Q4 2023 CBAK Energy Technology Inc Earnings Call
Okay.
Operator: Good day, ladies and gentlemen, thank you for standing by. Welcome to CBAK Energy Technology's fourth quarter and full year 2023 earnings conference call. Currently, all participants are in listen-only mode.
Good day, ladies and gentlemen, thank you for standing by about come to see back energy technologies fourth quarter and full year of 2023 earnings conference call.
Currently all participants are in listen only mode. Later, we'll conduct a question and answer session and instructions will follow at that time.
Operator: Later, we'll conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we're recording today's call. If you have any objections, you may disconnect at this time.
As a reminder, we are recording today's call. If you have any objections you may disconnect at this time no.
Operator: Now I turn the call over to Thierry Lee, CFO and Secretary of the Board of CBAK Energy. Mr. Lee, please proceed. Thank you, operator. And hello, everyone.
Now I'll turn the call over to Jerry Lee CFO and Secretary of the Board feedback energy Mr. Lee. Please proceed.
Thank you operator, and Hello, everyone welcome to CVR Energy's fourth quarter and full year of 2023 earnings conference call joining us today are Mr.
Jiewei Li Thierry: Welcome to CBAK Energy's fourth quarter and four years of 2023 earnings conference. Joining us today are Mr. Yunfei Li, Chief Executive Officer of CBAK Energy, myself, Chief Financial Officer and Secretary of the Board, and Jennifer. All I have to say is, thank you for having me, and I look forward to working with you.
Chief Executive Officer of CVR Energy myself, Chief Financial Officer, and Secretary of the Bowl and Jennifer.
Alright.
Sure.
Okay.
Okay.
Okay.
Okay.
Okay.
Yeah.
Jiewei Li Thierry: Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995 for working statements involved in shared risks and uncertainties. As such, the company's actual results may not be curiously 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 S&P. The committee does not assume any obligation to update any full linking statements except as required under applicable law.
Uh huh.
Okay.
Yeah.
Okay.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.
Forward looking statements involve inherent risks.
As 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.
Except as required under applicable laws.
Jiewei Li Thierry: Also, please note that unless otherwise stated, all figures mentioned during this conference call are U.S. storage. With that, let me now turn the call over to our CEO, Mr. Yunfei Li. Mr. Li will speak in Chinese, and I will translate his comments. Go ahead, Mr. Tian. Please don't make any questions.
Also please note that unless otherwise stated all figures mentioned during the conference call at <unk>.
With that let me now turn the call over to our CEO Mr. Li.
Sadly mistaken Chinese and unfortunately his comments into English go haven't studied Chris obviously pressure.
Yunfei Li: Hello, everyone. Thank you for attending the 4th Annual and All-Year-In-Progress Calls for Business in 2023.
Uh huh.
And that woman Dol RDR Tanya.
We do see China not yet.
Jiewei Li Thierry: Thank you for joining our fourth quarter and full year 2023 earnings conference call. We are very happy to see a steady growth in performance in the fourth quarter and a successful end to the year 2023.
Hello, everyone. Thank you for joining our fourth quarter and full year 2023 earnings conference call.
Okay.
Oh My God.
Yeah.
Sundar Yamana silicone already all of a sudden tenure.
Jiewei Li Thierry: Group, Anker, Huabao, Xinneng, etc. With the continuous support of many important customers, our battery business has continued to grow in the last quarter. The share price increased by 30.9% in the fourth quarter and reached 36.83 million USD. In terms of income, the battery income in the storage sector is 34.93 million USD, which is 84.3% of the total growth. The battery income in the field of heavy vehicles reached 520,000 U.S. dollars, which fell by 88.8% in the same period last year.
Sorry place Tomorrow.
Keith what uncle Bob Al.
Got it somehow cohort.
I noticed the top country.
Songs.
You go down come down at all.
Young Phil Koning somehow pythons essentially.
Thank you.
But I'll tell you about some of them.
Keith you control or even like huh.
You too.
So god all content.
That's about to come on line.
Can be summed up box.
Baucus Zhang.
Yes.
So the battle with pharma.
I'm talking about apart from your basketball golf ball.
Jiewei Li Thierry: Battery income in the field of light vehicles reached 1,380,000 U.S. dollars, which fell by 69.5% in the same period. The main reason is that the competition in the current power market is very intense, and the price level is relatively low. In the current situation, we will look at these two markets strategically and continue to expand our sales in the storage sector. In terms of profits, our battery business has reached a new high in history, reaching 36% in the fourth quarter, and increased by 27.7% in 2022. , The company's net profit reached 6.62 million USD this quarter, which is a significant increase compared to the previous year's net loss. According to the year-on-year data, the total annual revenue of the battery business in 2023 has increased by 40.4% to $130 million, to achieve a net profit of 13.37 million US dollars. All right, go ahead. Sorry, I'm going to mute myself.
And then on Trillium your attention so I don't know.
Bob I'm are you totally shut down.
You don't.
So we are right in time downtime can only sit hotdog priyanka.
Yeah.
Yeah, Sean Dowdy.
Sorry bound tend to my top Mount Quandary, I seem to have come out until that time.
Oh sure.
You called out women's cartoon earlier.
So starting off on that one in terms of yellow Maldini part D C Cingal Friday.
Without a partner and just ask you do you are there or are you going to come to our PR you got back in yeah.
Well.
Yeah.
Yeah, Joe you're right.
But you know that all Dubai Lazaro.
John Yung King County to Queensland got out.
Tanya I told you like Huh.
Our son and I didn't see your young so couldnt come down 500.
Sure Yeah. Thank you Mike.
Can you I don't even bother you tell me also is just the one megawatt.
Let me run you can sometimes you want New York.
Oh God.
Jiewei Li Thierry: Fine. We are pleased to announce another quarter of solid growth rounding off fiscal year 2023 on a high note, with sustained orders from key clients including Buseman Group, Anker Innovations, and Halotech. Our battery business maintained its growth momentum from the previous quarter, with fourth-quarter revenues up 30.9% year-over-year to reach $36.83 million. Of these revenues, $34.93 million came from batteries used in energy storage applications, a surge of 84.3% year-over-year, while $0.52 million came from batteries used in electric vehicles, down 88.8% year-over-year. Moreover, revenues from batteries used in light electric vehicles were $1.38 million, a decline of 69.5% year-over-year, primarily attributable to intense pollution and relatively low pricing across the power market.
