Intrinsic value of Kandi Technologies Group, Inc. - KNDI

Previous Close

$6.86

  Intrinsic Value

$0.77

stock screener

  Rating & Target

str. sell

-89%

Previous close

$6.86

 
Intrinsic value

$0.77

 
Up/down potential

-89%

 
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 0.4

 

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, %
  34.00
  31.10
  28.49
  26.14
  24.03
  22.12
  20.41
  18.87
  17.48
  16.24
  15.11
  14.10
  13.19
  12.37
  11.63
  10.97
  10.37
  9.84
  9.35
  8.92
  8.53
  8.17
  7.86
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
  6.37
Revenue, $m
  138
  181
  232
  293
  364
  444
  535
  636
  747
  868
  999
  1,140
  1,291
  1,451
  1,619
  1,797
  1,983
  2,178
  2,382
  2,595
  2,816
  3,046
  3,285
  3,534
  3,792
  4,061
  4,340
  4,630
  4,932
  5,246
Variable operating expenses, $m
  163
  211
  269
  338
  418
  509
  611
  726
  851
  988
  1,130
  1,290
  1,460
  1,640
  1,831
  2,032
  2,243
  2,464
  2,694
  2,934
  3,184
  3,445
  3,715
  3,996
  4,289
  4,592
  4,908
  5,236
  5,578
  5,933
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
  169
  217
  275
  345
  425
  516
  618
  733
  858
  995
  1,138
  1,298
  1,468
  1,648
  1,839
  2,040
  2,252
  2,473
  2,703
  2,943
  3,193
  3,455
  3,725
  4,006
  4,299
  4,603
  4,919
  5,247
  5,589
  5,945
Operating income, $m
  -31
  -36
  -43
  -51
  -61
  -71
  -83
  -97
  -112
  -128
  -138
  -157
  -177
  -198
  -220
  -244
  -268
  -294
  -321
  -349
  -378
  -408
  -440
  -473
  -507
  -542
  -579
  -617
  -657
  -698
EBITDA, $m
  -18
  -22
  -27
  -33
  -39
  -46
  -55
  -64
  -74
  -85
  -96
  -109
  -123
  -137
  -152
  -168
  -185
  -202
  -221
  -240
  -260
  -280
  -302
  -324
  -347
  -371
  -397
  -423
  -450
  -478
Interest expense (income), $m
  2
  5
  9
  14
  20
  26
  34
  43
  54
  65
  78
  91
  106
  122
  139
  157
  176
  196
  217
  239
  262
  286
  311
  337
  364
  392
  421
  452
  483
  516
  550
Earnings before tax, $m
  -36
  -45
  -57
  -71
  -87
  -106
  -127
  -151
  -177
  -205
  -230
  -263
  -299
  -337
  -377
  -420
  -464
  -511
  -560
  -611
  -664
  -719
  -777
  -837
  -899
  -963
  -1,030
  -1,100
  -1,173
  -1,248
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
  -36
  -45
  -57
  -71
  -87
  -106
  -127
  -151
  -177
  -205
  -230
  -263
  -299
  -337
  -377
  -420
  -464
  -511
  -560
  -611
  -664
  -719
  -777
  -837
  -899
  -963
  -1,030
  -1,100
  -1,173
  -1,248

