Pond Technologies

CBAK Energy Technology Reports Third Quarter 2023 Unaudited Financial Results

09 November 2023

DALIAN, China, Nov. 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 third quarter ended September 30, 2023.

Third Quarter of 2023 Financial Highlights

  • Net revenues from sales of batteries were $44.3 million, an increase of 71.5% from $25.8 million in the same period of 2022.
  • Net revenues from batteries used in light electric vehicles were $1.11 million, an decrease of 2.8% from $1.15 million in the same period of 2022.
  • Net revenues from batteries used in electric vehicles were $0.40 million, an increase of 19.5 times from $0.02 million in the same period of 2022.
  • Net revenues from uninterruptible supplies were $42.8 million, an increase of 73.5% from $24.7 million in the same period of 2022.
  • Gross margin for the battery business was 26.4%, an increase of 17.7 percentage points from 8.7% in the same period of 2022.
  • Net income attributable to shareholders of CBAK Energy (after deducting the change in fair value of warrants) was $6.3 million, compared to a net loss of $0.9 million in the same period of 2022.

Yunfei Li, Chairman and Chief Executive Officer of the Company, commented, "Amid the slowdown in China's battery industry and macro headwinds, we are pleased to deliver robust growth in our primary battery business and achieve both operating and net income in the third quarter, further improving our profitability. Looking ahead, we anticipate sustaining our solid financial and operating performance. This is supported by our significant order backlog, which exceeds our production capacity. Notably, orders for the Dalian facility have been scheduled toward the end of 2024, and our Nanjing facility is also overwhelmed. At the same time, we are continuing to improve production efficiency and expand production capacity, bolstering our market-leading position and reinforcing our growth trajectory."

Jiewei Li, Chief Financial Officer and Secretary of the Board of the Company, added, "As the battery business returned to year-over-year growth in the third quarter, we also recorded the ongoing improvements in gross margin and operating profit margin. This was underpinned by a sharp increase in the contribution of our higher-margin battery business and a reduction in the cost of revenues as we further leveraged our technology to improve production efficiency. Alongside a growing number of orders for our battery products, we will continue to find the right balance between growth and profitability while investing in R&D and production capacity expansion to enhance our sustainable, long-term competitiveness."

Third Quarter of 2023 Business Highlights & Recent Developments 

  • In September, CBAK Energy announced that its wholly-owned subsidiary, Nanjing CBAK reached an agreement with BAK Battery to acquire, from BAK Battery, a 5% stake in BAK Power, an unrelated, well-respected power battery R&D and manufacturing company.
  • In September, CBAK Energy announced that its wholly-owned subsidiary, Nanjing CBAK received an order worth RMB33.58 million from Anker, one of the largest third-party accessories suppliers globally for Apple Inc.'s products.

Third Quarter of 2023 Financial Results

Net revenues were $63.4 million, representing an increase of 9.9% compared to $57.7 million in the same period of 2022. This increase was primarily attributable to growth in the Company's battery business.

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

Battery Business

 

2022

Third

Quarter

 

2023
Third

Quarter

 

% Change
YoY

    Net Revenues ($)

 

25,845,959

 

44,327,653

 

71.5

    Gross Profits ($)

 

2,242,930

 

11,698,226

 

421.6

    Gross Margin

 

8.7 %

 

26.4 %

 

-

    Net Income ($)

 

1,064,317

 

7,770,711

 

630.1

Net Revenues from Battery
Business on Applications ($)

      

    Electric Vehicles

 

19,688

 

402,863

 

1946.2

    Light Electric Vehicles

 

1,146,370

 

1,114,107

 

-2.8

    Uninterruptable supplies

 

24,679,901

 

42,810,683

 

73.5

Total

 

25,845,959

 

44,327,653

 

71.5

Cost of revenues was $51.2 million, representing a decrease of 5.7% from $54.3 million in the same period of 2022. The decrease in the cost of revenues corresponds to the Company's higher gross profit from the batteries' segment.

Gross profit was $12.2 million, representing an increase of 254.0% from $3.5 million in the same period of 2022. Gross margin was 19.3%, compared to 6.0% in the same period of 2022.

Total operating expenses were $7.0 million, representing an increase of 40.8% from $4.9 million in the same period of 2022.

