Q1 2024 CBAK Energy Technology Inc Earnings Call
Okay.
Speaker Change: Good day, ladies and gentlemen, thank you for standing by and welcome to the feedback energy technologies first quarter 2024 earnings Conference call.
Speaker Change: Currently all participants are in listen only mode.
Speaker Change: We will conduct a question and answer session and instructions will follow at that time.
Speaker Change: As a reminder, we are recording today's call. If you have any objections you may disconnect at this time.
Now I would turn the cold or has that changed do you have any CFO and secretary of the board of C back energy Mr. Lee. Please proceed.
Thank you operator, Hello, everyone welcome to CVR Energy's first quarter 2024 in this conference call. Joining us today are Mr. Bailey, Chief Executive Officer of CVR Energy myself, Chief Financial Officer, and Secretary of the Board and Jennifer I'll interpret chair or general engineered Mr children can't wait.
As for the Q&A section.
We released our earnings we released our results earlier today. The press release is available on the company's IR website at IR <unk> com to see and that's where all that's come to a small surface relay of this call will also be available within a few hours in Ohio website.
Speaker Change: Before we continue please note that today's discussions will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.
Looking statements involve inherent risks and uncertainties as such.
The company's actual results may be materially different from today.
From the expectations expressed today.
Information regarding these and other risks and uncertainties, including the Companys public filings with the street.
It doesn't assume any obligations 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 lines in the U S doors with that let me now kind of Colbert to always see almost anything that necessarily will speak in Chinese and now which is great.
All that said your English really haven't started there's a whole bunch of ships.
Speaker Change: Oh go ahead.
Speaker Change: Well I mean.
Yeah.
Speaker Change: Great.
Hello, everyone. Thank you for joining our first quarter before our next conference call.
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You bet Bobby.
Yeah, Joe you're right.
First I would like to provide an overview of our performance in the first quarter. We are pleased to announce that we have commenced a year of 'twenty 'twenty four on a solid note.
Robust growth.
In the first quarter, our HOA business.
Recorded revenues of $44 84 million doors, a remarkable increase of 51, 5% compared to the same period last year, a strong start because that's a promising time for the year ahead.
Speaker Change: That's one of the page.
<unk> faced significant downward pressure with many of our competitors are experiencing declining gross margins and profits.
Terrific.
The trains.
She's got rapid growth, our company's strategic focus remains on the energy storage sector, especially at home energy storage portable energy storage.
Speaker Change: Consequently, our revenue from battery electric.
Electric vehicles declined two points to $48 million.
73, 6% year over year cemetery revenue from data rates using light electric vehicles decreased by 23, 3% to $151 million.
Speaker Change: Other hand, all revenues from waitressing, you're seeing energy storage applications grew tremendously to $42 $85 million, an impressive increase of 66% year over year.
Strong growth in our energy storage business.
It was the orders from high quality clients as propel improvement in our gross margins in the first quarter, our Patriot business achieved a historic high gross margin of 41, 2% an increase of 33 percentage points compared to the same period of last year.
Speaker Change: While net income from our Patriot business continues its work cacciatore from last year, reaching 11 $6 million to $8 million in the first quarter.
Elite.
From like $11 million seven year last year.
Speaker Change: This translates to 807 point distress.
Speaker Change: This translates to a 174 trees and quicker.
Switzerland is stuck mentioned net income for the entire prior year.
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Hello, everyone.
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Speaker Change:
Speaker Change: So Jim how would you acquire.
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Jim: Do you tend to like Boston Miami Beach.
So again you are right.
Kelly.
New York.
Now, let me delve into the specifics of our order demand as I've made a seventh 2024, we have recorded approximately 327 billion or approximately $45 2 million in combined battery of orders received yet to be fulfilled cross off with major production facilities in Dalian.
Bunching and Shaoxing.
Regarding all of its close to client relationships and soft mainly to 724 hour accumulation orders from Kimco group the largest manufacturer of school tourists and luxury try cycles worldwide total approximately RMB $28 million or approximately $8 42, my thoughts on our collaboration.
