China BAK Battery Q2 2025 Earnings Call Transcript

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August 18, 2025

Key Takeaways

  • Negative Sentiment: We reported Q2 net revenue of $40.52 M, down 15% year-over-year as the Dalian facility transitions from 26,600-format to the larger 4,135 battery model, weighing on consolidated results.
  • Negative Sentiment: The Nanjing plant is operating at full capacity while its phase II expansion faces a several-month delay to Q4 2025 due to equipment supplier constraints, limiting new order fulfillment.
  • Positive Sentiment: With both the new 4,135 cell production line and Nanjing phase II slated to start in Q3–Q4 2025, management expects a strong recovery in consolidated results by year-end.
  • Positive Sentiment: Hytrance raw materials unit delivered 59% revenue growth to $19.43 M and narrowed net losses by 32%, reflecting improved pricing and successful customer additions.
  • Neutral Sentiment: R&D on high-capacity 46 series cells is progressing toward target mass production by end-2026, but major capex deployment depends on securing large customer commitments.
AI Generated. May Contain Errors.
Earnings Conference Call
China BAK Battery Q2 2025
00:00 / 00:00

Transcript Sections

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Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to Seabeck Energy Technologies Second Quarter and First Half of twenty twenty five Earnings Conference Call. Currently, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, we are recording today's call.

Operator

If you have any objections, you may disconnect at this time. Now I will turn the call over to Irina, IR specialist of Seabac Energy. Irina, please proceed.

Executive

Thank you, operator, and hello, everyone. Welcome to CBAK Energy's earnings conference call for the second quarter and the 2025. Joining us today are Mr. Zhi Guang Hu or Jason, chief executive officer of CB AK Energy, mister Siri Li, chief financial officer and company secretary, and Yvan, who will help with our interpretation, will join us for the q and a section. We released our results earlier today.

Executive

The press release is available on the company's IR website at ir.cbak.com.cn as well as from the news web services. A replay of this call will also be available in a few hours on our IR website. Before we continue, please note that today's discussion will contain forward looking statements made under the safe harbor provisions of The US Private Securities Litigation Reform Act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectation expressed today.

Executive

Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligations to update any forward looking statements except as required under applicable laws. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U. S. Dollars.

Executive

With that, let me now turn the call over to our CEO, Mr. Zhi Guang Hu. Please go ahead, Jason.

Zhiguang Hu
CEO at CBAK Energy Technology

Hello, everyone. Thank you for joining our earnings conference call for the second quarter and 2025. As discussed last quarter, our Dalian facility are undergoing transition from model 26,000 to 5,000, a small format battery that had been used for nearly two decades to model 4,135, a much larger and a more advanced model that enjoys strong market popularity. This transition has led to a sharp decline in Darien's net revenues and gross profit. Given that we operate two major battery production base, any downturn in Dalian significantly impact our consolidated results.

Zhiguang Hu
CEO at CBAK Energy Technology

Meanwhile, our Nanjing facility are facing supply constraint due to surging demand for our model thirty two one hundred and forty cells. Phase one of our Nanjing plant will begin operation in 2021 is already running at a full capacity. We reported last quarter that phase two underweight underweight. However, its completion has been delayed by a few months to Q4, limiting our ability to fulfill additional pending orders. In short, Dalian is building a new production line for model forty-thirty five cells.

Zhiguang Hu
CEO at CBAK Energy Technology

With all existing and prospective customers currently testing samples and awaiting mass production, Nanjing is operating at a full capacity and unable to accommodate further demand until phase two comes online. Since both model 4,135 product and Nanjing phase two expansion are expected to be ready in Q3 to Q4, we anticipate a strong recovery in our consolidated results by year end. This situation explains the slowdown in our performance over the past two quarters. As of 06/30/2025, we reported net revenue of $40,520,000 down 15 percentage from $47,790,000 in the same period of 2024. The primary driver of the decline was a sharp reduction in sales to customers in the in the additional residential energy storage market who had previously purchased large volume model 26,600 cells.