  • Research and development expenses were $2.6 million, an increase of 8.1% from $2.4 million in the same period of 2022.
  • Sales and marketing expenses were $1.1 million, an increase of 33.8% from $0.8 million in the same period of 2022.
  • General and administrative expenses were $3.2 million, an increase of 73.7% from $1.9 million in the same period of 2022.
  • Provision for doubtful accounts was $0.02 million, compared to a recovery of doubtful accounts of $0.14 million in the same period of 2022.

Operating income amounted to $5.3 million, compared to an operating loss of $1.5 million in the same period of 2022.

Finance expense, net amounted to $0.4 million, compared to finance income, net of $0.7 million in the same period of 2022.

Change in fair value of warrants was $0.02 million, compared to $0.94 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 income attributable to shareholders of CBAK Energy was $6.3 million, compared to net loss attributable to shareholders of CBAK Energy of $290 in the same period of 2022.

Net income attributable to shareholders of CBAK Energy (after deducting the change in fair value of warrants) was $6.3 million, compared to a net loss of $0.9 million in the same period of 2022.

Basic and diluted income per share were both $0.07, compared to $0.00 in the same period of 2022.

Conference Call

CBAK Energy's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Thursday, November 9, 2023 (9:00 PM Beijing/Hong Kong Time on November 9, 2023).

For participants who wish to join our call online, please visit:
https://edge.media-server.com/mmc/p/imrz65fd 

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/BI1f60f4340d574f159da65982159458e2 

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/imrz65fd 

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
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 September 30, 2023

 

(Unaudited)

 

(In US$ except for number of shares)

 
  
  
    

December 31,
2022

  

September 30,
2023

 
         

(Unaudited)

 

Assets

          

Current assets

          

Cash and cash equivalents

   

$

6,519,212

  

$

3,176,249

 

Pledged deposits

    

30,836,864

   

42,511,872

 

Trade and bills receivable, net

    

27,413,575

   

45,564,242

 

Inventories

    

49,446,291

   

37,451,597

 

Prepayments and other receivable

    

5,915,080

   

7,266,257

 

Receivables from former subsidiary, net

    

5,518,052

   

323,973

 

Income tax recoverable

    

57,934

   

-

 

Total current assets

    

125,707,008

   

136,294,190

 
           

Property, plant and equipment, net

    

90,004,527

   

93,587,460

 

Construction in progress

    

9,954,202

   

35,605,326

 

Long-term investments, net

    

945,237

   

897,635

 

Prepaid land use rights

    

12,361,163

   

11,503,787

 

Intangible assets, net

    

1,309,058

   

936,062

 

Deposit paid for acquisition of long-term investments

    

-

   

3,669,851

 

Operating lease right-of-use assets, net

    

1,264,560

   

949,192

 

Deferred tax assets, net

    

2,486,979

   

3,397,566

 

Total assets

   

$

244,032,734

  

$

286,841,069

 
           

Liabilities

          

Current liabilities

          

Trade and bills payable

   

$

67,491,435

  

$

88,176,563

 

Short-term bank borrowings

    

14,907,875

   

33,190,571

 

Other short-term loans

    

689,096

   

338,581

 

Accrued expenses and other payables

    

25,605,661

   

38,481,174

 

Payables to former subsidiaries, net

    

358,067

   

389,250

 

Deferred government grants, current

    

1,299,715

   

366,171

 

Product warranty provisions

    

26,215

   

23,285

 

Warrants liability

    

136,000

   

-

 

Operating lease liability, current

    

575,496

   

366,391

 

Finance lease liability, current

    

844,297

   

-

 

Total current liabilities

    

111,933,857

   

161,331,986

 
           

Deferred government grants, non-current

    

5,577,020

   

5,022,216

 

Product warranty provisions

    

450,613

   

471,384

 

Operating lease liability, non-current

    

607,222

   

462,323

 

Accrued expenses and other payables, non-current

    

1,085,525

   

-

 

Total liabilities

    

119,654,237

   

167,287,909

 
           

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 89,611,396 issued and 89,467,190 outstanding as
  of September 30, 2023

    

89,135

   

89,611

 

Donated shares

    

14,101,689

   

14,101,689

 

