CBAK Energy Technology, Inc. (formerly China BAK Battery, Inc.) reported its financial results for the three and nine months ended September 30, 2024, revealing significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the third quarter of 2024, CBAK's net revenues decreased by 30% to $44.6 million, down from $63.4 million in the same period of 2023. This decline was attributed to reduced sales in several product lines, particularly in residential energy supply and uninterruptible power supplies, which saw a 34% drop to $28.2 million. Conversely, sales of batteries for light electric vehicles surged by 341% to $4.9 million. Gross profit for the quarter also fell to $7.0 million, a decrease of 43% from $12.2 million in the prior year, leading to an operating loss of $0.8 million, a stark contrast to the operating income of $5.3 million reported in Q3 2023.

Despite the quarterly downturn, CBAK's performance for the nine months ended September 30, 2024, showed resilience, with net revenues increasing by 2% to $151.2 million. Gross profit for this period surged to $38.5 million, a 102% increase from $19.0 million in the same period of 2023. Operating income turned positive at $15.4 million, compared to an operating loss of $1.4 million in the previous year. Net income for the nine months reached $14.9 million, a significant increase from $0.6 million in 2023.

Strategically, CBAK has been expanding its manufacturing capabilities, particularly in Dalian, Nanjing, and Zhejiang, to meet rising client demand. The company is also focusing on new product development and has made significant investments in its facilities, with capital expenditures for the nine months totaling $11.5 million, down from $24.9 million in the same period last year. The company plans to raise additional funds through bank borrowings and equity financing to support these expansions.

On the balance sheet, total assets increased from $281.2 million as of December 31, 2023, to $293.5 million by September 30, 2024. Total liabilities decreased slightly, resulting in an increase in total shareholders’ equity from $112.8 million to $131.2 million during the same period. However, the company reported an accumulated deficit of $118.1 million, raising concerns about its ability to continue as a going concern.

CBAK's management has acknowledged material weaknesses in its internal controls and is taking steps to address these issues, including hiring a new CFO with U.S. GAAP experience and providing training for financial personnel. The company aims to remediate these weaknesses promptly but cannot guarantee full resolution.

In a notable leadership change, Mr. Yunfei Li resigned as CEO on October 24, 2024, with Mr. Zhiguang Hu appointed as his successor.