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Segment Information | 6 Months Ended
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Jun. 30, 2024
Segment Information [Abstract] |
Segment Information |
30. | 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 12, 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 and six months ended June 30, 2023 and 2024 were as follows:
For the three months ended June 30, 2023 |  | CBAT |  |  | Hitrans |  |  | Corporate unallocated (note) |  |  | Consolidated |
Net revenues |  | $ | 22,232,003 |  |  | $ | 20,188,867 |  |  | $ | - |  |  | $ | 42,420,870 |
Cost of revenues |  |  | (18,806,856 | ) |  |  | (19,729,372 | ) |  |  | - |  |  |  | (38,536,228 | )
Gross profit |  |  | 3,425,147 |  |  |  | 459,495 |  |  |  | - |  |  |  | 3,884,642 |
Total operating expenses |  |  | (4,835,859 | ) |  |  | (2,355,472 | ) |  |  | (466,361 | ) |  |  | (7,657,692 | )
Operating (loss) income |  |  | (1,410,712 | ) |  |  | (1,895,977 | ) |  |  | (466,361 | ) |  |  | (3,773,050 | )
Finance income (expenses), net |  |  | 153,678 |  |  |  | 98,904 |  |  |  | (110 | ) |  |  | 252,472 |
Other income, net |  |  | 130,810 |  |  |  | 107,230 |  |  |  | 36,000 |  |  |  | 274,040 |
Income tax credit |  |  | - |  |  |  | 307,311 |  |  |  | - |  |  |  | 307,311 |
Net (loss) income |  |  | (1,126,224 | ) |  |  | (1,382,532 | ) |  |  | (430,471 | ) |  |  | (2,939,227 | )
For the three months ended June 30, 2024 |  | CBAT |  |  | Hitrans |  |  | Corporate unallocated (note) |  |  | Consolidated |
Net revenues |  | $ | 35,598,124 |  |  | $ | 12,194,921 |  |  | $ | - |  |  | $ | 47,793,045 |
Cost of revenues |  |  | (22,680,831 | ) |  |  | (12,384,188 | ) |  |  | - |  |  |  | (35,065,019 | )
Gross profit (loss) |  |  | 12,917,293 |  |  |  | (189,267 | ) |  |  | - |  |  |  | 12,728,026 |
Total operating expenses |  |  | (4,783,794 | ) |  |  | (1,691,427 | ) |  |  | (305,325 | ) |  |  | (6,780,546 | )
Operating income (loss) |  |  | 8,133,499 |  |  |  | (1,880,694 | ) |  |  | (305,325 | ) |  |  | 5,947,480 |
Finance income (expense), net |  |  | 619,455 |  |  |  | 69,318 |  |  |  | (52 | ) |  |  | 688,721 |
Other (expenses) income, net |  |  | (59,586 | ) |  |  | 247,297 |  |  |  | - |  |  |  | 187,711 |
Income tax expenses |  |  | (800,727 | ) |  |  | - |  |  |  | - |  |  |  | (800,727 | )
Net income (loss) |  |  | 7,892,641 |  |  |  | (1,564,079 | ) |  |  | (305,377 | ) |  |  | 6,023,185 |
For the six months ended June 30, 2023 |  | CBAT |  |  | Hitrans |  |  | Corporate unallocated (note) |  |  | Consolidated |
Net revenues |  | $ | 51,835,386 |  |  | $ | 32,982,185 |  |  | $ | - |  |  | $ | 84,817,571 |
Cost of revenues |  |  | (45,196,881 | ) |  |  | (32,830,304 | ) |  |  | - |  |  |  | (78,027,185 | )
Gross profit |  |  | 6,638,505 |  |  |  | 151,881 |  |  |  | - |  |  |  | 6,790,386 |
Total operating expenses |  |  | (8,063,805 | ) |  |  | (4,785,884 | ) |  |  | (594,637 | ) |  |  | (13,444,326 | )
Operating (loss) income |  |  | (1,425,300 | ) |  |  | (4,634,003 | ) |  |  | (594,637 | ) |  |  | (6,653,940 | )
Finance income (expenses), net |  |  | 186,660 |  |  |  | 71,285 |  |  |  | (162 | ) |  |  | 257,783 |
Other income, net |  |  | 221,340 |  |  |  | 199,913 |  |  |  | 121,000 |  |  |  | 542,253 |
Income tax credit |  |  | - |  |  |  | 710,195 |  |  |  | - |  |  |  | 710,195 |
