Good day, ladies and gentlemen. Thank you for standing by, and welcome to CBAK Energy Technology's fourth quarter and full year 2022 earnings conference call. Currently, all participants are in 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 Thierry Li, Director of Investor Relations of CBAK Energy Technology. Mr. Li, please proceed.
Thank you, operator, and hello everyone. Welcome to CBAK Energy's fourth quarter and full year 2022 earnings conference call. Joining us today are Mr. Yunfei Li, our Chief Executive Officer, Mrs. Yunna Pei, our Interim Chief Financial Officer, Mr. Xiujun Tian, our General Engineer , and Jennifer, our interpreter. We released results earlier today. The press release is available on the company's IR website at ir.cbak.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. 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 filings with the SEC. The company doesn't assume any obligations to update any forward-looking statements, except as required under applicable laws. Please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. Let me now turn the call over to our CEO, Mr. Yunfei Li. Mr. Li will speak in Chinese and I will translate his comments into English. Go ahead, Mr. Li. Thank you. Hello everyone. Thank you for joining our earnings conference call today. We have just released the financial report for Q4 and full year of 2022. We are proud to present to our shareholders and investors the tremendous growth we have achieved in sales revenues.
The company's revenue has grown by 3.7 x from $52.67 million in 2021 to $249 million in 2022, which is a remarkable achievement. Thanks to the continuous trust and support from our major clients, as well as the success we have achieved in expanding our overseas markets, our battery business has grown rapidly. In 2022, the annual revenue of our battery segment reached approximately $94.72 million, a remarkable increase of 1.76x year-over-year . We have announced orders from several major customers or potential important customers in previous announcements. Although out of confidentiality for the company's existing customers, we have not disclosed the names of some major customers, but from the full-year revenue growth of nearly 4x , it can be seen that these customers trust the company's orders and product quality is long-term and sustainable.
Among these announced customers, the total order amount of most of them is still increasing. In today's conference call, I will focus on reviewing the customer list we have announced in the past year, the status of customer signings, and as of December 31st, the latest order amounts. Because of the popularity of our business, the company is speeding up the expansion of production capacity. I will also report to shareholders and investors on the construction status of the company's new factory in Nanjing. In our previous announcements, we mentioned receiving orders from various important clients, some of whom we could not name due to confidentiality reasons. The fact that our revenue has increased by almost 4x indicates the long-term trust and satisfaction of these clients with our products and services. The order amount from these previously announced clients is still growing.
In this conference call, I will provide an update on these clients. Currently, we are actively expanding our production capacity to meet the high demand in our industry. I will also update our shareholders and investors on the construction status of our new factory in Nanjing. In 2022, the company has made significant progress in both research and development and sales. Our sales revenue increased by 3.7 x. We will become one of the earliest companies in the market to achieve mass production of sodium batteries. Currently, the company has a huge amount of orders waiting to be delivered. We also manages to maintain a good relationship with our major European customer. We are also supplying products to several internationally renowned clients. Relevant information will be released at the appropriate time.
The price of lithium carbonate, a key raw material, skyrocketed in the most of 2022 by about 300%, which affects our profitability. However, along with the new capacity put into use by each raw material producer, the price of lithium carbonate declines quickly. We believe that a quick decrease of raw material price will help us increase profits this year. The successful market development, decline of raw materials price and the unveiling of our sodium batteries together give us sufficient reasons to be optimistic about our financial performance in 2023. Now let me turn the call over to our Interim CFO, Yunna Pei, who will provide details on our financial performance.
Okay. Thank you, Mr. Li. Thank you everyone for joining our call today. I will now go over our key financial results for the fourth quarter and the full year of 2022. For the full details of our financial results, please refer to our earnings press release. We continue to maintain a strong momentum in the increase of sales of our battery and battery material products. As mentioned by Mr. Li, high cost of raw materials and the need to invest in and expand our capacity profits. With big clients making orders and price of raw materials declining in this year, we are very confident in the future growth of our profits. In 2022, our revenues and gross profits grew, reflecting the successful of our marketing strategies.
