Q3 2020 Kandi Technologies Group Inc Earnings Call
[music].
Greetings and welcome to the Kandi technologies third quarter 2020 financial results call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation if.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
I would now like to turn the conference over to your host <unk> well.
Investor Relations manager. Please go ahead.
Thank you operator.
Hello, everyone welcome to tender Technology School.
The quarter of 2020 <unk> earnings Conference call. The company the results earlier today, the press release available on the Investor relations topping off.
Oh pending website at www dot can be good call with us today are mr. Hu Xiaoming Ken.
And founder Chairman and Chief Executive Officer, and Mr., Alan Levin, Chief Financial Officer.
Michel well below book, we pay every month, followed by a question answer session.
Before we get started please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward looking statements involve inherent risk and uncertainty.
As such the Companys results may be materially different from the expectations expressed today.
So they will make sure gaudy these and other risks and uncertainties is included in the Companys public funding.
I see.
The company does not assume any obligation to update any forward looking statement, except of the mind as required under applicable law.
As a reminder, this conference call is being recorded in addition audio webcasting. This conference will be available on campus Investor Relations website at.
I will now turn the call over to Kandis, founder Chairman and CEO Mr. without me.
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Thank you all.
Hello, everyone. Thank you for joining us on the call today.
As you all know the public high school in Pops, its business activities around the world and I have had the sustained nextwave its negative impact on me sector.
With the electric vehicles being one of them can this business among others all sector to Rocco Hello.
However, with great efforts, we were able to resume production.
By utilizing all specialize advantages, we will also be able to transform battery swap technology in pouch went to some research and development into production on law.
Talking partnerships and find opportunities to showcase our expertise on these cases in this field.
We were also able to discover a number of opportunities in the field to all intelligent transportation and it's.
On the line.
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Which was approved our leadership.
In addition in the industry well, we'll explore more opportunities in small AG why would push forward our men Clawbacks and again Maki share.
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However, with great upside.
Oh, sorry over the past few months. He has brought to adopt this I would like to thank those who follow it closely but.
Others, Let me give you a recap on leasing development and the major milestones we achieved.
In August we delivered our first fully automated it.
In college and battery exchange systems to the right she Oh, well operating high coal hang on in China.
Meanwhile, well America Cambia merits I was able to hold up very successful virtually then to launch page 23 and 27. He we entered the U.S. market.
In September we establish a wholly owned subsidiary will Alibabas Wap service well.
We were able to register to name a China battery exchange technology, which is like Sinopec Scoop and China National Petroleum Corporation. They are the leaders in the sector to pull by petrol and.
Hi, not badly exchange, it's going to become the leader to cool by Fabrix change in this sector.
When she going to bring us a lot of potential.
And this enable us to monetize it doesn't happen we hop in the field of battery swap system.
In October we were able to form a strategic agreement with the worlds largest state owned of public service enterprise mistake would've try not to I don't think world Electric vehicle service company to cooperate in our area of expertise that we can score.
<unk> electric vehicles, we also launched 400000 Columbia Al Queda joint easy within five years, why she a program and will help resolve the gradual deliberate all a thousand TV to the city of Heico's, Hainan Province, and 2500 easy to the city of Celsion enjoyed jump.
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Most recently, where now that we plan to let Joe John Candy small battery swap technology Company limited.
Hi stock change the wallboard business after a thorough consideration and extensive engagement with top tier IPO advisors in China both.
Both ways.
Oh visors all competition.
That all Bobby swap business is ready to grow more rapidly with support from a capital in China. This is Albert good news what can be shareholders as he will enable us.
All it you realize those growing value of our small battery swap business.
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Well my comment either <unk> or <unk>.
We are pleased with our strategy, our progress and our achievements were.
Well the economy slowly reviving and increasing government support for the vehicle battery separation battery swap model. We continue to believe that the gross for the electric vehicle was babbling web model is very positive we opt to aggressively proving its expertise and leadership position.
And in the intelligent battery swap area and we believe there will be more exciting news coming we remain optimistic about our market opportunities and the potential market share for candy.
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Operator. Please proceed.
Thank you at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue in the interest of time. Please limit to one question and one follow up question then re enter the queue.
You for any additional questions you may have trust start to if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star key one moment. Please while we poll for questions.
Your first question comes from line of that Marlin married with Zacks. Please proceed with your question.
Thank you.
So can you provide a little bit more color on the North American strategy as it pertains to production capacity a closer to you know the the end market and and how you feel that way.
Oh.
Benefit the company. Thank you.
Hi, Good morning model, so you're talking about almost attitude to how to expand our capacity, especially for the electric vehicles right. Just to clarify you know I understand you don't.
