Q3 2021 CBAK Energy Technology Inc Earnings Call
Good day, ladies and gentlemen, thank you for standing by and welcome to see bag Energy technologies third quarter 2021 earnings Conference call.
Currently all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
As a reminder, we are recording today's call.
If you have any objections you may disconnect at this time.
Now I'd like to turn the call over to Mr. Terry Lee.
<unk> relations director of feedback energy Mr. Lee. Please proceed.
Yeah.
Thank you operator, and Hello, everyone welcome to see back Energy's third quarter 2021 earnings conference call. Joining us today are Mr. Bailey, our Chief Executive Officer, and Mrs. You're not pay the interim Chief Financial Officer will released results earlier today. The press release is available on the company.
This IR website at IR, they'll see back dot com bust CN as well as from Newswire services a relay on this call will also be available in a few hours on our IR website on.
On the call with me today I missed it you can see the Mrs. You not pay Mr. Wang the Vice President of Energy, Mexico Children's here now.
General engineer our interpreter Mr. Yung before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involved inherent risks and uncertainties as such.
Actual results may be materially different from the expectations expressed today further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC.
The company doesn't assume any obligation to update any forward looking statements, except as required under applicable laws.
Also please note that unless otherwise stated all figures mentioned during the conference call are in U S. Doris with that let me now turn the call over to always see all Mr. Bailey, Mr. Li with Big in Chinese and it works just like his comments in English go ahead, MS study and so you don't create Christian.
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Thank you Terry and Hello, everyone. Thank you for joining our earnings conference call today.
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I'm very pleased with our rapid revenue growth from high powered lithium bakeries, which saw a pick two 1% year over year growth to reach 9.6 media USD and is a testament to the excellent quality and performance of our bakery products I'm also happy to report that the new installations and Guardian.
In 19 counts are all on track and progressing according to schedule and that's why the global energy shortage and a new round of commodity price hikes. We believe our production expansion were huge positive business outcomes and amplify our ability to supply as we continue to build sales momentum in line with.
Global demand for clean energy based products.
In the third quarter. We also made a strategic decision to accelerate the new product line installation in <unk>, which was necessary as demand exceeding our supply is timely response increased confidence our customers have in earth and help us secure more orders as it's our priority to make the device.
The risks and various demand while existing basically products and our ongoing innovation. We further expanded our research and development, while broadening our product offerings. Overall, we believe our operations and growth strategies are well executed and ensures our prediction for capturing tremendous opportunities.
In the battery storage market.
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Oh, Oh, My God, you caught on Hudson Welcome Yun.
Got it.
I would now like to share with you. Some recent advancements we have made in innovating and expanding our product portfolio. Following our dedicated efforts in research and development.
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In August our special 26650, lithium ion battery design, especially for ultra low temperature with FIFA performance certification from the world's leading testing inspection and certification company S. T. F. A subsidiary audience feedback powerplay jewelry is the world's first company.
To receive certification for this unique basically we believe this is a remarkable step forward that validates the operational efficiency of our special 2665 old Bay, Troy and our technological leadership in the industry our customers have been testing our samples and we have seen growing demand for this.
Perfect that is suited for use in extremely low temperatures such as in China, Northern region harsh weather conditions as well as 40 aviation and aerospace industries.
We expect a special to six to six five obituary amongst our product portfolio to generate superior performance and results.
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In the third quarter, where we place the expansion of module two six at five Oh base rates with the newly added protection lie of module to six seven old Bay trees to upgrade the original product as of the end of September we completed a shakedown testing for the model to six seven obituaries, we should have gone there post paper was born.
From two wheel electric vehicle producers supported by new equipment and improved production process.
<unk> has a bigger unit capacity than module to Fitbit five Oh bakery.
A significantly lower cost than new bakery will be ready for commercial production by the end of the year.
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Meanwhile, we also completed a shakedown tests for the model 321 for all battery that targets <unk> and EV market with our stellar price to performance ratios and our ability to address diversified kind of needs. We expect our CRO their offerings to resonate across our growing customer group.
Making us become major phase, where a supplier for top L. EV manufacturers.
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Our developments in the latter two new bakeries also respect that our capacity expansion is being carried out as planned. We are extremely pleased with the progress we're making in building new production capacity. Our expansion is our strategy meticulously prepared for further growth that will extend to <unk>.
Far into the future.
Once completed it.
Oh, its output along with our existing capacity will support us to cater to the increasing demand for our innovative and reliable beechwood products efficiently.
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Next I would like to bring up their use of our progress in acquiring a majority of equity interests enjoyed him. They do high teens lithium battery Technology Corporation, who is a leading developer and manufacturer of tuna precursors and canceled materials in China and is also one of feedback and key suppliers.
We are currently in the process of asset transfer require court proceedings.
It's taking longer than expected, but we have to do making efforts to complete all of the proceedings and close the transaction. Upon the conviction of this transaction. We believe this strategic consolidation for a stable supply of raw materials will not only benefit us in the short term against the backdrop of rising commodity.
Prices, but also bring long term value for our business strategies.
The strategies and fewer our endeavors.
And innovative ecosystem base solution for power storage and electric vehicles.
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Mhm.
To summarize we see an ever increasing demand driving the basically industry with society of technological advancements.
Leveraging our innovative and expanding product portfolio capacity ramp up and strategic consolidation.
Well positioned reps Roche.
The two graphs the growth potential of the Boston market.
Which will be even greater once the global economy recovers its time for us to segment, our technology strength and expand manufacturing capacity. This year and the next with these ongoing innovations and populations will remain confidence for our future development, while maintaining our commitment to always generally.
Value for our shareholders.
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Great.