We increased significantly our investments in research and development to both develop new large cylindrical lithium battery and sodium battery products. Meanwhile, we managed to slightly reduce our sales and marketing expenses and the general and administrative expenses to increase our sales revenues, while to reduce our related expenses will be helpful in the long run to deliver a better financial result. Moving on to our results. In the fourth quarter, our net revenue surged by 95.9% to $54.4 million from the same period of 2021. In the full year, our net revenues grew by 372% to $248.7 million. The significant growth in our revenues was contributed by several factors.
First, on the EV market, our product has improved the features and higher quality, which become more attractive to EV manufacturers. The downstream market for electric vehicles continued to grow in 2022. Leading to an increase in demand for EV battery products. On the LEV market, thanks to a huge increase in market demand, we successfully sell more batteries to LEV manufacturers. More importantly, our large cylindrical lithium battery 32140 batteries have gradually been accepted by key players in the EV and LEV markets, leading to the significant growth. On the energy storage market, the increase in sales of batteries for uninterruptible power supplies in 2022 can be attributed to a combination of factors, including growing demand for renewable energy sources and our development of reliable products.
Additionally, our focus on research and development has allowed us to develop innovative and reliable energy storage products at a competitive pricing. As we continue to invest in R&D and improve our product offerings, we're expect to remain a leader in the energy storage industry and see continued growth in sales. Cost of revenues was $50.7 million in the fourth quarter, up by 89% from the same period in the prior previous year. Our cost of revenues for 2022 was $230.6 million, up by 384.9% from 2021. The increase in our cost of revenues was in line with the increase of large revenues.
Our gross profit was $3.7 million in U.S. dollars in the fourth quarter, representing an increase of 206.3% from the same period in the prior year. Gross profit for 2022 was $18.1 million, representing an increase of 254.1% from 2021. Gross margin was 6.7% from fourth quarter and 7.3% for 2022, compared with 3.75% and 9.7% in the same period of 2021. Gross profit margins slightly decreased in 2022, largely due to increase in price of battery raw materials in the year.
Along with the decline of raw material price from 2023, our gross profit margin will recover and increase this year. Our operating expenses rose by 84.7% to $12.6 million for fourth quarter and 75.9% to $10.9 million for 2022. The increase in operating expenses in 2022 was primarily due to our commitment to increase our investment in the research and development efforts and the impairment charge on Hitrans's property, plant and equipment as well as goodwill. Within that, our research and development expenses increased by 36.7% to $2.6 million for the fourth quarter and by 101.6% to $10.6 million for 2022.
Sales and marketing expenses decreased by 12.8% to $2 million for 2022. General and administration expenses decreased by 12.43% to $6.8 million for the fourth quarter and by 2.9% to $9.7 million for 2022. Even with the increase in R&D investments and the occurrence of impairment charges, our operating expenses were out only 11.9% relative to our revenues in 2022, compared with 31.9% in the same period of 2021. Our operating loss in the fourth quarter was $8.8 million, increased by 52.6% from the same period of 2021.
Operating loss in 2022 was, $11.5 million, reduced by 1.8% from $11.7 million in 2021.
Our change in fair value of warrants in fourth quarter was $1 million, decreased by 78% from the same period of 2021. The change in fair value of warrants for 2022 was $5.7 million compared to $61 million in the prior year. Thus, we recorded a net loss attributable to shareholders of CBAK Energy Technology of $10.7 million. For the fourth quarter, compared to net income attributable to shareholders of CBAK Energy Technology of $9.16 million. The net loss attributable to shareholders of CBAK Energy Technology was $9.47 million for 2022, compared to net income attributable to shareholders of $61.49 million in 2021. That concludes our prepared remarks.
Let's now open the call for questions. Operator, please go ahead.
Thank you. We will now begin the question and answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Once again, if you wish to ask your question, please press star one one on your telephone keypad. First question comes from the line of Tian Xia from IBM. Please ask your question, Tian.
Uh,
Okay. The first question is from IBM. I am glad to see the rapid growth of the company's revenue, and I've also noticed that the company suffered from some losses in profits. Can you give us more details in this regard? The management also mentioned that there has been a significant decrease in raw material prices. Do you think the company will be able to control its production cost in 2023?
Uh.
Uh,
Thank you for your question. According to our report we made just now, in 2022, due to the price fluctuation in lithium carbonate, that is one of the key raw materials of our products. The gross margin of our company witnessed a decline compared to the figure in 2021. On the other hand, if we have a look at the operation expenses of our company, we can see that we increased a lot in our input in the R&D. In 2022, our investment in R&D amounted to $106.3 million. It's more than double the amount of 2021. This factor also lead to a reduction in our profit.
