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spk06: Good day, ladies and gentlemen. Thank you for standing by and welcome to CBAG Energy Technologies' fourth quarter and full year 2021 earnings conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I'll turn the call over to Mr. Terry Lee, Investor Relations Director of Seabag Energy. Mr. Lee, please proceed.
spk09: Thank you, operator, and hello, everyone. Welcome to Seabag Energy's fourth quarter and full year 2021 earnings conference call. Joining us today are Mr. Yunfei Li, our Chief Executive Officer, and Mrs. Yuna Pei, our Interim Chief Financial Officer. We released results earlier today. The press release is available on the company's IR website at ir.cbac.com.cn, as well as from Newswire Services. A relay of this call will also be available in a few hours on our IR website. On the call with me today are Mr. Yunfei Li, our Chief Executive Officer, Mrs. Yuna Pei, our Interim Financial Officer, Mr. Xiu Juntian, our General Engineer, Mr. Wang Wenwu, our Vice President, and Mrs. Yang, our interpreter. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public firings with the SEC. The company doesn't assume any obligations to update any forward-looking statements, except as required under applicable laws. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in your storage. With that, let me now turn the call over to our CEO, Mr. Yunfei Li. Mr. Li will speak in Chinese and I will translate comments in English. Go ahead, Mr. Li. Thank you.
spk08: Hello, everyone. Thank you for attending today's conference.
spk09: Thank you and hello, everyone. Thank you for joining our conference call.
spk08: 2021 is the most important year for China. We have achieved significant achievements in many areas. Through innovation and technology and product development, we continue to strengthen our competitive advantage. We are also planning to expand our production capacity to meet the battery needs of electric vehicles and electric vehicles that are growing day by day. Specifically, we are starting to produce lithium-ion batteries in new factories in Jiangsu and Nanjing. At the same time, we are improving the production capacity of factories in Liaoning and Dalian. We believe that these layout will bring long-term benefits and extend to the distant future. In addition, we have also acquired 81.56% of Zhejiang Haichuang LiJian Technology Co., Ltd.' 's shareholding power, and have entered the LiZi battery material business. To establish and improve our battery product ecosystem, the transaction not only has an important strategic meaning, but also increases the price of materials
spk09: 2021 was a significant year for CBAG Energy as we made major achievements in multiple fronts. We continue to strengthen our competitive advantages through innovative technology and product developments. As scheduled, we scale up our production capacity to capitalize on increasing battery demands for light electric vehicles and electric vehicles. Specifically, we began production of lithium-ion batteries at our new facility in Nanjing and expanded capacity at the Dalian facility. We believe these developments will bring long-term benefits that will extend far into the future. Moreover, we brought in materials for lithium-ion batteries with an acquisition of 81.56% equity interest in Zhejiang Hydrogen's lithium battery technology corporation to build up and enhance our battery product ecosystem. The transaction will not only have crucial strategic benefits, which is secure and stable supply of raw materials even amid rising material costs, But we also expect it will help us generate greater revenues and even better financial performance in 2022. Thank you very much.
spk08: In 2021, we will continue to see a growth in revenue from high-power batteries, increasing by 46% to $33.31 million. Since December, we have seen In 2021, we continue to see higher revenues from high-power lithium batteries.
spk09: which grew 46% to $33.3 million. The merging of high points also added revenues of $17.8 million from December to bring our total net revenues in 2021 to $52.4 million, up 40% from the previous year. This increase was from the effective execution of our growth strategy, which boosted our expansion in the battery storage market.
spk08: Next, let me dive into our recent developments in technology and products as we strive to become a major proprietary supplier for top LEB producers. Okay. In 2021, we continue to see high-power... This is wrong. After the adjustment, we quickly started commercial production of 26700 battery and 32140 battery. The former can be used in two-wheeled electric vehicles, and the latter is used in LEV. Following the completion of shakedown test, it's quickly launched the commercial production of model 26700 battery and model 32140 battery. The former one is applicable to two-wheel electric bicycles
spk09: while the latter serves LEV and AOO-grade passenger EV market. The AOO-grade passenger electric vehicle is the category the Wuling Hongguang Mini EV, the best-selling EV in China, is under. Mr. Pei, do you have anything to add?
