CBAK Energy Reports Third Quarter 2021 Unaudited Financial Results

Rhea-AI Summary

CBAK Energy Technology reported its unaudited financial results for Q3 2021, showcasing strong growth in high-power lithium battery revenues of $9.6 million, up 51% year-over-year. However, gross profit declined 17% to $1.1 million, with a gross margin of 12%. Despite the overall decline in net income, which soared to $20 million compared to just $41,715 a year prior, operating losses increased to $3.2 million. The company also reported a substantial rise in operating expenses due to headcount growth and R&D costs, while cash reserves decreased from $33.3 million to $2 million.

Positive

• High-power lithium battery revenues grew by 51% year-over-year.
• Net income increased significantly to $20 million from $41,715 year-over-year.
• Basic and diluted earnings per share rose to $0.23, compared to $0.00 in the same quarter of 2020.

Negative

• Gross profit decreased by 17% from the previous year.
• Operating losses grew to $3.2 million, compared to an operating profit of $0.4 million in Q3 2020.
• Total operating expenses surged by 339%, driven by increased headcount and R&D costs.

DALIAN, China, Nov. 12, 2021 /PRNewswire/ -- CBAK Energy Technology, Inc. (NASDAQ: CBAT) ("CBAK Energy," or the "Company") a leading lithium-ion battery manufacturer and electric energy solution provider in China, today reported its unaudited financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Financial Highlights

• Net revenues were $9.6 million. Excluding revenues from raw material trades, approximately $9.6 million was from high power lithium batteries business, a 51% year-over-year growth in high power lithium battery revenues over the same period of 2020.
• Gross profit was $1.1 million, a decrease of 17% from $1.4 million in the same period of 2020.
• Gross margin was 12%, a decrease of 1 percentage point from the same period of 2020.
• Net Income was $20.0 million, compared to net income of $41,715 in the same period of 2020.

Yunfei Li, Chairman and Chief Executive Officer of the Company, noted: "We are very pleased with our robust battery sales in the third quarter. Notably, revenues from high-power lithium batteries totaled $9.6 million, representing 51% year-over-year growth. These results attest to the quality and level of recognition our industry-leading products have in the market. 

Mr. Li continued: "As scheduled, we are expanding our production capacity despite global energy shortage and commodity price hikes. This is a much-needed action as the new capacity will yield positive business outcomes and augment our ability to supply. Additionally, in order to address growing and diversified demands for batteries, we made meaningful progress in research and development while extending our product portfolio. Our operations and growth strategies are well on track, which we believe solidifies our market-leading position and capabilities to deliver long-term growth in this thriving industry."

Xiangyu Pei, Interim Chief Financial Officer of the Company, noted: "Our financial performance for high-power lithium batteries remained solid in the third quarter, a testament to the strong demand for our advanced and dependable products. Despite the increase in commodity prices, raw material cost was carefully managed through our previous contracts that have locked prices for certain materials. As evidenced by our healthy financial position and vigorous growth, we have the capabilities for executing our growth strategies that will push us further on the path to consistent, sustainable success."

Third Quarter 2021 Business Highlights & Recent Developments

• In August, the Company secured performance certification from the world's leading testing, inspection and certification company SGS for its special 26650 lithium-ion battery, specifically designed for use in ultra-low temperatures.

Third Quarter 2021 Financial Results

Net revenues were $9.6 million. Revenues from high power lithium batteries was approximately $9.6 million, representing 51% year-over-year growth compared to the same period of 2020. The Company did not have new raw material trades in this quarter and had a minor adjustment in revenues from previous raw material trades, and the new production line installation in Dalian plant had a temporarily adverse impact on existing production.

