Good day, ladies and gentlemen. Thank you for standing by, and welcome to the CBAK Energy Technology' third quarter 2024 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 will turn the call over to Xiujun Tian, IR Specialist of CBAK Energy. Ms. Tian, please go ahead.
Thank you, Operator, and hello everyone. Welcome to the CBAK Energy's earnings conference call for the third quarter 2024. Joining us today are Mr. Zhiguang Hu, or Jason, Chief Executive Officer of CBAK Energy. Mr. Jiewei Li, Chief Financial Officer and Secretary of the Board. Our General Engineer, Mr. Xiujun Tian, and Yva n, 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 ircbak.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 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 expectation expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation 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 U.S. 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 third quarter of 2024. I'm pleased to report on the performance of our battery business for the third quarter and for nine months of this year. Although the net revenue from our battery business slightly declined to $33.5 million in the third quarter, the overall revenue of the battery business in the first three quarters achieved a year-on-year growth of 18.4%, reaching $114 million. This is quite remarkable considering the general pressure and downturn in the entire new energy industry. The main reason for the decline in the net revenue from our battery business in the third quarter was a one-month suspension of the production line of our Dalian facility in September.
As the production line has been operating at full capacity since the beginning of the year, the continuing operating production line resulted in exceptionally high energy costs and needed to be suspended for refurbishment. We would like to provide a closer look at the revenue breakdown in our battery business. The revenue from battery for energy storage sector reached $33.46 million, a 25% decrease compared to the previous year. EV battery contributed $333,000, a decrease of 17% compared to the same period last year. Battery for light electric vehicles, including two-wheelers and three-wheelers, brought in $4.9 million, a year-on-year increase of 341%. Overall, our battery business remains focused on the energy storage market, supplemented by our endeavor to continue exploring the light electric vehicle market. With the increase in order from our Indian and Vietnamese customers, we believe that the revenue proportion of light electric vehicles will gradually increase.
Our battery business has maintained a high gross profit margin, reaching 34.3% in the first three quarters of this year, an increase of 15.2% compared to the same period in 2023. This gross margin figure is higher than that of most competitors, including some well-known industry giants. This year, our battery business achieved a net profit of $11.68 million in the first quarter, $7.89 million in the second quarter, and once again created a net profit of $2.04 million in the third quarter. When our competitors are suffering industry-wide downturns, we managed to make three consecutive quarters of a net profit of approximately $21.6 million. As usual, we will also provide an update on the announced clients. As of November 1, 2024, the total amount of orders received but not yet delivered at our major production bases in Dalian and Nanjing reached CNY 59.61 million, approximately $8.38 million.
As of November 1, 2024, our accumulated order amount with PowerOak has reached approximately RMB 80.65 million, about $11.35 million. Our orders with Viessmann Group have reached up to $213 million, about $233 million. As for Jinpeng Group, our accumulated orders value has reached approximately RMB 67.01 million, about $9.42 million. In addition, our important clients, Anker, have made orders of RMB 321 million, approximately $45.12 million since our collaboration. These customers have a stable relationship with us, and some of them are encouraging and pushing us for the establishment of our overseas factories and are willing to place orders in advance to help facilitate our move to expand overseas. Our Dalian facility has long been profitable. In Q3, we are pleased to see our Nanjing factory also achieved profitability.
The Nanjing factory, which started operation and manufacturing the new model 32140 large cylindrical battery at the end of 2021, has only been in business for less than three years. Originally, we anticipated that Nanjing factory would have to suffer net losses for a three-year period. Thanks to the hard work of our team, the Nanjing facility has successfully become profitable ahead of schedule. More importantly, the production line at our Nanjing factory is currently operating at full capacity due to high demand, prompting us to accelerate our capacity expansion plan. As of now, we have signed a procurement contract with the equipment supplier and plan to add a new production line that will enable compatible production of model 32140 and 40135 batteries in the second phase of Nanjing factory, with an estimated capacity of approximately 1.5 GWh for model 32140 and 1.5 GWh for model 40135.
We anticipate equipment installation in the first half of next year, followed by mass production in the second half. Furthermore, with respect to our R&D efforts, we are steadily advancing the development of new battery models. As just reported, we will soon be able to mass produce a model 40135 large cylindrical battery. The model 40135 large cylindrical battery has a strong market demand in applications such as light electric vehicles and energy storage. Additionally, we successfully developed the tabless model 26650 cylindrical battery and started the mass production in Dalian. The product has a characteristic of 25C discharge rate and performed really well in applications that require rapid energy release.
Besides, the Tabless 26650 cell can be charged from 0 to 100% in just 15 minutes, which is of great practical significance for applications that require fast charging and discharging, such as drones, desktop power supply, and data centers. Currently, we are one of the few companies in the market with the ability to mass produce this tabless model 26650 battery. Overall, we successfully maintained the strong momentum in our battery business by maintaining a high gross profit margin and sustaining net profits. Considering the current high demand for our model 32140 cells produced at our Nanjing factory and newly added capacity for our new model 40135 cells, we will accelerate the pace of capacity expansion to drive continued revenue growth. Now, let me turn the call to our CFO, Jiewei Li.