spk08: In addition, we are developing a customized battery pack for the Chinese nuclear-powered enterprise that designs and produces electric vehicles and battery control systems. Due to the pandemic, the delivery of materials has been delayed. We are now planning to In April of this year, this company issued a battery pack sample. The battery pack was originally intended to test the low-speed electric car produced by the subsidiary company Dafa Motors, which is a wind farm car. This once again proves the industry's firm trust in our technical ability and supports us to become a more innovative product for electric car development.
spk09: Additionally, we will develop a customized battery pack for Azapa Research and Development in China, which is the final Japan-wide venture that designs and produces electronics and battery control systems for electric vehicles. As the COVID-19 pandemic has delayed raw materials delivery, we are now expecting to send battery-set samples to Azapa this April. The battery pack will initially be used for testing low-speed EVs produced by Diehard Supermoto Corporation. a subsidiary of Toyota Motor Corporation. This is additional evidence of the industry's part in our solid technology capabilities and supports us in developing more innovative products for EVs.
spk08: We will continue to work hard to develop large-scale original-type batteries for light-engine electric vehicles and commercial electric vehicle markets.
spk09: We also continue our efforts in developing large cylindrical batteries for the LEV and passenger-grade EV markets. We will share this in more detail later this year when you see more concrete progresses. 接下来讨论一下扩产,我们对目前的进展是非常满意的。
spk08: can fully adapt to the growing market demand, especially in the new electric vehicles or electric vehicle market.
spk09: Moving on to capacity expansion, we are very satisfied with the progress, which is totally in line with our plans in responding to growing market demand, especially for the LEB and EV markets.
spk08: In addition, at the end of last year, Li Jianchi Factory in Nanjing has already started production. The annual production of the 32140 battery has reached 0.7 GWh. We will continue to gradually complete the production to the full. There are more battery delivery customers. We expect to complete the entire 1st phase construction at the end of this year. The total production capacity will be increased to 2 GWh. The main thing is to generate 32140 battery. In Nanjing, we began operations at the lithium battery manufacturing plant there last year.
spk09: with an initial annual capacity of 0.7 gigawatt hour for model 32140 battery. As we gradually ramp up the output to the plan's full production capacity, the batteries are being delivered to customers. We remain on track and on schedule to complete the first phase by the end of this year, when the total capacity will be lifted to 2 gigawatt hour each year, mainly for the same battery model. Meanwhile, we are also pushing the construction of the second phase, for which we will mainly produce the model 32140 battery, as well as large cylindrical batteries that we are currently in the midst of developing.
spk08: In addition, in Dalian, we also have a new production line. The annual production can reach 0.4GW. On the basis of the 26650 battery produced by the factory itself, the 26700 battery produced by the 26750 battery produced by the 26750 battery produced by the 26750 battery
spk09: In Dalian, we started a new production line with an annual capacity of 0.4 GWh for our model 26700 battery for the LEV and energy storage sector, in addition to the plant's main production of model 26500 battery. The Dalian facility has almost reached its full capacity. Therefore, we see a need to further expand its capacity to meet higher demands for our products. As of March, we have outstanding battery orders worth 230 million RMB, or about $36 million, of which approximately 90% end users are overseas.
spk08: Next, I will introduce the battery material business. At the end of November last year, we completed the acquisition of Haicheng, the leading battery material supplier in China. Considering the time of transaction completion, We only compared the financial data of HaiChang in December last year with the financial data of HaiChang in 2022 and the future financial performance will be greatly improved. Because HaiChang has a strong customer network, we are full of confidence in its future. Most of HaiChang's customers are domestic companies. HaiChang is currently in a state of almost full production. With that, I will now turn to our battery material.