Net Revenues by End-product Applications ($ thousands)		2021 Third Quarter				2020 Third Quarter			% Change YoY
High power lithium batteries used in:
Uninterruptable supplies		$9,336				$5,920			58
Light electric vehicles		227				23			887
Electric vehicles		1				408			(100)
Total high power lithium batteries		$9,563				$6,351			51
Raw materials used in lithium batteries		(1)				4,269			(100)
Total		$9,562				$10,620			(10)

Cost of revenues was $8.4 million, a decrease of 9% from $9.2 million in the same period of 2020.

Gross profit was $1.1 million, a decrease of 18% from $1.4 million in the same period of 2020. Gross margin was 12%, a decrease of 1 percentage point from the same period of 2020. The inflation in raw material prices resulted in the increase in production costs.

Total operating expenses were $4.3 million, an increase of 339% from $1.0 million in the same period of 2020. Most of the increase in all expense categories was due to growing headcount and research and development expenses associated with the Nanjing production facility, along with the expiration of the Chinese government's COVID-19 relief policy that had reduced social insurance contributions during the pandemic.

• Research and development expenses were $1.8 million, an increase of 307% from $0.4 million in the same period of 2020.  The increase in research and development expenses was also due to the Company's efforts in optimizing performance and cost-efficiency for battery products.
• Sales and marketing expenses were $0.5 million, an increase of 223% from $0.2 million in the same period of 2020. Given the growth in revenues from high power lithium batteries, we increased salaries and benefits for sales and marketing employees.
• General and administrative expenses were $2.2 million, an increase of 191% from $0.7 million in the same period of 2020.  The Company's rental expenses increased as it rented spaces for manufacturing, warehouse, and staff accommodation for the Nanjing production facility.
• Recovery of doubtful accounts was $0.2 million, compared to a recovery of doubtful accounts of $0.4 million in the same period of 2020.

Operating Loss was $3.2 million, compared to operating profit of $0.4 million in the same period of 2020.

Finance income, net was $0.1 million, compared to finance expenses of $0.4 million in the same period of 2020, and was a result of lower loan balances and interest income generated from vehicle leasing in 2021.

Change in fair value of warrant liabilities was $23.0 million, compared to nil in the same period of 2020. The change in fair value of warrant liabilities is mainly due to share price decline.

Net Income was $20.0 million, compared to net income of $41,715 in the same period of 2020.

Basic and diluted earnings per share were both $0.23. In comparison, basic and diluted earnings per share in the same period of 2020 were both $0.00.

Cash and cash equivalents were $2.0 million as of September 30, 2021, compared to $33.3 million as of June 30, 2021.

Conference Call

CBAK's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Friday, November 12, 2021 (9:00 PM Beijing/Hong Kong Time on November 12, 2021).

For participants who wish to join the call, please register in advance for the conference using the link provided below at least 15 minutes prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, Direct Event passcode, a unique registrant ID and an email with detailed instructions to join the conference call.

Participant Online Registration: 
http://apac.directeventreg.com/registration/event/9955106

Once completing the registration, please dial-in at least 10 minutes before the scheduled start time of the earnings call and enter the Direct Event passcode and registrant ID as instructed to connect to the call.

Additionally, a live and archived webcast of the conference call will be available at: https://edge.media-server.com/mmc/p/3k3p9eyw.

A replay of the conference call may be accessed by phone approximately two hours after the conclusion of the live call at the following numbers until November 20, 2021. To access the replay, please reference the conference ID 5182755.

International	+61-2-8199-0299
United States	+1-855-452-5696
Hong Kong, China	+852-800-963-117
Mainland, China	+86-800-870-0206
	+86-400-632-2162

About CBAK Energy

CBAK Energy Technology, Inc. (NASDAQ:CBAT）is a leading high-tech enterprise in China engaged in the development, manufacturing, and sales of new energy high power lithium batteries. The applications of the Company's products and solutions include light electric vehicles, electric vehicles, electric tools, energy storage, uninterruptible power supply (UPS), and other high-power applications. In January 2006, CBAK Energy became the first lithium battery manufacturer in China listed on the Nasdaq Stock Market. CBAK Energy has multiple operating subsidiaries in Dalian and Nanjing, as well as a large-scale R&D and production base in Dalian.

