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CBAK Energy Reports First Quarter 2022 Unaudited Financial Results

19 May 2022

Net revenues up 752% year over year in the first quarter 

CBAK Energy Technology, Inc. (NASDAQ: CBAT) ("CBAK Energy," or the "Company") a leading lithium-ion battery manufacturer and electric energy solution provider in China, today reported its unaudited financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Financial Highlights

  • Net revenues were $80.2 million, an increase of 752% from $9.4 million in the same period of 2021.
  • Gross profit was $5.3 million, an increase of 189% from $1.8 million in the same period of 2021.
  • Net income attributable to shareholders of CBAK Energy was $0.4 million, compared to a net income attributable to CBAK Energy shareholders of $29.6 million in the same period of 2021.

Yunfei Li, Chairman and Chief Executive Officer of the Company, commented: "We are very excited to kick off 2022 with our net revenues surging more than eight-fold year over year to reach $80.2 million in the first quarter, primarily driven by the material business brought by the Hitrans merger and robust demand for our high power lithium batteries." 

Mr. Li continued: "We will continue attentive operations in the material business with additional strategies to enhance its core competitiveness while actively combining them with other alternatives to counter the impact of increased raw material costs on the battery production. Additionally, we remain focused on product innovations to meet various demands and drive higher lithium battery sales. With our expansion into producing key materials for battery products and our relentless efforts into addressing the dynamic market, we are very confident in our capabilities to grow and thrive in the battery industry." 

Xiangyu Pei, Interim Chief Financial Officer of the Company, noted: "Our significant revenue expansion exemplified the efficacies of our growth strategies. Despite short-term challenges from raw material price hikes, we furthered our investments for our infrastructure to propel higher revenue levels.  Looking ahead, we will remain committed to driving our next phase of growth by leveraging and building upon our solid financial position and competitive advantages."

First Quarter 2022 Business Highlights & Recent Developments

  • In May, CBAK Energy received an order from a leading European provider of heating, cooling and renewable energy systems (the "Customer"), for a supply of lithium-ion batteries worth EUR 28.2 million ($29.3 million). The Customer has a global presence with annual sales of billions of Euros. CBAK Energy has been collaborating with the Customer since 2020.

First Quarter 2022 Financial Results

Net revenues were $80.2 million, an increase of 752% from $9.4 million in the same period of 2021. The increase was driven by additional revenues from lithium battery materials brought by the acquisition of Hitrans, and strong sales of high power lithium batteries.

Net Revenues by End-product Applications
($ thousands)

 

2022

First

Quarter

 

2021
First

Quarter

 

%
Change
YoY

 

Segment 1

High power lithium batteries used in:

             

    Uninterruptable supplies

 

$14,875

 

$8,764

 

70

    Light electric vehicles

 

146

 

34

 

329

    Electric vehicles

 

-

 

101

 

-100

Segment 2 (Hitrans)

Materials for use in manufacturing of lithium battery
cell

     Precursor                                                      

     Cathode

 

 

 

36,813

28,363

 

 

 

-

-

 

-

-

Trading of raw materials used in lithium batteries

 

-

 

517

 

-100

Total

 

$80,196

 

$9,416

 

752

                     

Cost of revenues was $74.9 million, an increase of 888% from $7.6 million in the same period of 2021. This was primarily due to increased net revenues.

Gross profit was $5.3 million, an increase of 189% from $1.8 million in the same period of 2021. Gross margin was 6.6%, compared to 19.5% for the same period of 2021. The decrease in gross margin was primarily due to the increase in raw material costs. 

Total operating expenses were $6.7 million, an increase of 256% from $1.9 million in the same period of 2021, primarily due to growing headcount and the consolidation of Hitrans.

  • Research and development expenses were $3.3 million, an increase of 585% from $0.5 million in the same period of 2021.
  • Sales and marketing expenses were $0.8 million, an increase of 290% from $0.2 million in the same period of 2021.
  • General and administrative expenses were $2.2 million, an increase of 69% from $1.3 million in the same period of 2021. 
  • Provision for doubtful accounts was $0.3 million, compared to recovery of doubtful accounts of $0.2 million in the same period of 2021.

Operating loss was $1.3 million, compared to $27,882 in the same period of 2021.

Finance income, net was $5,014, compared to finance expenses of $7,598 in the same period of 2021.

Change in fair value of warrants was $1.6 million, compared to $28.4 million in the same period of 2021. The change in fair value of the warrants liability is mainly due to share price decline.

Net income attributable to shareholders of CBAK Energy was $0.4 million, compared to a net income attributable to CBAK Energy shareholders of $29.6 million in the same period of 2021.

Basic and diluted income per share were both $0.01, compared to both $0.35 in the same period of 2021.

Cash and cash equivalents were $5.6 million as of March 31, 2022, compared to $7.4 million as of December 31, 2021.