spk09: In late November, we finally completed the acquisition of China's leading lithium-ion battery material supplier, HITRANS. Given the closing date of the deal, we only took account of the December results of HITRANS into our book. The merging of HITRANS is expected to significantly benefit our financial performance in 2022 and beyond. We are very optimistic about its future given its well-established customer network. Most of the HITRANS clients are domestic companies and is currently operating at full capacity by focusing on production and sales of MCM precursors and capital materials for lithium batteries. Hightrend's great performance and advanced technologies also allow it to be among the small and medium-sized enterprises that dominate major markets in niche sectors and secure increased financial and tax support and hence the credit policies from the government.
spk08: In 2022, despite the impact of chip shortcomings and the increase in cost of lithium-ion materials in the short term, we see that the electrification wave of new energy vehicles is still continuing and becoming more and more powerful. In the co-operation with various factors such as domestic and foreign policy, supply chain shortage, material zero component cost increase, etc., we expect that the new energy vehicle market will see an explosive growth. According to the estimates of industry associations and financial institutions, the power battery demand of electric vehicles in 2022 is expected to reach 450 kilowatts, which does not require and lead to a rise in battery prices. However, the long-term view is that the battery price will return to its original state. The continuous technology development and technology innovation, which focuses on supporting batteries, will also reduce the cost of Li batteries.
spk09: As 2022 evolves, we see electrification wave of new energy vehicles continuing and becoming even stronger, despite short-term impacts resulting from chip shortage and rising material costs for lithium battery. With multiple factors such as favorable policies at home and abroad, a supply chain shortage and increasing material and component costs, we expect the new energy vehicle market will see explosive sales growth, Based on forecasts from industry and associations and financial institutions, demand for EV power batteries is likely to reach 450 GWh in 2022, which exceeds current battery supply and is raising battery prices. However, we expect battery prices will be more rational in the long run. Continuous technology innovations led by the development of full-time large cylindrical batteries will also drive down lithium battery costs. Let's continue.
spk08: In terms of light electric vehicles, with the landing of the new standard, domestic electric vehicle trade has accelerated the washing up of the light electric vehicle industry, and the concentration of the industry has risen. The entire industry is heading in the direction of lithium-ionization, intelligentization, and long-term battery life. Light electric vehicles and lithium-ionized batteries in the areas of car sharing, charging, fast charging, and other areas have improved performance, while being affected by the epidemic.
spk09: With the implementation of new national standards for LEBs, sales of this vehicle type will accelerate and drive the industry's consolidation and bring sector leaders into the spotlight. The entire industry is now evolving in the direction of lithium electrification alongside intelligent and long-range technologies. Lithium batteries for LEVs also perform exceptionally well in vehicle sharing, battery swapping, and supercharging. At the same time, under the impact from the pandemic, the overseas market for LEVs has also grown, especially for e-bikes, high-speed electric motorcycles, and electric three-wheelers. Thank you.
spk08: We meet the needs of electric vehicles and light electric vehicles. In 2022, we will focus on improving production capacity and expanding the material business framework. First, we will continue to accelerate the construction and production of the second phase of Nanjing. At the same time, the other ecological line of the first phase is also in normal promotion. As mentioned before, we hope to achieve all the production of the first phase in 2022. The investment and release of Nanjing production capacity will further promote the company's income in the battery business framework. and has played an important role in our gradual entry into the electric vehicle market. At the same time, the company will use the strategic value of Haicheng to expand its business in raw materials to integrate the upstream and downstream industries. We not only hope to maintain the stability of the company's raw materials supply chain, but also hope to develop the raw materials industry, which is hot because of the rising price, into one of the main business of the company.
spk09: To meet the aforementioned demands from EVs and LEVs, we will continue our focus on ramping up capacity and broadening the materials business in fiscal year 2022. First, we will accelerate construction and commissioning for the second phase of the Lansing plant this year. At the same time, another production line of its first phase is also being built. And as noted earlier, we hope that the entire first phase will be put into production in 2022. The investment and release of Nanjing's production capacity will further increase the company's revenues from the regulatory business and will be of significant support for our steady entry into the EV market. Meanwhile, we will use the strategic value of high trends to expand our raw material business and integrate our upstream and downstream. We hope to not only maintain the stability of raw material supply chain, but also grow the raw material business which is now popular due to the rising material prices into one of our main business lines. We believe this segment of revenues will play a significant role in driving up our sales in 2022. As we look ahead, we believe these growth drivers and strategies position us very competitively in the industry and empowers us as a leader in lithium-ion battery production and electric energy solutions. Now, let me turn the call over to our interim CFO, Yuna Cai, who will provide details on our financial performance.
