大全新能源 (DQ) 2024 Q1 法說會逐字稿

Good day, and welcome to the Daqo New Energy first quarter 2024 results conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Xiang Xu, CEO. Please go ahead.

大家好，歡迎參加大全新能源2024年第一季業績電話會議。 （操作員說明）請注意此事件正在被記錄。現在我想把會議交給執行長徐翔。請繼續。

Hello, everyone. I'm Anita, the Investor Relations of Daqo New Energy. Thank you for joining our conference call today. So Daqo New Energy just issued its financial results first quarter of 2024, which can be found on our website at www.dqsolar.com. So today attending the conference call, we have our Chairman and CEO, Mr. Xiang Xu, our CFO, Mr. Ming Yang, and myself.

大家好。我是大全新能源投資者關係部的Anita。感謝您今天參加我們的電話會議。大全新能源剛剛發布了2024年第一季的財務業績，您可以在我們的網站www.dqsolar.com上找到該業績。今天參加電話會議的有我們的董事長兼執行長徐翔先生、我們的財務長楊明先生和我自己。

The call today will begin with an update from Mr. Xu, market conditions and company operations, and then Mr. Yang will discuss the company's financial performance for the quarter. After that, we'll open the floor to Q&A from the audience.

今天的電話會議首先由徐先生介紹最新情況、市場狀況和公司營運情況，然後楊先生將討論公司本季的財務表現。之後，我們將開始觀眾問答。

Before we begin the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth are forward-looking statements that are made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements.

在我們開始正式發言之前，我想提醒您，今天電話會議中的某些陳述，包括預期的未來營運和財務業績以及行業增長，都是根據美國私人證券訴訟改革的安全港條款做出的前瞻性陳述1995 年法案。許多因素可能導致實際結果與任何前瞻性陳述中包含的結果有重大差異。

Further information regarding these and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission. These statements only reflect our current and preliminary view as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. All information provided in today's call is as of today, and we undertake no duty to update such information except as required under applicable law.

有關這些風險和其他風險的更多資訊包含在我們向美國證券交易委員會提交或提供的報告或文件中。這些陳述僅反映我們截至今天的當前和初步觀點，可能會發生變化。我們實現這些預測的能力受到風險和不確定性的影響。今天的電話會議中提供的所有資訊均為截至今天的信息，除非適用法律要求，否則我們不承擔更新此類資訊的義務。

Also during the call, we will occasionally reference monetary amounts in US dollar terms. Please keep in mind that our functional currency is the Chinese RMB. We offer these translations into US dollars solely for the convenience of the audience. Mr. Xu will make his remarks regarding current market conditions and company performance in Chinese, which I'll translate into English after he finishes.

此外，在電話會議期間，我們偶爾會提及以美元計算的金額。請記住，我們的功能貨幣是人民幣。我們將這些翻譯成美元只是為了方便觀眾。徐先生將以中文就當前市場狀況和公司業績發表講話，他講完後我會將其翻譯成英文。

Now I'll turn the call to our CEO.

現在我將把電話轉給我們的執行長。

(interpreted) Hello, everyone. This is Anita. Thank you for joining the call. So I'll now translate our CEO, Mr. Xu's remarks. In the first quarter, we continued to optimize our manufacturing operations and made improvements in both yield and throughput at our two poly facilities. Total production volume for the quarter was 62,278 metric tons, which was above our expectations and represented an increase of 1,264 metric tons compared to the previous quarter.

（譯）大家好。這是安妮塔。感謝您加入通話。現在我來翻譯一下我們徐總的演講。第一季度，我們繼續優化製造業務，並提高了兩個多晶矽工廠的產量和吞吐量。本季總產量為 62,278 噸，超出我們的預期，較上季增加 1,264 噸。

Our Inner Mongolia 5A facility contributed 46% of our total production volume for the first quarter. Through achieve mounting R&D and significant purity improvements that are both -- at both facilities, we've further increased our N-type product mix from 60% in December last year to 72% in March. Compared to the end of last year, production called trended down over the quarter, decreasing further by 2% from fourth quarter 2023 to an average of [USD6.737] per kilogram in the first quarter of 2024.

我們的內蒙古 5A 工廠貢獻了第一季總產量的 46%。透過在兩個工廠持續進行研發和顯著提高純度，我們進一步將 N 型產品組合從去年 12 月的 60% 增加到 3 月的 72%。與去年底相比，本季產量呈下降趨勢，較 2023 年第四季進一步下降 2%，至 2024 年第一季平均每公斤 [6.737 美元]。

For the quarter, we generated $77 million in EBITDA. By the end of first quarter 2024, the company maintain a strong cash balance of $2.7 billion and a combined cash and bank note receivable balance of USD2.9 billion. We expect second quarter 2024 total poly and production volume to be approximately 60,000 metric ton to 63,000 metric tons. Similar to that of first quarter 2024, as the company maintains full production.

本季度，我們實現了 7,700 萬美元的 EBITDA。截至 2024 年第一季末，該公司維持 27 億美元的強勁現金餘額，應收現金和銀行票據餘額總計為 29 億美元。我們預計 2024 年第二季聚酯總產量和產量約為 60,000 噸至 63,000 噸。與 2024 年第一季類似，公司保持滿載生產。

We expect to finish construction and begin initial pilot production at our new Inner Mongolia Phase 5B facility in the second quarter of 2024 and expect to ramp up to full production level by the end of third quarter 2024. As a result, we anticipate full year 2024 production volume to be in the range of [280,000] metric ton to 300,000 metric tons, approximately 40% to 50% higher than that of 2023.

我們預計新的內蒙古 5B 期工廠將於 2024 年第二季完成建設並開始初步試生產，並預計在 2024 年第三季末達到全面生產水準。 ]噸至30萬噸之間，比2023年增加約40%至50%。

With one and 15 years of experience in poly production as well as a fully digitalized and integrated production system that optimizes operational efficiency will continue to increase our entire production in the product mix.

憑藉一年和十五年的多晶矽生產經驗以及優化營運效率的完全數位化和整合的生產系統，將繼續增加我們產品組合中的整個產量。

During the first quarter, the solar market initially showed signs of strength as we head into the Chinese New Year holiday set February, despite production cuts and downtime, as usual during the holidays, polysilicon demand had been strong pre-holiday at the wafer manufacturers kept utilization rate unchanged or even higher in anticipation of higher demand and better product pricing post holidays.

一季度，隨著2月份農曆新年假期的臨近，太陽能市場初步顯現出走強跡象，儘管節假日期間有減產和停工，但矽片製造商在節前仍保持強勁的多晶矽需求由於預期節後需求增加和產品定價更好，利用率維持不變甚至更高。

The general polysilicon price range was RMB65 to RMB70 per kilogram for N-type and RMB55 to RMB60 per kilogram for P-type during this period. However, with weaker than expected production plans downstream starting March, the wafer sector faced significant pressure from accumulated inventory and negative margins.

在此期間，多晶矽的整體價格範圍為N型每公斤65至70元，P型每公斤55至60元。然而，由於3月下游生產計畫弱於預期，矽片產業面臨庫存累積和負利潤的巨大壓力。

Market sentiment shifted significantly in mid-March with widespread expectations of falling prices throughout the value chain, particularly for polysilicon. As a result, downstream manufacturers began to lower utilization, reduce inventory and delay orders to minimize the impact of falling prices.

3 月中旬，市場情緒發生顯著變化，人們普遍預期整個價值鏈（尤其是多晶矽）的價格將會下跌。於是，下游廠商開始降低開工率、減少庫存並延後訂單，以盡量減少價格下跌的影響。

In April, further pressure on polysilicon prices emerge as the issue of excess inventory among the wafer manufacturers worsen and wafer customers further delayed orders and product delivery. Therefore, polysilicon prices dropped further by late April to RMB47 to RMB54 per kilogram for Tier 1 producers at the industry's cash breakeven costs.

