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CBAK Energy Technology Reports Fourth Quarter and Full Year 2023 Unaudited Financial Results

15 March 2024

DALIAN, China, March 15, 2024 /PRNewswire/ -- 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 fourth quarter and full year ended December 31, 2023.

Fourth Quarter of 2023 Financial Highlights

  • Net revenues from sales of batteries were $36.8 million, an increase of 30.9% from $28.1 million in the same period of 2022.

-    Net revenues from batteries used in light electric vehicles were $1.4 million, a decrease of 69.5% from $4.5 million in the same period of 2022.

-    Net revenues from batteries used in electric vehicles were $0.5 million, a decrease of 88.8% from $4.7 million in the same period of 2022. 

-    Net revenues from residential energy supply & uninterruptible supplies were $35.0 million, an increase of 84.3% from $19.0 million in the same period of 2022.

  • Gross margin for the battery business was 36.0%, an increase of 27.7 percentage points from 8.3% in the same period of 2022.

  • Net income from the battery business was $6.6 million, compared to a net loss of $6.4 million in the same period of 2022.

Full Year of 2023 Financial Highlights

  • Net revenues from sales of batteries were $133.0 million, an increase of 40.4% from $94.7 million in 2022.       

-    Net revenues from batteries used in light electric vehicles were $5.6 million, a decrease of 12.6% from $6.4 million in 2022.

-    Net revenues from batteries used in electric vehicles were $2.9 million, a decrease of 38.6% from $4.7 million in 2022. 

-    Net revenues from residential energy supply & uninterruptible supplies were $124.5 million, an increase of 48.9% from $83.6 million in 2022.       

  • Gross margin for the battery business was 23.8%, an increase of 14.9 percentage points from 8.9% in 2022.   
      
  • Net income for the battery business was $13.4 million, compared to a net loss of $7.8 million in 2022.

Yunfei Li, Chairman and Chief Executive Officer of the Company, commented, "We are delighted to announce a strong performance in the fourth quarter of 2023, concluding the year on a positive note. Our primary battery business sustained its growth trajectory from the previous quarter, supported by ongoing orders from key clients, including the Viessmann Group, one of Europe's largest battery manufacturers, Anker Innovations, NSURE Energy, PowerOAK (the parent company of BlueTTI), and Hello Tech (the parent company of Jackery). This steady influx of orders propelled a consistent increase in both sales and profits for our battery business. While economic challenges resulted in reduced orders and lower gross margins for our competitors, we experienced high product demand at our Dalian facilities, outpacing supply. In response, we secured a new facility in Shangqiu city, Henan province, China to address our clients' urgent needs. Notably, our battery business achieved a record-high gross margin last quarter. With our solid foundation across products and orders, enhanced visibility, and growing recognition in global markets, we are poised to expand our core businesses and attract more esteemed clients in the coming years to fuel our continued growth."

Jiewei Li, Chief Financial Officer and Secretary of the Board of the Company, added, "We closed the year with robust fourth quarter financial results from our battery business, achieving a 30.9% increase in net revenues and positive net income for the second consecutive quarter. As of December 31, 2023, our Dalian and Nanjing lithium production facilities had no outstanding secured bank loans. We believe that our solid fundamentals will continue to serve as a strong foundation for our business. Looking ahead to 2024, we are confident in our growth trajectory and project another year of net income for our battery business. We will share detailed net income guidance at an appropriate time."

Fourth Quarter of 2023 Financial Results

Net revenues[1] were $56.2 million, representing an increase of 3.2% compared to $54.5 million in the same period of 2022. This increase was primarily attributable to an increase in revenue from the Company's battery business, partially offset by a decrease in sales from Hitrans, which was affected by the slowdown in the raw materials market.

Among these revenues, detailed revenues from our battery business are:

Battery Business

 

2022

Fourth

Quarter

  

2023

Fourth

Quarter

  

%

Change

YoY

 

Net Revenues ($)

  

28,133,129

   

36,830,478

   

30.9

 

Gross Profits ($)

  

2,320,001

   

13,243,436

   

470.8

 

Gross Margin

  

8.3

%

  

36.0

%

  

-

 

Net Income/(loss) ($)

  

-6,353,106

   

6,622,297

   

-

 

Net Revenues from Battery Business on Applications ($)

            

Electric Vehicles

  

4,674,703

   

524,543

   

-88.8

 

Light Electric Vehicles

  

4,508,699

   

1,377,369

   

-69.5

 

Residential Energy Supply & Uninterruptable supplies

  

18,947,555

   

34,928,566

   

84.3

 

Total

  

28,130,957

   

36,830,478

   

30.9

 
 

 [1] Net revenues consist of the Company's self-operated battery business and Hitrans, which was acquired in 2021, an independently managed raw materials business. Hitrans had a strong client base and higher revenues at the time of acquisition. Following the acquisition, the Company maintained Hitrans' core management team and refrained from interfering in its day-to-day operations. The Company has no additional financial obligations to Hitrans, and its financial health will not significantly affect the financial standing of the Company's battery business, as it is only reflected in the Company's consolidated financial statements.

