While the Tech sector has seen a major pullback in 2014 following a five year bull run, there are still a few growth plays sporting high gains as of late. On the same day the tech-heavy Nasdaq rose 1.7 percent Chinese small-cap play Kandi Technologies (KNDI) saw shares jump on a spectacular earnings report.
Equities.com has been following the Hangzhou-based Kandi for some time, ever since our analysts first identified Kandi as a Small-Cap Star. Since first being included in the Small-Cap Star index, the carmaker has tripled in value. And despite a significant pullback in April, is still up 12.47 percent on the year.
The electric carmaker has been busy as of late, recently expanding electric car rental services in China. Kandi also made news in February when it was revealed that the company was finally turning a profit.
The gains in Kandi can be attributed at least nominally to the Chinese’ government’s financial support of the industry. In a country plagued with pollution problems brought on by an exponentially expanding cities and gasoline-powered auto network, electric cars are a clean, welcome addition to the urban landscape. In October 2013 the government announced subsidies ranging from $5,750-10,000 USD for citizens looking to purchase an electric car.
To be sure, Kandi will face stiffer competition in the electric car space if plans from American manufacturer Tesla (TSLA) moves forward with plans to build a plant in China. However, until the moment that materializes, Kandi looks to remain profitable.
For their first quarter 2014 earnings report, Kandi reported a net gain of $1.6 million, or $0.08 per share, versus the net gain of $1.3 million, or $0.07 per share, from the same period a year ago. Revenue for the quarter was $40.2 million, as compared to $14.6 million from the previous year.
Shares of Kandi gained 15.91 percent on the day to hit $13.26 a share.