進入4月份，矽片廠商庫存過剩問題進一步惡化，矽片客戶訂單和產品交付進一步推遲，多晶矽價格進一步承壓。因此，到 4 月底，以產業現金損益平衡成本，一級生產商的多晶矽價格進一步下跌至每公斤 47 元至 54 元人民幣。

At this level, we believe the entire solar value chain, including polysilicon, is likely to be loss-making in general, and that a large number of polysilicon producers are currently unprofitable. The solar industry has gone through multiple cycles in the past and based on our previous experience, we believe that the current low prices and market downturn will eventually result in a healthier market as for profitability and losses, as well as Casper will lead to many market players exiting the business with some possible bankruptcies.

在這個水準上，我們認為包括多晶矽在內的整個太陽能價值鏈可能總體上處於虧損狀態，並且大量多晶矽生產商目前無利可圖。太陽能產業在過去經歷了多個週期，根據我們先前的經驗，我們認為當前的低價和市場低迷最終會導致市場在盈利和虧損方面更加健康，而Casper將導致許多市場退出該業務的參與者可能會破產。

This will bring the inevitable capacity rationalization and solve the overcapacity issue we are currently experiencing and as demand growth resumes after excess inventories are depleted in the short term and on the backdrop of positive policies pushing renewable installations in the long run, the solar PV industry will return to more normal profitability and achieve better margins. We believe that at the end of the quarter we had one of the industry's lowest levels of finished goods inventory was approximately two weeks of production.

這將不可避免地帶來產能合理化，解決當前產能過剩問題，短期內過剩庫存耗儘後，隨著需求成長恢復，長期來看，在利好政策推動再生能源裝載機的背景下，太陽能光電產業將恢復更正常的獲利能力並實現更好的利潤率。我們相信，到本季末，我們的成品庫存水準處於行業最低水準之一，約為兩週的生產量。

Overall, 2023 markets step change for renewable power growth with China's newly installed solar PV capacity reaching a record high of 216.9 gigawatts, representing 148% year-over-year growth. We continued to see strong growth in solar PV installations in China during the first quarter of 2024, which reached an aggregate of 45.7 gigawatt, representing a 36% year-over-year growth rates.

整體而言，2023年再生能源發電市場將出現階段性變化，中國新增太陽能光電裝置容量將達到216.9吉瓦的歷史新高，較去年同期成長148%。 2024年第一季度，中國太陽能光電裝置容量持續強勁成長，總計達45.7吉瓦，年增36%。

Solar has become one of the most competitive forms of power generation and continuous cost reductions and solar PV products and associated reduction in solar energy generation costs are expected to create substantial additional demand for solar PV.

太陽能已成為最具競爭力的發電形式之一，成本的持續降低和太陽能光伏產品以及太陽能發電成本的相關降低預計將為太陽能光伏創造大量額外需求。

With 2023, setting the stage for gradually phasing out peak type products, we believe that 2024 will mark a year when N-type products dominate the industry. We are optimistic that we'll capture the long-term benefits of the growing global solar PV market and maintain our competitive advantage by enhancing our higher efficiency, N-type technology and optimizing our cost structure through digital transformation and AI adoption.

隨著2023年高峰型產品逐步淘汰，我們相信2024年將是N型產品佔據產業主導地位的一年。我們樂觀地認為，我們將透過數位轉型和人工智慧的採用來增強我們更高效率的N型技術並優化我們的成本結構，從而抓住不斷增長的全球太陽能光伏市場的長期利益，並保持我們的競爭優勢。

As one of the world's lowest cost producers with the highest quality and type product, a strong balance sheet and no financial debt, we believe we're very well positioned to weather the current market down cycle and emerge as one of the leaders in the industry to capture the market's future growth.

作為世界上成本最低的生產商之一，擁有最高品質和類型的產品、強大的資產負債表並且沒有金融債務，我們相信我們有能力度過當前的市場下行週期，並成為行業的領導者之一抓住市場的未來成長。

Now I will turn the call to our CFO, Mr. Ming Yang, who will discuss the company's financial performance for the quarter. Ming, please go ahead.

現在我將致電我們的財務長楊明先生，他將討論公司本季的財務表現。明，請繼續。

Hello, everyone, who is the CFO of Daqo New Energy. We appreciate you joining our earnings conference call today.

大家好，我是大全新能源的CFO。我們感謝您今天參加我們的收益電話會議。

I will now go over the company's first quarter 2024 financial performance. Revenues were $415.3 million compared to $476.3 million in the fourth quarter of 2023. And this and some [$109 million] in the first quarter of 2023. The decrease in revenue compared to the fourth quarter of 2023 was primarily due to a decrease in average selling prices and lower polysilicon sales volumes.

我現在回顧一下公司2024年第一季的財務表現。營收為 4.153 億美元，而 2023 年第四季為 4.763 億美元。和多晶矽銷量下降。

Gross profit was $72 million compared to $87 million in the fourth quarter of 2023 and $506 million in the first quarter of 2023. Gross margin was 17.4% compared to 18.3% in the fourth quarter of 2023 and 71.4% in the first quarter of 2023. The decrease in gross margin compared to the fourth quarter of 2023 was primarily due to lower average selling prices, which was partially mitigated by lower production costs.

毛利為7,200 萬美元，而2023 年第四季為8,700 萬美元，2023 年第一季為5.06 億美元。 71.4%。

Selling, general and administrative expenses were $38.4 million compared to $39 million in the fourth quarter of 2023 and $41.3 million in the first quarter of 2023. As G&A expenses during the first quarter included $19.6 million in noncash share-based compensation costs related to the company's share incentive plan compared to $19.6 million in the fourth quarter of 2023.

銷售、一般及管理費用為3,840 萬美元，而2023 年第四季為3,900 萬美元，2023 年第一季為4,130 萬美元。補償成本股權激勵計畫相比，2023 年第四季為 1,960 萬美元。

R&D expenses were $1.5 million compared to $3.3 million in the fourth quarter of 2023 and $1.9 million in the first quarter of 2023. R&D expenses vary from period to period and reflect the R&D activities that take place during the quarter. Our R&D activities currently focus on process and technologies to improve purity for polysilicon and remove contamination to increase our N-type polysilicon percentage.

研發費用為 150 萬美元，而 2023 年第四季為 330 萬美元，2023 年第一季為 190 萬美元。我們的研發活動目前主要集中在提高多晶矽純度和去除污染的製程和技術上，以提高我們的 N 型多晶矽百分比。

As a result of the foregoing, income from operations were $30.5 million compared to $83.3 million in the fourth quarter of 2023 and $462.8 million in the first quarter of 2023. Operating margin was 7.3% compared to 17.5% in the fourth quarter of 2023 and 65% in the first quarter of 2023. Foreign exchange loss was $0.3 million compared to a loss of $0.8 million in the fourth quarter 2023, and is attributed to the volatility and fluctuations of the US dollar to RMB exchange rate during the quarter.

綜上所述，營運收入為3,050 萬美元，而2023 年第四季為8,330 萬美元，2023 年第一季為4.628 億美元。 2023 年第四季為65 2023 年第一季外匯損失為 30 萬美元，而 2023 年第四季為損失 80 萬美元，歸因於該季度美元兌人民幣匯率的波動和波動。

Net income attributable to Daqo New Energy shareholders was $15.5 million compared to $53.3 million in the fourth quarter of 2023 and $278.8 million in the first quarter of 2023. Earnings per basic ADS was $0.24 compared to $0.76 in the fourth quarter of 2023 and 3.56 in the first quarter of 2023.