Gotcha.
Now, let me turn the call over to our interim CFO, you're not paying who will provide details on our financial performance go.
Go ahead, Mr and Mrs.
Mississippi.
Thank you central Mr. Danny and thank you everyone for joining our call today I will now go over our key said national results for the third quarter of country. It can be one for the full details of our financial results. Please refer to our earnings press release.
In the third quarter, our financial performance full bachelorette salesmen men, just drunk with Latkes I'll pass to demolish our industry, leading and dependable products.
Net revenues were nine $6 million in the third quarter and excluding revenues from all mature roaches, approximately 916 million U S. Dollar watch a high power led dispatch rate badness.
51% year over year.
Some had power lithium batteries avenues in the seven of 10 to 20, well it didn't incur a new raw material transactions. During this period before our move with them.
A majority of aperture interests hatches transactions, such as kidney all mature that was bought back with well only make when suitable opportunities are wrong, which did not occur in the third quarter of this year.
Once they complete the acquisition of the equity interest.
And good counsel I take it it's found that show a call wed expect to see more opportunities on the government sums all mature wells a.
Additionally, as Tony had mentioned the new production line installation without implant.
Who are they.
Words impact on existing production line well our production in the future will be supported by both our existing and newly established production capacity.
All told two avenues filed with a thought five 9% to eight.
Each pawn store many us dollars at the stove to control cost to counter the increase in raw material pass package.
Our prisoners assays to lock in the supply of certain raw materials have to ask to avoid a big goes below some commodity price pack.
While along with other peers, we have removed the bathroom pad there to offset the impact of drama.
It shows a package.
Our customers have accepted head of the interest in basketball practice, it's missing a veteran nimble link.
Our gross profit was one point my many U S dollars.
Quarter down 17% from a year earlier gross margin was 12%.
Chris It's Bob.
Percentage points summed up products.
The installation of the past dealt with all materials resulted in the increase in Cogs.
Total operating expenses well see.
300 days 13, 9% year over year.
Two bolt ons silly money has dollars most of the increase in operating expenses catch up the loss was due to growing headcount and do research and be loved.
Turning to expenses.
With our 19 production facility as well as the expiration of the Chinese government's COVID-19 didn't leave policy like how do they deal with the social insurance contributions during the pandemic.
Of that research and development expenses were one point H, mainly U S dollars. So they have enjoyed a 7% year over year.
Sales and marketing expenses increased that she can get it to loopnet present 2.5 of money as dollars general and administrative expenses well, it's 119, 1% to two upon to too many as dollars.
As they manage and improve their customer relationships and the quality of our customers leave they call married to gain real time $2 million of doubtful accounts compared to a recovery of zero point for many U S dollars a year earlier.
Our change in fair value of warrants was 10-K, it's two way mainly U S dollars and met that quarter compared to nil in the prior year.
They were able to generate could not come off the 10-K, mainly U S dollars.
During the period.
Compared to net income also fell to 1715.
And that's been shown there does tend to attention.
As of September certainly 10 to 801, our cash and cash equivalents rich the two mainly U S dollars compared to 32 eight points to a meeting us dollars as of June 3rd he can get into that.
Our solid financial position, we actually could pad to pad capable of being housing and expanding our product offerings.
It increased the production capacity.
Setting us on track for Florida.
The success into the future.
That concludes our prepared remarks, that's now open the call for questions. Operator. Please go ahead.
Thank you ladies and gentlemen, we will now begin the question and answer session.
If you wish you ask a question. Please press star one on your telephone and liked if your name to be announced if you wish to withdraw your were cast please press the pound key.
Please standby, while we compile the question and answer roster and once again, ladies and gentlemen, the star one.
Our first question comes from the line of Laura and their offense don't group. Please go ahead.
So.
Good evening, everyone. So I have a couple of questions about the company's strategy and also the structures.
So my first question is about this idea of a Friday.
All materials and like quarters customers. One was the same for sudden death.
Yeah.
Yeah.
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Mhm.
Revenue related to the raw material that was reported in different periods of last year and from our raw material futures trading.
At the 10 based on our industry experience, we felt that some throw in the pier village were at a low price. So we did some transactions and we did generate profit.
I think he's part of revenue does not belong to re occurring revenue.
Just came from an action that we took in response to the fluctuation of the market price.
In this quarter this year as there was no future changes in raw materials. So this part of revenue because it just.
A few months ago, our company announced that we are in the process.
Wiring hyphens, a raw material manufacturer committed to are indeed production and say it was up to a new REIT test.
Catch those materials and tuna V precursors that boy after the completion of the acquisition our revenue from Google in the T. Mobile will have a substantial increase and became a curbing revenue of our company.
The feature of this part of revenue will come from the protection and see it was raw materials, rather than the futures trade reported last year.
Okay.
That's it for the transmission.
So kind of thing you had a question.
Yeah, that's great. So.
The next question is about the EV companies like manufacturing plants, because some companies may have heard is that sometimes what do you think of that market opportunity over there and the.
Flight caused a major cause some nervousness in the market.
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700 yourself doing real well.
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Yeah.
Mhm, Okay. So we believe that the EV market has been has really entered the market oriented self sufficient stage and we see that you'd be has to become more and more popular among the consumers.
Ouch D E B markets will ashamed of robust growth EBITDA.
It is why many battery companies have dedicated more inputs to stepping up production capacity.
And we were well aware of this opportunity as a matter of fact, we began to formulate our strategy as early as the second half of 2020, we pay more attention to the.
Eight O O N eight oh small passenger car market, which has strong growth momentum in the past two years recently the monthly sales.
Amounts of many more dose have ranked the first in sales with a monthly sales amount of old bed 30000.