Sorry, I muted myself, Brian we're pleased.
We're pleased to announce another quarter of solid growth routing of fiscal year 2023 on a high note with sustained orders from key clients, including <unk> group Anker innovations and hydro Tech.
Our bakery business maintained its growth momentum from the previous quarter with fourth quarter revenues up 39% year over year to reach 36 $83 million.
These revenues $34 $93 million came from base rates used in energy storage applications, a surge of 84, 3% year over year while.
$2 million came from base rates used in electric vehicles down 88, 8% year over year. Moreover, revenues from base rates used in light vehicles were $138 million.
A decline of 69, 5% year over year.
Attributable to intense.
The LOE products across our markets.
Jiewei Li Thierry: Accordingly, we will strategically monitor both sectors while further expanding our sales in the energy storage sector. In terms of profitability, our battery business's growth margin rose to a historic high of 36% in the fourth quarter of 2023, up 27.7 percentage points year-over-year. Moreover, we achieved a second consecutive quarter of net income from battery, recording a net income of $6.62 million in the fourth quarter of 2023, a notable improvement compared to a net loss in the same period last year. For full year 2023, our battery business generated revenues of $133 million, soaring by 40.4% year-over-year. We delivered a full year operating income of $10.44 million, with a net income of $13.37 million from the battery before.
Accordingly, we will strategically monitor both sectors, while further expanding our sales in energy storage sector.
In terms of profitability, our Patriot business. This gross margin rose to history.
Very high of 36% in the fourth quarter of 2023 up 27, seven percentage points year over year.
Moreover, we achieved a second consecutive quarter of net income from Patriot business recording a net income of $6 $62 million in the fourth quarter of 2023, and notable improvement compared to a net loss in the same period last year.
Full year 2023, our bakery business generated revenues of $133 million soaring.
Soaring by 44% year over year.
We deliver a full year operating income of $10 $44 million with a net income of $13 $37 million.
Jiewei Li Thierry: Unknown Attendee, Jiewei Thierry, Xiangyu Pei, Yunfei Li, CBAK Energy Technology Inc. In 2023, our business has achieved different stages in all aspects. As we continue to advance battery technology and increase the production of large-scale water-flow lines to meet customer needs, we have accumulated a stable customer base. Currently, we are among the top three home storage suppliers in Europe and one of the world's largest heat and cooling equipment manufacturers, FITMA. Unknown Speaker, Unknown Speaker, Unknown Speaker. We cannot disclose the company's name.
From the Batesville business.
Based on the tissue.
Yeah.
Alright, and our Finance committee, Yeah, what was that coupon that she's on our portfolio.
They don't want mine bolt ons to the indenture as usual got all three models with Samsung.
And Mark will talk with you so commodity like not what coke with unity <unk>.
Oh, no I'm, not talking on foot and ankle and Michelle.
So you've got three that are going.
Corn on corn.
Cornerstone to pick them up.
So we bought a cumulative pre tax income.
Can you talk a whole lot you don't come in and talk to and I'm going to some greater or more.
<unk> hallmark.
Yeah, Jimmy I know why you don't own uncle and Lasalle.
That's what we called him from product quality.
Hi.
Yeah, Hi, Dr cellular afterwards.
Jiewei Li Thierry: Based on this, we are currently discussing business cooperation with Canadian electric vehicles. We hope to reach an agreement and announce relevant developments to shareholders and investors as soon as the customers agree. Not only that, but we are also looking forward to cooperation with the two car companies in India in 2024.
Well my HIFU, Oh don't treat other intensive.
Uh huh.
And I think going forward as well.
Thank you Mickey.
Peter its economy.
That's what I'm talking about good John about some.
So I'm glad that you touched on some of those oil he wasn't going to suddenly pattern.
It feels that cohort Toni I think we've got some cool Don Conkle.
<unk> someone do that.
Jiewei Li Thierry: This series of cooperation and potential cooperation opportunities have proved that our battery technology and product quality have won the recognition of the world's most prestigious battery companies. In the future, we will continue to strive for technological innovation, improve our product competitiveness, and provide customers with safe and reliable products. In 2023, we will make significant strides in our business operations on all fronts, achieving progress at various stages. Through consistent requirements for battery technologies and production ramp-up, we effectively fulfill customer orders and have nurtured a loyal, stable client base. We have fostered deep and robust partnerships with industry leaders worldwide, including Buseman Group, a leading provider of residential energy storage applications into Europe, and one of the world's largest manufacturers of heating and cooling, Anker Innovations, the largest third-party accessory supplier for Apple-incorporated products.
Well put it well.
Hi, all along you didn't go with tablets.
Yeah, sorry, I can unpack on corridor.
You said a Florida.
You did a cortisol.
But as you could tell me a lot.
As usual.
Oh I.
So you can keep it up.
Whaler Wow Macdonald Keith you Julien.
Can you talk about chunky things only when coke.
Call that comes in.
In 2023, we made significant strides in our business operations on all fronts, achieving progress at various stages.
Through consistent refinement of battery technologies and production ramp up.
Typically fulfill customer orders and have nurture a lawyer stable client base, we have fostered deep and robust partnerships with industry leaders worldwide, including views My group, a leading provider of residential energy storage application into Europe, and one of the world's largest manufacturers of shooting.
And cooling systems.
And can the innovations the largest third party accessory supplier for Echo incorporated's products, how to attack the largest supplier of outdoor portable energy storage globally and parent company of Jefferies.
Jiewei Li Thierry: Harlow Tech, the largest supplier of outdoor portable energy storage globally and parent company of Jackery. PowerOAK, the world's leading portable power station manufacturer and the parent company of top-rated portable power supply brands Blue TTI, and India-based Ensure Energy, among others. We have also forged a partnership with the largest battery manufacturer in Europe. However, due to confidentiality obligations, we cannot disclose their identity for now.
Paolo AK, the world's leading portable power station manufacturer and the parent company of top rated portable power supply strength Blue GTR and.
In India base to ensure energy among others.
We have also forged a partnership with the largest battery manufacturer in Europe. However, due to confidentiality obligations, we cannot disclose their identity for now. In addition, we have been negotiating with key stakeholders in Canada's electric vehicle industry exploring potential collaborations.
