Good day ladies and gentlemen. Welcome to the Kandi Technologies Full Year 2019 Financial Results Conference Call. For your information, today's conference is being recorded. I would now like to turn the call over to your host Ms. Kewa Luo. Please go ahead, Ma'am.

Thank you, operator. Hello, everyone. Welcome to Kandi Technologies Group full year 2019 earnings conference call. The company distributed its earnings press release earlier today and you can find a copy of it on Kandi's website at www.kandivehicles.com. With us today are Kandi's Founder, Chairman and Chief Executive Officer. Mr. Hu will deliver prepared remarks followed by a question-and-answer session. Before we get started, I'm going to review the Safe Harbor statement regarding today's conference call. Please note that the discussions today 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 risks and uncertainties. As such, the company's results may differ materially from views expressed today. Further information regarding these and other risks and uncertainties are included in the company's annual report on Form-10 K for the fiscal year ended December 31st, 2019 and in other documents filed with the U.S. Securities and Exchange Commission. Kandi does not assume any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference call is being recorded. In addition, an audio webcast of this conference will be available on Kandi's Investor Relations website. I will now turn the call over to Kandi's Founder, Chairman and CEO, Mr. Hu Xiaoming.

[Foreign Language] Hello everyone and thank you for joining us on the call today. In 2019, due to the restructuring of the joint venture company, which we now call the Affiliate Company, we stopped production of our previous EV products in order to make adjustments and upgrade the product structure. Despite these challenges, Kandi had a strong year in 2019 with solid performance. Full year 2019 revenue was $135.7 million, up to 20.7% and the gross margin expanded to 18.7%. Please refer to the Form 10-K we filed today for more detailed financial information. In 2019, will laid the groundwork for growth with new product development, market expansion, and implementing government-accredited ride-share vehicles in the third, 4 tier cities. However, the COVID-19 crisis has delayed progress in 2020. Once the virus situation is under control, the foundation we have built in 2019 will enable us to succeed this year. We will keep the market informed with more information as required. Now, I will answer your question. Please go ahead. Operator, we're ready to take some questions.

Thank you. [Operator Instructions] We will take our first question from Walter Hill of Carty & Company. Please go ahead.

Regarding Kandi's expected strong balance sheet with the full magnitude of it -- while at full magnitude, right not sure until Q1 is reported in few weeks, the payments from Geely and maybe Jinhua in Q1 2020 based on the $75 million, basically $1.20 in positive working capital, and $221 million, about $4.25 in book value at the end of Q3, and the sale of the Jinhua facility, which appears to be priced at least 10 times higher than what the Jinhua facility was on Kandi's books. It appears that Kandi's balance sheet could soar to a net book value of around $285 million or about $5.38 a share and working capital of $137 million about $2.85 a share. My question clearly, if even close to these expectations, Kandi will have one of the strongest balance sheets relative to a market cap of any EV player in China. We expect to possibly see Kandi take advantage of the industry stress and China by making one or more cash acquisitions? And after the Q1 quiet period ends and numbers are reported in a few weeks, can we expect to see a resumption of either insider or company share buybacks?

Thank you for your question. Let me translate. [Foreign Language]

Thank you for your question. I believe there are significant impacts on other companies as a result of COVID-19 pandemic. I don't think they are prepared for this. According to the involving situation, the companies were asked to make appropriate adjustments to their strategic business planning, which will focus on having a steady growth. For now, we are not actively planning on any questions -- any acquisitions, unless there are some targeted companies. Otherwise, we are not planning for now. And to answer your second question, we are bullish on our long-term outlook. But given the highly volatile nature of the COVID-19 crisis, we believe that conserving our resources is the most prudent course of action in the near-term.

Thank you.

Thank you.

Thank you. We move to our next question from Frank [Indiscernible] of -- a Private Investor. Please go ahead sir.

Yes and a good morning. I have three very short questions. First question is the high cap factory on Hainan Island presently manufacturing vehicles, and which vehicles are manufactured there?

Do you finish asking all the questions, then Mr. Hu can answer all together?

Sure. Second question, have any sales occurred to [Indiscernible] companies located on Hainan Island? And if so, how many? And are they continuing? And my third question, Google Earth views somewhat appears to be two dormitories on the campus on Hainan Island associated with Kandi's lots. Do the presence of the dormitory and the use of them presents any risks to the employees if they are there from the COVID-19 and if so, what precaution has the company taken to keep them healthy?