For more information, please visit www.cbak.com.cn.

Safe Harbor Statement

This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All "forward-looking statements" relating to the business of CBAK Energy Technology, Inc. and its subsidiary companies, which can be identified by the use of forward-looking terminology such as "believes", "expects" or similar expressions, involve known and unknown risks and uncertainties which could cause actual results to differ materially. These factors include but are not limited to: the ability of the Company to meet its contract or agreement obligations; the uncertain market for the Company's lithium battery cells; business, macroeconomic, technological, regulatory, or other factors affecting the profitability of battery cells designed for energy storage; and risks related to CBAK Energy's business and risks related to operating in China. Please refer to CBAK Energy's most recent Annual Report on Form 10-K, as well as other SEC reports that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. CBAK Energy's actual results could differ materially from those contained in the forward-looking statements. CBAK Energy undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date of this release unless expressly requested by applicable law.

For investor and media inquiries, please contact:

In China:

CBAK Energy Technology, Inc.
Investor Relations Department
Phone: 86-411-39185985
Email: ir@cbak.com.cn

The Blueshirt Group
Ms. Feifei Shen
Phone: +86 13466566136
Email: feifei@blueshirtgroup.com

The Blueshirt Group
Ms. Suwen Feng
Phone: +86 13917110134
Email: suwen@blueshirtgroup.com

In the United States:

The Blueshirt Group
Ms. Julia Qian
Phone: +1 973-619-3227
Email: Julia@blueshirtgroup.com

 

CBAK Energy Technology, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(In $ except for number of shares)
			December 31,				September 30,
			2020				2021
Assets
Current assets
Cash and cash equivalents			$	11,681,750			$	1,993,531
Pledged deposits				8,989,748				15,552,996
Trade accounts and bills receivable, net				29,571,274				22,231,442
Inventories				5,252,845				9,249,455
Prepayments and other receivables				7,439,544				9,715,578
Investment in sales-type lease, net				235,245				838,649
Total current assets				63,170,406				59,581,651
Property, plant and equipment, net				41,040,370				42,050,589
Construction in progress				30,193,309				49,246,115
Non-marketable equity securities				-				702,807
Deposit paid for acquisition of a subsidiary				-				8,349,118
Loan to unrelated third party - Hitrans				-				20,326,775
Operating lease right-of-use assets, net				-				1,981,422
Prepaid land use right- non current				7,500,780				7,465,426
Intangible assets, net				11,807				21,418
Investment in sales-type lease, net				850,407				980,731
Total assets			$	142,767,079			$	190,706,052
Liabilities
Current liabilities
Trade accounts and bills payable			$	28,352,292			$	21,050,320
Current maturities of long-term bank loans				13,739,546				-
Other short-term loans				1,253,869				680,563
Accrued expenses and other payables				11,645,459				15,796,594
Payables to former subsidiaries, net				626,990				361,874
Deferred government grants, current				151,476				153,402
Product warranty provisions				155,888				124,670
Operating lease liability, current				-				753,404
Warrants liability				17,783,000				10,474,000
Total current liabilities				73,708,520				49,394,827
Deferred government grants, non-current				7,304,832				8,833,848
Operating lease liability				-				801,266
Product warranty provision				1,835,717				1,873,626
Long term tax payable				7,511,182				7,606,677
Total liabilities				90,360,251				68,510,244
Commitments and contingencies
Shareholders' equity
Common stock $0.001 par value; 500,000,000 authorized; 53,220,902     issued and 53,076,696 outstanding as of December 31, 2020, 88,555,390     issued and 88,411,184 outstanding as of September 30, 2021				79,310				88,555
Donated shares				14,101,689				14,101,689
Additional paid-in capital				225,278,113				241,232,244
Statutory reserves				1,230,511				1,230,511
Accumulated deficit				(183,984,311)				(131,654,694)
Accumulated other comprehensive loss				(239,609)				1,240,354
				56,465,703				126,238,659
Less: Treasury shares				(4,066,610)				(4,066,610)
Total shareholders' equities				52,399,093				122,172,049
Non-controlling interests				7,735				23,759
Total of equities				52,406,828				122,195,808
Total liabilities and shareholders' equity			$	142,767,079			$	190,706,052

