Half Year 2025 Kandi Technologies Group Inc Earnings Call
Operator: 2025. At this time, all participants are in a listen-only mode. Today's conference is being recorded. I will now turn the call over to your host, Ms. Qiwa Luo, the IR Director of the company. Please go ahead.
Operator: At this time, all participants are in a listen-only mode. Today's conference is being recorded. I will now turn the call over to your host, Ms. Kewa Luo, the IR Director of the company. Please go ahead.
Kewa Luo: Hello, everyone, welcome to Kandi Technologies' Earnings Conference Call for H1 2025. As a reminder, today's call is being recorded. The company's financial and operational highlights were issued in a press release earlier today and are available online. You can access the earnings press release and subscribe to the company's email alerts by visiting the investor relations section of our website at ir.kandigroup.com. Joining us today are Mr. Feng Chen, Chief Executive Officer, and Mr. Alan Lim, Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today.
Kewa Luo: Hello, everyone, and welcome to Kandi Technologies' earnings conference call for the first half of 2025. As a reminder, today's call is being recorded. The company's financial and operational highlights were issued in a press release earlier today and are available online. You can access the earnings press release and subscribe to the company's email alerts by visiting the investor relations section of our website at ir.kandigroup.com. Joining us today are Ms. Feng Chen, Chief Executive Officer, and Mr. Allen Lin, Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today.
Kewa Luo: Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligations to update any forward-looking statements except as required under applicable laws. Unless otherwise noted, all financial figures discussed today are in US dollars. I will now turn the call over to our CEO, Mr. Feng Chen, who will deliver his remarks in Chinese, followed immediately by an English translation. Mr. Chen, please go ahead. Good day, investors and analysts. Welcome to Kandi Technologies' Earnings Conference Call for H1 2025. We sincerely appreciate your taking the time to join us as we review the company's H1 performance. In H1 2025, the global microeconomic landscape remained clouded by considerable uncertainty, creating real headwinds for our business.
Kewa Luo: Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligations to update any forward-looking statements except as required under applicable laws. Unless otherwise noted, all financial figures discussed today are in US dollars. I will now turn the call over to our CEO, Mr. Feng Chen, who will deliver his remarks in Chinese, followed immediately by an English translation. Mr. Chen, please go ahead.
Feng Chen: 各位投资者、分析师，大家好。欢迎各位参加康迪科技2025年上半年度业绩电话会。非常感谢大家抽出宝贵时间与我们一同回顾公司上半年的业绩表现。
Kewa Luo: Good day, investors and analysts. Welcome to Kandi Technologies' earnings conference call for the first half of 2025. We sincerely appreciate your taking the time to join us as we review the company's first half performance.
Feng Chen: 2025年上半年，全球宏观经济环境依然面临诸多的不确定性，且这一趋势对我们业务的发展带来了不小的挑战。然而，凭借公司卓越的应变能力，我们依然取得了显著的战略进展。在稳固传统非公路车业务的同时，我们结合自身优势，积极布局具身智能和新能源基础设施领域。通过多项重要合作的落地，我们逐步完成了从传统制造企业向以智能装备制造为核心的控股平台公司的战略转型。这一转型不仅展现了公司在复杂经济环境下的韧性，也凸显了我们持续增长的潜力。
Kewa Luo: In the first half of 2025, the global microeconomic landscape remained clouded by considerable uncertainty, creating real headwinds for our business. Nevertheless, thanks to our agility and strategic foresight, we made substantial progress on several key initiatives. While enhancing our traditional off-road vehicle operations, we also leveraged our core strengths to expand into the emerging fields of embodied intelligence, and new energy infrastructure. Through the confirmation of several pivotal partnerships, we steadily advanced our transformation from a conventional manufacturing enterprise into a holding platform with intelligent equipment manufacturing at its core. This transformation initiative not only speaks to our resilience in a challenging environment, but also reaffirms our confidence in delivering sustainable growth over the long term.
