Pond Technologies

CBAK Energy Reports Second Quarter and First Half 2023 Unaudited Financial Results

09 August 2023

DALIAN, China, Aug. 9, 2023 /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 second quarter and first half of 2023 ended June 30, 2023.

First Half of 2023 Financial Highlights

  • Net revenues from sales of batteries were $51.8 million, an increase of 27.2% from $40.7 million in the same period of 2022.
  • Net revenues from batteries used in light electric vehicles were $3.1 million, an increase of 309.9% from $0.8 million in the same period of 2022.
  • Net revenues from batteries used in electric vehicles were $2.0 million, an increase of 6454.4 times from $303.0 in the same period of 2022.
  • Net revenues from uninterruptible supplies were $46.8 million, an increase of 17.0% from $40.0 million in the same period of 2022.
  • Gross margin for the battery business was 12.8%, an increase of 3.4 percentage points from 9.4% in the same period of 2022.

Yunfei Li, Chairman and Chief Executive Officer of the Company, commented, "During the first half of 2023, our battery business had strong revenue growth of 97% in the first quarter; however, during the second quarter, we began to experience a temporary slowdown in sales, as a result of the volatility of lithium carbonate prices, a crucial raw material. Despite this short-term challenge, we remain confident that our revenue growth will bounce back in the upcoming quarters as many of our clients will place new orders in the second half of the year when prices begin to stabilize. Moreover, we have successfully entered into a series of partnerships with Echom, HiNa Battery, Viessmann Group, and Hello Tech, which will help sustain our topline growth and further strengthen our lead in China's battery market."

Xiangyu Pei, Interim Chief Financial Officer, added, "We are pleased to report strong half year results marked by sustainable growth and increased profitability. Thanks to our product's strength and optimized operating efficiency, our gross margin rose to 15.4%, compared with 11.0% for the same period last year. Going forward, our top priorities are to accelerate sales growth and improve profitability. Our solid balance sheet gives us the flexibility to continue investing in our future by accelerating our research and development across product lines as well as expanding our technology and business initiatives to create value for both our users and our shareholders."

Second Quarter of 2023 Business Highlights & Recent Developments 

  • In July, CBAK Energy announced that its subsidiary, Dalian CBAK, reached agreements with the Shangqiu Urban-Rural Integration Demonstration Zone and partnering entities, which will increase Dalian CBAK's capacity by approximately RMB300 million worth of the 26700 cylindrical batteries.
  • In July, CBAK Energy announced that its subsidiary, Nanjing CBAK, entered a 3-year strategic partnership for a RMB180 million lithium-ion battery order with Echom, a well-known industrial design group in China.
  • In June, CBAK Energy announced a strategic agreement with HiNa Battery, a unicorn and leading player in the sodium electricity industry, and Hello Tech, the parent company of Jackery, a premier global portable power supplier, respectively, during its first Corporate Open Day.
  • In June, CBAK Energy announced that it is the first company worldwide to achieve mass production of large cylindrical sodium batteries and full-scale commercialization along the entire value chain from upstream to downstream during the Corporate Open Day.
  • In June, CBAK Energy received an order worth EUR116.5 million (approximately USD124.5 million) of lithium-ion batteries from the Viessmann Group, a leading European heating, cooling, and renewable energy system provider, for 2024.
  • In June, CBAK Energy entered into a strategic agreement and secured RMB25 million in funding from Hello Tech, the parent company of Jackery, a leading global portable power supplier, for the sodium-ion battery R&D program.

Second Quarter of 2023 Financial Results

Net revenues were $42.4 million, representing a decline of 24.7% compared to $56.3 million in the same period of 2022. This decline was primarily attributable to a decrease in sales by the battery business and Hitrans, an indirect majority-owned subsidiary engaged in the production and sale of battery raw materials. The decline in battery sales was primarily driven by the price volatility of lithium carbonate, leading clients to hold off on placing new orders during the second quarter. However, we are optimistic that demand will rebound in subsequent quarters as prices stabilize.