Jiewei Li Thierry: In addition, we have been negotiating with key stakeholders in Canada's electric vehicle industry, exploring potential collaborations with the intention of formalizing agreements. We will keep our shareholders and investors informed of these developments after securing consent from Alkai. Furthermore, we expect to establish a partnership with a leading India-based scooter manufacturer in 2024. These partnerships and potential alliances demonstrate the broad recognition of our battery technologies and product excellence by top-tier players in the global battery sector. Moving forward, we will remain committed to technological innovation to bolster our product competitiveness, delighting customers with safe and reliable products. Unknown Attendee, In terms of order demand, as of March 8, 2024, we and Dalian and Nanjing's two main production bases and the company's lithium-ion material supplier Haichuang have reached an order total of 7.7 billion yuan, about 1.07 billion US dollars. In addition, we have made good progress in disclosing customer orders in the past. As of March 8, 2024, the number of orders we have made with Draminha reached about 6,160,000 yuan, or about 8.57 million US dollars. The number of orders with the Faceman Group reached 2.13 billion euros, or about 1.95 billion US dollars.
With the intention of formalizing agreements.
We will keep our shareholders and investors in the form of these developments after securing consent from our clients.
Furthermore, we expect to establish a partnership with a leading India based school term manufacturers in 2020 for these partnerships and potential alliances demonstrate the broad recognition of our battery technologies and product excellence by top tier players in the global Patriot sector.
Moving forward, we will remain committed to technological innovation to bolster our product competitiveness delighting customers with safe and reliable products based on the tissue.
Total balance sheet go down.
This is true also.
Talking about it.
Michael Lapides Goldman Polyalcohol, 19, I'm not going to rush on hand.
So.
You can see is higher now cornerstone hi, Tang yen dollar <unk> gel for document ancillary Bob I'll hit on key young Renminbi, Yeah, you Darling team you might draw.
So I wanted to of course, you Piero dose cohort inbounds on that metric.
Sure.
I was talking about as well now call me a hot chocolate.
You can parse out yeah little chat E bike militia right right yeah.
Rob I want remind you placed a multi partner.
Jiewei Li Thierry: In addition, we have made good progress in disclosing customer orders in the past. As of March 8, 2004, the number of orders we have made with Draminha reached 6,069,000 yuan, or about 8.45 million US dollars. In addition to the cooperation orders with DLMH, FISMA, and JINPENG, we have also received a series of orders from Anker. The current order amount has reached 73.55 million RMB, about 10.24 million U.S. dollars.
Not at all.
Are you, saying Oh, yeah, yeah yeah.
So what room central could you talk about that.
So our son restructured ourselves.
The panel forgotten banking right.
Yeah, Sandy I don't know since you're one of them would be.
Yeah.
So it's a warmer.
So what are you doing on Neal Hot summer.
Tim called out exactly about what well know Carlo to quote unquote.
On <unk> can you tell somebody with a y.
Jiewei Li Thierry: These orders, which have continued to grow, not only show our influence in the global market but also set a solid foundation for the company's future development. Turning to our order demand, as of March 8, 2024, we have reported RMB 771 million, or approximately $107 million in the combined value of orders we have received but have yet to fulfill across our two main production facilities, Beidalian and HITRANCE. Our budget team is Jiewei Thierry. Additionally, we have made substantial strides in our previous disclosed client initiative. As of March 8, 2024, our collaboration with PowerOAK has brought Earth's orders amounting to roughly RMB61.6 million, or approximately $8.57 million. Our partnership with Wilsman Group has generated orders totaling €213 million, or approximately $195 million. Furthermore, our cooperation group, the world's largest scooter and electric tricycle manufacturer, has delivered orders amounting to roughly RMB 60.69 million, or approximately $8.45 million.
This is the one megawatt.
So now looking at that point in time, instead of a woman central should have come through.
But as a father.
Yes without equal.
Turning to our order demand as of March eight 2024, we have reported RMB $771 million or approximately $107 million in the combined value of orders, we have received but have yet to fulfil across our two main production facilities.
In Nanjing and high teens.
Okay Eddie materials.
Additionally, we have made substantial strides in our previous disclosed client initiatives.
March eight 2024 hour collaboration with power <unk> has brought us orders amounting to roughly RMB 61, six media or <unk>.
<unk> 8000.
$57 million.
Our partnership with <unk> group has generated orders totaling 213 million euros or approximately $195 million.
Furthermore.
Arranging.
We're the largest distributor inventory.
Try and circle manufacturer task.
Orders amounting to Robyn.
Six <unk> 2016.
While approximately $8 45.
Jiewei Li Thierry: In addition to orders from these collaborations, we have progressively secured substantial orders amounting to RMB 73.55 million, or approximately $10.44 million. This consistent growth in our development volume affects not only our global market performance but also leads to a firm foundation for the company's future. Next, I will introduce the company's progress in the field. In the third quarter of 2023, our company successfully realized the production of large-diameter nano batteries and is one of the few companies in the world that has a large-scale production capacity of lithium-ion batteries. Our lithium-ion battery production line is currently based in Nanjing Production Base and has a capacity of 0.5 GW. Since the launch of mass production, we have not asked for a renewable battery. At present, we...
In addition to orders won applications, we have program separately.
Substantial orders from entering operations.
Welcome to RMB 70, $355 million prompt a checkpoint.
Okay.
Consistent growth in North Dakota, Okay.
Our global marketing for us.
A firm foundation.
Future advancement.
Okay.
Oh I meant what I said is a concern.
Pardon me that's intact.
I mean I understand your antifungal at all on the call.
<unk> hung ocean carrier Andrew knots.
Hum.
So essentially ratio put whether it's your doctor, but not in Chicago and Washington.
Well my money's attention sometimes yes.
In 19, or sometimes you do.
You don't know Linda do you want to do that.
Sure.
Downtown Eli.
And she couldn't go into.
Well my merchant.
One of them.
With Centurylink GTE similar total drive topline you quite some time not venture that sometimes China.
Jiewei Li Thierry: Therefore, we are actively discussing with investors to expand the production of lithium-ion batteries. At the same time, we are also developing a larger model of auxiliary lithium battery. At present, the 40140 model battery is in phase A, while the 46120 model battery is in phase B.