We also see.
So such as our target customers make me, we organized some meetings for business cooperation with quite a few manufactured out of this kind and they also expressed their interest in cooperation with it.
Our goal is to ramp up our production capacity for many more doors as a start and then we're going to scale and expand to more high end more dose and for our large building the REIT.
Every nickel batteries, we will target at this kind of the high end market.
I think for the translation.
Thank you. So my last question was about the Understructure an awful disease.
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Okay.
She.
She back it's not adopting the I E.
Our leased at entities in the United States directly control the entity in Hong Kong and Hong Kong Company directly hold subsidiary operating in China. It is essentially different from the structure of the traditional internet companies, who in direct me can show.
The operation subject through operation agreements.
There's risk.
It's much much more smoother than the ink for the investors.
Our auditor at sea that D is registered in P. C E O P E and H P. I C. P H E.
And it just a legal accounting Paul Flynn.
There was at least told possibility that our company would be in these pits due to noncompliance issues and whatnot.
The investors.
Should pay more attention to is the risk posed by stock price fluctuations.
Let's say for the translation.
Okay.
Yeah. These are all my questions. Thank you very much.
And I'm doing this <expletive> of winter, we went up because sometimes you can lead to weight that.
Thank you I'll next question comes from the line of Mark M. M. S. B M. Well. Please go ahead.
I want to see more people have taken control and supplying the EV market, but there's no news of what see buckets to newco.
So there's a lot of talk about because I'm looking on your website or what your plans are going forward from the last update it seemed as if there was going to be quite a few bits going forward, but nothing no could you state wide.
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P J, if I mean, the good thing though.
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In total we had about Oh.
Nicole.
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Judy would you like Oh, Andrew Schenker from Alex Smith.
Hi, Andrew.
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They show that just the timing of when the onshore I told many times, it's been I shouldn't say listen I'll tell you what Matt.
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I'm just trying to show them cause you based your country.
We like to put it.
Yes.
Mhm.
Yeah.
Well done.
In simple terms.
Oh, Okay. So as a nation, we have started our J P. G go out as early as.
The second half of last year, and we started the installation of the protection line in 19 and it is.
I'm excited for the protection of the launch.
Leanne good coke batteries.
Which can be used for some vehicles such as Tesla and then at the time, what we planned to have focused on is the L. E B markets and the eight O O passenger vehicles.
I think this year, we felt that the market has become more hot and then we also find that quite a lot of common victorious in shortage of the supply of batteries that is why we make timely adjustments and we're excited to shift our focus to E. B. So.
Evening, you will peak of four crews and the priority of all current stage and will also be the prep I'll do it a feature development.
Yeah.
Yeah.
Okay.
Hello.
Okay.
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For the good people, if I remember who deal with us.
I just.
Just wanted to go home teed up on that just for exactly.
Simply put hobbies attempting kind of off the table.
Okay.
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But given up on it.
With it.
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Montana, Alberta.
Hi.
Yeah.
Mhm.
I am responsible for the technician part if I see these questions from the perspective uptake Nixon I'll technology I have to say that the investment periods for a project in a car manufacturer what used to be very long and slow.
Let's say three years, however, with the divestments of industrial technology. This investment period has been shortened to Asbury exterior need more than one year to do the R&D and product design and advantage with Arris is that we get involved in the ignite.
Faith.
When dot com and you're just picture I had started to design that product and are involved men play.
Plays a very positive role in this.
In this period or in the home.
<unk> process.
The moment, you well know quizzical about one of the Oh God don't watch as it has done that Oh, well remember, there's a sense of humor.
Ladies and gentlemen.
So as you know there's a enjoy your day.
And do they have a tangent, but we give that sort of era.
So that's really the simple secure.
This is Joe.
Cool.
The new solution.
Uh huh.
Uh huh.
The one at the top.
So if they don't go into that.
But was it Dorothy.
Hum spend how much further down the road.
Can you talk to.
So I'm gonna do go to somebody else if they don't get there.
No.
Yeah.
Uh huh.
And in China, we have already developed some substantial part not such as the young Y Automotives and cute.
Cute at Chile, Chile, automotive when I talk about substantial cooperation it means the song of the deep Sea collection with the project more dose and then the R&D of the projects I can tell you that the production under our partnership is already in the phase of.
Child check off pilots.
Protection and I cannot release the exact model.
Here in front of you, but I can tell you that it is it is in the 46 a series of products and we haven't looked at the overseas market. Some folding carton manufacturer is also show that interest in our products such as some German companies. They are also.
They are interested in these products.
Jim you sounded one a well known 10 Bucks a ton here.
Uh-huh cause even are you going to.
The English identifying them.
Yeah, Richard I don't know that there's a good definitely when you go through the portfolio, but you have to judge that.
Yourself.
Mhm, so based on the achievements that we've made in the previous periods. We can say we are really confident in our future performance. We believe that we can have a remarkable performance in the EV market in the future.
Sure.
So you've heard the interest but is there any significant pool of signed nickel opinion of these deals with.
Yeah.
Tricia jumped I would say that that seem to to watch now you'll nail. She wishes are attending the egos machine Yeah C lesion corridor she each lately.
Oh well.
Excuse me.
When you think about saying Oh, a male without a phone call.
Mhm.
So we are at the stage of technical discussion and then ask for it and formal agreements you'll need to refer it to the announcement that we will probably are published on our website or some extra channels.
Yeah.
Okay. Thank you.
Got you know quite that.
Great. Thank you see no more questions in the queue, Let me turn the call back to Mr. Ian Bailey for closing remarks.
And he wanted to say.
Right.
Right.