Yes.
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Okay, So well I will start with my answers and we'll have Mr., who do a third the lab rate you know all about this crash it to give you more.
You know answer so.
So basically.
Basically we are now having oh, he be I never really manufactured in our China, Hi, no facilities in order to meet the need in our China and U.S. market problems. So for our capacity can meet their need.
For the time being a you know, including a lot of talk hailing platform in China and you said you can tell we can that start at the sales off the Oh.
The class won't be in HEICO and also in sales Inc. and we are picking up there will be.
He Perry I'm for our sales team USA. So so far I guess, we all like capacity in E Com, China high now facilities can meet that need.
But I guess, what sort of strategy what expansion I will allocate to mr. hu to keep us Oh stood out explanation.
So allow me to speak to you know I'm missing or at least I can translate that Tom to answer for you on potential guns. A mother went down juices, while you on that maybe they didn't want to hold the unique Oh, Yeah, Hi, Oh, you guys. Since you got pull pull one then they got what puts out that he got to tell you.
Oh meal, some of which you don't does not work on the job we should do well. So so how I am going to sell so well known high not to talk about that in the month.
So you would share a woman Joel sendek, when they don't need to highlight module, which industry issue not do it didn't need to be up yet, which will walk you can kind of just you know.
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Great and then go mine and then go onto that and your weight out to ensure that you are saying.
<unk>, Oh, so marla as Mr., who come from that that capacity for now we can meet the needs for the foreseeable future. So so far I think will come on the facilities and the capacity on a high note that some of these.
And of course, we're exploring different options, but for now we stick with our facilities in high net.
Thank you.
Welcome.
Your next question comes from line of Arthur Porcari with corporate strategies. Please proceed with your question.
Congratulations.
Relations Mr. hu on achieving some immense milestones fiction since last conference call of course, Youve covered a few of those but the two in particular that impressed me is the strategic partnership with the state grid as.
Which is Chinese mass electric utility as you said.
It's like just don't really is how big it is 1.2 billion consumers, 90% of all the land mass in China and number two on the fortune global 502nd only to Walmart actually but just as impressive to me. Its former investment banker you attracted China's largest investment bank citic to lead an IPO syndicate to underwrite.
Spin off IPO of candies wholly own battery subsidiary that we've been talking about the capitalized and monetize candies exceptional expertise in all the facets of easy technology.
I assume this is thanks to Mr. Who's 30 or experience as the pioneer of Finfet or quick battery exchange technology, one of the hottest sectors in China today, but the background here 10 years in two weeks ago, Mr. Who may remember I had the honor of joining him and Jim why China at the opening of China's first quick battery exchange station, which.
So it can be selling a small two C.D.V. actually powered by lead acid battery. It shows you how long ago. This was which was independent of the car Neil was not the first one to do this the car owner would pay around $3. Each time you change the batteries.
More than just a coincidence at that time tiny candy, who was the first to making commercially so even he's in China had the same state grid as its partner in this early trial seemingly from the recent P.R. provided most all the same services in this new agreement if I remember correctly, what attracted state grid most of the candy.
The extra time was the ability to charge the batteries overnight when grid demand was at its low point, which included excess batteries in the racks, which would allow state grid to extract power from the excess batteries during times of peak is usually midday.
That time this was called B to GE or battery to grid. Most remember at that time midday brownouts of major cities globally.
The Candy trial was an early success in the China National Government later officially recognized what they called the hung joke kind GE for power mode quick battery exchange as one of only three approved methods of charging nationwide, yes, they specifically use candies name and the officially tight with this background I kind of have a couple of questions.
I don't know whether that was probably too much to overload mr. hu with but maybe.
Maybe I'll get to handle this uh huh.
What do you want to just to go into the questions now or do you want to try to paraphrase, what you said to Mr. hu.
No I can't I think you can Pacific questions. Okay.
Okay. Thank you for a long time support by the way.
[laughter] sure. Thank you in the PR Miss you said the two parties will cooperate extensively across the whole supply chain and include about a dozen issues. Most of these are self explanatory, but three I'd like you to expand upon and then a final general observation.
What's different or unique with this new candy subsidiaries quick battery exchange over competitors, such as Neil and his candies battery technology patented or proprietary if so can you tell us more about this.
That's part one of the four part question.
Okay, well so.
So I guess.
I'm first of all you know I'm for US you know we have out in the field of the battery swaps Oh, we have dozens of the patents in terms of the that they.
Convention and then the practices as for them you know I'm sure.
Well its lavish on Monday was supported by the state grid I'm sure. They should have some sort of.