Cost of revenues was $43.5 million, representing a decrease of 14.2% from $50.7 million in the same period of 2022. The decrease in the cost of revenues corresponds to the Company's higher gross profit from the battery business.

Gross profit was $12.7 million, representing an increase of 235.3% from $3.8 million in the same period of 2022. Gross margin was 22.6%, compared to 7.0% in the same period of 2022.

Total operating expenses were $18.6 million, representing an increase of 47.6% from $12.6 million in the same period of 2022.

  • Research and development expenses were $3.9 million, an increase of 48.4% from $2.6 million in the same period of 2022.
  • Sales and marketing expenses were $2.1 million, compared with $-0.4 million in the same period of 2022.
  • General and administrative expenses were $4.5 million, an increase of 40.6% from $3.2 million in the same period of 2022.
  • Provision for doubtful accounts was $0.74 million, compared to $0.76 million in the same period of 2022.

Operating loss amounted to $5.9 million, compared to an operating loss of $8.8 million in the same period of 2022.

Finance income, net amounted to $0.6 million, compared to $0.4 million in the same period of 2022.

Change in fair value of warrants was nil, compared to $1.01 million in the same period of 2022. The change in fair value of the warrants liability is mainly due to the share price movement.

Net loss attributable to shareholders of CBAK Energy was $4.8 million, compared to net loss attributable to shareholders of CBAK Energy of $10.7 million in the same period of 2022.

Net loss attributable to shareholders of CBAK Energy (after deducting the change in fair value of warrants) was $4.8 million, compared to a net loss of $11.7 million in the same period of 2022, mainly due to the weaker performance of Hitrans, which was affected by the slowdown in the raw materials market.

Full Year of 2023 Financial Results

Net revenues were $204.4 million, representing a decrease of 17.8% compared to $248.7 million in 2022. The decrease was primarily due to the decrease in sales from Hitrans, which was affected by the slowdown in the raw materials market.

Among these revenues, detailed revenues from our battery business are: 

Battery Business

 

2022

  

2023

  

%

Change

YoY

 

Net Revenues ($)

  

94,715,189

   

132,993,518

   

40.4

 

Gross Profits ($)

  

8,382,142

   

31,580,168

   

276.8

 

Gross Margin

  

8.9

%

  

23.8

%

  

-

 

Net Income (Loss) ($)

  

-7,768,248

   

13,369,180

   

-

 

Net Revenues from Battery Business on Applications ($)

            

Electric Vehicles

  

4,694,694

   

2,883,385

   

-38.6

 

Light Electric Vehicles

  

6,415,277

   

5,607,435

   

-12.6

 

Residential Energy Supply & Uninterruptable supplies

  

83,603,046

   

124,502,698

   

48.9

 

Total

  

94,713,017

   

132,993,518

   

40.4

 

Cost of revenues was $172.7 million, representing a decrease of 25.1% from $230.6 million in 2022. The decrease in the cost of revenues was in line with the decrease of net revenues.

Gross profit was $31.7 million, representing an increase of 75.3% from $18.1 million in 2022. Gross margin was 15.5%, compared to 7.3% in 2022.

Total operating expenses were $39.0 million, representing an increase of 31.2% from $29.6 million in 2022.

  • Research and development expenses were $11.9 million, an increase of 12.2% from $10.6 million in 2022.
  • Sales and marketing expenses were $4.9 million, an increase of 144.2% from $2.0 million in 2022.
  • General and administrative expenses were $13.8 million, an increase of 41.6% from $9.7 million in 2022.
  • Provision for expected credit losses was $1.0 million, compared to $0.8 million in 2022.

Operating loss amounted to $7.3 million, compared to an operating loss of $11.5 million in 2022.

Finance income, net amounted to $0.4 million, compared to $0.5 million in 2022.