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
  587
  770
  989
  1,248
  1,548
  1,890
  2,276
  2,706
  3,179
  3,695
  4,253
  4,853
  5,493
  6,172
  6,890
  7,646
  8,440
  9,270
  10,137
  11,041
  11,982
  12,961
  13,980
  15,038
  16,138
  17,280
  18,468
  19,703
  20,987
  22,323
Adjusted assets (=assets-cash), $m
  587
  770
  989
  1,248
  1,548
  1,890
  2,276
  2,706
  3,179
  3,695
  4,253
  4,853
  5,493
  6,172
  6,890
  7,646
  8,440
  9,270
  10,137
  11,041
  11,982
  12,961
  13,980
  15,038
  16,138
  17,280
  18,468
  19,703
  20,987
  22,323
Revenue / Adjusted assets
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  0.235
  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
  81
  106
  136
  171
  212
  259
  312
  371
  436
  507
  584
  666
  754
  847
  946
  1,049
  1,158
  1,272
  1,391
  1,515
  1,644
  1,779
  1,919
  2,064
  2,215
  2,372
  2,535
  2,704
  2,880
  3,064
Working capital, $m
  69
  90
  116
  147
  182
  222
  267
  318
  373
  434
  500
  570
  645
  725
  810
  898
  992
  1,089
  1,191
  1,297
  1,408
  1,523
  1,643
  1,767
  1,896
  2,030
  2,170
  2,315
  2,466
  2,623
Total debt, $m
  165
  255
  362
  489
  636
  805
  994
  1,205
  1,437
  1,691
  1,965
  2,259
  2,573
  2,907
  3,260
  3,631
  4,020
  4,428
  4,854
  5,297
  5,760
  6,241
  6,740
  7,260
  7,800
  8,361
  8,944
  9,551
  10,181
  10,837
Total liabilities, $m
  288
  378
  486
  613
  760
  928
  1,118
  1,328
  1,561
  1,814
  2,088
  2,383
  2,697
  3,031
  3,383
  3,754
  4,144
  4,551
  4,977
  5,421
  5,883
  6,364
  6,864
  7,384
  7,924
  8,485
  9,068
  9,674
  10,305
  10,961
Total equity, $m
  299
  392
  504
  635
  788
  962
  1,159
  1,377
  1,618
  1,881
  2,165
  2,470
  2,796
  3,142
  3,507
  3,892
  4,296
  4,718
  5,160
  5,620
  6,099
  6,597
  7,116
  7,654
  8,214
  8,796
  9,400
  10,029
  10,683
  11,363
Total liabilities and equity, $m
  587
  770
  990
  1,248
  1,548
  1,890
  2,277
  2,705
  3,179
  3,695
  4,253
  4,853
  5,493
  6,173
  6,890
  7,646
  8,440
  9,269
  10,137
  11,041
  11,982
  12,961
  13,980
  15,038
  16,138
  17,281
  18,468
  19,703
  20,988
  22,324
Debt-to-equity ratio
  0.550
  0.650
  0.720
  0.770
  0.810
  0.840
  0.860
  0.870
  0.890
  0.900
  0.910
  0.910
  0.920
  0.930
  0.930
  0.930
  0.940
  0.940
  0.940
  0.940
  0.940
  0.950
  0.950
  0.950
  0.950
  0.950
  0.950
  0.950
  0.950
  0.950
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
  -36
  -45
  -57
  -71
  -87
  -106
  -127
  -151
  -177
  -205
  -230
  -263
  -299
  -337
  -377
  -420
  -464
  -511
  -560
  -611
  -664
  -719
  -777
  -837
  -899
  -963
  -1,030
  -1,100
  -1,173
  -1,248
Depreciation, amort., depletion, $m
  12
  14
  16
  19
  22
  25
  29
  33
  38
  43
  42
  48
  54
  61
  68
  75
  83
  92
  100
  109
  118
  128
  138
  148
  159
  171
  182
  195
  207
  220
Funds from operations, $m
  -23
  -31
  -41
  -52
  -65
  -81
  -98
  -117
  -139
  -162
  -188
  -215
  -245
  -276
  -309
  -344
  -381
  -420
  -460
  -502
  -546
  -591
  -639
  -688
  -739
  -793
  -848
  -906
  -965
  -1,028
Change in working capital, $m
  18
  21
  26
  30
  35
  40
  45
  50
  56
  61
  66
  70
  75
  80
  84
  89
  93
  98
  102
  106
  111
  115
  120
  124
  129
  134
  140
  145
  151
  157
Cash from operations, $m
  -41
  -53
  -67
  -83
  -101
  -121
  -143
  -168
  -194
  -223
  -253
  -286
  -320
  -356
  -394
  -433
  -474
  -517
  -562
  -608
  -656
  -706
  -759
  -813
  -869
  -927
  -988
  -1,051
  -1,116
  -1,185
Maintenance CAPEX, $m
  -4
  -6
  -8
  -10
  -12
  -15
  -19
  -22
  -27
  -31
  -36
  -42
  -48
  -54
  -61
  -68
  -75
  -83
  -92
  -100
  -109
  -118
  -128
  -138
  -148
  -159
  -171
  -182
  -195
  -207