Kewa Luo: Nevertheless, thanks to our agility and strategic foresight, we made substantial progress on several key initiatives. While enhancing our traditional off-road vehicle operations, we also leveraged our core strengths to expand into the emerging fields of embodied intelligence and new energy infrastructure. Through the confirmation of several pivotal partnerships, we steadily advanced our transformation from a conventional manufacturing enterprise into a holding platform with intelligent equipment manufacturing at its core. This transformation initiative not only speaks to our resilience in a challenging environment, also reaffirms our confidence in delivering sustainable growth over the long term. I will begin with an update on the latest developments in our core business. Following the adjustments and upgrades made in H1, we have entered a new phase of refined operations with the goal of delivering steady, high-quality growth.
Feng Chen: 首先，我将重点介绍公司在主营业务方面的最新进展。经过上半年的调整与升级后，我们进入了精细化运营的新阶段。目标是稳健实现高质量增长，通过更高效的资源配置、库存去化和成本控制，我们正在逐步提升利润水平，同时增强现金流管理的韧性。
Kewa Luo: I will begin with an update on the latest developments in our core business. Following the adjustments and upgrades made in the first half of the year, we have entered a new phase of refined operations with the goal of delivering steady, high-quality growth. Through more efficient resource allocation, inventory optimization, and disciplined cost control, we are gradually improving our profitability and strengthening our cash flow management. Let's look more closely at this business operations from three key aspects.
Kewa Luo: Through more efficient resource allocation, inventory optimization, and disciplined cost control, we are gradually improving our profitability and strengthening our cash flow management. Let's look more closely at its business operations from three key aspects.
Feng Chen: 在产品销售方面，我们聚焦零售渠道的库存管理，毛利率显著提升，达到了45.2%，较2024年同期的31.7%增长了13.5个百分点。充分体现了公司在精细化运营和成本控制方面的有效措施。与此同时，通过优化内部生产组织架构与产品装配线运营流程，我们有效提高了生产效率，缩短了产品的交付周期。这些举措不仅加快了销售进度，也进一步提升了产品交付的可靠性。
Feng Chen: 达到了45.2%，较2024年同期的31.7%增长了13.5个百分点，充分体现了公司在精细化运营和成本控制方面的有效措施。与此同时，通过优化内部生产组织架构与产品装配线运营流程，我们有效提高了生产效率，缩短了产品的交付周期。这些举措不仅加快了销售进度，也进一步提升了产品交付的可靠性。
Kewa Luo: In product sales, our focus on inventory management within retail channels drove a notable improvement in growth margin to 45.2% for H1 2025, up 13.5 percentage points from 31.7% in the same period of 2024. This reflects the effectiveness of our refined operations and cost control initiatives. Meanwhile, by optimizing our internal production structure and streamlining assembly line processes, we have enhanced manufacturing efficiency and shortened delivery cycles, further strengthening product delivery reliability.
Kewa Luo: In product sales, our focus on inventory management within retail channels drove a notable improvement in gross margin to 45.2% for the first half of 2025, up 13.5 percentage points from 31.7% in the same period of 2024. This reflects the effectiveness of our refined operations and cost control initiatives. Meanwhile, by optimizing our internal production structure and streamlining assembly line processes, we have enhanced manufacturing efficiency and shortened delivery cycles, further strengthening product delivery reliability.
Feng Chen: 在销售渠道方面，我们力求实现更加均衡的布局，形成更广泛的触达与服务能力。我们不仅巩固与Lowe's等大型零售商超的合作，还进一步扩大经销商网络。目前产品已入驻1,050家零售商超门店，且经销商网络呈稳步增长态势。经过新销售团队的努力，截止六月底，经销商与零售商的销售结构从以前的1:9拉升至2:8。
Feng Chen: 在销售渠道方面，我们力求实现更加均衡的布局，形成更广泛的触达与服务能力。我们不仅巩固与LOS等大型零售商超的合作，还进一步扩大经销商网络。目前，产品已入驻1,050家零售商超门店，且经销商网络呈稳步增长态势。经过新销售团队的努力，截止6月底，经销商与零售商的销售结构从以前的1:9拉升至2:8。
Kewa Luo: Second, on the sales channel front, we are creating a more balanced and strategic distribution layout to enhance both our market penetration and service capabilities. To that end, we have reinforced key partnerships with major retailers, including Lowe's, while further expanding our dealer network. Our products are now carried in 1,050 retail outlets, with our dealer network demonstrating steady growth. Thanks to the concerted efforts of our new sales team, the dealer to retail sales mix has improved from 1 to 9 previously to 2 to 8 as of the end of June, reflecting a more diversified and resilient channel structure.
