Intrinsic value of Kandi Technologies Group - KNDI

Previous Close

$4.66

  Intrinsic Value

$1.03

stock screener

  Rating & Target

str. sell

-78%

Previous close

$4.66

 
Intrinsic value

$1.03

 
Up/down potential

-78%

 
Rating

str. sell

We calculate the intrinsic value of KNDI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  105
  107
  110
  113
  117
  120
  124
  129
  134
  139
  144
  150
  156
  163
  170
  177
  185
  194
  202
  212
  222
  232
  243
  254
  266
  279
  293
  307
  322
  337
Variable operating expenses, $m
  125
  128
  131
  135
  139
  143
  148
  154
  159
  165
  170
  177
  185
  192
  201
  210
  219
  229
  239
  250
  262
  274
  287
  300
  315
  330
  346
  362
  380
  398
Fixed operating expenses, $m
  6
  6
  6
  7
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  8
  9
  9
  9
  9
  9
  10
  10
  10
  10
  11
  11
  11
  11
  12
Total operating expenses, $m
  131
  134
  137
  142
  146
  150
  155
  161
  166
  172
  178
  185
  193
  200
  209
  218
  228
  238
  248
  259
  271
  284
  297
  310
  325
  341
  357
  373
  391
  410
Operating income, $m
  -26
  -27
  -28
  -28
  -29
  -30
  -31
  -32
  -33
  -34
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
EBITDA, $m
  -21
  -21
  -22
  -22
  -23
  -24
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -45
  -47
  -49
  -51
  -54
  -56
  -58
Interest expense (income), $m
  2
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  13
  13
  14
  15
  16
  17
  18
  20
  21
  22
  23
  25
  26
  28
  30
Earnings before tax, $m
  -31
  -32
  -33
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -81
  -85
  -89
  -93
  -97
  -102
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -31
  -32
  -33
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -81
  -85
  -89
  -93
  -97
  -102

