Good day, ladies and gentlemen. Thank you for standing by. Welcome to CBAT Energy Technology's Fourth Quarter and Full-Year of 2023 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 Thierry Li, CFO and Secretary of the Board of CBAK Energy. Mr. Li, please proceed.

Thank you, operator. And hello, everyone. Welcome to CBAT Energy's fourth quarter and full-year of 2023 earnings conference call. Joining us today are Mr. Yunfei Li, Chief Executive Officer of CBAT Energy, myself, Chief Financial Officer and Secretary of the Board; and Jennifer, our interpreter. [Technical Difficulty] 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. 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. Yunfei Li. Mr. Li will speak in Chinese and I will translate his comments into English. Go ahead, Mr. Li.

[Foreign Language] [Interpreted] Hello, everyone, thank you for joining our fourth quarter and full-year 2023 earnings conference call. We are pleased to announce another quarter of solid growth, routing off fiscal year 2023 on a high note. With sustained orders from key clients including Viessmann Group, Anker Innovations and Hello Tech. Our battery business maintained its growth momentum from the previous quarter with fourth quarter revenues, up 30.9% year-over-year to reach $36.83 million. Of these revenues $34.93 million came from batteries used in energy storage applications, a surge of 84.3% year-over-year, while $0.52 million came from batteries used in electric vehicles, down 88.8% year-over-year. Moreover revenues from batteries used in light electric vehicles were $1.38 million, a decline of 69.5% year-over-year, primarily attributable to [Technical Difficulty] 12 month. Accordingly, we will strategically monitor both sectors, while further expanding our sales in energy storage sector. In terms of profitability, our battery business's gross margin rose to a historic high of 36% in the fourth quarter of 2023, up 27.7 percentage points year-over-year. Moreover, we achieved a second consecutive quarter of net income from battery business. Recording a net income of $6.62 million in the fourth quarter of 2023, a notable improvement compared to a net loss in the same period last year. In full-year 2023, our battery business generated revenues of $133 million, soaring by 40.4% year-over-year. We delivered a full-year operating income of $10.44 million with a net income of $13.37 million from the battery business based on addition. In 2023, we made significant strides in our business operations on all fronts, achieving progress at various stages. Through consistent requirement of battery technologies and production ramp-up, we effectively fulfill customer orders and have nurtured a lower, stable client base. We have fostered deep and robust partnerships with industry leaders worldwide,…

Thank you, everyone, for making the time to join our earnings conference call today. As our CEO mentioned earlier, we concluded the year with a robust fourth quarter financial performance from our battery business, where we achieved a double-digit increase in net revenues and positive income for the second consecutive quarter. We are pleased to see continued growth momentum in our battery business. Building on our solid fundamentals, we remain confident in our growth transitory through 2024 and anticipate a full-year net profit for our battery business. We will provide more details on our net income guidance at the appropriate time. Turning now to Hitrans, our current battery material unit, which we strategically acquired in 2021, at the time of the acquisition, Hitrans boosted a strong client base and a higher level of revenue. Following the acquisition we maintain Hitrans core management team and refrain from interfering in its day-to-day operations. We have no addition, no financial obligations to Hitrans and its financial health will not materially affect the financial standing of our [Technical Difficulty] as is only reflected in our consolidated financial statements. That's why we have focused on reporting financial results solely from our battery business in our earnings release and earnings conference call to provide investors and shareholders with a clear understanding of our performance. We are currently talking with private equity investors for Hitrans and sodium ion battery business, and we hope to complete a private placement financing to support the development of our business. These investors, whether they are interested in Hitrans or the sodium ion battery business, a consistently valuing the individual businesses materials and sodium ion batteries and more than the current market capitalization of our entire public company. Notably, their valuations do not take into account our core lithium battery business, indicating…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] First question comes from Brian Lantier from Zacks Small Cap Research. Please go ahead.

Good evening, gentlemen. I just wanted to hone in a little bit on the gross margin. Do you feel like the gross margin in the fourth quarter was -- is that going to be a sustainable gross margin going forward? And was it principally driven by pricing on your products and some of the new contracts or was it more on the input side as costs have come down for some of your inputs?

[Foreign Language]

Let me respond to your question, Brain. I think as you may be aware that the current competition in the battery market is very intense and key players in this industry keep lowering down their price to gain much more orders and customers. We are completely different our batteries boosted a feature of highly stable and high safe characteristics and our biggest clients up to three years testing completely satisfied by the performance of our battery products. That's why they're willing to keep us a high price at this market condition. Coming back to your question, we believe that being affected by the current market condition, the price will also go down in the long-term, but we are still confident that the gross margin that we will present to you in the coming reporting period will still be higher than the market average. Thanks.

Great. Thank you. And I know we've talked in the past about long-term capacity goals, and I know that's a little bit influx right now, because it will be based upon whether you're producing lithium batteries or sodium batteries. But do you have any long-term capacity goals for 2024, 2025 that you can share with us at this point?

[Foreign Language]

[Foreign Language]

[Foreign Language] [Interpreted] Yes. Well, so in terms of capacity growth, well, we have steadily increased our capacity based on our cooperation with our clients and also we increase it according to the needs of our clients. So that is why in the past years, we have steadily ramped up our capacity in different production facilities. And as you can see from our 2024 to 2025 reports, we have introduced a lot of big customers in the past year and the introduction of the big customers will also boost our -- will require us to boost our production capacity, so that we can well meet their demand. So in the future, we are going to continue to increase our production capacity. And when it comes to the sodium battery, well, I have to say this is a battery that enjoys a great future. For sodium ion battery, it has some good features that lithium ion battery cannot compete. For example, it is suitable to be used in low temperature condition [Indiscernible]. So in the future, we believe that we will also substantially increase and expand the production capacity of sodium ion battery, and we have a good expectation for that.

Let me add one point. As we mentioned in our report that we have three major factories under construction for Nanjing Phase 2 and the first factory has been ruled. So we are doing interior construction at this moment, if everything goes well, we will have one production line for this factory in 2024. But if it's -- we cannot determine if it will be producing a sodium ion batteries or lithium ion batteries is up to client demand. And also, we are also talking to private equity investors about financing on the sodium ion project. So that would also affect our decision-making. So it's a decision that we will make in this year and a lot of the factors affect this decision-making.

Great. I appreciate that. The last question I have is, I guess on outside investment. If you could give us some sort of idea as to how advanced these negotiations are? Do you think this is a -- we could hear something in the first-half of 2024 or the back half of 2024, either regarding high trends or a sodium investment?

[Foreign Language]

Well, let me respond to this question. We hope that we can announce something really positive in the first-half of 2024, but it's really depending on the private equity investors. I can -- the information I can share is that a lot of the investors from China are very interested in our sodium ion batteries, because we are almost the only one that can mass produce the largest synergical sodium ion batteries. But we're also doing a lot of the math with them right now, because investing in a new battery plant is very expensive and we need to discuss with them about how much financing we need from them and what structure, which should the best need from ours and also doable for them. [Technical Difficulty] negotiation, but everyone is very interested.

Great, thank you.

Thank you for the questions. [Operator Instructions] Seeing no more questions in the queue. Let me turn the call back to Mr. Yunfei Li for closing remarks.

[Foreign Language] [Interpreted] Thank you. 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 all again. This concludes the call. You may now disconnect your lines.