Okay. Thank you. [Foreign Language]

First of all, thank you for your questions. Hainan factory many manufacturers model K23, this is for the rideshare market. But because of the COVID-19 situation, the local government suggests us to put on hold for any sales to the rideshare market. Again, due to this very fast-changing COVID situation, we can't make any follow sales forecast at this time. Regarding to the dormitory and our employees there, because it's a very -- it's a brand new building there; I believe it's a very safe place for them to be residents. And for everyone who came from the outside of the city, they all have to go through the 14 day quarantine. So, for now, there was no expected cases happened in our dormitory.

Thank you.

Thank you.

Thank you. We take our next question from Terry [Indiscernible] and Associates. Please go ahead.

Yes, good morning. And thank you, Mr. Hu for a very nice last 15 months in some pretty tough and challenging times. First, I want to tell you that I've lived in Oklahoma City, Oklahoma for all my life, but 10 years ago, I moved to a neighborhood that believe or not had two of the Kandi Cocos. And I need to tell you that I've driven them and they are both still running today. So, there's a testament to these things will last a long time. Anyway, my question is about sales in the United States. How is that going? What are -- any tarries or COVID-19 problems that you're seeing? And what's your expectations for sales in the U.S. going forward? Thank you.

[Foreign Language]

Actually the dealerships are ready to distribute the Kandi EV and we now have about 50 dealerships, but the COVID crisis has delayed everything. Everything is closed now in the U.S. I think we will resume building the dealership network as the economy recovers.

Okay. Maybe a follow-on question. Which cars are being offered over here or which ones will be like the K23 or the K27? And is the K27, is at a [Indiscernible] made EV?

[Foreign Language]

So, right now we are planning on selling both K23 and K27.

Okay. Final question, real quick. Does he -- does Mr. Hu ever plan on coming back to the U.S. for a shareholder's meeting like the one we had in San Francisco, five, six, seven years ago?

[Foreign Language]

Mr. Hu is saying that, definitely I do have the plan on going as long as the opportunity arises. And so I really look forward to a meeting with you guys again when next chance -- we host this kind of conference.

Very good. Thank you again very much.

Thank you very much.

Thank you. We move to Steve Miller, Private Investor. Please go ahead, sir.

Thank you. I have three short questions on totally different subjects. First one is, when will Kandi get off the Public Company Accounting Oversight Board non-compliant list, is that a priority for Kandi? And if it is, you and Henry Yu the Head of the Audit Committee is doing to make it happen?

I have some – I couldn't hear you clearly.

Okay. Let me try again. When will Kandi get off the Public Company Accounting Oversight Board non-compliant list? Is that a priority for you? And if it is, what are you and Henry Yu the Head of the Audit Committee doing to make it happen? Will it take more months or years? [Technical Difficulty] [Foreign Language]

Hi, Steve. My phone got some technical problems. I couldn't hear you clearly so right now operator, just connect me on the other lines. Please repeat your question, one more time.

Sure. When will Kandi get off the Public Company Accounting Oversight Board non-compliant list? Is that a priority for Kandi and if it is, whether you and Henry Yu the Head of the Audit Committee doing to make it happen, will it take more months or years?

.:

[Foreign Language]

The most important reason, we change to our auditor from the BDL to the current auditor, Marcum, is because you provide PCAOB access to more auditing information.

So it's anticipated that like within six months Kandi is going to be off to non-compliant list?

[Foreign Language]

According my company colleagues, she said, for now, after our 2019 10-K is released PCAOB will have access to our 2019 financial auditing draft, but before that for 2018, they weren't able to have the access.

All right. And then pardon my pronunciation, but whatever happened to Ms. Yuanyao Wang, the Vice President of Finance, who was appointed by Kandi’s Board in February of last year. Is she's still at Kandi? And Ms. Zhu Xiaoying who was appointed as Interim Chief Financial Officer in January of last year, will she ever become the official CFO or are there plans to replace her this year?

[Foreign Language]

We actually right now have very good candidates. That would be led by – as going to be on Board shortly.

Okay. And finally, I understand that one of the tasks with Blueshirt from the very start, which was several months ago, wants to dramatically overhaul Kandi’s websites. I've heard that, they have made recommendations to you how they should be improved, but perhaps they've not been given the full go ahead. Why is it taking so long?

[Foreign Language]

We do intend to make substantial and useful updates to both the general website and the Investor Relations section. They are a lot of work to be done, but we expect to finish before the end of the third quarter.

All right. Thank you very much.

Thank you.

We move now to our Arthur Porcari of Corporate Strategies Inc. Please go ahead.