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

Battery Business

 

2022

Second

Quarter

 

2023
Second

Quarter

 

%
Change
YoY

    Net Revenues ($)

 

25,715,415

 

22,232,003

 

-13.5

    Gross Profits ($)

 

2,836,287

 

3,425,147

 

20.8

    Gross Margin

 

11.0 %

 

15.4 %

 

-

Net Revenues from Battery Business
on Applications ($)

      

    Electric Vehicles

 

(6)

 

135,731

 

-

    Light Electric Vehicles

 

671,444

 

1,147,902

 

71.0

    Uninterruptable supplies

 

25,043,977

 

20,948,370

 

-16.4

Total

 

25,715,415

 

22,232,003

 

-13.5

Cost of revenues was $38.5 million, representing a decrease of 24.2% from $50.8 million in the same period of 2022. This decrease was primarily due to the decline in net revenues.

Gross profit was $3.9 million, representing a decrease of 29.8% from $5.5 million in the same period of 2022. Gross margin was 9.2%, compared to 9.8% in the same period of 2022.

Total operating expenses were $7.7 million, representing an increase of 42.1% from $5.4 million in the same period of 2022.

  • Research and development expenses were $3.0 million, an increase of 29.6% from $2.3 million in the same period of 2022.
  • Sales and marketing expenses were $1.0 million, an increase of 38.1% from $0.7 million in the same period of 2022.
  • General and administrative expenses were $3.6 million, an increase of 46.0% from $2.5 million in the same period of 2022.
  • Provision for doubtful accounts was $0.13 million, compared to a recovery of doubtful accounts of $0.06 million in the same period of 2022.

Operating loss amounted to $3.8 million, compared to an operating income of $0.1 million in the same period of 2022.

Finance income, net amounted to $0.3 million, compared to a finance expense of $0.6 million in the same period of 2022.

Change in fair value of warrants was $0.04 million, compared to $2.13 million in the same period of 2022. The change in fair value of the warrants liability is mainly due to the share price decline.

Net loss attributable to shareholders of CBAK Energy was $2.6 million, compared to a net income attributable to shareholders of CBAK Energy of $0.8 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 $2.7 million, compared to $1.3 million in the same period of 2022.

Basic and diluted loss per share were both $0.03, compared to nil in the same period of 2022.

First Half of 2023 Financial Results                     

Net revenues were $84.8 million, representing a decrease of 37.8% from $136.6 million in the same period of 2022. This decrease was primarily attributable to a decrease in sales by the battery business and Hitrans, an indirect majority-owned subsidiary engaged in the production and sale of battery raw materials.

Battery Business

 

2022

First Half

 

2023
First Half

 

% Change
YoY

    Net Revenues ($)

 

40,736,101

 

51,835,386

 

27.2

    Gross Profits ($)

 

3,819,211

 

6,638,505

 

73.8

    Gross Margin

 

9.4 %

 

12.8 %

 

-

Net Revenues from Battery Business on
Applications ($)

      

    Electric Vehicles

 

303

 

1,955,979

 

645,437.6

    Light Electric Vehicles

 

760,208

 

3,115,959

 

309.9

    Uninterruptable supplies

 

39,975,590

 

46,763,448

 

17.0

Total

 

40,736,101

 

51,835,386

 

27.2

Cost of revenues was $78.0 million, representing a decrease of 37.9% from $125.7 million in the same period of 2022. This decrease was primarily due to the decline in net revenues.

Gross profit was $6.8 million, representing a decrease of 37.4% from $10.9 million in the same period of 2022. Gross margin was 8.0%, compared to 7.9% in the same period of 2022.

Total operating expenses were $13.4 million, representing an increase of 11.4% from $12.0 million in the same period of 2022.

  • Research and development expenses were $5.4 million, a decrease of 3.1% from $5.6 million in the same period of 2022.
  • Sales and marketing expenses were $1.7 million, an increase of 10.3% from $1.5 million in the same period of 2022.
  • General and administrative expenses were $6.1 million, an increase of 29.2% from $4.7 million in the same period of 2022.
  • Provision for doubtful accounts was $0.26 million, compared to $0.21 million in the same period of 2022.

Operating loss was $6.7 million, compared to $1.2 million in the same period of 2022.