Hi, Stacey utilities shootout Jeanie good don't yet.
Uh huh.
Uh huh.
Isn't it rounds out the offering.
Thank you.
That's the only thing that's being done.
Thank God.
Thank you operator, and thank you all for participating in today's call and for your support we appreciate your interest and look for what you're reporting to you again next quarter on all progress.
Thank you all again this concludes our call you may now disconnect.
[music].
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Good day, ladies and gentlemen, thank you for standing by and welcome to see Big Energy Technologies third quarter 2021 earnings Conference call.
Currently all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
As a reminder, we are recording today's call.
If you have any objections you may disconnect at this time.
Now I'd like to turn the call over to Mr. Terry Lee Investor Relations director of feedback energy Mr. Lee. Please proceed.
Thank you operator, and Hello, everyone welcome to see back Energy's third quarter 2021 earnings conference call. Joining us today are Mr. Bailey, our Chief Executive Officer, and Mrs. Youre not pay into really Chief Financial Officer, We released results already year to date the press releases.
Available on the company's IR website at IR docs see backed up comp of CN as well as from Newswire services a relay on this call will also be available in a few hours on our IR website on.
On the call with me today I missed it you can say the message youre not pay them instead of.
One was the vice President of <unk> energy, Mr. Children's here now.
General engineer our interpreter Mr. Yung before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provision.
U S Private Securities Litigation Reform Act of 1995 forward looking statements involved inherent risks and uncertainties.
Such the company's actual results may be materially different from the expectations expressed today further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC.
It doesn't assume any obligation to update any forward looking statements, except as required under applicable laws.
Also please note that unless otherwise stated all figures mentioned during the conference call are in U S dollars with that let me now turn the call over to our C. O mistaken failing Mr. Li will speak in Chinese and it works just like his comments in English go ahead, Ms study and phase one K Christian.
Uh huh.
Oh God awful.
Sometimes I found out since then does that mean for you.
Thank you Teri Hello, everyone. Thank you for joining our earnings conference call today.
Yeah.
Well my first Hong Kong coastal Southern California, but you can infer from that since I know acquired cool. So comes off hold me at Samsung.
I don't know what your library.
Yeah, I mean, you have a woman that's interest hunting dog courtyard.
Well I'm not doing Huntsville, one partner.
So I see it on pause or something it sounds like some government sell down.
Woman Farmyard, CRO 19, Gung Ho Hum.
Hongdong well.
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We don't think so.
Thompson.
Well no.
That's your Cogs on a social circle bogged down.
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Yoga Young woman Soggy homegrown Phil.
So Don you said that's not young.
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Huntington crop.
Currency Cogs in terms of dock doors, and you know well, we don't want a CEO.
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Young Guy who's at the.
We're creeping into what I'm, telling you I'm Paul.
Oh, Yeah, yeah, well now you're talking about your young so it's I'm not signed yet.
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Turning to Chicago goggles.
Yeah.
Okay.
I'm very pleased with our rapid revenue growth from high powered lithium bakeries, which saw a 51% year over year growth to reach 9.6 media USD and is a testament to the excellent quality and performance of our bakery products. I'm also happy to report that the new installations, and Guardian and 19 patents Oh.
We're on track and progressing according to schedule, despite a global energy shortage and a new round of commodity price hikes. We believe our production expansion were huge positive business outcomes and amplify our ability to supply as we continue to build sales momentum in line with the provost demand for clean air.
Energy based products.
In the third quarter. We also made a strategic decision to accelerate the new product line installation and diet, which was necessary as demand exceeding our supply is tightening of response increased the confidence our customers have in Earth and help her secure more orders at least our priority to make sure that the virus.
Various demands while existing bakery products and our ongoing innovation, we further expanded our research and development, while broadening our product offerings. Overall, we believe our operations and growth strategies are well executed and ensured our prediction for capturing tremendous opportunities in the beta.
Storage market.
Okay.
Fair enough.
It turns out they know what's wrong.
Yeah.
Yeah.
In fact, what time zone you can go a woman thing I saw from your number which doesn't really halt while my guy punky caught on hunting cool well found yet.
Huh.
I would now like to share with you. Some recent advancements we have made in innovating and expanding our product portfolio. Following our dedicated efforts in research and development.
Sure.
Uh huh.
How are doing.
So I don't even know where there really isn't a greenfield.
And I'm not sure.
Yeah, Yeah. So it doesn't go through I think.
It's a dog zone, well I'm not sure Hawker and father.
Todd Anthony this is Tom.
No I agree with Zillow.
So still don't tend to go through when I saw him.
So that's an analysis that you bought.
No I've got a woman, who I don't even know what insurance at all.
Jody CRO almonds.
Well I mean a CRO.
Sure Jonathan.
Wyman you kind of turn on sensors on the ones that we're going to end up.
So we're feeling some go up right you're talking to one of your turnkey Hong Kong Hong Sandon Mhm.
Well no you're correct.
All right well I mean, those haven't been so hard on time zones.
Yeah.
In August our special 26650, lithium ion battery designs is especially for ultra low temperature received but performance certification from the worlds, leading testing inspection and certification company S. T F. Our subsidiary audience feedback power battery is the word.
First company to receive certification for this unique bakery. We believe this is a remarkable step forward that validates the operational efficiency of our special 2665 Old Bay, Troy and I worked in order to co leadership in the industry.
Customers have been testing our samples and we have seen growing demand for this product.
That is suited for use in extremely low temperatures such as in China, Northern region harsh weather conditions as well as 40 aviation and aerospace industries, We expect a special 26650, basically among our product portfolio to generate superior performance and results.
And based on tissue.