Change in fair value of warrants was $0.1 million, compared to $5.7 million in 2022. The change in fair value of the warrants liability is mainly due to the share price movement.

Net loss attributable to shareholders of CBAK Energy was $2.5 million, compared to net loss attributable to shareholders of CBAK Energy of $9.5 million in 2022.  

Net loss attributable to shareholders of CBAK Energy (after deducting the change in fair value of warrants) was $2.6 million, compared to a net loss of $15.2 million in 2022, mainly due to the weaker performance of Hitrans, which was affected by the slowdown in the raw materials market.

Basic and diluted loss per share were both $0.03, compared to basic and diluted loss per share of $0.11 in 2022.

Conference Call

CBAK Energy's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Friday, March 15, 2024 (8:00 PM Beijing/Hong Kong Time on March 15, 2024).

For participants who wish to join our call online, please visit:
https://edge.media-server.com/mmc/p/p4d96jix 

Participants who plan to ask questions during the call will need to register at least 15 minutes prior to the scheduled call start time using the link provided below. Upon registration, participants will receive the conference call access information, including dial-in numbers, a unique pin, and an email with detailed instructions.

Participant Online Registration:
https://register.vevent.com/register/BId788502bb16b4e41b84b2528dbc6f135  

Once completing the registration, please dial-in at least 10 minutes before the scheduled start time of the conference call and enter the personal pin as instructed to connect to the call.

A replay of the conference call may be accessed within seven days after the conclusion of the live call at the following website: https://edge.media-server.com/mmc/p/p4d96jix

The earnings release and the link for the replay are available at ir.cbak.com.cn.

About CBAK Energy

CBAK Energy Technology, Inc. (NASDAQ: CBAT) is a leading high-tech enterprise in China engaged in the development, manufacturing, and sales of new energy high power lithium and sodium batteries, as well as the production of raw materials for use in manufacturing high power lithium batteries. The applications of the Company's products and solutions include electric vehicles, light electric vehicles, energy storage 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, Shaoxing and Shangqiu, as well as a large-scale R&D and production base in Dalian.

For more information, please visit ir.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, that 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, the effects of the global Covid-19 pandemic or other health epidemics, changes in domestic and foreign laws, regulations and taxes, 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 markets for the Company's products 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 further inquiries, please contact:

In China:

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

Piacente Financial Communications
Ms. Hui Fan
Tel: +86-10-6508-0677
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.  

In the United States:

Piacente Financial Communications
Ms. Brandi Piacente
Tel: +1-212-481-2050
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

CBAK Energy Technology, Inc. and Subsidiaries 

 

Unaudited Condensed Consolidated Balance Sheets

 

As of December 31, 2022 and 2023

 

(In US$ except for number of shares)

 
  
    

December 31,
2022

  

December 31,
2023

 

   Assets

          

   Current assets

          

Cash and cash equivalents

   

$

6,519,212

  

$

4,643,267

 

Pledged deposits

    

30,836,864

   

54,179,549

 

Trade and bills receivable, net

    

27,413,575

   

28,653,047

 

Inventories

    

49,446,291

   

33,413,422

 

Prepayments and other receivables

    

5,915,080

   

7,459,254

 

Receivables from former subsidiary

    

5,518,052

   

74,946

 

Income tax recoverable

    

57,934

   

-

 

Total current assets

    

125,707,008

   

128,423,485

 
           

Property, plant and equipment, net

    

90,004,527

   

91,628,832

 

Construction in progress

    

9,954,202

   

37,797,862

 

Long-term investments, net

    

945,237

   

2,565,005

 

Prepaid land use rights

    

12,361,163

   

11,712,704

 

Intangible assets, net

    

1,309,058

   

841,360

 

Deposit paid for acquisition of long-term investments

    

-

   

7,101,492

 

Operating lease right-of-use assets, net

    

1,264,560

   

1,084,520

 

Deferred tax assets, net

    

2,486,979

   

-

 

Total assets

   

$

244,032,734

  

$

281,155,260

 
           

Liabilities

          

Current liabilities

          

Trade and bills payable

   

$

67,491,435

   

82,429,575

 

Short-term bank borrowings

    

14,907,875

   

32,587,676

 

Other short-term loans

    

689,096

   

339,552

 

Accrued expenses and other payables

    

25,605,661

   

41,992,540

 

Payable to a former subsidiary, net

    

358,067

   

411,111

 

Deferred government grants, current

    

1,299,715

   

375,375

 

Product warranty provisions

    

