20-05-2025
CBAK Energy Technology Inc (CBAT) Q1 2025 Earnings Call Highlights: Navigating Revenue Declines ...
Net Revenue: $34.9 million, a 41% year-over-year decline.
Battery Business Revenue: $36 million, a 54.6% decrease from the prior year.
Electric Vehicle Segment Revenue: 11.9% increase.
Light Electric Vehicle Segment Revenue: 88.4% growth.
Home Energy Storage Business Revenue: 60.4% decline.
Net Loss: $1.64 million compared to net income of $9.8 million in the same period last year.
Battery Segment Income: Declined from $11.68 million to $0.34 million.
Warning! GuruFocus has detected 6 Warning Signs with CBAT.
Release Date: May 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
CBAK Energy Technology Inc (NASDAQ:CBAT) is transitioning to a new product, Model 4,135, which has strong market potential and early positive feedback from customers.
The Nanjing facility is maintaining strong growth momentum with the production of the competitive Model 32,140, which is running at full capacity.
The company is planning to establish a manufacturing facility in Southeast Asia, driven by customer demand, which could enhance its global production footprint.
A major customer has committed to a four-year high-volume purchase agreement, which includes substantial pre-payments, indicating strong future revenue potential.
The new Southeast Asian facility will have flexible manufacturing capabilities, allowing it to produce both Model 32,140 and Model 4,135 cells, which could boost overall business performance.
CBAK Energy Technology Inc (NASDAQ:CBAT) reported a significant year-over-year decline of 41% in net revenues for the first quarter of 2025.
The battery segment experienced a drastic income decline from $11.68 million to $0.34 million, contributing to a net loss of $1.64 million.
The home energy storage business saw a 60.4% decline, negatively impacting overall revenue.
The Dalian facility's primary product, Model 26,650, is considered outdated, affecting its competitiveness.
The company does not anticipate a full recovery until the Dalian facility completes its upgrade and the new Model 4,135 is launched.
Q: Can you confirm the expansion goals for your facilities in Dalian and Nanjing? A: Our plan for the Dalian facility remains unchanged, with the new manufacturing line for Model 4,135 having a capacity of 2.3 gigawatt hours. Construction is expected to be completed by the end of June, with trial production starting in the second half of the year. For Nanjing, we have made pre-payments for 3 gigawatt hours of equipment, but due to a new project in Southeast Asia, we plan to relocate one assembly line there, resulting in 1.5 gigawatt hours for both Nanjing and the Southeast Asian country. Zhiguang Hu, CEO & President
Q: Are your customers likely to stick with cylindrical cells for storage, or might they consider prismatic or pouch cells? A: Our main market is home energy storage systems, where high voltage applications often favor cylindrical cells due to design flexibility. While prismatic cells are used, cylindrical and large cylindrical cells are expected to maintain a significant market share due to their structural stability and suitability for common voltage models. Jiewei Li Thierry, CFO & Company Secretary
Q: Are your portable energy customers looking to pull forward demand during the tariff pause? A: Yes, customers are seeking solutions, including relocating manufacturing lines overseas. Our move to Southeast Asia is client-driven, with favorable terms offered by customers. We have closed a deal and expect to announce further details soon. Companies like Jackery and others are pursuing similar strategies. Zhiguang Hu, CEO & President
Q: What is the status of the agreement with a major customer for a large-scale order? A: We are close to finalizing an agreement for a four-year high-volume order, initially focusing on Model 32,140 and transitioning to Model 4,135. A dedicated manufacturing line in Southeast Asia is planned to support this order, with significant recovery expected next year. Jiewei Li Thierry, CFO & Company Secretary
Q: How do you plan to address the current tariff challenges? A: We are evaluating establishing an overseas manufacturing facility in Southeast Asia and exploring expansion in the United States if costs are justified. The decision to expand into Southeast Asia is customer-driven, with a high-volume purchase agreement in principle. The new facility is expected to begin production by mid-next year. Zhiguang Hu, CEO & President
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