With Pollo vacate a global leader in portable energy storage technology, and a subset there with energy storage grant for OTT I reached approximately RMB 41 28 million.
So many five 7 million adults addiction or any.
Our older I suppose he was my group one of the Europe, Europe, Europe upstream household energy storage suppliers, a leading European manufacturer of it.
Jim: Teaching affording systems amounted junkrat.
Amounted to an impressive RMB 111 billion or approximately 153 b.
Simultaneously our orders was anker innovations one of the largest party accessories quietest Brooklyn.
Operators products also rich RMB $74 8 million.
Jim: At 10 point study suite.
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Pardon me.
Well thank you all.
I'm going to cover that whole wheat, corn country John Kocur.
Brazil will go.
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Yeah.
Furthermore, our client base in the industry.
This sector continues to expand we have received substantial orders from several key clients, which will strengthen our global market presence and increase our market share among them is our European bakery industry tried it with whom we are currently discussing future collaborations and negotiating confidential attitude of our freedoms, we hope to obtain the kind.
So consent to update investors shareholders and kept the market about the progress of these collaborations through a picture of kind of new channels.
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But yes part of it well see well done.
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Our CTO.
Do you see the kind of policy and that's how you can maintain that.
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Yeah. Thanks Sidney.
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You can pull out quite a bit.
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That's very useful.
Speaker Change: Yeah, you got it.
Julian when we got it wrong.
So.
I've got no doubt.
Turning to our research and development efforts, we remain committed to exploring to talk first about crosstie reassert myself the bakery market makers.
They are sharing new product innovations.
And with that came the development of our larger synergy cold lithium ion bakery.
Model for all one four is progressing smoothly.
Pending the dimensions of our Orange surgical basically this modal that'd be great.
Suppose energy density and cost effectiveness, providing clients with a more effective and safer solutions all company plans to procure a production equipment in the fourth quarter of 2024 and expect to formally launch mass production in the first quarter of next year, we believe that the introduction of this product.
It's going to bolster our market expansion efforts and drive an increase in sales based on tissue.
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Speaker Change: Over time.
Go ahead Tony.
You talked about how I see at whole foods.
Speaker Change: Oh, you're talking about in total was useful trying not my function and myself of course sorry.
Speaker Change: Sorry afternoon.
Tony: And all of our country.
Tony: Well, we're going to do here.
Oh, yeah, Okay cool with that molecule.
Sure.
Yeah, well it shows that all of them that they should use with a kind of a ship.
Meanwhile, our Patriot technology is gaining recognition as a condition of the market.
Attention from some tough competition.
Adding foreign companies longer supply right.
Addiction sufferings several foreign Giants have approached us about acquiring with our large surgical page with manufacturing technology.
In order to transfer we are currently conducting right compressive evaluation.
Considering the possibility of transferring or licensing out basically technology in certain pockets.
Tony: Sure.
Tony: So on my line so he's always been here.
So that's when it was just something that you don't know.
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Tony: Exactly.
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Tony: We don't put home cohorts in Kentucky.
Thank you Phil.
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Speaker Change: Got it.
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So where do you like that we like.
Speaker Change: So you don't want nothing more.
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Yes.
Speaker Change: You can quantify that.
Speaker Change: Yeah.
Okay.
Speaker Change: On base rates become more comments.
Speaker Change: So rich market, we will continue to strengthen our technology R&D and innovation in energy storage to meet the needs of various customer groups and the <unk>.
Growing demand for energy.
At the mall.
Served increasing interest in sodium each week.
Our vacation among phase III factories that sprint customers in Europe.
That's a space.
Speaker Change: One of the top and that's one of the first companies achieve mass production is up lots of surgical sodium Patriots. We are very excited about this trial. We are also in talks with several industrial investors and we're crossing investments once regarding separate financings for our sodium on Voyager aiming to promote sodium I'm basically its development.
And then the <unk> and.
Our lithium battery segment in future.
They're going to ship.
Speaker Change: Can you tell them that they do it totally right.
Speaker Change: So that's how I would guess yes.
