NEW YORK (TheStreet) -- Shares of Kandi Technologies(KNDI) - Get Report were gaining 13.3% to $13.95 Tuesday after the Securities and Exchange Commission closed an investigation into the China-based auto manufacturer.
The Enforcement Division of the SEC said it doesn't intend to recommend that the SEC take any action against the company. The SEC started its investigation into Kandi in Nov. 2013.
"We are extremely pleased that the SEC has concluded its investigation, particularly since its existence was the subject of much misleading and harmful press by those holding short positions in the company's securities," Kandi Chairman and CEO Hu Xiaoming said in a statement. "We respect the SEC and its mandate to protect investors, and cooperated in its investigation."
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Xiaoming continued, "As I have stated before, Kandi's management's primary interests have always been twofold -- shareholder protection and building a solid foundation for the continued long term growth of the Company. We will continue to pursue those goals with transparency and in compliance with all applicable laws and regulations."
TheStreet Ratings team rates KANDI TECHNOLOGIES GROUP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate KANDI TECHNOLOGIES GROUP (KNDI) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KNDI's very impressive revenue growth greatly exceeded the industry average of 10.1%. Since the same quarter one year prior, revenues leaped by 157.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KNDI's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.34, which illustrates the ability to avoid short-term cash problems.
- KANDI TECHNOLOGIES GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, KANDI TECHNOLOGIES GROUP swung to a loss, reporting -$0.57 versus $0.20 in the prior year.
- The gross profit margin for KANDI TECHNOLOGIES GROUP is rather low; currently it is at 15.61%. It has decreased significantly from the same period last year. Despite the weak results of the gross profit margin, the net profit margin of 30.61% has significantly outperformed against the industry average.
- Net operating cash flow has significantly decreased to -$9.21 million or 124.77% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: KNDI Ratings Report