Good evening, Mr. Hu. Hopefully you and your family are in good health, and also congratulations in delivering a strong 2019 revenue growth while in business transition. Along with this new auditor conversion to the new U.S. based global auditor Marcum.

Hi, sorry. Arthur, can you repeat your last question?

All I was doing, I was just saying, we'll just move on. Recently Kandi has been given a lot of very positive shared press swag daily, daily in the release of the new sanction in Maple 30X SUV. This both in the China media and the U.S. TV media. After subsidy pricing has Kandi and the media had reported the cost of the average 30X is around $10,000. And some 30,000 units are reported expected to be sold by French in this year. As one English media source headline the 30X is less than a quarter of the price of the Tesla 3. Yet aside from speed range, the 30X has many of the same features to include. movable sunroof, autonomous driving sensors, 30 minute Quick Charge, full featured touchscreen and even a feature that Tesla doesn't have an 80 quick battery exchange. I have a few questions.

Okay. I’ll -- Let me translate what you have so far. [Foreign Language]

[Foreign Language]

And I really appreciate you asking about my family, everybody in family is doing well. Please go ahead with your question. I will answer one-by-one.

Okay. As past reporting, can we expect--

Hello.

Yeah. Can you hear me? Hello.

Yes. Yes. Go ahead.

Okay. As past…

Yes. Yes.

As past report, it can be had expected to be bidding on providing parts and batteries for function as in the past that has for JV cars, but at these low 30X prices, it would seem impossible for Kandi to make any profit bidding on Shenzhen parts. Do you still expect Kandi to provide these parts or are we going to pass on that for now? I have some more questions…

[Foreign Language]

[Foreign Language]

Yes. This is actually a very good question. As you can see that JV has put out a lot of efforts in promoting the 30X cars so they do have a very high requirements for the price for the easy part. Therefore, Kandi has adjusted its model structure to increase battery production for intelligent electric transportation products and for this year we do have a lot of planning for a variety of products, but due to the market uncertainties right now we are still waiting to see the growth opportunities. Yeah, that's all.

Okay. That's what I thought. Well, Kandi 100% subsidiary Jinhua, Ankao providing the quick battery exchange technology in the Jinping EVs. If not, why not? And also what percentage of 30X sales are expected to be sold to individuals versus ride? And I still have one more behind that.

[Foreign Language]

[Foreign Language]

Actually the business model Maple 30X doesn't have the percentage change feature, because this is targeting the family use of car. And also in order to be providing this car for the ride-sharing market, you have to have the wheelbase more than 2.65 meters and this car doesn't meet the requirements. But however the next model that Fengsheng going to release later this year, it's going to meet the requirements. Also Ankao [indiscernible] technologies will be deploying in the vehicle intended for the ride-share market, because it's very important to have the high idealization of the cars. And this year we also see a lot of supporting policies from government to supporting the battery, quick battery exchange model. So we do see a lot of potential in this.

Okay. I'm sorry. I've got a little hard time to hear. Did you say the subsequent model at least the next follow-up model will use the Ankao battery exchange or not? It can kind of garbled.

[Foreign Language]

[Foreign Language]

He's saying that the next model is going to use the quick battery exchange feature, but not necessarily only Ankao, probably is going to be the technology going to be available for four different providers.

Okay. Do we have any other? Okay. Other than obviously using the ride-share -- sorry, quick battery exchange in Kandi’s 300,000 government approved program that we've been talking about. Other than that, do we have any other outside customers, potential customers out there that they're interested in Kandi at quick battery exchange is obviously it's very quick, it’s 60 to 80 seconds compared to like 6.5 minutes for NEOs and they've been very high on their quick battery exchange features -- for the future.

[Foreign Language]

[Foreign Language] Okay. I want -- first of all, I want to confirm that our quick battery exchange takes 90 seconds. So -- and I do believe that potentially in the future on all the vehicles that used in the rideshare market will be the potential customers for our battery -- quick battery exchange technology.

Okay, last question. Since Geely Holdings seems to have spent over 750 million on both purchasing its stock and funding the new EV for research development other expenses, is the Kandi option to potentially buyback that significant portion of the JV still alive. If so, when does it expire? And any additional thoughts by Mr. Hu on this subject?

[Foreign Language]

Yes, this option is still valid. And when we assign a contract by wishing say was two years after the signing of the contract, so our decision on whether to execute a buyback will depending on whether it is beneficial to the interests of Kandi shareholder at that time. And for now, it's hard to say, but by the time that the buyback is not going to beneficial for the Kandi shareholder, then it won't be something I would do.