Finance income, net was $0.3 million, compared to a finance expense of $0.6 million in the same period of 2022.

Change in fair value of warrants was $0.12 million, compared to $3.76 million in the same period of 2022. The change in fair value of the warrants liability is mainly due to the share price decline.

Net loss attributable to shareholders of CBAK Energy was $4.0 million, compared to a net income attributable to shareholders of CBAK Energy of $1.2 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 $4.1 million, compared to $2.5 million in the same period of 2022.

Basic and diluted loss per share were both $0.05, compared to $0.01 for both basic and diluted income per share in the same period of 2022.

Conference Call

CBAK Energy's management will host an earnings conference call at 8:30 AM U.S. Eastern Time on Wednesday, August 9, 2023 (8:30 PM Beijing/Hong Kong Time on August 9, 2023).

For participants who wish to join our call online, please visit:
https://edge.media-server.com/mmc/p/6uzum5dv 

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/BI83386b12da554bf7abfbd186831164cd

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/6uzum5dv

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 batteries and 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, 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 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
Mr. Thierry Jiewei Li
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

Condensed consolidated Balance Sheets

As of December 31, 2022 and June 30, 2023

(Unaudited)

(In US$ except for number of shares)

 
   

December 31,
2022

  

June 30,
2023

 
      

(Unaudited)

 

Assets

       

Current assets

       

Cash and cash equivalents

  

$

6,519,212

  

$

3,449,446

 

Pledged deposits

   

30,836,864

   

40,189,167

 

Trade and bills receivable, net

   

27,413,575

   

29,322,723

 

Inventories

   

49,446,291

   

41,818,660

 

Prepayments and other receivable

   

5,915,080

   

5,267,046

 

Receivables from former subsidiary, net

   

5,518,052

   

323,973

 

Income tax recoverable

   

57,934

   

55,182

 

Total current assets

   

125,707,008

   

120,426,197

 
          

Property, plant and equipment, net

   

90,004,527

   

88,084,125

 

Construction in progress

   

9,954,202

   

25,945,637

 

Long-term investments, net

   

945,237

   

900,334

 

Prepaid land use rights

   

12,361,163

   

11,616,881

 

Intangible assets, net

   

1,309,058

   

1,017,171

 

Operating lease right-of-use assets, net

   

1,264,560

   

1,082,209

 

Deferred tax assets, net

   

2,486,979

   

3,101,858

 

Total assets

  

$

244,032,734

  

$

252,174,412

 
          

Liabilities

         

Current liabilities

         

Trade and bills payable

  

$

67,491,435

  

$

75,570,051

 

Short-term bank borrowings

   

14,907,875

   

26,813,901

 

Other short-term loans

   

689,096

   

352,482

 

Accrued expenses and other payables

   

25,605,661

   

27,869,385

 

Payables to former subsidiaries, net

   

358,067

   

387,263

 

Deferred government grants, current

   

1,299,715

   

367,271

 

Product warranty provisions

   

26,215

   

23,355

 

Warrants liability

   

136,000

   

15,000

 

Operating lease liability, current

   

575,496

   

366,391

 

Finance lease liability, current

   

844,297

   

114,884

 

Total current liabilities

   

111,933,857

   

131,879,983

 
          

Deferred government grants, non-current

   

5,577,020

   

5,129,127

 

Product warranty provisions

   

450,613

   

451,739

 

Operating lease liability, non-current

   

607,222

   

539,742

 

Accrued expenses and other payables, non-current

   

1,085,525

   

-

 

Total liabilities

   

119,654,237

   

138,000,591

 
          

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 89,151,731 issued and 89,007,525 outstanding
    as of June 30, 2023

   

89,135

   

89,151

 

Donated shares

   

14,101,689

   

14,101,689

 

Additional paid-in capital

   

246,240,998

   

247,070,345

 

Statutory reserves

   

1,230,511

   

1,230,511

 

Accumulated deficit

   

(131,946,705)

   

(135,962,050)

 

Accumulated other comprehensive income (loss)

   

(8,153,644)

   

(13,798,697)

 
    

