Q2 2024 CBAK Energy Technology Inc Earnings Call
Fuji Japan China
Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to CBAK Energy Technology's second quarter and the first half of 2024 earnings conference call. Currently, all participants are in 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 will turn the call over to Thierry Li, CFO and Secretary of the Board of CBAK Energy. Mr. Li, please proceed. Thank you, operator.
Operator: Good day, ladies and gentlemen.
Operator: Thank you for standing by and welcome to CBAK Energy Technology's second quarter and the first half of 2024 earnings conference call. Currently, all participants are in listen-only mode. Laser 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.
Speaker Change: Good day, ladies and gentlemen. Thank you for standing by and welcome to CBAK Energy Technology's second quarter and the first half of 2024 earnings conference call.
Speaker Change: Currently, all participants are in 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.
Operator: Now I will turn the call over to Thierry Li, CFO and Secretary of the Board of CBAK Energy. Mr. Li, please proceed.
Thierry Li: Now I will turn the call over to Thierry Li, CFO and Secretary of the Board of CBAK Energy. Mr. Li, please proceed.
Thierry Li: Thank you, operator, and hello everyone. Welcome to CBAK Energy's earnings conference call for the second quarter and the first half of 2024.
Thierry Li: Thank you, operator, and hello everyone. Welcome to CBAK Energy's earnest conference call for the second quarter of the first half of 2020. Joining us today are Mr. Yunfei Li, Chief Executive Officer of CBAK Energy, myself, the Chief Financial Officer and Secretary of the Board, and Jennifer, our interpreter. Our General Engineer, Mr. Xiu Junjian, will join us for the Q&A section. We released our results earlier today. The press release is available on the company's IR website at ir.cbak.com.cn, as well as from Newswire Services.
Thierry Li: Thank you, operator, and hello, everyone. Welcome to CBAK Energy's earnest conference call for the second quarter in the first half of 2024. Joining us today are Mr. Yunfei Li, Chief Executive Officer of CBAK Energy, myself, Chief Financial Officer and Secretary of the Board, and Jennifer, our interpreter.
Thierry Li: Joining us today are Mr. Yunfei Li, Chief Executive Officer of CBAK Energy; myself, Chief Financial Officer and Secretary of the Board; and Jennifer, our interpreter. Our General Engineer, Mr. Shodun Tian, is joining us for the Q&A section.
Thierry Li: We released our results earlier today. The press releases on this are available on the Communist IR website, ir.cbac.com.cn, as well as from NewsWild Services. A relay of this call will also be available in a few hours on our IR website.
Speaker Change: Our General Engineer Mr. Xiu Juntian will join us for the Q&A section.
Speaker Change: We released our results earlier today. The press release is available on the company's IR website at ir.cbak.com.cn, as well as from Newswire Services. A relay of this call will also be available in a few hours on our IR website.
Thierry Li: Before we continue, please note that today's discussion will contain four-looking statements made under the safe harbor provisions of the US Private Security Litigation Reform Act of 1995. Four-looking statements involved in hearing risks and uncertainties. As such, the Communist actual results may be materially different from the expectations expressed today.
Thierry Li: A replay of this call will also be available in a few hours on our IR website. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. The Private Securities Litigation Reform Act of 1995 for all of his statements involved in human risk and certainty. 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. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Also, please note that, unless otherwise stated, all figures mentioned during the conference call are in US dollars.
Speaker Change: 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.
Speaker Change: All of these statements involved in hearing risk and uncertainties.
Speaker Change: 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. The company doesn't assume any obligations to update any forward-looking statements except as required under applicable laws.
Thierry Li: First, the information regarding these and other risks and uncertainties is included in the Communist Public Fireways with the SEC. The company doesn't assume any obligations to update any four-looking statements except as required under people's rules.
Thierry Li: Also, please note that unless otherwise stated, all figures mentioned during the conference call are in US dollars.
Yunfei Li: Also, please note that unless otherwise stated, all figures mentioned during the conference call are in US dollars. 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 into English. Go ahead, Mr. Li.
Thierry Li: 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 into English. Go ahead, Mr. Li. Mr. Li, you may begin.
Thierry Li: With that, let me now tend to call over to our CEO, Mr. Yanfei. Mr. Li will speak in Chinese, and I will translate his comments in English. Go ahead, Mr. Li.
Thierry Li: Please only continue.
Yunfei Li: Hello everyone. Thank you for joining our earnings conference call for the second quarter of the year.
Yunfei Li: Hello, everyone. Thank you for joining us. This is the second quarter of 2024 and the first half of the year.
Speaker Change: Thank you. Thank you.
Yunfei Li: Hello everyone, thank you all for participating in our program.
Yunfei Li: 2024 Second Quarter and First Half Earnings Conference Call
Thierry Li: Hello everyone, thank you for joining our earnings conference call for the second quarter and first half of 2024.
Speaker Change: Hello everyone, thank you for joining our earnings conference call for the second quarter in first half of 2024.
Yunfei Li: The company's sales performance is once again at a new high in the second quarter of this year. The second quarter battery business revenue increased by 60% to $35.6 million. This has become a very rare phenomenon in the entire new energy industry.
Speaker Change: Let's continue.
Speaker Change: At the same time, sales performance once again reached a new high in the second quarter of this year. Revenue from the battery business in the second quarter achieved a year-on-year growth of 60%, reaching 35.6 million USD.
Speaker Change: Thank you.
Speaker Change: This has generally become an uneconomical image in the entire New South Yang industry, which is very rare.
Thierry Li: According to the income analysis, the income of the storage battery reached 33.57 million USD, which is 60% higher than before. Last year, the total revenue of electric vehicles, such as two-wheeled vehicles and three-wheeled vehicles, increased by 4.6 percent, and the total revenue of light electric vehicles, such as two-wheeled vehicles and three-wheeled vehicles, increased by 1.83 million dollars, which is 59% more than last year. , [inaudible] maintained its high position and reached 36.2% in the second quarter.
Speaker Change: Specifically from the revenue analysis, the income from energy storage batteries reached 33.57 million USD, a year-on-year increase of 60%.
Speaker Change: The revenue from passenger batteries reached $200,000, a 46% increase compared to the same period last year. The revenue from batteries for light electric vehicles such as two-wheelers and three-wheelers reached $1.83 million, a 59% year-over-year increase.
Speaker Change: From the perspective of revenue proportion, the company's main business is still primarily focused on energy storage.
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total of the total of the total of the So of August 1st, 2024, our two primary reproduction facilities in Dali and Nanjing have accumulated a substantial order backlog totaling 410 million yuan, or approximately 57 million US dollars, which remains undelivered.
Speaker Change: We believe that in the long term, energy storage will continue to be the main growth driver for the company.
Speaker Change: At the same time, we also expect a sharp increase in battery sales orders for two-wheelers and three-wheelers from the sports market in the second half of the year. In terms of profit, our battery business's gross profit margin continues to remain high.
Yunfei Li: In 2023, it increased by 20.9% and surpassed most competitors and fully reflected our battery quality and strength. This year, our battery business achieved a net profit of $11.68 million in the first quarter. This quarter, we created another net profit of $1.89 million in the battery business. This year, they have achieved net profits in two programs in a row. From the data from the first half of the year, the battery business in 2024 is expected to grow by 55% year-on-year, to 8,044,000 U.S. dollars, with a net profit of 39% and a net profit of 19,580,000 U.S. dollars.
Speaker Change: Maintained at a high level, reaching 36.2% in the second quarter, an increase of 29 percentage points compared to the restart of growth in 2023, and higher than most competitors, further demonstrating the quality and strength of our batteries.
Speaker Change: This year, our battery business achieved a net profit of $11.68 million in the first quarter. In this quarter, we once again created a net profit of $1.89 million in the battery business.
