CBAK Energy(CBAT) - 2024 Q3 - Quarterly Results

Company Overview & Highlights CBAK Energy, a leading lithium-ion battery manufacturer, reported strong financial results for the first nine months of 2024, driven by significant battery business growth and strategic capacity expansion plans Introduction CBAK Energy Technology, Inc. reported its unaudited financial results for the third quarter and first nine months ended September 30, 2024, highlighting its position as a leading lithium-ion battery manufacturer and electric energy solution provider in China - CBAK Energy Technology, Inc. (NASDAQ: CBAT) is a leading lithium-ion battery manufacturer and electric energy solution provider in China[1] First Nine Months 2024 Financial Highlights For the first nine months of 2024, CBAK Energy reported significant growth in its battery business, with net revenues increasing by 18.4% and gross margin expanding substantially to 34.3%, while net income from the battery business more than tripled | Metric | 9M 2023 (USD) | 9M 2024 (USD) | % Change YoY | | :-------------------------------- | :------------ | :------------ | :----------- | | Net revenues from sales of batteries | $96.2 million | $113.9 million | 18.4% | | Gross margin for battery business | 19.1% | 34.3% | +15.2 ppts | | Net income from battery business | $6.7 million | $21.6 million | 222% | - Net revenues from batteries used in light electric vehicles increased by 95% to $8.2 million[2][3] - Net revenues from residential energy supply & uninterruptible supplies increased by 16.8% to $104.6 million[2][3] - Net revenues from batteries used in electric vehicles decreased by 57.1% to $1.0 million[2][3] Management Commentary Management expressed satisfaction with the strong financial performance, particularly the 18.4% increase in battery sales revenue and the impressive 34.6% gross margin, which positions the company ahead of competitors, leading to plans for a 2.5 to 3 GWh capacity expansion - CEO Zhiguang Hu highlighted a remarkable 18.4% increase in battery sales revenue and an impressive gross margin of 34.6% for the same period, positioning the company ahead of competitors[4] - CFO Jiewei Li noted the Nanjing facility became profitable as of Q3, with demand surpassing current capacity[4] - The company plans to expand production at its Nanjing Phase II project, adding an additional 2.5 to 3 GWh of capacity by next year in response to robust client demand[4] Third Quarter 2024 Financial Performance CBAK Energy's Q3 2024 performance saw a decline in consolidated net revenues and gross profit, leading to an operating loss, primarily due to factory maintenance and acquired business underperformance Consolidated Financial Results (Q3 2024) In Q3 2024, net revenues decreased by 29.7% year-over-year to $44.6 million, primarily due to a one-month maintenance suspension at the Dalian factory and suboptimal performance from the acquired Hitrans business, leading to a 43% decrease in gross profit and an operating loss | Metric | Q3 2023 (USD) | Q3 2024 (USD) | % Change YoY | | :---------------- | :------------ | :------------ | :----------- | | Net revenues | $63.4 million | $44.6 million | (29.7%) | | Cost of revenues | $51.2 million | $37.7 million | (26.4%) | | Gross profit | $12.2 million | $7.0 million | (43%) | | Gross margin | 19.3% | 15.6% | -3.7 ppts | - The decrease in revenues was attributed to a one-month maintenance suspension at the Dalian factory and suboptimal business performance from Hitrans[5] Battery Business Performance (Q3 2024) The battery business experienced a 25% decrease in net revenues in Q3 2024, resulting in a 31% decline in gross profits and a lower gross margin of 22.9%, while light electric vehicle battery revenues surged by 341% | Battery Business Metric | Q3 2023 (USD) | Q3 2024 (USD) | % Change YoY | | :--------------------------------------- | :------------ | :------------ | :----------- | | Net Revenues | $44,327,653 | $33,461,793 | (25%) | | Gross Profits | $11,698,226 | $7,665,009 | (31%) | | Gross Margin | 26.4% | 22.9% | -3.5 ppts | | Net Income | $7,770,711 | $2,035,338 | (73.8%) | | Battery Application Revenue | Q3 2023 (USD) | Q3 2024 (USD) | % Change YoY | | :--------------------------------------- | :------------ | :------------ | :----------- | | Electric Vehicles | $402,863 | $333,216 | (17%) | | Light Electric Vehicles | $1,114,107 | $4,913,644 | 341% | | Residential Energy Supply & Uninterruptible supplies | $42,810,683 | $28,214,934 | (34%) | Operating Expenses Analysis (Q3 2024) Total operating expenses increased by 12% in Q3 2024, driven primarily by a 36% rise in research and development expenses, while sales and marketing and general and administrative expenses saw reductions | Operating Expense Category | Q3 2023 (USD) | Q3 2024 (USD) | % Change YoY | | :-------------------------------- | :------------ | :------------ | :----------- | | Total operating expenses | $7.0 million | $7.8 million | 12% | | Research and development expenses | $2.5 million | $3.4 million | 36% | | Sales and marketing expenses | $1.1 million | $1.0 million | (8%) | | General and administrative expenses | $3.2 million | $2.8 million | (14%) | | Recovery of doubtful accounts | ($0.25 million provision) | $0.55 million recovery | N/A | Net Income and EPS (Q3 2024) CBAK Energy reported an operating loss of $0.83 million in Q3 2024, a significant decline from an operating income of $5.3 million in the prior year, resulting in a net loss attributable to shareholders of $0.2 million, largely due to the net loss from the Hitrans raw material manufacturing unit | Metric | Q3 2023 (USD) | Q3 2024 (USD) | | :------------------------------------------------- | :------------ | :------------ | | Operating income (loss) | $5.3 million | ($0.83 million) | | Net income (loss) attributable to CBAK Energy | $6.3 million | ($0.2 million) | | Net income (loss) attributable to CBAK Energy (after warrants) | $6.2 million | $17,647 | | Basic and diluted income (loss) per share | $0.07 | $0.00 | - The net loss was mainly due to the acquired raw material manufacturing unit, Hitrans, being in a net loss position[10] First Nine Months 2024 Financial Performance CBAK Energy's first nine months of 2024 showed robust consolidated financial growth, with significant increases in net revenues, gross profit, and net income, primarily driven by strong battery business performance Consolidated Financial Results (First Nine Months 2024) For the first nine months of 2024, net revenues increased by 2.0% to $151.2 million, primarily driven by the battery business, with gross profit more than doubling to $38.5 million and gross margin significantly improving to 25.4% | Metric | 9M 2023 (USD) | 9M 2024 (USD) | % Change YoY | | :---------------- | :------------ | :------------ | :----------- | | Net revenues | $148.3 million | $151.2 million | 2.0% | | Cost of revenues | $129.2 million | $112.8 million | (12.7%) | | Gross profit | $19.0 million | $38.5 million | 102.0% | | Gross margin | 12.8% | 25.4% | +12.6 ppts | - The increase in net revenues was primarily attributable to an increase in revenue from the Company's battery business[10] Battery Business Performance (First Nine Months 2024) The battery business demonstrated strong growth in the first nine months of 2024, with net revenues increasing by 18.4% and gross profits surging by 109.5%, while net income more than tripled, driven by significant growth in light electric vehicle and residential energy supply battery sales | Battery Business Metric | 9M 2023 (USD) | 9M 2024 (USD) | % Change YoY | | :--------------------------------------- | :------------ | :------------ | :----------- | | Net Revenues | $96,163,040 | $113,897,786 | 18.4% | | Gross Profits | $18,336,732 | $39,040,824 | 109.5% | | Gross Margin | 19.0% | 34.3% | +15.3 ppts | | Net (Loss) Income | $6,746,883 | $21,610,408 | 220.3% | | Battery Application Revenue | 9M 2023 (USD) | 9M 2024 (USD) | % Change YoY | | :--------------------------------------- | :------------ | :------------ | :----------- | | Electric Vehicles | $2,358,842 | $1,012,655 | (57.0%) | | Light Electric Vehicles | $4,230,066 | $8,249,437 | 95.0% | | Residential Energy Supply & Uninterruptible supplies | $89,574,132 | $104,635,694 | 16.8% | Operating Expenses Analysis (First Nine Months 2024) Total operating expenses increased by 13.1% for the first nine months of 2024, with sales and marketing expenses seeing the largest percentage increase at 46.9%, followed by research and development expenses at 14.9% | Operating Expense Category | 9M 2023 (USD) | 9M 2024 (USD) | % Change YoY | | :-------------------------------- | :------------ | :------------ | :----------- | | Total operating expenses | $20.4 million | $23.1 million | 13.1% | | Research and development expenses | $8.0 million | $9.2 million | 14.9% | | Sales and marketing expenses | $2.8 million | $4.1 million | 46.9% | | General and administrative expenses | $9.3 million | $10.0 million | 7.5% | | Recovery of doubtful accounts | ($0.3 million provision) | $0.2 million recovery | N/A | Net Income and EPS (First Nine Months 2024) CBAK Energy achieved an operating income of $15.4 million for the first nine months of 2024, a significant turnaround from an operating loss in the prior year, with net income attributable to shareholders surging to $16.3 million, primarily due to the strong performance of the battery business | Metric | 9M 2023 (USD) | 9M 2024 (USD) | | :------------------------------------------------- | :------------ | :------------ | | Operating income (loss) | ($1.4 million) | $15.4 million | | Net income attributable to CBAK Energy | $2.3 million | $16.3 million | | Net income attributable to