You said home should come.
Coming back to Johan <unk> tension.
Paul Krump.
Yesterday.
<unk> yard.
Okay.
Turning to you.
Our young children are pseudo yard.
Jiewei Li Thierry: We expect that in the second half of 2024, Unknown Speaker, Brian Lantier, Unknown Attendee, Jiewei Thierry, Xiangyu Pei, Yunfei Li, CBAK Energy Technology Inc. Next, let me walk you through our latest R&D developments. In the second quarter of 2023, we successfully commenced mass production of large cylindrical sodium ion batteries, emerging as one of the few Our sodium ion battery production lines are currently located at our Nanjing facility, which features a 0.5 gigawatt hour capacity. Since we commenced mass production, demand for our sodium ion batteries has outstripped supply. As a result, we have been actively engaging with PE investors to ramp up sodium ion battery production capacity. In the meantime, we have also been developing larger cylindrical lithium-ion battery models, including model 40140 and 46120. Model 40140 is in the prototype A sample stage, and model 46120 is already in the prototype B sample stage.
To answer three P&C as well.
Well I mean, you guys are the Austin chalk on yet.
Ooh yard and they see all the attention it doesn't go beyond.
Beyond Japan.
Gee downtown hotels, Yeah, Yeah, sure John countries should skew towards him.
Oh Gee intelligence.
It sounds like you know how conoco he also a gamble.
Next let me walk you through our latest R&D developments in the second quarter of 2023, we successfully commenced a mass production of largest surgical sodium <unk> bakeries emerging as one of the few companies worldwide with the capacity to mass produce lithium ion batteries.
Our sodium on basically production lines are currently located at our 19 facility, which features eight five gigawatt hour capacity.
Since we commenced mass production demand for our sodium <unk> has.
Has outstripped supply.
As a result, we have been actively engaged engaging with PE investors to ramp up sodium <unk> bakery production capacity.
In the meantime, we have also been developing larger synergy co lithium ion battery models, including models for <unk> and for six months Youll model for one for all is in prototype a central stage and model for six months you always already in prototype be simple stage, we expect model.
For six months, you owe to compete prototype be simple stage and become ready for mass production by the latter half of 2024.
Jiewei Li Thierry: We expect model 46120 to complete the prototype B sample stage and become ready for mass production by the latter half of 2024. We will continue to fine-tune these models in response to market demand dynamics, potentially leading to modifications before the start of production. In addition, we have also made relevant arrangements and plans in the field of energy generation. At present, we have three production lines in Dalian. The main production line is the 206050 lithium-ion battery. Unknown Attendee, Jiewei Thierry, Xiangyu Pei, Yunfei Li, In order to meet the needs of our customers and to alleviate the situation of a large number of factories not being able to supply electricity, we have rented a battery factory located in Shangqiu, Henan Province in 2023 to produce 26700 models of batteries.
We will continue to fine tune. These models in response to market demand dynamics potentially leading to modifications before the start of production.
Nishu.
So July one.
How does that sound groupon on social selling Roundup point gregoire.
Yeah, well my grandfather, and sometimes that TV sunpower sometimes.
There are sometimes harder they already understand how about this until it <unk>.
So on young patent on Croissant, all ETE Washington.
I'm, Matt Coss, Utah, Guangzhou, and Kantar confluence of events, you should well maybe hardly Sundance Utah.
So until that second half.
You somehow Arnaud Chilean anything other than shoot Montana, Changzhou contact about China.
Josh noncore months on coupon coupled as usual.
Two top tier.
It turns out all the time now.
When it comes out one could call Dr. Thompson corneal scarring compound.
Hum.
You only went down telephone handset.
According to some time, sorry, often anything harder you increasingly bench than we thought.
Alex you're right, sometimes blood is rental tension on Amit.
Hum portion is sometimes the dentition 19, if you can talk about China and battle to Austin downtown.
Jiewei Li Thierry: At present, the capacity of the factory in Shangqiu is 0.5 gigawatts, which can meet the needs of some of our customers. This measure further increases our capacity and provides customers with more stable and reliable product supply. In terms of Nanjing factories, we have two production lines in Nanjing No. 1 factory. One is a fixed production line, and the other is a cylindrical production line with the number 32140.
You don't need to tell sometime not infusion.
So corn harvest time, one kind of data you don't know Austin.
So 19, Archie somewhat stronger.
Concluding acquired Sungard patent law.
The tempo of ongoing publishing all zone.
But al Shabaab awesome.
Some of that did you guys talk about funding some of our thinking.
Dongseo Amazon consumer cohorts, you George I think in fact current Utah finally sums of money to call. These attention.
Jiewei Li Thierry: Another is the ability to produce nano-diphenyl-based batteries. When two production lines produce lithium batteries at the same time, the capacity of Nanjing I-Q factory will reach two billion kilowatts. When one of the two production lines is short-circuited, Unknown Attendee, Xiangyu Pei, Yunfei Li, Xiangyu Pei, In addition, the Nanjing-2 project is in the construction phase, and three large factories are planned to be built. It is expected that after all the work is completed and put into use, the total production capacity will reach 18 billion tons. The first factory of the project has been sealed and is currently undergoing internal renovation.
Well my tongue cheeks youll, sometimes could you can you just tell them, sometimes Shelby you chair of our minimum goal being recorded.
Yeah.
Cool.
Yeah on the portal.
We have also strategically optimize dollar production capacity with a well coordinated production line layout currently our target facilities. We operate three production lines primary manufacturing model to 665 old medium.
Those flights bakeries with a total annual production capacity of one gigawatt hour to better address customer needs and mitigate supply shortages at our Italian facility caused by excessive demand in 2023, we leased a bakery plant located in Shanshal colon for producing module to six 7% <unk>.
Jiewei Li Thierry: We want to increase the production of sodium nitrate or lithium-ion batteries according to customer requirements at the factory. In the future, we want to continue to optimize production layout and improve production efficiency to ensure that we can flexibly respond to market changes and client order volume fluctuations. We have also strategically optimized our production capacity with a well-coordinated production line layout. Currently, at our Dalian facility, we operate three production lines, primary manufacturing model 26650, medium iron, false plate, and between them, with a total annual production capacity of one gigawatt hour to better address customer needs and mitigate supply shortages at our Daliang facility caused by excessive demand. In 2023, we leased a battery plant located in Shangqiu, Henan for producing Model 2670O battery.
