China BAK Battery (NASDAQ:CBAT) executives said fiscal 2025 marked a “definitive transitional period” as the company shifted its product mix toward newer cylindrical cell formats and expanded capacity, driving sharp fourth-quarter revenue growth while pressuring margins during production ramp-ups.
Fourth-quarter revenue jumped as LEV and raw materials accelerated
Chief Executive Officer Zhiguang Hu said consolidated net revenue in the fourth quarter rose 131.80% year over year to $58.80 million. Chief Financial Officer Jiewei Li added that the quarter’s revenue was split between the battery business and the company’s Hitrans raw materials segment.
Hitrans revenue in the quarter was $27.98 million, which Li described as a 944.1% increase from Q4 2024, reflecting higher raw material prices and downstream order placement.
Margin compression tied to ramp-up costs; quarterly net loss reported
While sales rose sharply, the company reported profitability pressure. Li said gross profit in Q4 2025 was about $4.28 million, with gross margin of 7.3% versus 13.1% in Q4 2024.
He attributed the margin compression to “transitional friction costs,” “suboptimal use,” and high fixed-cost absorption during the initial ramp-up of the new Model 40135 line in Dalian and Phase Two Model 32140 lines in Nanjing. Operating loss for the quarter was about $8.01 million, and net loss attributable to shareholders was $7.38 million, he said.
Full-year results: revenue growth, higher spending, and operating loss
On a full-year basis, Hu said consolidated net revenue reached $100.19 million, up 11% from 2024. Li also discussed full-year performance, stating that net revenues were $195.19 million, up about 11% year over year, with Hitrans contributing $188.92 million (up 123%) and the battery business contributing $105.98 million.
Li said full-year gross profit was about $18.42 million, for a 9.4% margin, down from 23.7% in 2024. Operating expenses increased 12% to $36.86 million, driven by a 21% rise in R&D to $15.8 million and a 16% increase in general and administrative expense to $16.20 million.
According to Li, the higher R&D spend funded next-generation cell development, including “advanced large format cylindrical models such as the 46115, 46135, and 46150,” and “highly specialized sodium-ion chemistries” targeted for low-temperature resilience and fast charging. The company’s full-year operating loss was about $18.44 million, and net loss attributable to shareholders was about $19.8 million, Li said.
Li highlighted “other income” of $8.27 million, which he said included a $5 million compensation payment the company “successfully collected from a canceled customer order.” He also said 2025 was the company’s first year deploying a hedging structure using “foreign currency forward contracts, options swaps, and commodity contracts,” resulting in a non-cash derivative fair value loss of approximately $0.44 million.
Capacity expansion and product transitions: 40135 and 32140 highlighted
Hu detailed major manufacturing transitions underway. At the Dalian facility, he said customers are moving from a legacy “26 series battery” with 1 GWh of capacity to the new Model 40135 cells. Hu said the company commissioned a new 40135 production line with 2.3 GWh capacity at the end of 2025 and described demand as exceeding supply: “We are selling every single unit we can produce,” he said, adding that the order book is outpacing the ramp-up trajectory.
In Nanjing, Hu said the company added two new production lines at its Phase Two facility at the end of 2025 to address demand for Model 32140 cells. He said the expansion adds 3.0 GWh of capacity to complement 1.5 GWh already operating in Phase One, and the company expects the two new high-speed lines to reach full capacity by early 2027.
During the Q&A, Li said gross margin was “affected severely” by the Phase Two and Dalian ramp-ups. He said the Dalian ramp-up is expected to be completed in the first half of “this year,” while the Nanjing Phase Two timeline is “early 2027,” though he said the company would try to accelerate the timeline, targeting “the second half of 2026” while calling early 2027 the “reasonable timetable.” Li added, “Ideally, in the second half of this year, our gross margin will gradually rebound,” and said 2026 margins should “look better than right now.”
LEV battery packs in Africa, Malaysia plans, and energy storage focus
Hu said the company began battery pack integration operations in 2025 through wholly owned subsidiary Nanjing CBAK, assembling cells into “plug-and-play battery system” to bypass intermediate integrators and sell to end users. He said these packs are primarily designed for LEV battery swapping infrastructure in Africa and noted a strategic partnership with Spiro, which he described as one of Africa’s largest two-wheeler battery swapping enterprises. Hu said Spiro has rapidly become one of the company’s top five customers and that the companies are exploring additional cooperation, including a possible cooperative entity in Africa to support localized expansion.
Li added that the company received a “substantial order” beginning in early 2025 from a major African customer (which he said is originally from India), prompting the creation of a battery pack assembly unit that purchases cells from Nanjing and assembles packs for that customer. Li said the relationship could potentially expand beyond LEVs into energy storage in the future.
Hu said the company views Southeast Asia and Africa as key LEV growth markets over the next three years, citing strong high-temperature performance for its cells and packs in those regions.
Hu also pointed to policy changes in China affecting export tax rebates for lithium-ion batteries, saying the rebate rate is being reduced from 13% to 9%, with further reductions to 6% by April 2026 and elimination by January 2027. To mitigate the impact, he said the company incorporated a Malaysian subsidiary on April 13, 2025, and is pushing forward with construction of a manufacturing facility in Malaysia “within this year” to provide diversified sourcing options for international clients.
On energy storage, Hu said the company is currently focused on “household storage, balcony storage, and portable storage” and is also developing square-shaped cells. In response to a question about grid-scale storage, the company said it is working on “big prismatic cell” research and development that could be used in grid-size systems.
Hu also discussed corporate actions and outlook, noting that stockholders approved a redomicile merger to move incorporation from Nevada to the Cayman Islands to improve operational and administrative efficiency and align with international expansion. He said the company expects consolidated sales to reach a record high in 2026, citing demand for the 40135 and 32140 cells, capacity ramp progress, Hitrans strength, and global LEV growth.
About China BAK Battery (NASDAQ:CBAT)
China BAK Battery Inc (NASDAQ: CBAT) is a China-based developer and manufacturer of rechargeable lithium-ion batteries and related power solutions. The company’s core product lines include small, medium and large format batteries, battery modules and pack assemblies designed for consumer electronics, electric vehicles, energy storage systems and other industrial applications. China BAK Battery offers polymer lithium-ion cells, prismatic and cylindrical cells, as well as integrated battery systems tailored to meet the performance requirements of its clients.
Founded in 2001 and headquartered in Shenzhen, China BAK Battery has expanded its manufacturing footprint and research and development capabilities over the years to serve customers across Asia, Europe and North America.