spk04: Okay. Thank you, Mr. Li and Terry. And thank you, everyone, for joining our call today. I will now go over our key financial results for the fourth quarter and full year of 2021. For the full details of our financial results, please refer to our earnings press release. In 2021, we continued to expand revenue and growth margin levels that are driven by stronger sales of batteries for uninterruptible supplies and LEVs. as well as the addition of the material business brought by the acquisition of . We also tend to profitability in 2021 from a loss in the previous year. Notably, we continued to invest in new , new business, as well as research and development to drive further growth. We believe this invest, the investments combined with our strong financial position and powerful battery product ecosystem will propel us towards long-term profitable growth. Moving on to our results. In the fourth quarter of 2021, net revenues surged 80% to 27.8%. million US dollars from the same period of 2020, primarily due to strong sales of high-powered lithium batteries and additional revenues from lithium battery materials brought by the acquisition of hedges from November 26, 2021 to December 31, 2021. For the full year 2021, NAS revenues were up 40% to 52.7 million U.S. dollars, of which 34.7 million U.S. dollars was from high-powered lithium batteries, which grew 49% year-over-year, and 17.8 million U.S. dollars was from hatchlings since its acquisition. Cost of revenues was 26.8 million US dollars in the fourth quarter and 47.6 million US dollars for the full year 2021, up 86% and 36% respectively from the previous year. Growth margin was 3.7% in the fourth quarter compared with 6.8% in the same period of 2020, as raw material costs rose. Still, in 2021, a growth margin rose 250 basis points year over year to 9.7%. The improvement in growth margin was primarily attributed to the increase in the quality, passing rate of our products, which was a result of our quality control and upgrades on production lines. In the fourth quarter, we decreased operating expenses by 3% from the previous year to $6.8 million, as we recovered some doubtful accounts, and there is no impairment charge on property, launch, and equipment. which offset the impact from increased expenses related to research and development, sales and marketing, and general administration. For the full year 2021, our operating expenses rose 50% to $16.8 million, primarily due to growing headcount and the acquisition of hatches. Within that, our research and development expenses were $5.3 million, and sales and marketing expenses were $2.3 million, each more than tripled from the previous year. Our R&D expenses accounted for about 10% of revenues in 2021, up from 4% in 2020. as we expanded our efforts to upgrade technology and products. Additionally, general and administration expenses increased 168% to $10 million. Still, our operating expense ratio was 32% in 2021, compared with 30% in 2020. Our change in share value of wallets was $4.6 million in the fourth quarter, compared to $2.1 million in the prior year. Thus, net income attributable to shareholders of CDK Energy was $9.2 million during the period. compared to not attributable to shareholders of the BAK Energy of $4.3 million in the same period of 2020. For the full year, our change in fair value of warrants was $61.8 million, compared with $2.1 million in the prior year. net income attributable to shareholders of feedback energy was 61.5 million US dollars compared to net loss attributable to shareholders of feedback energy of 7.8 million US dollars in 2020. As of December 31, 2021, our cash and cash equivalents reached 7.4 million U.S. dollars compared to 2 million U.S. dollars as of September 30, 2021. That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead.
spk06: Thanks. Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and write for your name to be announced. If you wish to withdraw your request, please press the pound or hash key. Please stand by while we compile the question and answer roster. So once again, let's start one of the questions. As a reminder, if you wish to ask a question, please press star 1 on your telephone keypad. Our first question comes from the line of Laura Liu from Stone Street Group. Please ask your question.
spk03: 你好,谢谢。我是Stone Street的Laura。 我想问一下就是最近俄乌的局势使得这个沽和涅的价格都急剧的上升。 那这对于海创生产电池原材料以及中底生产这个离离子电池有多大的影响? And do the two companies have any measures to deal with the increase in the price of metal?
