Q4 2024 CBAK Energy Technology Inc Earnings Call
2013. http://www.youtube.com.kr
Speaker Change: Now I'll turn the call over to each enchant IR specialists of Seatback energy Mr. Gantt. Please proceed.
Yeah.
Speaker Change: Thank you operator, and Hello, everyone welcome to CPA tea and juice, earning conference call for the fourth quarter and full year 2024, and journey of today, NESA, Chagall, who or Jason She's excuse he officer of CPA key energy necessity really she financial officer in the company.
Speaker Change: Secretary, our general engineer, Mr. Xing Jin, Kim and events, who will help with our integration well in January 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, the CPA could come to see them as well as from the newswire services.
Speaker Change: Pay off this call will also be available in a few hours Oh.
Speaker Change: Right.
Speaker Change: Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.
Speaker Change: Forward looking statements involve risks and uncertainties as such the company's actual results may be materially different from the expectations expressed to date.
Speaker Change: Further information regarding these and other risks and uncertainties is included in the company's public filings with the S. E C.
Speaker Change: The company does not assume any obligations to update any forward looking statements, except as required under applicable laws.
Speaker Change: Also please note that unless otherwise stated all figures mentioned during the conference call are in U S dollars.
Jason: With that I mean, now turn the call over to our CEO and he said you got cool. Please go ahead Jason.
Jason: Hello, everyone. Thank you for joining our army <unk> earnings call for the fourth quarter and full year of 2024, I'm pleased to present, the pro forma chop all battery business for.
Jason: For the fourth quarter and full year of 2024.
Jason: The revenues for the battery segment increased modestly by two seven percentage, reaching wandered searches fixed point 59 for the year.
Jason: Despite the moderate screws in revenue our gross profit for the battery segment served by <unk> Seven point 58 person teed rising from 31 point 58 million to 43 point, so far meeting.
Jason: The girls profit modeling out the battery segment expanded significantly to 31 pardon fire present, it compared to.
But twenty-three pond, some two five percentage in 2023.
Jason: Marking an impressive increase up.
Jason: 7.7 percentage points year over year.
Jason: Reported net income.
Jason: Of all battery segment.
Jason: Pardon 43 million for the year 2024, compared to a certain point <unk> 7 million in 2023.
Jason: Marking an impressive increase of.
Jason: 13 9.8 percentage.
Jason: B, how consistent our first site over the past few quarters.
Jason: Separately all standard gross profit and net income figures are particularly noteworthy given the prevailing challenge and downturn in the broader energy sector.
Speaker Change: Well many of our competitors, including problem mainland Chinese battery manufacturers are experiencing declining profit.
Jason: Our performance.
Speaker Change: She is dark to trust.
Speaker Change: As communicated in previous price released demand fall battery is batteries. The modal surged to 140 largest single cell remain exceptionally strong our current production capacity in that you fully brocade, which means not the revenue.
Speaker Change: Likely to remain that'd be a life or a decent no capacity become available.
Speaker Change: To address this demand we are in the Pearl size, Oh commissioning two new product lines for the model 30 to 140 in that you expect it to be operational by the end of 2020 file. So his passion do at St D. What all were up production capacity.
Speaker Change: Additionally, we are upgrading.
Speaker Change: Our Italian properties, Firstly cheese with currently manufactured the older model 'twenty to 'twenty six its Algeria since 2006.
Speaker Change: Our new product line will be introduced to produce the larger model 40, 170 fives integral battery.
Speaker Change: I do the other 2.3 to one hour.
Yeah.
She's upgrade is also LTC tied it to be completed by the end of 'twenty 'twenty file.
Speaker Change: With this expansion and upgrades, we are confidence in our ability to achieve.
Speaker Change: The potential rebound here, Bruce starting in 2020 six.
Speaker Change: I would also like to provide all the advisor and the shareholder with an overview of our current and future product portfolio. We have two primary product line manufactured at all thought in London perfectly Tees, some modal twenty-six its browser along with it.
Speaker Change: We're reiland model 26 out of 100, and modal 30 to wander 40, both the model 26000, or 26, 700 and model 32, one or 40 depots cylindrical cells.
Speaker Change: It's a model 26 through the browser 26, 700 series the Wella put in Tucson, six as the worst first default for itself.
Speaker Change: Continue to hold a significant position in the market well this model may be considerate outdated in certain aspect.
Speaker Change: Remain popular is back to the ER segments, particularly in the home energy storage and the portable power supply market across Europe, and the United States.