All right. Well, thank you very much. And we look forward to hear from you all again in a couple of weeks, I guess for the first quarter numbers.

Thank you.

Is that right.

Mr. Hu is saying that once the COVID-19 situation is controlled, I will come to U.S. to meet everyone.

Okay, very good. Thank you very much. Bye-bye.

Thank you.

Thank you. We take our next question from John [Indiscernible] Technologies. Please go ahead.

Yes, good morning. One question, the Yongkang Scrou factory has just received in addition or is presently being enlarged, will that location continue to be upgraded, or the functions presently there be moved to the new Jinhua location?

[Foreign Language]

We are experiencing a high-demand for motors, especially due to the growth of intelligent electric transportation products. In order to meet this demand, we are spending that actually we have complete the structure now. And so, we are going to have 6,600 square meters of the production base. We expect to have the increased capacity producing in the second half of this year. And also, I -- due to the increased capacity, I expect the revenue from the Yongkang Scrou is going to have a very high growth this year.

Thank you, sir. You and your family stay well. Thank you once again.

Thank you.

Thank you. We'll move to our next question to Michael Fearnow of Focus Tech Investments Inc. Please go ahead.

Yes, good evening. I want to address present PR regarding a 300,000 government accredited with a third and fourth care cityride earning program using Kandi EVs like the K23 and the quick battery exchange have been put on trial in Jinhua suburb. This was a partnership with a giant LCV and offload utility vehicle maker Jinping. In the press release from a few months ago, it was mentioned that at some point Kandi and Jinpeng would likely be swapping some equity. I want to break my question in two parts. The first part is, since this is a private, little can be found, can Mr. Hu explained more about Jinpeng and why he feels they were a good partner for Kandi?

Thank you. Okay. Let me translate. [Foreign Language]

I really appreciate your question. And Jinpeng is an outstanding partner because they have very high volume of sales and massive distribution network. In the past few years, they have been selling over one million two wheelers and 100,000 low speed vehicles annually. EV distribution network cleanses entire country with over 10,000 hours of which 2,000 are country level, most importantly, we pulled shared enthusiast for this price sharing opportunity in the third and fourth tier cities where their distribution network can efficiently reach our target customers. Therefore, boosting the partnership will be a win-win for all involved.

,:

Yes, we do have them on the call but they are not on sleep mode.

Yes when Mr. Hu finishes question, I would like to direct a little bit of information towards Blueshirt Group. Okay. Thank you.

[Foreign Language]

First of all, the equity swap with Kim Hong is being discussed, if ever implemented it will be out with subsidy company or high non company. I don't think, it's going to be a significant amount of percentage. But it's going to be enough to be serious about a partnership. Regarding to what's going to the relationships, I believe it is a strong alliance with our expertise and resources and this cooperation brings many possible offset not just the cash and technology.

Okay. And as far as Blueshirt Group, can they expand on their role with Kandi going forward and kind of require ahead. I know one time they spotted some questions that were sent by email, and those are very helpful. And I'm hoping, we'll do that in the future. And one general question for Blueshirt on these conferences, quarterly conference calls, is it possible to use something like the zoom video conferencing app and prosper even get a little more efficiency on the translation?

[Foreign Language]

Board will play a very important role in helping us with a communication especially that you know our team consists of all Chinese, we like to have Americans who understand Wall Street, understand the company's operation to represent us in the market to help deliver the message in a very efficient way. And in regarding to whether or not having the virtual conference, I think depending on -- in the future, if we, if it's necessary, if it's practical, we will always keep the options open to explore opportunities.

Thank you and look forward to a successful 2020.

[Foreign Language]

Thank you. We have no further questions. We have no further questions at this time

Okay, we can finish the call. [Foreign Language] Mr. Hu is just saying that from last call, we did some feedback telling us that some investors are not able to ask questions. So, right now [Technical difficulty]

Please go ahead. End of Q&A:

[Foreign Language] Thank you, ladies and gentlemen for attending today's call. On behalf of the Board of Directors and management team or Kandi Technologies Group, I would like to reaffirm our commitment. We will continue to work diligently to maximize shareholder value by focusing on growing our EV business strategically, while delivering strong operational results. Thank you, very much for your outstanding support. We look forward to talking with you in the next call. If you have any additional questions, please don't hesitate to contact our Investor Relations Department and our outside IR consultants. Goodbye.

Thank you. Ladies and gentlemen, that will conclude today's conference call. Thank you for your participation. You may now disconnect