CBAK Energy(CBAT) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - Battery business revenue in Q3 2023 reached $44.33 million, a 71.51% YoY increase [4] - Operating income for Q3 2023 was$ 7.58 million, with net income at $7.77 million, 6.3 times higher than the same period last year [4] - Gross margin for the battery business in Q3 2023 was 26.4%, up 17.7 percentage points from 8.7% in Q3 2022 [14] - Net revenue for Q3 2023 was$ 63.4 million, a 9.9% increase from $57.7 million in Q3 2022 [14] - Gross profit in Q3 2023 was$ 12.2 million, a 264% increase from $3.5 million in Q3 2022 [15] Business Line Data and Key Metrics - Revenue from energy storage applications was$ 42.81 million, a 73.5% YoY increase [5] - Revenue from electric vehicle batteries was $0.4 million, a 19.5x YoY increase [5] - Revenue from light electric vehicle batteries was$ 1.11 million, down 2.8% YoY [5] - Total battery business revenue for the first nine months of 2023 was $96.16 million, a 44.43% YoY increase [5] Market Data and Key Metrics - Orders from key clients in Europe and the US have shown exceptional stability and sustainability [6] - As of November 1, 2023, the company had approximately RMB900 million in unfulfilled orders across its Dalian and Nanjing facilities [6] - Orders from PowerOak totaled around RMB43.2 million, while orders from JinPeng Group amounted to roughly RMB63.59 million [7] - Orders from Viessmann Group totaled EUR116.5 million from the beginning of 2023 to November 1 [8] - Orders from Anker Innovations amounted to RMB58.35 million, with expectations of monthly orders in the future [8] Company Strategy and Industry Competition - The company is focusing on meeting prime clients with scale, investing in production capacity and R&D [9] - The Dalian and Nanjing facilities have reached a production capacity of one gigawatt hour [9] - The company is developing new lithium battery models (46115 and 46157) with higher energy density and extended lifespan [9] - The company plans to expand the production capacity for the 46 series batteries to 15 gigawatt hours at the Dalian facility [10] - The company is the only one in China capable of mass-producing sodium-ion batteries, with plans to build a plant with a target capacity of 10 gigawatt hours [11] Management Commentary on Operating Environment and Future Outlook - The company is confident in sustaining robust performance and profit growth despite global economic slowdown [6] - The company expects to finalize private equity financing for the sodium-ion battery plant soon [11] - The company aims to achieve a twin-engine growth model with 36 gigawatt hours of lithium battery capacity and 10 gigawatt hours of sodium-ion battery capacity [12] Other Important Information - The company has engaged in discussions with major customers from Europe and the US regarding various operations, including product supply [8] - The company’s R&D expenses increased by 8.1% to$ 2.6 million in Q3 2023 [15] - Sales and marketing expenses increased by 33.8% to $1.1 million in Q3 2023 [15] - General and administrative expenses increased by 73.7% to$ 3.2 million in Q3 2023 [16] Q&A Session Summary Question: Growth in the uninterruptible power business - The growth in Q3 2023 was driven by both existing customers increasing orders and new customer contributions [18] Question: Update on the raw material business - The raw material industry is experiencing a slowdown, but the company believes Hitrans will improve sharply once the industry recovers [20] Question: Sodium-ion battery technology and project progress - The company released its first sodium-ion battery product in June 2023 and is the first in China to achieve mass production [23] - The company is selecting a location for the sodium-ion battery production line and plans to expand capacity to 10 gigawatt hours next year [24] Question: Partnership with Anker Innovations - Anker Innovations has started pilot production with the company’s batteries, and the order volume is expected to increase to 800,000-1.2 million items with an order value of about RMB14 million [26]