In the future, we will still be committed-Through the continuous input in the R&D in our high quality battery products so as to maintain a leading position in the industry.
嗯 。 呃 ， 另 外 呢 ， 我 们 也 在 持 续 ， 呃 ， 一 直 以 来 呢 ， 都 在 持 续 致 力 于 优 化 我 们 的 生 产 工 艺 ， 呃 ， 来 降 低 生 产 成 本 ， 呃 ， 也 致 力 于 加 强 公 司 的 治 理 结 构 ， 呃 ， 希 望 能 够 不 断 地 提 高 我 们 经 营 的 效 率 。 所 以 综 合 来 看 ， 呃 ，
公 司 在 2022 年 的 营 业 收 入 ， 呃 ， 在 同 比 增 长 了 三 点 七 倍 的 条 件 下 呢 ， 我 们 的 经 营 性 亏 损 ， 呃 ， 是 收 窄 的 ， 呃 ， 经 营 性 的 亏 损 同 比 降 低 了 百 分 之 一 点 八 。 所 以 我 们 相 信 ， 就 是 在 2023 年 ， 随 着 ， 呃 ， 材 料 价 格 回 归 到 正 常 的 水 平 ， 以 及 我 们 的 ， 呃 ， 这 些 治 理 结 构 的 不 断 提 升 ， 呃 ， 这 些 因 素 都 有 利 于 ， 呃 ， 公 司 利 润 的 增 长 。 嗯 ， 谢 谢 。
On the other hand, we have been committed to the optimization of our production processes with an aim to reduce the production cost. In addition, we also make our efforts in improving the management structure so as to improve the operation efficiency. If you have a look at the specific figures of 2022, our revenue realized a 3.7x fold of increase. If we have a look at the operation loss, actually it shrinks to some extent by 1.8%. If we have a look at 2023 with the price of raw material returning to a normal level, and also with the optimization of our management structure, we believe that our profitability will be further increased. That's it.
好 的 ， 非 常 感 谢 您 的 回 答 。 我 有 第 二 个 问 题 ， 那 目 前 呢 ， 也 看 到 公 司 刚 刚 提 到 了 钠 电 池 ， 可 否 就 钠 电 池 的 应 用 场 景 、 市 场 规 模 ， 更 重 要 的 呢 ， 是 在 中 国 市 场 目 前 的 热 度 做 个 介 绍 。 另 外 一 个 想 知 道 的 是 ， 贵 公 司 在 钠 电 池 领 域 是 否 目 前 处 于 比 较 领 先 的 地 位 呢 ？ 谢 谢 。
Thank you for question. Sorry, thank you for your answer. I have another question. Just now the senior management spoke of sodium battery. Can you walk us through the application scenarios and the market size of sodium battery? In particular, can you give us an update on its popularity in the Chinese market? Is the company currently in a leading position in sodium batteries? Thank you.
这 个 问 题 我 们 让 田 总 来 回 答 一 下 吧.
