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Segment Information
 6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
Segment Information

28. Segment Information

  

The Group’s chief operating decision maker has been identified as the Chief Executive Officer (“CEO”) who reviews financial information of operating segments based on US GAAP amounts when making decisions about allocating resources and assessing performance of the Company.

  

As a result of the Hitrans acquisition discussed in Note 11, the Group determined that Hitrans met the criteria for separate reportable segment given its financial information is separately reviewed by the Group’s CEO. As a result, the Group determined that it operated in two operating segments namely CBAT and Hitrans upon completion of acquisition. CBAT’s segment mainly includes the manufacture, commercialization and distribution of a wide variety of standard and customized lithium ion rechargeable batteries for use in a wide array of applications. Hitrans’ segment mainly includes the development and manufacturing of NCM precursor and cathode materials.

  

The Company primarily operates in the PRC and substantially all of the Company’s long-lived assets are located in the PRC.

  

The Company’s chief operating decision maker evaluates performance based on each reporting segment’s net revenue, cost of revenues, operating expenses, operating income, finance income (expense), other income and net income. Net revenue, cost of revenues, operating expenses, operating income, finance income (expense), other income and net income by segment for the three and six months ended June 30, 2021 and 2022 were as follows:

  

For the three months ended June 30, 2021   CBAT     Corporate
unallocated
(note)		     Consolidated  
Net revenues   $ 5,889,154     $ -     $ 5,889,154  
Cost of revenues     (4,791,503 )     -       (4,791,503 )
Gross profit     1,097,651       -       1,097,651  
Total operating expenses     (3,207,587 )     (613,575 )     (3,821,162 )
Operating loss     (2,109,936 )      (613,575 )     (2,723,511 )
Finance income, net     51,594       1,106       52,700  
Other income, net     331,576       5,059,458       5,391,034  
Income tax (expense) credit     -       -       -  
Net (loss) income     (1,726,766 )      4,446,989       2,720,223  

  

For the three months ended June 30, 2022   CBAT     Hitrans     Corporate
unallocated
(note)		     Consolidated  
Net revenues   $ 25,715,415     $ 30,634,245     $ -     $ 56,349,660  
Cost of revenues     (22,879,128 )     (27,935,224 )     -       (50,814,352 )
Gross profit     2,836,287       2,699,021       -       5,535,308  
Total operating expenses     (3,160,096 )     (1,892,508 )     (338,215 )     (5,390,819 )
Operating (loss) income     (323,809 )     806,513       (338,215 )     144,489  
Finance income (expenses), net     82,956       (96,857 )     (606,589 )     (620,490 )
Other (expenses) income, net     (723,820 )     264,874       2,131,000       1,672,054  
Income tax expenses     -       (179,788 )     -       (179,788 )
Net (loss) income     (964,673 )     794,742       1,186,196       1,016,265  

 

For the six months ended June 30, 2021   CBAT     Corporate
unallocated
(note)		     Consolidated  
Net revenues   $ 15,305,203     $ -     $ 15,305,203  
Cost of revenues     (12,368,123 )     -       (12,368,123 )
Gross profit     2,937,080       -       2,937,080  
Total operating expenses     (4,526,835 )     (1,161,638 )     (5,688,473 )
Operating loss     (1,589,755 )     (1,161,638 )     (2,751,393 )
Finance income, net     38,151       6,951       45,102  
Other income, net     1,549,224       33,485,458       35,034,682  
Income tax (expense) credit     -       -       -  
Net (loss) income     (2,380 )     32,330,771       32,328,391  

  

For the six months ended June 30, 2022   CBAT     Hitrans     Corporate
unallocated
(note)		     Consolidated  
Net revenues   $ 40,736,101     $ 95,809,857     $ -     $ 136,545,958  
Cost of revenues     (36,916,890 )     (88,777,406 )     -       (125,694,296 )
Gross profit     3,819,211       7,032,451       -       10,851,662  
Total operating expenses     (6,268,832 )     (5,030,255 )     (743,347 )     (12,042,434 )
Operating (loss) income     (2,449,621 )     2,002,196       (743,347 )     (1,190,772 )
Finance income (expenses), net     190,826       (199,565 )     (606,737 )     (615,476 )
Other (expenses) income, net     (220,664 )     46,922       3,763,000       3,589,258  
Income tax expenses     -       (86,242 )     -       (86,242 )
Net (loss) income     (2,479,459 )     1,763,311       2,412,916       1,696,768  
                                 
As of June 30, 2022                                
Identifiable long-lived assets     98,270,980       29,806,602       -       128,077,582  
Total assets     185,340,523       84,324,915       316,300       269,981,738  

 

Note: The Company does not allocate its assets located and expenses incurred outside China to its reportable segments because these assets and activities are managed at a corporate level.

  

Net revenues by product:

 

The Company’s products can be categorized into high power lithium batteries and materials used in manufacturing of lithium batteries. For the product sales of high power lithium batteries, the Company manufactured five types of Li-ion rechargeable batteries: aluminum-case cell, battery pack, cylindrical cell, lithium polymer cell and high-power lithium battery cell. The Company’s battery products are sold to packing plants operated by third parties primarily for use in mobile phones and other electronic devices. For the product sales of materials used in manufacturing of lithium batteries, the Company, via its subsidiary, Hitrans, manufactured cathode materials and Precursor for use in manufacturing of cathode. Revenue from these products is as follows:

 

    Three months ended
June 30,		     Six months ended
June 30,		  
    2021     2022     2021     2022  
High power lithium batteries used in:                        
Electric vehicles   $ 396     $ (6 )   $ 101,372     $ 303  
Light electric vehicles     74,459       671,444       108,563       760,208  
Uninterruptable supplies     5,813,136       25,043,977       14,576,719       39,975,590  
Trading of raw material used in lithium batteries     1,163       -       518,549       -  
      5,889,154       25,715,415       15,305,203       40,736,101  
                                 
Materials used in manufacturing of lithium batteries                                
Cathode     -       26,523,780       -       54,886,657  
Precursor     -       4,110,465       -       40,923,200  
      -       30,634,245       -       95,809,857  
Total consolidated revenue   $ 5,889,154     $ 56,349,660     $ 15,305,203     $ 136,545,958  

 

Net revenues by geographic area:

  

The Company’s operations are located in the PRC. The following table provides an analysis of the Company’s sales by geographical markets based on locations of customers:

 

    Three months ended
June 30,		     Six months ended
June 30,		  
    2021     2022     2021     2022  
Mainland China   $ 5,376,444     $ 42,620,429     $ 13,002,237     $ 114,616,442  
Europe     490,493       13,740,194       2,279,538       21,875,100  
Others     22,217       (10,963 )     23,428       54,416  
Total   $ 5,889,154     $ 56,349,660     $ 15,305,203     $ 136,545,958  

 

Substantially all of the Company’s long-lived assets are located in the PRC.