Speaker Change: This year, two consecutive milestones have already achieved net profit.
Speaker Change: Based on the data from the first half of the year, the battery business revenue in 2024 increased by 55% year-on-year to $80.44 million, with a gross margin of 39%, achieving a net profit of approximately $19.58 million.
Thierry Li: The company's sales performance reached unprecedented heights once again in the second quarter of this year. Revenues from our battery business surged to $35.6 million, representing a remarkable 60% year-on-year growth, an impressive feat given the overall pressures and downturns within the new energy sector. Here is a closer look at the revenue breakdown review; batteries for the need for energy storage sector generated $33.57 million, reflecting a 60% year on year increase. EV batteries contributed $200,000, marking a 46% rise compared to the previous year.
Speaker Change: The company's sales performance has reached unprecedented heights once again in the second quarter of this year. Revenues from our battery business surged to $35.6 million, representing a remarkable 60% year-on-year growth, an impressive feat given the overall pressures and downturns within the new energy sector.
Speaker Change: Here is a closer look at the Revenue Breakdown Reviews.
Speaker Change: Batteries for energy storage sector generated $33.57 million, reflecting a 60% year-on-year increase.
Speaker Change: EV batteries contributed $200,000, marking a 46% rise compared to the previous year.
Thierry Li: Batteries for light electric vehicles, including two wheelers and three wheelers, brought in $1.83 million, with a notable 59% year-on-year growth. However, revenues from the energy storage sector remain the dominant force in our revenue composition, and we anticipate it will continue to be a principal driver of our growth for the foreseeable future. Additionally, we foresee a significant uptake in sales orders for two-stroke and three-wheeler batteries from the Indian market in the latter half of this year.
Speaker Change: Batteries for light electric vehicles including 2-wheelers and 3-wheelers brought in $1.83 million, with a notable 59% year-on-year growth.
Speaker Change: Revenues from the energy storage sector remains the dominant force in our revenue composition and we anticipate it will continue to be a principal driver of our growth for the foreseeable future.
Speaker Change: Additionally, we foresee a significant uptick in sales orders for two-wheeler and three-wheeler batteries from Indian market in the latter half of this year.
Thierry Li: In terms of profitability, our battery business maintained a robust performance with a growth margin reaching 36.2% in the second quarter, an impressive 20.9 percentage points higher than the same period in 2023 and surpassing most competitors. This demonstrates the exceptional quality of our batteries and our strong market position. So far this year, our battery business achieved a net profit of $11.68 million in the first quarter, and we have sustained this positive trend with a net profit of $7.89 million in the second quarter, resulting in consecutive profitable quarters. For the first half of 2024, our battery division's revenue has increased about 55% year over year to $80.44 million with a gross margin of 39% and a net profit of approximately $19.58 million. Yunfei, thank you.
Speaker Change: In terms of profitability, our B2B business maintains a robust performance, with a growth margin reaching 36.2% in the second quarter, an impressive 20.9 percentage points higher than the same period in 2023 and surpassing most competitors.
Speaker Change: This demonstrates the exceptional quality of our batteries and our strong market position.
Speaker Change: So far this year, our battery business achieved a net profit of $11.68 million in the first quarter and we have sustained this positive trend with a net profit of $7.89 million in the second quarter, resulting in consecutive profitable quarters.
Speaker Change: For the first half of 2024, our battery division's revenue has increased by 55% year-over-year to $80.44 million with a gross margin of 39% and a net profit of approximately $19.58 million.
Yunfei Li: In terms of orders, as of August 1, 2024, our two main production bases in Dalian and Nanjing have received a total of 4.1 billion RMB in order to deliver the order, about 5.057 billion US dollars. For customers who have been disclosed in the past, as of August 1, 2024, the amount of orders we have made in cooperation with DLM has reached 66.4 million RMB, or about 930.39 million US dollars. For customers who have been disclosed in the past, the amount of orders we have made in cooperation with FACEMON has reached 2.13 billion US dollars.
Speaker Change: Regarding orders, up until August 1, 2024.
Speaker Change: Our two main production bases in Dalian and Nanjing have received orders totaling 410 million RMB, approximately 57 million USD.
Speaker Change: For customers who have already been disclosed, as of August 1, 2024
Speaker Change: We are working with Delami Sea to get orders.
Speaker Change: The amount has already reached 66.4 million RMB, approximately 9.3039 million USD. The order amount from the Facebook group is as high as 213 million EUR, approximately 233 million USD.
Yunfei Li: About 2.33 billion US dollars. For customers who have been disclosed in the past, the amount of orders we have made in cooperation with JINPENG has reached 62.64 million RMB. About 878 million US dollars. For customers who have been disclosed in the past, [inaudible] will continue to order and look forward to our new customers in the sports market will also continue to order in the second half of this year and self-office.
Speaker Change: Since the cooperation order amount with Jinpeng Group reached 62.64 million RMB, and 8.78 million USD with De Nan Ming Hai and FaceMon Group, apart from the cooperation orders with Jinpeng Group, our cooperation order amount with Anker has accumulated to
Speaker Change: 1.24 billion RMB, approximately 11.43 million USD. We expect these customers to
Thierry Li: As of August 1, 2024, our two primary production facilities in Dali and Nanjing have accumulated a substantial order backlog totaling 410 million yuan, or approximately $57 million, which remains undelivered. For our non-customers whose names were disclosed before, PowerOAK has placed orders amounting to approximately $66.4 million, or about $9.3 million. Guzman Group has secured orders worth a substantial 213 million euros, equivalent to approximately 233 million US dollars. Jingpen Group has committed to orders totaling around 62.64 million yuan, roughly $8.78 million.
Speaker Change: As of August 1st, 2024, our two primary production facilities in Dali and Nanjing have accumulated a substantial order backlog totaling 410 million yuan, or approximately 57 million US dollars, which remains undelivered.
Yunfei Li: For our non-customers whose names were disclosed before, PowerOak has placed orders amounting to approximately 66.4 million yuan, or about 9.3 million US dollars. Viewsman Group has secured orders worth a substantial 213 million euros, equivalent to approximately 233 million US dollars. Jincon Group has committed to orders totaling around 62.64 million yuan, roughly 8.78 million dollars. Additionally, the cumulative order volume with anchor has reached 103 million yuan, or approximately 11.43 million dollars. We anticipate continuing order placements from these established clients and optimistic about receiving substantial or new orders from the Indian market in the latter half of this year.
Speaker Change: For our non-customers whose names we've disclosed before, PowerOAK has placed orders amounting to approximately 66.4 million yuan, or about 9.3 million US dollars.
Speaker Change: Guzman Group has secured orders worth a substantial 213 million euros equivalent to approximately 233 million US dollars.
Speaker Change: Jing Peng Group has committed to orders totaling around 62.64 million yuan, roughly 8.78 million dollars.
Thierry Li: Additionally, the cumulative order volume with Anker has reached 103 million yuan, or approximately $11.43 million. We anticipate continued order placement from these established clients and are optimistic about receiving substantial new orders from the Indian market in the latter half of this year.
Speaker Change: Additionally, the cumulative order volume with Anker has reached 103 million yuan or approximately $11.43 million.
Speaker Change: We anticipate continued order placements from these established clients, and are optimistic about receiving substantial new orders from the Indian market in the latter half of this year.
Yunfei Li: In terms of R&D, our R&D team has completed the development of the large-diameter battery model 4.0.5. 9 The plan is to officially purchase production equipment in September this year 3 And will officially enter the mass production stage by March next year. The 40135 battery is a popular model in the current battery market, and the market demand is very sufficient.
