CBAK Energy Technology, Inc. Q4 FY2023 earnings call

• Battery business maintained growth momentum in Q4 2023 with revenue increase and historic high gross margin. Full-year 2023 battery revenues surged 40.4% y-o-y.
• Forged partnerships with key clients like Viessmann Group, Anker Innovations, Hello Tech, etc.
• R&D developments: Commenced mass production of large sodium ion batteries, developed lithium ion battery models, optimized production capacity in Dalian, Changzhou, and Nanjing facilities.
• Ongoing negotiations with Canada's electric vehicle industry and plan to partner with an India-based scooter manufacturer in 2024.

In the fourth quarter of 2023, CBAT Energy's battery business saw fourth quarter revenues up 30.9% year-over-year to reach $36.83 million. Of this, $34.93 million came from energy storage applications (up 84.3% y-o-y), $0.52 million from electric vehicles (down 88.8% y-o-y), and $1.38 million from light electric vehicles (down 69.5% y-o-y). For full-year 2023, battery business revenues were $133 million, a 40.4% y-o-y increase. The battery business's gross margin in Q4 2023 rose to a historic high of 36%, up 27.7 percentage points y-o-y. Net income from the battery business in Q4 2023 was $6.62 million, compared to a net loss in the same period last year. Full-year 2023 battery business operating income was $10.44 million with net income of $13.37 million.

• Expect to increase investments in R&D and production capacity in 2024.
• Anticipate full-year net profit for battery business in 2024.
• Talking with private equity investors for Hitrans and sodium ion battery business, aiming for private placement financing.

• Intense competition in the battery market may lead to price decreases in the long-term.
• Uncertainties in private placement financing negotiations for Hitrans and sodium ion battery business.

Q: Concern on whether Q4 gross margin is sustainable and what drove it.

A: Battery has stable and safe features, confident gross margin will be above market average despite potential price drops.

Q: Long-term capacity goals.

A: Capacity growth based on client needs, will continue increasing production capacity, especially for sodium ion batteries.

Q: Progress on outside investment negotiations.

A: Hoping for positive announcements in first half of 2024, investors interested in sodium ion batteries, but negotiations ongoing.