CBAK Energy Technology Limited

Good day ladies and gentlemen, thank you for standing by and welcome to CBEC Energy Technologies second quarter and first half of 2025 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 will turn the call over to Irina, IR Specialist of CBAC Energy. Irina, please proceed.

Thank you, operator, and hello, everyone. Welcome to CBAK Energy's earnings conference call for the second quarter and the first half of 2025. Engineers today are Mr. Zhiguang Hu, or Jason, Chief Executive Officer of CBAK Energy, Mr. Thierry Li, Chief Financial Officer and Company Secretary, and Yvonne, who will help with our interpretation, will join us for the Q&A section. We released our results earlier today. The press release is available on the company's IR website at ir.cbak.com.cn, as well as from the Newswell services. A replay of this call will also be available in a few hours on our IR website. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US private security litigation reform act of 1995. Forward-looking statements involve inherent risk and uncertainties. As such, the company's actual results may be materially different from the expectation expressed today. Further information regarding this and other risks and uncertainties is included in the company's public filings with the SEC. The company does not 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 US dollars. With that, let me now turn the call over to our CEO, Mr. Zhiguang Hu, please go ahead, Jason.

Hello, everyone. Thank you for joining our earnings conference call for the second quarter and first half of 2025. As discussed last quarter, our Dalian facilities are undergoing a transition from model 26600, a small format battery that has been in use for nearly two decades, to model 40135, a much larger and more advanced model that enjoys strong market popularity. This transition has led to a sharp decline in Dalian's net revenues and gross profit. Given that we operate to major battery production base, any downturn in Dalian significantly impact our consolidated results. Meanwhile, our Nanjing facilities are facing supply constraints due to surging demand for our Model 32 140 cells. Phase 1 of our Nanjing plant, which began operation in 2021, is already running at full capacity. We reported Last quarter, they had phase two . However, its completion has been delayed by a few months to Q4, limiting our ability to fulfill additional pending orders. In short, Dalian is building a new production line for model 4035 cells. with all existing and prospective customers currently testing samples and awaiting mass production. Nanjing is operating at a full capacity and are able to accommodate further demand until phase two comes online. Since both the model 4135 production and Nanjing phase two expansion are expected to be ready in Q3 to Q4, we anticipate a strong recovery in our consolidated results by year-end. This situation explains the slowdown in our performance over the past two quarters. As of June 30, 2025, we reported net revenue of $40.52 million, down 15% from $47.79 million in the same period of 2024. The primary driver of the decline was a sharp reduction in sales to customers in the residential energy storage market who had previously purchased large volume of model 26600 cells. Sales in this segment fell by 44.8% year-over-year. As a result, the composition of our largest customer has shifted with significant growth in order from leading player in the possible power supply sector and top manufacturers in India's two- and three-wheeler market. Our strategy moving forward is to continue targeting high-quality European and American customers for our model 26,000, 32,140, and upcoming 40,135 sales. Well, further expanding our market share in India and the portable power supply industry with our model 32140 and 4135 products. We had previously decided in partnership with our customer to relocate part of our manufacturing lines overseas in response to U.S. tariffs on Chinese products. However, we have temporarily paused our Meridian project as a short-term solution and know that governments of both countries are currently engaged in active negotiation to reach an agreement. We believe it is prudent to monitor the outcome of these talks before committing to any major investment. That said, establishing battery some production capacity in the U.S. remains an element of our long-term strategy. We continue discussion with potential partners to determine the most cost-effective approach to realizing this plan. Now let me turn the call to our CFO, Xiewei Li.