大全新能源股東應佔淨利為1,550 萬美元，而2023 年第四季為5,330 萬美元，2023 年第一季為2.788 億美元。 0.76 美元，2023 年第一季為3.56 美元。

Adjusted net income attributable to Daqo New Energy Corp shareholders, excluding non-cash share-based compensation costs, was $36 million compared to $74.3 million in the fourth quarter of 2023 and $210 million in the first quarter of 2023. Adjusted earnings per basic ADS was 0.55 compared to 1.6 in the fourth quarter of 2023 and 3.96 in the first quarter of 2023.

調整後歸屬於大全新能源公司股東的淨利潤（不包括非現金股份補償成本）為3,600 萬美元，而2023 年第四季為7,430 萬美元，2023 年第一季為2.1 億美元。股基本美國存託憑證收益為0.55，而 2023 年第四季為 1.6，2023 年第一季為 3.96。

EBITDA was $76.9 million compared to $128 million in the fourth quarter of 2023 and $490 million in the first quarter of 2023. The EBITDA margin was 18.5% compared to 26.9% in the fourth quarter of 2023 and 69% in the first quarter of 2023.

EBITDA 為7,690 萬美元，而2023 年第四季為1.28 億美元，2023 年第一季為4.9 億美元。 69%。

Now on the company's financial condition. As of March 31, 2024, the company had $2.689 billion in cash and cash equivalents compared to $3.05 billion as of December 31, 2023, and $4.1 billion as of March 31, 2023. And as of March 31, 2024, the notes receivable balance was $194 million compared to $116 million as of December 31, 2023, and $791 million as of March 31, 2023. No receivables are present bank notes with maturity within six months.

現在介紹一下公司的財務狀況。截至2024年3月31日，該公司擁有現金及現金等價物26.89億美元，而截至2023年12月31日為30.5億美元，截至2023年3月31日為41億美元。日，應收票據餘額為 1.94 億美元，而截至 2023 年 12 月 31 日為 1.16 億美元，截至 2023 年 3 月 31 日為 7.91 億美元。

For the three months ended March 31, 2024, net cash used in operating activities was $113.9 million compared to net cash provided by operating activities of $807 million in the same period of 2023.

截至2024年3月31日的三個月，經營活動使用的現金淨額為1.139億美元，而2023年同期經營活動提供的現金淨額為8.07億美元。

Net cash used in operating activities for the quarter was the result of change in operating assets and liabilities, primarily related to the company's payment of approximately $75 million in tax payable is due during the first quarter as well as an increase in the receivable balance of approximately $78 million and other items that used cash include payments to suppliers in conjunction with the period related to the Chinese New Year holidays as well as the increase in inventory.

本季度經營活動使用的現金淨額是經營資產和負債變化的結果，主要與公司在第一季度支付約 7500 萬美元的應付稅款以及應收賬款餘額增加約7800萬美元和其他使用現金的項目包括與農曆新年假期相關的期間向供應商付款以及庫存增加。

For the three months ended March 31, 2024 net cash used in investing activities was $190.5 million compared to $268.9 million in the same period of 2023. Net cash used in investing activities in the first quarter of 2024 was primarily related to the capital expenditures on the company's Phase 5A and Phase 5B policy can expansion projects in Balto city Inner Mongolia. Due to the recent changes in market condition, the company's Board and management team have decided to temporarily postpone the company's non-polysilicon manufacturing capacity expansion plans to reserve capital.

截至 2024 年 3 月 31 日的三個月，投資活動使用的現金淨額為 1.905 億美元，而 2023 年同期為 2.689 億美元。和5B期政策可擴建工程位於內蒙古巴爾托市。因近期市場狀況發生變化，公司董事會及營運團隊決定暫時延後公司非多晶矽產能擴張計劃，以儲備資金。

As such, the company's capital expenditure plan has been reduced to approximately $700 million for the year, which is related to the company's Inner Mongolia polysilicon project and this represents a significant decrease from the previous capital expenditure plan for the year of approximately $1.1 billion to $1.2 billion.

因此，公司本年度的資本支出計畫已減少至約7億美元，與公司的內蒙古多晶矽項目相關，較先前的年度資本支出計畫約11億美元大幅減少至1.2美元。

And for the three months ended March 31, 2024, net cash used in finance activities was $6 million compared to net cash provided by financing activities of $59.9 million in the same period of 2023. Net cash used in finance activities in the first quarter of 2024 was primarily related to approximately $5 million used for the company's share repurchase.

截至2024 年3 月31 日的三個月，財務活動使用的現金淨額為600 萬美元，而2023 年同期融資活動提供的現金淨額為5,990 萬美元。淨額主要與用於公司股票回購的約500萬美元有關。

And that concludes our prepared remarks. We will now open the call to Q&A from the audience. Operator, please begin.

我們準備好的發言就到此結束。我們現在將開始觀眾問答環節。接線員，請開始。

We will now begin the question and answer session. (Operator Instructions) Phil Shen, ROTH MKM.

我們現在開始問答環節。 （操作員說明）Phil Shen，ROTH MKM。

Phil, your line is open if you'd like to ask your question. Yes, we seem to be unable to connect to Phil Shen's audio. The next question comes from Alan Lau, Jefferies.

菲爾，如果您想提出問題，您的熱線已開放。是的，我們似乎無法連接 Phil Shen 的音訊。下一個問題來自 Jefferies 的 Alan Lau。

Thanks a lot for taking my question management. So I think as the first question that I've received after the announcement is about the buyback. So I wonder if there's any guidance from the management in regards to buyback or dividends are planned in this year.

非常感謝您接受我的問題管理。因此，我認為公告發布後收到的第一個問題是關於回購的。所以我想知道管理層今年是否有關於回購或股息計劃的任何指導。

Okay. So the Board actually had a discussion about potentially potential a share continue to do the share repurchase program. I think in light of the current market condition where the industry overall is actually looking like going to be making losses were uncertain. How long this might last? so the Board does feel like it's more prudent to conserve capital for now to weather the market downturn.

好的。因此，董事會實際上討論了繼續進行股票回購計劃的潛在潛力。我認為，鑑於當前的市場狀況，整個行業實際上看起來會虧損，這是不確定的。這可能會持續多久？因此，董事會確實認為目前保存資本以因應市場低迷更為謹慎。

And then they would like to see how the market would perform and if the market does improve perhaps later in the year, I think the Board would definitely consider a program at a later date as appropriate. I think to us either because of the market condition I think the Board does feel that we need to conserve capital. I think, including though we significantly reduced our capacity expansion plan.

然後他們想看看市場表現如何，如果市場確實在今年稍後有所改善，我認為董事會肯定會在適當的稍後考慮一項計劃。我認為對我們來說，由於市場狀況，我認為董事會確實認為我們需要節省資本。我認為，包括儘管我們大幅減少了產能擴張計劃。

And separately I think the company is also should strategically looking at potential expansions overseas outside of China, including in areas of the Middle East, where we're actually looking at several locations pretty actively and then also potentially in other areas in Southeast Asia as well. So that also represents a potential use of funds for the company. So the Board is also making some considerations because of that as well.

另外，我認為該公司也應該策略性地考慮中國以外的海外潛在擴張，包括中東地區，我們實際上正在非常積極地尋找幾個地點，然後也可能在東南亞其他地區。因此，這也代表了公司資金的潛在用途。因此董事會也在考慮這一點。

Well, I see. So another question I have is on the US volume. So in terms of the production and actually the company has actually -- will have an upside surprise in the production volume, but it sells things are lower than the production volumes. So would like to know how much is the inventory right now in the company. And also this in regards to the sales volume in the first quarter, was it related to the cut in utilization rate in wafer segment?

嗯，我明白了。我的另一個問題是關於美國的銷售。因此，就產量而言，實際上該公司的產量實際上會出現上行驚喜，但其銷售量低於產量。所以想知道現在公司的庫存是多少。還有第一季的銷量，是否與晶圓板塊的利用率下降有關？

Okay. Yes, I think operationally, the company actually was doing very well this quarter. I think if we exclude the impact of the market condition in the second half of March, I think we produce more than 62,000 metric tons, an increase of the previous quarter. So this is a pretty good improvement. Particularly on the quality side, we made very significant improvements in quality, particularly in Mongolia facility.