200, or one of them I don't know I don't want anything about cord heart you want.
He has done the internet sometimes that.
Uh huh.
Yes.
Well my longtime a lot harder.
Well I'm not down on their own and send them to go up.
Sometimes some oh, yeah, sorry, yeah.
Okay.
I'm going to go down.
In some sense it on salary and none of them are the other with enough instances.
Cause about pontoon.
Because all companies go down go Don Sorensen.
Yankees don't sign up for it sometimes it sounds yeah.
In the third quarter, we would taste expansion of module two six at five Oh base rates with the newly added production lie of Moto 2670, bakeries to upgrade or regional product.
As of the end of September we completed a shakedown testing for the model to six seven O O bakeries, we should have gone there positive responses from two wheel electric vehicle producers supported by new equipment and improved production process.
It basically has a bigger unit capacity than module to 6650 bakery.
Significantly lower cost than new bakery will be ready for commercial production by the end of the year based on what you said.
Oh sure well not a one time thing I didnt really really top notch.
Sorry, I'll put it I'm sorry.
Hello, Sir.
Sure.
We've got a woman who know non stop.
Clark.
Martin dwell all cohorts since I'm not on mute woman wrong Huntington Ingalls I don't know cohorts single touch on Cold mill.
Hum.
Mhm, arguing.
It was found out to check one last time.
Meanwhile, we also convicted of Shaked out has to for the model suite two one for all bakery that targets the L EV and EV market with our stellar price to performance ratios and our ability to address diversified kind of needs. We expect our product offerings to resonate across our growing customer group.
Making or has become a major base, where a supplier for top L. EV manufacturers.
Sure.
Or is that a whole unknown hindrance to the argon you're fine young woman Wonder Tottenham Court someone's got to harden.
Well I'm not going to court on Dun Dun conduct hearings.
Courtyard, Phili Ooh boy, so where do you like that some docs going on its own doesn't but you found one concerns he tightened out home it sounds that sounds kind of hard to picture well My Martin Luther to one nine times.
I'm, saying sometime this year.
I'll, let developments in Atlanta to a new base rates also reflect that our capacity expansion is being carried out as planned we're extremely pleased with the progress we're making in building new production capacity.
Expansion is our strategy meticulously prepared for further growth that works tend to fall into the future. Once COVID-19 is its output along with our existing capacity will support us to cater to the increasing demand for our innovative and reliable way to wood products.
Okay.
There's not one times here, how does that one month or even go down right.
Yeah.
Homeserve problems on foods and.
So, but I think that.
Hi, Tom I'm sure some guardians sungard.
Some of these hard all kind of like what's the dotcom Oh sure Yeah, sure well I'm not too long from Thomson.
Well my more time, sometimes there isn't any thoughts either partner.
Yeah, Good times right now.
Tom you talked about.
Tom.
He is the one third that's hungry.
One of them.
Yeah, Paul Johnson subtle.
One young tied all pulling on that sounds that sounds prudent sometime this summer Gordon.
It sounds that sounds it sounds like I'm not breaking them out.
Your woman fun right.
So I wonder woman Danielle so some downside to that.
Thompson's Doctor.
Hello, Matt.
No Don Carson not quite equal now.
So I've been here.
Fonda, sometimes people.
Next I would like to bring up their use of our progress in acquiring a majority of equity interests in Georgetown. They do high teens lithium battery Technology Corporation, who is a leading developer and manufacturer of tuna precursors and canceled materials in China and is also one of sea back and key suppliers.
We are currently in the process of asset transfer require court proceedings.
Yes, it is taking longer than expected, but we have to do making efforts to complete all of the proceedings and close the transaction. Upon the conviction of this transaction. We believe this strategic consolidation for a stable supply of the raw materials will not only benefit us in the short term against the backdrop of rising.
To your prices, but also bring long term value for our business strategies.
The strategies and fewer all endeavor's in building, an innovative ecosystem base solution for power storage and electric vehicles, because they don't exist.
Sorry, I'm here.
I know they suffered on.
Well I'm I'm counting on him put on some Gulf of Mexico tourism, knocking on your door put them up on that.
He's got a woman Cogs, so people don't quote on the Thompson cools off.
So that's on the Arkansas warmer yard snugly Nepal.
Follow up on plus or sometimes not sometimes sammy.
Central European football.
I'll come and talk to you about on Sunbelt Fremont.
Yeah, I'm not sure why my own home.
Who knows where it's been quite a ton not much at all.
Yeah.
Now across the bank well normally genteel airport don't cause on soccer argon two months.
To summarize we see an ever increasing demand driving the basically industry with society technological advancements by leveraging our innovative and expanding product portfolio capacity ramp up and strategic consolidation, we are well positioned reps to close to two graphs the growth potential of <unk>.
The Boston market, which will be even greater once the global economy recovers its time for us to segment, our technology strength and expand manufacturing capacity. This year and the next with these ongoing innovations in populations will remain confident for our future development, while maintaining our.
Commitments to always generate value for our shareholders.
Sure.
Does that not tell them the nurses I fall who's done.
Great.
Most of the time, we've got here.
Now, let me turn the call over to our interim CFO, who will provide details on our financial performance go.
Go ahead Mr.
Mississippi.
Thank you Central history, Stephanie and thank you everyone for joining our call today I will now go over our financial results for the third quarter of turnkey Covid what further.
Details of our financial results. Please refer to our earnings press release.
In the third quarter, our financial performance full Bachelor Salesmen men, just drunk with Nike basketball.
Our industry, leading and dependable products.
Net revenues were nine $6 million in the third quarter.