Now, let me turn the call over to our CFO, Terry Lee, who will provide the teaching hours on our financial performance.
Thank you.
Thank you Mr.
And thanks, everyone for making time to join our earnings conference call. Today. We are delighted to report strong first quarter results marked by my sustainable growth and increase the profitability total net revenues increased by 38, 7% year over year, while net revenues from our battery business.
So a significant uplift of 51, 5% year over year in addiction. The gross margin jumped to 31, 9% from six 9% a year ago with the gross margin of our phase III business searching 30.3 percentage points year over year to 41, 2%.
Without our bottom line turned positive with a net income of $9 6 million doors and our net income from the Patriot business.
$11 7 million.
Positive for the third consecutive quarter, we believe that we will be able to achieve a net income from the bakery business of RMB $220 million or approximately $35 million.
The $215 million or approximately $34 $6 million for the full year of 2024. In addition, itunes or independently operated subsidiary that supplies lithium between materials also expense to breakeven or incurred on the flood losses. This year.
Another exciting news and we want to share with you we have to gather attention from multiple institutional investors. Currently we are in the process of due diligence with these institutional investors put investment approvals, while the progress of these transactions is uncertain due to the factors such as evaluations.
We hope to complete private financing this year.
It's frequently we will provide updates to investors shareholders and the capital market on relevance with government officials.
Official channels of our company.
I will now provide an overview of our 2024 first quarter financial results in the interest of time I won't be presenting.
I will be presenting abbreviated highlights only we encourage you to refer to our approach.
Our press release issued earlier today for complete details.
In the first quarter, our total net revenues increased by 38, 7% year over year to $58 8 million doors net revenues from sales of <unk> reached $44 8 million doors, a year over year increase of 51, 5%. Our total gross profit grew 546 three.
Year over year to $18 $8 million.
Resulting in a gross margin of 31, 9% compared to six point in a macro sense.
In the prior year period gross profit for the bakery business increased by 474, 4% year over year to $18 $5 million with gross margin climbing to 41, 2% from 10, 9% in the prior year period, our total operating income amounted to $10 $3 million.
From an operating loss of $2 $9 million in the prior year period.
Income attributable to shareholders of CVR energy with $9 $8 million compared to a net loss of $1 4 million in the prior year period net income from the Patriot business was $11 $7 million compared to your point $1 million in the same period of 2020 suite that concludes our prepared remarks.
Now open the call for questions. Operator. Please go ahead.
Thank you as a reminder to ask a question. Please press star one and one on your telephone and wait for your name to be announced until we've got your question. Please press star one and one again.
Once again, please press star one and one on your telephone and wait for your name to be announced did withdraw. Your question. Please press star one and one again thank you.
We're not going to proceed with our first question.
Okay.
Sure.
Two questions come from the line of Brian <unk> from Zacks small cap research. Please ask your question. Your line is opened.
Good evening gentlemen.
Congratulations on a really impressive performance.
If I could dive a little bit more into the gross margin Terry.
Is that a combination of factors here.
When you're signing the contracts the pricing that you're achieving from the customers and then the cost input falling.
Over the last year.
Speaker Change: Or if you could just give me a little bit more color as to how you were able to achieve gross margin improvement.
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Teachers downtown so it's one quarter now if I'm gonna gaining momentum of course, you can be all called <unk>.
Okay. So thank you for your question I'm going to explain there were two main reasons because this so the gross margin the fish fish points that if you compare it with the other leading battery manufacturer in the Chinese market. The gross margin is around 20%.
All right.
Margin is about 40% that is double the abbott reach in the Chinese market why well on the one hand, it is because our product quality has been well recognized by some big customers from Europe and from the U S.
This customer is at the high end customers they value try they value product quality over price and we have been in cooperation with them for four to five years, and we received almost zero customer complaint from that.
That is a very good testimony that how well our product has been recognized by Dan.
This is one of the reasons why they are willing to offer a good price to US and then secondly, just also because of the declining of the debt.
They'll go materially just as Brian just mentioned, yes, indeed, the coast of lithium carbonate has declined.