好的。是的，我認為在營運方面，該公司本季實際上表現得非常好。我認為，如果我們排除3月下半月市場狀況的影響，我認為我們的產量將超過62,000噸，比上季度增加。所以這是一個非常好的改進。特別是在品質方面，我們在品質方面取得了非常顯著的進步，特別是在蒙古工廠。

So any type of margins now north of 70% of our mix and the same time, we also saw further reduction in production costs, I think just to start in a sense and then March, the industry conditions declined significantly. I think customers delayed their orders, they delayed delivery of polysilicon for production, the lower utilization, I think, in anticipation of lower polysilicon pricing, but also because of the significant wafer inventory sales occurring at the time.

因此，現在任何類型的利潤率都超過了我們組合的 70%，同時，我們也看到生產成本進一步下降，我認為從某種意義上來說只是開始，然後 3 月份，行業狀況顯著下降。我認為客戶推遲了訂單，推遲了用於生產的多晶矽的交付，我認為利用率較低，是因為預期多晶矽價格較低，但也是因為當時出現了大量的晶圓庫存銷售。

Yes. So actually, this situation actually persistent more or less through mid to late April. I think now we're shipping normally, but at a much lower pricing. At the end of the quarter, we had approximately a two weeks, slightly less than two weeks of production of finished goods inventory. So we think that's probably one of the lowest within the industry.

是的。所以實際上，這種情況其實一直持續到4月中下旬。我認為現在我們可以正常發貨，但價格要低得多。在本季末，我們有大約兩週、略少於兩週的產成品庫存。所以我們認為這可能是業內最低的之一。

It's two weeks of inventory is actually quite impressive. So I had a question I have is on the other operating income. So the Q-o-Q change as a relatively significant. So I'd like to know if it relate to the change in the subsidies provided in terms of the power tariff?

兩週的庫存量確實相當可觀。所以我有一個問題是關於其他營業收入的。所以 Q-o-Q 的變化是比較顯著的。那麼我想知道這是否與電價補貼的變化有關？

So actually, I believe we had other. So it's actually an expense for the quarter rather than the income and then related to some of the older equipment that we replaced. So though we equipment needs to be expensed which longer being used. It amounted to about $1.6 million. So it's not too significant as this happens maybe once a year or something like that.

所以實際上，我相信我們還有其他的。所以它實際上是該季度的支出而不是收入，然後與我們更換的一些舊設備有關。因此，儘管我們的設備需要花費更長的時間來使用。金額約 160 萬美元。所以這並不太重要，因為這種情況可能每年發生一次或類似的情況。

I see. So in the first quarter, there isn't any subsidies coming in, right, like in 4Q?

我懂了。那麼第一季沒有任何補貼，對吧，就像第四季一樣？

Yeah. We would expect some subsidy potentially in the second quarter. And the more subsidy likely in the fourth quarter. Usually is in the second half of the year.

是的。我們預計第二季可能會出現一些補貼。第四季可能會有更多補貼。一般是在下半年。

So my last question is regards to the industry like how do you see the poly price going forward this year and then when you will see a turnaround in the industry?

所以我的最後一個問題是關於這個行業的，例如你如何看待今年的多晶價格，然後你什麼時候會看到這個行業的改善？

Okay. So the most recent price decline, we believe actually is more of our resolve then the inventory adjustment that's happening, right? So customers delaying orders in line with the expectations of a lower pricing in future periods, right. So people tend to want to take a wait and see mode. And now at the lower price, we're starting to see and orders returning also at a lower pricing level. And we think the pricing level where the industry is right now is actually money-losing probably for costsa 70%, 80% of the industry. So I think almost majority of the players are losing money right now and this certainly cannot be sustainable.

好的。因此，我們認為最近的價格下跌實際上更多的是我們的決心，而不是正在發生的庫存調整，對嗎？因此，客戶推遲訂單是為了符合未來一段時間內較低定價的預期，對吧。因此人們傾向於採取觀望模式。現在，在較低的價格下，我們開始看到訂單也以較低的價格水平返回。我們認為，對於該行業 70%、80% 的成本來說，目前該行業的定價水準實際上是在虧損的。所以我認為現在幾乎大多數玩家都在賠錢，這肯定是不可持續的。

I think of this five-step process, it's a matter of time. The number of players will likely need to shut down or some of the major recent exit of the business are going to be a bankruptcy. I think we're likely to see that as price stays at this low level, but then I will bring the eventual capacity rationalization right. I think that people are expecting.

我認為這五個步驟的過程，只是時間問題。大量的玩家可能需要關閉，或者最近一些主要的業務退出將是破產。我認為，隨著價格保持在如此低的水平，我們可能會看到這種情況，但隨後我將實現最終的產能合理化。我認為人們正在期待。

And at the same time, you also have a lot of opportunity on demand. So also, we think China is likely to be very strong this year because of where the panel prices right now. So it's offering very high return for the solar projects in China, I think globally as well. So we are optimistic that we could see a very significant end market this year. So I think it's the balance of these two. Any timing hard to tell. I think we could see some improvement in the second half of this year.

同時，你也有很多按需的機會。因此，我們認為，由於目前面板價格，中國今年可能會非常強勁。因此，它為中國的太陽能專案提供了非常高的回報，我認為在全球範圍內也是如此。因此，我們樂觀地認為今年我們可能會看到一個非常重要的終端市場。所以我認為這是兩者的平衡。任何時間都很難說。我認為今年下半年我們可以看到一些改善。

Thank you. So I think the -- so let's talk about the a lot of players are actually losing money so are you going to delay your Phase 5B or like what is the capital going to look like in this year, especially at current prices?

謝謝。所以我認為——所以讓我們談談很多玩家實際上都在虧損，所以你會推遲你的第 5B 階段嗎？

So we're delaying everything else, almost everything else, except 5Bs, because 5Bs already ready to go into production because it's been under construction for a year or over a year. So I think, frankly, we're still at least for now as of today, it's still being planned originally scheduled to start production in Q2 in this quarter, actually initial production and then ramp up in Q3.

因此，我們推遲了其他所有事情，幾乎所有其他事情，除了 5B，因為 5B 已經準備好投入生產，因為它已經建造了一年或一年多。所以我認為，坦白說，至少到目前為止，我們仍然計劃原定在本季第二季開始生產，實際上是初步生產，然後在第三季增加。

So that's all. 'll take a pass on. And yeah, I'll pass on to our investors. Thanks a lot for taking my questions.

就這樣。會接受的。是的，我會將其轉達給我們的投資者。非常感謝您回答我的問題。

Okay. Thank you.

好的。謝謝。

Leo Ho, Daiwa Capital Markets.

Leo Ho，大和資本市場。

Thanks, management for your time today. My first question is regarding the FBR granular, a circuit. We noticed as our circle major module makers, including, for example, long G&JK as suggesting that the [FPR] go paying ratio. Now they can do around [50%] for N-type wafer. I just wonder if we can share any update on this SPL use a situation was Altec and Amgen of why we're seeing such a sudden increase in at ratio. Thank you.

謝謝管理層今天抽出時間。我的第一個問題是關於 FBR 顆粒電路。我們注意到，我們圈子裡的主要模組製造商，包括長期的 G&JK，都表明 [FPR] 會支付比率。現在他們可以為 N 型晶圓做到 [50%] 左右。我只是想知道我們是否可以分享有關此 SPL 使用情況的任何更新，Altec 和 Amgen 解釋了為什麼我們看到比率突然增加。謝謝。

I think on the FPR, at least based on feedback from our customers, it continues to have higher levels of contaminants and higher surface metal and the higher hydrogen and higher carbon. So is I think the challenge with most of the wafer producer is that the higher carbon content actually leads to a breaking of the waterfall. So and then also the contamination and also the hydrogen jumping issue means that less amount of poly can be used per program.

