Segment Information

6 Months Ended

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.