Others as well, although we have not really investigators in details about which ones. They happen how many they have you know overall.
Okay is there anything unique about the company's battery recycling. It. This is a different subject a battery recycling technology. This is a subject we've heard very little about till now historically, it's been well known that lithium batteries are very difficult to recycle.
Oh right, yes, indeed, well.
Well battery recycling well poised pieces off the back of a swap company.
In this respect well we have to we do have the technology I'm curious you solved the cut back recycling process, you know well such as Oh. It one other technology, we can be reflected I guess in light and the separation like you know the activation and.
Steve its that's all those are different now that the potty goes like you know they as you May know I think we would try to first make them into the positive and negative and and in order to.
Two separate then that we have a pretty high effectively process to recover that conversation.
So basically these materials after they get a separate at they can be used and we'll do you realise studying turned dose escalation of the waste battery materials, so basically that can maximize the.
And that you cannot make a value off data the waste you know.
And make it a.
For the concept I called that sort of stuff that they bought process you know overall.
I remember here in London.
Yeah.
Lets you do when we're when we acquired <unk> encounter a while back that was also mentioned at that time I believe Mr. Hu said something to the extent that typically the.
Normal lithium battery is maybe 15 or 20% recyclable, but Jim.
Jim <unk> and Tallahassee technology that could make it over 50% recyclable I was just wondering.
If we could maybe find out if that was still correct and the same battery we have today.
Why such a big difference between what what they have and what others are able to achieve.
Right I guess would then I would that I get a question to Mr. Koo. So allow me to speak in Chinese and hosted a calculation afterwards.
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HM.
<unk> lean back made by well, although as you may know oncology that <unk>.
Similarly for the that that they're swap rates. So we have not had the better exchange recycle company. So asked for that basically are we still looking on the technology, but so far the efficiency is roughly 50% to 60% of that recycling efficiently.
Okay. Yeah. Good that is that's a big number for lithia, okay into be art mentioned and I quote flexible control. The power load exchange is that similar to the BT GE or battery to grid technology.
It's attracted state grid to less 10 years ago is that what he means that's what's planned.
I read a grid, where they can yeah, yeah or back into the grid.
It is yeah, well basically I think our best him a lot endocrinologist in rest of sums that you know we use the bathroom epic electric vehicles to basically maximize Oh, you know on that.
You know from the from the Beetroot Gee I'd, that's I think that's pretty awesome luck acknowledge it but that plus we have and hence a and a more efficient way to to process, but that's basically similar yeah.
Okay, and finally, why do you both state grid sound candies battery technology, so attractive that it would partner up with so small a company is candy and its quick battery exchange subsidiary for a second time.
HM.
Well I guess, the adult kandi or its not as of course, not as big as that stake read all the or the so biologic somebody's units. They are used in China, but then we ought to advocates and then the petition as all the technology called separation of vehicle and electricity.
Are you the Chester the power swap note you know for that you'd be EPS in China.
So I mean, we have a you know a fully automatic swap osmotic that there was talk system you know with over a dozen is off the pad is bangin and that utility model. The model right. So basically EPS you may know our ultimate ways to have a system that realize the one key.
One click you know automated quake battery swap in the process.
And and exactly you know this is the the technology being welcome you know bites and supported by the China government and you know more than 10 years off or even wore off the packets in the field of the battery swapping for that you'd be.
As you May know the company actually well has accumulated a pretty extensive experience. So I mean, this we got help or size, but then our technology Oh, a skill set a pretty.
<unk> and <unk> and season compared to other companies in China, and I think that those are basically the reasons why are the state grid and these related company a willing to copy with us, but and then I wanted to explain is that it's not just a bad.
Technology at that age restricted but also our does that swap them. This month Beddia swap technology, it's really a traffic that's the key point in this cross that can't expect them to well if US yeah, Okay, well what impressed me. The most is it state grid kicking back a second time 10 years later to the same little comfort.
He so to speak and so they must really been something that they saw back 10 years ago. I guess was just way before its time again use lead acid batteries that was just a comment just one other thing that's doing something you just said a moment ago.
What did get refreshed over here is the capacity still 100000 cars, a year and a handling facility.
But where can he could make that many.
Yeah, I mean, we can <unk>.
Yeah, I mean, where do I get as you may know all we have the data, but the high now if it's a lumpy is no startup two to walk in in production in US. She is early last year. So right now we still we find that our capacity, but I guess ongoing you know at the kept us they would be more and more and that should be sufficient to meet the need you know <unk>.
<unk> upcoming sales in China and us.
