Kandi Technologies Group Earnings: Revving Higher

Source: Kandi.

Kandi Technologies Group wrapped up a record year by posting fresh financials on Monday. The Chinese maker of electric cars, ATVs, and go-karts drove up revenue by 80% to $170.2 million for all of 2014. Earnings clocked in at $12.3 million -- or $0.29 a share -- reversing a loss in 2013.

The growth isn't as dramatic if we limit our view to just the fourth quarter. Kandi's press release only details the financials for the full year, but it's easy to break down the year-over-year performance by stripping away the first three quarters of 2013 and 2014.

Revenue climbed just 5% to $52.9 million during the fourth quarter from the prior year's final period, according to S&P Capital IQ data. Kandi's profit was a modest $1.7 million or $0.03 a share, but that reversed a steep loss from a year earlier.

Kandi has come a long way since it began carving out a reasonable living making small vehicles including go-karts and ATVs. It then teamed up with Geely Automobile in a joint venture that has cranked out a reasonably priced electric vehicle in China, as well as a growing auto-sharing platform in which Chinese drivers rent the electric sedans by the hour.

Tesla Motors has run into some resistance in China, warning earlier this year that Model S demand has been light as it scales back its workforce in the world's most populous nation. Tesla's shortcomings in China aren't carrying over to Kandi's fundamentals. The company is at the lower end of the pricing spectrum, and some government subsidies and tax breaks are limited to cars made by Chinese manufacturers.

It also helps that Kandi is generating its demand through its car-sharing system that has now expanded to nine Chinese cities, with 14,398 pure electric vehicles delivered over the past two years. The car-sharing platform helped Kandi sell 10,935 electric vehicles for all of 2014, including 3,656 during the fourth quarter.

With China's notorious air pollution struggles, it's a safe bet the chunky national and local government subsidies will continue for buyers of electric vehicles, explaining why Kandi's outlook seems far more upbeat than the cautious stance that Tesla was advocating recently.

Kandi is on a roll. It cleared one obstacle when a 15-month Securities and Exchange Commission investigation began to wind down a few weeks ago. Kandi announced last month that the regulatory agency's Enforcement Division is recommending the SEC take no action against the company. This might not entirely silence bearish knocks against Kandi, but it obviously gives the bulls better armor.

A new obstacle -- resuming accelerating top-line growth -- should be easier to clear this time around. With year-over-year revenue growth decelerating to a mere 5% clip in its latest quarter, Kandi will need to keep demand for its electric vehicles booming. With an improving economy prompting pedestrians and bicyclists to rent cars now and then, while China tries to wean its drivers off fossil fuels, the climate couldn't be any brighter for Kandi.

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Rick Munarriz owns shares of Kandi Technologies. The Motley Fool recommends Kandi Technologies and Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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