我認為在 FPR 上，至少根據我們客戶的回饋，它仍然具有更高水平的污染物和更高的表面金屬以及更高的氫和碳。我認為大多數晶圓生產商面臨的挑戰是，較高的碳含量實際上會導致瀑布的破裂。因此，污染和氫跳躍問題意味著每個程序可以使用更少的多晶矽。

So we use it we are already have a slight reduction in production yield per run on the ingot. So and that's the main reason why customers require discount and currently primarily use it as a mix. In a previous understanding is the mix is between 10% to 30%. You've I think every producer probably has a slightly different mix.

因此，當我們使用它時，鑄錠每次運行的產量已經略有下降。這就是客戶要求折扣並且目前主要將其作為組合的主要原因。之前的理解是混合比例在10%到30%之間。我認為每個製作人的組合可能都略有不同。

I think, some of them, the main player, all these players also our customer, I think, I don't even wanted to diversify their sourcing or maybe they want to lower their costs, right? So they're always looking for lower costs sources. So they can extent that they can use, right? So we're not surprised that there are some kind of agreement. And lease agreements always at least in China and there's always these are kind of framework agreements ratio. So the volume and pricing is adjusted amongst the gates.

我認為，其中一些是主要參與者，所有這些參與者也是我們的客戶，我想，我什至不想使他們的採購多樣化，或者也許他們想降低成本，對吧？因此，他們總是在尋找成本較低的來源。這樣他們就可以擴大他們的使用範圍，對嗎？因此，我們對達成某種協議並不感到驚訝。至少在中國總是有租賃協議，而且總是有框架協議的比例。因此，數量和價格會在各個大門之間進行調整。

Understood. That's very clear. My next question is regarding the price gap for different type of policy, I can say, for example, N-type versus P-type and then also for N-type high-quality polysilicon that we put against at FBR, what are those price gaps going to look high right now and also looking forward? Thank you.

明白了。這非常清楚。我的下一個問題是關於不同類型政策的價格差距，我可以說，例如，N型與P型，然後還有我們在FBR反對的N型高質量多晶矽，這些價格是多少現在和未來的差距看起來會很大嗎？謝謝。

I think consistently the N-type poly has had price premium in the range of maybe RMB5 to RMB10 per kilogram. I think currently is somewhere in the RMB7 to RMB8 per kilogram still even the current pricing. Well FBR is generally priced at a discount to the P-type poly, generally, above the FBR has different grades price, right? But within N-type and P-type, there's is also different grades in generally related to the form factor of the surface structure. Yeah. So it's not like one single price, so it's usually a range of price.

我認為 N 型多晶矽的溢價一直在每公斤 5 至 10 元人民幣之間。我認為目前的價格仍然在每公斤7元到8元之間。那麼FBR的價格一般比P型多晶要打折扣，通常FBR上面都有不同檔次的價格吧？但在N型和P型中，也有不同的等級，一般與表面結構的形狀因素有關。是的。所以它不像一個單一的價格，所以它通常是一個價格範圍。

And my last question is regarding electricity tariffs for about how and what's the capacities? Would there be any like electricity to have changes that we expected for this year of ownership?

我的最後一個問題是關於電價，電價如何以及容量有多大？是否會有像電力這樣的變化來改變我們今年的所有權預期？

No, we expect any electricity tariff adjustments on the electricity rates?

不，我們預期電價會有所調整嗎？

Thanks so much. Exactly. Thank you.

非常感謝。確切地。謝謝。

Okay. I think first thing, Xiang, we're expecting the rate to be a very stable. I think the rate has been fixed. The previous adjustments was mostly related to -- I think of a policy issued by NDRC that kind of a bid, single entity type of energy price structure. At the same time, we also -- of course, at a time where and the coal prices, which was at a higher price. So our utility company actually was losing money on the power sales to us, on the power generators.

好的。我認為首先，Xiang，我們預計利率將非常穩定。我認為利率已經確定了。先前的調整主要與──我認為國家發展委員會發布的政策，那種招標、單一實體類型的能源價格結構有關。同時，當然，當時煤炭價格也較高。因此，我們的公用事業公司實際上在向我們銷售電力、發電機方面虧損了。

So after the rate adjustment, that's no longer the case and we continue to have the most favorable utility rate for that local utility for the region and very still competitive. But we don't expect that to change or the rate to change. And some noise for in Mongolia, in the Mongolia already had an adjustment, I think around in the first half of 2023, I believe. Also based on the NDRC rule.

因此，費率調整後，情況不再如此，我們繼續享有該地區當地公用事業最優惠的公用事業費率，並且仍然具有競爭力。但我們預期這種情況或利率不會改變。蒙古的一些噪音，蒙古已經進行了調整，我認為大約在 2023 年上半年。亦以國發改委規定為依據。

So now the Inner Mongolia restructure is actually a market-based structure, were actually the rays not actually floating based on market supply and demand for the utility market. But because we buy or a significant portion of our power comes from renewables and renewable pricing utility is lower than coal for the Inner Mongolia grid. So and also, we have the most preferential pricing for the whole local grid there. So we do have think we have a very, very utility price there and we don't expect that to change, because it's already being adjusted.

所以現在內蒙古的重組其實是一個市場化的結構，實際上光線不是根據公用事業市場的市場供給來浮動的。但因為我們購買或很大一部分電力來自再生能源，而內蒙古電網的再生能源定價效用低於煤炭。因此，我們對整個當地電網有最優惠的定價。因此，我們確實認為那裡的公用事業價格非常非常高，我們預計這種情況不會改變，因為它已經在調整。

Thank you so much for the additional color. These are all from my side. Thank you.

非常感謝您提供額外的顏色。這些都是我這邊的。謝謝。

Yeah great. Thank you.

很好。謝謝。

(Operator Instructions)

（操作員說明）

Phil Shen, ROTH MKM.

Phil Shen，羅斯 MKM。

Hi, everyone. Thanks for taking my questions. I'm sorry about the technical difficulties earlier. I'd like to explore price just a little bit more. Can you give us a sense of pricing beyond this year as well. Do you think there could be some recovery next year and we've seen price decline recently and some of the experts that we've been consulting with, suggests that prices will continue to decline as we go through the year. So wondering if you can give us a view of 2025. Thanks.

大家好。感謝您回答我的問題。對於之前的技術困難，我深感抱歉。我想進一步探討一下價格。您能否為我們介紹一下今年以後的定價狀況？您認為明年可能會出現一些復甦嗎？所以想知道您能否為我們介紹一下 2025 年的情況。

Okay. I -- we do think pricing is probably it is at the bottom, if not at the bottom near the very bottom, this ready below cash breakeven price for a lot of the producers. We think 70% to 80% -- we think starting in the next two months or so, we will start to see -- we are already starting to see shutdowns and we will see more shutdowns going forward. If this persists through Q3 and we think on some of the producers will arrive to cash problem and then if it goes into next year, we'll and I mean, we might see an OCI like what type of shutdown, right I think some investors might remember [osage], -- was kind of gave up.

好的。我——我們確實認為定價可能處於底部，即使不是接近底部的底部，對於許多生產商來說，這已經低於現金盈虧平衡價格。我們認為 70% 到 80%——我們認為從未來兩個月左右開始，我們將開始看到——我們已經開始看到停工，我們將看到更多的停工。如果這種情況持續到第三季度，我們認為一些生產商將遇到現金問題，然後如果進入明年，我的意思是，我們可能會看到OCI，例如什麼類型的關閉，對吧，我認為一些投資人可能還記得[osage]，——有點放棄了。

So I think it is price stays low, we will see this kind of condition. We don't think price can stay this low until, say through next year. Certainly, you would have much lower production of poly than in this plan is not sufficient to service the market and the demand growth, because I know some of that the current market conditions due to inventory adjustments, right.