Okay, well. Thank you very much very affirmative looks like a great quarter coming up for quarter four and next year should be gang busters. Thank you very much and congratulate thank you Matt.
Thanks.
Your next question comes from the line of Joe well Kramer private Investor. Please proceed with your question.
Oh, yes, it seems like it can be both in China, and the U.S. is starting to pick up real positive momentum.
However, we have heard little if anything about Gillies holdings running or Sunshine.
With kids is carried an interest and then you update us on what is happening there and are you still bullish on Andrey who probably still has close to a billion dollars and us being able to make this deal a major player in the China easy market.
Thank you right.
Thank you well first of all I proudly Julie has still been actively envy.
Involved and participate in the market some of that each of the new energy vehicle judge that but that's not the major trend all the automobile, but then however, we do I know we are aware of the developer of the solar cell, we just a subsidiary or under that Chile technology.
It is rather slower than expected in so far and we are exploring you know weve, Chile technology to see how it will be fine.
You know that develop plan and to make it up to speed as we expect it but again I mean are we sure that you know a chilly Tonight, and Chile and gene acknowledge it. They are you know ethically fully involved in that market.
Oh that you'd be market of course [noise].
Thank you.
Thank you.
Your next question comes from line of Walter Hill, with Carty and company. Please proceed with your question.
All right. Thank you two weeks ago can be put out a PR establishing that they're using <unk> technology company, a three way company owned 80% by Rubio, 10%, but can be 10% budget pain to be the operating companies for the five year 300000 E V.
Got better credit did ride hailing program that PR did cause some confusion to new investors thinking that cant use 10% was the primary way candy makes its money off this deal could you clarify the following points that I've got four points and I'm over I'll read Ah I, just don't read them all.
I think that a couple of them are Bourbon short.
Hey, what specifically is the difference between a job much accredited program and a ride hailing program.
Fee in some detail what is each partners required responsibility to earn its share of the company.
Part C.
This P.R. speaks of two additional programs that appear to be kicking off this month and I believe mr. Vincent yes, a thousand E Bay's for Hainan Province, and 20 504 succeed teaching program.
Weeks back all 3500 will be delivered by.
Like Candy before this year end and if so what types of revenues should be expected.
The last part the PR does not give an idea of how many of its 300000 E. These will ultimately be from can be stable.
However, the state grid PR out or the week prior sales can be intends to supply 300000 vehicles to various ride sharing programs, which seems to say that kandi will be providing all of the 300000, if so can we assume that.
The new candy he be models will be shortly on the way.
Thank you okay. So I believe that the first question me aus is a let me close Ravi it's about the difference between or the.
Credit a program right and are there ways <unk> ODL ride hailing program sales.
Well as you may know actually.
<unk> in order to upgrade the online car hailing platform in China even.
He is quite the.
Prove all relevant departments and different government agencies.
Then only.
Only we can truly approval and approved and audits accredited certifications issue were released by the government agencies is considered as a a compliant online car platform adult I mean in the market Oh, we do know that they are still quite.
Considerable amount of the cluster bombs that are not fully compliant with their requirements. So we can caught in the so called noncompliance. The car hailing platform. So I mean, how would be fan we how we how what differentiate us from those platform is we are the the golfing creditor.
Also you may see the legal on like how many platforms that will not get shutdown cost, we fully support and authorized by the government.
Is that I'm answering your question about the prescription yet how we differentiate <unk> okay, yes, okay.
Great Great and I think your second question was about.
That rose Oh, the response that look the obvious one split these all off each partners right. Yes, So I mean debt basically we called it that can be they actually impact in a legal oh candies, we basically so that battery swap equipment and of course the <unk>.
Okay 20 freeze to their lives. We also will provide do relate at all you know the maintenance for that not to knowledge of maintenance and you know rather something like the technical perspective, ER and the second Paul in a gym pan basically that utilizing DM the lodge.
And distribution network to promote the program I mean, they have a great network and then that but they can't bring up more customers to us.
And the last one is the rightful rental I mean, they they are the season upgrade to all this.
Yes, the the stimulus up as a core holding and other cities. So they have a great experience on <unk> expenses extensive management skills that you operate and so there are really two primary operate. These you know platform. So that's how we share our responsibility and and how we can oh.
Sure you know for that.
To the platform of the lines.
Data, Okay. So I guess, let me move to the next question the Knicks, especially you talking about you know you kind of referring to or what I'm missing who started in the beginning of the the progress up how we deliver the UBI is to the Hi, then and then Uh huh.
Psycho City and also to the the sales you you know it off the judge I'll, probably just right and.
And you know what the what do we expect that can be delivered by the yen Oh well apparently we are working on the delivery currently <unk> S. Full at the the actual numbers, but at year end. It is still ongoing so.