Speaker Change: Mr. Wei, please go on
Mr. Wei: In terms of research and development, our R&D team has completed the development of the large cylindrical battery model 4.635.
Mr. Wei: Currently, the plan is to officially procure ecological equipment in September this year, and complete the equipment commissioning by March next year, officially entering the mass production stage.
Speaker Change: The 40135 model large cylindrical battery is currently a popular model in the battery market, with very strong market demand. After conducting thorough market research, we believe that the 40135 batteries we produce will fill the gap.
Thierry Li: After a thorough market research, we believe that the 40135 battery produced by us will make up for the shortcomings. Tianbu Market Current Needs, Unknown Executive, Jiewei Thierry, Yunfei Li, CBAK Energy Technology Inc. In terms of battery capacity, it has increased from 5% to 600%. Energy density increased by 10% to 20%, and cycle life increased by 30% to 50%. CN135, a large-capacitor battery, Chai is now expected to be placed at our Dalian production base.
Speaker Change: Fill the current market demand
Speaker Change: Vacancies are also expected to once again drive our sales to rapid growth. In terms of specific technical parameters, our 40135 battery compared to the 2026650 small cylindrical battery,
Yunfei Li: We have received a number of orders from the Indian market in Dali and Nanjing, or about 8.8 million dollars.
Speaker Change: The battery capacity has been increased by 5% to 600.
Speaker Change: Energy density increased by 10% to 20%, cycle life improved by 30% to 50%, the ecosystem of the 4135 large cylindrical battery.
Yunfei Li: Regarding research and development, our IND team has successfully completed the development of a new large-surgical battery model for 0135. We are on track to affectionately purchase production equipment in September of this year and plan to complete the equipment commissioning by March of the next year. With mass production scheduled to commence, they're shortly up there. The model for 0135 battery is highly anticipated in the current battery market, driven by strong demand. Based on our comprehensive market research, we are confident that the 40135 batteries will address existing market gaps and significantly boost our sales growth. In terms of technical specifications, the 40135 battery represents a substantial advancement over our current model 26650 battery, featuring a 500% to 600% increase in capacity, a 10% to 20% enhancement in energy density, and a 30% to 50% improvement in cycle life.
Speaker Change: The production line is expected to be placed at our Dalian manufacturing base.
Yunfei Li: Regarding research and development, our R&D team has successfully completed the development of a new large cylindrical battery model, 40135. We are on track to officially purchase production equipment in September of this year and plan to complete the equipment commissioning by March of the next year, with mass production scheduled to commence shortly thereafter.
Speaker Change: Regarding research and development, our R&D team has successfully completed the development of a new large cylindrical battery model, 40135. We are on track to officially purchase production equipment in September of this year and plan to complete the equipment commissioning by March of the next year.
Thierry Li: The Model 40135 battery is highly anticipated in the current battery market, driven by strong demand. Based on our comprehensive market research, we are confident that the 40135 batteries will address existing market gaps and significantly boost our sales growth. In terms of technical specifications, the 40135 battery represents a substantial advancement over our current model 26650 battery, featuring a 500% to 600% increase in capacity, a 10% to 20% enhancement in energy density, and a 30% to 50% improvement in cycle life. The production line for the Model 40135 battery is set to be established at our Dalian production base. Thank you.
Speaker Change: with mass production schedule to commence shortly thereafter.
Speaker Change: The Model 40135 battery is highly anticipated in the current battery market, driven by strong demand. Based on our comprehensive market research, we are confident that the 40135 batteries will address existing market gaps and significantly boost our sales growth.
Speaker Change: In terms of technical specifications, the 40135 battery represents a substantial advancement over our current model 26650 battery.
Speaker Change: featuring a 500% to 600% increase in capacity, a 10% to 20% enhancement in energy density, and a 30% to 50% improvement in cycle life. The production line for the model 40135 battery is set to be established at our Darling production base.
Yunfei Li: The production line for the model 40135 battery is set to be established at our darling production base.
Yunfei Li: In short, our battery business has continued to grow well in the first quarter. Whether in terms of sales revenue increase or Unknown Speaker 1, Unknown Speaker 2, Unknown Speaker 3, Unknown Speaker 4, Unknown Speaker 5,, Keep an optimistic outlook for the full-year profit of 2024 and hope to challenge the market again after the company's new 40135 battery is launched and achieve rapid growth in performance.
Speaker Change: Thank you, I will continue
Speaker Change: Overall, our battery business has continued the good growth momentum from the first quarter, both in terms of sales revenue increase and industry growth.
Speaker Change: Still in maintaining high profit margins and sustaining net profits
Speaker Change: The company has delivered a satisfactory answer. We still...
Speaker Change: Maintain an optimistic outlook for full-year profitability in 2024, and hope to capture the market after the launch of the company's new 40135 model battery, achieving rapid growth in performance once again.
Thierry Li: Overall, our battery business has sustained impressive growth momentum since the first quarter. The company achieved notable success with substantial increases in sales revenue, as well as maintaining robust gross profit margins and net profit. We are confident in our positive outlook for the full year of 2024. With the anticipated launch of our new Model 40135 battery, we are poised to capture market share and drive another surge in our sales performance. Thank you.
Yunfei Li: Overall, our beta business has sustained impressive growth momentum from the first quarter. The company has achieved notable success with substantial increases in sales revenue, as well as maintaining robust growth profit margins and net profits. We are confident in our positive outlook for the full year of 2024. With the anticipated launch of our new model 40135 battery, we are pleased to capture market share and drive another search in our sales performance.
Speaker Change: Overall, our battery business has sustained impressive growth momentum from the first quarter. The company has achieved notable success with substantial increases in sales revenue, as well as maintaining robust growth profit margins and net profits.
Speaker Change: We are confident in our positive outlook for the full year of 2024. With the anticipated launch of our new model 40135 battery, we are poised to capture market share and drive another surge in our sales performance.
Operator: Next, let me welcome our next speaker, Jiewei Li, to introduce the company's financial performance to investors.
Li Jiewei: Next, let's welcome our next speaker, Li Jiewei, to introduce the company's financial performance to investors.
Operator: Now, let me turn the call over to our CFO, Thierry Li, who will provide details on our financial performance. Thank you, Mr. Li, and thanks, everyone, for making time to join our earnings conference call today.
Li Jiewei: Now let me turn the call over to our CFO , Thierry Li, who will provide details on our financial performance.
Thierry Li: Thank you, Mr. Li, and thanks everyone for making time to join our earnings conference call today. As our CEO highlighted, our beta business has delivered impressive financial results for the second quarter, marking a double-digit increase in net revenues and achieving positive net income for the second consecutive quarter of 2024. We are delighted to witness ongoing growth momentum in our battery division, with our strong foundation. We will remain confident in our growth territory for the remainder of 2024 and anticipate achieving a robust full year net profit for our beta business.
Thierry Li: Thank you, Mr. Li, and thanks, everyone, for making time to join our earnings conference call today.
Thierry Li: As our CEO highlighted, our battery business delivered impressive financial results for the second quarter, marking a double-digit increase in net revenues and achieving positive net income for the second consecutive quarter of 2024. We are delighted to witness ongoing growth momentum in our battery division. With our strong foundation, we remain confident in our growth trajectory for the remainder of 2024 and anticipate achieving a robust full-year net profit for our battery business.
Thierry Li: As our CEO highlighted, our battery business has delivered impressive financial results for the second quarter, marking a double-digit increase in net revenues and achieving positive net income for the second consecutive quarter of 2024.
Speaker Change: We are delighted to witness ongoing growth momentum in our battery division.
Speaker Change: With our strong foundation, we remain confident in our growth trajectory for the remainder of 2024 and anticipate achieving a robust full-year net profit for our battery business.