Speaker Change: We anticipate it paints a gradual pick light you still supports its model. However.
Speaker Change: <unk> P R.
Speaker Change: <unk> two.
Speaker Change: To contribute to our partner about net revenues.
Speaker Change: Our decently, we foresee sipped among major Cottesmore from legacy model to larger cell format, such as the model three to 140.
Speaker Change: Commie model <unk> 135, the multiples 30 to 140, our flagship product manufactured at our Nanjing Firstly Ts.
Speaker Change: It's widely utilized in the pulpwood power supply sector and <unk>.
Speaker Change: Is rapidly gaining traction in the OE sector, particularly for two and three builders vehicles.
Speaker Change: According to the market research, our 30 to 140 <unk> cells <unk>.
Speaker Change: Her month, 90%, 19% global market share with demand for outpacing our current production capacity.
Speaker Change: As previously mentioned, we are preparing to launch a new large central Gsell. Some model 40, <unk> hundred 70, Fives and model is designed to serve the portable power supply and home entity salaries sectors.
Speaker Change: It is back to a number of our existing customer for the modal 26, this voucher or to transition to this new model.
Speaker Change: What's model 40, 175 entered mass production by the end of this.
Speaker Change: This year, we anticipate a substantial increase in that revenue followed on air personalities.
Luke King: Luke King of hat, our production portfolio will cause seasons.
Luke King: Wilkins he's style small cylindrical cells model 26 at <unk> 26, 700 from talent and a lot of the new Casals model 40 Watt hundreds 35 from <unk> and the model.
Luke King: 30 to 140 from 19, enabling us to meet the diverse needs of our customers.
Luke King: If activity late.
Luke King: As always we will also provide an update on.
Luke King: Our our announced declined as of March 10, two.
Luke King: 'twenty 'twenty you filed the total value of orders received but not yet steroid at all major production bases in talent and then you.
Luke King: <unk> reached RMB 126 point 96 million approximately seven.
Luke King: 17 point 54 meeting.
Luke King: Our Q, our accumulated order volume with power Hawk now stand at a problem lately RMB 87.5 million about Tao point Tara Street meeting.
Luke King: Well our total orders.
Luke King: So with my group has rated has rated euro $213 million or products lately.
Luke King: 231, pardon 2 billion. Additionally, our alder wider width and pump group has grown to RMB.
Luke King: 75 point to 55 million about.
Luke King: 10 point 44 million.
Luke King: Notably our key clients hunker has placed order totaling.
M B 440.
Luke King: Eight made in our products lately 61 point 82 meeting.
Luke King: Since the beginning of all of our collaboration.
Luke King: We believe that the demand from the automotive customer in 2020 pounds will likely increase significantly.
Luke King: I would also like to provide a summary of our current production capacity and.
Luke King: The plant and passion to offer our Alaska and a shareholder perspective.
Luke King: At present, our Italian facility.
Luke King: And you're a euro about one to one hour for the model 26. These vouchers.
Luke King: On the 26th 700, well our 19, firstly T. How okra biopsy of one three terawatt hour for the model three to 140.
Luke King: As previously reported we are in the profile of expanding our capacity by adding 2.3 D. But all for the model 40, 175 at Altamira facility and a three G by the hour for the model started to widen or 40 at all and in your properties.
Luke King: By the end of 'twenty 'twenty file our total production capacity of 14 nickel cells is backed it too right.
Luke King: Seven six Terawatt hour.
Luke King: However, it is important to know that it will take time for the annuity.
Luke King: Added productive life to ramp up to full capacity.
Luke King: This means that we may not achieve the fruit.
Luke King: Okay.
Speaker Change: Absolutely not.
Speaker Change: Nonetheless, the design all of this is bounded.
Speaker Change: IC under its course and underscores the substantial potential for cruise and the scalability.
Speaker Change: Offering our advisor a plumbing a promising outlook for the future.
Speaker Change: Overall, we have thoughtfully. So 10 strong moment term yelp atrabilious by maintaining a higher accrues girls Prophage, Marty and all performing most it most of our competitor in the term in terms of not per feature.
Speaker Change: It's our ability.
Speaker Change: We are confident that the battery segment, we will remain profitable in 2020 file. In addition, we are actively upgrading our product portfolio and expanding per Doc production capacity to address the surging demand with the new capacity coming online.
Speaker Change: We actually see paid we anticipate another phase of significant Bruce in 'twenty 'twenty six.
Speaker Change: Now, let me turn the call to our CFO TBD.