Excluding revenue from the all mature roaches, approximately 916 mailing us dollar watched a high powered lithium battery goodness, Oh 15, 1%, Yeah Oh yeah.
High powered lithium batteries avenues in the same bench of 'twenty or 'twenty.
When you get into incremental raw material transactions during this period.
For our move by a majority of extra interest in patches transaction, such as trading all mature they'll stop Asquith will only make when suitable opportunities go wrong.
Which did not occur in the third quarter of this year.
Once they complete the acquisition of the equity interest in patches and good counsel I take it it's found that show a call wed expect to see more opportunities on the government some government shutdowns.
Additionally, as necessary he had a match and then real production line installation without in plants.
Temporary adverse impact on existing production line well our production in the future will be supported by both our existing and newly established production capacity.
I'll kill two avenues firewood, that's up five 9% to <unk>.
Eight point for many AD dollars at their store to control costs to sometimes the increase in raw material pass package.
I went through their assets to lock in the supply of certain raw materials have to act to avoid a big goes below some commodity price pack.
Meanwhile, along with other peers. We have is is the bathroom projects to offset the impact of John Mccallion mature the package.
Our customers have accepted head of the interest in basketball practice, it's missing the boat link.
Our gross profit was one plus my money as dollars in the third.
Quarter down 17% from a year earlier gross margin was 12%.
Chris It's Bob percentage points I'm, the president and CEO, but it's I shouldn't have to pass those through all materials resulted in the increase in Cogs.
Total operating expenses no.
Hamzah days 13, 9% year over year.
To build upon.
S dollars.
Most of the increase in operating expenses catch up the loss was due to COVID-19 owing had comps.
Research and development expenses associated with our 19 production facility as well as.
Exploration update Chinese government's COVID-19 didn't leave policy not how does it give us the social insurance contributions during the pandemic.
That research and development expenses were one point H niehaus dollars up so they have generated a 7% year over year.
And marketing expenses increased that sure sounds good attendance at present true so plus five and 19 U S dollars general and administrative expenses well, it's 191% to two upon to too many dollars.
As they manage to and improve their customer relationships and the quality of our coffee mate movie comedy that they're real time $2 million of doubtful accounts compared to a recovery of the general partner for many U S dollars a year earlier.
Our challenge is there are a variety of warrants was 10-K, Romania daughter's isn't that that quarter compared to nil in the prior year.
They were able to generate enough income off the 10-K.
That's dollars.
The pyramid.
Compared to net income also fell to 1715.
That's been pyramid tend to attention.
As of September 30, 10 to 801, our cash and cash equivalents, which then two mainly U S dollars compared to 13 three points to them moving us dollars as of June 3rd he can get into that.
Our solid financial position, we actually could pad to pad capable of being housing and expanding our product offerings.
Increased production capacity.
Setting us on track for Florida, and the success into the future.
That concludes our prepared remarks, let's now open the call for questions. Operator. Please go ahead.
Thank you ladies and gentlemen, we will now begin the question and answer session.
If you wish you also a question. Please press star one on your telephone and liked if your name to be announced if you wish to withdraw your web cast. Please press the pound key.
Please standby, while we compile the question and answer roster.
Again, ladies and gentlemen, this style one okay.
Our first question comes from the line of Laura Leo offense don't group. Please go ahead.
Okay.
Good evening, everyone. So I have a couple of questions about the company's strategy and also the structure.
So my first question is about the VAT and Friday fields on raw materials and like core customers can then why was the sales for Sun bets.
Yeah.
Yeah.
Okay now women show Hsinchu and I too don't you should they go when she touched on tissue to the win T. D. Two I'm sure. Glenn you go sit there John do you still see it go down.
As you're planning your woman show here without doing good true again to ensure that can't shouldn't intaglio dwindle show translation now women. So can you ship.
Social gate Toyota shouldn't younger Kunal.
In general when you don't have to pay something along is only paid off.
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I need to and Mr pin.
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No matter, where you are going to die and yeah I got it all done that Jacobs enjoyed trial yet.
Josh.
She went on she spoke with all the Powerball game genre young.
So realizing you sort of entitled Joey.
Number of women gosh, it depends you hung upon black woman.
I'm, sorry that was a trend, which I'll do their job. So you have to.
No no that's helpful.
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But she's doing well then mailed Julien tried other mall so he Jay buth.
So she nailed down.
That shouldn't women diet change because yeah, you can call. It sounds like show go, but yes, Hello, Tom Shanghai Trunk lines No Mark I don't we don't see young you awake financial detail, Denise I mentioned cheap cheap.
Tight out there against that Shanghai, where social so any way like that we'll move onto Sogo Joel no.
Constitutes our yantai out on the game show, where you still thought that so I'm not sure that sometimes it jumped again, how confident you sound too hung in there so and my weight I took them from their usual definitely lots of you guys Hello, there should track with social.
Once you're about Mt.
Yeah.
Mhm.
Revenue related to the raw material that was reported in different periods of last year.
From our raw material futures trading at a 10 based on our industry experience, we felt that some throw in the pier village were at a low price. So we did some transactions and we did generate profit.
So I think he's part of revenue does not belong to re occurring revenue. It just came from an action that we took in response to the fluctuation of the market price.
In this quarter this year as there was no future shape in raw materials.
So this part of revenue because it just.
I think a few months ago, our company announced that we are in the process of acquiring hyphen raw material manufacturer committed to are indeed production and say it was all turned to reach tests.
Catch those materials and ton of each precursors that boy after the completion of the prediction our revenue from Google in the T. Mobile will have a substantial increase and became a cooling revenue of our company in the future. This part of revenue will come from the protection and say it was.
Raw materials, rather than the futures trades reported last year.