Thierry Li: As previously noted, high trends, the raw materials manufacturing unit will acquire operates independently from our core beta business and doesn't directly affect the financial performance of our beta business. Aquile in 2021, primarily for investment purposes, high trends is currently experiencing net losses, which may influence our consolidated financial statements.
Thierry Li: As previously noted, HITRANCE, the raw materials manufacturing unit we acquired, operates independently from our core battery business and doesn't directly affect the financial performance of our battery business. Acquired in 2021, primarily for investment purposes, HITRANCE is currently experiencing net losses, which may influence our consolidated financial statement.
Speaker Change: As previously noted, HITRANS, the raw materials manufacturing unit we acquired, operates independently from our core battery business and doesn't directly affect the financial performance of our battery business.
Speaker Change: Acquired in 2021 primarily for investment purposes.
Speaker Change: HITRANS is currently experiencing net losses which may influence our consolidated financial statements.
Thierry Li: To provide investors with a clear understanding of our core beta business performance, this earnings release focuses specifically on the battery segment. We encourage investors to review the segment information section of our Form 102, where the performance of our beta business and high trends is presented separately.
Thierry Li: To provide investors with a clear understanding of our core battery business's performance, this earnings release focuses specifically on the battery sector. We encourage investors to review the segment information section of our Form 10-2, where the performance of our battery business and hydrants is presented separately. I will now provide an overview of our financial results for the second quarter of 2024. In the interest of time, I will be presenting abbreviated highlights only.
Speaker Change: To provide investors with a clear understanding of our core battery business' performance, this earnings release focuses specifically on the battery segment.
Speaker Change: We encourage investors to review the segment information section of our Form 10-2, where the performance of our battery business and hydrants is presented separately.
Thierry Li: I will now provide an overview of our financial results for the second quarter of 2024. In the interest of time, I will be presenting abbreviated highlights only. We encourage you to refer to our press release.
Speaker Change: I will now provide an overview of our financial results for the second quarter of 2024. In the interest of time, I will be presenting abbreviated highlights only. We encourage you to refer to our press release
Thierry Li: We encourage you to refer to our press release issued earlier today for the complete details. In the second quarter, our total net revenues increased by 13% year over year to $47.8 million. Net revenues from sales of batteries reached $35.6 million, a year over year increase of 60%. Our total gross profit grew 227% year over year to $12.7 million, resulting in a gross margin of 26.6% compared to 9.2% in the prior year period.
Thierry Li: issued earlier today for the complete details.
Thierry Li: Gross profit for the battery business increased by 276% year over year to $12.9 million, with growth margin climbing to 36.3% from 15.4% in the prior year period. Our total operating income amounted to $5.95 million compared to an operating loss of $3.77 million in the prior year period. Net income attributable to shareholders of CBAK Energy after deducting the change in fair value of warrants was $6.45 million compared to a net loss of $2.7 million in the prior year period. Net income from the battery business was $7.89 million compared to a net loss of $1.13 million in the same period of 2023.
Thierry Li: In the second quarter, our total net revenues increased by 13% year-over-year to 47.8 million dollars. Net revenues from sales of batteries reached 35.6 million dollars, a year-over-year increase of 60%. Our total gross profit grew 227% year-over-year to 12.7 million dollars. Resulting in a gross margin of 26.6% compared to 9.2% in the prior year period. Gross profit for the battery business increased by 276% year-over-year to 12.9 million dollars. With gross margin climbing to 36.3% from 15.4% in prior year period. Our total operating income amounted to $5.95 million compared to an operating loss of $3.77 million in the prior year period.
Speaker Change: issued earlier today for the complete details.
Speaker Change: In the second quarter, our total net revenues increased by 13% year-over-year to $47.8 million. Net revenues from sales of batteries reached $35.6 million, a year-over-year increase of 60%.
Speaker Change: Our total gross profit grew 227% year-over-year to $12.7 million, resulting in a gross margin of 26.6% compared to 9.2% in the prior year period.
Speaker Change: Gross profit for the battery business increased by 276% year-over-year to $12.9 million.
Speaker Change: with growth margin climbing to 36.3% from 15.4% in the prior year period.
Speaker Change: Our total operating income amounted to $5.95 million compared to an operating loss of $3.77 million in the prior year period.
Thierry Li: Net income attributable to shareholders of CBAK Energy after deducting the change in fair value of warrants was $6.45 million compared to a net loss of $2.7 million in the prior year period. Net income from the battery business was $7.89 million compared to a net loss of $1.13 million in the same period of 2023.
Speaker Change: Net income attributable to shareholders of CBAK Energy after deducting the change in fair value of warrants was $6.45 million, compared to a net loss of $2.7 million in the prior year period.
Speaker Change: Net income from the battery business was $7.89 million compared to a net loss of $1.13 million in the same period of 2023.
Thierry Li: In summary, we have secure net income for the second consecutive quarter in 2024 and achieve an exceptionally high gross margin. As we prepare to begin mass production of the new model 40135, we anticipate a significant increase in order volumes. We are confident that this will drive continuing growth in our sales revenues.
Thierry Li: In summary, we have secured net income for the second consecutive quarter in 2024 and achieved an exceptionally high growth margin. As we prepare to begin mass production of the new Model 40135, we anticipate a significant increase in order volumes, and we are confident that this will drive continued growth in our sales revenue.
Speaker Change: In summary, we have secured net income for the second consecutive quarter in 2024 and achieved an exceptionally high growth margin. As we prepare to begin mass production of the new model 40135, we anticipate a significant increase in order volumes.
Thierry Li: That concludes our prepared remarks. Let's now open the call for questions or greater. Please go ahead.
Speaker Change: We are confident that this will drive continued growth in our sales revenues. That concludes our prepared remarks.
Operator: That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead.
Speaker Change: Let's now open the call for questions. Operator, please go ahead.
Operator: 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. Do we throw 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. Do we throw your question? Please press star one and one again.
Operator: Thank you. As a reminder, to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Once again, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. We are now going to proceed with our first question. The questions come from the line of Brian Lantier from Zach's Small Cap Research. Please ask your question.
Speaker Change: Thank you. As a reminder to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question, please press star 1 and 1 again. Once again, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you.
Operator: Please stand by while we come by the Q&A roster. This will take a few moments. Thank you.
Operator: We are now going to proceed with our first question.
Speaker Change: We are now going to proceed with our first question.
Brian Lantier: The questions come from the line of Brian Landtiv from Zach Small Capresearch.
Brian Lantier: Please ask your question.
Speaker Change: The questions come from the line of Brian Lantier from Zach's Small Cap Research. Please ask your question.
Brian Lantier: Good evening, gentlemen. I was wondering if I could just ask a question about what you're seeing in the market right now. You're still posting pretty attractive margins relative to competitors. Are you seeing an increased competition for bids? I guess that's the first question about the market landscape right now.
Brian Lantier: Good evening, gentlemen. I was wondering if I could just ask a question about what you're seeing in the market right now. You're still posting pretty attractive margins relative to competitors. Are you seeing any increased competition for bids? I guess that's the first question about the market landscape right now.
Speaker Change: Good evening, gentlemen.
Speaker Change: I was wondering if I could just ask a question about what you're seeing in the market right now. You're still posting...
Speaker Change: pretty attractive margins relative to competitors.
Brian Lantier: Are you seeing any increased competition for bids? I guess that's the first question about the market landscape right now.
Brian Lantier: Good evening, gentlemen. First of all, my first question is to ask what you're seeing in the market. In your interview, I saw that you are very well-witted and well-witted. I want to see what you're seeing in the market right now.