Kewa Luo: Second, on the sales channel front, we are creating a more balanced and strategic distribution layout to enhance both our market penetration and service capabilities. To that end, we have reinforced key partnerships with major retailers, including LOS, while further expanding our dealer network. Our products are now carried in 1,050 retail outlets, with our dealer network demonstrating steady growth. Thanks to the concerted efforts of our new sales team, the dealer-to-retail sales mix has improved from 1:9 previously to 2:8 as of the end of June, reflecting a more diversified and resilient channel structure.
Feng Chen: 除了传统销售渠道外，我们也积极探索高毛利自主销售渠道、电商平台以及核心经销商体系等，评估和优化大客户合作的长期利润结构。我们力求在品牌曝光、市场份额和利润之间实现更优平衡。
Feng Chen: 除了传统销售渠道外，我们也积极探索高毛利自主销售渠道、电商平台以及核心经销商体系等。评估和优化大客户合作的长期利润结构，我们力求在品牌曝光、市场份额和利润之间实现更优平衡。
Kewa Luo: Beyond our traditional sales channels, we are actively exploring high-margin direct-to-consumer channels, e-commerce platforms, and major distributor networks. While evaluating and optimizing the long-term profitability of our key account partnerships, we aim to achieve an optimal balance among brand visibility, market share, and profitability.
Kewa Luo: Beyond our traditional sales channels, we are actively exploring high-margin direct-to-consumer channels, e-commerce platforms, and major distributor networks. While evaluating and optimizing the long-term profitability of our key account partnerships, we aim to achieve an optimal balance among brand visibility, market share, and profitability.
Feng Chen: 此外，我们已经开始积极推动新产品的设计与研发，相关设计图纸已经完成，预计将于明年年中正式上市。这些新产品的推出将为公司带来新的增长动力，进一步丰富我们的产品线，并增强市场的竞争力。
Feng Chen: 此外，我们已经开始积极推动新产品的设计与研发。相关设计图纸已经完成，预计将于明年年中正式上市。这些新产品的推出将为公司带来新的增长动力，进一步丰富我们的产品线，并增强市场的竞争力。
Kewa Luo: Finally, we have proactively accelerated the design and development of several new products. The design schematics are finalized, and we anticipate launching these products by the middle of next year. Their introduction will provide new growth momentum, broaden our product portfolio, and further enhance our market competitiveness.
Kewa Luo: Finally, we have proactively accelerated the design and development of several new products. The design schematics are finalized, and we anticipate launching these products by the middle of next year. Their introduction will provide new growth momentum, broaden our product portfolio, and further enhance our market competitiveness.
Feng Chen: 在新兴业务领域，我们始终保持敏锐的市场洞察力和创新驱动精神，尤其在智能装备和新能源基础设施领域增加了战略投入。
Feng Chen: 在新兴业务领域，我们始终保持敏锐的市场洞察力和创新驱动精神，尤其在智能装备和新能源基础设施领域增加了战略投入。
Kewa Luo: Moving on to our emerging business segments. Supported by keen market insights, we maintain an innovation-driven approach to these segments, with particular emphasis on intelligent equipment and new energy infrastructure. Let me walk you through our latest initiatives in those two fields.
Kewa Luo: Moving on to our emerging business segments, supported by key market insights, we maintain an innovation-driven approach to these segments, with particular emphasis on intelligent equipment, and new energy infrastructure. Let me walk you through our latest initiatives in those two fields.