CBAK Energy (after warrants) | $2.1 million | $16.3 million | | Basic and diluted income (loss) per share | $0.03 | $0.18 | - The significant increase in net income was mainly due to the strong performance of the battery business[15] Corporate Information This section provides an overview of CBAK Energy as a leading battery manufacturer, details of the Q3 2024 earnings conference call, a safe harbor statement for forward-looking information, and investor contact details About CBAK Energy CBAK Energy Technology, Inc. is a leading high-tech enterprise in China specializing in the development, manufacturing, and sales of new energy high-power lithium and sodium batteries, along with raw materials, serving electric vehicles, light electric vehicles, and energy storage - CBAK Energy is a leading high-tech enterprise in China focused on new energy high-power lithium and sodium batteries and raw materials[18] - Products are used in electric vehicles, light electric vehicles, and energy storage[18] - The company was the first lithium battery manufacturer in China listed on the Nasdaq Stock Market in January 2006[18] - Operates multiple subsidiaries and a large R&D and production base in Dalian, Nanjing, Shaoxing, and Shangqiu[18] Conference Call Details CBAK Energy's management hosted an earnings conference call on November 12, 2024, at 8:00 AM U.S. Eastern Time, with online access and registration required for participants wishing to ask questions, and a replay available online - An earnings conference call was hosted on Tuesday, November 12, 2024, at 8:00 AM U.S. Eastern Time[16][17] - Participants could join online via a provided link, with registration required for asking questions[16][17] - A replay of the conference call is accessible online for seven days after the live call[16][17] Safe Harbor Statement This press release includes forward-looking statements subject to substantial risks and uncertainties, which may cause actual results to differ materially from expectations, based on current management beliefs with no obligation for public updates beyond legal requirements - The press release contains "forward-looking statements" regarding future results, financial position, strategy, and plans[20][21] - These statements involve substantial risks and uncertainties, and actual results may differ materially[20][21] - Factors causing differences include legal/operational risks in China, government oversight, economic challenges, and market volatility[20][21] - The company undertakes no obligation to publicly update or revise these statements, except as required by law[20][21] Contact Information For further inquiries, investors can contact CBAK Energy Technology, Inc.'s Investor Relations Department via email - Investor Relations Department contact email: ir@cbak.com.cn[22] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated balance sheets and statements of operations, detailing asset, liability, equity, revenue, and income figures for Q3 and the first nine months of 2024 Condensed Consolidated Balance Sheets As of September 30, 2024, CBAK Energy's total assets increased to $293.5 million from $281.2 million at year-end 2023, driven by higher cash and deposits, while total liabilities slightly decreased and total equity grew significantly, reflecting improved financial health | Balance Sheet Item | Dec 31, 2023 (USD) | Sep 30, 2024 (Unaudited) (USD) | | :-------------------------------- | :----------------- | :----------------------------- | | Total assets | $281,155,260 | $293,477,354 | | Total liabilities | $167,696,919 | $163,395,991 | | Total equity | $113,458,341 | $130,081,363 | | Cash and cash equivalents | $4,643,267 | $10,448,362 | | Pledged deposits | $54,179,549 | $37,415,946 | | Short-term deposits | - | $13,788,170 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) The consolidated statements show a net loss of $0.69 million for Q3 2024, a reversal from a net income of $5.76 million in Q3 2023, but for the first nine months of 2024, the company reported a net income of $14.91 million, a substantial improvement from $0.62 million in the prior year | Income Statement Item | Q3 2023 (USD) | Q3 2024 (USD) | 9M 2023 (USD) | 9M 2024 (USD) | | :------------------------------------------------- | :------------ | :------------ | :------------ | :------------ | | Net revenues | $63,441,109 | $44,628,241 | $148,258,680 | $151,243,718 | | Gross profit | $12,248,578 | $6,954,557 | $19,038,964 | $38,463,630 | | Operating income (loss) | $5,289,094 | ($827,873) | ($1,364,846) | $15,382,590 | | Net income (loss) | $5,764,148 | ($685,539) | $620,439 | $14,910,120 | | Net income (loss) attributable to CBAK Energy | $6,334,792 | $17,647 | $2,319,447 | $16,299,559 | | Basic income (loss) per share | $0.07 | $0.00 | $0.03 | $0.18 | | Diluted income (loss) per share | $0.07 | $0.00 | $0.03 | $0.18 |