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CE

CBAK Energy Technology, Inc. (CBAT)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue rebounded sharply to $60.92M, up 36.5% year over year and up 50% sequentially, driven by raw materials (Hitrans) strength; gross margin compressed to 8% amid legacy product transition. Basic/diluted EPS was $0.03 versus $0.00 last year and losses in Q1/Q2 .
  • Significant beats versus sparse Street consensus: Revenue $60.9M vs $39.3M consensus; EPS $0.03 vs -$0.04 consensus, reflecting better-than-expected battery profitability and raw materials price recovery; note only one estimate covers CBAT for each metric (thin coverage).*
  • Management highlighted successful 40135 line upgrade in Dalian and imminent Nanjing capacity additions (2.3 GWh and 2 GWh, respectively), plus strong demand for 32140 remaining supply-constrained—key catalysts for near-term growth .
  • Qualitative drivers: Hitrans benefited from raw materials price rebound; battery segment net income rose 123% on demand for 32140 despite transition-related margin headwinds; orders ramping for 40135 and strategic partnership with Anker to localize production (Malaysia) support multi-quarter trajectory .

What Went Well and What Went Wrong

What Went Well

  • Battery segment net income rose 122.7% YoY to $4.53M on robust 32140 demand; consolidated net income attributable improved to $2.65M from ~$0.02M last year .
  • Hitrans raw materials revenue surged 143.7% YoY to $27.22M; segment gross profit turned positive and loss narrowed with raw material price recovery .
  • Management executed product upgrade: “successful upgrade from the Model 26650 to the Model 40135 at our Dalian facility... new Nanjing production lines... add a further 2 GWh” .

What Went Wrong

  • Gross margin compressed to 8% from 15.6% YoY and 11–13.7% in recent quarters, as lower 26650 volumes raised unit costs during transition to 40135 .
  • Battery business gross profit fell 42.4% YoY to $4.42M and battery gross margin to 13.1%, reflecting validation phase and demand shift from legacy products .
  • Operating loss widened to $3.55M vs $0.83M loss last year; raw materials segment still loss-making (loss $2.11M), albeit improving .

Financial Results

Consolidated Quarterly Financials (Oldest → Newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD)$34,938,901 $40,524,333 $60,923,560
Gross Profit ($USD)$4,801,734 $4,462,409 $5,362,376
Gross Margin (%)13.7% 11.0% 8.0%
Operating Income (Loss) ($USD)$(2,864,019) $(3,528,576) $(3,547,020)
Net Income Attributable ($USD)$(1,579,234) $(3,072,964) $2,650,503
Basic EPS ($)$(0.02) $(0.03) $0.03
Diluted EPS ($)$(0.02) $(0.03) $0.03

Q3 YoY Comparison

MetricQ3 2024Q3 2025
Revenue ($USD)$44,628,241 $60,923,560
Gross Margin (%)15.6% 8.0%
Operating Income (Loss) ($USD)$(827,873) $(3,547,020)
Net Income Attributable ($USD)$17,647 $2,650,503
Basic/Diluted EPS ($)$0.00/$0.00 $0.03/$0.03
Battery Business Net Revenues ($USD)$33,461,793 $33,708,106
Battery Business Gross Profit ($USD)$7,665,009 $4,415,285
Battery Business Gross Margin (%)22.9% 13.1%
Battery Business Net Income ($USD)$2,035,338 $4,531,883
Hitrans Net Revenues ($USD)$11,166,448 $27,215,454
Hitrans Gross Profit ($USD)$(710,452) $460,438
Hitrans Gross Margin (%)(6.4)% 1.7%
Hitrans Net Loss ($USD)$(2,603,969) $(2,114,683)

Battery Business Application Breakdown (Q1–Q3 2025)

Application ($USD)Q1 2025Q2 2025Q3 2025
Electric Vehicles$537,507 $142,139 $57,283
Light Electric Vehicles$2,844,874 $2,426,624 $18,172,629
Residential Energy Supply & UPS$16,980,957 $18,521,374 $15,478,194
Battery Business Net Revenues$20,363,338 $21,090,137 $33,708,106

Versus Estimates (Q3 2025)

MetricConsensusActual
Revenue ($USD)$39,267,800*$60,923,560
Primary EPS ($)$(0.04)*$0.03
Coverage (# of estimates)Revenue: 1*; EPS: 1*n/a

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated RevenueFY/Q4 2025None providedNone providedMaintained: No formal guidance
Gross MarginFY/Q4 2025None providedNone providedMaintained: No formal guidance
Capacity (40135 Dalian)Ongoing2.3 GWh target (prior) 2.3 GWh expected contribution (affirmed) Maintained/Affirmed
Capacity (32140 Nanjing)Mid-Nov–YE 2025Expansion planned +2 GWh lines to commence mid-November Raised/Timing Confirmed
Regional Manufacturing (Malaysia)End-2025 startProject announced; orders valued at ~$357M Proceeding; mass production targeted by end-2025 Maintained/Executing

Earnings Call Themes & Trends

Note: Q3 2025 transcript not available in repository; themes reflect Q1 2025 call, Q2 press release, and Q3 management comments.

