CBAK Energy Reports Third Quarter 2022 Unaudited Financial Results

–Net Revenues up 504% year over year in the third quarter –

DALIAN, China, Nov. 14, 2022 /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 of 2022 ended September 30, 2022.

Third Quarter of 2022 Financial Highlights

Net revenues were $57.7 million, an increase of 504% from $9.6 million for the same period of 2021. Gross profit was $3.5 million, representing an increase of 206%, for the three months ended September 30, 2022, from gross profit of $1.1 million for the same period of 2021. Net loss attributable to shareholders of CBAK Energy (after deducting change in fair value of warrants) was narrowed to $0.9 million from $3.0 million for the same period of 2021, reduced by 68.6%.

Yunfei Li, Chairman and Chief Executive Officer of the Company, commented: “Our company managed to maintain a strong momentum in the growth of revenues in the third quarter of 2022. Our efforts to develop the electric vehicle (“EV”) & light electric vehicle(“LEV”) market have achieved noticeable progress. Our revenues contributed from the EV & LEV market in the third quarter grew by 413% compared to the same period in 2021. Our strategic partnership with JinPeng Group, one of China’s biggest LEV manufacturers, and its EV manufacturing unit, Jemmell, brings our battery products to an increasing number of electric vehicles. With our cooperation with more EV/LEV manufacturers, we anticipate to see our products be applied to more electric vehicles and revenues from this market segment grow at a faster pace.” 

Mr. Li continued: “We are also glad to see that there is an increasing global demand for green energy, which substantially boost our energy storage business. We believe that our clients with businesses all over the world will keep a strong demand for our battery products in the near future.” 

Xiangyu Pei, Interim Chief Financial Officer of the Company, noted: “In the first nine months of 2022, we managed to achieve a year-over-year increase of 681% in revenues to $194 million. During this period, revenues from our battery business grew by 168% to $66.6 million as compared to the same period of 2021, of which revenues from the LEV/EV sector have posted a strong increase of 341%. Given the strong demand for our battery products, we are very positive about our growth and development in the near term.”

Third Quarter of 2022 Business Highlights & Recent Developments

In August 2022, CBAK Energy announced a strategic partnership agreement with Welson Power, a China-based new energy company that has a broad sales network in India, to sell CBAK Energy’s model 32140 batteries in the Indian market. In September 2022, CBAK Energy announced that it obtained a battery order worth of approximately EUR 28.4 million ($27.8 million) from a leading European provider of heating, cooling and renewable energy systems. This new order will bring the total order value that CBAK Energy has received from the Customer in 2022 to approximately EUR 59.6 million.

Third Quarter of 2022 Financial Results

Net revenues were $57.7 million, an increase of 504% from $9.6 million for the same period of 2021. This was driven mostly by strong sales of high-power lithium batteries as well as from sales of materials for use in manufacturing lithium battery, a new operating segment as a result of the acquisition of Zhejiang Hitrans Lithium Battery Technology Co., Ltd (“Hitrans”) in November 2021. The table below breaks down our net revenues by segment, and further breaks down the battery segment by end application and the materials segment by product type.

 

Net Revenues by End-product Applications
($ thousands)

2021

Third

Quarter

2022
Third

Quarter

% Change
YoY

Segment 1

High power lithium batteries used in:

    Uninterruptible supplies

$9,335

$24,680

164 %

    Light electric vehicles

227

1,146

404 %

    Electric vehicles

20

Trading of raw materials used in lithium batteries

9,562

25,846

170 %

Segment 2

Materials for use in manufacturing of lithium battery cell

 Precursor                                                      

     Cathode

 

 

 

 

 

 

20,681

11,195

 

 

 

31,876

Total

$9,562

$57,722

504 %

 

Cost of revenues was $54.3 million, an increase of 544% from $8.4 million for the same period of 2021. This was in line with the increased net revenues.