嗯 ， 好 的 。 嗯 ， 非 常 好 的 一 个 问 题 啊 。 那 么 这 个 问 题 的 话 呢 ， 主 要 先 回 答 一 个 ， 就 是 关 于 在 中 国 市 场 目 前 钠 离 子 电 池 的 一 个 热 度 的 一 个 问 题 ， 这 是 基 于 连 续 三 年 的 锂 ， 锂 电 ， 锂 的 这 个 锂 矿 的 价 格 的 一 个 上 升 ， 碳 酸 锂 价 格 的 话 呢 ， 翻 了 好 几 倍 。 完 了 这 样 子 的 话 呢 ， 就 是 导 致 锂 的 ， 锂 电 池 的 这 个 价 格 波 动 ， 这 个 对 这 个 市 场 的 一 个 ， 呃 ，
整 个 反 应 来 说 的 话 呢 ， 是 很 不 友 好 的 。 那 么 现 在 钠 离 子 电 池 的 话 呢 ， 这 个 在 这 个 时 期 就 迎 来 了 一 个 很 好 的 一 个 发 展 。 那 么 钠 的 价 格 的 话 呢 ， 是 比 较 稳 定 且 比 较 易 获 取 的 。 那 么 所 以 说 现 在 在 国 内 的 话 呢 ， 对 于 钠 的 这 个 热 度 是 关 注 度 非 常 高 的 。 同 时 钠 的 话 呢 ， 它 又 具 备 一 个 高 倍 率 以 及 这 个 低 温 性 能 良 好 的 一 个 这 样 的 一 个 特 点 。
所 以 说 钠 的 话 ， 它 在 这 个 车 用 以 及 在 这 个 ， 尤 其 是 在 冬 季 比 较 冷 的 天 气 里 头 ， 它 在 这 块 这 个 方 面 一 个 深 度 ， 那 比 那 个 锂 要 好 一 些 。 呃 ， 另 外 的 话 呢 ， 就 是 在 储 能 市 场 上 ， 基 于 钠 的 这 个 价 格 ， 一 个 是 稳 定 ， 一 个 是 价 格 低 廉 ， 它 也 会 有 一 个 更 好 的 一 个 表 现 。 那 么 刚 才 我 们 的 这 个 报 告 中 也 有 一 期 ， 就 是 钠 的 这 个 市 场 将 会 有 千 亿 级 的 市 场 。
实 际 上 锂 的 价 格 最 近 是 有 一 些 下 滑 ， 但 是 对 于 钠 的 这 个 热 度 的 话 呢 ， 并 没 有 影 响 。 呃 ， 如 果 说 锂 的 价 格 持 续 高 位 的 话 呢 ， 实 际 上 会 给 钠 让 出 更 高 的 一 个 市 场 的 一 个 份 额 。 那 么 现 在 就 是 钠 的 现 在 一 个 市 场 的 一 个 热 度 问 题 。 关 于 我 们 公 司 的 这 个 钠 的 一 个 进 程 的 话 ， 我 们 现 在 已 经 研 发 了 三 代 的 那 个 钠 离 子 电 池 ， 包 括 刚 刚 在 ，
在 我 们 的 这 个 报 告 中 公 布 的 2670 的 这 一 款 ， 呃 ， 还 有 我 们 做 的 32140， 呃 ， 一 百 三 十 瓦 时 每 公 斤 的 产 品 。 呃 ， 那 么 这 块 的 话 呢 ， 我 们 一 百 三 十 瓦 时 每 公 斤 的 产 品 的 话 呢 ， 已 经 配 合 我 们 的 ， 呃 ，
合 作 伙 伴 已 经 进 行 装 车 ， 呃 ， 进 行 那 个 ， 呃 ， 上 工 挂 了 。 那 么 我 们 现 在 马 上 的 话 呢 ， 就 具 备 这 个 大 批 量 上 量 以 及 这 个 装 车 ， 装 车 销 售 的 这 样 一 个 条 件 。 呃 ， 以 上 是 我 的 回 答 。
This is a very good question. First of all, I'd like to answer the question about the popularity of sodium battery in the Chinese markets. In the past three years, we all notice that the price of lithium-ion battery fluctuate a lot. It is mainly because of the fluctuation of the lithium carbonate. It increased multifold in the past three years. Actually this kind of fluctuation in price exerted a negative impact in its market. However, if we have a look at sodium battery, on the one hand, it enjoys a more stable price, and on the other hand, it is easier to assess. It has a better accessibility. Besides that, its performance in low temperature condition is also superior.
That will be, that makes it a good product to be used in vehicles, especially in winter when the temperature is low. We can say that its performance is even better than the lithium battery in the low temperature condition. Given the low price and the stability in price, we believe that the popularity of sodium battery will even grow in the market in the future. We expect a billions of dollars market size for sodium battery. In addition, the decline in the popularity of lithium battery will also, on another hand, create a market opportunity for sodium battery, and we expect the market to further expand in the future.
If you ask me about the development status of the sodium battery in our company, well, we have already finished three generations of development, and we have sodium battery products such as the 26700 and 32140. For the latter one, we have already come up with products that is 130 W per kg . We have already cooperated with our partners now to put these products on the vehicle. In the coming future, we're going to promote the mass production of these products, and we'll use them more and more in the vehicles. That's it for the answer. Thank you for your question again.
All right. Thank you. Once again, to ask a question, please press star one one on your telephone. We have a follow-up question from the line of Tian Xia. Please ask your question, Tian.
