If even close to achieving these targets, the CAGR, compound annual growth rate would be over 80%; gross profit around $1.75 a share in that year, which I assume, he’s talking about is 26%. Obviously, with the stock down 40% since the last conference call and 85% below its all-time high, not only is the market not believing management, it’s betting on a negative growth over the next few years. This is despite the company announcing a $30 million share buyback right after the last conference call. I have a few questions to follow up, but just say that to them first. Okay. Do you think maybe the major price decline could have something to do with no press releases in over four months and when Kandi in years has put out over 40 a year for the past 10 years?
Xiaoming Hu: Let’s make it two questions. Let me Okay. Go ahead. Let’s do one question per time. Okay? We have been through the strategic shift in the last two years that caused cost certain — caused uncertainties, right? That’s why we stick with a more conservative approach of the PR effort. As our performance continues to grow and become more steady, we will definitely increase our PR effort.
Arthur Porcari: That’s quite obvious with the stock being down that you’re not doing any effort to get public relations out, I think that’s very bad. Stocks need to be promoted. It’s not by management, by analysts or somebody, but let me move on. This management still stand by the target of $500 million in sales and 30% gross margins over the next two to even three years.
Xiaoming Hu: During the fiscal year 2023, we achieved a turnaround from net loss to net profit. So we are convinced that the sales and profit will continue to increase significantly in the next two to three years.
Arthur Porcari: So you’re not standing by that 500 number, but that’s okay, I guess. Why do you not report non-GAAP numbers as well? If you were to report — about $11 million in non-cash charges for stock-based compensation, that would have added 12 — at least for analysts to look at, they like looking at that number because it’s a one-time item. It’s a non-cash charge. And in this particular case, we would have earned $0.12 or $0.13 for the year. If it was any other company, it would report the non-GAAP.
Xiaoming Hu: So what we are doing right now is full gap disclosure. We stick with complying with the SEC disclosure regulations and requirements. So basically, we would like to present an accurate presentation to investors without too much confusion. And second of all, it’s based on the recommendation from our auditors to present GAAP complying figures. We are trying to take a more conservative approach to present the exact correct amount to all the investors and regulators. But what you mentioned, we may take into consideration in the future.
Arthur Porcari: Okay. Well, first, to comment to that as well. Well, again, that cost us about $0.12 a share in earnings, where any other firm out there would report both sets of numbers. Analysts, particularly in tech-related companies, don’t even care about GAAP anymore when they put out their research reports. They look at the non-GAAP because you know that these companies are putting out shares all the time. So they’re — I mean, as far as stock-based compensations, a lot of times, they don’t even get exercised. So again, it cost us about — we would have had probably $0.14 to $0.15 in non-GAAP income for the year instead of just showing $0.02 and I can promise you, the stock would not be trading at $0.90 under cash or $0.70 under cash in the bank.
You have $3 a share in cash in the bank now, on top of everything else has been growing. And I see you also bought back, am I correct, over 700,000 shares of stock so far since December when you started the share buyback.
Kewa Luo: This is the question whether we have bought back 700,000 shares. I think we disclosed all the shares buyback in the K. Is that what you’re trying to ask?
Arthur Porcari: Yes, there are two sets of numbers in it. One was — I mean, you didn’t start buying until probably December because you announced it the last week in November, and that shows about 175,000 shares last year, but you also have a subsequent event in there that shows over 0.5 million more shares were purchased. So my question is, is it — have we, in fact, repurchased somewhere between 700,000 and 800,000 shares in just the past couple three months?
Kewa Luo: So your question was that’s the number, 700,000 we have purchased, right?
Arthur Porcari: Right. I mean, that’s the number that you have. I just wanted to make sure you have two separate numbers. It does seem to say that in 2023, you purchased around 180,000. And I guess, so far, you’ve traded — bought over $0.5 million at an average price of around $2.74.
Xiaoming Hu: Okay. Let me translate so far. So as for the amount of shares we have purchased since December until February, the figure we get is correct. It’s roughly 700,000 shares we have buyback in last two, three months. Correct.
Arthur Porcari: That is pretty impressive when you consider the average daily volume has shrink down to about 60,000 to 70,000 shares a day, and you can only buy 25% at any given day of the average daily volume. But what about insights? We used to see insiders buying the stock at $4 or $5 a share in years that they were losing money hand over fist. We haven’t seen Mr. Hu or Henry Hu or any other insider buy a share of the stock in 2.5 years. And if you’re doing 10b-5s with the corporation, that should not restrict inside executive buying as well, at least I’m starting within the window.