spk05: Due to the conflict between Russia and Ukraine, the price of cobalt and nickel has increased sharply. How will this impact the raw material production in hydrants and the production of lithium-ion batteries in seabed energy? And what measures do the two companies have in place to cope with the rise in metal price?
spk02: The rise in the price of metal is not much of an impact on the battery business of Zhongbi Energy. In terms of material business, the rise in the price of metal has some impact on our expectations, but it is not very big. The company has taken a lot of metal from the low price, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, including a supply of metal, This is a feature of our warehouse. In the past, it was already stocked in a relatively sufficient situation. Locked production profits. In this way, the sales price and material price are linked. In this way, you can reduce the impact to the lowest level, or even say that the investor can earn higher profits. OK, with regard to battery business,
spk05: The materials involved in most orders and shipment of seabed energy are lithium-ion phosphate, and the price rise of cobalt and nickel has little influence on our products. In terms of material business, the estimation of a rise in metal price does have some impact, but the company can navigate by taking various measures For example, given that the shelf life of nickel, gold, and manganese is quite long compared with other metals, we have replenished the stock when the price is low and we have replenished to quite a high level so we can lock the production profits and also build a linkage between the sales price and material price. And with all these measures, we can mitigate the impact on our material business and even make some profit from it. And on another hand, now batteries are scarce resources in the market, and the customers can basically digest the price increase caused by the external factors. After we communicate with them, they can understand, and the they also told us that the impact on the material preparation and sales is acceptable to them.
spk06: Thank you. Laura, do you have any follow-up questions?
spk03: Okay, thank you. I have a second question. Okay, I have a second question. How do you see the electric vehicle or electric vehicle battery markets in 2022?
spk07: Because of the rise in raw materials. But we also see that the development direction of the entire global energy is still moving towards the establishment. And now, because of the Russian-Ukrainian conflict, there is still some international influence. And the price of traditional energy is also fluctuating a lot. So consumers are also able to absorb the pressure of the rise in raw materials in electric vehicles. This year, from the domestic electric vehicle market, we recorded a double growth compared to last year. Especially some of the leading companies like Tesla, as well as the domestic Biatia, as well as these new forces. They are all on the top. In the traditional, in the A00 class of our company's positioning, this kind of car, this sales has always been in the entire high, middle, and low-end models. Its sales should also be ranked in the top three in the ranking. And last year, this kind of AD&D car has been standing in terms of quantity. In terms of the entire electric vehicle consumer market, it should be ranked in the first and second places. So in the future, the electric vehicle market Um.
spk05: Okay, so due to the price increase of raw material, we did see some impact to the markets. However, if we have a look at a long-term market development potential, we can see that the whole market is turning into electrification. But we also have to admit that the conflict between Russia and Ukraine, together with some geopolitical issues, the price fluctuation is quite huge. However, we are happy to see that the consumers can digest and understand and also they can absorb the pressure brought by the price increase of raw material. And if we have a look at the factory industry and EV industry in China, we can see that there is a big increase, a double or even triple increase in the domestic EV market, including we see a sharp increase in the sales of some major car manufacturer companies like Tesla and BYD, etc. And if we have a look at the AOO passenger cars, we can see that no matter the sales at the high end or median end or low end, our sales amount always ranked top three. And last year, in terms of AOO passenger cars, in terms of the sales volume, the total EV consumer vehicle in the sales, we also occupied number one and number two in the markets. So if we look into the future, we can see that the EV market still maintains a rapid growth momentum. And in turn, the market demand for battery will also increase correspondingly. And all these market situations are in line with our industrial layout and our market positioning.