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  446
  456
  468
  481
  496
  512
  529
  548
  569
  590
  614
  639
  665
  693
  723
  755
  789
  824
  862
  901
  943
  987
  1,033
  1,082
  1,134
  1,188
  1,245
  1,305
  1,369
  1,435
Adjusted assets (=assets-cash), $m
  446
  456
  468
  481
  496
  512
  529
  548
  569
  590
  614
  639
  665
  693
  723
  755
  789
  824
  862
  901
  943
  987
  1,033
  1,082
  1,134
  1,188
  1,245
  1,305
  1,369
  1,435
Revenue / Adjusted assets
  0.235
  0.235
  0.235
  0.235
  0.236
  0.234
  0.234
  0.235
  0.236
  0.236
  0.235
  0.235
  0.235
  0.235
  0.235
  0.234
  0.234
  0.235
  0.234
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
Average production assets, $m
  61
  63
  64
  66
  68
  70
  73
  75
  78
  81
  84
  88
  91
  95
  99
  104
  108
  113
  118
  124
  129
  135
  142
  149
  156
  163
  171
  179
  188
  197
Working capital, $m
  52
  54
  55
  57
  58
  60
  62
  64
  67
  69
  72
  75
  78
  81
  85
  89
  93
  97
  101
  106
  111
  116
  121
  127
  133
  140
  146
  153
  161
  169
Total debt, $m
  96
  101
  106
  113
  120
  128
  136
  146
  156
  166
  178
  190
  203
  217
  232
  247
  264
  281
  300
  319
  339
  361
  384
  408
  433
  460
  488
  517
  548
  581
Total liabilities, $m
  219
  224
  230
  236
  244
  251
  260
  269
  279
  290
  301
  314
  327
  340
  355
  371
  387
  405
  423
  442
  463
  485
  507
  531
  557
  583
  611
  641
  672
  705
Total equity, $m
  227
  232
  238
  245
  252
  261
  269
  279
  289
  301
  312
  325
  339
  353
  368
  384
  401
  419
  439
  459
  480
  502
  526
  551
  577
  605
  634
  664
  697
  730
Total liabilities and equity, $m
  446
  456
  468
  481
  496
  512
  529
  548
  568
  591
  613
  639
  666
  693
  723
  755
  788
  824
  862
  901
  943
  987
  1,033
  1,082
  1,134
  1,188
  1,245
  1,305
  1,369
  1,435
Debt-to-equity ratio
  0.420
  0.430
  0.450
  0.460
  0.480
  0.490
  0.510
  0.520
  0.540
  0.550
  0.570
  0.580
  0.600
  0.610
  0.630
  0.640
  0.660
  0.670
  0.680
  0.700
  0.710
  0.720
  0.730
  0.740
  0.750
  0.760
  0.770
  0.780
  0.790
  0.800
Adjusted equity ratio
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -31
  -32
  -33
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -81
  -85
  -89
  -93
  -97
  -102
Depreciation, amort., depletion, $m
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  6
  6
  7
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
Funds from operations, $m
  -26
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -55
  -58
  -60
  -63
  -66
  -69
  -73
  -76
  -80
  -84
  -88
Change in working capital, $m
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
Cash from operations, $m
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -60
  -62
  -65
  -69
  -72
  -75
  -79
  -83
  -87
  -91
  -96
Maintenance CAPEX, $m
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
New CAPEX, $m
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
Cash from investing activities, $m
  -5
  -5
  -7
  -7
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -11
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -20
  -20
  -22
  -23
Free cash flow, $m
  -32
  -33
  -35
  -36
  -37
  -39
  -41
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -81
  -85
  -89
  -93
  -98
  -103
  -108
  -113
  -118
Issuance/(repayment) of debt, $m
  4
  5
  6
  6
  7
  8
  9
  9
  10
  11
  11
  12
  13
  14
  15
  16
  16
  17
  18
  19
  21
  22
  23
  24
  25
  27
  28
  30
  31
  33
Issuance/(repurchase) of shares, $m
  36
  37
  39
  41
  43
  45
  47
  49
  51
  53
  55
  57
  60
  63
  66
  69
  73
  76
  80
  84
  88
  92
  97
  102
  107
  112
  118
  124
  130
  136
Cash from financing (excl. dividends), $m  
  40
  42
  45
  47
  50
  53
  56
  58
  61
  64
  66
  69
  73
  77
  81
  85
  89
  93
  98
  103
  109
  114
  120
  126
  132
  139
  146
  154
  161
  169
Total cash flow (excl. dividends), $m
  7
  9
  10
  11
  12
  13
  14
  16
  17
  18
  18
  19
  20
  21
  23
  24
  25
  27
  28
  30
  32
  33
  35
  37
  39
  41
  43
  45
  48
  50
Retained Cash Flow (-), $m
  -36
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -60
  -63
  -66
  -69
  -73
  -76
  -80
  -84
  -88
  -92
  -97
  -102
  -107
  -112
  -118
  -124
  -130
  -136
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -28
  -28
  -29
  -30
  -30
  -31
  -32
  -33
  -34
  -36
  -37
  -38
  -40
  -42
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -71
  -75
  -78
  -82
  -86
Discount rate, %
  7.20
  7.56
  7.94
  8.33
  8.75
  9.19
  9.65
  10.13
  10.64
  11.17
  11.73
  12.31
  12.93
  13.58
  14.26
  14.97
  15.72
  16.50
  17.33
  18.19
  19.10
  20.06
  21.06
  22.11
  23.22
  24.38
  25.60
  26.88
  28.22
  29.64
PV of cash for distribution, $m
  -26
  -24
  -23
  -21
  -20
  -18
  -17
  -15
  -14
  -12
  -11
  -10
  -8
  -7
  -6
  -5
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  87.0
  75.3
  65.1
  56.1
  48.2
  41.4
  35.4
  30.3
  25.8
  22.0
  18.8
  16.1
  13.7
  11.7
  9.9
  8.4
  7.2
  6.1
  5.2
  4.4
  3.7
  3.1
  2.7
  2.2
  1.9
  1.6
  1.4
  1.1
  1.0
  0.8

Kandi Technologies Group, Inc. (Kandi) is focused on the development of pure electric vehicle (EV) products and manufacturing electric vehicle's parts. The Company's business operations are the design, development, manufacturing and commercialization of electric vehicles, electric vehicle parts and off-road vehicles, which are distributed in China and global markets. Its products include EV parts, EV products and off-road vehicles, including all-terrain vehicles, utility vehicles, go-karts and others. The Company conducts its business operations through its subsidiary, Zhejiang Kandi Vehicles Co., Ltd. (Kandi Vehicles), and the partial subsidiaries of Kandi Vehicles. The Company focuses on fuel efficient, pure EV parts manufacturing. Its subsidiary, Jinhua Kandi New Energy Vehicles Co., Ltd., holds battery packing production rights, and supplies the battery pack to the joint venture company.

