NEW YORK (TheStreet) -- Kandi Technologies (KNDI) - Get Kandi Technologies Group, Inc. Report stock is climbing Tuesday after the specialty automaker announced it had signed a supply contract with Lishen Battery System.
By late afternoon, shares had added 4.2% to $11.54.
Kandi's wholly-owned subsidiary Zhejiang Kandi Vehicles has signed a one-year supply contract with China's largest producer of rechargeable lithium-ion batteries. The contract will begin May 2014 with a minimum of 25,000 cases of batteries delivered. The contract is valued at around $58.5 million.
"Chinese Premier Keqiang Li recently reiterated plans to boost clean energy by promoting the industrialization of electric vehicles," the company notes in a statement. "Management believes that Premier Li's remarks foreshadow an acceleration in the industrialization of pure electric vehicles in China."
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, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KNDI's very impressive revenue growth greatly exceeded the industry average of 5.2%. Since the same quarter one year prior, revenues leaped by 92.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, KNDI's share price has jumped by 225.00%, exceeding the performance of the broader market during that same time frame. Although KNDI had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
- KANDI TECHNOLOGIES GROUP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, KANDI TECHNOLOGIES GROUP swung to a loss, reporting -$0.57 versus $0.20 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Automobiles industry. The net income has significantly decreased by 776.1% when compared to the same quarter one year ago, falling from $2.17 million to -$14.65 million.
- You can view the full analysis from the report here: KNDI Ratings Report