Thank you, Jason, and thanks everyone for making time to join our earnings conference call today.
Since Jason has introduced our key financial metrics, in the interest of time, I will not be duplicating the presentation of the numbers. We encourage you to refer to our press release issued earlier today for complete details. In the third quarter, our battery business experienced a slowdown. As Jason mentioned in his remarks, this was primarily due to a one-month suspension of production at our Dalian factory. For the first eight months of the year, the factory operated at full capacity without any breaks, which led to a significant increase in energy costs. To mitigate these costs and enable upgrades, we paused operations for a month. During this period, we optimized energy usage and upgraded one production line to support the production of our new tabless model 26650 cells.
As for our Nanjing factory, now in its third year, it has successfully transitioned into a profitable production center with a steady flow of orders fully booking its capacity. Currently, we face a supply shortage of approximately five million cells from Nanjing, underscoring the strong demand. Looking ahead, although our gross margin has been exceptionally high, we anticipate a gradual return to more typical levels, yet still higher than industry competitors. In summary, our Dalian factory has long been a key contributor to our net profits, while our Nanjing facility initially incurred losses due to construction, setup of new production lines, and the promotion of new battery models. Now that Nanjing has turned profitable, we expect that both factories will drive our financial growth in the future. With the expanded capacity in Nanjing next year, we remain optimistic about the company's performance.
Thank you, and we will now open the floor for the Q&A section. Operator, please go ahead.
Thank you. To ask a question, please press star one, one on the telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take the first question from the line of Brian Lantier from Zacks Small Cap Research. Please go ahead.
Good morning, everyone. I appreciate all the updates. You're navigating a difficult environment, and having success is good to see with some of the new products. I guess the first question is just around some of the weaknesses that you're seeing in the battery business. Is it principally derived from pricing pressures from competitors, or is it more on the demand side from some of your clients in Europe?
[Foreign language].
So first of all, as we are using the tabless design for our 26650, then we can increase the C rate performance of the cell. So this will help us to more easily to let our product be used in the starter battery business, especially the starter battery for the new energy vehicle and also the combustion engine vehicle as well. So from this new business, we can get a reasonable profit.
So secondly, for our energy product, then we gradually increase the capacity of our product. So in terms of the industry, then compared to our competitor, we have more energy density from ourselves, which makes our product more compatible. Okay,
[Foreign language].
To summarize, that's all the answers for myself.
Okay. Great. Sorry, I'll jump back in with another question if that's okay.
How frequently do you anticipate doing maintenance shutdowns like you did at Dalian? Is this an annual process or every three-to-five years that you would do this?
[Foreign language].
So this question is yours.
[Foreign language]
So the shutdown from Dalian factory is mainly because we are upgrading our product from the energy battery cell to the high C rate battery cell. So it's an optimization and also the upgrade of our production line. So this is in order to carry on this optimization, then we need to shut down the cell to do this. And the reason why we are doing that is also decided by the market trend. And also for this shutting down, we have already planned it in the first half of this year. So this is the normal operation as planned from the start of the year.
Yes, and also as we just mentioned in our remarks, the other reason for the suspension of production at Dalian for one month is simply because the Dalian factory has been operated since the very beginning of the year until September without any breaks. So the energy cost was so high at the moment that we decided that we can suspend production to reduce energy cost. At the same time, we have time to upgrade our production lines.
Okay, great. The LEVs are obviously a bright spot right now. Is that principally coming from Vietnam and India?
Sorry, can you repeat your question?
Yeah. Sorry, the LEV business, the light electric vehicles, is that demand principally coming from customers in India and Vietnam?
[Foreign language].
Yes, so the main business for the LEV is mainly Southeast Asia area. So that includes India, Vietnam, Indonesia, etc.
So for these countries, they cannot produce the battery by themselves. So they are relying on to import the battery from China. So in terms of all of the cell manufacturers in China, our products are the most stable. So that's why you can see a dramatic increase of our demand.
Okay, great. The last one for me is I think I heard you mention the prospect of overseas expansion. If I heard that correctly, any details on that, where you're looking, timelines, things like that? Thank you.
[Foreign language].
I will directly respond to your question, Brian. At this moment, the only information we can tell is that this is simply client driven. We have certain big clients coming to us saying that we need to accelerate the setup of overseas factory. So with that demand, we are actually looking for some places that fit our best of interest.
Certainly, the U.S. is under our consideration, but we have not yet decided which country that we are going to build our production lines, and also we will not do it solely by ourselves. We are actually looking for domestic partners that can help us manage the daily operations and also some government issues, applications, management, something like that, so it's still in the early stage, but the management takes this issue as one of our routine jobs. We are having right now very serious discussions with a lot of parties. This is the only thing we can review, and as we mentioned in our remarks, our clients are very willing to place orders in advance to push us to build up this factory.
Okay, great. Thank you very much. Thank you.
As a reminder, if you wish to ask a question, please press star one, one on your telephone. That's star one and one if you wish to ask a question. Thank you. Seeing 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 next quarter on our progress. Thank you.
Thank you all again. This concludes the call. You may now disconnect.