Good day, ladies and gentlemen. Thank you for standing by and welcome to CBAK Energy Technology’s Fourth Quarter and Full Year 2024 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we'll conduct the question-and-answer session, and instructions will follow at the 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 [Yixian Tian] (ph), IR Specialist of CBAK Energy. Ms. Tian, please proceed.

Thank you, operator, and hello, everyone. Welcome to CBAK Energy's earning conference call for the fourth quarter and full year 2024. And joining us today are Mr. Zhiguang Hu or Jason, Chief Executive Officer of CBAK Energy, Mr. Jiewei Li, Chief Financial Officer and the Company Secretary, our General Engineer, Ms. Xiujun Tian and [Yven] (ph) who will help with our integration will join us for the Q&A section. We released our result earlier today. The press release is available on the company's IR website at ir.cbak.com.cn, as well as from the Newswire 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 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 filings 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 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 first quarter and the full year of 2024. I'm pleased to present the performance of our battery business for the fourth quarter and the full year of 2024. Net revenues for the battery segment increased modestly by 2.7%, reaching $136.59 million for the year. Despite the moderate growth in revenue, our gross profit for the battery segment surged by 37.58%, rising from $31.58 million to $43.05 million. The gross profit margin of the battery segment expanded significantly to 31.5% compared to 23.75% in 2023, marking an impressive increase of 7.7 percentage points year-over-year. We reported a net income of our battery segment of $19.43 million for the year 2024 compared to $13.97 million in 2023, marking an impressive increase of 39.08%. As we have consistently emphasized over the past few quarters, this exceptionally outstanding gross profit and net income figures are particularly noteworthy given the prevailing challenge and downturn in the broader new energy sector. While many of our competitors, including prominent Chinese battery manufacturers are experiencing declining profit, our performance stands in stark contrast. As communicated in previous press release, demand for battery, especially the model 32140 large cylindrical cell remain exceptionally strong. Our current production capacity in Nanjing is fully booked, which means net revenue are likely to remain steady unless additional capacity become available. To address this demand, we are in the process of commissioning two new production lines for the model, 32140 in Nanjing, expected to be operational by the end of 2025. The expansion will add 3 gigawatt hour of production capacity. Additionally, we are upgrading our Dalian facility which currently manufacture the older model, 26650 since 2006. A new product line will be introduced to produce the larger model, 40135 cylindrical battery,…

Thank you, Jason, and thanks, everyone for making time to join our earnings conference call today. As Jason has presented the net revenues growth and gross profit figures for our battery segment, I will now provide an overview of our consolidated financial results, which include the performance of Hitrans, our raw materials production unit. In the interest of time, I will focus only on the key metrics rather than discussing the figures in detail. For a comprehensive breakdown of our financial performance, we encourage you to refer to our press release issued earlier today. For the full year, our consolidated net revenues declined by 13.51%, falling to $176.61 million from $204.44 million in 2023. Despite this decrease, consolidated gross profit rose significantly by 31.68%, reaching $41.75 million compared to $31.72 million in the previous year. The gross profit margin improved substantially to 23.7%, an increase of 8.18 percentage points from 15.52% in 2023. We achieved a net income attributable to shareholders of CBAK Energy of $11.79 million for 2024, a remarkable turnaround from the net loss of $2.45 million reported in 2023. This performance demonstrates our ability to generate higher gross profits and achieve positive net income despite lower net revenues. The decline in consolidated net revenues and the lower consolidated net income, especially when compared to the significantly higher net income of our battery segment can be primarily attributed to the performance of our raw materials production unit, Hitrans. The raw materials industry, particularly for those related to lithium ion batteries, has faced declining prices over the past few years, which have since stabilized at relatively low levels. Additionally, the industrial-wide capacity expansion that began in 2021 has led to an oversupply, intensifying competition and creating operational challenges for Hitrans. On a positive note, since acquiring Hitrans in 2021,…

[Operator Instructions] We will now take our first question from the line of Brian Lantier from Zacks. Please ask your question, Brian.

Good evening. Thank you for all that color. It's really interesting to see the progress and have a vision for where the company will be 24 months from now. So I appreciate that. I guess as you're getting ready to expand the product lines, what are you seeing as you're speaking to equipment suppliers in the market? Are you getting any better pricing on some of the equipment that could be coming in? And do you think that could ultimately lead to maybe faster implementation of some of these production lines given some of the challenges that exist in the battery market today?

Thank you, Brian. I will translate your question to our team. [Foreign Language]

Sorry, I muted myself. Sorry, Brian. Let me directly respond to your question in English. I would say, as for our expansion plan in Nanjing domestically, for the terms and the pricing we get from the suppliers, it's almost the same as that for our competitors. But certainly, we get much more favorable terms with respect to the payment condition and the payment schedule. They allow us to delay a great portion of the payments much later than our competitors can get. And we have already completed the first prepayments and certain equipment has already been sent to Nanjing. As I just discussed in our prepared remarks, we are still assessing if we are going to relocate part of this equipment to our overseas factory or we are just going to simply invest in new equipment. That has not yet been determined. I think that -- I think I already answered your question.

Great. Thank you. You have customers around the globe. Are you hearing anything from them regarding concerns about the global economy?

We do not hear -- please, Yven, please.

[Foreign Language]

We do not hear any specific concerns about the global economy from our customers, but we do feel the concerns on the potential and current existing geopolitical risk. Actually, as we just disclosed, we are actually being pushed by our major customers to set up our overseas factory in order to avoid the existing tariffs. And we also hear the concerns from our major customers about their decline of sales in their end applications caused by the decline of economy. But in general, we are still very positive about the future of our -- of the new energy industry especially in Europe and in the United States. A huge potential to replace existing units. I think the concern is more placed on the tariffs and geopolitical risk.

Great. And lastly, on Hitrans. Obviously, it's a difficult market right now. Are you still exploring any possible divestiture of that business?

[Foreign Language]

As we have already expressed, Hitrans industry, industry Hitrans is now experiencing a downturn. So we would not extend any new investments in Hitrans.

Okay. Great, thank you. I’ll let someone else go.

[Operator Instructions]

Sorry, I just dropped the line.

Thank you, Mr. Jiewei Li, we are still waiting for questions. [Operator Instructions] I see no more questions in the queue. Let me turn the call back to Jason for closing remarks.

Thank you, operator, and thank you all for participating in today's call and for your support. We appreciate your interest and look forward to reporting to you again that quarter on our program.

Thank you all again. This concludes the call. You may now disconnect.