sales performance in May and June," said Chairman and CEO Xiaoming Hu in a press release.
Kandi's gross margin increased to 15.3% from 13.3% in Q2 2015. Operating margin, however, fell to negative 4.3% from 3.1% in the prior year quarter, as total operating expenses ballooned 140% to $10.8 million, with most of the increase coming from higher stock compensation expense.
All told, net income declined to $2.8 million from $5.4 million in the second quarter of 2015, and earnings per share fell 50% to $0.06.
"We have performed very well financially during the second quarter of 2016," added CFO Cheng Wang. "Our margin improved compared to the same quarter last year, and our non-GAAP net income reached $10.5 million, a 114.8% increase compared to $4.9 million in the same period of 2015."
Hu said during a conference call with analysts that delays in government subsidies could make it difficult for Kandi to hit its full-year guidance for sales of at least 35,000 electronic vehicle products in 2016:
Still, Hu remains optimistic regarding the future of China's electronic vehicle market.
"Nevertheless, we are still very confident in EV market growth in China," said Hu.
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