CBAK Energy Technology Inc (CBAT) 2023 Q1 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by. And welcome to the CBAK Energy Technology's First Quarter 2023 Earnings Conference Call. (Operator Instructions)

美好的一天，女士們先生們。謝謝你的支持。歡迎參加 CBAK Energy Technology 2023 年第一季度收益電話會議。 （操作員說明）

As a reminder, we are recording today's call. If you have any objections, you may disconnect at any time.

謹此提醒您，我們正在對今天的通話進行錄音。如果您有任何異議，可以隨時斷開連接。

Now, I will turn the call over to Thierry Li, Investor Relations Director of CBAK Energy.

現在，我將把電話轉給 CBAK Energy 投資者關係總監 Thierry Li。

Mr. Li, please proceed.

李先生，請繼續。

Thank you, Operator. And hello everyone. Welcome to CBAK Energy's first quarter 2023 earnings conference call.

謝謝你，接線員。大家好。歡迎參加 CBAK Energy 2023 年第一季度收益電話會議。

Joining us today are Mr. Yunfei Li, our Chief Executive Officer; Mrs. Xiangyu Pei, our Interim Chief Financial Officer; Mr. Xiujun Tian, our General Engineer; and Jennifer, our interpreter.

今天加入我們的是我們的首席執行官李雲飛先生；裴翔宇女士，我們的臨時首席財務官；田秀軍先生，我們的總工程師；還有我們的翻譯詹妮弗。

We released results earlier today. The press release is available on the company's IR website at ir.cbak.com.cn as well as from Newswire services.

我們今天早些時候發布了結果。該新聞稿可在公司IR網站ir.cbak.com.cn以及Newswire服務上獲取。

A replay of this call will also be available in a few hours on our IR website.

幾小時後我們的 IR 網站上也將提供本次電話會議的重播。

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.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。

Forward-looking statements involve inherent risks and uncertainties.

前瞻性陳述涉及固有風險和不確定性。

As such, the company's actual results may be materially different from the expectations expressed today.

因此，公司的實際結果可能與今天表達的預期存在重大差異。

Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC.

有關這些以及其他風險和不確定性的更多信息包含在該公司向 SEC 提交的公開文件中。

The company doesn't assume any obligations to update any forward-looking statements, except as required under applicable laws.

除適用法律要求外，該公司不承擔任何更新任何前瞻性陳述的義務。

Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars.

另請注意，除非另有說明，電話會議中提到的所有數字均以美元為單位。

With that, let me now turn the call over to our CEO, Mr. Yunfei Li. Mr. Li will speak in Chinese and I will translate his comments into English.

現在讓我將電話轉給我們的首席執行官李雲飛先生。李先生將用中文發言，我將他的評論翻譯成英文。

Go ahead, Mr. Li.

繼續吧，李先生。

Thank you. And hello, everyone. Thank you for joining our earnings conference call today.

謝謝。大家好。感謝您今天參加我們的財報電話會議。

We have just released our financial results for the first quarter of 2023. Regrettably, our total revenues have declined as a result of reduced revenues from our materials division, stemming from a significant fall in the price of raw materials. As part of current market conditions, we have achieved satisfactory results in our primary business, which involves selling lithium batteries. In particular, our battery business generated revenues of $29.6 million, representing a 97.1% increase from the same period last year.

我們剛剛發布了 2023 年第一季度的財務業績。遺憾的是，由於原材料價格大幅下跌，材料部門的收入減少，我們的總收入有所下降。在當前市場狀況下，我們的主營業務（即銷售鋰電池）取得了令人滿意的業績。其中，電池業務實現收入2960萬美元，同比增長97.1%。

Among these revenues, $25.82 million came from batteries used in energy storage applications, which is a 72.9% increase, while $1.97 million came from batteries used in light electric vehicles, reflecting an impressive growth of 2117.2%. Moreover, revenues from batteries used in electric vehicles, was $1.82 million marking a remarkable increase of 5889.8 times compared to the same period last year. In addition to achieving significant revenue growth, we have also witnessed a significant improvement in our gross profit margin. For our battery business, the gross profit margin in the first quarter reached 10.85% representing an increase of 4.31 percentage points from the previous year. We are competent that our gross profit margin will continue to improve in the future as our capacity gradually releases and production efficiency continuously gets improved.

