CBAK Energy Technology Limited — financial distress indicators
Financial-health summary
CBAK Energy Technology Limited's reported numbers place it in the 'Watch' financial-health band (distress score 41/100). The main indicators are severe working-capital shortfall, ohlson o-score signals likely failure and losses in 2 of the last 3 years. Independently, the Ohlson accounting model puts its 1-year failure probability at 91% and the market-implied (Merton) default probability is 2.1%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Current ratio is 0.65 (current assets cover 65% of near-term obligations).
Cash-flow insolvency test: inability to pay debts as they fall due is the trigger for both U.S. involuntary petitions and Indian IBC default.
O-score 2.34 → model probability 91%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Short-term debt is 4.6× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Operating margin fell from 1% to -10% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+11% YoY).
📰 Recent news scan
- China BAK Battery Targets India Growth, AI Data Centers With Major Capacity ExpansionYahoo Finance · 2026-10-05
- CBAK Energy Agrees on Battery Supply Framework with European CustomerYahoo Finance · 2026-10-01
- CBAK Energy Signs Investment Agreement for 12 GWh Sodium-Ion Battery Project in NanjingYahoo Finance · 2026-09-24
- CBAK Energy Technology Stock And 2 Top Penny Stocks To WatchYahoo Finance · 2026-09-23
- CBAK Energy Reports Internal Sodium-Ion Cell Test Results and Outlines 12 GWh Capacity PlanYahoo Finance · 2026-09-17
- CBAK Energy Highlights Completed Nanjing Phase II Ramp-Up and Accelerating Global Demand Following Investor ConferenceYahoo Finance · 2026-09-02
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do CBAK Energy Technology Limited's financial-health indicators show?
As of 2026-10-08, CBAK Energy Technology Limited's public financial data places it in the 'Watch' band with a distress score of 41/100, driven by severe working-capital shortfall, ohlson o-score signals likely failure and losses in 2 of the last 3 years. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is CBAK Energy Technology Limited's financial distress score?
41/100 ('Watch'). Ohlson O-score 2.34 (model 1-year failure probability 91%). Merton distance-to-default 2.02 σ (model default probability 2.1%).
What works in CBAK Energy Technology Limited's favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+11% YoY).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.