So Lee from the peak in 2022 soda.
Reduction in the material costs have also contributed to the increase of our gross margin.
Okay. All right. Thank you very much sand at market, yes, just to clarify the 20% gross margin for market appreciation of only four top players. If you are talking about medium size basically manufacturer.
Gross margin is somewhere between 50% to your 8% something like that.
Yes.
Great. Thank you very much.
And if I could ask a question more on the overall market itself anecdotally looking at some of your customers' products.
It looks like they are pushing a lot of their larger storage units for home storage and emergency storage system.
I wonder how that impacts you and I guess the demand for cells. It seems like as each unit is requiring more cells that will lead to additional purchases in higher volume.
Is that a trend you're seeing as well I guess from your customers.
On the one channel where the wind piece of junk E T cells aren't crew, who the Campinas shih-tzu without no wonder about the hotel need oxygen on attrition just to come.
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Speaker Change: Yeah.
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Speaker Change: Absolutely.
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Speaker Change: Good luck.
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Speaker Change: Noted continue to cheat.
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Total bummer.
Speaker Change: Okay.
Mhm.
Can you go to a conclusion.
We're 'twenty. So it seems like also the accounting Sam <unk> filling out swinging pathway. It's I mean, we don't talk a whole cereal, we honestly and kind of what your time what unions over the initial hold kind of where you are with what we want.
Hum.
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And yes, indeed, we observed the change in the market demand.
Speaker Change: Actually we also witnessed an increasing order in the household still reach to IDEXX.
Just as we have announced in our our media, but knees, we have already have our production our strategic plan that focused on 461 at four <unk>, which represents a big day.
Is a bigger dimension of the lithium battery.
We believe that it will be able to feel the pain in dogs.
And battery with a larger sized and if you have a look at the all the large cylindrical batteries like 26650, we have already achieved a stable market.
Sure or sell 43214 out we've already opened the market and receiving oldest gradually and then 440140, we have already entered into.
A full 6140, we've already entered into adult B type some poll a prototype.
<unk>.
Development stage.
Speaker Change: So yes, indeed, we have these.
Strategic plan well in place already and then are we.
Speaker Change: We are making this plan we are pitching careful consideration of the market demand and we're ensuring that our production will match the market demand and besides that.
To add is a 44014 it is predicted that we're going to start mass production in the first quarter of.
Oh.
I sure can.
Speaker Change: And to that of 225.
44614, we also have our plan in 2025.
Speaker Change: Okay great.
The last question if I could just.
Maybe ask about the.
Facility expansion, and where you stand on reaching your goals.
Five gigawatts of production capacity.
I guess at the end of 2024.
Hum number what did you do when tissue Guang will mention Trump way more about change the one piece just on the midterm core down she Moshe Nuncle tap Oh, maybe I don't know Joel shortage issue I'm sure you'd all he got.
Its finian thought though.
Hi, Linda Central Washington, some data will be out there.
Well when I played out about one of them, we're not going to Lynch I'm, Brian I'll, let you.
Let me respond to your question.
I think youre correct, we are preparing.
The additional five or six gigawatt hour.
Capacity by the end of this year.
We reported an hour.
In our full year 2023 earnings call.
Their first.
The large the first large factory in our phase III Nanjing project is already roofed. So what we are doing right. Now is we are procuring the equipment.
Facility are way up with well with procuring orders production equipment right now.
And the timeline.
Ryan, it's very smooth and we believe that older equipment will be ready by the end of this year.
So next year first quarter, we will start the production. So this is the time line.
No change.
Thank you for the update.
Thank you once again as a reminder to ask a question. Please press star one and one on your telephone and wait for your name to be announced.
Seeing no more questions in the queue, let me turn the call back to Mr. Young family for closing remarks.
Yes.
There's only X ray sensors.
Sure.
So the only thing that engine as a hobby.
Did I say Gee do.
We bought <unk>.
Thank you operator, and thank you all for participating in today's call enforced 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 your lines. Thank you.
Okay.
[music].