Feng Chen: 今年上半年，我们与中国领先的巨深智能创新企业杭州云深处科技展开深度合作，联合开发智能高尔夫装备与安防巡检自主机器人，基于自主研发的云边端自算系统。这些新兴智能装备将精准满足市场多元化的需求，进而为公司智能装备业务拓展提供巨大的增长潜力。
Feng Chen: 今年上半年，我们与中国领先的具身智能创新企业杭州云深处科技展开深度合作，联合开发智能高尔夫装备与安防巡检四足机器人。基于自主研发的云终端智算系统，这些新兴智能装备将精准满足市场多元化的需求，进而为公司智能装备业务拓展提供巨大的增长潜力。
Kewa Luo: In H1 of this year, we embarked on a deep collaboration with DEEP Robotics, a leading Chinese innovator in embodied intelligence, to jointly develop smart golf equipment and quadruped robots for security inspections. Leveraging our independently developed cloud edge terminal intelligence computing system, these emerging smart devices are designed to precisely meet diverse market needs, unlocking substantial growth potential for our intelligent equipment business.
Kewa Luo: In the first half of this year, we embarked on a deep collaboration with Deep Robotics, a leading Chinese innovator in embodied intelligence, to jointly develop intelligent golf equipment and quadruped robots for security inspections. Leveraging our independently developed Cloud Edge Terminal Intelligence Computing System, these emerging smart devices are designed to precisely meet diverse market needs, unlocking substantial growth potential for our intelligent equipment business.
Feng Chen: 在新能源基础设施领域，换电技术依然是我们重点布局的方向。康迪科技早在十几年前便致力于推动换电技术的普及与运用，是行业的开拓者和先行者。我们旗下子公司中换电浙江科技有限公司已成为全球动力电池巨头宁德时代重卡换电设备的供应商，并且成功获得首个订单，助力其万站计划的实施。这一合作将不仅深化我们的技术优势，还将带来可观的收入。
Feng Chen: 在新能源技术设施领域，换电技术依然是我们重点布局的方向。康迪科技早在十几年前便致力于推动换电技术的普及与应用，是行业的开拓者和先行者。我们旗下子公司中换电浙江科技有限公司已成为全球动力电池巨头宁德时代重卡换电设备的供应商，并且成功获得首个订单，助力起万战计划的实施。这一合作将不仅深化我们的技术优势，还将带来可观的收入。
Kewa Luo: In the new energy infrastructure sector, battery swapping technology remains a key strategic cornerstone for us. Kandi has been advancing the adoption and application of this technology for over a decade, establishing ourselves as an industry pioneer. Through our subsidiary, China Battery Exchange (Zhejiang) Technology Co., Ltd., we have become a supplier of heavy truck battery swapping station equipment to CATL, the global leader in power batteries, and have successfully secured our first order to support the rollout of its ambitious Ten Thousand Station Plan. This collaboration not only strengthens our technological leadership, but also positions us to generate substantial revenue.
Kewa Luo: In the new energy infrastructure sector, battery swapping technology remains a key strategic cornerstone for us. Kandi has been advancing the adoption and application of this technology for over a decade, establishing ourselves as an industry pioneer. Through our subsidiary, China Battery Exchange Zhejiang Technology Co., Ltd., we have become a supplier of heavy truck battery swapping station equipment to CATL, the global leader in power batteries, and have successfully secured our first order to support the rollout of its ambitious 10,000 stations plan. This collaboration not only strengthens our technological leadership, but also positions us to generate substantial revenue.
Feng Chen: 从财务状况来看，截至2025年6月30日，公司拥有$2.57亿的现金及现金等价物、受限现金和承担。财务状况保持稳健，为未来的增长和业务扩展提供了充足的资金保障。
Feng Chen: 从财务状况来看，截至2025年6月30日，公司拥有2.57亿美元的现金及现金等价物，受限现金和存单。财务状况保持稳健，为未来的增长和业务扩展提供了充足的资金保障。
Kewa Luo: Before I conclude, a brief look at our financial position. As of 30 June 2025, the company held $257 million in cash equivalents, restricted cash, and certificates of deposit. Our balance sheet remains exceptionally strong, providing ample liquidity to support both our strategic growth initiatives and ongoing business expansions.