121,561,984

   

112,730,949

 

Less: Treasury shares

   

(4,066,610)

   

(4,066,610)

 

Total shareholders' equity

   

117,495,374

   

108,664,339

 

Non-controlling interests

   

6,883,123

   

5,509,482

 

Total equity

   

124,378,497

   

114,173,821

 
          

Total liabilities and shareholder's equity

  

$

244,032,734

  

$

252,174,412

 

CBAK Energy Technology, Inc. and Subsidiaries

 

Condensed consolidated Statements of Operations and Comprehensive Loss

 

For the three and six months ended June 30, 2022 and 2023

 

(Unaudited)

 

(In US$ except for number of shares)

 
  
   

Three months ended
June 30,

  

Six months ended
June 30,

 
   

2022

  

2023

  

2022

  

2023

 

Net revenues

  

$

56,349,660

  

$

42,420,870

  

$

136,545,958

  

$

84,817,571

 

Cost of revenues

   

(50,814,352)

   

(38,536,228)

   

(125,694,296)

   

(78,027,185)

 

Gross profit

   

5,535,308

   

3,884,642

   

10,851,662

   

6,790,386

 

Operating expenses:

                 

Research and development expenses

   

(2,299,466)

   

(2,980,718)

   

(5,612,590)

   

(5,436,046)

 

Sales and marketing expenses

   

(697,664)

   

(963,588)

   

(1,527,338)

   

(1,684,592)

 

General and administrative expenses

   

(2,453,515)

   

(3,582,893)

   

(4,690,889)

   

(6,062,028)

 

Recovery of (provision for) doubtful
    accounts

   

59,826

   

(130,493)

   

(211,617)

   

(261,660)

 

Total operating expenses

   

(5,390,819)

   

(7,657,692)

   

(12,042,434)

   

(13,444,326)

 

Operating income (loss)

   

144,489

   

(3,773,050)

   

(1,190,772)

   

(6,653,940)

 

Finance (expenses) income, net

   

(620,490)

   

252,472

   

(615,476)

   

257,783

 

Other (expenses) income, net

   

(458,946)

   

238,040

   

(173,742)

   

421,253

 

Change in fair value of warrants

   

2,131,000

   

36,000

   

3,763,000

   

121,000

 

Income before income tax

   

1,196,053

   

(3,246,538)

   

1,783,010

   

(5,853,904)

 

Income tax (expenses) credit

   

(179,788)

   

307,311

   

(86,242)

   

710,195

 

Net income (loss)

   

1,016,265

   

(2,939,227)

   

1,696,768

  

$

(5,143,709)

 

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

   

(211,075)

   

304,237

   

(447,125)

   

1,128,364

 

Net income (loss) attributable to
    CBAK Energy Technology, Inc.

  

$

805,190

  

$

(2,634,990)

  

$

1,249,643

  

$

(4,015,345)

 
                  

Net income (loss)

   

1,016,265

   

(2,939,227)

   

1,696,768

   

(5,143,709)

 

Other comprehensive loss

                 

   – Foreign currency translation
    adjustment

   

(7,126,920)

   

(6,639,109)

   

(6,694,727)

   

(5,890,330)

 

Comprehensive loss

   

(6,110,655)

   

(9,578,336)

   

(4,997,959)

   

(11,034,039)

 

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

   

(205,075)

   

643,620

   

(482,134)

   

1,373,641

 

Comprehensive loss attributable to
    CBAK Energy Technology, Inc.

  

$

(6,315,730)

  

$

(8,934,716)

  

$

(5,480,093)

  

$

(9,660,398)

 
                  

Income (loss) per share

                 

    – Basic

  

$

0.00

*

 

$

(0.03)

  

$

0.01

  

$

(0.05)

 

    – Diluted

  

$

0.00

*

 

$

(0.03)

  

$

0.01

  

$

(0.05)

 
                  

Weighted average number of shares
    of common stock:

                 

    – Basic

   

89,007,924

   

89,030,137

   

88,852,594

   

89,021,795

 

    – Diluted

   

89,019,818

   

89,030,137

   

88,865,263

   

89,021,795

 

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