Conference Call

CBAK Energy's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Thursday, May 19, 2022 (8:00 PM Beijing/Hong Kong Time on May 19, 2022).

Details of the conference call are as follows:

International:

+61-2-9253-5921

United States:

+1-855-824-5644 / +1 646-722-4977

Hong Kong, China:

+852-3027-6500

Mainland, China:

+86-800-988-0563 / +86-400-821-0637

Event ID:

EV00135062

Participants Pin:

36584787#

Additionally, a live and archived webcast of the conference call will be available at:
https://edge.media-server.com/mmc/p/bgp5bgms

A replay of the conference call may be accessed by phone within seven days after the conclusion of the live call at the following numbers. To access the replay, please reference the Access code: 520002274#

International:

+61-2-8325-2405

United States:

+1-646-982-0473

Hong Kong, China:

+852-3027-6520

Mainland, China:

+86-400-821-0623

About CBAK Energy

CBAK Energy Technology, Inc. is a leading high-tech enterprise in China engaged in the development, manufacturing, and sales of new energy high power lithium batteries and raw materials used for manufacturing high power lithium batteries. The applications of the Company's battery products and solutions include light electric vehicles, electric vehicles, electric tools, energy storage, uninterruptible power supply (UPS), and other high-power applications. In January 2006, CBAK Energy became the first lithium battery manufacturer in China listed on the Nasdaq Stock Market. CBAK Energy has multiple operating subsidiaries in Dalian, Nanjing and Shaoxing, as well as a large-scale R&D and production base in Dalian.

For more information, please visit www.cbak.com.cn.

Safe Harbor Statement

This press release contains "forward-looking statements" that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. We have attempted to identify forward-looking statements by terminology including "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "should," or "will" or the negative of these terms or other comparable terminology. Our actual results may differ materially or perhaps significantly from those discussed herein, or implied by, these forward-looking statements. Any forward-looking statements contained in this press release are only estimates or predictions of future events based on information currently available to our management and management's current beliefs about the potential outcome of future events. Whether these future events will occur as management anticipates, whether we will achieve our business objectives, and whether our revenues, operating results, or financial condition will improve in future periods are subject to numerous risks.  There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: significant legal and operational risks associated with having substantially all of our business operations in China, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our securities or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless, trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely for three consecutive years, the effects of the global Covid-19 pandemic, changes in domestic and foreign laws, regulations and taxes, uncertainties related to China's legal system and economic, political and social events in China, the volatility of the securities markets; and other risks including, but not limited to, the ability of the Company to meet its contractual obligations, the uncertain market for the Company's lithium battery cells and business, macroeconomic, technological, regulatory, or other factors affecting the profitability of our products and solutions that we discussed or referred to in the Company's disclosure documents filed with the U.S. Securities and Exchange Commission (the "SEC") available on the SEC's website at www.sec.gov, including the Company's most recent Annual Report on Form 10-K as well as in our other reports filed or furnished from time to time with the SEC. You should read these factors and the other cautionary statements made in this press release. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. The forward-looking statements included in this press release are made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statements, other than as required by applicable law.

For investor and media inquiries, please contact:

In China:

CBAK Energy Technology, Inc.
Investor Relations Department
Mr. Thierry Jiewei Li
Phone: 86-18675423231
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

The Blueshirt Group
Ms. Feifei Shen
Phone: +86 13466566136
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

The Blueshirt Group
Ms. Suwen Feng
Phone: +86 13917110134
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

In the United States:

The Blueshirt Group
Ms. Julia Qian
Phone: +1 973-619-3227
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Related Links
https://ir.cbak.com.cn/

CBAK Energy Technology, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(In $ except for number of shares)

 
   

December 31, 2021

 

March 31, 2022

             

(Unaudited)

 

Assets

               

Current assets

               

Cash and cash equivalents

 

$

7,357,875

   

$

5,608,465

 

Pledged deposits

   

18,996,749

     

25,142,097

 

Trade accounts and bills receivable, net

   

49,907,129

     

50,265,784

 

Inventories

   

30,133,340

     

41,871,149

 

Prepayments and other receivables

   

12,746,990

     

14,516,068

 

Receivables from former subsidiary

   

2,263,955

     

1,134,585

 

Amount due from non-controlling interest, current

   

125,883

     

126,161

 

Amount due from related party, current

   

472,061

     

473,104

 

Income tax recoverable

   

47,189

     

47,295

 

Investment in sales-type lease, net

   

790,516

     

792,262

 
                 

Total current assets

   

122,841,687

     

139,976,970

 
                 

Property, plant and equipment, net

   

90,042,773

     

88,532,811

 

Construction in progress

   

27,343,092

     

28,410,293

 

Non-marketable equity securities

   

712,930

     

714,504

 

Prepaid land use rights

   

13,797,230

     

13,737,871

 

Intangible assets, net

   