Additional paid-in capital

    

246,240,998

   

247,200,355

 

Statutory reserves

    

1,230,511

   

1,230,511

 

Accumulated deficit

    

(131,946,705)

   

(129,627,258)

 

Accumulated other comprehensive loss

    

(8,153,644)

   

(14,330,746)

 
     

121,561,984

   

118,664,162

 

Less: Treasury shares

    

(4,066,610)

   

(4,066,610)

 

Total shareholders' equity

    

117,495,374

   

114,597,552

 

Non-controlling interests

    

6,883,123

   

4,955,608

 

Total equity

    

124,378,497

   

119,553,160

 
           

Total liabilities and shareholder's equity

   

$

244,032,734

  

$

286,841,069

 

CBAK Energy Technology, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the three and nine months ended September 30, 2022 and 2023

(Unaudited)

(In US$ except for number of shares)

 
        
   

Three months ended
September 30,

  

Nine months ended
September 30,

 
   

2022

  

2023

  

2022

  

2023

 

Net revenues

  

$

57,721,692

  

$

63,441,109

  

$

194,267,650

  

$

148,258,680

 

Cost of revenues

   

(54,261,244)

   

(51,192,531)

   

(179,955,540)

   

(129,219,716)

 

Gross profit

   

3,460,448

   

12,248,578

   

14,312,110

   

19,038,964

 

Operating expenses:

                 

Research and development
  expenses

   

(2,385,591)

   

(2,577,714)

   

(7,998,181)

   

(8,013,760)

 

Sales and marketing expenses

   

(834,501)

   

(1,116,377)

   

(2,361,839)

   

(2,800,969)

 

General and administrative
  expenses

   

(1,866,055)

   

(3,240,770)

   

(6,556,944)

   

(9,302,798)

 

Recovery of (provision for)
  doubtful accounts

   

142,966

   

(24,623)

   

(68,651)

   

(286,283)

 

Total operating expenses

   

(4,943,181)

   

(6,959,484)

   

(16,985,615)

   

(20,403,810)

 

Operating (loss) income

   

(1,482,733)

   

5,289,094

   

(2,673,505)

   

(1,364,846)

 

Finance income (expenses), net

   

687,345

   

(447,031)

   

71,869

   

(189,248)

 

Other (expenses) income, net

   

(991,352)

   

601,654

   

(1,165,094)

   

1,022,907

 

Change in fair value of warrants

   

936,000

   

15,000

   

4,699,000

   

136,000

 

Income (loss) before income tax

   

(850,740)

   

5,458,717

   

932,270

   

(395,187)

 

Income tax credit (expenses)

   

2,012

   

305,431

   

(84,230)

   

1,015,626

 

Net (loss) income

   

(848,728)

   

5,764,148

   

848,040

   

620,439

 

Less: Net loss attributable to non-
  controlling interest

   

848,438

   

570,644

   

401,313

   

1,699,008

 

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

  

$

(290)

  

$

6,334,792

  

$

1,249,353

  

$

2,319,447

 
                  

Net (loss) income

   

(848,728)

   

5,764,148

   

848,040

   

620,439

 

Other comprehensive loss

                 

      – Foreign currency translation
         adjustment

   

(8,925,745)

   

(515,279)

   

(15,620,472)

   

(6,405,609)

 

Comprehensive (loss) income

   

(9,774,473)

   

5,248,869

   

(14,772,432)

   

(5,785,170)

 

Less: Comprehensive loss
  attributable to non-controlling
  interest

   

1,632,419

   

553,874

   

1,150,285

   

1,927,515

 

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

  

$

(8,142,054)

  

$

5,802,743

  

$

(13,622,147)

  

$

(3,857,655)

 
                  

Income (loss) per share

                 

      – Basic

  

$

(0.00)

*

 

$

0.07

  

$

0.01

  

$

0.03

 

      – Diluted

  

$

(0.00)

*

 

$

0.07

  

$

0.01

  

$

0.03

 
                  

Weighted average number of
  shares of common stock:

                 

      – Basic

   

88,996,692

   

89,473,026

   

88,900,977

   

89,171,988

 

      – Diluted

   

88,996,692

   

89,904,319

   

88,923,265

   

89,582,401

 

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