Operator: Good evening, everyone. First of all, my first question is, how do you view the market? I saw in your financial statements that you have maintained a very good profit margin and are superior to competitors. I would like to see how you view the current market pattern. Do you think future competition will be further intensified? Yunfei Li, CBAK Energy Technology Inc.
Brian Lantier: Good evening everyone, first of all, my first question is how do you view the market? I noticed in your financial statements that your profit margins are very well maintained and are better than your competitors. I would like to know how you view the current market landscape. Do you think competition will further intensify in the future?
Brian Lantier: Do you think the future will come to an end?
Operator: We will ask Yunfei to answer questions about sales and marketing. Then we will ask Mr. Tian to answer questions about the industry.
Brian Lantier: Q. What is your opinion on the market? Q. What is your opinion on the market? Q. What is your opinion on the market? Q. What is your opinion on the market? Q. What is your opinion on the market? Q. What is your opinion on the market? Q. What is your opinion on the market? Q. What is your opinion on the market?
Speaker Change: Regarding the issues of the sales outside the market, we will have General Yun from the North to mainly address them, and then General Tian can add any industry-related insights.
Yunfei Li: About profit, in this industry, we have always made products that are different from each other. Our products have also been fully recognized by customers. So far, we have exported products to customers in Germany, and so far, there have been no complaints.
Speaker Change: 关于利润这一块呢,因为我们...
General Tian: It can be said that in this industry, we have always been making products related to X.
Speaker Change: Our product has also been fully recognized by our customers.
Speaker Change: So far, the products we have exported to our customers in Germany have not received any complaints. Our customers also maintain a very favorable competitive advantage in the industry.
Yunfei Li: Customers have maintained a very strong competitive advantage in the same industry. Our third-party products have also been very leading in their industries among our top companies. So customers' recognition of our products has also guaranteed our product profits. In the future, our clients have raised higher requirements for us. They may continue to increase our orders in the future. In the future... I guarantee that our product, Yunfei Li, CBAK Energy Technology Inc.
Speaker Change: Our 32 products are also among the leading ones in our top companies in the industry. Therefore, the recognition of our products by customers ensures the profitability of our products.
Speaker Change: Future customers have raised higher demands for us, and our orders may continue to increase in the future. We will ensure the quality of our products.
Speaker Change: If the aspect of quality can always maintain a competitive advantage
Unknown Executive: Mr. Tian, please tell us about the current situation in the market. What's your name?
Speaker Change: Mr. Tian, could you please provide additional information about the overall market competition landscape and the current situation?
Unknown Executive: Okay. Our company is based on small power and small storage. So, the batteries are all made of cylindrical, small volume, flexible products. The 40135 we made this time is based on the products of R660 and 32140. It is a supplement to the product. As Mr. Yunfei Li, CEO of CBAK Energy Technology Inc. said, we focus on differentiation in the market. We dig deep into the needs of our customers and make sure that our products are the best-selling products in the market.
Mr. Tian: Our company is focused on small power and small energy storage, so the batteries we use are cylindrical and relatively small in size.
Mr. Tian: A convenient product.
Speaker Change: For this time, the 40135 product is a supplement to the products 2660 and 32140.
Yunfei: As our CEO Mr. Yunfei Li says, in the market, we mainly focus on differentiation and deeply exploring customer needs.
Yunfei: Make our product the single champion in the current market
Unknown Executive: In this way, we ensure that we are relatively ahead of our competitors in terms of quality. Second, we ensure that our products meet the quality standards of almost all customers. In this way, we ensure that we are in control of the market and the profit margin.
Mr. Yunfei: In this way, we ensure that we maintain a relative lead in quality compared to our competitors.
Mr. Yunfei: Secondly, ensuring quality assurance and meeting customer expectations with almost zero complaints will help us maintain our market position and profit margin advantage.
Unknown Executive: Okay, so in terms of profitability, well, the reason that we can maintain a substantial gross profit and gross margin is because we have always sought differentiated development in the industry. And the differentiated products that we provide have also gained recognition from the customers. As you can see, in all the products that we export to Germany, we have achieved zero complaints from the customers.
Operator: Good day ladies and gentlemen. Thank you for standing by and welcome to CBAK Energy Technology's second quarter and the first half of 2024 earnings conference call. Currently all participants are in listen only mode.
Mr. Yunfei: That's all for today.
Mr. Yunfei: Okay, so in terms of the profitability, well, the reason that we can maintain a substantial
Mr. Yunfei: gross profits and gross margins because we have always seek for differentiated development in the industry and the differentiated products that we provide have also gained the recognition from the customers.
Operator: Laser 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.
Thierry Li: Now I will turn the call over to Thierry Li, CFO and Secretary of the Board of CBAK Energy. Mr. Li, please proceed. Thank you operator and hello everyone.
Mr. Yunfei: As you can see in all the products that we export to Germany, we achieved a zero complaint from the customers.
Thierry Li: Welcome to CBAK Energy's earnings conference call for the second quarter and the first half of 2024.
Unknown Executive: And because of that, we also maintain a notable competitive edge with our data peers in the same industry. And the same situation happens in the tricycle sector, too. And it is because of the recognition from the clients that allows us to maintain good profitability in the markets. And because of that, we believe that our customers will continue to raise higher requirements on us. But on our side, we will do our utmost to ensure high product quality.
Mr. Yunfei: And because of that, we also maintain a notable competitive edge with our data peers in the same industry. And the same situation happens also in the tricycles.
Thierry Li: Joining us today are Mr. Yunfei Li, Chief Executive Officer of CBAK Energy, myself, Chief Financial Officer and Secretary of the Board, and Jennifer, our interpreter, our General Engineer, Mr. Shodun Tian, we're joining us for the Q&A section. We released our results earlier today. The press releases on this available on the Communist IR website, ir.cbac.com.cn, as well as from NewsWild Services. A relay of this call will also be available in a few hours on our IR website.
Mr. Yunfei: It is because of the recognition from the clients that allow us to maintain a good profitability in the market.
Mr. Yunfei: And besides that, we believe that our customers will continue to raise higher requirements on us, but on our side, we will do our utmost.
Thierry Li: Before we continue, please note that today's discussion will contain four-looking statements made under the safe harbor provisions of the US private security litigation reform act of 1995. Four-looking statements involved in hearing risks and uncertainties. As such, the Communist Actual Results may be materially different from the expectations expressed today. First, the information regarding these and other risks and uncertainties is included in the Communist Public Fireways with the SEC. The company doesn't assume any obligations to update any four-looking statements except as required under people's rules. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in US dollars.
Unknown Executive: And we believe that that will also lay a solid foundation for us to acquire and secure more orders from customers. And besides that, we have another colleague who also adds that, if we take a look at the market landscape, we've always tried to differentiate ourselves from the product portfolio, especially in terms of the small power and also storage battery. That is why we have been focused a lot on producing cylindrical batteries with flexible combinations.
Mr. Yunfei: to ensure a high product quality and we believe that that will also lay a solid foundation for us to acquire and secure more orders from the customers.
Speaker Change: And besides that, we have another colleague who also adds that.
Yunfei Li: If we have a look at the market landscape, we have always tried to differentiate ourselves from the product portfolio, especially in terms of the small power and also storage battery.
Speaker Change: If we have a look at the market landscape, we've always tried to differentiate ourselves from the product portfolio, especially in terms of the...