Net (loss) income |  |  | (1,017,300 | ) |  |  | (3,652,610 | ) |  |  | (473,799 | ) |  |  | (5,143,709 | )
As of June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Identifiable long-lived assets |  |  | 95,839,741 |  |  |  | 31,906,282 |  |  |  | - |  |  |  | 127,746,023 |
Total assets |  |  | 169,751,833 |  |  |  | 82,409,230 |  |  |  | 13,349 |  |  |  | 252,174,412 |
For the six months ended June 30, 2024 |  | CBAT |  |  | Hitrans |  |  | Corporate unallocated (note) |  |  | Consolidated |
Net revenues |  | $ | 80,435,993 |  |  | $ | 26,179,484 |  |  | $ | - |  |  | $ | 106,615,477 |
Cost of revenues |  |  | (49,060,178 | ) |  |  | (26,046,226 | ) |  |  | - |  |  |  | (75,106,404 | )
Gross profit |  |  | 31,375,815 |  |  |  | 133,258 |  |  |  | - |  |  |  | 31,509,073 |
Total operating expenses |  |  | (10,763,265 | ) |  |  | (3,113,883 | ) |  |  | (1,421,462 | ) |  |  | (15,298,610 | )
Operating income (loss) |  |  | 20,612,550 |  |  |  | (2,980,625 | ) |  |  | (1,421,462 | ) |  |  | 16,210,463 |
Finance income (expenses), net |  |  | 631,176 |  |  |  | 67,321 |  |  |  | (113 | ) |  |  | 698,384 |
Other income, net |  |  | 180,857 |  |  |  | 355,468 |  |  |  | - |  |  |  | 536,325 |
Income tax expenses |  |  | (1,849,513 | ) |  |  | - |  |  |  | - |  |  |  | (1,849,513 | )
Net income (loss) |  |  | 19,575,070 |  |  |  | (2,557,836 | ) |  |  | (1,421,575 | ) |  |  | 15,595,659 |
As of June 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Identifiable long-lived assets |  |  | 96,251,410 |  |  |  | 41,736,529 |  |  |  | - |  |  |  | 137,987,939 |
Total assets |  |  | 203,471,301 |  |  |  | 76,113,457 |  |  |  | 32,271 |  |  |  | 279,617,029 |
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, |
|  | 2023 |  |  | 2024 |  |  | 2023 |  |  | 2024 |
High power lithium batteries used in: |  |  |  |  |  |  |  |  |  |  |  |
Electric vehicles |  | $ | 135,731 |  |  | $ | 199,258 |  |  | $ | 1,955,979 |  |  | $ | 679,439 |
Light electric vehicles |  |  | 1,147,902 |  |  |  | 1,825,501 |  |  |  | 3,115,959 |  |  |  | 3,335,793 |
Residential energy supply & uninterruptable supplies |  |  | 20,948,370 |  |  |  | 33,573,365 |  |  |  | 46,763,448 |  |  |  | 76,420,761 |
|  |  | 22,232,003 |  |  |  | 35,598,124 |  |  |  | 51,835,386 |  |  |  | 80,435,993 |
Materials used in manufacturing of lithium batteries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cathode |  |  | 10,070,627 |  |  |  | 8,248,245 |  |  |  | 20,691,700 |  |  |  | 17,434,438 |
Precursor |  |  | 10,118,240 |  |  |  | 3,946,676 |  |  |  | 12,290,485 |  |  |  | 8,745,046 |
|  |  | 20,188,867 |  |  |  | 12,194,921 |  |  |  | 32,982,185 |  |  |  | 26,179,484 |
Total consolidated revenue |  | $ | 42,420,870 |  |  | $ | 47,793,045 |  |  | $ | 84,817,571 |  |  | $ | 106,615,477 |
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, |
|  | 2023 |  |  | 2024 |  |  | 2023 |  |  | 2024 |
Mainland China |  | $ | 31,338,415 |  |  | $ | 24,482,831 |  |  | $ | 55,885,152 |  |  | $ | 48,173,594 |
Europe |  |  | 10,642,516 |  |  |  | 21,209,530 |  |  |  | 27,901,804 |  |  |  | 54,103,444 |
Others |  |  | 439,939 |  |  |  | 2,100,684 |  |  |  | 1,030,615 |  |  |  | 4,338,439 |
Total |  | $ | 42,420,870 |  |  | $ | 47,793,045 |  |  | $ | 84,817,571 |  |  | $ | 106,615,477 |
Substantially all of the Company’s long-lived assets are located in the PRC.

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