其中，2582萬美元來自儲能應用電池，增長72.9%；197萬美元來自輕型電動汽車電池，增長2117.2%，令人印象深刻。此外，電動汽車用電池收入為182萬美元，同比大幅增長5889.8倍。除了實現收入的顯著增長外，我們還見證了毛利率的顯著改善。電池業務一季度毛利率達到10.85%，同比提升4.31個百分點。我們相信，隨著產能的逐步釋放和生產效率的不斷提高，未來我們的毛利率將持續提高。

As usual, I would like to begin by providing an update on the total value of orders that we have received, but yet to fulfill. As of April 30, 2023, the combined value of pending orders across our three main production facilities situated in Dalian, Nanjing and Shaoxing has reached roughly $187 million. This figure has risen since our previous earnings call suggesting a favorable development in our efforts to acquire new customers and secure new orders from existing ones. We maintain a high level of optimism regarding our market revenue prospects for 2023, particularly with respect to the revenue generated from our primary business operations which is the sales of lithium batteries.

像往常一樣，我想首先提供我們已收到但尚未履行的訂單總價值的最新信息。截至 2023 年 4 月 30 日，我們位於大連、南京和紹興的三個主要生產設施的待處理訂單總價值已達到約 1.87 億美元。自我們上次的財報電話會議以來，這一數字有所上升，表明我們在獲取新客戶和從現有客戶那裡獲得新訂單的努力方面取得了有利的進展。我們對 2023 年的市場收入前景保持高度樂觀，特別是對我們的主要業務運營（即鋰電池銷售）產生的收入。

Revenues from the LEV and EV sectors, has continued to grow as a result of further collaboration with Jinpeng Group and its affiliate Jemmell. As of April 30, 2023, Jinpeng Group and its affiliate have placed orders worth RMB20.31 million since 2023. As a result, we had consecutively ranked among the top 15 LFP lithium battery suppliers in China in terms of installed capacity for EV and LEV applications in January and February, according to publicly available data.

通過與金鵬集團及其附屬公司 Jemmell 的進一步合作，LEV 和 EV 領域的收入持續增長。截至2023年4月30日，金鵬集團及其關聯公司自2023年以來累計訂單金額2,031萬元，連續躋身中國電動車、輕型電動車裝機量前15名磷酸鐵鋰電池供應商根據公開數據，一月和二月的申請量。

After consolidating our existing foundation in the energy storage field, our aim is to continue our efforts towards the LEV and EV markets. As of April 30, we have also received orders totaling approximately RMB3.58 million this year from our cooperation with us (inaudible) modules and we expect to further promote the cooperation with (inaudible) modules in the future.

鞏固了我們在儲能領域的現有基礎後，我們的目標是繼續發力LEV和EV市場。截至4月30日，今年我們還收到了與我們（聽不清）模塊合作的訂單，總計約人民幣358萬元，我們預計未來將進一步推動與（聽不清）模塊的合作。

We have had in depth discussions with our major European clients as we previously disclosed to further our collaboration for this year. Both parties have expressed a strong willingness to continue working together and we expect to announce details of the agreed deal soon. As our cooperative relationship deepens and becomes more stable, we anticipate receiving larger orders from this European client than we have in the past.

正如我們之前所披露的，我們已經與歐洲主要客戶進行了深入討論，以進一步推進今年的合作。雙方均表達了繼續合作的強烈意願，我們預計很快將公佈所達成的交易細節。隨著我們合作關係的加深和更加穩定，我們預計會從這個歐洲客戶那裡收到比過去更大的訂單。

Additionally, we announced in April our collaboration with PowerOak, a company that ranks among the top three global players in the portable power supply markets through its subsidiary rebrand BlueTTi. Our partnership with PowerOak and BlueTTi started in March 2022. And we have received orders worth approximately $5.35 million so far. PowerOak expected to place orders on a monthly basis indicating that the order volume of our collaboration with PowerOak is expected to continue increasing. We have been able to enter and expand in the global market for portable power supplies mostly through our collaboration with PowerOak, which is also one of the key markets that company is paying close attention to. At present, we're actively reaching out to the top clients in this market and the hopeful to present our investors and shareholders with better cooperation projects and all the information.

此外，我們於 4 月宣布與 PowerOak 合作，PowerOak 是一家通過其子公司更名為 BlueTTi 躋身全球便攜式電源市場前三名的公司。我們與 PowerOak 和 BlueTTi 的合作始於 2022 年 3 月。迄今為止，我們已收到價值約 535 萬美元的訂單。 PowerOak預計每月都會下訂單，這表明我們與PowerOak合作的訂單量預計將繼續增加。我們能夠進入並拓展全球便攜式電源市場主要是通過與PowerOak的合作，這也是公司密切關注的重點市場之一。目前，我們正在積極接觸這個市場的頂級客戶，希望為我們的投資者和股東提供更好的合作項目和所有信息。

We have received inquiries from several institutional investors and potential clients about the status of our sodium ion batteries. In the near future, we plan to hold a product launch event for our sodium ion batteries, and hope that our investors and shareholders were stated for our announcement. As we mentioned in our previous earnings call, sodium ion batteries are currently a major focus for many battery companies. Once produced on a large scale, sodium ion batteries are expected to replace lead acid batteries that are widely used in light electric vehicles, which have a negative environmental impact. Our development of sodium ion batteries not only positions us to enter the market worth about tens of billions of dollars, but also reflects our commitment to environmental responsibility.

