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China BAK Battery, Inc. (CBAK) Reports Third Quarter Revenues More Than Double

China BAK Battery, Inc. (CBAK), a Chinese manufacturer and distributor of a variety of lithium ion rechargeable batteries for consumer electronics and general industrial applications, reported third quarter results yesterday after the close. Revenues rose to $68.5 million, an increase of 132% year over year and 33% over the preceding quarter. Net loss for the quarter shrank to $2.3 million, or 4 cents per share, vs. losses of $2.7 million last year and $6.2 million in Q2 08. The lone analyst surveyed expected a loss of 7 cents per share on sales of $44.7 million.

“Looking at the third quarter of fiscal 2008, we are pleased to see record revenue, improved gross margin and narrower loss, and the continuous expansion of our customer base. We also obtained final approval on the land use rights of BAK Industrial Park, which removed the last major uncertainty in our growth path. We’re confident that we will achieve our FY08 revenue target of $210 million, and expect to expand our product offerings with the Tianjin facilities put into operation in or about October 2008,” commented Mr. Xiangqian Li, CEO of China BAK.

Revenues from cylindrical cells used in notebook computers grew at a torrid pace, rising over 100% sequentially to $13.6 million, a jump of nearly 1300% year over year. Revenues from prismatic cells used in aluminum and steel-cased battery packs, rose a more modest 22.5% sequentially and 114% for the same period last year. The third quarter is traditionally the slowest quarter for China BAK during the fiscal year. The current estimate for fourth quarter results includes $64.7 million in revenues and a profit of 2 cents per share.

Shares of CBAK closed Monday at $4.60 and have traded in a 52-week range of $3.04 – $9.07. CBAK historically has been a favorite among traders in Chinese stocks, and a solid earnings report has the potential to instigate a substantial move on heavy volume. Previous pops on earnings beats, however, have been short-lived.

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