Kandi Technologies Group, Inc. (KNDI) Q3 2020 Earnings Report, Transcript and Summary

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. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Kewa Luo, Investor Relations Manager. Please go ahead.

Thank you, operator. Hello, everyone. Welcome to Kandi Technologies Group third quarter of 2020 earnings conference call. The company released the results earlier today. The press release is available on the Investor Relations sector of Kandi's website at www.kandivehicle.com. With us today are Mr. Hu Xiaoming, Kandi's Founder, Chairman and Chief Executive Officer; and Mr. Alan Lim, Chief Financial Officer. Mr. Hu will deliver prepared remarks, followed by a question-and-answer session. Before we get started, please note that today's discussions 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 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 obligation to update any forward-looking statements, except as reminded required under applicable law. As a reminder, this conference call is being recorded. In addition, an audio webcasting 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] Thank you, Kewa. Hello, everyone. Thank you for joining us on the call today. As you all know, the COVID crisis impacted business activities around the world, and it has to have negative impact on many sectors with electric vehicles being one of them, Kandi’s business among others sector directly. However, with great efforts we were able to resume production by utilizing our specialized advantages. We were also able to transform battery swap technology and powertrain system research and development into production and lock in partnerships and find opportunities to showcase our expertise and used cases in this field. We were also able to discover a number of opportunities in the field of intelligence, expectations and if any of those [ph] products, which further approved our leadership position in the industry. We will explore more opportunities in smart EV, while we push forward our main product and gain market share. However, with great efforts, sorry – over the past few months, Kandi has very productive. I would like to thank those who follow our news closely. For others, let me give you a recap on recent developments in the major milestones we achieved. In August, we delivered our first fully automated intelligent battery exchange system to the rideshare operator in Haikou, Hainan in China. Meanwhile, in America, Kandi America was able to hold a very successful virtual event to launch K23 and K27 EVs into the U.S. market. In September, we established a wholly owned subsidiary for our battery swap service. We were able to register their name as China Battery Exchange Technology, which is like Sinopec Group and China National Petroleum Corporation. They are the leaders in the sector to provide petroleum. But China Battery Exchange is going to become the leader to provide battery exchange in the sector, and which is going to bring us a lot of potentials. And this enable us to monetize dozens of patents we have in the field of battery swap system. In October, we were able to form a strategic agreement with the world's largest state-owned public service enterprise, the State Grid of China to Zhejiang State Grid Electric Vehicle Service Company to cooperate in our area of expertise battery exchange for pure electric vehicles. We also launched 300,000 government-accredited pure EV within five years rideshare program and has begun the graduate delivery of 1,000 EVs to the city of Haikou in Hainan province and 2,500 EVs to the city of Shaoxing in Zhejiang province. Most recently, we announced that we plan to list Zhejiang Kandi Smart Battery Swap Technology Company Limited on Shanghai Stock Exchange’s STAR Board. This is after a thorough consideration and extensive engagement with top tier IPO advisors in China. Both ways and our advisors are confident that our battery swap business is ready to grow more rapidly with support from the capital in China. This is a very good news for Kandi shareholders, will enable us all to realize the growing value of our smart battery swap business. We are pleased with our strategy, our progress and our achievements with the economy slowly reviving and increasing government support for the vehicle battery separation battery swap model. We continue to believe that as well for electric vehicle with battery swap model is very positive. We also aggressively proving its expertise and leadership position in the intelligent battery swap area. And we believe there will be more exciting news coming. We remain optimistic about our market opportunities and potential market share for Kandi. Now, let me and my CFO Alan answer your questions. To save the time, Alan is going to answer your question directly in English. If there was something Alan is not sure, I will take over. Operator, please proceed.

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Your first question comes from the line of Marla Marin 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 closer to the end market and how you feel that will benefit the company? Thank you.

Hi, good morning, Marla. So you’re talking about our strategy to help expand our capacity especially for the electric vehicles, right? Just to clarify, I understand.

Yes.