Uh, 好 的 ， 非 常 感 谢 。 不 好 意 思 ， 我 还 有 两 个 问 题 希 望 得 到 您 的 回 答 。 呃 ， 第 一 个 呢 ， 是 公 司 在 ， 呃 ， 电 动 车 和 轻 型 电 动 车 领 域 都 得 到 了 大 幅 到 ， 大 幅 的 增 长 。 呃 ， 但 是 呢 ， 因 为 看 到 公 司 大 部 分 的 营 收 还 是 来 源 于 储 能 业 务 ，
那 么 请 问 未 来 电 动 车 还 有 ， 和 这 个 轻 型 电 动 车 部 分 的 营 收 还 会 继 续 高 速 增 长 吗 ？ 呃 ， 尤 其 是 在 贵 公 司 钠 电 池 投 产 以 后 。 那 么 这 是 我 的 问 题 。 谢 谢 。
Okay. Thank you for answer, but still I have another two questions. The first one: the company has experienced significant revenue growth in both EV and LEV sector. Since most of the company's revenue still comes from the energy storage business, will EV and LEV continue to grow rapidly in the future, especially after sodium battery is put into mass production?
这 个 问 题 让 费总， 费总 来 回 答 一 下 吧， 关 于 我 们 公 司 在 这 个 电 动 车 跟 轻 型 电 动 车 领 域 的 未 来。
Okay, the question goes to Mr. Li.
嗯 ， 刚 才 这 位 先 生 也 提 到 了 ， 就 说 是 我 们 现 在 的 营 业 收 入 大 部 分 来 ， 来 自 于 储 能 业 务 ， 呃 ， 这 个 主 要 是 原 因 是 什 么 ？ 是 因 为 我 们 ， 呃 ， 这 个 产 品 是 主 要 现 在 的 销 售 ， 呃 ， 大 连 的 销 售 占 ， 占 的 比 重 比 较 大 ， 因 为 大 连 的 产 品 就 是 那 个 二 六 六 五 零 、 二 六 七 零 零 ， 就 是 多 数 都 是 用 在 储 能 那 个 业 务 上 。 所 以 说 这 个 大 连 的 那 个 占 的 比 重 比 较 大 ，
就 是 ， 呃 ， 都 是 在 储 能 这 个 方 面 。 嗯 ， 三 ， 我 们 南 京 的 产 品 三 二 幺 四 零 ， 由 于 去 年 才 开 始 量 产 ， 量 产 了 之 后 啊 ， 然 后 一 些 的 车 厂 它 也 是 正 在 认 证 的 过 程 ， 但 是 我 们 去 年 也 已 经 有 了 接 近 五 千 万 的 销 售 。 嗯 ， 因 为 我 们 的 产 能 有 限 ， 很 多 的 车 厂 呢 ， 呃 ， 虽 然 是 经 过 了 认 证 ， 但 是 呢 不 敢 释 放 订 单 ，
也 现 在 也 是 正 在 还 是 在 ， 呃 ， 一 直 是 在 那 个 等 待 我 们 的 产 能 释 放 出 来 之 后 才 可 以 。 我 想 随 着 我 们 下 半 年 我 们 的 另 一 条 产 线 ， 呃 ， 达 到 生 产 ， 呃 ， 能 够 满 足 客 户 的 需 求 ， 我 们 的 那 个 还 会 有 更 ， 更 多 的 那 个 电 动 车 和 轻 型 电 动 车 的 那 个 客 户 ， 呃 ， 那 个 我 们 去 为 他 们 供 货 。 呃 ， 所 以 我 认 为 我 们 这 个 下 半 年 ， 我 们 这 个 增 长 ，
呃 ， 还 会 ， 那 个 电 动 车 的 那 个 销 售 会 ， 会 有 增 长 。 呃 ， 具 体 说 钠 电 池 呢 ， 就 说 投 入 以 后 啊 ， 对 于 增 长 会 带 来 一 定 的 这 个 增 长 。
可 能 是 在 今 年 呢 ， 我 们 是 重 点 是 在 钠 电 池 的 研 发 和 呃 ， 在 生 产 这 一 块 ， 呃 ， 明 年 给 ， 给 客 户 送 样 和 认 证 的 过 程 ， 估 计 在 如 果 是 说 真 正 的 能 装 车 ， 应 该 在 明 年 。 嗯 ， 谢 谢 。
Okay, yes, you're right, you mentioned that most of the revenue comes from energy storage and what is the reason behind it? If you have a look at the product that are manufactured in Dalian plant, that is our product 26650 and 26700. Yeah, you're right. The sales in the sales revenue, the energy storage does take up a large proportion. However if we have a look at the Nanjing facility, it is the plant that mainly produce 32140, and this product hasn't been mass produced until last year. A lot of OEM companies are still doing the certification at the moment.