That's it for the transmission.
So kind of thing you other question.
Yeah, that's great. So.
The next question is about the EV companies like Atlanta spectrum for US. There's some companies that have heard of that sometimes what do you think of that market opportunity over there and.
Like call it a major customers in the market.
I'm not sure when tissue Guangxi, Oh Women's Washington does she comes from Johan Dahl E. B, some Guangdong Chico attention. She is coming through each year wait, though it's probably more of a cool down the coupon not women can we see some young kind of digest.
He's laid out how you would change and as you can see if we should boost.
Shang Yao Chew Sito mobile confirmed Kunal.
I didn't want to you don't want it seem ones won't contango with ample choice.
Although my wasn't up without a lot of bundling all of Africa.
Oh, well Miss was down kind of that sometimes there's a English is not in the harsher.
Without onto what tells you that you could imagine that there's a richer Sasha.
Well not all of them.
What I would call. So this is all about.
The orange on the Eagle It doesn't all come in on or just your thoughts on the Eagle.
Yeah, you didn't do it so I'm not totally sure.
Sure.
No matter what month.
So that is not yet.
With me.
Hunter you could put your dentist you talked a woman the one issue or concocting ideally.
It didn't show this yourself.
And that's I'm not sure.
Are you just talking Chi Tung and they'll go to Joseph.
India, Turkey Hill.
700 yourself doing real well, maybe I should note related to its employees the Jacob grocery shop.
So it didn't hit me.
You know you do a job village with you in the Douglas.
It's something that is yet to do that into the one that got it.
I would tell them you know.
Some of them Jonathan do we have to negotiate.
Sure Jamie.
The old element, there's a museum Tokyo young.
Technological put yourself on a woman who you bought chip would you call it onto a CEO telco mineral metabolism wanted to wait.
Yeah on that you're going to go down towards you know how that's all you should take a concern of the auto book.
Yeah.
Yeah.
Mhm, Okay. So we believe that the EV market has been has really entered the market oriented self sufficient stage and we can see that you'd be has to become more and more popular among the consumers.
The EV market will usher in a robust growth.
It's just one of many battery companies have dedicated more input.
Stepping up production capacity.
And we were well aware of this opportunity as a matter of fact, we began to formulate our J P. G. As early as the second half of 2020, we pay more attention to the.
Eight O O N eight oh small passenger car market.
Each has its strong growth momentum in the past two years recently the monthly sales.
Sales amounts of many models have ranked the first in <unk>.
With advanced me say at least amount of a bed 30000.
We also see.
Great.
Such as.
Our target customers lately, we organized some meetings for business cooperation with quite a few manufactured out of this kind and they also expressed their interest in cooperation with.
Our goal is to ramp up our production capacity for many more doors as a start and then we're going to scale and expand to more high end more doors and for our large Linda.
So every nickel batteries, we will target at this kind of the high end market.
They pay for the translation.
Thank you. So my last question was about the Understructure an awful disease.
So if a company operating under the guidance structures and Hum.
Like is the auditor Pcs will be certified and if Sears Penny Peters.
Right.
I would not be cycle, when he said when he chuckled a windshield.
Well when it comes to ship a ship because V I E, which a good chunk of without no Jacob citizen. She should we should say P. C E O.
Speak to Chipboard, Nigel May Ocean, let's say Jai pie differentiating them.
Sure when teaching them when they sample patient.
Hold on.
A woman goes to push away I can't go without formation or message does that make what does she wants it George he he.
<unk> got the full suite G.
Yeah, our notching didn't get all Congo shallow holes with two 2 million. That's the gunship well then do don't tackle really trying to hold the two don't put air launch yeah Tunghwa niche it he can do.
T that CAGR castle, you'll jumping to that should be a normal woman who tend to tackle.
Actual from Kashagan shop, now my pleasure woman does shouldn't he sure.
Did they change on that Thomas just that piece L. B E.
Got it okay. This year.
Anyway, HK sapa, social tools with them, either she'll say changzhou Guido package here shows no.
In a market like we saw him in the Union jobs had a commercial shop.
Fortune Gong, Brooklyn to which I will touch on those things yet.
Yeah.
Steve.
She back it's not adopting B I E.
At least it entities in the United States directly control the entity in Hong Kong, and Hong Kong Company directly who subsidiaries operating in China. It is extreme surely different from the structure of the traditional internet companies, who in direct making show.
The operation subjects through operation agreements.
There's risk.
But it's much much more smoother than the ink for the investors.
Our auditor at sea that D is registered in P. C E O P E and H P. I C. P H E.
And it just a legal accounting Paul Flynn.
There was at least told possibility that our company would be in these pits due to noncompliance issues and would be.
The investors.
Should pay more attention to it does risk post to buy stock price fluctuations.
That's a footage inflation.
Okay.
Yes. These are all my questions. Thank you very much.
And I've been doing this <expletive> of winter, we wind up getting cheaper way to weight that.
Thank you. All next question comes from the line of M. B, a mark from M. S. B M. Well. Please go ahead.
I wasn't sure.
People have taken control and supplying the EV market.
There's no news of what see buckets to newco.
So there's a lot of talk but there's nothing on your website or what your plans are going forward from the last update it seemed as if there was going to be quite a few bits going forward, but nothing no could you state wide.
Well I'm glad you like in Washington to change the windshield and I'm a blind E. G. Go will maintain G. G E beta because she's hung do find though a well known well in Zhengzhou mean continue wuxi I'm going to follow that shifting Chennai jumping meals Shinbu G. T. D. G talked a whole lot either because it's been so now when they see ashish I wish them.
J P J, if I mean the consumer.
So what is your long haul would play that much and he'll take that.