Gross profit was $3.5 million, representing an increase of 206% from $1.1 million in the same period of 2021. Gross Margin was 6%, a decrease of 6% from 12% in the same period of 2021. The decrease in gross profits was primarily due to the increase in raw material prices and the fact that our materials segment has a lower profit margin. 

Total operating expenses were $4.9 million, an increase of 14.8% from $4.3 million in the same period of 2021. Most of the increase in all expense categories was the revenue growth and was largely attributable to an increase in headcount as result of the acquisition of Hitrans and additional hires in our new facility in Nanjing.

Research and development expenses were $2.4 million, an increase of 31% from $1.8 million for the same period of 2021. Sales and marketing expenses were $0.8 million, an increase of 64% from $0.5 million for the same period of 2021. General and administrative expenses were $1.9 million, a decrease of 14% from $2.2 million for the same period of 2021.  Recovery of doubtful accounts was $0.2 million, compared to $0.2 million for the same period of 2021.

Operating loss was $1.5 million, compared to $3.2 million for the same period of 2021, representing a decrease of 53.3%.

Finance income, net was $0.7 million, compared to $0.1 million for the same period of 2021, representing an increase of 433%.

Change in fair value of warrants was $0.9 million, compared to $23.0 million for the same period of 2021. The change in the fair value of the warrants liability is mainly due to share price movement.

Net loss attributable to shareholders of CBAK Energy was $290, compared to net income attributable to shareholders of CBAK Energy of $20.0 million for the same period of 2021.

Basic and diluted loss per share were both nil. In comparison, basic and diluted income per share for the same period of 2021 were both $0.23.

Conference Call

CBAK’s management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Monday, November 14, 2022 (9:00 PM Beijing/Hong Kong Time on November 14, 2022).

For participants who wish to join our call online, please visit:
https://edge.media-server.com/mmc/p/jtk2vobi

Participants who plan to ask questions at 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 personal pin and an email with detailed instructions.

Participant Online Registration: 
https://register.vevent.com/register/BI1d48d566e44b4cc3b22602d7960df36c

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/jtk2vobi

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 www.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, 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, trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely for three consecutive years, the effects of the global Covid-19 pandemic, changes in domestic and foreign laws, regulations and taxes, uncertainties related to China’s legal system and economic, political and social events in China, 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 market for the Company’s lithium battery cells 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 investor and media inquiries, please contact:

CBAK Energy Technology, Inc.
Investor Relations Department
Mr. Thierry Jiewei Li
Phone: 86-18675423231
Email: ir@cbak.com.cn

 

CBAK Energy Technology, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(In $ except for number of shares)

 