Yunfei Li: With that, let me now tend to call over to our CEO, Mr. Yanfei. Mr. Li will speak in Chinese and I will translate his comments in English. Go ahead, Mr. Li. Please only continue. Hello everyone. Thank you for joining our earnings conference call for the second quarter of the year. [inaudible] I am Brian Lantier, Unknown Executive, Jiewei Thierry,[inaudible] Jiewei Thierry, Unknown Executive, Jiewei Thierry, Unknown Executive, Jiewei Thierry Unknown Executive, Jiewei Thierry, Unknown Executive, Jiewei Thierry Unknown Executive, Jiewei Thierry, Unknown Executive, Jiewei Thierry, Unknown Executive, Jiewei Thierry, Unknown Executive, Jiewei Thierry So of August 1st, 2024, our two primary reproduction facilities in Dali and Nanjing have accumulated a substantial order backlog totaling 410 million yuan, or approximately 57 million US dollars, which remains undelivered.
Yunfei Li: That is why we have been focused a lot on producing cylindrical batteries with flexible combination, and we are I think we are developing a new model that is called 40135, and we believe that it is a very good supplement to our existing model 265.0 and 32142, 1.4.0, 1.4.0. And then just as Mr. Yunfei Thierry mentioned that differentiation allowed us to secure our market position and also we are we are we are we are debating deep into the customer's big mount that is why we have been able to maintain market number one in the small segmented markets and also we are superior for the quality allowed us to maintain a good market share and also our profitability.
Speaker Change: small power and also
Speaker Change: storage battery. And that is why we are we have been focused a lot on producing cylindrical batteries with flexible combination. And we are adding we're developing a new
Unknown Executive: And we are adding, we are developing a new model that is called 40135. And we believe that it is a very good supplement to our existing models 26650 and 32142, 140, 140. And just as Mr. Yunfei Li mentioned that differentiation allows us to secure our market position. And also, we are dipping, we are, we were diving deep into the customer's demand. That is why we have been able to maintain market number one in the small segmented markets. And also, our superior product quality allows us to maintain a good market share and also our profitability. That's it for our answer. Thank you for your question.
Speaker Change: model that is called 40135 and we believe that it is a very good supplement to our existing model 26650 and 32142.
Speaker Change: Wang Bo'ou, Wang Bo'ou, and just as Mr. Yunfei Li mentioned that differentiation allows us to
Speaker Change: Secure our market position and also we are dipping we are we were diving deep into the
Speaker Change: customers demand. That is why we have been able to maintain market number one in the small segmented markets. And also, we, our
Speaker Change: Superior product quality allows us to maintain a good market share and also our profitability.
Yunfei Li: That's it for our answer. Thank you for your question.
Brian Lantier: Thank you very much. I appreciate that.
Brian Lantier: Thank you very much. I appreciate that.
Speaker Change: That's it for our answer. Thank you for your question.
Brian Lantier: If I could ask a couple of questions about the new model batteries, the 40135, do you think that will principally serve your existing customer base in the storage business and then also regarding the analysis for the fast charging 32140. I think maybe when might we hear something about an A sample on that product, and I guess if you have any technical information that you can share about the fast charging 32140, because I'm wondering about heat dissipation and things like that. We just not heard a lot of detail on that. Thank you.
Speaker Change: Thank you very much. I appreciate that. If I could ask a couple of questions about the new model batteries, the 40135, do you think that will principally serve your existing customer base in the storage business?
Speaker Change: and then also regarding the announcement for the fast-charging 32140
Speaker Change: I think maybe when might we hear something about an A sample on that product?
Speaker Change: And yeah, I guess if you have any technical information that you can share about that, the fast charging 32140, because I'm wondering about heat dissipation and things like that. We just not heard a lot of detail on that battery yet.
Yunfei Li: Okay. Okay Q.
Brian Lantier: If I could ask a couple of questions about the new model batteries, the 40135, do you think that will principally serve your existing customer base in the storage business? And then also, regarding the announcement for the fast-charging 32140, I think maybe when we might hear something about an A sample for that product? And yeah, I guess if you have any technical information that you can share about that fast charging 32140, because I'm wondering about heat dissipation and things like that. We just haven't heard a lot of detail about that battery yet. Thank you.
Speaker Change: Thank you.
Speaker Change: Okay, I would like to ask a few questions about this new battery model 40135. My first question is: Is it primarily serving our existing energy storage business customers?
Brian Lantier: Okay, I would like to ask a few questions about the new battery model 40135. The first question I would like to ask is, is it mainly for our existing customers in the storage business?
Brian Lantier: The second question I would like to ask is, regarding the fast charging model 32140, when will we be able to hear some news about the development of product A? And regarding the fast charging model 32140, I would like to ask if there is any specific technical information you can share with us, because I am more interested in the problem of heat dissipation.
Speaker Change: Then, I also want to ask about the fast-charging model 32140. When can we expect to hear some news about the development of the A-sample for this product? Additionally, regarding the 32140 fast-charging battery model, I would like to know if there is any specific technical information you can share with us. I am particularly interested in the heat dissipation issue, but we haven't heard much detail about the 32140 battery so far. Could you share some information about this model?
Brian Lantier: But we haven't heard a lot about the details of the 32140 battery yet, so I would like to ask if you can share them with us.
Unknown Executive: ??40135????????????????? All right, jumping right on it.
Speaker Change: Thank you.
Speaker Change: Regarding the market situation and customer situation of 40135
Unknown Executive: Let me answer the question. The first question is about the existing market for the 40135 battery. We have achieved a market series. It can be applied in the storage market. Just like the product of our 32140, it can also be applied in our portable storage.
Yunfei Li: What is your first question? Q. What is your first question? Q. What is your first question? Q. What is your first question? Q. What is your first question? Q. What is your first question? Q. What is your first question? Q. What is your first question? Q. What is your first question? Q. What is your first question? Q.
Speaker Change: Let's see if President Fei or President Tian will answer.
Speaker Change: Let me answer the question.
Speaker Change: The first question is about the current market for the 40135 model in telecommunications. We have reached a market sequence in this area, and it can be applied in the energy storage market. Just like our 32140 product, it can also be used in our portable energy storage. Currently, our major partners are involved.
Unknown Executive: Now our partner and our home storage also have applications, and the 40135 can also be applied in such a market. But there is a difference in the market, because the capacity of our 32140 battery is 50A, and the capacity of the 40135 battery is 20A.
Speaker Change: Additionally, our family organization also has applications. As for the 40135 model, it can also be applied in such a market. However, there will be some differences in the market because our 32140 product has a capacity of 50 ampere-hours.
Unknown Executive: It is a product with a difference in capacity. So, our 32140 is equipped with a capacity system of 15, 30, 45, and 60, while 40135 just meets the 20, 40, such as a product series.
Speaker Change: The capacity of 40135 is 20 ampere-hours.
Speaker Change: It is a product with varying capacities.
Speaker Change: So, for our 32140, the capacity system we have when combined is 15, 30, 45, 60. The 40135 perfectly complements the 20, 40 product series. It serves as a supplement to our product line.
Unknown Executive: It is a supplement to our product. At the same time, this product is in the small power market of electric two-wheeled vehicles, and it also has such a supplementary function.
Speaker Change: At the same time, this product also serves as a supplement in the small power market for electric two-wheelers.
Unknown Executive: This is the first question. Okay. I will go first.
Speaker Change: This is the first question.
Speaker Change: Thank you.
Speaker Change: Thank you very much.
Speaker Change: Then I'll flip over first, okay?
Speaker Change: So.
Speaker Change: So, Mr. Tian just answered the question about the market of...
Speaker Change: 40135
Speaker Change: For this model, the sequence of this model allows us to put it in the use of storage battery. It is similar to 32140, it can be used both in portable energy storage and also household energy storage, just like the 40135, but of course, there is some difference between these two models.
Unknown Executive: Okay. Okay. So, how is it used both in portable energy storage and also household energy storage? Just like the 4-0-1-3-5, but, of course, there is some difference between these two models. For the 3-2-1-4-0, its energy capacity is 5 N per hour, but for the new one, it is 20. So you can see the capacity is different. And also for 3-2-1-4-0, it is the capacity; we also have the 15, 30, 45, and 60.
