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Segment Information
 3 Months Ended
Mar. 31, 2023
Segment Information [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 CBAK and Hitrans upon completion of acquisition. CBAK’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 months ended March 31, 2022 and 2023 were as follows:

 

For the three months ended March 31, 2022  CBAT   Hitrans   Corporate unallocated (note)   Consolidated 
Net revenues  $15,020,686   $65,175,612   $
-
   $80,196,298 
Cost of revenues   (14,037,762)   (60,842,182)   
-
    (74,879,944)
Gross profit   982,924    4,333,430    
-
    5,316,354 
Total operating expenses   (3,108,736)   (3,137,747)   (405,132)   (6,651,615)
Operating (loss) income   (2,125,812)   1,195,683    (405,132)   (1,335,261)
Finance income (expense), net   107,870    (102,708)   (148)   5,014 
Other income (expense),net   503,156    (217,952)   1,632,000    1,917,204 
Income tax credit   
-
    93,546    
-
    93,546 
Net (loss) income   (1,514,786)   968,569    1,226,720    680,503 

  

For the three months ended March 31, 2023  CBAT   Hitrans   Corporate unallocated (note)   Consolidated 
Net revenues  $29,603,383   $12,793,318   $
-
   $42,396,701 
Cost of revenues   (26,390,025)   (13,100,932)   
-
    (39,490,957)
Gross profit (loss)   3,213,358    (307,614)   
-
    2,905,744 
Total operating expenses   (3,227,946)   (2,430,412)   (128,276)   (5,786,634)
Operating loss   (14,588)   (2,738,026)   (128,276)   (2,880,890)
Finance income (expenses), net   32,982    (27,619)   (52)   5,311 
Other income, net   90,530    92,683    85,000    268,213 
Income tax credit   
-
    402,884    
-
    402,884 
Net income (loss)   108,924    (2,270,078)   (43,328)   (2,204,482)
                     
As of March 31, 2023   
 
    
 
    
 
    
 
 
Identifiable long-lived assets   94,912,129    23,382,309    
-
    118,294,438 
Total assets   178,749,980    73,306,835    113,453    252,170,268 

  

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
March 31,		 
   2022   2023 
High power lithium batteries used in:        
Electric vehicles  $309   $1,820,248 
Light electric vehicles   88,764    1,968,057 
Uninterruptable supplies   14,931,613    25,815,078 
    15,020,686    29,603,383 
           
Materials used in manufacturing of lithium batteries          
Cathode   28,362,877    10,621,073 
Precursor   36,812,735    2,172,245 
    65,175,612    12,793,318 
Total consolidated revenue  $80,196,298   $42,396,701 

  

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
March 31,		  
    2022     2023  
Mainland China   $ 71,996,013     $  24,546,737  
Europe     8,134,906       17,259,288  
Others     65,379       590,676  
Total   $ 80,196,298     $ 42,396,701  

 

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