Okay. So, well, I will start with my answers and we'll have Mr. Hu to elaborate about discussion to give you a more detail answer. So basically we are now having our EVs primarily manufactured in our China's Hainan facilities in order to meet the need in our China and U.S. market. So far our capacity can meet the need for the time being including our car-hailing platform in China and you said you can tell we can start at the sales of the platform in Heico and also in Shaoxing. And we are picking up well, preparing for ourselves in the U.S. So far, I guess, our capacity in China Hainan facilities can meet the need. But I guess for the thorough strategy for expansion I will allocate to Mr. Hu to give us a third explanation. So allow me to speak to Mr. Lu broadly so I can translate that to answer for you. [Foreign Language]

[Foreign Language]

So Marla, as Mr. Hu confirmed the capacity for now we can meet the needs for their foreseeable future. So far I think we'll count on the facilities and the capacity of our Hainan facilities. And of course, we'll explore different options, but for now we stick with our facilities with Hainan.

Thank you.

Welcome.

Your next question comes from the line of Arthur Porcari with Corporate Strategies. Please proceed with your question.

Congratulations Mr. Hu, achieving some immense milestones for Kandi’s live conference call. Of course, you've covered a few of those. But the two in particular impressed me is the strategic partnership with the State Grid, which is China's massive electric utility as you said. It's like just don't realize how big it is, 1.2 billion consumers, 90% of all the landmass in China. And number two, on the Fortune Global 500, second only to Walmart actually. But just as impressive to me as former investment banker, you attracted China's largest investment bank CICC to lead an IPO syndicate to underwrite a spin off IPO of Kandi’s wholly owned battery subsidiary that we've been talking about. To capitalize and monetize Kandi’s exceptional expertise in all the facets of EV technology, I assume this is thanks to Mr. Hu’s 30-year experiences the pioneer of inventor a quick battery exchange technology, one of the hottest sectors in China today. But a little background here, 10 years and two weeks ago, Mr. Hu may remember, I had the honor of joining at Guangdong in China at the opening of China's first quick battery exchange station, which saw Kandi selling a small two seat EV, actually powered by lead-acid battery that shows you how long ago this was which was independent of the car. NIO was not the first one to do this. The car owner would pay around $3 each time he changed the battery. More than just the coincidence at that time Tiny Kandi, who is the first to make and commercially sell EVs in China had the same State Grid as a partner in this early trial. Seemingly from the recent PR provided most all the same services in this new agreement. If I remember correctly, what attracted State Grid most of the Kandi QBX at the 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 use, usually midday. At that time, this was called B2G or battery to grid, most will remember at that time midday brownouts major cities globally. The Kandi trial was an early success and the China National Government later officially recognized what they called the Hangzhou Kangji for a power mode, quick battery exchange, as one of only three approved methods of charging nationwide. Yes. They specifically use Kandi’s name in the official title. With this background, I'm going to have a couple of questions. I don't know whether that was probably too much to overload Mr. Hu with, but maybe Alan could handle this. But do you want me just to go into the questions now? Or do you want to try to paraphrase what I said to Mr. Hu?

I think you can proceed with the questions. Okay. Thank you for a long time support by the way.

Okay. Sure. Thank you. In the PR, Mr. Hu said the two parties will cooperate extensively across the whole supply chain and include about a dozen issues. Most of these were self-explanatory, but three, I'd like you to band upon, and then a final general observation. What's different or unique with this new Kandi subsidiaries, quick battery exchange over competitors, such as NIO and is Kandi battery technology patented or proprietary. If so, can you tell us more about this? That's part one of our four-part question.

Okay. Well. So I guess, and first of all, for us, we have in the field of the battery swaps, we have dozens of the patents in terms of the – that invention and then the practices as for them, I'm sure. So I will explain with how many we supported by the State Grid. I'm sure they should have certain outages as well, although we have not really investigated in details about which ones they have and how many they have overall.

Okay. Is there anything unique about the company's battery recycling? This is a different subject, 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 recycle right.

Yes, right, yes indeed. Well. Battery recycling [indiscernible] pieces of the battery swap company. In this respect, well, we have – we do have the technology to accept the battery cycling process, well, such as one of the technology can be reflected, I guess in the separation, the activation and the synthesis of those different other particles like they, as you may know. I think we will try to first make them into the positive and negative ends. And in order to separate them, then we have pretty high effectively the process to recover the composition. So basically these materials out there, they get separated they can be used and to realize that internal circulation of the waste battery materials. So basically that can maximize the economic value of the waste and make it pretty complex [indiscernible] process.

