ChinaBAK Battery reported its Q2 results last night and they were much better than thefew analysts that follow it were expecting.
==> CBAK reported a $0.04 per shareloss for the quarter, but that was 3 cents better than the $0.07 loss Wall Street was expecting. Don’t let that lossbother you either because Q2 is the traditionally slow quarter of the year for CBAK. That 4 cent loss, by the way,translates in to only a miniscule $36,000.
==>What blew me away was the gigantic surge in revenues to $68.5 million, a whopping 54% more than the consensus forecastof $44.67 million. That is not only a record for the company but a 30% increase over the same quarter last year.
==>Revenue from cylindrical cell batteries, the type used in laptop computers, rose to $13.6 million, more than a 100%increase for Q1 and has grown to 20% of total sales.
==> Management is doing a great job. Isay that because operating expenses as a percentage of sales dropped to 12.3% last quarter versus 14.8% last quarterand 22.0% in the same quarter of last year.
No wonder management is so optimistic about the future.”Looking at the third quarter of fiscal 2008, we are pleased to see record revenue, improved gross margin and narrowerloss, and the continuous expansion of our customer base. We’re confident that we will achieve our FY08 revenue targetof $210 million, and expect to expand our product offerings with the Tianjin facilities put into operation in or aboutOctober 2008,” said CEO Xiangqian Li, CEO of ChinaBAK.
Most important of all, the Tianjin production facility is now completed and will be runningby October. This plant is where the new hybrid car batteries will be produced and power CBAK’s profits to the moon.
Tianjin City, by the way, has been designated by the Chinesegovernment as a electric car battery manufacturing center. With that type of government push, CBAK’s prosperous futureis all but done deal.
