Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CBAK Energy Technology Inc (CBAT, Financial) reported a 60% year-on-year growth in revenues from its battery business, reaching $35.6 million.
- The company's gross margin for the battery business increased to 36.3% in the second quarter, significantly higher than the previous year's 15.4%.
- Net profit for the battery business was $7.89 million in the second quarter, continuing the positive trend from the first quarter.
- The company has a substantial order backlog totaling approximately USD57 million as of August 1, 2024.
- CBAK Energy Technology Inc (CBAT) is set to launch a new large cylindrical battery model, 40135, which is expected to significantly boost sales growth.
Negative Points
- The raw materials manufacturing unit, Hitrans, acquired in 2021, is currently experiencing net losses, which may influence the consolidated financial statements.
- Despite the overall positive performance, the company faces increased competition in the market, which could impact future profitability.
- The company's total net revenues increased by only 13% year over year, which is modest compared to the growth in the battery segment.
- The new model 40135 battery is still in the development phase, with mass production not scheduled to commence until after March next year, potentially delaying expected revenue boosts.
- The company has to ensure high product quality to meet increasing customer demands, which could strain resources and operational efficiency.
Q & A Highlights
Q: What are you seeing in the market right now, and how are you maintaining attractive margins relative to competitors?
A: We maintain substantial gross profits and margins by focusing on differentiated development and high-quality products, which have gained customer recognition. Our products, especially those exported to Germany, have achieved zero complaints. This recognition allows us to maintain profitability and secure more orders. Additionally, our focus on cylindrical batteries with flexible combinations, like the new 40135 model, helps us maintain a competitive edge.
Q: Can you provide more details about the new 40135 battery model and its market application?
A: The 40135 model is designed for both portable and household energy storage, similar to the 32140 model but with higher capacity. It can also be used in scooters, addressing market gaps. The 40135 battery offers capacities of 20 and 40 ampere-hours, making it a good supplement to our existing product line.
Q: When can we expect to hear more about the fast-charging 32140 battery, and what are its technical highlights?
A: The 32140 battery features robust heat dissipation and fast charging capabilities. We are collaborating with Eaton for UPS applications. Additionally, we are developing a new 26650 battery with a full tab design for better heat dissipation at our Dalian facility.
Q: How do you plan to address the increased competition for bids in the market?
A: We differentiate ourselves through our product portfolio, focusing on small power and storage batteries. Our superior product quality and deep understanding of customer demands allow us to maintain a strong market position and profitability.
Q: What are your expectations for the Indian market in the latter half of the year?
A: We anticipate a significant uptick in sales orders for two-wheelers and three-wheeler batteries from the Indian market. We are optimistic about receiving substantial new orders, which will drive our growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