However, our sales have already amounted to $50 million already. And after the vehicle manufacturers pass the certification, and after the increase of our production capacity, let's say at the second half of this year, we believe that our production capacity will better meet the demand of the customers and they will place more order with us. We will better supply our LEV and EV customers in the second half of the year. We have the reason to believe the sales volume of LEV and EV in the LEV and EV markets will continue to grow.
If you talk about the impact of when sodium battery put into production. The priority of our business this year is to do R&D and production, and we will also send samples to our customer and help them to pass the certification. For next year, we believe that more of our products will be put into mass production, and they will be put in the vehicles. That's the answer to the question number 3. You said you have another question, right?
Yeah。
您 刚 才 提 到 -
好 的 好 的 ， 呃 ， 非 常 感 谢 。 我 有 最 后 一 个 问 题 ， 谢 谢 。 呃 ， 在 过 去 的 几 次 电 话 会 中 ， 呃 ， 贵 司 曾 经 提 到 过 你 们 正 在 开 发 更 大 型 的 圆 柱 形 电 池 ， 那 么 关 于 四 六 系 列 的 开 发 ， 不 知 道 有 没 有 可 以 给 ， 呃 ， 我 们 这 些 投 资 人 分 享 的 信 息 呢 ？ 谢 谢 。
Yes, in the previous several conference calls, the company mentioned that it is developing larger cylindrical batteries. Is there any information about the development progress that can be shared with investors?
这 个 问 题 我 们 请 Xiujun Tian 来 回 答 一 下.
嗯 ， 好 的 ， 感 谢 。 那 么 公 司 最 近 ， 呃 ， 最 近 这 一 两 年 的 话 呢 ， 也 是 一 直 在 加 大 对 于 大 圆 柱 电 池 的 一 个 开 发 。 那 么 前 面 已 经 公 示 过 的 我 们 的 四 六 这 个 系 列 的 三 十 五 安 时 的 产 品 的 A 样 ， 呃 ， 已 经 制 备 完 成 ， 并 且 测 试 已 经 达 到 了 我 们 A 样 的 设 计 目 标 。 呃 ， 我 们 现 在 的 这 个 进 度 是 B 样 的 这 个 设 计 已 经 冻 结 ， 并 且 B 样 的 产 品 开 模 已 经 完 成 ，
现 在 正 在 进 行 的 是 这 个 工 艺 开 发 和 工 艺 设 计 的 冻 结 阶 段 。 那 么 这 款 产 品 的 话 呢 ， 预 计 在 不 久 的 将 来 ， 啊 ， 我 们 会 这 个 推 向 量 产 。 那 么 我 们 现 在 正 在 这 个 开 发 的 还 有 四 六 的 其 他 系 列 ， 呃 ， 四 六 的 幺 二 零 ， 完 了 是 二 十 五 安 时 的 产 品 ， 以 及 更 大 的 圆 柱 的 五 十 三 时 的 产 品 。 呃 ， 因 为 在 家 用 市 场 上 ， 关 于 二 十 五 、 五 十 以 及 一 百 的 这 样 的 一 个 ，
呃 ， 容 量 的 这 样 的 产 品 的 话 呢 ， 更 适 合 这 个 家 庭 储 能 市 场 的 一 个 应 用 。 那 么 这 个 我 们 开 发 的 这 两 款 的 话 呢 ， 将 会 是 这 个 市 场 的 一 个 黄 金 尺 寸 ， 嗯 ， 预 计 的 话 呢 ， 后 续 会 有 更 ， 更 高 的 一 个 性 价 比 ， 呃 ， 甚 至 于 比 现 在 市 场 上 一 些 已 经 ， 呃 ， 占 据 很 大 市 场 份 额 的 一 些 产 品 的 话 ， 性 价 比 会 更 高 。 这 个 产 品 的 话 是 未 来 可 期 。 呃 ， 以 上 是 我 的 回 复 。
Yes, indeed. In the past two years, we have been doubling our efforts in the development of large cylindrical batteries, especially the 46 series. We have already finished the prototype A design and trial product and trial and shake down test. The test results indicate that this prototype can reach the design objectives. Now we have finished the prototype B in terms of we have already finished the mold development, and now we are in the process of developing the manufacturing process, and we expect that it will be put into mass production in the near future. At the same time, we have been also developing other products under this 46 series. For example, 120. For there were two other slides that is 50 volt and 100. We believe that these two types of products will be a very suitable product for the household energy storage.