When we acquired Jinhua An Kao a while back, that was also mentioned that that time, and I believe Mr. Hu said something to the extent of it, typically the normal lithium battery is maybe 15% or 20% recyclable. But Jinhua An Kao had a technology that could make it over 50% recycled. But I was just wondering if we could maybe find out if that was still correct and the same battery we have today and why such a big difference between what they have and what others were able to achieve?

Right. I guess for that I would delegate a question to Mr. Hu. So allow me to speak in Chinese and I will do a translation afterward.

Sure.

[Foreign Language]

[Foreign Language]

[Foreign Language] As you may know, An Kao's battery primarily for the battery swap, right? So we have another – the battery exchange, recycle company. So as for that basically we're still looking at the technology. But so far the efficiency is roughly 50% to 60% of the recycling efficiency.

Right. Okay. Yes. Good. That's a big number for lithium. Okay. In the PR mentioned tonight, “flexible control of power load exchange,” is that similar to the B2G or battery to grid technology attracted State Grid to us 10 years ago? Is that what he means? That's what's planned. I read the grid where they can…

Yes, yes.

Back into the grid, it is.

Yes. Well, basically I think that's similar in the technologies in the systems that we use the battery of electric vehicles to basically maximize. From the B2B, that's – I think, that's pretty similar technology. But then of course, we have a more intense and more efficient way to process. But that's basically similar. Yes.

Okay. And finally, why do you believe State Grid found Kandi's battery technology so attractive that it would partner up with so smaller companies Kandi and its quick battery exchange subsidiary for a second time?

Well, I guess although Kandi, it's not as, of course not as big as the State Grid or the super large companies in the state or in China. But then we are the advocates and then the petitioners of the technology called separation of vehicle and electricity power swap mode for the EVs in China. So I mean, we have a fully automatic swap, a smart battery swap system, with over dozens of the patterns of invention and that utility model – the model, right. So basically as you may know, our ultimate way is to have a system that realized that one key, one click, automatic quick battery swap in a process. And exactly, this is the technology being welcomed by and supported by the China government. And more than 10 years old or even more of the practice in the field of the battery swapping for the EVs, as you may know, the company actually well has accumulated pretty expensive experience. So, I mean, this regard of our size, but then our technology, our skillset, a pretty extended and seasoned compared to other companies in China. And I think that those are basically the reasons why the State Grid and this related company are willing to cooperate with us. But – and then I wanted to explain it that it's not just our battery technology that extracted, but as our – the swap – smart battery swap technologies really attractive. That's the key point and that is cross [indiscernible].

Yes. Okay. Well, what impressed me the most is it State Grid came back the second time, 10 years later to the same little company, so to speak. And so there must really have been something that they saw back 10 years ago. I guess, was just way before its time again used lead acid batteries. That was just a comment. Just one other [indiscernible] you just said a moment ago. I want to get refreshed over here, is the capacity fill 100,000 cars a year in Hainan facility that were Kandi can make that many?

Yes, we can.

Yes.

I mean, we've estimated all we have the Hainan facilities started to work in production since early last year. So right now we still finding our capacity, but I guess on the way, the capacity will be more and more, and that should be sufficient to meet the need for our company sales in China and U.S.

Okay. Well, thank you very much. Very informative. Looks like a great quarter coming up quarter four and next year should be [indiscernible]. Thank you very much. Again, congratulations.

Thank you.

Thank you. Bye-Bye. Thanks.

Your next question comes from line of Joel Cramer, private investor. Please proceed with your question.

Yes, it seems that Kandi both in China and the U.S. is starting to pick up real positive momentum. However, we have heard little if anything about Geely’s Holdings running of Zhejiang, which Kandi is carried and interested in? Can you update us on what is happening there? And are you still bullish on Kandi who probably still has close to $1 billion invested in being able to make this deal a major player in the China EV market? Thank you.

Great. Thank you. Well, first of all, apparently, JV has been actively involved in participating in the market competition of the new electric vehicle fabrication trend of the automobile. But then, however, we do and we are aware of the development of the Fengsheng, which is the subsidiary under the Geely Technology is rather lower than our expected and so far, and we are exploring with Geely Technology and see how to refine the development plan and make it up to speed as we expect. But again, I mean, we assure that Geely – Geely Technology, they are actively and fully involved in the market, of the EV market, of course.