December 31,

September 30,

2021

2022

Assets

Current assets

Cash and cash equivalents

$

7,357,875

4,045,329

Pledged deposits

18,996,749

37,591,281

Trade and bills receivable, net

49,907,129

21,902,180

Inventories

30,133,340

52,709,868

Prepayments and other receivables

12,746,990

5,457,532

Receivables from former subsidiary

2,263,955

6,341,988

Amount due from non-controlling interest, current

125,883

112,424

Amount due from related party

472,061

210,796

Income tax recoverable

47,189

56,251

Investment in sales-type lease, net

790,516

815,013

Total current assets

122,841,687

129,242,662

Property, plant and equipment, net

90,042,773

88,154,577

Construction in progress

27,343,092

15,839,191

Long-term investments, net

712,930

917,768

Prepaid land use right- non current

13,797,230

12,081,968

Intangible assets, net

1,961,739

1,383,789

Operating lease right-of-use assets, net

1,968,032

571,851

Investment in sales-type lease, net

838,528

317,279

Amount due from non-controlling interest, non-current

62,941

56,212

Deferred tax assets, net

1,403,813

1,175,624

Goodwill

1,645,232

1,470,904

Total assets

$

262,617,997

$

251,211,825

Liabilities

Current liabilities

Trade and bills payable

$

65,376,212

$

70,532,360

Short-term bank loans

8,811,820

17,573,866

Other short-term loans

4,679,122

3,482,583

Accrued expenses and other payables

22,963,700

19,602,212

Payables to former subsidiaries, net

326,507

368,772

Deferred government grants, current

3,834,481

1,613,838

Product warranty provisions

127,837

104,053

Operating lease liability, current

801,797

304,574

Finance lease liability, current

1,173,589

Warrants liability

5,846,000

1,147,000

Total current liabilities

112,767,476

115,902,847

Deferred government grants, non-current

6,189,196

5,809,485

Operating lease liability

876,323

120,101

Product warranty provision

1,900,429

1,776,912

Total liabilities

121,733,424

123,609,345

Commitments and contingencies

Shareholders’ equity

Common stock $0.001 par value; 500,000,000 authorized; 88,849,222
issued and 88,705,016 outstanding as of December 31, 2021, 89,135,064
issued and 88,990,858 outstanding as of September 30, 2022

88,849

89,135

Donated shares

14,101,689

14,101,689

Additional paid-in capital

241,946,362

243,053,288

Statutory reserves

1,230,511

1,230,511

Accumulated deficit

(122,498,259)

(121,248,906)

Accumulated other comprehensive income (loss)

2,489,017

(12,382,483)

137,358,169

124,843,234

Less: Treasury shares

(4,066,610)

(4,066,610)

Total shareholders’ equities

133,291,559

120,776,624

Non-controlling interests

7,593,014

6,825,856

Total of equities

140,884,573

127,602,480

Total liabilities and shareholders’ equity

262,617,997

251,211,825

  

CBAK Energy Technology, Inc. and Subsidiaries

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

(In $ except for number of shares)

 

Three months ended

Nine months ended

September 30,

September 30,

2021

2022

2021

2022

Net revenues

$

9,562,190

57,721,692

$

24,867,393

$

194,267,650

Cost of revenues

(8,430,808)

(54,261,244)

(20,798,931)

(179,955,540)

Gross profit

1,131,382

3,460,448

4,068,462

14,312,110

Operating expenses:

Research and development expenses

(1,815,756)

(2,385,591)

(3,344,817)

(7,998,181)

Sales and marketing expenses

(510,386)

(834,501)

(1,262,999)

(2,361,839)

General and administrative expenses

(2,158,183)

(1,866,055)

(5,823,560)

(6,556,944)

Recovery of (provision for) doubtful accounts

178,897

142,966

437,475

(68,651)

Total operating expenses

(4,305,428)

(4,943,181)

(9,993,901)

(16,985,615)

Operating loss

(3,174,046)

(1,482,733)

(5,925,439)

(2,673,505)

Finance income, net

129,340

687,345

174,442

71,869

Other income (expenses), net

69,970

(991,352)

1,619,194

(1,165,094)

Impairment of non-marketable equity securities

(43)

(690,585)

Change in fair value of warrants

22,998,000

936,000

57,174,000

4,699,000

Income (loss) before income tax

20,023,221

(850,740)

52,351,612

932,270

Income tax credit (expenses)

2,012

(84,230)

Net income (loss)

20,023,221

(848,728)

52,351,612

848,040

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

(3,487)

848,438

(21,995)

401,313

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

$

20,019,734

(290)

$

52,329,617

$

1,249,353

Other comprehensive income (loss)

Net income (loss)

20,023,221

(848,728)

52,351,612

848,040

– Foreign currency translation adjustment

243,258

(8,925,745)

1,473,992

(15,620,472)

Comprehensive income (loss)

20,266,479

(9,774,473)

53,825,604

(14,772,432)

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

(3,404)

1,632,419

(16,024)

1,150,285

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

$

20,263,075

(8,142,054)

$

53,809,580

$

(13,622,147)

Income (Loss) per share

– Basic

$

0.23

$

0.00

*

$

0.60

$

0.01

– Diluted

$

0.23

$

0.00

*

$

0.60

$

0.01

Weighted average number of shares of common stock:

– Basic

88,419,998

88,996,692

87,043,490

88,900,977

– Diluted

88,709,210

89,996,692

87,349,010

88,923,265

*

Less than $0.01 per share