On November 9, 2023, CBAK Energy Technology Inc (CBAT, Financial), a leading lithium-ion battery manufacturer and electric energy solution provider in China, released its unaudited financial results for the third quarter ended September 30, 2023. Despite the slowdown in China’s battery industry and macroeconomic headwinds, CBAK Energy reported robust growth in its primary battery business, leading to improved profitability and a solid financial performance.
Management Commentary
Yunfei Li, Chairman and CEO of CBAK Energy, expressed satisfaction with the company's performance, stating,
“Amid the slowdown in China’s battery industry and macro headwinds, we are pleased to deliver robust growth in our primary battery business and achieve both operating and net income in the third quarter, further improving our profitability.”He also highlighted the significant order backlog, which exceeds the company's production capacity, as a positive indicator for future performance.
Jiewei Li, CFO and Secretary of the Board, added,
“As the battery business returned to year over year growth in the third quarter, we also recorded the ongoing improvements in gross margin and operating profit margin.”He emphasized the company's focus on balancing growth and profitability while investing in R&D and production capacity expansion.
Financial Performance
The company's net revenues for Q3 2023 were $63.4 million, a 9.9% increase from $57.7 million in the same period of 2022. This growth was primarily due to the expansion of the company’s battery business, which saw a 71.5% increase in net revenues year-over-year. The battery business's gross profits also saw a remarkable increase of 421.6%, and its net income grew by 630.1%.
Cost of revenues decreased by 5.7% to $51.2 million, contributing to a higher gross profit of $12.2 million, up 254.0% from the previous year. The gross margin improved significantly to 19.3%, compared to 6.0% in Q3 2022. Operating expenses increased by 40.8% to $7.0 million, but the company still managed to report an operating income of $5.3 million, a notable turnaround from an operating loss of $1.5 million in the same quarter of the previous year.
Net income attributable to shareholders was $6.3 million, compared to a net loss attributable to shareholders of $290 in Q3 2022. Basic and diluted income per share were both $0.07, a substantial increase from $0.00 in the same period of 2022.
Balance Sheet and Cash Flow
The balance sheet of CBAK Energy showed total assets of $286.8 million as of September 30, 2023, compared to $244.0 million as of December 31, 2022. The increase in assets was primarily due to higher trade and bills receivable and an increase in construction in progress. Total liabilities also rose to $167.3 million from $119.7 million, mainly due to higher trade and bills payable and short-term bank borrowings. Shareholders' equity stood at $114.6 million, a decrease from $117.5 million at the end of 2022.
CBAK Energy's financial results indicate a strong performance in the third quarter of 2023, with significant improvements in revenue, profitability, and earnings per share. The company's focus on its battery business and operational efficiencies has paid off, positioning it well for sustained growth despite industry challenges.
For more detailed information, investors and interested parties are encouraged to visit ir.cbak.com.cn for the earnings release and conference call replay.
Explore the complete 8-K earnings release (here) from CBAK Energy Technology Inc for further details.