So we cannot be 100% sure that you know how much can be actually get lever completely and I guess and a time line up at the later it will be would depend on the the progress of the project. So I guess I'm you know again good idea when the yen complete then we cannot have the numbers disclosed on the fund.
Mr statements, but I think that's the best way was to up to you know have actual Vegas by then.
And I think you also mentioned the last question should be about.
You know the relation is about how we can supply our east to the T.D. onto the program right.
Well, yes, as you May know I mean, the so called US 30000 employees in five years program is rather like.
And idea of the program, but not.
Entirely on necessarily mean, so they will for sure. You know includes 30 300000 babies to the market. So I mean.
So how many costs will be humming EPS would be supply to the market at the end by the program. We are not hunter, but it's sure but I mean, the behind the so called the 300000 is probably like a like a you may say like a like a slogan what idea.
So but then.
Bottom line is that we would try to supply one of the major <unk> share of the easy as to the platform and best our go and of course, I mean, you need that we may even try to invent and launch different new maltose into deal costs to meet the demand ongoing.
Thanks, So hopefully im beech, and Cessna response, Youre and get yourself, you'll you'll Kansas.
<unk>.
Thank you.
Your next question comes from the line of Michael Fear now with focused Tech investments. Please proceed with your question.
Good morning, and thank you.
I'd like to refer to the.
Joint venture with Geely Holdings, which is named thing she pinching.
When the recently.
Can be transferred an additional 28%.
Of their holdings to the joint venture.
And when that.
Transfer was made.
They made an announcement that they could purchase equity back from the joint venture.
Through March 31, that's 2021.
I've got kind of a tweet Christian.
Okay is there expectation that deadline will be extended.
And.
When will when real kind of decide.
To exercise that option or have they made any.
Thoughts on that exercise of the option.
And finally, if they do.
Exercise their option can.
Can you give me an indication of what percentage of the joint venture Candy.
And they would ultimately home.
Thank you.
Thank you.
As for these credits and as far as we're concerned.
The company I think we're still in the process of negotiating we bought the counterparty that Chile technology.
At the moment so.
You know I I I opposed to you know there's no really upgrade concrete.
And so for each of the questions because we're still working on you know worked on damage tried to resolve in the midst of exploring our options.
So at the moment you know, there's no really I, congrats and a progress for each of you know we got into that line would have expanded on how we can exercise the option is always to try to explore and negotiate so I guess I'm I'm.
Hopefully by early next year, we'll have a better idea Oh, you know up and then under about progress then will you know kit audit investors updated you know when you know the time is right. All the time, we conclude without conclusion.
Just a good clarification.
Hi, My understanding is that if they exercise their option.
They can do with candy common shares.
Is that correct.
Yes, one moment, let me take that question to Mr. Hu.
Hey, who show a new health coaches went Dol rule that was the whole.
Wow, you warm and guns unique who thought you could see a lagging new afton with something that you see on whether she knew at Donaldsonville woman box back fence or sit by Nike They understood the whole woman in Bali, which leads to the whole tell you its own day folks.
Wait you see a conference how wasn't the windows to go some woman Josh to know a quick they file a coma different of course trying to sell a civil cagle a woman goes the candy make what sounds like you'll see that trend joining a child fine. So the syphilis season, we got caught on the phone.
To that does that kinda talk yeah, you took them converging.
Oh say Hudson's only on being sure that swept up tick up to the EPS about this weak economy. It can you talk about how the how the okay.
Mm Hmm, so as Prime Minister, who is a and so yeah. I mean does it change the shared between phone so and Candide. That's one of the options and we try to explore these possible possibility, but we have not come up with a very concrete conclusions, yet but that possible.
Alright, Thanks for your answer.
Good luck.
Okay. Thank you.
Your next question comes from the line of Mark Miller Private Investor. Please proceed with your question.
Good evening guys I'm just one question here if I remember correctly what are the main features of Andy's Ridge.
Original quick battery strange was the ability to have a mobile battery exchange units available.
For an emergency battery swap in just a few minutes.
Locations.
Due to the battery side slide positioning between the rocker panels and the wheels.
Well this feature be available for all of <unk>.
Oh.
Yeah, basically walks you know for our our <unk> like catering to clean out mostly you know it was for the catering to free at the time being.
Well they'll be able to make custom side slides for other companies.
At some point in time.
Oh, Yeah, I mean basically.
Basically the idea is that you know that equipment can you know fit those had the size like electric vehicles and of course, well ought to Brent Oh, you know.