 

 

CBAK Energy Technology, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(In $ except for number of shares)
			Three months ended September 30,								Nine months ended September 30,
			2020				2021				2020				2021
Net revenues			$	10,620,656			$	9,562,190			$	22,146,177			$	24,867,393
Cost of revenues				(9,245,811)				(8,430,808)				(20,477,719)				(20,798,931)
Gross profit				1,374,845				1,131,382				1,668,458				4,068,462
Operating expenses:
Research and development expenses				(446,162)				(1,815,756)				(1,130,316)				(3,344,817)
Sales and marketing expenses				(157,485)				(510,386)				(351,963)				(1,262,999)
General and administrative expenses				(741,785)				(2,158,183)				(2,614,349)				(5,823,560)
Recovery of (provision for) doubtful accounts				364,168				178,897				(63,534)				437,475
Total operating expenses				(981,264)				(4,305,428)				(4,160,162)				(9,993,901)
Operating profit (loss)				393,581				(3,174,046)				(2,491,704)				(5,925,439)
Finance (expenses) income, net				(357,739)				129,340				(1,171,030)				174,442
Other income, net				5,873				69,970				152,171				1,619,194
Impairment of non-marketable equity securities				-				(43)				-				(690,585)
Change in fair value of warrants				-				22,998,000				-				57,174,000
Income (loss) before income tax and     discontinued operations				41,715				20,023,221				(3,510,563)				52,351,612
Income tax expense				-				-				-				-
Net income (loss)				41,715				20,023,221				(3,510,563)				52,351,612
Less: Net income (loss) attributable to non-     controlling interests				2,532				(3,487)				(2,386)				(21,995)
Net income (loss) attributable to shareholders     of CBAK Energy Technology, Inc.			$	44,247			$	20,019,734			$	(3,512,949)			$	52,329,617
Other comprehensive income (loss)
Net loss				41,715				20,023,221				(3,510,563)				52,351,612
– Foreign currency translation adjustment				846,695				243,258				574,526				1,473,992
Comprehensive income (loss)				888,410				20,266,479				(2,936,037)				53,825,604
Less: Comprehensive loss (income)     attributable to non-controlling interests				3,465				(3,404)				(630)				(16,024)
Comprehensive income (loss) attributable to     CBAK Energy Technology, Inc.			$	891,875			$	20,263,075			$	(2,936,667)			$	53,809,580
(Loss) Income per share
– Basic			$	0.00			$	0.23			$	(0.06)			$	0.60
– Diluted			$	0.00			$	0.23			$	(0.06)			$	0.60
Weighted average number of shares of     common stock:
– Basic				64,909,894				88,419,998				59,569,498				87,043,490
– Diluted				65,400,058				88,709,210				59,569,498				87,349,010

 

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SOURCE CBAK Energy Technology, Inc.

FAQ

What were CBAK Energy's revenues for Q3 2021?

CBAK Energy reported net revenues of $9.6 million for Q3 2021.

How much did CBAK Energy's net income increase in Q3 2021?

Net income for CBAK Energy increased to $20 million in Q3 2021, up from $41,715 in the same period of 2020.

What is the growth rate of CBAK's high-power lithium battery revenues?

High-power lithium battery revenues grew by 51% year-over-year in Q3 2021.

What was the operating loss reported by CBAK Energy in Q3 2021?

CBAK Energy reported an operating loss of $3.2 million in Q3 2021.

How did CBAK Energy's cash position change in Q3 2021?

CBAK Energy's cash and cash equivalents decreased from $33.3 million to $2 million as of September 30, 2021.