所以我認為價格保持在低位，我們會看到這種情況。我們認為價格不會保持在這麼低的水平，直到明年。當然，你的多晶矽產量會比這個計劃低得多，不足以滿足市場和需求增長，因為我知道當前的市場狀況是由於庫存調整造成的，對吧。

So and then ultimately in the downstream, customers will need to restart, buying again, right? Because they bought, probably more than they need in, say, in the first half of the quarter. And then when -- they expected demand or price increase did not materialize in second half of March that's when they slow down or stop ordering. So it's kind of market behavior that's creating kind of the volatility that we're seeing in the market.

那麼最終在下游，客戶將需要重新啟動，再次購買，對吧？因為他們購買的東西可能比他們需要的東西多，例如在本季的上半季。然後，當他們預期的需求或價格上漲在三月下半月沒有實現時，他們就會放慢或停止訂購。因此，正是這種市場行為造成了我們在市場上看到的波動。

Got it. Thanks Ming Yang. Can you talk about the amount of channel inventory that's in the market now. And then do you expect that to continue to grow for the near term? And then when do you think that peaks? Thanks.

知道了。謝謝明陽。能談談現在市場上的通路庫存量嗎？那麼您預計這一數字在短期內會持續成長嗎？那你認為什麼時候會達到頂峰？謝謝。

We've heard various amounts of you call it statistics or number of -- we've heard it somewhere in the range of 150,000 to 180,000 metric tons right now of channel inventory and we're very insignificant part of that as some of our peers. I mean peer actually have a lot of inventory currently. So we'll see how that works.

我們聽說過你們稱之為統計數據或數量的各種說法——我們聽說過目前渠道庫存在150,000 到180,000 公噸的範圍內，而與我們的一些同行相比，我們在其中的比例非常微不足道。我的意思是同行目前實際上有很多庫存。那麼我們將看看它是如何工作的。

Okay. And then you talked about 70%, 80% are losing money. What's your guess as to what percentage of the industry could be shut down by the end of the year. I mean you think it could be as much as a quarter of the industry could be. Well, what percentage of the business of the industry could go out of business and maybe you could go away or what are your thoughts on that? Thanks.

好的。然後你談到70%、80%都在賠錢。您猜想今年年底該行業有多少比例可能會被關閉？我的意思是，你認為這個比例可能高達整個產業的四分之一。那麼，該行業有多少比例的業務可能會倒閉，也許您可能會離開，或者您對此有何想法？謝謝。

This is very ballpark. I think about half would shut down.

這是非常大概的。我認為一半會關閉。

Thank you. you mean exit?

謝謝。你的意思是退出？

Yeah. I mean, yeah, I think capacities that's kind of in China is definitely not competitive capacity at the current market and even some capacity in Mongolia it's can then compare to the current price.

是的。我的意思是，是的，我認為中國的產能在當前市場上絕對不是有競爭力的產能，甚至蒙古的一些產能也可以與當前價格進行比較。

Okay, last question --

好吧，最後一個問題——

Because not produce the sustainability. Okay.

因為不產生可持續性。好的。

Thank you. What are your thoughts on the Chinese government stepping in to influence or regulates maybe setting price caps or something like that we were reading and seeing some potential for that module industry. Do you think there could be something like that for poly where the government steps in to avoid this some overcapacity in the future?

謝謝。您對中國政府介入影響或監管、可能設定價格上限或類似的事情有何看法，我們正在閱讀並看到該模組產業的一些潛力。您認為保利是否會出現類似的情況，政府會介入以避免未來產​​能過剩？

We haven't heard about that at all. We haven't seen any government action.

我們根本沒聽過這個。我們還沒有看到任何政府行動。

Okay. Thank you very much. I'll pass it on.

好的。非常感謝。我會把它傳遞下去。

Okay. Thank you.

好的。謝謝。

[Alan Hahn], JPMorgan.

[艾倫·哈恩]，摩根大通。

Hi, this Alan from JP Morgan. I have like -- questions on the amount of capacity in the system right now and also like the outlook in the next one to two quarters and on other than you who else would be adding capacity? That would be my first questions.

大家好，我是摩根大通的艾倫。我對系統目前的容量有類似的疑問，也喜歡未來一到兩個季度的前景，以及除了您之外還有誰會增加容量？這是我的第一個問題。

Our standing a capacity in the system is around maybe 1.8 million to 2 million tons per year.

我們系統的常備產能約為每年 180 萬噸至 200 萬噸。

Got it. And my second question is like how do you -- what do you expect your cost structure will be with the new plant commencing in second quarter or for the new plant what do you expect the new plant's cost structure will be?

知道了。我的第二個問題是，您預計第二季啟動的新工廠的成本結構將如何，或者您預計新工廠的成本結構將是什麼？

Okay. I think at least as of today, okay. So we are expecting our costs to continue to decline. So I think preliminarily because we're ramping up in a Mongolia Phase 2. So costs for Q2, it is probably similar to slightly less than in Q1. And then we think costs will continue to trend down forward Q3 and Q4?

好的。我想至少從今天開始，好吧。因此，我們預計我們的成本將繼續下降。所以我認為，初步是因為我們正在蒙古第二階段加大力度。然後我們認為成本將在第三季和第四季繼續下降？

Well, I guess, like what's driving the cost down with the commencement of the new plan in second quarter that will be fully ramp up in Q3, right. So do you have like a target for the cost structure of the new plant?

嗯，我想，就像第二季新計劃開始時推動成本下降的原因一樣，新計劃將在第三季全面增加，對吧。那麼您對新工廠的成本結構有目標嗎？

Okay. Right. So I don't think we've discussed this earlier. So for the first time, Inner Mongolia cost is now below washing down cost, right. I don't know if you remember, so they know Mangolia costs, design was to be below the Gamba was higher than in -- franchise, I think. Q3, Q4 until this quarter. Sales, we had very same thing for improvements in quality as well.

好的。正確的。所以我認為我們之前沒有討論過這個問題。所以，內蒙古的成本現在第一次低於沖洗成本，對吧。我不知道你是否還記得，所以他們知道 Mangolia 的成本，設計是低於 Gamba 的，我認為比特許經營的要高。第三季、第四季直到本季。銷售方面，我們也有同樣的事情來提高品質。

So I think that gave us further confidence that once in the Mangolia phase 2 start, it should be able to see similar or even better trajectory in terms of cost reduction and quality improvements. Because of now we've done this one. So we know where all the issues are.

因此，我認為這給了我們進一步的信心，一旦 Mangolia 第二階段開始，它應該能夠在成本降低和品質提高方面看到類似甚至更好的軌跡。因為現在我們已經做到了這一點。所以我們知道所有問題出在哪裡。

Got it. Thanks. And there are automate all the question?

知道了。謝謝。並且有自動化所有的問題嗎？

Great. Thank you, Alan.

偉大的。謝謝你，艾倫。

This concludes our question and answer session. I would like to turn the conference back over to Anita Zhu for any closing remarks.

我們的問答環節到此結束。我想將會議轉回由 Anita Zhu 發表閉幕詞。

Thank you, everyone again for participating in today's conference call. Should you have any further questions please don't hesitate to contact us. Thank you and have an awesome day. Goodbye.