spk02: OK, let me add a little bit. According to some data from industry institutions and platforms, the new car sales in China and overseas in 2022 can reach 4.8 million and 4.4 million. In response to the demand for electric power, it can reach a demand of 450 GWh. There is also a very good performance in the case of light and light electric vehicles. It is expected to reach a demand of 48 million. In this case, LiDian's penetration rate can be increased by 25%. In 2022, with the landing of the new target, the exchange of domestic electric vehicles led to the opening of the industry of light electric vehicles. The industry has gained a good level of development. In the future, it will include li-electric, intelligent, and long-distance driving. Yes, I want to add some more information. According to the
spk05: According to the industrial institution and data from the platform, it is estimated that the sales volume of new energy vehicles will reach 4.8 million and 4.4 million at home and abroad, respectively, in 2022. And if we have a look at the demand for power battery, it is estimated to reach 450 gigawatts. Besides that, in terms of light electric vehicle, the sales volume of electric two-wheelers in China amounted to 48 million in 2021, and the penetration rates of lithium battery was 25%. And in 2022, with the implementation of new national standards, the weapon of electric vehicle will accelerate the reshuffle of the light electric vehicle industry and the industry will become more consolidated. And it will be featuring lithium battery empowered, electrification, intelligence, and long range. And if we add all this together, we will see that the lithium battery of light electric vehicles will also be developing rapidly in car sharing, power swapping, fast charging, etc. So we believe that the market prospects will be promising in the future, in 2022. Thank you.
spk06: Your next question comes from the line of Carl Birkenfeld from Opus. Please go ahead.
spk01: Okay. It's American Trust Investment Services, Carl Birkenfeld, New York. The question I have is, the first question I have is, has the lockdowns in COVID adversely affected your production facilities and Dalian and Nanjing. And that's my first question. Has COVID affected those facilities?
spk04: In the past two years, the COVID-19 pandemic has not had a major impact on our production in Dalian and Nanjing. During the pandemic, we had a phenomenon of the pandemic control and shutdown, but this did not last very long.
spk05: 所以目前来看是没有受到太大影响的。 Okay, so since the outbreak of COVID-19 in the beginning of 2020, it has been over two years now. But if we have a look at China, we have to say that there is no major impact in our production facilities in both Dalian and Nanjing. Although we did undergoing some shutdown. However, it didn't last long, so it didn't exert a big impact on our production.
spk04: And if we look at this issue from the perspective of customer need, during these past two years,
spk05: we witnessed a sharp increase in the need for new energy vehicle and lithium batteries. That is why our orders have been increasing. So we have to say that there is no negative impact on Earth from the perspective of consumer need.
spk01: Thank you. My second question is, I think was answered in the previous person's question, and that was the material cost increase in the lithium batteries. I guess you guys are passing the increased course on to your consumers to keep the margins the same?
spk05: Okay, so it's a question, right? and transfer it to the consumer. So, through this method, we can maintain the convenience of profit. Mr. Pei, can you answer this question? Okay, I will explain this problem from two perspectives.
spk04: First, it is our material business. Because this material is in the upper part of the industrial chain, it is easier to transfer the price to the lower part of the industrial chain. Therefore, the price of raw materials can be easily transferred to the customer in the lower part of the industrial chain. China China China China China China China China OK. OK.
spk05: So we are going to answer this question from two different business segments. First of all, let's have a look at our material business. As our material business stands at the upstream of the industrial chain, so it is more easy for us to pass the price increase to the median or the lower end. If we have a look at the second segment, that is our battery business. Battery business, we stand at the median end. And then for the passing over of the price increase, it will be a little bit slower. There will be some latency in it. So due to the increase of the price of lithium carbonate, there will be some impact in our battery business. And we are going to see an influence starting from Q4 of 2021 and then also in this year. We're going to see a passing down of the price increase to the downstream gradually.
spk01: Thank you. You're welcome.
spk06: Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone keypad. We have a follow-up question from the line of Laura Liu from Stone Street Group. Please go ahead.
spk05: I have a question concerning the strategic priority of the company in 2022. Could you give us some updates?