Oh boy.
Yeah.
In total we had about Oh.
My God of war.
Yeah, Oh Jee, good teaching E B Chicago T G I.
Sure women are chomping city, there's a lot of junk xiaomi and Barbuda chichi that country can you'll you'll go down they seem to downshifting Chi Med D. J C agenda chinchillas amount due to the lower B a meal you can see not a email shimbun. She types of G. T. The torture nothing I'm Gonna TSH I wish it were made with Georgia, if I mean I've been CEO.
Oh sure.
Oh, well known country.
Yeah.
Judy kind of puts you at like Oh, Andrew Schenker from Ollie's corny.
Hi, Andrew.
Well, then chinchilla toward ownership.
So a big Oh you do.
Well I think.
Uh huh.
Uh huh.
Oh, gosh, well monitor once you're in society.
How would you like to shop.
So the junior and they've got some kind of ballpark.
Uh huh.
Good Oh, yeah sure.
It's a time to you know what.
I mentioned that just the turnover look onshore until a lot of times, it's been I shouldn't say listen I'll tell you what Matt.
Junior I'm, not sure, which Alan and Joe.
So you based your country.
What we like to put it.
Mhm.
Yeah.
Following on the phone.
Simple things.
Oh, Okay. How does so as I mentioned, we have started our J P. G go out as early as.
The second half of last year, and we start kits the installation of the protection law in 19 and it is.
Exhausted for the protection of the launch.
Lean to Coke batteries.
Which can be used for some vehicles such as Tesla and then at the time, what we plan to focus on is the L E B market and the eight O O passenger vehicles.
This year, we found that the market has become more hot and then we also find that quite a lot of common habitual risks are in shortage of the supply of batteries that is why we make a comedy adjustments and we're excited to shift our focus to E. B. So.
It won't be the full pace and the priority of all current stage and will also be the prep I'll do it tee of a future development.
Yeah.
Hello.
Okay.
So agenda wasn't it.
I'll take a piece of our members who go to that.
Just wondering if you're willing to give up on that just for.
Exactly.
Kind of off the cuff I don't you don't just sit on top.
That's all she was appointed to your son individual member of the team down there in the deck are you going to quantify that.
Have I got you would've thought with auto.
I've given up on it.
Yeah.
That should relieve a doubling of what.
What months are going to go to it goes up.
It gives us a whole host of the times when you don't get a lot of Judy in Hungary.
Into the cause as soon as you don't have the time to.
It comes down but slightly down.
But women.
Hungry hungry today, because I'm sure you do that.
They're not particularly what how quickly you can go on Sunday night football.
Montana yogurt.
Hi.
Mhm.
I am responsible for the technician.
If I see these questions from the perspective uptake Nixon I'll technology I have to say that the investment periods for a project in a car manufacturer what used to be very long as long as lets say three years, however, with the divestments of industrial.
Oh technology. This big Beckman period has been shortened to Asbury exterior need more than one year to do the R&D and product design and advantage with Arris is that we get involved in the <unk> phase.
When dot com and you're just picture I had started to exhaust that product and are involved men play.
Plays a very positive role in this.
In this period or in this.
<unk> process.
The moment, you well know quizzical about one of the Oh God.
If you don't watch as well.
There's a sense of humor.
Ladies and gentlemen.
So as you can go visit enjoy your gyms or how long does the changes or you have a tangent, but that's what it is.
Thirdly, the symbol SR and go to the times Andrew.
So Lucy let up there though.
Uh huh.
What have you learned on it right.
I wouldn't do it if they don't go into them.
What was it the Ritchie.
Hum spend how much further down there you go.
Hum.
I think to them.
Yeah.
Uh huh.
And in China, we have already picked up some substantial part not such as the young Y Automotives and shoot a cherry shall we automotive when I talk about substantial cooperation it means the.
Deep Sea collection with the project models and then the R&D of the projects I can tell you that the production under our partnership is already in the phase of child check off pilots.
Protection and I cannot release the exact model.
Here in front of you, but I can tell you that it is it is in the 46 a series of products.
We have to look at the overseas market. Some smoothing co manufacturers also show that interest in our products such as some German companies. They are also they are interested in these products.
Oh Gee you saw on the one that Windows 10 Bucks agenda take a pause.
Do you feel like you're going to.
Enjoy the English identifying them.
Thank you Richard.
Absolutely.
When you judge it yourself.
Yourself.
Mhm, so based on the achievements that we've made in the previous periods. We can say we are really confident in.
Our future performance, we believe that we can have a remarkable performance in the EV market in the future.
Sure.
So you've heard the interest but is there any significant fall off signing up any of these deals with.
Yeah.
Just your jumbo jet that seem to the why now you'll make sure. She attempting there he goes from a sheer yeah seen Asia corridor, she each and every day.
Oh.
Sure.
And because of that Jamie.
You'll know what are the Congo.
Mhm.
So we are at the stage of technical discussion and then ask for it and formal agreements you'll need to refer to the announcement that we will probably published.
Published on our website or some extra channels.
Sure.
Okay. Thank you.
Got you know quite that.
Great. Thank you.
No more questions in the queue, let me turn the call back to Mr. Ian Bailey for closing remarks.
And he wanted to say.
Right.
Right.
I think I've seen them tortilla shootout jeanie good don't yet.
Uh huh.
Yeah.
Okay.
So not the whole thing.
Goodbye. Thank you those backlogs going into Boston was named a team that can go.
Huh.
Thank you operator, and thank you all for participating in today's call and for your support we appreciate your interest and look for what you're reporting to you again next quarter on all progress.
Thank you all again this concludes our call you may now disconnect.