再次感謝大家參加今天的電話會議。如果您還有任何疑問，請隨時與我們聯繫。謝謝您，祝您有美好的一天。再見。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。

Event ID: 137307855735 Event Name: Q1 2024 Daqo New Energy Corp Earnings Call Event Date: 2024-04-29T12:00:00 UTC

活動ID：137307855735 活動名稱：大全新能源2024年第一季財報電話會議活動日期：2024-04-29T12:00:00 UTC

P: Operator;; C: Anita Zhu;Daqo New Energy Corp;IR C: Xiang Xu;Daqo New Energy Corp;Chairman of the Board, Chief Executive Officer C: Ming Yang;Daqo New Energy Corp;Chief Financial Officer P: Alan Lau;Jefferies LLC;Analyst P: Leo Ho;Daiwa Capital Markets;Analyst P: Phil Shen;ROTH MKM Partners, LLC;Analyst P: Alan Hahn;JPMorgan Chase & Co.;Analyst

P：操作員；； C: Anita Zhu;大全新能源公司;IR C: 徐翔;大全新能源公司;董事會主席、首席執行官 C: 楊明;大全新能源公司;首席財務官 P: Alan Lau;Jefferies LLC;分析師P：Leo Ho；Daiwa Capital Markets；分析師P：Phil Shen；ROTH MKM Partners, LLC；分析師P：Alan Hahn；摩根大通；分析師

Good day, and welcome to the Daqo New Energy first quarter 2024 results conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Xiang Xu, CEO. Please go ahead.

大家好，歡迎參加大全新能源2024年第一季業績電話會議。 （操作員說明）請注意此事件正在被記錄。現在我想把會議交給執行長徐翔。請繼續。

Hello, everyone. I'm Anita, the Investor Relations of Daqo New Energy. Thank you for joining our conference call today. So Daqo New Energy just issued its financial results first quarter of 2024, which can be found on our website at www.dqsolar.com. So today attending the conference call, we have our Chairman and CEO, Mr. Xiang Xu, our CFO, Mr. Ming Yang, and myself.

大家好。我是大全新能源投資者關係部的Anita。感謝您今天參加我們的電話會議。大全新能源剛剛發布了2024年第一季的財務業績，您可以在我們的網站www.dqsolar.com上找到該業績。今天參加電話會議的有我們的董事長兼執行長徐翔先生、我們的財務長楊明先生和我自己。

The call today will begin with an update from Mr. Xu, market conditions and company operations, and then Mr. Yang will discuss the company's financial performance for the quarter. After that, we'll open the floor to Q&A from the audience.

今天的電話會議首先由徐先生介紹最新情況、市場狀況和公司營運情況，然後楊先生將討論公司本季的財務表現。之後，我們將開始觀眾問答。

Before we begin the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth are forward-looking statements that are made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements.

在我們開始正式發言之前，我想提醒您，今天電話會議中的某些陳述，包括預期的未來營運和財務業績以及行業增長，都是根據美國私人證券訴訟改革的安全港條款做出的前瞻性陳述1995 年法案。許多因素可能導致實際結果與任何前瞻性陳述中包含的結果有重大差異。

Further information regarding these and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission. These statements only reflect our current and preliminary view as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. All information provided in today's call is as of today, and we undertake no duty to update such information except as required under applicable law.

有關這些風險和其他風險的更多資訊包含在我們向美國證券交易委員會提交或提供的報告或文件中。這些陳述僅反映我們截至今天的當前和初步觀點，可能會發生變化。我們實現這些預測的能力受到風險和不確定性的影響。今天的電話會議中提供的所有資訊均為截至今天的信息，除非適用法律要求，否則我們不承擔更新此類資訊的義務。

Also during the call, we will occasionally reference monetary amounts in US dollar terms. Please keep in mind that our functional currency is the Chinese RMB. We offer these translations into US dollars solely for the convenience of the audience. Mr. Xu will make his remarks regarding current market conditions and company performance in Chinese, which I'll translate into English after he finishes.

此外，在電話會議期間，我們偶爾會提及以美元計算的金額。請記住，我們的功能貨幣是人民幣。我們將這些翻譯成美元只是為了方便觀眾。徐先生將以中文就當前市場狀況和公司業績發表講話，他講完後我會將其翻譯成英文。

Now I'll turn the call to our CEO.

現在我將把電話轉給我們的執行長。

(interpreted) Hello, everyone. This is Anita. Thank you for joining the call. So I'll now translate our CEO, Mr. Xu's remarks. In the first quarter, we continued to optimize our manufacturing operations and made improvements in both yield and throughput at our two poly facilities. Total production volume for the quarter was 62,278 metric tons, which was above our expectations and represented an increase of 1,264 metric tons compared to the previous quarter.

（譯）大家好。這是安妮塔。感謝您加入通話。現在我來翻譯一下我們徐總的演講。第一季度，我們繼續優化製造業務，並提高了兩個多晶矽工廠的產量和吞吐量。本季總產量為 62,278 噸，超出我們的預期，較上季增加 1,264 噸。

Our Inner Mongolia 5A facility contributed 46% of our total production volume for the first quarter. Through achieve mounting R&D and significant purity improvements that are both -- at both facilities, we've further increased our N-type product mix from 60% in December last year to 72% in March. Compared to the end of last year, production called trended down over the quarter, decreasing further by 2% from fourth quarter 2023 to an average of [USD6.737] per kilogram in the first quarter of 2024.

我們的內蒙古 5A 工廠貢獻了第一季總產量的 46%。透過在兩個工廠持續進行研發和顯著提高純度，我們進一步將 N 型產品組合從去年 12 月的 60% 增加到 3 月的 72%。與去年底相比，本季產量呈下降趨勢，較 2023 年第四季進一步下降 2%，至 2024 年第一季平均每公斤 [6.737 美元]。

For the quarter, we generated $77 million in EBITDA. By the end of first quarter 2024, the company maintain a strong cash balance of $2.7 billion and a combined cash and bank note receivable balance of USD2.9 billion. We expect second quarter 2024 total poly and production volume to be approximately 60,000 metric ton to 63,000 metric tons. Similar to that of first quarter 2024, as the company maintains full production.

本季度，我們實現了 7,700 萬美元的 EBITDA。截至 2024 年第一季末，該公司維持著 27 億美元的強勁現金餘額，應收現金和銀行票據餘額總計為 29 億美元。我們預計 2024 年第二季聚酯總產量和產量約為 60,000 噸至 63,000 噸。與 2024 年第一季類似，公司保持滿載生產。

We expect to finish construction and begin initial pilot production at our new Inner Mongolia Phase 5B facility in the second quarter of 2024 and expect to ramp up to full production level by the end of third quarter 2024. As a result, we anticipate full year 2024 production volume to be in the range of [280,000] metric ton to 300,000 metric tons, approximately 40% to 50% higher than that of 2023.

我們預計新的內蒙古 5B 期工廠將於 2024 年第二季完成建設並開始初步試生產，並預計在 2024 年第三季末達到全面生產水準。 ]噸至30萬噸之間，比2023年增加約40%至50%。

With one and 15 years of experience in poly production as well as a fully digitalized and integrated production system that optimizes operational efficiency will continue to increase our entire production in the product mix.

憑藉一年和十五年的多晶矽生產經驗以及優化營運效率的完全數位化和整合的生產系統，將繼續增加我們產品組合中的整個產量。

During the first quarter, the solar market initially showed signs of strength as we head into the Chinese New Year holiday set February, despite production cuts and downtime, as usual during the holidays, polysilicon demand had been strong pre-holiday at the wafer manufacturers kept utilization rate unchanged or even higher in anticipation of higher demand and better product pricing post holidays.

一季度，隨著2月份農曆新年假期的臨近，太陽能市場初步顯現出走強跡象，儘管節假日期間有減產和停工，但矽片製造商在節前仍保持強勁的多晶矽需求由於預期節後需求增加和產品定價更好，利用率維持不變甚至更高。

The general polysilicon price range was RMB65 to RMB70 per kilogram for N-type and RMB55 to RMB60 per kilogram for P-type during this period. However, with weaker than expected production plans downstream starting March, the wafer sector faced significant pressure from accumulated inventory and negative margins.

在此期間，多晶矽的整體價格範圍為N型每公斤65至70元，P型每公斤55至60元。然而，由於3月開始下游生產計畫弱於預期，矽片產業面臨庫存累積和負利潤的巨大壓力。

Market sentiment shifted significantly in mid-March with widespread expectations of falling prices throughout the value chain, particularly for polysilicon. As a result, downstream manufacturers began to lower utilization, reduce inventory and delay orders to minimize the impact of falling prices.