Thank you.

Thank you.

Your next question comes from the line of Walter Hill with Carty & Company. Please proceed with your question.

Thank you. Two weeks ago, Kandi put out a PR establishing the Zhejiang Ruiheng Technology, three – 80% by Ruibo, 10% by Kandi, 10% by Jinpeng to be the operating company for the five year 300,000 EV, government-accredited ride-hailing program. That PR did cause some confusion to new investors thinking that Kandi’s 10% was the primary way, Kandi makes its money? Could you clarify the following points? And I've got four points. And I'll read them, I'm just going to read them all because that’s very short. A, what specifically is the difference between a government-accredited program and a ride-hailing program? B, in some detail, what is partner's required responsibility to own a share of the company? Part C, this PR speaks of two initial programs that appear to be kicking off this month and I believe this new venture deal, a 1,000 fleets for Hainan province and 2,500 for Shaoxing, Zhejiang program. Do you expect all 3,500 will be delivered by Kandi before this year-end? And if so what types of revenue should be expected? In the last part, the PR does not give an idea of how many of the 300,000 EVs will ultimately be from Kandi’s table. However, the State Grid PR, Kandi intends to supply 300,000 vehicles to various ride-sharing programs, which seems to say that Kandi will be providing all of the 300,000. If so, can we assume that the new Kandi EV models will be shortly on the way? Thank you.

Thank you. Okay, I believe that the first question asked is, let me confirm, it’s about the difference between the accredited program, right and other regular, other ride-hailing program, right. Well, as you may know, actually in order to operate online car-sharing platform in China, it requires the approval of relevant departments and different government agencies. And only we kept full approval and approved in other accredited certifications, an issue was released by the government agencies is considered as a compliant online car platform. Although, I mean, in the market we do know that there are still quite considerable amount of the platforms that are not fully compliant with the requirements, so we can call in so called non-compliant car hailing platform. So I mean how – what differentiates us from those platform is are the government accredited and also you may see the legal online car hailing platform that will not get shutdown, because we are fully support and authorized by the government. Is that answering your question about – the first question about how we differentiate ourselves?

Yes.

Okay, great. I think the second question about the roles or the responsibilities of the partners, right?

Yes.

So I mean they are three partners, they are Kandi, they are Jinpeng and Ruibo. Us, Kandi as we basically sell the swap equipment and of course the EVs K23 to the alliance, we also will provide later the technology maintenance and rather from like a mechanical perspective. And the second partner, Jinpeng basically they are utilizing the large distribution network to promote the program. I mean they have great network that they can bring up more customers to us. And the last one is the Ruibo. Ruibo I mean they are season upgrade of the stimulus service of the car-hailing [indiscernible] so they have a great experience, extensive management perspective operate and so they always primarily operate in our platform. So that’s how we share our responsibility and how we can earn our share to the platform the alliance. Okay, so let me move to the next question. You talked about – you are kind of referring to what Mr. Hu said in the beginning of the progress of how we deliver the EVS to Hainan and then Heico city and also through the – of the Zhejiang Province, right. And what do we expect that can be built by the year end. Currently we are working on the delivery currently. But as for the actual numbers by the year end is still ongoing. So we cannot be 100% sure that how much can be actually delivered completely. And I guess the timeline of the delivery will depend on the progress of the project. So I guess, you can get idea when the year-end complete, then we can have the numbers disclosed on the financial statement. I think that's the past week was to have actual figures by then. And I think you also mentioned the last question should be about the relationship about how we can supply our EVs to the program, right. I mean, the so-called 30,000 EVs in five years, program is rather like idea of the program, but not entirely or necessarily means that they will for sure include 300,000 EVs to the market. So I mean, for how many cars will be – or how many EVs will be supplied to the market at the end of the program? We have not contacted the issuer, but I mean, so called the [indiscernible] is like you may say like a slogan or idea. But then as bottom line is we will try to supply one of the major share of EVs to the platform and that’s our goal. And of course, I mean, we may even try to invent and launch different new models in the due course to meet the demand on going.

Thank you.

[Indiscernible]. Thank you.

Thank you.