26,215

   

23,870

 

Warrants liability

    

136,000

   

-

 

Operating lease liability, current

    

575,496

   

691,992

 

Finance lease liability, current

    

844,297

   

1,643,864

 
           

Total current liabilities

    

111,933,857

   

160,495,555

 
           

Deferred government grants, non-current

    

5,577,020

   

6,203,488

 

Product warranty provisions

    

450,613

   

522,574

 

Operating lease liability, non-current

    

607,222

   

475,302

 

Accrued expenses and other payables, non-current

    

1,085,525

   

-

 

Total liabilities

    

119,654,237

   

167,696,919

 
           

Commitments and contingencies

          
           

Shareholders' equity

          

Common stock $0.001 par value; 500,000,000 authorized; 89,135,064
   issued and 88,990,858 outstanding as of December 31, 2022; and
   90,063,396 issued and 89,919,190 outstanding as of December 31,
   2023

    

89,135

   

90,063

 

Donated shares

    

14,101,689

   

14,101,689

 

Additional paid-in capital

    

246,240,998

   

247,465,817

 

Statutory reserves

    

1,230,511

   

1,230,511

 

Accumulated deficit

    

(131,946,705)

   

(134,395,762)

 

Accumulated other comprehensive loss

    

(8,153,644)

   

(11,601,403)

 
     

121,561,984

   

116,890,915

 
           

Less: Treasury shares

    

(4,066,610)

   

(4,066,610)

 
           

Total shareholders' equity

    

117,495,374

   

112,824,305

 

Non-controlling interests

    

6,883,123

   

634,036

 

Total equity

    

124,378,497

   

113,458,341

 
           

Total liabilities and shareholder's equity

   

$

244,032,734

  

$

281,155,260

 

CBAK Energy Technology, Inc. and Subsidiaries

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

For the years ended December 31, 2022 and 2023

(In US$ except for number of shares)

 
  
  
    

 Year ended  

  

Year ended

 
    

December 31,
2022

  

December 31,
2023

 

Net revenues

   

$

248,725,485

  

$

204,438,365

 

Cost of revenues

    

(230,630,161)

   

(172,714,042)

 

Gross profit

    

18,095,324

   

31,724,323

 

Operating expenses:

          

Research and development expenses

    

(10,635,486)

   

(11,928,070)

 

Sales and marketing expenses

    

(2,007,812)

   

(4,903,926)

 

General and administrative expenses

    

(9,737,711)

   

(13,789,108)

 

Impairment charge on long-lived assets

    

(4,831,708)

   

(7,070,236)

 

Impairment charge on goodwill

    

(1,556,078)

   

-

 

Provision for expected credit losses and bad debts written off

    

(831,132)

   

(1,284,795)

 

Total operating expenses

    

(29,599,927)

   

(38,976,135)

 

Operating loss

    

(11,504,603)

   

(7,251,812)

 

Finance income, net

    

491,060

   

432,900

 

Other (expenses) income, net

    

(7,252,475)

   

3,023,238

 

Impairment charges on equity investee

    

-

   

(2,366,080)

 

Share of loss of equity investee

    

-

   

(27,428)

 

Changes in fair value of warrants liability

    

5,710,000

   

136,000

 

Loss before income tax

    

(12,556,018)

   

(6,053,182)

 

Income tax credit (expenses), net

    

1,228,207

   

(2,486,145)

 

Net loss

    

(11,327,811)

   

(8,539,327)

 

Less: Net loss attributable to non-controlling interests

    

1,879,365

   

7,522,337

 

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

   

$

(9,448,446)

  

$

(1,016,990)

 
           

Net loss

    

(11,327,811)

   

(8,539,327)

 

Other comprehensive loss

          

– Foreign currency translation adjustment

    

(11,189,175)

   

(3,606,576)

 

Comprehensive loss

    

(22,516,986)

   

(12,145,903)

 

Less: Comprehensive loss attributable to non-controlling interests

    

2,425,879

   

7,759,779

 

   Comprehensive loss attributable to CBAK Energy Technology, Inc.

   

$

(20,091,107)

  

$

(4,386,124)

 
           

Loss per share

          

– Basic

   

$

(0.11)

  

$

(0.03)

 

– Diluted

   

$

(0.11)

  

$

(0.03)

 
           

Weighted average number of shares of common stock:

          

– Basic

    

88,927,671

   

89,252,085

 

– Diluted

    

88,927,671

   

89,252,085

 

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