Speaker Change: For the 32140, we have
Speaker Change: It is the, the energy capacity is 5N.
Speaker Change: Our power, but for the new one, it is 20.
Speaker Change: So you can see the capacity is different. And also for 32140, it is the
Speaker Change: It is the, the capacity, we also have the 15, 30, 45, and 60, but for the new model, 4, 0, 1, 3, 5, we will offer 20 and 40, so as you can see, it is a very good supplement.
Unknown Executive: But for the new model, 4-0-1-3-5, we will offer 20 and 40. As you can see, it is a very good supplement to our existing product line. And besides that, the new model can also be applied to scooters. And we believe that this will also help us to address the market gap.
Speaker Change: through our existing product line. And besides that, the new model can also be applicable for the scooters. And we believe that this will also help us to address the market gap.
Unknown Executive: So this is the answer to the first question. We are going to come up with the second one. Okay, you can go ahead.
Speaker Change: So this is the answer to the first question. We are going to come up with the second one.
Unknown Executive: The second question is about the fast charging system of our company, and the fast charging system is also a key point of this system in terms of heat dissipation. As for 32140, we have already announced the fast charging and high heat dissipation of our Shi'an Shi 32140. We are cooperating with a well-known international brand, Eaton. This product is mainly used for UPS applications. But this is through our partner, our domestic partner, to supply to our Chinese customers.
Yunfei Li: For our non-customers whose names were disclosed before, PowerOak has placed orders amounting to approximately 66.4 million yuan, or about 9.3 million US dollars. Viewsman Group has secured orders worth a substantial 213 million Euros, equivalent to approximately 233 million US dollars. Jincon Group has committed to orders totaling around 62.64 million yuan, roughly 8.78 million dollars. Additionally, the cumulative order volume with anchor has reached 103 million yuan, or approximately 11.43 million dollars. We anticipate continuing order placements from these established clients and optimistic about receiving substantial or new orders from the Indian market in the latter half of this year.
Yunfei Li: What is your second question? Q. What is your first question? Q. What is your first question?
Speaker Change: The second question is about our company's fast charging system. Regarding the fast charging system, the cooling aspect is also a technical highlight of this system.
Speaker Change: As for 32140, we have already announced our actual case of 32140 earlier.
Speaker Change: We are collaborating with some well-known international brands on fast charging and high heat dissipation products.
Speaker Change: This product is mainly used for a UPS application, but it is supplied to our end customers through our domestic partners.
Unknown Executive: But this one, it's a Bayreth-1 heat dissipation. We are now building a product that is higher than this one, the Bayreth-1 heat dissipation. Sorry, what heat dissipation? High Bayreth-1 heat dissipation.
Speaker Change: However, this one has a certain discharge rate and cooling system. We are currently developing a product with a higher discharge rate than this cell.
Unknown Executive: I am from Hong Kong. Now we are still working on another product, 26650 Quanjier. We did not announce our product at this meeting, but in the second half of this year, we will launch this product. The performance of this product will be better than 32140's 10A. It will have a better rate, faster charging, and better performance.
Speaker Change: High-rate fast charging performance and rapid heat dissipation characteristics
Yunfei Li: Now, we are still in the list of 26650 products. This is in our meeting; there is no announcement of our products. But today, in the next half of this year, we are going to have a look at the content of the content products in the next half of this year.
Speaker Change: Okay. Okay.
Speaker Change: Currently, we are also developing another product, the 26650 full nickel product. We did not announce this product at our meeting this time, but it will go into mass production in the second half of this year.
Speaker Change: The performance of this inner tube product will have better fast-charging capability and better heat dissipation compared to the 32140 laboratory.
Unknown Executive: Can you tell us about the new model again? I was surprised. On August 14th,
Speaker Change: Can you repeat the model of your new product? This is a 26650, 3 ampere-hour fast charging product, fully connected.
Yunfei Li: Brian Lantier, Unknown Executive, Jiewei Thierry, Yunfei Li, Yunfei Li, Yunfei Li, Yunfei Li, Yunfei Li, Yunfei Li, Yunfei Li, Yunfei Li, Yunfei Li, Yunfei Li. Okay.
Unknown Executive: QuaickushQuail QS Okay.
Unknown Executive: Uh-huh. So for the second question, about the fast charging product line, I'd like to answer the second question about the fast charging product line. Well, I have to say that the very robust heat dissipation is the technical highlight of our new product model for 32140. It is already outstanding in terms of its fast charging at 10 mA and also the high dissipation rates.
Yunfei Li: So, for the I would like to answer the second question about the first charging product line. Well, I have to say that the very robust heat dissipation is the technical highlight of our new product model for 32140. It is already outstanding in terms of its fast charging with 10N and also the high dissipation rates.
Speaker Change: Okay.
Speaker Change: Uh-huh. Uh. Okay.
Speaker Change: So for the, I'd like to answer the second question about the fast charging product line. Well, I have to say that the
Yunfei Li: We have received a number of orders from the Indian market in Dali and Nanjing, or about 8.8 million dollars. Regarding research and development, our IND team has successfully completed the development of a new large-surgical battery model for 0135. We are on track to affectionately purchase production equipment in September of this year and plan to complete the equipment commissioning by March of the next year. With mass production scheduled to commence, they're shortly up there.
Speaker Change: The very robust heat dissipation is the technical highlight of our new product model for 32140. It is already outstanding in terms of its fast,
Speaker Change: charging with 10 M and also the high dissipation rate.
Yunfei Li: And with these products, we are joining hands with one of our very well-known business players, multiplayer called Ethan, and our products mainly for the UPS. And then, through our Chinese partner, we are supplying these products to the end clients. And for the, so the product highlight is the high dissipation rates as well as its capacity. And, and big size that for the six six five all we have a new product that is with 3N. And it is also our very, we can say it is a 3N per hour fast charging product with a full set.
Unknown Executive: And when these products are made, we are joining hands with one of our very well-known business players, a market player called Eaton, and our products are mainly for UPS. And then through our Chinese partner, we are supplying these products to the end clients. And for the, so the product highlight is the high, the high dissipation rates and as well as its capacity, and besides that for the Unknown Executive, Jiewei Thierry, Yunfei Li, CBAK Energy Technology Inc., are you?
Speaker Change: And with these products, we are joining hands with one of our very well-known business partners.
Yunfei Li: The model for 0135 battery is highly anticipated in the current battery market, driven by strong demand. Based on our comprehensive market research, we are confident that the 40135 batteries will address existing market gaps and significantly boost our sales growth. In terms of technical specifications, the 40135 battery represents a substantial advancement over our current model 26650 battery, featuring a 500% to 600% increase in capacity, a 10% to 20% enhancement in energy density, and a 30% to 50% improvement in cycle life.
Speaker Change: and a market player called Eaton and our products is mainly for the UPS and then through our Chinese partner we are supplying these products to the end clients.
Speaker Change: And for the, so the product highlight is the high...
Speaker Change: The high dissipation rates and as well as its capacity and
Speaker Change: And besides that, for the six...
Speaker Change: 650, we have a new product that is with 3N and it is also very, we can say it is a 3 ampere hour fast charging product with full set.
Yunfei Li: The production line for the model 40135 battery is set to be established at our darling production base. Overall, our beta business has sustained impressive growth momentum from the first quarter. The company has achieved notable success with substantial increases in sales revenue, as well as maintaining robust growth profit margins and net profits.
Speaker Change: Yiyu
Unknown Executive: Let me add that we are right now in our Dalian facilities in the process of development, research, and development of our new 26650 battery. That battery is designed with a cabless or full cab design, and that design would allow this battery to have a very good heat dispersion characteristic.