To date, our Changzhou facility is equipped with a production capacity of <unk> five gigawatt hour sufficient to fulfill part of our customer demand.
This strategic move further boosted our production capacity, ensuring a more stable and reliable supply of products to clients.
Regarding our 19 facility. The 19 Phase one project consists of two production lines one dedicated to <unk>.
Sort of model suite, two one for all synergy called lithium ion batteries and the other outfit should produce either cynical lithium batteries or surgical sodium ion batteries the projects capacities up to to get the hours. When both lines are producing lithium ion batteries are up to one five gigawatt hours.
When one production line is dedicated to sodium <unk> basically production.
Furthermore, construction of our <unk> phase two project is in full swing with three large factories in the pipeline. Once all three are completed and operational the total capacity of 19 phase II project is expected to be up to 18 gigawatt hours. Thus.
Jiewei Li Thierry: Today, our Shangqiu facility is equipped with a production capacity of 0.5 GWh, sufficient to fulfill part of our customer demand. This strategic move further boosts our production capacity, ensuring a more stable and reliable supply of products. Regarding our Nanjing facility, the Nanjing Phase 1 project consists of two production lines, one dedicated to the production of Model 32140 synergistic lithium-ion battery, and the other outfit should produce either cylindrical lithium batteries or cylindrical sodium ion batteries. The project's capacity is up to 2 gigawatt hours when both lines are producing lithium-ion batteries, or up to 1.5 gigawatt hours when one production line is dedicated to sodium- Furthermore, construction of our Nanjing Phase 2 project is in full swing, with three large factories in the pipeline. Once all three are completed and operational, the total capacity of Nanjing Phase 2 is expected to be up to 18 gigawatt hours.
Thus far the first factory has been looked at.
Interior decoration is underway, we will determine whether to outfit. This factory was production lines for sodium iron ore lithium ion batteries based on customer demand.
Moving forward, we will further optimize our production line layout to enhance production efficiency, ensuring that we can respond swiftly to market.
As the market shifts in order fluctuations.
Tissue.
Based on these issues.
Okay.
Oh, okay.
I will continue.
So on that I saw.
California is also up.
Leveraging shop.
So youll hear in some central challenging some Chow Tai Chi.
So you're talking about putting in T Center household use ha high Pine you in fact on our coastal corridor cohorts vehicles.
Called a special meeting.
I'm going to I'm not sure when we're going through time hunger Nate.
<unk> car, Ts, where youll should die down I was hoping to see.
We don't talk about <unk> 17, a countertop from Fannie Tomo Nicole.
Jiewei Li Thierry: Thus far, the first factory has been moved, and interior decoration is underway. We will determine whether to outfit this factory with production lines for sodium ion or lithium ion batteries based on customer demand. Moving forward, we will further optimize our production line layout to enhance production efficiency, ensuring that we can respond swiftly to the market, market shifts, and order fluctuations. In general, in the background of the decline of the battery industry in the entire environment, our battery industry still shows a strong growth pattern and resilience.
So it seems to vary sometimes knowledge.
So somehow knowing that its eugene.
Oh, My God CGM Nonrandom young.
You don't go too far that vehicle it seems on the ocean.
Some are already asking in Wilmington tissue type outside of China.
Nope I met with her rule.
T O.
<unk> talk cohort Shanghai cortisol.
Got quite our my gosh, how solar is in constant currency.
Hello.
<unk> is the only one.
Oh, My God, we like I said, Huntsville don't know volatility than that anyway.
That's useful.
In summary, despite a tepid macro economy environment and downward pressures across the bakery sector.
Jiewei Li Thierry: This growth is not only reflected in financial data but also reflected in our company's stable customer structure and abundant re-order orders. More importantly, our company has gained sufficient recognition for its leading position and technical advantages in the industry. Among them, the most advanced battery factories in Europe have become our customers. As one of the first companies to have the production capacity of nanoparticle batteries, we have a huge potential and competitive advantage in the field of new energy.
Our bakery business consistently demonstrated robust growth momentum and resilience in the full year 2023.
<unk> was reflected both in our strong financial metrics and in the stability of our client base and the wealth of water is in our pipeline.
More importantly to company's industry leadership, and technological age has been fully acknowledged but across the industry evidenced by the adoption of our products by the most advanced <unk> facility in Europe.
As a pioneer in the sodium ion battery production, we possessed immense potential and competitive advantages in the renewable energy field.
Jiewei Li Thierry: In 2024, we will continue to increase investment in R&D and energy production and plan to cooperate with more world-class customers to further expand our market share and improve the global influence and visibility of our company. We believe that these investments will help us maintain a leading position in future market competition and establish a good foundation. In summary, despite the challenging macroeconomy environment and downward pressures across the batteries, our battery business consistently demonstrated robust growth momentum and resilience in the full year 2023. This vitality was reflected both in our strong financial metrics and in the stability of our client base and the wealth of orders in our pipeline. More importantly, the company's industry leadership and technological age have been fully acknowledged across the industry, evidenced by the adoption of our products by the most advanced battery facilities in Europe. As a pioneer in sodium ion battery production, we possessed immense potential and competitive advantages in the renewable energy field.
Looking ahead to 2024, we will further increase our investments in research development and production capacity.
Also by fostering more and deeper collaborations with globally. We know clients, we will further augment our market share and elevate the company's global inference and visibility. We are confident that these synchronized endeavors. We will we will segment our position as a front runner in the competitor.
Industry for years to come.
Okay.
The hotel Monaco, Paul Geraghty Samsung.
As I said, how its outcomes without high will be out soon.
Now, let me turn the call over to our CEO, Mr. Li who will provide details on our financial performance.
Thank you everyone for making time to join our earnings conference call today.
As our CEO mentioned earlier, we concluded the year with a robust fourth quarter financial performance from our bakery business, where we achieved a double digit increase in net revenues and positive income for the second consecutive quarter.
We are pleased to see continued growth momentum in our bakery business.
Building on our solid fundamentals, we remain confident in our growth trajectory through 2024 and anticipate a full year net profit for our battery business. We will provide more details on our net income guidance at the appropriate time.