Your next question is from the line of Michael Fearnow with Focus Tech Investments. Please proceed with your question.

Good morning. And thank you. I would like to refer to the joint venture with Geely Holdings, which is named Zhejiang, when they recently Kandi 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 this joint venture through March 30, 2021. I've got kind of a three-part question. Is there an expectation that deadline will be extended? And when will Kandi 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 you give me an indication of what percentage of the joint venture Kandi would ultimately own? Thank you.

Thank you. As for this question as far as we are concerned the company, I think, we're still in the process of negotiating we brought the counterparty the GLE Technology at the moment. So at present there's not really a very concrete answer for each of the questions because we're still working on them and we solved and we are still exploring our options. So at the moment, there's no really concrete progress for each of – we got in the deadline, would that be extended or how we can exercise the option. We still try to explore and negotiate. So I guess hopefully by early next year we'll have a better idea and then progress then we'll keep all investors updated, when the time is right – in a time, we can include with our conclusion.

[Indiscernible] and at time of clarification, my understanding is that if they exercise their option, they can do it with Kandi, common shares. Is that correct?

One moment let me direct the question to Mr. Hu.

[Foreign Language]

So Mr. Hu’s answer yes I mean takes, exchange the shares between [indiscernible] and Kandi, that’s one of the options and we try explore this possibility that we have not come up with a very concrete conclusion yet, but that’s possible.

Great, thank you for your answer. Good luck

Thank you.

Your next question comes from the line of Mark Miller, Private Investor. Please proceed with your question.

Good evening guys. Just one question here. If I remember correctly, one of the main features of Kandi's original quick battery exchange was the ability to have a mobile battery exchange unit available for an emergency battery-swap in just a few minutes, on locations due to the battery side, by positioning between the rocker panels and the wheels. Will this feature be available for all of Kandi's EVs? That's it.

Yes, basically it works for our EVs like K23 and mostly for K23 at the time being.

Will they be able to make custom side slides for other companies at some point in time?

Yes, I mean basically the idea the equipment can fit those other sized light electric vehicles and of course other brands the equipment can still work out with them, as long as there is some adjustments off some data exchange or some other some other fine tune yes that is feasible after some adjustments.

Where is Kandi placed or compared to their competitors on this? Can you tell us about that?

How we….

[indiscernible] that you’ve created, I mean, how are the other people stacked up against this?

I guess for – I mean for that answer let me turn it over to Mr. Hu and see if …

Yes, it appears when I looked at the video it seems that yours is much more quicker. I've saw [indiscernible] while back, and it seemed like theirs was much more time consuming and yours is…

Yes, so I guess…

So, I mean, is there anybody else or where is everybody else on it or is there anybody pursuing this that you know of?

[Indiscernible] perusing that. I mean that’s of the – as you may know the battery-swap system now is fully supported and encouraged by the government in China. So sure other companies, they would try to go and trend and proceed. Then for us we are one of the pioneers in the market and our 90 second one click automatic swap system is one of the best in the country. So I guess that's how differentiates from other competitors. But I'm sure other competitors they were still working on the technology and I guess you'll – if I was to do some other research report of how they do it, but as least for us we have other patents to do this also that's, I guess, one of the – I think the timing, but 90 second is how it differentiates from other competitors.

Okay. That's fine. That's all I have. Thanks for – thanks for taking my question.

Thank you.

Your next question comes from the line of Richard Goldstein with National Securities. Please proceed with your question.

Good morning. Thank you. My question has to do with the spinoff. The IPO announced last Monday for Kandi's battery-swap subsidiary, Mr. Hu, you may not remember, but we met at the San Francisco Shareholders Meeting in 2014, I am with a major U.S. brokerage firm and as an investment advisor, and also have close business contacts in Hangzhou, my clients represented significant holding in Kandi’s shares from even before we met. I must admit it was a stunning revelation that today turn the largest and third largest global brokerage well note to Wall Street had signed on to lead the Kandi battery-swap IPO syndicate in China on the new Shanghai tech orientated STAR stock exchange. As the word gets out on this in the U.S., this should create a lot of respect on Wall Street, but I have a couple of few questions here. First what was it that attracted CICC, China's top firm to take the lead on the Kandi IPO? And we do 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 both dollar and percentage issued of the battery subsidiary? Next, originally, Kandi announced it would include Yongkang Scrou I don't know if pronouncing it right, with a 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 or buy and sell after market shares on the STAR exchange either individual or institutions? Thank you.