Kewa Luo: Before I conclude, a brief look at our financial position. As of 30 June 2025, the company held $257 million in cash, cash equivalents, restricted cash, and certificates of deposit. Our balance sheet remains exceptionally strong, providing ample liquidity to support both our strategic growth initiatives and ongoing business expansions.
Feng Chen: 回顾二零二五年上半年，康迪科技在面对外部挑战和内部转型时，展现了坚韧的应变能力和持续成长的潜力。尽管我们面临了一些短期波动，但通过精细化运营、战略调整以及技术创新，我们为公司的长期发展奠定了坚实的基础。
Feng Chen: 回顾2025年上半年，康迪科技在面对外部挑战和内部转型时，展现了坚韧的应变能力和持续成长的潜力。尽管我们面临了一些短期波动，但通过精细化运营、战略调整以及技术创新，我们为公司的长期发展奠定了坚实的基础。
Kewa Luo: In summary, Kandi demonstrated resilience and a strong capacity for sustained growth amid external challenges and internal transformation during H1 2025. Despite some short-term volatility, we believe our disciplined focus on optimized operations, strategic recalibration, and technological innovation has positioned the company for long-term development.
Kewa Luo: In summary, Kandi demonstrated resilience and a strong capacity for sustained growth amid external challenges and internal transformation during the first half of 2025. Despite some short-term volatility, we believe our displayed focus on optimized operations, strategic recalibration, and technological innovation has positioned the company for long-term development.
Feng Chen: 我们坚信在稳定现金流业务加增长孵化业务的双引擎战略指引下，深耕非公路车领域，同时发力智能装备和新能源市场。通过稳扎稳打与持续创新，公司将在未来的竞争中立于不败之地，为股东和投资者创造更大价值。
Feng Chen: 我们坚信，在稳定现金流业务加增长孵化业务的双引擎战略指引下，深耕非公路车领域，同时发力智能装备和新能源市场，通过稳扎稳打与持续创新，公司将在未来的竞争中立于不败之地，为股东和投资者创造更大价值。
Kewa Luo: Looking ahead, we are confident in our dual engine strategy, balancing stable cash flow businesses with growth incubation businesses. Through disciplined execution and continuous innovation, we will strengthen our position in the off-road vehicle sector while strategically expanding into intelligent equipment and new energy markets, maintaining our competitive edge and creating long-term value for our shareholders and investors.
Kewa Luo: Looking ahead, we are confident in our dual engine strategy, balancing stable cash flow businesses with growth incubation businesses. Through displayed execution and continuous innovation, we will strengthen our position in the off-road vehicle sector, while strategically expanding into intelligent equipment and new energy markets, maintaining our competitive edge, and creating long-term value for our shareholders and investors.
Feng Chen: 接下来我把时间交给我们的首席财务官艾伦·林，为大家详细介绍公司上半年的业绩表现。谢谢大家。
Feng Chen: 接下来我把时间交给我们的首席财务官 Alan Lim，为大家详细介绍公司上半年的业绩表现。谢谢大家。
Kewa Luo: Now, let me turn the call over to our CFO, Alan Lim, who will provide details on our financial performance. Thank you.
Kewa Luo: Now, let me turn the call over to our CFO, Allen Lin, who will provide details on our financial performance. Thank you.
Alan Lim: Thank you, Mr. Chen and Kewa, and thank you everyone for joining us today. I will go over our unaudited financial results for H1 2025. The net revenues were $36.3 million, down 39.3% from $59.8 million for the same period of 2024, primarily reflecting the lower sales of off-road vehicles and EV products. The cost of goods sold was $19.9 million, a decrease of 51.3% from $40.9 million for the same period of 2024. The decrease was primarily due to the corresponding decrease in sales. The gross profit was $16.4 million, compared with $19.0 million for the same period of 2024.