我們收到了一些機構投資者和潛在客戶對我們鈉離子電池狀況的詢問。在不久的將來，我們計劃舉辦鈉離子電池的產品發布會，並希望我們的投資者和股東能夠了解我們的公告。正如我們在之前的財報電話會議中提到的，鈉離子電池目前是許多電池公司的主要關注點。一旦大規模生產，鈉離子電池有望取代廣泛用於輕型電動汽車的鉛酸電池，鉛酸電池會對環境產生負面影響。我們開發鈉離子電池不僅使我們能夠進入價值數百億美元的市場，而且體現了我們對環境責任的承諾。

In terms of the progress of our Nanjing Phase 2 project, we have completed the roof searing of some of our factories and expect them to be operational by the end of this year at the earliest. We are also making active preparations for an investor day. And we'll invite all investors and shareholders with our company at an appropriate time to walk through our Nanjing project. Once we're ready, we were released information about the Investor Day.

就南京二期項目的進展而言，我們已完成部分工廠的屋頂燒製，預計最快將於今年年底投入運營。我們也在積極準備投資者日。我們將在適當的時候邀請所有投資者和股東與我們公司一起參觀我們的南京項目。一旦我們準備好，我們就會發布有關投資者日的信息。

Now, let me turn the call over to our Interim CFO Xiangyu Pei, who will provide details on our financial performance.

現在，讓我將電話轉給我們的臨時首席財務官裴翔宇，他將提供有關我們財務業績的詳細信息。

Okay. Thank you, Mr. Yunfei. Thank you everyone for joining our call today.

好的。謝謝雲飛先生。感謝大家今天加入我們的電話會議。

I will now go over our key financial results for the first quarter 2023. For the full details of our financial results, please refer to our earnings press release.

我現在將回顧我們 2023 年第一季度的主要財務業績。有關我們財務業績的完整詳細信息，請參閱我們的收益新聞稿。

The way how we intend to draw momentum in the sales of our battery products, we are optimistic for this year given that we have reached an agreement with our major European clients and made a progress in developing clients in the global portable power supply market. Our gross margin from our primary revenues versus battery has also recovered to 10.85%. As our new capacity releases and our production efficiency improved, we are confidence that the gross margin for our battery business will continue to grow.

對於我們打算如何推動電池產品的銷售勢頭，我們對今年持樂觀態度，因為我們已經與歐洲主要客戶達成協議，並且在全球便攜式電源市場開發客戶方面取得了進展。我們的主要收入與電池的毛利率也恢復至 10.85%。隨著新產能的釋放和生產效率的提高，我們有信心電池業務的毛利率將持續增長。

Moving on to our financial performance, we experienced 47% decrease in large revenues in the first quarter, dropping to $42 million from the same period in 2022. The main cause of this decline is the drop in our materials business, which has been negatively impacted by a fluctuating price of materials. On the other hand, we had strong performance in our revenues of lithium battery sales achieving revenues of $29 million, which represents a substantial increase of 97%. Among these revenues, $25.8 million were from batteries used in the energy storage applications, representing a growth of 72.9%., $1.97 million came from batteries in light electric vehicles showing an impressive increase of 2117%. Additionally, our revenue from battery sales in electric vehicles, were $1.8 million, which is an expected low growth of 5889 times compared to the same period last year. This significant improvement in our primary business, are very encouraging. We expect that the positive momentum to continue and we are confident that we will achieve better results this year.