Yes, thank you for your answers and your support. So first of all, when you talk about what to try to see to be taking the lead of IPO project, I think, in a nutshell that should be our technology of the Smart Battery Swap, we have one click 90 second swap system that is one of the pioneer in the market. And as you may know, Kandi, we are an advocate and a practitioner of the technology called separation of vehicle and the electricity that is swap mode for quite a while. And that's how we can develop such a sophisticated system. We've dozens of the patents, of inventions and then utility models. So I mean, it's really our technology that attract the CICC to pick the lead of these IPO project, of course, because of our extended experience and sophisticated technology. So expense right now, the technology and the mode is really encouraged and supported by the state, I mean, by the government, by the China Government. And it also a couple of strong market demand for such automatic swap battery system. So I guess those are the reasons that really track them invoke and the lead of this IPO project. And as far as about the details of the IPO, like the dollar amount and like the percentage to be issued, well at the moment there's not really a concrete conclusion yet, well, as you may know, we are still working with different brokerage firms and the other professional institutions to evaluate this whole project. But then I guess long story short, we are confident that the project will turn out to be success, but as for the details, I guess we will have the IPO to disclose later on when we come up with the conclusion. And at present there's no too much detail to we can comment. And I guess in this IPO project most it includes the Kandi battery-swap system, which formally called the Ankao and they also include the Yongkang Scrou which with technology, no certificate in the electrical system and motors. And finally, about how U.S. investors can participate in the IPO and maybe how they can get ignore for the secondary market, right. So basically, I mean, that's no different from other deals to be listed in the top world. I guess first and foremost common way or the standardized way is for the, I guess, for the institutional investors to or the qualified investors to join or participate in some offline issuance and participate in some stock board placements that would take place under the stock board. So, I mean, again, those are rather the standardized way that would do or no difference from other company to the list in the stock board. And after that the investors, of China those foreign investors can also purchase some shares in the stock board under the secondary market through pathway call the Shanghai-Hong Kong Stock Connect. So that's how you can get some shares through this pathway. So hopefully these two questions can, I mean, this can address your questions.

Great. There's one follow-up. Is there a timeframe that you have provided for this battery exchange listing to be completed?

Again, I mean, just like we are still exploring options and the time of the projects. At the moment we don't have a concrete timeline yet. I guess what we want is to make it a success and bring the best and the maximize benefit 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 questions.

Good morning. Thanks for taking my question. It was good to see Kandi written up after the last conference call by a true stock research analyst with Zacks Research, particularly encouraging to see the analysts give Kandi initial valuation of $12 a share and call it very conservative at that price, which is only around half its competitors trading multiple on 2021 revenue estimates. Yet for 2020, she is only estimating around $80 million revs and $135 million in 2021, not the same as last year's revenues. Can you comment on the analyst revenue estimate for both years and might you hope to exceed either, the two estimates?

Right, well got in the sales folks from the Zacks Research, [indiscernible] for the company. We respect their estimates, but currently don't have detail comment on that. What we can do is we do the best and try to achieve the most for investors, but then as for the results, I think we will let our investor to stay tuned to our upcoming releases of the financial statements of the year and the next coming Q.

Okay. Since we've not seen any update notes from this analyst, despite a lot of big news, do you – or would you expect that we'll get something soon now that the Q3 2020 numbers are out?

Yes, I mean, again, all of the disclosures will be included in our Q3 and then also the upcoming 2020 yearend financial statement. I mean, for all the updates, we'll disclose that accordingly in the financial statements report.

And I also noticed that you now have a very attractive new website with a lot of good info on the company. However, I couldn't find a link to this analyst research report on the Kandi site. I think that would be very helpful for new investors wanting to do due diligence on the company. So maybe something you can do put a link on there.

Right, right. I mean, well, thank you for your follow-up questions and we will seriously consider and try to explore the options. Thank you for the update.

And then the last, last question, and thank you for your time. So you've got the Zacks Research report and now CITIC, they're going to be, I assume, following the public battery-swaps sub. Would it be reasonable to expect some additional, legitimate research coming out on Kandi? That's my last question. Thank you for your time.