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q1 2025)Current Period (Q3 2025)Trend
Product upgrade (26650 → 40135)Dalian upgrade driving short-term revenue/margin pressure; validation in process Transition underway; validation progressing Upgrade completed; 40135 line operating; orders ramping Improving/Executing
Capacity addsNanjing Phase II expansion postponed to Q4 Plan: Dalian +2.3 GWh; Nanjing +3 GWh with partial relocation to SE Asia Dalian 40135 +2.3 GWh; Nanjing +2 GWh commencing mid-Nov Improving/Visibility
Tariffs/geopoliticsEvaluating overseas manufacturing; client-driven Considering SE Asia/US moves; client prepayments; 4-year agreement in principle Malaysia project announced with Anker; localization underway Mitigation Advancing
Raw materials pricingHitrans challenged prior year Hitrans still weak; cautious stance Raw materials prices rebounding; Hitrans revenue up 144% YoY Improving
Customer order momentumValidation phase; demand steady for 32140 Strong demand, fully booked 32140; large 4-year order close Anker partnership (~$357M potential); 40135 orders ~1.2M cells [$5M] Strengthening
Application mix (Light EV, Residential)LEV modest growth; Residential down LEV +88% YoY; Residential down LEV surged to $18.17M; Residential $15.48M Mix shifting to LEV

Management Commentary

  • “We are pleased to have achieved a solid recovery in the third quarter... raw materials segment successfully seized market opportunities... successful upgrade from the Model 26650 to the Model 40135 at our Dalian facility... new Nanjing production lines... significant growth lies ahead” — CEO Zhiguang Hu .
  • “Model 40135 production line is expected to contribute an additional 2.3 GWh... Nanjing lines will add 2 GWh for our Model 32140... 32140 continues to experience supply constraints” — CFO Jiewei Li .
  • “Within one month of operation [40135], delivered 500,000 cells ($2M revenue); orders 1.2M cells ($5M); ramping to ~100,000 cells/day by year end” — Company statement .
  • “Partnership with Anker... long-term cooperation framework with potential orders valued at ~$357M... mass production of 32140 and 40135 in Malaysia by end of 2025” — Company statement .

Q&A Highlights

Note: Q3 2025 transcript not available. Highlights from Q1 2025 call (for trend context):

  • Capacity planning: Dalian 40135 at 2.3 GWh; Nanjing expansion adjusted to 1.5 GWh with 1.5 GWh relocated to SE Asia to mitigate tariffs .
  • Cell format: Management emphasized large cylindrical cells’ design advantages vs prismatic/pouch for high-voltage residential storage and e-scooters .
  • Tariff-driven demand responses: Customers seeking supplier relocation; management indicated deal near-closed with favorable terms; cited peers like Jackery/Anker pursuing similar strategies .

Estimates Context

  • Revenue materially beat consensus ($60.9M vs $39.3M), reflecting Hitrans strength and early 40135 traction; EPS surprised positively ($0.03 vs -$0.04).*
  • Thin sell-side coverage (one estimate each) suggests potential for meaningful estimate recalibration post-print.*
    Values retrieved from S&P Global.*

KPIs and Operating Metrics

KPIQ3 2025Context
40135 daily output~20,000 cells initial; ~100,000/day target by YEDalian upgrade completed; delivered 500,000 cells ($2M) within one month; 1.2M cells backlog ($5M)
Capacity adds+2.3 GWh (40135 Dalian); +2 GWh (32140 Nanjing mid-Nov)Supply-constrained 32140; growth visibility improving
Hitrans revenue YoY+143.7% to $27.22MRaw materials price recovery
Battery segment net income$4.53M (+122.7% YoY)32140 demand offsetting legacy transition

Key Takeaways for Investors

  • Quarter quality: Strong revenue/EPS beats with thin coverage; setup for estimate revisions across near-term horizon.*
  • Mix shift underway: LEV application revenues surged; residential storage normalized; 32140 remains constrained, implying upside as capacity adds come online .
  • Transition drag fading: 40135 ramp, Nanjing adds, Malaysia localization (Anker) mitigate tariff risks and support margin recovery trajectory over coming quarters .
  • Raw materials tailwind: Hitrans benefiting from price rebound; watch sustainability of pricing and segment profitability normalization .
  • Near-term catalysts: 40135 production ramp, Nanjing line start (mid-Nov), further customer disclosures and Malaysia progress updates .
  • Risk monitor: Gross margin pressure persists during transition; operating losses still present; execution on capacity ramp and tariff mitigation is critical .
  • Portfolio implications: Favor accumulation on capacity milestones and customer order visibility; reassess position if margin recovery underperforms or if raw material pricing reverses .