Yunfei Li: Let me add it.
Speaker Change: Well done.
Yunfei Li: We are, we are right now in our Italian societies in a process of development, research and development of our new 26650 battery. That battery is designed with a catalyst or full tap design. And that design would allow this battery to have a very good heat dispassion characteristics.
Brian Lantier: Great. Thank you all very much. I appreciate that.
Brian Lantier: Great. Thank you all very much. I appreciate that. Thank you.
Operator: Thank you. As a reminder to ask a question, please press tall one and one on your telephone and wait for your name to be announced. Until we draw your questions, please press tall one and one again. Thank you.
Operator: Thank you. As a reminder to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Thank you. Seeing no more questions in the queue, let me turn the call back to Mr. Yunfei Li for closing remarks.
Yunfei Li: We are confident in our positive outlook for the full year of 2024, with the anticipated launch of our new model 40135 battery, we are pleased to capture market share and drive another search in our sales performance.
Yunfei Li: Seeing no more questions in the queue, let me turn the call back to Mr. Jan Philly for closing remarks. Thank you all for participating in today's call and for support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Thank you all for participating.
Yunfei Li: That's all for today.
Yunfei Li: Thank you all for attending today's conference. We look forward to reporting to you again in the next session.
Yunfei Li: 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.
Speaker Change: Thank you operator, and thank you all for participating in today's call influenced port. We appreciate your interest and look forward to reporting to you again next quarter on our progress.
Thierry Li: Thank you Mr. Li and thanks everyone for making time to join our earnings conference call today. As our CEO highlighted, our beta business has delivered impressive financial results for the second quarter, marking a double-digit increase in net revenues and achieving positive net income for the second consecutive quarter of 2024. We are delighted to witness ongoing growth momentum in our battery division, with our strong foundation will remain confident in our growth territory for the remainder of 2024 and anticipate achieving a robust full year net profit for our beta business.
Speaker Change: Yeah.
Operator: Thank you. This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you, and have a great day.
Speaker Change: Okay. Thank you I'll close today's conference call. Thank you all for participating you may now disconnect. Your lines. Thank you and have a great day.
Operator: You may now disconnect your lines. Thank you, and have a great day.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Thierry Li: As previously noted, high trends, the raw materials manufacturing unit will acquire operates independently from our core beta business and doesn't directly affect the financial performance of our beta business. Aquile in 2021, primarily for investment purposes, high trends is currently experiencing net losses, which may influence our consolidated financial statements. To provide investors with a clear understanding of our core beta business performance, this earnings released focuses specifically on the battery segment. We encourage investors to review the segment information section of our form 102, where the performance of our beta business and high trends is presented separately.
Thierry Li: I will now provide an overview of our financial results for the second quarter of 2024. In the interest of time, I will be presenting abbreviated highlights only.
Thierry Li: We encourage you to refer to our press release, issued earlier today for the complete details. In the second quarter, our total net revenues increased by 13% year-over-year to 47.8 million dollars. Net revenues from sales of batteries reached 35.6 million dollars a year-over-year increase of 60%. Our total gross profit grew 227% year-over-year to 12.7 million dollars. Resulting in a gross margin of 26.6% compared to 9.2% in the prior year period. Gross profit for the battery business increased by 276% year-over-year to 12.9 million dollars.
Thierry Li: With gross margin climbing to 36.3% from 15.4% in prior year period. Our total operating income amounted to $5.95 million compared to an operating loss of $3.77 million in the prior year period. Net income attribute goal to shareholders of CBAK Energy after deducting the change in fair value of warrants was $6.45 million compared to a net loss of $2.7 million in the prior year period. Net income from the battery business was $7.89 million compared to a net loss of $1.13 million in the same period of 2023.
Thierry Li: In summary, we have secure net income for the second consecutive quarter in 2024 and achieve an exceptionally high gross margin. As we prepare to begin mass production of the new model 40135, we anticipate a significant increase in order volumes. We are confident that this will drive continuing growth in our sales revenues.
Thierry Li: That concludes our prepared remarks. [inaudible] Please stand by while we come by the Q&A roster. This will take a few moments.
Thierry Li: Thank you.
Brian Lantier: We are now going to proceed with our first question. The questions come from the line of Brian Landtiv from Zach Small Capresearch. Please ask your question.
Brian Lantier: Good evening, gentlemen. I was wondering if I could just ask a question about what you're seeing in the market right now. You're still posting pretty attractive margins relative to competitors. Are you seeing an increased competition for bids? I guess that's the first question about the market landscape right now. [inaudible] In your interview, I saw that you are very well-witted and well-witted. I want to see what you're seeing in the market right now.
Brian Lantier: Do you think the future will come to an end? Q. What do you think about the current situation? Q. What do you think about the current situation? Q. What do you think about the current situation? Q. What do you think about the current situation? Q. What do you think about the current situation? Q. What do you think about the current situation? Q. What do you think about the current situation? Q. What do you think about the current situation? Q. What do you think about the current situation?
Unknown Executive: If we have a look at the market landscape, we have always tried to differentiate ourselves from the product portfolio, especially in terms of the small power and also storage battery. That is why we have been focused a lot on producing cylindrical batteries with flexible combination and we are I think we are developing a new model that is called 40135 and we believe that it is a very good supplement to our existing model 265.0 and 32142, 1.4.0, 1.4.0.
Unknown Executive: And then just as Mr. Yunfei Thierry mentioned that differentiation allowed us to secure our market position and also we are we are we are we are debating deep into the customer's big mount that is why we have been able to maintain market number one in the small segmented markets and also we are superior for the quality allowed us to maintain a good market share and also our profitability.
Unknown Executive: That's it for our answer. Thank you for your question. Thank you very much. I appreciate that.
Unknown Executive: If I could ask a couple of questions about the new model batteries, the 40135, do you think that will principally serve your existing customer base in the storage business and then also regarding the analysis for the fast charging 32140. I think maybe when might we hear something about an A sample on that product and I guess if you[inaudible] Okay. Okay.
Unknown Executive: [inaudible][inaudible] in the hands of the company, we are currently in the hands of the company, we are currently in the hands of the company, Now, we are still in the list of 26650 products. This is in our meeting, there is no announcement of our products. But today, in the next half of this year, we are going to have a look at the content of the content products in the next half of this year. [inaudible] Okay.
Unknown Executive: So, for the, I would like to answer the second question about the first charging product line. Well, I have to say that the very robust heat dissipation is the technical highlight of our new product model for 32140. It is already outstanding in terms of its fast charging with 10N and also the high dissipation rates. And with these products, we are joining hands with one of our very well-known business player, multiplayer called Ethan, and our products mainly for the UPS.
Unknown Executive: And then through our Chinese partner, we are supplying these products to the end clients. And for the, so the product highlight is the high dissipation rates as well as its capacity. And, and big size that for the six six five all we have a new product that is with 3N. And it is also our very, we can say it is a 3N per hour fast charging product with full set.
Unknown Executive: Let me add it. We are, we are right now in our Italian societies in a process of development, research and development of our new 26650 battery. That battery is designed with a catalyst or full tap design. And that design would allow this battery to have a very good heat dispassion characteristics. Great.
Unknown Executive: Thank you all very much. I appreciate that. Thank you.
Operator: As a reminder to ask a question, please press tall one and one on your telephone and wait for your name to be announced. Until we draw your questions, please press tall one and one again. Thank you.
Yunfei Li: Seeing no more questions in the queue, let me turn the call back to Mr. Jan Philly for closing remarks. Thank you all for participating in today's call and for support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Thank you all for participating.
Operator: You may now disconnect your lines. Thank you and have a great day.