Speaker Change: Yeah.
Speaker Change: Thank you, Jason and thanks, everyone for making time to join our earnings conference call today.
Speaker Change: Jason has presented a net revenues growth and gross profit figures for our bakery segment I will now provide an overview of our consolidated financial results, which include the performance of hydrous, our raw materials production unit at <unk>.
Speaker Change: Interest of time, our focus only on the key metrics rather than discussing the figures in detail.
Speaker Change: For a comprehensive breakdown of our financial performance, we encourage you to refer to our press release issued earlier today.
Speaker Change: For the full year, our consolidated net revenues declined by 13 points, 61%.
Speaker Change: During two $176 $61 million from <unk> <unk>.
Speaker Change: Two from 204 44 million <unk> in 2023.
Speaker Change: Despite this decrease consolidated gross profit rose significantly by such 168%.
Speaker Change: Reaching $41 $75 million compared to $31 72 million tourists in the previous year.
Speaker Change: The gross profit margin improved substantially to 23, 7% an increase of $8 18 percentage points from $15, 52% in 2023.
Speaker Change: We achieved a net income attributable to shareholders of <unk>.
Speaker Change: <unk> energy of 11 $79 million for 2024.
A remarkable turnaround from the net loss of $2 $45 million reported in 2023.
Speaker Change: This performance demonstrates our ability to generate higher gross profits and achieved positive net income despite lower net revenues.
Speaker Change: The decline in consolidated net revenues and a lower consolidated net income, especially when compared to the significantly higher net income of our bakery segment can be primarily attributed to the performance of our raw materials production unit hydrants.
Speaker Change: The raw materials industry, particularly for dose related to lithium ion Baytree's has faced a declining prices over the past few years, which has since stabilized at relate typically low levels.
Speaker Change: Additionally, the industrial wide capacity expansion that began in 2021 has led to an oversupply intensifying competition and creating operational challenges for hydrants.
Speaker Change: On a positive note since acquiring <unk> in 2021, we have chosen not to integrate these products into our Patriot segments supply chain. We also retain high chance core investment team to ensure his independence.
Speaker Change: Moreover, we have fully met our financial obligations to hydrants minute, if financial performance doesn't directly impact our bakery segment's results.
Speaker Change: This strategic separation is why we have focused exclusively on reporting the financial performance of our bakery segment during our earnings conference calls.
Speaker Change: This approach provides our investors and shareholders with a clear and more accurate understanding of our company's core performance.
Speaker Change: Next I'd like to provide an update on our overseas capacity deployment plan.
Speaker Change: In response to current geopolitical risks and at the request of our major customers, we're actively exploring solutions to mitigate existing and potentially higher tariffs.
In recent months, we have conducted extensive phases to southeast Asia.
Speaker Change: Value add potential sites for establishing our overseas factory, which we plan to proceed with in coming months.
Speaker Change: We're still assessing whether to relocate part of our existing equipment and production lines.
Invest in new equipment as part of an expansion strategy.
Speaker Change: Our goal is to begin supplying sales from the overseas facility to our major customers by 2026.
Speaker Change: Encouragingly these customers have already expressed strong interest in pacing substantial orders.
Speaker Change: Company by a higher percentage of prepayments.
We are currently in the process of finalizing terms with them.
Speaker Change: Further information will be disclosed once formal agreements are reached.
Speaker Change: In summary, the underwhelming financial performance of hydrants.
Speaker Change: It has impact our consolidated results, making them less favorable compared to those of our bakery segment.
However, we successfully achieved higher gross profits and a positive net income despite lower net revenues. Additionally, we are actively pursuing the establishment of overseas production capacity to meet the demands of our major customers, who have expressed interest in placing substantial orders under favorable terms.
Speaker Change: We remain optimistic and look for water sharing more positive developments in coming months.
Speaker Change: Thank you we will now open the floor for the Q&A section operator. Please go ahead.
Speaker Change: We will now begin the question and answer session to ask a question. Please press star one on your telephone you would.
Speaker Change: Thank you Matt.
Speaker Change: As I said a lot leaner Hayes.
Speaker Change: To withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.
Speaker Change: We will now take our first question from the line of Brian <unk> from Zacks. Please ask your question Brian.
Speaker Change: Okay.
Brian: Good evening, Thank you for all that color it's.
Speaker Change: Really interesting to see.
Speaker Change: The progress and have a vision for where the company will be.
Speaker Change: 24 months from now so I appreciate that.