Zhiguang Hu
CEO at CBAK Energy Technology

Sales in this segment fell by 44.8 percentage year over year. As a result, the composition of our largest customer has shipped with significant growth in order from leading player in the possible power supply sector and 12 manufacturers in India's two and three wheelers market. Our strategy moving forward is to continue targeting high quality European and American customers for our model twenty six thousand hundred and twenty one hundred and forty and upcoming 40,135 cells. Well, further expanding our market share in India and the portable power supply industry with our model thirty two thousand one hundred and forty and forty one hundred and thirty five products. We had previously decided in partnership with our customer to relocate part of our manufacturing lines overseas response to US tariff on Chinese products.

Zhiguang Hu
CEO at CBAK Energy Technology

However, we have temporarily paused our Malayan project as a short term solution and know that government of both countries are currently engaged in active negotiation to reach an agreement. We believe it is prudent to monitor the outcome of these talks before committing to any major investment. That said, establishing battery cell production capacity in The US remains a core element of our long term strategy. We continue discussion with potential partners to determine the most cost effective approach to realizing this plan. Now let me turn the call to our CFO, J. W. Lee.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

Thank you, Jason. As Jason just mentioned, our net revenues declined primarily due to our strategic transaction from a small format battery model to a larger, more advanced model. Alongside this revenue decline, we reported net losses attributable to Seabeck Energy shareholders of $3,070,000 and total net losses of 3,360,000.00 Of these, the battery segment accounted for 2,070,000.00 in net losses, while our raw materials production unit, Hytrance, reported net losses of 1,060,000.00. Despite weaker performance in our battery segment, high trends deliver a notably improved result. Net revenues for high trends reached approximately 19,430,000.00, up 59.36% from 12,190,000.00 in the same period of 2024.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

Its net losses narrowed by 32.02% from 1,560,000.00 in Q2 last year to 1,060,000.00 in the same period this year. This improvement reflects Heitron's sustained efforts to expand its market presence. In the second quarter and 2025, the unit successfully secured several new customers driving growth in raw material sales. Furthermore, a modest decline in raw material price prices during the first half and of twenty twenty five stimulated customer demand and encourage additional order placements. Looking ahead, we firmly believe that with the completion of our product portfolio upgrade and phase two nineteen project by year end, combined with Heitrans' continued expansion into new high quality customers and the ongoing recovery in the raw material prices.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

The financial performance of both Heitrans and our battery segment will see a strong rebound in near future. Thank you. We will now open the floor for the Q and A section. Operator, please go ahead.

Operator

Thank We will take our first question. And the question comes from the line of Brian Lantier from Saks Small Cap Research. Please go ahead. Your line is open.

Brian Lantier
Senior Research Analyst at Zacks Small Cap Research

Great. Good evening, gentlemen. I wonder if you could talk a little bit about the competitive landscape right now. And if you're experiencing any pricing pressures or if customers are really focusing on the products and the availability of your products.

Zhiguang Hu
CEO at CBAK Energy Technology

Okay. I think the the price for us usually the price. As you know, now the battery technology developed very quick. And every year, the performance such as capacity increased. Why the battery cell capacity increased?

Zhiguang Hu
CEO at CBAK Energy Technology

Because the high capacity can reduce the cost. And the market right now is very sensitive for the cost. So CBK transfer a small battery to a larger battery cell to reduce the cost to meet the market requirement. And the volume act actually, now the market volume is increased very quick too Because now for a inter market now need battery, such as consumer market and two wheels, three wheels, two wheels, three wheels market and electric vehicles. So volume increase is very big.