New CAPEX, $m
  -20
  -25
  -30
  -35
  -41
  -47
  -53
  -59
  -65
  -71
  -77
  -82
  -88
  -93
  -99
  -104
  -109
  -114
  -119
  -124
  -129
  -134
  -140
  -145
  -151
  -157
  -163
  -169
  -176
  -183
Cash from investing activities, $m
  -24
  -31
  -38
  -45
  -53
  -62
  -72
  -81
  -92
  -102
  -113
  -124
  -136
  -147
  -160
  -172
  -184
  -197
  -211
  -224
  -238
  -252
  -268
  -283
  -299
  -316
  -334
  -351
  -371
  -390
Free cash flow, $m
  -66
  -84
  -104
  -128
  -154
  -183
  -215
  -249
  -286
  -325
  -366
  -410
  -456
  -503
  -553
  -605
  -659
  -714
  -772
  -832
  -895
  -959
  -1,026
  -1,096
  -1,168
  -1,243
  -1,321
  -1,402
  -1,487
  -1,575
Issuance/(repayment) of debt, $m
  73
  90
  108
  127
  147
  168
  189
  211
  232
  253
  274
  294
  314
  334
  353
  371
  389
  408
  426
  444
  462
  481
  500
  520
  540
  561
  583
  606
  631
  656
Issuance/(repurchase) of shares, $m
  112
  138
  169
  203
  240
  280
  323
  369
  417
  468
  514
  568
  625
  683
  743
  805
  868
  934
  1,001
  1,071
  1,143
  1,218
  1,295
  1,375
  1,459
  1,545
  1,635
  1,729
  1,826
  1,928
Cash from financing (excl. dividends), $m  
  185
  228
  277
  330
  387
  448
  512
  580
  649
  721
  788
  862
  939
  1,017
  1,096
  1,176
  1,257
  1,342
  1,427
  1,515
  1,605
  1,699
  1,795
  1,895
  1,999
  2,106
  2,218
  2,335
  2,457
  2,584
Total cash flow (excl. dividends), $m
  119
  144
  172
  202
  233
  265
  298
  331
  364
  396
  422
  453
  483
  513
  542
  571
  599
  627
  655
  683
  711
  740
  769
  799
  830
  863
  897
  932
  970
  1,009
Retained Cash Flow (-), $m
  -112
  -138
  -169
  -203
  -240
  -280
  -323
  -369
  -417
  -468
  -514
  -568
  -625
  -683
  -743
  -805
  -868
  -934
  -1,001
  -1,071
  -1,143
  -1,218
  -1,295
  -1,375
  -1,459
  -1,545
  -1,635
  -1,729
  -1,826
  -1,928
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
  7
  6
  3
  -1
  -7
  -15
  -25
  -38
  -54
  -72
  -92
  -116
  -141
  -170
  -201
  -234
  -269
  -307
  -347
  -388
  -432
  -478
  -526
  -576
  -628
  -682
  -738
  -796
  -857
  -919
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
  7
  5
  3
  -1
  -5
  -9
  -13
  -18
  -22
  -25
  -27
  -29
  -29
  -29
  -27
  -25
  -23
  -20
  -17
  -14
  -11
  -9
  -6
  -5
  -3
  -2
  -2
  -1
  -1
  0
Current shareholders' claim on cash, %
  76.0
  58.8
  46.2
  36.9
  29.8
  24.3
  20.1
  16.7
  14.0
  11.9
  10.1
  8.7
  7.5
  6.5
  5.6
  4.9
  4.3
  3.8
  3.3
  3.0
  2.6
  2.3
  2.1
  1.8
  1.6
  1.5
  1.3
  1.2
  1.1
  1.0

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, Inc. (KNDI)

Valuation Ratios
P/E Ratio -46.7
Price to Sales 2.5
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow -6.5
Price to Free Cash Flow -5.8
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 $103 million for the last fiscal year's total revenue generated by Kandi Technologies Group, Inc.. The default revenue input number comes from 0001 income statement of Kandi Technologies Group, Inc.. 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 34% 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, Inc., 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, Inc..
    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, Inc..

Corporate tax rate of 27% is the nominal tax rate for Kandi Technologies Group, Inc.. 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, Inc. 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, Inc. - 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 51.481 million for Kandi Technologies Group, Inc. 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, Inc. at the current share price and the inputted number of shares is $0.4 billion.

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