再來看看我們的財務業績，第一季度我們的大額收入下降了 47%，較 2022 年同期下降至 4200 萬美元。造成這一下降的主要原因是我們的材料業務下降，該業務受到了負面影響受材料價格波動的影響。另一方面，我們的鋰電池銷售收入表現強勁，實現收入2900萬美元，大幅增長97%。其中，2580萬美元來自儲能應用電池，增長72.9%。197萬美元來自輕型電動汽車電池，增長2117%，令人印象深刻。此外，我們的電動汽車電池銷售收入為180萬美元，預計較去年同期低增長5889倍。這對我們主營業務的顯著改善，是非常令人鼓舞的。我們預計這一積極勢頭將持續下去，我們有信心今年取得更好的成績。

The cost of revenues in the first quarter was $39.25 million, which represents a decrease of 47% from the same period in the previous year. The reduction in cost of revenue was consistent with the decline in revenue. In the first quarter, our gross profit decreased by 45% year-on-year to $2.9 million, while the gross margin largely increased to 6.8% from 6.6% in the same period last year. This was largely due to the significant increase in gross profit margin of our battery business. The gross margin for our battery segment was 10.8%, up by 4.3 percentage points (technical difficulty).

第一季度營收成本為3925萬美元，較上年同期下降47%。收入成本的下降與收入的下降一致。第一季度，我們的毛利潤同比下降45%至290萬美元，而毛利率則從去年同期的6.6%大幅上升至6.8%。這主要是由於我們的電池業務毛利率大幅上升。電池板塊毛利率10.8%，提升4.3個百分點（技術難度）。

That concludes my prepared remarks. We will now open the call to for questions. Operator, please go ahead. Thank you.

我準備好的發言就到此結束。我們現在將開放電話提問。接線員，請繼續。謝謝。

(Operator Instructions) Our first question comes from (Inaudible) from TPG. Your line is open.

（操作員說明）我們的第一個問題來自 TPG（聽不清）。您的線路已開通。

Okay. So first of all, I'd like to say thank you for taking my question. And also want to congratulate you for your strong performance in the first quarter of the year. I have two questions. The first one is that it seems that sodium battery is about to be put into production. Can you tell us what earns that sodium ion batteries as the replacement of lead acid batteries can bring to the environmental protection? And my second question is that you just mentioned the company has the plan to launch an Investor Day at an appropriate time. Are investors are welcome to visit the company on this Investor Day. What's the progress of the construction and equipment installation in the Nanjing Phase 2 project. If we pay a visit to the production facility on the Investors Day what can we see on-site? Thank you.

好的。首先，我想說謝謝你提出我的問題。還要祝賀您在今年第一季度的強勁表現。我有兩個問題。第一個是鈉電池好像要投產了。您能告訴我們鈉離子電池替代鉛酸電池能為環保帶來什麼收益嗎？我的第二個問題是，你剛才提到公司計劃在適當的時候舉辦投資者日活動。歡迎投資者在投資者日參觀公司。南京二期工程建設及設備安裝進展如何？如果我們在投資者日參觀生產設施，我們可以在現場看到什麼？謝謝。

Okay. So Mr. Tian is going to address the first question.

好的。那麼田先生先回答第一個問題。

Well, if -- let's have a look at the difference between lead-acid battery and sodium ion battery. For lead-acid batteries, they are liquid state battery. Compared with sodium ion battery, liquid battery is easier to spread. And it is -- as a heavy metal, it can cause pollution through soil and water and if lead enter into human body it may cause poisonous. It can also lead through some diseases in human beings. And if human being intake a large amount of lead, it may even pose a threat to the life -- to the safety of this person. However, if we have a look at sodium ion battery, there is a large storage of net of sodium in our nature. And actually it is also a very common ingredient or a very common element in our food. It is even be regarded a dispensable element to human being. So we can say sodium ion battery is -- or we can say sodium is very friendly to human being and sodium ion battery is very friendly to the nature. And if we can use sodium ion battery then we can really embark on a journey towards green development. And we believe that it is a very good supplement to the lead acid battery. It is not only environmental friendly, but also it is economically competitive in the industry. That's it for the answer for the question one.

好吧，如果——我們來看看鉛酸電池和鈉離子電池的區別。對於鉛酸電池來說，它們是液態電池。與鈉離子電池相比，液態電池更容易普及。它是——作為一種重金屬，它會通過土壤和水造成污染，如果鉛進入人體可能會導致中毒。它還可以導致人類的一些疾病。而如果人類攝入大量的鉛，甚至可能對生命——人的安全構成威脅。然而，如果我們看一下鈉離子電池，就會發現我們的自然界中儲存著大量的鈉。實際上它也是我們食物中非常常見的成分或非常常見的元素。它甚至被認為是人類可有可無的元素。所以我們可以說鈉離子電池——或者我們可以說鈉對人類非常友好，鈉離子電池對自然非常友好。如果我們能夠使用鈉離子電池，那麼我們就可以真正踏上綠色發展之旅。我們相信它是對鉛酸電池非常好的補充。不僅環保，而且在行業中具有經濟競爭力。這就是問題一的答案。

Okay. So with regard to the second question concerning Investors Day. Well, we do have the plan to organize an Investors Day event in the near future and we extend a sincere welcome to all the shareholders and the investors to pay a visit to our production facility and to join us on the Investors Day. And on that day, we will also invite the media to do the publicity and to do a media campaign for us. And it will -- you would like to know the progress of the construction of Nanjing second phase project, I will be very happy to give you more updates. So there will be a building that is designated to be an 8 kilowatt battery production facility and it will -- the construction will be finished by June this year. And by then, the 18 gigawatts-hour supporting factories will also be completed at a time. And we already send the specification of our equipment through the suppliers and we are about to send them the bidding document very soon.