Jiewei Li Thierry: Looking ahead to 2024, we will further increase our investments in research, development, and production capacity. Also, by fostering more and deeper collaborations with globally renowned clients, we will further augment our market share and elevate the company's global influence and visibility. We're confident that these synchronized endeavors will establish our position as a frontrunner in the competitive industry for years to come. Next, I would like to invite our CFO, Mr. Jiewei, to introduce the company's financial performance to investors.
Turning now to <unk>, our current base material unit, which we strategically acquired in 2021 at the time of the acquisition hydrants boosted a strong client base and the higher level of revenue.
Following the acquisition.
<unk>, Hi changes core management team and refrain from interfering in his day to day operations. We have no addition, no financial obligations to high teens and is a financial health will not materially affect our financial standing of our spectrum.
Jiewei Li Thierry: Now, let me turn the call over to our CEO, Mr. Li, who will provide details on our financial performance. Thank you, everyone, for making the time to join our earnings conference call today. As our CEO mentioned earlier, we concluded the year with a robust fourth quarter financial performance from our battery business, where we achieved a double-digit increase in net revenues and positive income for the second consecutive quarter. We are pleased to see continued growth momentum in our beta. Building on our solid fundamentals, we remain confident in our growth trajectory through 2024 and anticipate a full year net profit for our battery business. We will provide more details on our net income guidance at the appropriate time. Turning now to HITRANS, our current battery material unit, which we strategically acquired in 2021. At the time of the acquisition, HITRANS had a strong client base and a higher level of revenue. Following the acquisition, we retained HITRANS' core management team and refrained from interfering in its day-to-day operations.
Only reflected in our consolidated financial statements.
It's why we have focused on reporting financial results solely from our bakery business in our earnings release and earnings conference call to provide investors and shareholders with a clear understanding of our performance.
We're currently talking with private equity investors for hydrants, and sodium I'm basically business.
And hope to complete a private placement financing to support the development of our business.
These investors whether they are interested in high teens or the sodium <unk> bakery business.
Consistent valuing.
Evaluating the individual businesses materials.
Materials and on sodium <unk> at more than the current market capitalization of our entire public company.
Notably their valuations do not take into account our call lithium basically business, indicating that our market value is currently significantly under estimated.
I will now provide an overview of our 2023 fourth quarter financial results in the interest of time I will be presenting abbreviated highlights only.
We encourage you to refer to our press release issued earlier today for complete details.
Jiewei Li Thierry: We have no additional financial obligations to HITRANS, and its financial health will not materially affect the financial standing of our company, as is only reflected in our consolidated financial statement. That's why we have focused on reporting financial results solely from our battery business in our earnings release and earnings conference call to provide investors and shareholders with a clear understanding of our performance. We're currently talking with private equity investors for high trends and sodium. I'm basically, and we hope to complete a private placement financing to support the development of our business. These investors, whether they're interested in hydrogen or the sodium ion battery business, consistently valuing the individual businesses, materials, and materials and Unknown Attendee, Jiewei Thierry, Xiangyu Pei, Yunfei Li, C Notably, their valuations do not take into account our core lithium battery business, indicating that our market value is currently significantly underestimated.
In the fourth quarter, our total net revenues increased by three 2% year over year to $56 $2 million.
Net revenues from sales of batteries ratio $36 8 million a year over year increase of 39%.
Our total gross profit grew 235, 3% year over year to $12 7 million.
Resulting in a gross margin of 22, 6% compared to 7% in the prior year period.
Gross profit for the bakery business increased by 478% year over year to $13 $2 million.
With gross margin climbing to 36% from eight 3% in the prior year period.
Our total operating loss amounted to $5 9 million.
Compared to an operating loss of $8 8 million in the prior year period.
Net loss attributable to shareholders of CVR energy after deducting the change in the fair value of warrants was $4 8 million compared.
Jiewei Li Thierry: I will now provide an overview of our 2023 fourth quarter financial results. In the interest of time, I will be presenting abbreviated highlights on, but we encourage you to refer to our press release issued earlier today for complete detail. In the fourth quarter, our total net revenues increased by 3.2% year-over-year to $56.2 million. Net revenues from sales of batteries reached $36.8 million, a year-over-year increase of 30.9%.
Compared to a net loss of $11 7 million.
In the prior year period.
Net income from the bakery business was $6 6 million.
<unk> to net loss of $6 4 million in the same period of 2022.
As we mentioned earlier, we have a large number of prestigious clients around where however, due to continued cash agreements we cannot disclose their names without their consent going forward, we will actively communicate with them as part of our customer disclosure, we hope to be able to disclose more client names to our shareholders in <unk>.
Jiewei Li Thierry: Our total gross profit grew 235.3% year over year to $12.7 million, resulting in a gross margin of 22.6% compared to 7% in the prior year period. Growth profit for the battery business increased by 470.8% over the year to $13.2 million, with growth margin climbing to 36% from 8.3% in the prior year period. Our total operating loss amounted to $5.9 million compared to an operating loss of $8.8 million in the prior year.
Painful.
In conclusion, our solid fundamentals will continue to provide a solid foundation for basically for our business going forward, enabling us to strike a healthy balance between growth and profitability.
That concludes our prepared remarks ill now open the call for questions.
Go ahead.
Thank you we will now begin the question and answer session to ask a question. Please press star one one on your telephone and wait for a name to be announced.
If you would like to cancel request please press <unk>.
Star one again.
Okay.
As a reminder to ask question. Please press star one to one to help you short silence for questions have been collected.
Jiewei Li Thierry: The net loss attributable to shareholders of CBAK Energy after deducting the change in the fair value of warrants was $4.8 million, compared to a net loss of $11.7 million in the prior year period. Net income from the battery business was $6.6 million, compared to a net loss of $6.4 million in the same period of 2022. As we mentioned earlier, we have a large number of prestigious clients around the world. However, due to confidentiality agreements, we cannot disclose their names without their consent.
First question.
<unk> comes from Brian <unk> from Zacks small cap research. Please go ahead.
Okay.
Good evening, gentlemen, I just wanted to hone in a little bit on the gross margin.
Do you feel like the gross margin in the fourth quarter.
What is that going to be a sustainable gross margin going forward.