No problem. And thank you for your support. Well as for the questions about different other analytic boards, we have been communicating with others analysts as well. So I guess please stay tuned for any upcoming research reports to be released, then I can find out what they say about us. And thank you.

Okay.

Your next question comes from line of Frank Blatterman with Private Investor. Please proceed with your question.

Yes, good evening. My questions involve the fact Hainan Island and the battery-swap station that was to live in there. How many employees are presently working on the assembly line of Hainan? And what is the average output per week? What model vehicles are presently being made there and are these vehicles being manufactured to fulfill, present purchase orders, or are they being manufactured for expected domain? And then the question is involving the battery at the same station that was delivered there. Is it in operation at this time? And how many batteries swaps made on an average daily? Was the station that was delivered there as part of a trial operation, or was it purchased and how many battery exchange stations are presently in operation? Hello. Hello.

Hi. So as for the question, I guess as for the battery-swap system, I guess, they question is we have so far, I mean, – so far as you may know, we have shipped one of our first station to the Haikou, which is located in Hainan province as one of the travel and kickoff of the whole project. And so far that's the one that being trial and use over there. And in the quarter four we expect to deliver more battery swap systems to both the Haikou city and also the Kaohsiung City. Those are the two ports that will run our project program to kick off the car-hailing platform. So along with the [indiscernible] fleet that we're going to deliver, we also will deliver the battery-swap stop system to these two locations. But as far as how many we’ll delivered by the year end, it depends on the progress. So, I mean again, stay tuned to our financials and we'll disclose that accordingly in upcoming financial statements.

Well, you used the word delivery. Was it purchased or is it – has it been delivered as part of a trial?

Right, I mean we have delivered one as you may know, we’ve disclosed in the past that there’s one already being used and tested in Haikou. So in the upcoming quarter we are going to deliver more stations after batter swap spread to cities to kick off the pilot project.

Okay. If I may be permitted to make another question, are there presently any travel restrictions or mandatory quarantine required for travel to the Island of Henan from Mainland China? And residents of other Southeast Asia countries travel without restrictions to mandate quarantine. If you don't know that's okay.

Yes, that question. I'm not hundred percent sure.

Okay. Do you know how many employees are personally working on the assembly line of Henan and average hours per week?

Sorry, you mean how many employees working at what facility I'm sorry? Can I catch you again?

On Henan Island.

Kewa can you help me to say that to Mr. Hu can about 300 employees. Okay. And what model vehicle is making?

[Foreign Language]

[Foreign Language] About 300 employees.

Okay. And what model vehicle are they making?

[Foreign Language] K23 [Foreign Language] K23 for rideshare market.

Okay. Are these vehicles being manufactured for present purchase orders or through expected demand?

[Foreign Language] Right now the manufacturing, the production based on the orders from the rideshare market.

Okay. Okay, now I wasn't able to get a proper to one of my other questions. You stated or you said you had either shipped or delivered one battery exchange station, was that actually purchased or was that delivered as part of a trial operation?

[Foreign Language] Yes, it’s purchased by the service provider and is part of the trial operation.

Okay. Do you have any battery swaps to be made on a typical day?

[Foreign Language]

[Foreign Language]

Right now still is trial operations per day probably about 20, 30 cars we’ll be swapping a battery there.

Okay, so 20, 30 swaps per day.

[Foreign Language]

[Foreign Language]

And the numbers of varies sometimes 10, 15, 20, can be more. We are still – they are still in the process of getting more operating approvals from the local government agency.

Okay. Very good. Thank you for taking my questions.

Thank you, Frank.

Thank you.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I'd like to turn the call back to management for closing remarks.

[Foreign Language] Thank you ladies and gentlemen for attending today’s call. On behalf of the Board of Directors and management team at Kandi Technologies Group I would like to reaffirm our commitment. We will continue to work diligently to maximize shareholder value by growing our main EV business and expecting applications of our expertise in battery swap system. We look forward to be delivering our operating and financial results in the coming quarters. Thank you very much for your support. We look forward to talking with you in the next call. If you have any additional questions, please do not hesitate to contact our Investor Relations department. Goodbye.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.