好的。關於投資者日的第二個問題。嗯，我們確實計劃在不久的將來組織投資者日活動，我們真誠地歡迎所有股東和投資者參觀我們的生產設施並參加我們的投資者日活動。那天我們也會邀請媒體為我們做宣傳、做媒體宣傳。你們想了解南京二期工程的建設進展，我很樂意為你們提供更多最新消息。因此，將會有一座建築被指定為 8 千瓦電池生產設施，並且該建築將於今年 6 月完工。屆時，18吉瓦時配套工廠也將一次性建成。我們已經通過供應商發送了我們設備的規格，我們很快就會向他們發送招標文件。

So if you pay a visit to our production facilities on the Investors Day, we believe that you will see our factories are ready for the installation of equipment by then.

因此，如果您在投資者日參觀我們的生產設施，我們相信屆時您會看到我們的工廠已經準備好安裝設備。

And once again we would like to extend an invitation to all the shareholders and investors you are more than welcome to visit us.

我們再次向各位股東和投資者發出邀請，歡迎您蒞臨參觀。

(Operator Instructions) We have a question from (Inaudible) from TPG. Your line is open.

（操作員說明）我們收到 TPG 的（聽不清）問題。您的線路已開通。

Okay. We noticed that the battery business of the company has grown very rapidly in recent years, especially the Energy Storage segment. How do you see the composition of revenue from the battery business in the future? To what extent can the share of revenue from LEV and EV business increase?

好的。我們注意到，公司電池業務近年來增長非常迅速，尤其是儲能板塊。您如何看待未來電池業務的收入構成？ LEV和EV業務的收入佔比能提升到什麼程度？

So yes. You are right. From the sales revenue of the first quarter, we can see that energy storage business segment does occupy a big proportion of our sales revenue. And the revenue from the EV and LEV occupies a secondary position. And if we have a look at the revenue composition, we can see that the revenue from energy storage takes up about more than 80% of our total revenue. So based on the orders that we have in hand, and as well as the production capacity, it is estimated that this year, we are still going to maintain similar revenue composition just similar to the first quarter. But if we have very deep -- a deeper dig, or if we dive in deeper into the figure of the first quarter, we are also very happy to see that the sales revenue of the LEV -- from the LEV and EV also witnessed substantial growth. If we compared with the previous year, we achieved $3.7 million sales value in EV and LEV. And we believe that with the increase of the production capacity in our Nanjing production facility next year, as well as the continuous efforts that we are going to put in the EV and LEV markets, we predict that next year we are going to see an explosive growth in our LEV and EV revenue.

所以是的。你是對的。從一季度的銷售收入來看，儲能業務板塊確實佔據了我們銷售收入的很大一部分。而EV和LEV的收入則佔據次要地位。如果我們看一下收入構成，我們可以看到儲能收入占我們總收入的80%以上。因此，根據我們在手的訂單以及產能，預計今年我們仍將保持與第一季度相似的收入構成。但如果我們進行非常深入的挖掘，或者如果我們更深入地研究第一季度的數字，我們也很高興看到LEV的銷售收入——來自LEV和EV的銷售收入也見證了可觀的增長生長。如果與上一年相比，我們在電動汽車和輕型電動汽車領域實現了 370 萬美元的銷售額。我們相信，隨著明年南京工廠產能的增加，以及我們在EV和LEV市場的持續發力，我們預計明年將會出現爆發式的增長。我們的 LEV 和 EV 收入增長。

Thank you. I see no more questions in the queue.

謝謝。我在隊列中沒有看到更多問題。

Let me turn the call back to Mr. Yunfei Li for closing remarks.

讓我把電話轉回給李雲飛先生做總結髮言。

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.

謝謝接線員，感謝大家參加今天的電話會議並給予支持。我們感謝您的關注，並期待下個季度再次向您報告我們的進展。

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

再次感謝大家。通話就此結束。您現在可以斷開連接。