Dutton Associates Announces Investment Opinion: Kandi Technologies Speculative Buy Rating In Update Coverage By Dutton Associates

Business Wire, April 30, 2008

ROSEVILLE, Calif. -- Dutton Associates updates its coverage of Kandi Technologies (Nasdaq: KNDI) maintaining a Speculative Buy rating and a price target of $6.72. The 13-page report by Dutton senior analyst Stanley Ng is available at www.jmdutton.com as well as from First Call, Bloomberg Professional, Zacks, Reuters, Knobias, and other leading financial portals.

Kandi Technologies recently announced its financial results for the 4Q07 and for the full year ended December 31, 2007, with revenue slightly below our forecast at $34.7 million and a net income of $5.0 million at just 3.8% below our projection. Even though sales in 4Q07 were lower than our estimate and operating expenses witnessed a significant increase to 11.1% of revenue, compared to 6.3% in 3Q07; we are surprised to see that gross and operating margins in 4Q07 showed visible increases to 24.7% and 13.6% respectively from 16.5% and 10.3% respectively in 3Q07. These margin improvements indicated that rising raw material costs and higher operating costs have limited impact on Kandi. Even though rising global oil prices are dampening demand for passenger cars, we believe the situation would actually help stimulate demand for Kandi's energy-saving, affordable super-mini cars. Meanwhile, while tightening measures in China and weakening economic growth in the overseas markets may dampen leisure vehicle sales, we argue that the market demand for such products will remain strong, and price-conscious overseas buyers would simply switch to ATVs, UTVs, and go-karts from China, which are selling at cheaper prices with similar quality and functionalities compared to similar products from Japan and Taiwan. Our new target price has not taken into consideration Kandi's planned aggressive expansion of its super-mini car project, which is estimated to increase revenue by 50% in 2009 and EPS by 20-30% and thus provide further upside potential for the stock.

About Dutton Associates

Dutton Associates is one of the largest independent investment research firms in the U.S. Its 30 senior analysts are primarily CFAs, and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.

The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. The Firm does not accept any equity compensation. We received $35,000 from the Company for 4 quarterly Research Reports with coverage commencing on 10/30/2007. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.