Allen Lin: Thank you, Mr. Chen and Qiwa Luo, and thank you everyone for joining us today. I will go over our unaltered financial results for the first half of 2025. The net revenues were $36.3 million, down 39.3% from $59.8 million for the same period of 2024, primarily reflecting the lower sales of off-road vehicles and EV products. The cost of goods sold was $19.9 million, a decrease of 51.3% from $40.9 million for the same period of 2024. The decrease was primarily due to the corresponding decrease in sales. The gross profit was $16.4 million, compared with $19.0 million for the same period of 2024. The gross margin improved significantly to 45.2%, up from 31.7% last year, driven by more favorable product mix, regional revenue distribution, as well as increased sales of previously impaired inventory.
Alan Lim: The gross margin improved significantly to 45.2%, up from 31.7% last year, driven by more favorable product mix and regional revenue distribution, as well as increased sales of previously impaired inventory. The total operating expenses were $18.3 million, a decrease of 21.4% from $23.3 million for the same period of 2024. Regarding the breakdown for expenses, research and development expenses were $2.5 million, up 48.5% from $1.7 million for the same period of 2024, mainly due to a battery product R&D project launched in H1 2025. The selling and marketing expenses were $4.5 million, down 35.8% from $7.0 million for the same period of 2024. The decrease was comparable with the scale of decrease in revenue.
Allen Lin: The total operating expenses were $18.3 million, a decrease of 21.4% from $23.3 million for the same period of 2024. Regarding the breakdown for expenses, research and development expenses were $2.5 million, up 48.5% from $1.7 million for the same period of 2024, mainly due to a battery product R&D project launched in the first half of 2025. Selling and marketing expenses were $4.5 million, down 35.8% from $7.0 million for the same period of 2024. The decrease was comparable with the scale of decrease in revenue. General and administrative expenses were $11.3 million, down 22.6% from $14.6 million for the same period of 2024. The decrease was mainly due to lower depreciation resulting from the long-lived asset impairment recorded at the end of 2024, and reduced stock-based compensation expenses compared with the prior year period.
Alan Lim: The general and administrative expenses were $11.3 million, down 22.6% from $14.6 million for the same period of 2024. The decrease was mainly due to a lower depreciation resulting from the long-lived asset impairment recorded at the end of 2024 and reduced stock-based compensation expenses compared with the prior year period. The net income was $1.7 million, compared with $2.4 million for the same period of 2024. The basic and diluted net income attributable to the company's stockholders per share were $0.02, compared with $0.03 for the same period of 2024. Turning to our balance sheets. Our financial position remains strong.
Allen Lin: The net income was $1.7 million, compared with $2.4 million for the same period of 2024. The basic and diluted net income attributable to the company stockholders per share were $0.02, compared with $0.03 for the same period of 2024. Turning to our balance sheets, our financial position remains strong. As of 30 June 2025, the company had cash and cash equivalents, the receipt of cash, and certificates of deposit totaling $256.7 million, compared with $126.3 million as of 31 December 2024. That concludes our remarks. I will now hand the call back to Qiwa Luo for any final comments. Thank you.
Alan Lim: As of 30 June 2025, the company had cash and cash equivalents, the restricted cash and certificates of deposit totaling $256.7 million, compared with $126.3 million as of 31 December 2024. That concludes our remarks. I will now hand the call back to Kewa Luo for any final comments. Thank you.
Operator: Thank you once again for joining us today. If you have any further questions, please reach out using the contact information provided on our website. We appreciate your time and interest in Kandi Technologies. This concludes today's conference call. You may now disconnect.
Kewa Luo: Thank you once again for joining us today. If you have any further questions, please reach out using the contact information provided on our website. We appreciate your time and interest in Kandi Technologies. This concludes today's conference call. You may now disconnect.
Operator: Thank you. This concludes today's call. Have a wonderful afternoon. You may now disconnect your lines.