FINANCIAL RATIOS  of  Kandi Technologies Group (KNDI)

Valuation Ratios
P/E Ratio -31.8
Price to Sales 1.7
Price to Book 1
Price to Tangible Book
Price to Cash Flow -4.4
Price to Free Cash Flow -4
Growth Rates
Sales Growth Rate -35.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 500%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 12.5%
Total Debt to Equity 33.6%
Interest Coverage -2
Management Effectiveness
Return On Assets -1.2%
Ret/ On Assets - 3 Yr. Avg. 3%
Return On Total Capital -2.4%
Ret/ On T. Cap. - 3 Yr. Avg. 3.1%
Return On Equity -3%
Return On Equity - 3 Yr. Avg. 3.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 14%
Gross Margin - 3 Yr. Avg. 13.8%
EBITDA Margin 0.8%
EBITDA Margin - 3 Yr. Avg. 9.8%
Operating Margin -24.8%
Oper. Margin - 3 Yr. Avg. -8%
Pre-Tax Margin -4.7%
Pre-Tax Margin - 3 Yr. Avg. 4.9%
Net Profit Margin -5.4%
Net Profit Margin - 3 Yr. Avg. 3%
Effective Tax Rate -16.7%
Eff/ Tax Rate - 3 Yr. Avg. 10.6%
Payout Ratio 0%

KNDI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KNDI stock intrinsic value calculation we used $102.805621 million for the last fiscal year's total revenue generated by Kandi Technologies Group. The default revenue input number comes from 0001 income statement of Kandi Technologies Group. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our KNDI stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.2%, whose default value for KNDI is calculated based on our internal credit rating of Kandi Technologies Group, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Kandi Technologies Group.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of KNDI stock the variable cost ratio is equal to 119.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $6 million in the base year in the intrinsic value calculation for KNDI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Kandi Technologies Group.

Corporate tax rate of 27% is the nominal tax rate for Kandi Technologies Group. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the KNDI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for KNDI are equal to 58.4%.

Life of production assets of 13.9 years is the average useful life of capital assets used in Kandi Technologies Group operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for KNDI is equal to 50%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $222.990312 million for Kandi Technologies Group - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 51.009 million for Kandi Technologies Group is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Kandi Technologies Group at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
FSS Federal Signal 24.13 25.91  hold

COMPANY NEWS

▶ Kandi Tech: 3Q Earnings Snapshot   [Nov-09-18 08:12AM  Associated Press]
▶ This Electric-Vehicle IPO Doubles As Single-Seater EVs Get Hot   [Oct-29-18 12:19PM  Investor's Business Daily]
▶ Now Definitely Is Not the Right Time to Buy Nio Stock   [Oct-16-18 10:35AM  InvestorPlace]
▶ Why Kandi Stock Jumped Today   [Oct-03-18 03:37PM  Motley Fool]
▶ First Batch of Kandis EX3 Model Pure EV Launch on Market   [Sep-26-18 08:47AM  GlobeNewswire]
▶ Kandi Tech: 2Q Earnings Snapshot   [Aug-09-18 08:37AM  Associated Press]
▶ Kandi Pure EV Models EX3 and K23 Receive MIIT Approvals   [Jun-07-18 08:47AM  GlobeNewswire]
▶ Kandi Technologies Acquires Sportsman Country, LLC   [Jun-04-18 08:33AM  GlobeNewswire]
▶ Kandi Tech: 1Q Earnings Snapshot   [May-10-18 08:27AM  Associated Press]
▶ Who Owns Most Of Kandi Technologies Group Inc (NASDAQ:KNDI)?   [Jan-01-18 01:25PM  Simply Wall St.]
▶ Kandi Tech posts 3Q profit   [07:37AM  Associated Press]
▶ Can Kandi Stock Keep Going After Last Week's 60% Pop?   [Oct-08-17 10:07AM  Motley Fool]
▶ Kandis JV Company Achieved 3,213 EV Units Sales in August   [Sep-05-17 08:37AM  GlobeNewswire]
▶ Kandi Tech reports 2Q loss   [Aug-09-17 10:39PM  Associated Press]
▶ Kandi Tech reports 1Q loss   [08:01AM  Associated Press]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.