1,961,739

     

1,834,351

 

Operating lease right-of-use assets, net

   

1,968,032

     

1,659,214

 

Investment in sales-type lease, net

   

838,528

     

714,933

 

Amount due from related party, non-current

   

62,941

     

63,081

 

Deferred tax assets, net

   

1,403,813

     

1,500,564

 

Goodwill

   

1,645,232

     

1,650,629

 
                 

Total assets

 

$

262,617,997

   

$

278,795,221

 
                 

Liabilities

               

Current liabilities

               

Trade accounts and bills payable

 

$

65,376,212

   

$

79,270,001

 

Short-term bank borrowings

   

8,811,820

     

14,674,721

 

Other short-term loans

   

4,679,122

     

746,699

 

Accrued expenses and other payables

   

22,963,700

     

24,477,309

 

Payables to former subsidiaries, net

   

326,507

     

325,624

 

Deferred government grants, current

   

3,834,481

     

2,270,463

 

Product warranty provisions

   

127,837

     

104,122

 

Warrants liability

   

5,846,000

     

4,214,000

 

Operating lease liability, current

   

801,797

     

711,034

 
                 

Total current liabilities

   

112,767,476

     

126,793,973

 
                 

Deferred government grants, non-current

   

6,189,196

     

7,207,728

 

Product warranty provisions

   

1,900,429

     

1,923,542

 

Operating lease liability, non-current

   

876,323

     

837,930

 
                 

Total liabilities

   

121,733,424

     

136,763,173

 
                 

Commitments and contingencies

               
                 

Shareholders' equity

               

Common stock $0.001 par value; 500,000,000
authorized; 88,849,222 issued and 88,705,016
outstanding as of December 31, 2021 and March
31, 2022

   

88,849

     

88,849

 

Donated shares

   

14,101,689

     

14,101,689

 

Additional paid-in capital

   

241,946,362

     

241,981,141

 

Statutory reserves

   

1,230,511

     

1,230,511

 

Accumulated deficit

   

(122,498,259)

     

(122,053,806)

 

Accumulated other comprehensive loss

   

2,489,017

     

2,880,201

 
     

137,358,169

     

138,228,585

 
                 

Less: Treasury shares

   

(4,066,610)

     

(4,066,610)

 
                 

Total shareholders' equity

   

133,291,559

     

134,161,975

 

Non-controlling interests

   

7,593,014

     

7,870,073

 

Total equity

   

140,884,573

     

142,032,048

 
                 

Total liabilities and shareholder's equity

 

$

262,617,997

   

$

278,795,221

 

CBAK Energy Technology, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Comprehensive
Income (Loss)

(In $ except for number of shares)

 
       

Three months ended March 31,

 
   

Note

 

2021

   

2022

 

Net revenues

 

25

 

$

9,416,049

   

$

80,196,298

 

Cost of revenues

       

(7,576,620)

     

(74,879,944)

 

Gross profit

       

1,839,429

     

5,316,354

 

Operating expenses:

                   

Research and development expenses

       

(483,749)

     

(3,313,124)

 

Sales and marketing expenses

       

(213,142)

     

(829,674)

 

General and administrative expenses

       

(1,324,481)

     

(2,237,374)

 

Recovery of (Provision for) doubtful accounts

 

4

   

154,061

     

(271,443)

 

Total operating expenses

       

(1,867,311)

     

(6,651,615)

 

Operating loss

       

(27,882)

     

(1,335,261)

 

Finance (expenses) income, net

       

(7,598)

     

5,014

 

Other income, net

       

1,217,648

     

285,204

 

Changes in fair value of warrants liability

       

28,426,000

     

1,632,000

 

Income before income tax

       

29,608,168

     

586,957

 

Income tax credit

 

18

   

-

     

93,546

 

Net income

       

29,608,168

     

680,503

 

Less: Net loss (income) attributable to non-controlling
interests

       

1,114

     

(236,050)

 

Net income attributable to shareholders of CBAK
    Energy Technology, Inc.

     

$

29,609,282

   

$

444,453

 
                     

Net income

       

29,608,168

     

680,503

 

Other comprehensive income

                   

– Foreign currency translation adjustment

       

89,138

     

432,193

 

Comprehensive income

       

29,697,306

     

1,112,696

 

Less: Comprehensive loss (income) attributable to non-
    controlling interests

       

6,017

     

(277,059)

 

Comprehensive income attributable to CBAK Energy
    Technology, Inc.

     

$

29,703,323

   

$

835,637

 
                     

Income per share

 

26

               

– Basic

     

$

0.35

   

$

0.01

 

- Diluted

     

$

0.35

   

$

0.01

 
                     
                     

Weighted average number of shares of common stock:

 

20

               

– Basic

       

84,283,605

     

88,713,841

 

– Diluted

       

84,933,913

     

88,734,957

 

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