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Segment Information
 9 Months Ended
Sep. 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 nine months ended September 30, 2023 and 2024 were as follows:

 

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 three months ended September 30, 2024  CBAT   Hitrans   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $33,461,793   $11,166,448   $
-
   $44,628,241 
Cost of revenues   (25,796,784)   (11,876,900)   
-
    (37,673,684)
Gross profit (loss)   7,665,009    (710,452)   
-
    6,954,557 
Total operating expenses   (5,778,378)   (1,887,142)   (116,910)   (7,782,430)
Operating income (loss)   1,886,631    (2,597,594)   (116,910)   (827,873)
Finance income (expense), net   28,366    (68,718)   2    (40,350)
Other (expenses) income, net   459,628    62,343    
-
    521,971 
Income tax expenses   (339,287)   
-
    
-
    (339,287)
Net income (loss)   2,035,338    (2,603,969)   (116,908)   (685,539)

  

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 credit   
-
    1,015,626    
-
    1,015,626 
Net income (loss)   6,746,883    (5,412,787)   (713,657)   620,439 

 

For the nine months ended September 30, 2024  CBAT   Hitrans   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $113,897,786   $37,345,932   $
-
   $151,243,718 
Cost of revenues   (74,856,962)   (37,923,126)   
-
    (112,780,088)
Gross profit (loss)   39,040,824    (577,194)   
-
    38,463,630 
Total operating expenses   (16,541,643)   (5,001,025)   (1,538,372)   (23,081,040)
Operating income (loss)   22,499,181    (5,578,219)   (1,538,372)   15,382,590 
Finance income (expenses), net   659,542    (1,397)   (111)   658,034 
Other income, net   640,485    417,811    
-
    1,058,296 
Income tax expenses   (2,188,800)   
-
    
-
    (2,188,800)
Net income (loss)   21,610,408    (5,161,805)   (1,538,483)   14,910,120 
                     
As of September 30, 2024                    
Identifiable long-lived assets   100,014,711    44,165,797    
-
    144,180,508 
Total assets   212,814,150    80,620,657    42,547    293,477,354 

  

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,		 
   2023   2024   2023   2024 
High power lithium batteries used in:                
Electric vehicles  $402,863   $333,216   $2,358,842   $1,012,655 
Light electric vehicles   1,114,107    4,913,644    4,230,066    8,249,437 
Residential energy supply & uninterruptable supplies   42,810,683    28,214,933    89,574,132    104,635,694 
    44,327,653    33,461,793    96,163,040    113,897,786 
                     
Materials used in manufacturing of lithium batteries                    
Cathode   10,379,475    9,342,507    31,071,175    26,776,945 
Precursor   8,733,981    1,823,941    21,024,465    10,568,987 
    19,113,456    11,166,448    52,095,640    37,345,932 
Total consolidated revenue  $63,441,109   $44,628,241   $148,258,680   $151,243,718 

 

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,		 
   2023   2024   2023   2024 
Mainland China  $31,777,754   $27,712,677   $87,662,906   $75,886,271 
Europe   29,648,334    11,779,738    57,550,138    65,883,182 
Others   2,015,021    5,135,826    3,045,636    9,474,265 
Total  $63,441,109   $44,628,241   $148,258,680   $151,243,718 

 

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