This is seen to be the golden dimension, golden size for household energy storage, and will also present a better price-performance ratio. It is even more superior than those products with a big market share at present. We believe that these products will enjoy a promising future. That's it for the answer. Thank you. Okay. Now, I have finished all my questions. Thanks a lot for the answers.
Thank you. Our next question comes from the line of Keith Kohl from Hedgeye. Please ask your question, Keith.
Congratulations to your immense revenue growth. Regarding the current liabilities and the negative cash flow in the past years, do you believe there will ever be serious liquidity issues in the near future? The cost of revenue does not come down.
Uh,
好 的， 谢 谢 您 的 问 题。 其 实 从 两 个 角 度 来 分 析， 首 先 在 经 营 性 的 现 金 流 上 来 讲， 目 前 公 司 就 是 现 有 业 务 的 已 经 现 有 的 产 能 这 里 带 来 的 正 常 经 营 性 的 现 金 流 是 可 以 达 到 有 所 支 撑 的。 因 为 目 前 呢 经 过 去 年 跟 今 年 的 一 个 测 算， 我 们 的 在 电 池 业 务 及 材 料 业 务 都 是 有 所 利 润， 现 金 流 也 是 足 以 支 撑 的。 另 一 方 面，
在 我 们 新 的 产 能 扩 张 的 过 程 当 中 呢， 我 们 目 前 也 有 几 个 资 金 来 源 的 渠 道 来 得 以 匹 配 我 们 产 能 的 扩 张。 首 先 是 我 们 在 各 个 中 国 的 各 个 生 产 基 地， 各 个 生 产 基 地 的 当 地 政 府 对 于 我 们 新 的 产 能 扩 建 都 是 有 政 策 支 持 的。
另 外 第 二 方 面 就 是 在 当 地 的 银 行 方 面 的 一 个 债 务 性 的 支 持 力 度 也 是 比 较 大。 另 外 在 第 三 个 方 面 来 讲， 目 前 我 们 在 海 外 的 U.S. 资 本 市 场 的 海 外 投 资 人， 以 及 在 国 内 的 投 资 人 对 于 公 司 的 项 目 的 兴 趣 都 是 比 较 高。 目 前 我 们 也 在 洽 谈 当 中， 公 司 将 根 据 我 们 的 项 目 进 度 情 况 来 合 理 地 匹 配 我 们 的 资 金 需 求。 谢 谢。
I'll thank you for your question. We can answer this question from two dimensions. First of all, if we have a look at the operation cash flow, actually the cash flow brought by our product with our production capacity can. It's sufficient. Or we can say the cash brought by our existing business is sufficient. Both last year and this year, we have carried out the calculation and we according to the results of the calculation, the revenue brought by both the battery business and the material business can sufficiently support our cash flow. If and, on the other hand, if we have a look at the expansion of our production capacity, we actually have some revenue of financial support coming from different sources. The first one is the local government, where our production facilities are based in.
Actually, we have gained great support from the local government. They give us some policy incentives to support us. Secondly, we also gain support from the banks in China. Thirdly, in the U.S. capital markets, both the domestic investors and overseas investors expressed their great interest in our products. Now we are having a lot of talks with them, and we believe they can also give us supplies in, sorry, a support in the financial, in finance. That's it for the answer. Thank you for your question again.
Thank you. Keith, do you have any follow-up questions? All right. Thank you. As a reminder to ask a question, please press star one again on your telephone keypad. All right. Seeing no further questions in the queue, let me turn the call back to Mr. Yunfei Li for closing remarks.
Thank you, operator, and thank you all for participating on today's call and for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress.
Thank you all again. This concludes the call. You may now disconnect.