By Brian Lantier, CFA
NASDAQ:CBAT
READ THE FULL CBAT RESEARCH REPORT
New Investor Presentation
CBAK Energy (NASDAQ:CBAT) has added an updated investor presentation to the company's investor relations website this week, which includes several new pieces of information indicating that the company is still on track to meet or exceed our capacity expansion forecasts for 2026.
As we've noted previously, 2025 and 2026 represent a major transition for CBAK, as it significantly upgrades its production facilities in Dalian and Nanjing.
Dalian
We believe that as a result of additional production for 40135 cells at Dalian, the facility's total capacity is 3.3 GWh (up from 1 GWh a year ago). This facility is now producing older-style 26650 and 26700 cells for legacy customers and larger 40135 cells on a new production line that became operational in Q4. Despite the more than 200% increase in capacity at Dalian, the company indicated that its long-term goals include eventually reaching 16 GWh at Dalian, with most of the additional capacity focused on model 40135 cells.
Nanjing
We had previously modeled that the company had 1.3 GWh of capacity at the Nanjing facility for the production of 32140 cells, with additional capacity under construction in Phase 2 of the Nanjing expansion. As with Dalian, CBAK has an aggressive expansion plan in Nanjing, aiming to reach a total capacity of 20 GWh.
Shangqui
The company highlighted this facility for the first time in the presentation and noted that total production at this leased site is relatively small (0.5 GWh for 26700 cells) but could eventually grow to 2.0 GWh.
Management previously indicated that the company intended to post videos detailing the new production capacity in Nanjing by the end of 2025; however, we have not yet seen these videos. We believe the investor confirmation that the capacity additions are online will be a near-term catalyst for the company's shares when videos detailing new production lines are released.
As we previously discussed, CBAK entered 2025 with 2.3 GWh of production capacity at two locations, primarily producing 26650 and 32140-series cells. At this size, CBAK would likely be considered a Tier 4, niche player in the battery cell market. If the production capacity data in this investor presentation is accurate, and CBAK has more than 6 GWh of capacity at 3 facilities.
Plans to Mitigate Trade Risks
The company noted that, as part of its strategy to limit the risk related to global trade uncertainty, it was exploring the possibility of leasing or building a new facility in Southeast Asia. We assume that this facility would be based in a country not subject to the same trade challenges faced by China. The company indicated that it is targeting an executed agreement by 2027, with mass production beginning in 2028.
We are not adjusting our target valuation, which remains $1.50/share, but we believe there are several key catalysts in 2026 that could garner considerable investor interest, including confirmation of a substantial capacity upgrade and updated revenue and earnings forecasts that make CBAK's valuation compelling at this time.
In our full updated report, we discuss challenges and opportunities facing the battery cell market in 2026 and new corporate structure changes that have been proposed by CBAK Energy. We encourage investors to read our full updated report.
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