Operator: Thank you. This concludes today's call. Have a wonderful afternoon. You may now disconnect your lines.
All participants are in a listen only mode. Today's conference is being recorded.
I will now turn the call over to your host Ms Kilo Luo.
I R. A director of the company. Please go ahead.
Hello, everyone and welcome to Kandi Technologies earnings Conference call for the first half of 2025.
As a reminder, today's call is being recorded the company's financial and operational highlights were issued in a press release earlier today.
Are available online you can access the earnings press release and are subscribed to the company's E mail alerts by visiting the Investor Relations section of our website at IR Dot Candy group Dotcom.
Joining us today are missed phone Chen Chief Executive Officer, and Mr. Alan Laing Chief Financial Officer.
Before we begin 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.
We're looking statements involve inherent risks and uncertainties.
Such the company's actual results may be materially different from the expectations expressed today.
Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC.
The company does not assume any obligations to update any forward looking statements, except as required under applicable laws.
Unless otherwise noted all financial figures discussed today are in U S dollars.
I will now turn the call over to our CEO Mr phone churn.
Will deliver his remarks in Chinese followed immediately by English translation. Mr. Tang. Please go ahead.
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Good day investors and analysts welcome to Kandi Technologies earnings conference call for the first half of 2020 five.
We sincerely appreciate your taking the time to join US as we review the company's first half performance.
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In the first half of 2025 global microeconomic landscape remained clouded by considerable uncertainty.
Ladies real headwinds for our business.
Nevertheless, thanks to our agility and strategic foresight, we made substantial progress on several key initiatives, while enhancing our traditional off road vehicle operations.
Also leveraged our core strengths to expand into the emerging fields of embedded intelligence annual energy infrastructure.
So the confirmation of several pivotal partnerships with steadily advanced our transformation from a conventional opinion factoring enterprise into a holding platform was intelligent equipment manufacturing at its core.
This transformation initiative not only speaks to our resilience in a challenging environment, but also reaffirms our confidence in delivering sustainable growth over the long term.
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I will begin with update on the latest developments in our core business.
Following the adjustments and upgrades may in the first half of the year. We have entered a new phase of refined operations with the goal of delivering steady high quality growth.
So a more efficient resource allocation inventory optimization and disciplined cost control, we are gradually improving our profitability and strengthening our cash flow management.
Let's look more closely at his business operations from three key aspects.
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In product sales, our focus on inventory management within retail channels drove a notable improvement in gross margin to 45, 2% for the first half of 2025.
$13 five percentage points from 31, 7% in the same period of 2024.
It's really flags the effectiveness of our refined operations and cost control initiatives. Meanwhile, by optimizing our internal production structure and streamlining Assembly line processes, we have enhancing manufacturing efficiency and shortened to leave.
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Further strengthening product delivery reliability.
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Second on the sales channel front, we are creating a more balanced and strategic distribution layout to enhance both our market penetration and service capabilities to.
To that end, we have reinforced the key partnerships with major retailers, including Lowe's wildfire, they expanding our dealer network.
Our products are now carried in a thousand and 50 retail outlets with our dealer network demonstrating steady growth.
Thanks to the concerted efforts of our new sales team.
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Beyond our traditional sales channels.
We are actively exploring high margin direct to consumer channels e-commerce platforms, and a major distributor networks, while evaluating and optimizing the long term profitability of our key account and partnerships.
We aim to achieve optimal balanced a mom brand visibility market share and profitability.
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Finally, we have proactively accelerated the design and development of several new products that design schematics are finalized and we anticipate launching these products by the middle of next year.
Their introduction will provide new growth momentum broaden our product portfolio and further enhance our market competitiveness.
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Moving onto our immersion business segments supported by key market insights.
We maintain our innovation driven approach to these segments.
The particular emphasis on intelligent equipment and new energy infrastructure, Let me walk you through our latest initiative in those two fields.
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In the first half of this year, we embarked on a deep collaboration with deep robotics.