He couldn't they can see what go with them, obviously must have some adjustments now you know off some data exchange also might somebody else fight too, but yeah, that's feasible office some adjustment.
We're just candies place or compared to their competitors on this.
Can you tell us about that.
You mean, how we.
We're talking to all that product and created a beat and how does the other people stack up again.
Mm.
Hi, I guess, you know for the <unk>. So I mean, it's a good question I mean delegate to Mr. Hu and see if he doesn't know here is one of the video it seems that yours is much more quicker I saw version of deal a while back.
And it seemed like there was much more time consuming.
And years, Yeah, I guess, so I mean is there anybody else out where is everybody else on or is anybody pursuing this search.
But you know yeah I'm sure. They are pursuing that I mean, that's one of the Oh as you may know the the the bad through a swap no system now is for at least a quota and they courage by the government in China. So I'm sure audit companies. They would try to you I'm going to trend and and.
Proceed, but then for US we have one of the pine in the up market and although you know 92nd one well like automated swaps season. This will not be one of the basket <unk> you get a country. So I guess, that's how you know defense, yes from our competitors, but you know I'm sure a lot of competitors stay what's the what kind.
Technology, and I guess, you'll be if I just might there be such report on how they do it but and at least for US you know we have a lot of patents to do so so that's I guess, what went up though I think that Jaime 90 seconds is how differentiate us from other competitors.
Correct.
Okay. That's fine that's all I have.
Thanks, Rick Thanks, Raul do for taking my question.
Thank you.
Your next question comes from the line of Richard Goldstein with National Securities. Please proceed with your question.
[laughter].
Good morning. Thank you my question has to do with the spin off.
You announced last Monday for candies battery swap subsidiary.
Mr. Yu you may not remember, but we met its a San Francisco shareholders meeting day.
They in 2014.
And was amazed U.S. brokerage firm and as an investment advisor and also close business contacts in hone Joe My clients represented represent a significant holding and kandi shares from even before we met.
I must admit it was a stunning revelation that citic, China's largest and third largest global brokerage well known to Wall Street.
[noise] has signed on to lead the Kennedy battery swap IPO syndicate in China on the new Shanghai Tech oriented stores start could change as.
As a rule gets out as the word gets out on this in the U.S. They should create a lot of respect on wall Street, but I have a couple of few questions here.
First what is.
What was it that attracted citrix China's top firm to take the lead on the Candy IPO.
And would you envision they would also have potential research coverage to follow.
Second part of the question would be how large would you expect the IPO to be in.
In both dollar and percentage issued of the batteries subsidiary.
That's the originally you can do now so it does include young can screw I don't know if I'm pronouncing it right with the battery swap company is that still the case or is it just the battery company.
And lastly is it possible for U.S. investors to participate in the IPO were buying so after market shares on the store change either individual or institutions think.
Thank you.
Yes, thank you for the answers and.
And your support so first of all when you're talking about what I tried to see to two.
B.
Taking the lead of IPO project I think in a nutshell that that should be our technology. All the or is this more a better swap you know we have the one clay noted PSEG and swaps is some days one of the pioneers in the market and as you May know you know.
Can be you know, while we are an advocate and the precision of the technology called the separation of vehicle and electricity that this swap <unk> you know for quite a while and that's how we can develop you know such sophisticated a system. You know we have dozens of our dependence of inventions and then.
You have to look at more of those.
So I mean, it's really our technology they track the the ceded to pick a lead off the IPO project.
Of course, I'll use up all extended experienced and sophisticated technology.
So expansion now you know.
The technology and the Modi is really encouraged and supported by the state I mean by that Gaufman by the by the Chinese government and it also.
You know a couple of the strong market demand for such in the the automatic swapped batteries system. So I guess those are the reasons that relate shut them you know tweaking the walk in to elite. These IPO project.
And.
Yes, that's.
Hi, it's about the you know does that he tells up the IPO like the dollar amount and like the percentage to be issued.
Well at the moment, there's not really a can create concrete conclusion yet.
Well as you May know, we still working with different like the brokerage firms I'm in the other professional institutions to evaluate this whole project.
But then you know.
I guess long story short we are confident that the <unk>. The project, we turned up two basis EPS, but as for the details I guess, Oh, we will.
You know I'll have to appeal to these close later once they become and we come to the conclusion. So an EPS at present, you know there's no too much detail to you we cannot comment.
Oh and I guess in this IPO project, mostly you. It includes you know I'm the guy that can be a swap Betty would stop system, which formally called and Cal and they also include a young cat sequel, which without technology.
You know something like in the <unk> electric system and multiples.
