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Segment Information
 9 Months Ended
Sep. 30, 2023
Segment Information [Abstract]  
Segment Information

29. 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 nine months ended September 30, 2022 and 2023 were as follows:

  

For the three months ended September 30, 2022  CBAT   Hitrans   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $25,845,959   $31,875,733   $
-
   $57,721,692 
Cost of revenues   (23,603,029)   (30,658,215)   
-
    (54,261,244)
Gross profit   2,242,930    1,217,518    
-
    3,460,448 
Total operating expenses   (2,485,812)   (2,352,448)   (104,921)   (4,943,181)
Operating loss   (242,882)   (1,134,930)   (104,921)   (1,482,733)
Finance income (expenses), net   214,947    (134,115)   606,513    687,345 
Other income (expenses), net   1,092,252    (2,083,604)   936,000    (55,352)
Income tax credit   
-
    2,012    
-
    2,012 
Net income (loss)   1,064,317    (3,350,637)   1,437,592    (848,728)

 

For the three months ended September 30, 2023  CBAT   Hitrans   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $44,327,653   $19,113,456   $
-
   $63,441,109 
Cost of revenues   (32,629,427)   (18,563,104)   
-
    (51,192,531)
Gross profit   11,698,226    550,352    
-
    12,248,578 
Total operating expenses   (4,120,379)   (2,577,715)   (261,390)   (6,959,484)
Operating income (loss)   7,577,847    (2,027,363)   (261,390)   5,289,094 
Finance (expenses) income, net   (403,599)   (43,435)   3    (447,031)
Other income, net   596,463    5,191    15,000    616,654 
Income tax credit   
-
    305,431    
-
    305,431 
Net income (loss)   7,770,711    (1,760,176)   (246,387)   5,764,148 

 

For the nine months ended September 30, 2022  CBAT   Hitrans   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $66,582,060   $127,685,590   $
-
   $194,267,650 
Cost of revenues   (60,519,919)   (119,435,621)   
-
    (179,955,540)
Gross profit   6,062,141    8,249,969    
-
    14,312,110 
Total operating expenses   (8,754,644)   (7,382,703)   (848,268)   (16,985,615)
Operating (loss) income   (2,692,503)   867,266    (848,268)   (2,673,505)
Finance income (expenses), net   405,773    (333,680)   (224)   71,869 
Other income (expenses), net   871,588    (2,036,682)   4,699,000    3,533,906 
Income tax expenses   
-
    (84,230)   
-
    (84,230)
Net (loss) income   (1,415,142)   (1,587,326)   3,850,508    848,040 

 

For the nine months ended September 30, 2023  CBAT   Hitrans   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $96,163,040   $52,095,640   $
-
   $148,258,680 
Cost of revenues   (77,826,308)   (51,393,408)   
-
    (129,219,716)
Gross profit   18,336,732    702,232    
-
    19,038,964 
Total operating expenses   (12,190,713)   (7,363,599)   (849,498)   (20,403,810)
Operating income (loss)   6,146,019    (6,661,367)   (849,498)   (1,364,846)
Finance (expenses) income, net   (216,939)   27,850    (159)   (189,248)
Other income, net   817,803    205,104    136,000    1,158,907 
Income tax expenses   
-
    1,015,626    
-
    1,015,626 
Net income (loss)   6,746,883    (5,412,787)   (713,657)   620,439 
                     
As of September 30, 2023                    
Identifiable long-lived assets   98,069,634    44,512,193    
-
    142,581,827 
Total assets   185,396,100    101,394,531    50,438    286,841,069 

 

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
September 30,		   Nine months ended
September 30,		 
   2022   2023   2022   2023 
High power lithium batteries used in:                
Electric vehicles  $19,688   $402,863   $19,991   $2,358,842 
Light electric vehicles   1,146,370    1,114,107    1,906,578    4,230,066 
Uninterruptable supplies   24,679,901    42,810,683    64,655,491    89,574,132 
    25,845,959    44,327,653    66,582,060    96,163,040 
Materials used in manufacturing of lithium batteries                    
Cathode   11,195,810    10,379,475    66,082,467    31,071,175 
Precursor   20,679,923    8,733,981    61,603,123    21,024,465 
    31,875,733    19,113,456    127,685,590    52,095,640 
Total consolidated revenue  $57,721,692   $63,441,109   $194,267,650   $148,258,680 

 

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
September 30,		   Nine months ended
September 30,		 
   2022   2023   2022   2023 
Mainland China  $42,538,023   $31,777,754   $157,154,465   $87,662,906 
Europe   15,033,148    29,648,334    36,908,248    57,550,138 
Others   150,521    2,015,021    204,937    3,045,636 
Total  $57,721,692   $63,441,109   $194,267,650   $148,258,680 

 

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