Speaker Change: I guess as you're getting ready to expand the product lines. What are you seeing as youre speaking to.
Speaker Change: Shipment suppliers in the market are you getting any better pricing on some of the equipment that could be coming in and do you think that could ultimately lead to.
Speaker Change: Maybe faster implementation of some of these production lines given some of the challenges that exist in the battery market today.
Speaker Change: Okay.
Speaker Change: Thank you Brian.
Speaker Change: Translate your question to our team.
Speaker Change: Brian when the venture for a why do you want <unk>.
Speaker Change: No way.
Speaker Change: It seems to have been a total so if we're going to change a little bit at home, which had not thought of as your chocolate or somebody on the outdoor for Ingersoll Rand.
Speaker Change: Try to distribute a total win with US now they get to you.
Speaker Change: Okay.
Speaker Change: Kevin.
Speaker Change: Sorry, I'll get myself I'm, sorry, Brian Let me directly responded to your question in English.
Speaker Change: I'd say as for our expansion plan in Nanjing domestically.
Speaker Change: For the terms and pricing we get from the suppliers, it's almost Sam and his staff.
Speaker Change: For our competitors certainly we get much more favorable terms.
Speaker Change: With respect to the Cayman connection and the and the payment schedule.
Speaker Change: Allow us to delay a great portion of the payments.
Speaker Change: Much later than our competitors can get.
Speaker Change: And we have already completed.
Speaker Change: Prepayments and certain equipment has already been central in Lunching S.
Speaker Change: As I just discussed in our prepared remarks, we are still assessing if we are going to relocate part of this equipment to our oversea factory or are we just going to.
Speaker Change: Simply.
Speaker Change: Invest in new equipment.
Speaker Change: That has not yet been determined.
Speaker Change: I think that.
Speaker Change: I think I I think I already answered that question.
Speaker Change: Okay.
Speaker Change: Great. Thank you.
Speaker Change: You have customers around the globe.
Speaker Change: Are you hearing anything from them regarding concerns about the global economy.
Speaker Change: We lost share.
Yes.
Speaker Change: Even please.
Speaker Change: Tariff when store for everyone when the cohort of essential Daniela <unk> cohort, our daughter, which and the changes in your trunk artisan.
Speaker Change: Okay.
Speaker Change: Whose only equate out to go and he actually what we thought.
Speaker Change: With AMA.
Speaker Change: Okay.
Speaker Change: Would you not hear any specific concerns about the global economy from our customers, but we do.
Speaker Change: The concerns on potential and current existing geopolitical risks.
Speaker Change: Actually we just disclose we actually are being pushed by our major customers to set up our overseas factory in orders here.
Speaker Change: Boy <unk> tariffs.
Speaker Change: And we also here.
Speaker Change: The concerns from our major customers about.
Speaker Change: Their decline of sales in their end applications.
Speaker Change: Caused by the kind of economy.
Speaker Change: But in general we are still very positive about the future of our.
Speaker Change: Of the new energy industry S.
Speaker Change: Especially in Europe, and in the United States, a huge potential to replace existing units.
Bob.
I think the concern is more paced on the tariffs and.
Speaker Change: Geopolitical risks.
Speaker Change: Okay great.
Speaker Change: And lastly on high trends, obviously, it's a difficult market right now.
Speaker Change: Are you still exploring any.
Speaker Change: Possible divestiture of that business.
Speaker Change: Cellular scoring of hydronic Tricia.
Speaker Change: We'll add a hydraulic militia Chihuahua total today.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: As we have already expressed high chance that industry on the industrial high chances in is now experienced experiencing a downturn so.
Speaker Change: We would not extend any new investments in high teens.
Speaker Change: Okay.
Speaker Change: Alright, Thank you ill, let someone else go.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: As a reminder to ask a question. Please press star one on your telephone keypad.
Speaker Change: Once again Thats star 114 questions.
Speaker Change: Sorry, I just.
Speaker Change: Okay.
Speaker Change: Jump the line.
Speaker Change: Thank you Mr. Charlie we also leading for questions. Once again, if you wish to ask a question. Please press star one on your telephone.
Seeing no more questions in the queue, let me turn the call back to Jason for closing remarks.
Speaker Change: Thank you operator, and thank you all for positive you're painting in today's call and for your support.
Speaker Change: Appreciate your interest and look forward to reporting to you again, that's quarter, our Pearl graph.
Speaker Change: Thank you all again this concludes the call you may now disconnect.
Speaker Change: Okay.
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