Kandi Technologies

On Friday, Chinese electric car parts maker Kandi Technologies (KNDI) stock crashed by nearly 10% after it announced its first-quarter results. In the quarter ended March 2019, the company reported an adjusted net loss of $0.09 per share as compared to a net profit of $0.07 per share in the quarter ended in March 2018. Kandi’s losses were mainly driven by the joint venture company’s increased share of loss in the last quarter as compared to the first quarter of 2018.

Why China’s Kandi Technologies Crashed Today

Sign up for Bagels & Stox, our witty take on the top market and investment news, straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.

Why the stock crashed by ~10%

On the positive side, Kandi’s revenues more than doubled to $18.1 million, up 116.8% YoY in the first quarter, while its gross profit also surged by 113.6% YoY to $3.1 million. However, a massive 188.5% YoY rise in Kandi’s first-quarter operating expenses and its negative operating margin could be some of the factors that hurt investors’ sentiments. Also, the joint venture company’s revenue tanked by 26.3% YoY, and it reported a net loss of $20.2 million in the last quarter.

On March 25, Kandi signed an equity transfer agreement with Geely Technologies, its long-time partner in the joint venture company. Under the agreement, Kandi agreed to sell 21.47% of its stake in the joint venture to Geely. After the deal, Kandi will own a 22% stake in the joint venture company, while Geely would own the remaining 78% stake.

The pressure from the broader market sell-off

Apart from these factors, the broader market weakness due to the renewed US-China trade tensions further pressured Kandi stock today. As a result, Chinese companies Tencent Holdings (TCEHY), Alibaba (BABA), and Baidu (BIDU) were trading with falls of 0.2%, 2.2%, and 2.3%, respectively, at 11:10 AM EST today. In contrast, JD.com (JD) was up by 3.1% for the day after it reported its strong first-quarter results earlier today.

Nonetheless, as of yesterday’s closing, Kandi Technologies, Tencent, Alibaba, and Baidu were trading in the green territory on a year-to-date basis with 30.5%, 21.0%, 30.6%, and 0.1% gains, respectively.

Latest articles

Pure Storage shares have risen more than 15% today. The company announced its second-quarter results after the markets closed on Wednesday.

Nordstrom (JWN) stock was up 16% as of 11:50 AM today after it reported better-than-expected earnings for the second quarter of fiscal 2019.

Last month, four automakers, including Ford, made a voluntary deal with California to make cars cleaner and more fuel efficient. Trump isn't happy with the deal.

GameStop (GME) shares rose 8% in early market trading today. The company laid off about 120 employees as part of its restructuring process.

Today, citing German business publication Manager Magazin, Reuters reported that Volkswagen CEO Herbert Diess is interested in a stake in Tesla.

For the second quarter, Cresco Labs reported revenues of $29.9 million, which beat analysts’ expectation of $27.9 million.