Q3 2025 CBAK Energy Technology Inc Earnings Call

Speaker #1: Later, we will conduct a question-and-answer session. An instruction 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 #1: Now, I will turn the call over to Etienne Thien, IR Specialist of CBAK Energy. Ms. Thien, please proceed.

Speaker #2: Thank you, Operator, and hello everyone. Welcome to CBAK Energy's earnings conference call for the third quarter of 2025. Today, we have Mr. Zhiguang Hu, or Jason, Chief Executive Officer of CBAK Energy, Mr. Jiewei Thierry, Chief Financial Officer and Company Secretary, and an event who will help with our interpretation when needed.

Speaker #2: 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 the newswell services.

Speaker #2: 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. Private Securities Litigation Reform Act of 1995.

Speaker #2: Forward-looking statements involve inherent risks and uncertainties. As such, the Company's actual results may be materially different from the expectations expressed today. Further information regarding this and other risks and uncertainties is included in the Company's public filings with the SEC.

Speaker #2: The company does not assume any obligations to update any forward-looking statements, except as required under the applicable laws. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars.

Speaker #2: With that, let me now turn the call over to our CEO. Please go ahead, Jason.

Speaker #3: Hello, everyone. Thank you for joining our earnings conference call for the third quarter of 2025. Our consolidated revenue rose sharply this quarter, increasing 36.5% year over year to $30.9 million.

Speaker #3: Compared with approximately $44.6 million in the same period last year, the strong growth was primarily driven by the recovery of high trends in our better raw material segment.

Speaker #3: Since acquiring high trends in 2021, the segment had been weighed down by industry-wide overcapacity and a prolonged decline in raw material prices. As a result, we experienced several years of weak performance. Recently, however, we have been pleased to see clear signs of recovery. Raw material prices have rebounded steadily, driving a meaningful turnaround at high trends.

Speaker #3: In the third quarter alone, High Trends generated approximately $27.2 million in revenue, representing a 143.7% increase year over year. With the continued recovery in the raw material market, we are confident that the High Trends team will build on this positive momentum to further advance sales and narrow losses in the coming quarters.

Speaker #3: Our battery business also began to stabilize in the third quarter after a short-term volume decline caused by our ongoing product portfolio upgrade. Revenue in this segment grew 0.7% year over year, effectively returning to the same level as the prior year's quarter.

Thank you, Jason. As Jason mentioned, there's a high chance we will deliver a very solid performance this quarter, with sales increasing significantly and net loss narrowing to $3.1 million, an 18.8% improvement from $2.6 million in the same period of 2024.

If this momentum continues, we believe there are high chances of returning to profitability in the coming quarters.

Meanwhile, although our battery business reported flat year-over-year revenue, following a weaker performance last quarter, segment net income rebounded strongly, up 122.7% to $4.53 million compared with $2.04 million a year ago. This rebound was mainly driven, as Jason noted, by robust demand for our Model 32140 batteries, which are currently in short supply.

Well, with both segments showing meaningful improvement in profitability or consolidated net income attributable to CBAK Energy shareholders reaching $2.65 million, representing a 150-fold increase year-over-year.

We are confident that the new 4135 production line at our Dian facility, together with the upcoming 3140 production expansion, will further enhance our earnings performance. Combined with the ongoing recovery of our raw materials industry, which continues to strengthen, we expect high chances of positive results. We believe that our overall performance in the coming quarters and years will deliver sustainable value for our shareholders and investors.

Furthermore, we continue to pursue overseas manufacturing expansion, but progress remains contingent on updates to China's export control policies covering lithium battery materials and equipment.

Until the Chinese authorities clarify or adjust these restrictions for the recent meeting between the Chinese and U.S. presidents in Busan, we are unable to advance specific overseas projects.

On the commercial side, we have signed a term sheet with one of Asia's largest publicly listed companies to jointly develop an overseas medium battery production base.

This reflects strong strategic alignment and commercial potential. However, we would like to remind investors that policy shifts could affect our overseas plans and timelines.

Should policy conditions permit, management of the company has reached a firm consensus that establishing a stable overseas production base outside China will significantly enhance our supply reliability and strengthen our position as a preferred supplier to major global customers. Thank you. We will now open the floor for the Q&A section. Operator, please go ahead.

Thank you.

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Please stand by while we compile the Q&A queue.

Uh, good evening, gentlemen. Uh, really impressive results from the LED Division. I was wondering if you could talk a little bit about any particular customer concentration in that market and how sustainable you see the flight electric vehicle sales going in the coming quarters.

Um, thank you Brian. Um

concern.

Sit down.

Thank you. Um, so actually for the uh, uh daily business, especially the 2 leaders and 3 with it. So, I think now, we are developing pretty good, especially in the southeast Asia countries. And for example, in India, uh, for the top 10, uh, uh, 2 wheelers, uh, tweeters oems. And we are, uh, we have all in communication with them, and some of them we have already has M Supply to them. And also, for example, in India for the battery swapping business, we are also uh, incorporating with 1 of the biggest battery swapping uh, company in in India as well. So uh in this industry, I think, now we are developing pretty good.

Okay, great, that's really helpful. Um, regarding High trans, um,

What do you see overall in the market regarding potential oversupply versus demand?

Come up to meet the supply in the industry.

And should we expect more balance in the market going forward?

Um,

2821.

Okay, Brian. Uh, let me take this question. Um, for high chances of product, is always, um, very clear. Um, they're making, um, NCM raw materials to, um, a couple of the battery manufacturers. Um, some of them are not our competitors because we're making lfp sales. Um, so high chance is, um, exploring um, the market, but I don't think they're going to find some other, um, new customers beyond the current, um area. So how what high chance of do just to keep improving?

Um, the quality and performance of their current, um, raw material products. Um, along with this, um, recovery of the whole industry. Um, I think we can expect or anticipate a much stronger performance, um, of high chance in the coming quarters.

Great uh and I guess looking forward to 2026 uh sounds like you could at some point B um have production pass the above 6. Gigawatts.

Um, when do you expect that to be the case? Is it mid-year, the end of 2026? And has it become any easier to secure the necessary production equipment to, um, you know, power these expansions?

I,

To eat.

All of the equipment has already been installed in the warehouse in both studies and the 19th. Uh,

Was in darling is is already trial production and in uh, 1982 will be uh, start toy production uh in this month. And we hopefully buy a q1 next year, then we will achieve mass production for uh, both factories and also uh,

In terms of all of the orders we have got, and then, uh, the 6 Gigabytes, our will be achieved next year, which is in accordance with the order we have already received from the customers.

Um, I would like to add another point. Um, I think in mid-November, um, we're going to announce that our 19 expansion plan, um, is going to complete soon, and then we are preparing a video, um, showing CA, showing the latest equipment we have and the new production line, um, for the purpose that all our investors and um, shareholders can have a very, very clear picture of how our factory looks.

Great. Thank you so much. It sounds really exciting. I'll open the queue up to anyone else.

Thank you. Once again, to ask a question, you will need to press *1 and 1 on your telephone and wait for your name to be announced to withdraw your question. Please press *1 and 1 again.

Thank you. Seeing no more questions in the queue, let me turn the call back to Jason for closing remarks.

Thank you, operator. And thank you all for participating in today's call and for your support.

We appreciate your interest and look forward to reporting to you again next quarter on our progress.

Thank you all again. This concludes the call; you may now disconnect.