Jiewei Li Thierry: Going forward, we will actively communicate with them as part of our customer disclosure. We hope to be able to disclose more client names to our shareholders in 2024. In conclusion, our solid fundamentals will continue to provide a solid foundation for our business going forward, enabling us to strike a healthy balance between growth and profitability. That concludes our prepared remarks.
And was principally driven by pricing on your products and some of the new contracts or was it more on the input side as costs have come down for some of your inputs.
Okay.
Although diego in Kenosha, Guangdong minimally now mentioned Altice is key to consider Molly.
She telecom cushy, but Jim James <unk> Sidoti <unk> co tissue demand.
Oh, gosh functioning <unk> Chihuahua months Jaeger <unk> hook holds a bout.
Operator: We will now begin the question and answer session. To ask a question, please press star 11 on your telephone and wait for a name to be announced. If you'd like to cancel your request, please press star 11 again.
I'll talk more about multifunction hedging way cheap holiday shifts in sort of central to ensure temperature.
Yeah.
And while I say that.
So let me respond to your question Ryan.
I think as you may be aware that the current limitation in the bakery market.
Operator: As a reminder, to ask questions, please press star 11. There'll be a short silence while questions are being collected. The first question comes from Brian Lantier from Zagg Small Cap Research. Please go ahead.
<unk> intense.
Key players in this industry keep lowering DAU their price to gain much more orders and customers.
We are completely different.
Our baytree's boosted a feature of highly stable and high safe.
Brian Lantier: Good evening, gentlemen. I just wanted to hone in a little bit on the gross margin. Do you feel that the gross margin in the fourth quarter was, is that going to be a sustainable gross margin going forward? And was it principally driven by pricing on your products and some of the new contracts? Or was it more on the input side, as costs have come down for some of your input? The first question is about the interest rate.
Safe characteristics and our biggest clients up to three years testing.
Completely satisfied by the by the performance of our bakery products, that's why they're willing to keep us a high price.
At this market condition.
Coming back to a question we believe that.
Being affected by the current market condition.
The price will also go down in a long term, but we are still confident it at the gross margin.
Jiewei Li Thierry: We know that the interest rate for the fourth quarter has increased significantly. Is the interest rate sustainable? Is the reason for the increase due to the acquisition of new contracts? Or is it due to other factors, such as a drop in costs? I'll answer this question.
That we will present to you in the coming reporting pure rate will still be higher than the market average.
Okay.
Great. Thank you.
I know we've talked in the past about long term capacity goals and I know thats a little bit.
Jiewei Li Thierry: Let me respond to your question, Brian. I think, as you may be aware, that the current competition in the battery market is very intense, and key players in this industry keep lowering their prices to gain much more orders and customers. We are completely different.
Influx right now because it will be based upon whether you are producing lithium batteries or sodium batteries, but do you have a any.
Long term capacity goals for 2020 for 2025.
That you can share with us at this point.
A moment ago, <unk> Tsang Chi Tung and adhesion Norman <unk> DAU come into Chung from intuition is important human T O G G Sebastian channel each incident.
Jiewei Li Thierry: Our batteries have boosted a feature of highly stable and high safety characteristics. And our biggest clients, after three years of testing, are completely satisfied by the performance of our battery products. That's why they're willing to give us a high price in this market condition. Unknown Speaker 0, Coming back to your question, we believe that, being affected by the current market condition, the price will also go down in the long term, but we are still confident that the growth margin that we will present to you in the coming reporting period will still be higher than the market average. Great, thank you.
<unk> your question on Monday to inkjet, Hey, listen when shots Ty G Siddhartha.
So not only will own M D. Each hung Chi Tung patient G class emotional machine the JV since you've taken time efficient manner.
Okay.
Oh.
General and lighter weight is hardly go quietly technologically ticketing and hold all of that I think when Sheila.
The other woman.
On the <unk>, you can cope with the acre hurdle.
Brian Lantier: And I know we've talked in the past about long-term capacity goals, and I know that's a little bit in flux right now because it will be based upon whether you're producing lithium batteries or sodium batteries. But do you have any long-term capacity goals for 2024-2025 that you can share with us at this point? In the past, we have talked about the improvement of long-term production capacity. We have also noticed some fluctuations in production capacity.
Can you cope with the Eagles future of the Honeywell booties on them.
<unk> hundred <unk> sure about how long do the dishwasher Sudan diligent budget.
D R.
Jonathan you undertook a coco Chanel route to Illinois.
The agenda <unk> young Thai cooler.
<unk> and blood alcohol noma.
<unk> was a year or two the uninstall usual evolution.
No Gabe.
The T cell.
Jiewei Li Thierry: We are producing lithium-ion batteries and also lithium-ion cells. So I would like to ask, in 2024-2025, for the improvement of long-term production capacity, do we have any new information to share with them? Unknown Speaker.
<unk>.
<unk> hi.
The agenda to rejigger agenda do.
But what are the developer.
And under <unk>, two <unk> hundred <unk> venture so kudos.
Jiewei Li Thierry: Unknown Speaker Tian, Brian Lantier, Unknown Attendee, Jiewei Thierry, Xiangyu Pei, Yunfei Li, CBAK Energy Technology Integrated, Unknown Attendee, Jiewei Thierry, Xiangyu Pei, Yunfei Li, CBAK Energy Integrated, Okay. The growth of our production capacity is based on cooperation with customers. The demand for customers is steadily increasing, and the production capacity of our previous layout is used to build the factory's infrastructure.
So there's no general.
<unk> and <unk>.
Yourself.
Mhm.
Oh, well so in terms of capacity grows well we have that.
<unk> increased our capacity based on our cooperation with our clients and also we increase it according to the needs of our clients.
That is why in the past years, we have steadily ramp up our capacity in different production facilities.
Jiewei Li Thierry: Based on the new input of customers in 2023 and 2024, we have already explained in the previous report that there are many new big customers coming in today. In order to meet the demands of big customers, we will continue to improve our production capacity. Another thing is the lithium-ion battery. This is our new liquid. Due to the lack of low-temperature and low-rate performance of lithium-ion batteries, we launched a new product, the Li-ion battery.
And as you can see from our rate 2024 to 225, they poach we have introduced.
So big customers in the past E H and the introduction of the <unk>.
Custom managed well also.