And finally about how you know how the U.S. investors can participate in the IPO and maybe how they can getting walks you know for the SEC kindred market right. So basically I mean thats no different from auto dealers.
To get at least the end or the that the stopwatch I guess the first before they come on weight Oh, the standardized way EPS for the.
And I guess for the <unk> does the institutional investors to Oh, the qualified investors to to join <unk> participate in some online offline issuance Oh I participate in something they chick placements you know that would take place on that the that the stock Award.
So I mean again those are rather to standardize weight that would do well no. No difference auto are committed to the listening to stop or and after that or invest does oh, China. Yeah. Those one off or investors can also purchased some shares into this dog board under the second there.
Markets, who are the pathway core that Shanghai, Hong Kong stock connect its you know so that's how you can get some shares you know dodi's pathway.
So hopefully you know this field questions can I mean, it's and says can address your questions.
Great just one follow up on is there a timeframe that you have provided for this battery exchange listening to be completed.
Yeah.
Again, I mean, just like we're still exploring options and then that at the time of the project at the moment or we don't have a very you know a concrete timeline, yet I guess, what we want is to.
To make it a success and brings the fast and all of them maximize benefits to our investors.
Great. Thank you very much.
Thank you.
Your next question comes from the line of Mike Pfeffer with Oppenheimer. Please proceed with your question.
Good morning, Thanks for taking my question.
It was good to see.
Candy written up after the last conference call by a true stock research analyst with Zacks research, particularly encouraging to see the analysts give candy initial valuation of $12 a share and call. It very conservative at that price, which is only around half its competitors trading multiple on 2012.
Anyone revenue estimates yet for 2020, she's only estimating around 80 million revs and 135 million and 2021 about the same as last year's revenues can you comment on the analysts' revenue estimate for both years and might you hope to exceed either the two estimates.
[noise] right well regarding the we got in the that's does focus from that sector resorts family.
Fairly well in it because it is you know from oxy and analysts Oh for the knowledge of the company. We respect their that that estimate but that we don't have a free retail coming on that or what we can do is we did a bass and tied to a chip demos for investors, but then as for the.
The results a I think a little less our best effort to stay true.
To our upcoming releases off the financial statement something he and the next coming you know kids. It's okay. Since we've not seen any update notes from this analysts. Despite a lot of Big news do you or would you expect we'll get something soon now that the Q3 20 numbers are out.
Yeah, I mean again, you know all the disclosed all the necessary be clearly disclose EPS will be included in our Q3 and then also the upcoming 2020 <unk> and financial statements. So I mean for all that you know I'm. The updates on a chain guys look is closed you know they were only in the financial statements report.
And I also noticed that you now have a very attractive a new website with a lot of good in filling the company. However, I couldn't find a link to this analyst research port on the Candy site. I think you know that would be very helpful for new investors wanting to do due diligence on the company. So maybe it's something you can do put a link on there.
Right right I mean, well. Thank you for your follow in the suggestions and we will seriously consider that and then you know try to explore the options and then I think the last one last question and thank you for your time, So you've got the Zack Research report and now Citic, you know, they're going to be I assume falling.
The public battery swap sub would it be reasonable expect some additional legitimate research coming out on candy.
That's my last question. Thank you for your time <unk> no problem and thank you for your support as well as for the questions about different other analytic books or we have been communicating with all the analysts as well.
So I guess I. Please stay tuned for an upcoming research reports to be released Yeah. Then I can find out you know what they say about this and.
Thank you.
Your next question comes from line of Frank Bladder men with private Investor. Please proceed with your question.
Yes. Good evening my questions involve the fact, you know eight in Ireland and the battery swap station that was to live in there.
How many employees are presently working on the Assembly line to Hey, Dan I'm, what do you see average out but a week.
What model vehicles that presently being made there and all of these vehicles being manufactured to Phil President purchased or what is where they eat manufactures are expected to Maine.
And then the question involved we get back we exchange station that was the Olympic There is in operation at this time and how many batteries swaps being made on an average day.
I was just thinking that was delivered they're part of a trial operation or what's your purchase.
And how many battery exchange stations are presently in operation.
Hello.
Hello.
Hi, so asphalt the question I guess.
As for the the fastener sub system I guess as you know I'm five crashes out we have so far I mean ER for suffice you may know we have shipped one up the I'll first you know station to the HEICO. We just look at again high net province S. On the petrovic kick off of the whole.
Project, and so thought that the one that being trial and use are like there and in the corner for we expect to deliver more Oh, you know what the battery sops systems to both the HEICO City and also does salvaging city those are the two.
You know.
Sports that will run about project program to kick off the whole car hailing platform. So a long with the catering to feed that we're going to de lever. We also would delever bad yourself to some you know to these two locations.