Leading Chinese innovator, Inc. In body intelligence jointly if they have a lot of intelligence golf equipment and corporate pads robots for security inspections.
Leveraging our independently developed cloud ACH terminal intelligence computing system is emerging smart devices are designed to precisely meet diverse Marquis means unlocking substantial growth potential for our intelligent equipment business.
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And the new energy infrastructure sector battery swapping technology remains a key key strategic cornerstone for US Kandi has been advancing the adoption and application of this technology for over a decade.
Establishing ourselves as the industry pioneer.
Through our subsidiary China Battery exchange technology.
Technology Company limited, we have become a supplier of heavy truck battery swapping station equipment to C. A T L.
The global leader in power batteries and have successfully secured our first order to support the rollout of its ambitious 10000 stations plan.
This collaboration not only strengthens our technological leadership.
Also positions us to generate substantial revenue.
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Before I conclude a brief look at our financial position.
As of June 32025, the company held 257 million in cash cash equivalents restricted cash and certificates of deposit.
Our balance sheet remains exceptionally strong providing ample liquidity to support both our strategic growth initiatives and ongoing business expansion.
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In summary, candy demonstrated resilience and a strong capacity for sustained growth amid external challenges and internal transformation. During the first half of 2025. Despite some short term volatility we believe our disciplined focus on <unk>.
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Recalibration and technological innovation.
Has positioned the company for long term development.
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Looking ahead, we are confident in our door engine strategy.
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Disciplined execution and continuous innovation, we will strengthen our position in the off road vehicle sector, while strategically expanding into intelligent equipment and new energy markets.
Maintaining our competitive edge and creating long term value for our shareholders and investors.
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Now, let me turn the call over to our CFO Alan Laing.
We will provide details on our financial performance. Thank you.
Thank you Mr. Chairman Thank you.
Thank you everyone for joining us today.
I will go over our unaudited financial results for the first half of 'twenty five.
The net revenues were $36 3 million down 39, 3% from $59 8 million for the same period of 2024.
Merrily, reflecting the lowest that it was up off road vehicles MEP product.
The cost of goods sold.
$19 9 million a decrease of 51, 3% from $40 9 million for the same period of transition before.
The decrease was primarily due to the corresponding be kitchen south.
The gross profit was $16 4 million compared with 19 million for the same period of 2024.
The gross margin improved significantly to 45, 2% up from 41, 7% last year.
Driven by more favorable product mix and regional revenue distribution as well as increased.
The increase was a previously impaired inventory.
Total operating expenses were $18 3 million a decrease of 21, 4% from $23 3 million for the temporary or 2024.
Regarding the breakdown of expenses.
Research and development expenses were $2 5 million.
Up 48, 5% from $1 7 million for the period of 2024.
Mainly due to a battery product R&D project launch in the first half of 2025.
The selling and marketing expenses were $4 5 million down 48% from seven 1 million for the same period of 2024.
The decrease was comparable with the scale of decrease in revenue.
General and administrative expenses.
$3 million.
Now 22, 6% from 14 6 million for the.
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The decrease was mainly due to a lower depreciation resulting from the long lived asset impairment recorded at the end of 2024 and reduced stock based compensation expenses compared with the prior year period.
The net income was $1 7 million compared with $2 4 million for the same period of 2024.
The basic and diluted net income attributable to the company stockholders for sure.
There were particularly two dollar compared with fewer points to a $3 for the same period of 2024.
Turning to our balance sheet.
Our financial position remains strong.
At June 30 of 225, the company had cash and cash equivalents.
The cash and certificate of deposit totaling $257 million compared with $126 3 million from December 31, 2020.
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That concludes our remarks I would now hand, the call back to cure for any final comments. Thank you.
Thank you once again for <unk>.
Joining us today, if you have any further questions. Please reach out using the contact information provided on our website.
Your time and interest in Kandi technologies. This concludes today's conference call you may now disconnect.
Thank you. This concludes today's call have a wonderful afternoon, you may now disconnect your lines.