Brian Lantier
Senior Research Analyst at Zacks Small Cap Research

Okay. Thank you for that.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

Sorry, Brian. Let me let me add some points. I think following what Jason just commented, right now, because, our most of the of the leading battery players in China producing prismatic sales, which has a much lower cost advantages over our technical route. However, right now, as you may know that all the manufacturers for cylindrical cells are actually trying their best to upgrade their product to a much larger battery model. So actually the larger your battery will be actually the lower the better cost effective your battery is going to be.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

So our strategy is just to keep investing in the R and D programs to try to produce a larger size of our batteries. The project of 4,135 is the one that we are currently investing. It's a major upgrade from 26,650. The size will be much, much larger, which means there is cost that would be effectively lower than our current product. In the future, as we always say, we are also investing in the R and D of the Series 46, which will be much larger than all the current products we have.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

We believe that with the time being and with all our R and D programs going very well, we will eventually have a very cost effective products in the market. And that product would target that order major customer market that values the value that would just pay attention pay great attention to the coast, including the two wheeler and three wheeler markets that Jason just mentioned.

Brian Lantier
Senior Research Analyst at Zacks Small Cap Research

Great. My next question was going to be on the 46 series cells. Where do you stand in that development? And when do you think best case scenario, you could actually be producing something like a forty six nine fifty or something along those lines?

Zhiguang Hu
CEO at CBAK Energy Technology

Actually, now we make the research and development for the SIG series from already more than two years. And our target, we will achieve the MAD product of 46 series cell at the end of next year. And the

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

Yeah. Let me add some point. As Jason just say, we have already spent enough time on the IND of Series 46. We have probably a couple of actual models to choose, 46,120 or 46,950. A lot of the models to choose actually depend on our major customers preference.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

I think the key elements determining when we are going to mass produce for this the Series 46 is actually the capital, because right now the equipment and production line for Series 46 is extremely expensive at this moment, unless we have securing significant orders from our customers. Otherwise, we will be very cautious about investing into this expensive production line, considering especially considering we have already two expansion projects at hand, a project for 4135 and a project for 03/1940. If we have a choice, we would like to complete a fundraising and then proceed with the construction of production life of 46. Otherwise, we prefer the conviction of the current two project first.

Brian Lantier
Senior Research Analyst at Zacks Small Cap Research

Okay, great. That's helpful. Were there specific factors that caused the delay in the Nanjing expansion? Was it tied to uncertainty around possibly expanding in Malaysia first? Or and just or was it difficulty securing equipment?

Brian Lantier
Senior Research Analyst at Zacks Small Cap Research

If you have any color around what caused that delay, I'd appreciate it.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

Let me respond to this question. I think the major issues causing the delay of our Nanjing project actually comes down to our equipment supplier. Some of our major equipment suppliers face problems sending over their equipment. So there so it's just as a result, we have a probably a couple months of delay. We don't think we're going into any legal tussles with these suppliers because that would cause much longer delays.

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

We are going to resolve these problems very soon. So expectedly, we are going to I think we're going to complete the expansion for this phase by the end of this year.

Brian Lantier
Senior Research Analyst at Zacks Small Cap Research

Okay. Great. And just a housekeeping. Have you been active? Have you disclosed yet if you've been active under the 20,000,000 buyback?

Brian Lantier
Senior Research Analyst at Zacks Small Cap Research

And if you have, how much capacity is still available under that buyback?

Jiewei Li
CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology

Well, yes. After we announced the stock buyback, program, we do, we did, spend certain cash, buying our, our stock back. I think we have so far spent about, roughly, we need to check the number, but roughly between 1.3 to, you know, $1,500,000 at this moment, and the stock price was pushed up above, like, dollars I think it's still strongly underestimated our company, but we will see how the market goes and determine when we're going to buy the stock back again because the program is a one year long program.

Brian Lantier
Senior Research Analyst at Zacks Small Cap Research

Okay. Great. Thank you for the update. I appreciate it. Thank you.

Operator

Thank you. Thank you. Seeing no more questions in the queue, let me turn the call back to Jason for closing remarks.

Zhiguang Hu
CEO at CBAK Energy Technology

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. Thank you.

Operator

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

Analysts
    • Executive
    • Zhiguang Hu
      CEO at CBAK Energy Technology
    • Jiewei Li
      CFO, Director & Secretary of the Board of Directors at CBAK Energy Technology
    • Brian Lantier
      Senior Research Analyst at Zacks Small Cap Research
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