Boost our well require us to boost our production capacity each so that we can well meet their demand.
Jiewei Li Thierry: The performance of our customers is also very good. Therefore, our expectation of improving production capacity is also very high. Or, Hmm. Well, so in terms of capacity growth, we have, Secondly, increased our capacity based on our cooperation with our clients. And we also increase it according to the needs of our clients.
In the future we are going to continue to increase our production capacity and when it comes to it does so D. In.
That to me well I have to say this is a better read their injuries.
Great future for sodium <unk>.
Some good features that lithium ion battery cannot compete for example, it is suitable to be used in low temperature conviction exit.
So aimed at being chiller believe that we will also.
Jiewei Li Thierry: So that is why in the past years, we have steadily ramped up our capacity in different production facilities. And as you can see from our 2024 to 2025 reports, we have introduced lots of big customers in the past year, and the introduction of big customers will also boost our well require us to boost our production capacity so that we can well meet the demand. So in the future, we are going to continue to increase our production capacity. And when it comes to the sodium battery, well, I have to say this is a battery that enjoys a great future for sodium ion batteries. It has some good features that the lithium ion battery cannot compete with. For example, it is suitable to be used in low temperature conditioning effects.
So that delayed increase and expand the production capacity of silicon and better reach and we have a good explanation for that.
Let me let me at one point as we mentioned in our report.
We have three major factories under construction for 19 phase III.
And the first.
Factory has been grouped it.
So we are doing in interior construction at this moment.
Everything goes well, we will have one production line.
This factory in 2024.
But if.
We cannot determine if it will be producing a sodium ion batteries or lithium ion batteries the size up to client demand and also where we're also talking to private equity investors about financing on the <unk> project. So that would also affect our decision making.
Jiewei Li Thierry: So in the future, we believe that we will also steadily increase and expand the production capacity of the sodium ion battery, and we have a good expectation for that. Let me make one point, as we mentioned in our report, that we have three major factories under construction for Nanjing phase two. And the first factory has been routed.
So.
It is a decision that we will make in this year and.
A lot of the factors affect this decision making.
Yeah.
Okay, great. Thank you very much I appreciate that.
Last question I have is I guess outside investment you could give us some sort of idea as to how advanced season negotiations or do you think this is a or we could hear something in the first half of 'twenty 'twenty four or the back half of 2024.
Jiewei Li Thierry: So we are doing interior construction at this moment, and everything is going well. We will have one production line for this factory in 2024. But if it's, we cannot determine if it will be producing sodium ion batteries or lithium ion batteries; it's up to current demand. And also, we are also talking to private equity investors about financing the sodium ion project. So that would also affect our decision making. So, say it's a decision that we will make this year and a lot of factors will affect this decision. Great, thank you very much. I appreciate that.
Regarding high trends or a sodium investments.
I'll now like would hold to the farmer.
Two <unk> one on Goldman Samsung move soon.
<unk>.
Some of the coaches and Tokyo.
<unk>, Oh, Jacob pumps on them, which empower <unk> mapping so it sounds a bit high tronc was at day 90 in CIT, a J if I'm in the torture omission shadow sword that assuming the Shanghai <unk>, which is the shop on NIM and I'll go back to understanding the Tom Palmer.
Well, let me respond to this question, we hope that we can allow something really positive in the first half of 'twenty 'twenty four base really depending on the.
Brian Lantier: The last question I have is, I guess, on outside investment. If you could give us some sort of idea as to how advanced these negotiations are, that would be great. Do you think this is a we could hear something in the first half of 2024 or the back half of 2024, either regarding high trends or a sodium investment? Can you share with us about the current negotiation with potential investors? What stage are we at now? For example, are we able to reach an agreement in the first half or second half of 2024 with Hichron or lithium-ion batteries?
Private equity investors.
I can take information I can share is that a lot of the investors from China are very interesting in our sodium on baytree's because we are almost the only one that can mass produce the largest synergy <unk> bakeries.
But we're also.
A lot of the math with them right now is investing in a new bakery plant is very expensive and.
And we need to do.
Discuss with them about how much financing, we need from them and what structure.
Sure the best need from US and also what I'll also doable for them.
And table.
Negotiation, but everyone is very interested.
Okay.
Jiewei Li Thierry: Well, let me respond to this question. We hope that we can announce something really positive in the first half of 2024, but it's really dependent on the private equity investors.
Great. Thank you.
Thank you for the questions once again to ask a question. Please press star one one on your telephone.
Seeing no more questions in the queue, let me turn the call back to Mr. <unk> Li for closing remarks.
Jiewei Li Thierry: I can share the information I can share is that a lot of investors from China are very interested in our sodium ion batteries because we are almost the only one that can mass produce them. But we're also doing a lot of the math with them right now because investing in a new battery plant is very expensive. And we need to discuss with them about how much funding we need from them and what structure you the best need from earth and also what is also doable for them. Unknown Attendee, Jiewei Thierry, Xiangyu Pei, Yunfei Li, CBAK Energy Technology Inc. Great, thank you. Thank you for the questions. Once again, to ask questions, please press star 11 on your telephone. Seeing no more questions in the queue, let me turn the call back to Mr. Yunfei Li for closing remarks. Transcription by ESO.
Personal care food choices.
Okay.
Thanks, Nicole and financing and other offerings.
It is seasonal and cyclical blue bar.
Yeah.
Okay.
Thank you.
Thank you operator, and thank you all for participating in today's call and for your support we appreciate your interest and look for war to reporting to you again next quarter on our progress.
Thank you all again this concludes the call you may now disconnect your lines.
[noise].
Yeah.
[music].
Yunfei Li: Translation by — Thank you all for attending today's conference. We look forward to seeing you again next week. Thank you, operator, and thank you all for participating in today's call and for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Thank you all again. This concludes the call. You may now disconnect the line. Brian Lantier, Unknown Executive, Unknown Attendee, Jiewei Thierry, Xiangyu Pei, Yunfei Li, CBAK Energy Technology Inc
Okay.
[music].
Okay.
So.
Tim.
[music].
Okay.
[music].
Okay.
Okay.
[music].
Okay.
Okay.
[music].
Okay.
[music].
Yes.
Yes.
[music].
Okay.
So.
Tim.
Yes.
[music].
Okay.
[music].
Yes.