But as far as how many it was delivered by the end of it depends on the progress. So I mean, I'm I'm again stay tuned to a financial is in well disclose that up I know you know accordingly in the upcoming financial statement.
Well you used the word delivery was a purchase or is it has it that delivered as part of a trial.
Right I mean with deliver one you know as you may know, we disclosed in the past that you know thats ones already being used and tested in HEICO. So in the upcoming quarter are we going to de lever a more stations of the battery swap through these two you know.
Cities to kick off our you know our does that the pilot project.
[noise] okay.
If I may be prevented sneak in another question are there personally any traveler restrictions of mandatory for a gain rig.
Required for travel to the island, obtaining from mainland China and.
And Ken residents of other southeast Asia countries.
Well without restrictions of mandate foreign kids.
If you don't know if that's okay.
Yeah, but that question I'm not sure, but it's sure.
Okay do you know how many employees are presently working on the assembly line to hate need any EPS account per week.
Sorry, you mean, how many employees working and at what facilities I'm, sorry, I didn't catch it again.
On Hainan Island.
Oh cool I can you help me to try to say that you can be said, who can see Oh my friends I hold high Jones, I understand exactly how you're going to indefinitely.
Sure that if I'm right on it.
I bought the warehousing please.
Okay, and what models vehicle that they making.
I understand that you're right Uh huh jump that your bausch and lomb made quite <unk>.
Pay our summer active and they got one here.
Hey, Tony Blair Marathon.
Hey, 20 totally flat last year market.
Okay are these vehicles being manufactured or Brexit purchase orders warfare expected demand.
I didn't catch watches all sure yet should teach on yeah, hi, how light only deal I think done a high share woman Keybanc you know they see how this ritual.
Well I'm going to redeem dominates water.
Andrew I hear about getting back to him.
Right now the manufacturing and the production based on order.
Orders from the ratio might yet.
Okay.
Okay, and I wasn't able to get a proper range one of my other questions.
You stated who would say you had to either shipped or what do you live in one battery exchange station.
Was that actually purchase or was that delivered as part of the trial operation.
A woman she can come or.
In California need God, one yen.
Well, yes sure that.
She was the only thing I Shouldnt say how.
Excuse me, but I know high school, we should try and meet hydro financially share should go back to my.
Kumar Thats, finishing my food find that comes to mind them.
Your English yes.
Yes, just purchased by the service provider and it's part of the trial operation.
Okay do you happen to know how many battery swaps have been made on a typical day.
Hey.
Oh, I see when I say, it's more transactional.
On one hand, Daiichi I know George I'll be I'm sure Oh, yeah.
Yeah.
[laughter] Rethinking my who actually changing your standard today, yeah, there too because I thought that I talked about.
I rang now ceiling tile plating operation per day, probably about I'm 2030 cars will be swapping a bad way there.
Okay. So 2030 swaps for de Ya. Thanks, Yeah, I'm sure. She baffles on <unk>, you mentioned that they are there.
[laughter] around the country Obama yeah, there's roadway day, but for sure Yeah, I've actually Angie I've found found a sound why mega.
<unk> sure sure about your if it was you I maybe want to borrow.
On the numbers of marriage, sometimes can I I can 15 Chinese anymore.
The way I see a lot they are still in the process of getting getting why operating approvals from the local government agency.
Okay very good. Thank you for taking my question.
Thank you Frank.
Thank you.
Ladies and gentlemen, we have reached the end of the question answer session and I'd like to turn the call back to management for closing remarks.
I hear go anytime dropping down to type property, what seemed like 100 could you see it on don't feel quite quite apparent problem, but.
Unless you want minutes no let me jump in fusion.
No I think again on she's are you paying job right yeah, Okay fine she's going to you're going to find that seasonally you want it.
He says you don't eat all woman.
Woman. She died when I see a good season with them. So she had challenging the team [laughter] tight when you.
Gosh, if I got it so she.
She might show you didn't properly tissue good huh.
No no I wouldn't it she told <unk> crunchy, yeah, she she's getting back out again.
Thank you, ladies and gentlemen for attending today's call on behalf of the board of directors and management team that can be technology school I will like to reaffirm our commitment well, we'll continue to work diligently to maximize shareholder value by growing our navy business and that thing applications.
Our expertise in battery swap system, we look forward to delivering strong operating and financial results in the coming quarter. Thank you very much for your support we look forward to taking talking with you in the next call. If you have any additional questions. Please do not hesitate.
[music] content Ali Mess Relations Department Goodbye.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Thank you operator.
[music].