spk07: to attract more car users and major suppliers. In terms of our production capacity, our CEO and CFO have made some introductions. Our production capacity is also based on the direction of our two businesses. Because our energy, especially our overseas energy business, is growing very fast, I think now the new order is constantly coming in. We have already received the order at the end of 2023. We have also expanded some on the two tiers. There are also some large domestic customers on the LEV. Including some profits on the LEV. We are also gradually developing some high-performance, such as power-saving and power-saving services. From a car point of view, we are mainly based in Nanjing, and we are producing new large-capacity, full-capacity large-capacity products. This product is very suitable. At present, we have just introduced the use of some A00 and A00 car customers. That is to say, this year we will gradually This is our goal and our strategy around the two aspects mentioned just now. Of course, from the product layout, we will also do some basic accumulations for Nanjing II to ensure that after the expansion of our Nanjing II is even bigger, there will be a formal and neutral market for our large customer products.
spk05: okay so if we have a To answer this question, I'm going to say that there were two areas of priorities that we will pay special attention to in the year 2022. First of all, we are going to try to maintain our advantages in the traditional business. including energy storage and LEV, we will try to maintain a rapid growth in this area. And besides that, we will also try to research and develop more high-end products. And secondly, we will also try to gain more customers, especially big customers in our vehicle business. And this year we are going to focusing and centering on these strategies so as to ensure that these two priorities will be well attained. And in terms of product line allocation, we will try our best to promote the construction and operation of Nanjing Phase 2 projects and also try to accumulate more market needs to ensure that after the expansion of capacity, our products will well meet the needs of the customers. The median and and big customers. And I also want to add that according to our business strategy, actually our energy storage business have witnessed big growth, especially that we have gained a lot of orders from the overseas markets. And our order scheduling has been made until 2023 already. And we will also try to attend more to wheeler and LEV customers, not only overseas but also in the domestic markets. And we will also try to grow our business in LEV, especially in some business with big profits like battery swapping and battery charging. And for Nanjing, we will also have the plan to develop the large cylindrical batteries, which we believe will be suitable for the AOO and AO passenger cars. So we will try our best to make all this priority well implemented. 我再简单来补充一些
spk04: Just now, Mr. Wang also introduced that the order in our hands has already been announced. In 2021, we spent a year to complete the expansion of the production capacity of Dalian and Nanjing two bases. After the expansion of the entire year, we have already had a better production capacity and a large number of customer orders. These will affect our financial data in the fiscal year 2022. There will be a good growth. We will continue to consider the expansion of the production capacity of Dalian and Nanjing's two production bases based on the full use of existing production capacity. This is the battery business. On the other hand, in terms of the material business, in addition to acquiring HaiChuang, in addition to bringing us the strategic value of the entire upstream and downstream industrial chain, because the material price continues to rise this year, the raw material business So I want to add more points.
spk05: the the previous speaker just mentioned about that our order have been received until 2023 that is to say that now the supply has outperformed that the amount has outperformed the supply exceed the supply and in 2021 we use one year to expand the production capacity of our darling and managing facilities which have put us in a very good position to provide enough production capacity. And on the other hand, we have already gained sufficient orders. And all these two favorable conditions will lead to, which we believe, an outstanding financial performance in the year 2022. And we will try our best to make good use of the existing capacity. And we will also have a close look at the market needs and to decide whether to expand, further expand our capacity in Nanjing or Dalian or not. So what I've been talking about is our battery business. If we have a look at our material business, after the acquisition of high trends, we have well-integrated the upstream and downstream supply chain. And given that the price of raw material have been increasing, the acquisition will also well positioned us in favorable position. And I believe that our material business will also be a highlight in our major business in 2022. So with all this adding all these factors together, I believe that the performance of our company in 2022 can be well anticipated. We have confidence in it.
spk06: Thank you, Laura. Do you have any further questions?
spk05: 沒有了,以上就是我做的問題,謝謝。 I have no more questions, thank you.
spk06: Thank you. Seeing no more questions in the queue, let me turn the call back to Mr. Yunfei Li for closing remarks. 非常感謝各位參加今天的電話會,我們期待下一季度再和各位匯報新的進展,謝謝。
spk05: Thank you all again. Thank you. Thank you all for joining this meeting, and we're looking forward to providing you more updates in the next quarter's early meeting. Thank you all again. This concludes the call. You may now disconnect.
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