3 月中旬，市場情緒發生顯著變化，人們普遍預期整個價值鏈（尤其是多晶矽）的價格將會下跌。於是，下游廠商開始降低開工率、減少庫存並延後訂單，以盡量減少價格下跌的影響。

In April, further pressure on polysilicon prices emerge as the issue of excess inventory among the wafer manufacturers worsen and wafer customers further delayed orders and product delivery. Therefore, polysilicon prices dropped further by late April to RMB47 to RMB54 per kilogram for Tier 1 producers at the industry's cash breakeven costs.

進入4月份，矽片廠商庫存過剩問題進一步惡化，矽片客戶訂單和產品交付進一步推遲，多晶矽價格進一步承壓。因此，到 4 月下旬，以產業現金盈虧平衡成本，一級生產商的多晶矽價格進一步下跌至每公斤 47 元至 54 元人民幣。

At this level, we believe the entire solar value chain, including polysilicon, is likely to be loss-making in general, and that a large number of polysilicon producers are currently unprofitable. The solar industry has gone through multiple cycles in the past and based on our previous experience, we believe that the current low prices and market downturn will eventually result in a healthier market as for profitability and losses, as well as Casper will lead to many market players exiting the business with some possible bankruptcies.

在這個水準上，我們認為包括多晶矽在內的整個太陽能價值鏈可能總體上處於虧損狀態，並且大量多晶矽生產商目前無利可圖。太陽能產業在過去經歷了多個週期，根據我們先前的經驗，我們認為當前的低價和市場低迷最終會導致市場在盈利和虧損方面更加健康，而Casper將導致許多市場退出該業務的參與者可能會破產。

This will bring the inevitable capacity rationalization and solve the overcapacity issue we are currently experiencing and as demand growth resumes after excess inventories are depleted in the short term and on the backdrop of positive policies pushing renewable installations in the long run, the solar PV industry will return to more normal profitability and achieve better margins. We believe that at the end of the quarter we had one of the industry's lowest levels of finished goods inventory was approximately two weeks of production.

這將不可避免地帶來產能合理化，解決當前產能過剩問題，短期內過剩庫存耗儘後，隨著需求成長恢復，長期來看，在利好政策推動再生能源裝載機的背景下，太陽能光電產業將恢復更正常的獲利能力並實現更好的利潤率。我們相信，到本季末，我們的成品庫存水準處於行業最低水準之一，約為兩週的生產量。

Overall, 2023 markets step change for renewable power growth with China's newly installed solar PV capacity reaching a record high of 216.9 gigawatts, representing 148% year-over-year growth. We continued to see strong growth in solar PV installations in China during the first quarter of 2024, which reached an aggregate of 45.7 gigawatt, representing a 36% year-over-year growth rates.

整體而言，2023年再生能源發電市場將出現階段性變化，中國新增太陽能光電裝置容量將達到216.9吉瓦的歷史新高，較去年同期成長148%。 2024年第一季度，中國太陽能光電裝置容量持續強勁成長，總計達45.7吉瓦，年增36%。

Solar has become one of the most competitive forms of power generation and continuous cost reductions and solar PV products and associated reduction in solar energy generation costs are expected to create substantial additional demand for solar PV.

太陽能已成為最具競爭力的發電形式之一，成本的持續降低和太陽能光伏產品以及太陽能發電成本的相關降低預計將為太陽能光伏創造大量額外需求。

With 2023, setting the stage for gradually phasing out peak type products, we believe that 2024 will mark a year when N-type products dominate the industry. We are optimistic that we'll capture the long-term benefits of the growing global solar PV market and maintain our competitive advantage by enhancing our higher efficiency, N-type technology and optimizing our cost structure through digital transformation and AI adoption.

隨著2023年高峰型產品逐步淘汰，我們相信2024年將是N型產品佔據產業主導地位的一年。我們樂觀地認為，我們將透過數位轉型和人工智慧的採用來增強我們更高效率的N型技術並優化我們的成本結構，從而抓住不斷增長的全球太陽能光伏市場的長期利益，並保持我們的競爭優勢。

As one of the world's lowest cost producers with the highest quality and type product, a strong balance sheet and no financial debt, we believe we're very well positioned to weather the current market down cycle and emerge as one of the leaders in the industry to capture the market's future growth.

作為世界上成本最低的生產商之一，擁有最高品質和類型的產品、強大的資產負債表並且沒有金融債務，我們相信我們有能力度過當前的市場下行週期，並成為行業的領導者之一抓住市場的未來成長。

Now I will turn the call to our CFO, Mr. Ming Yang, who will discuss the company's financial performance for the quarter. Ming, please go ahead.

現在我將致電我們的財務長楊明先生，他將討論公司本季的財務表現。明，請繼續。

Hello, everyone, who is the CFO of Daqo New Energy. We appreciate you joining our earnings conference call today.

大家好，我是大全新能源的CFO。我們感謝您今天參加我們的收益電話會議。

I will now go over the company's first quarter 2024 financial performance. Revenues were $415.3 million compared to $476.3 million in the fourth quarter of 2023. And this and some [$109 million] in the first quarter of 2023. The decrease in revenue compared to the fourth quarter of 2023 was primarily due to a decrease in average selling prices and lower polysilicon sales volumes.

我現在回顧一下公司2024年第一季的財務表現。營收為 4.153 億美元，而 2023 年第四季為 4.763 億美元。和多晶矽銷量下降。

Gross profit was $72 million compared to $87 million in the fourth quarter of 2023 and $506 million in the first quarter of 2023. Gross margin was 17.4% compared to 18.3% in the fourth quarter of 2023 and 71.4% in the first quarter of 2023. The decrease in gross margin compared to the fourth quarter of 2023 was primarily due to lower average selling prices, which was partially mitigated by lower production costs.

毛利為7,200 萬美元，而2023 年第四季為8,700 萬美元，2023 年第一季為5.06 億美元。 71.4%。

Selling, general and administrative expenses were $38.4 million compared to $39 million in the fourth quarter of 2023 and $41.3 million in the first quarter of 2023. As G&A expenses during the first quarter included $19.6 million in noncash share-based compensation costs related to the company's share incentive plan compared to $19.6 million in the fourth quarter of 2023.

銷售、一般及管理費用為3,840 萬美元，而2023 年第四季為3,900 萬美元，2023 年第一季為4,130 萬美元。補償成本股權激勵計畫相比，2023 年第四季為 1,960 萬美元。

R&D expenses were $1.5 million compared to $3.3 million in the fourth quarter of 2023 and $1.9 million in the first quarter of 2023. R&D expenses vary from period to period and reflect the R&D activities that take place during the quarter. Our R&D activities currently focus on process and technologies to improve purity for polysilicon and remove contamination to increase our N-type polysilicon percentage.

研發費用為 150 萬美元，而 2023 年第四季為 330 萬美元，2023 年第一季為 190 萬美元。我們的研發活動目前主要集中在提高多晶矽純度和去除污染的製程和技術上，以提高我們的 N 型多晶矽百分比。

As a result of the foregoing, income from operations were $30.5 million compared to $83.3 million in the fourth quarter of 2023 and $462.8 million in the first quarter of 2023. Operating margin was 7.3% compared to 17.5% in the fourth quarter of 2023 and 65% in the first quarter of 2023. Foreign exchange loss was $0.3 million compared to a loss of $0.8 million in the fourth quarter 2023, and is attributed to the volatility and fluctuations of the US dollar to RMB exchange rate during the quarter.

綜上所述，營運收入為3,050 萬美元，而2023 年第四季為8,330 萬美元，2023 年第一季為4.628 億美元。 2023 年第四季為65 2023 年第一季外匯損失為 30 萬美元，而 2023 年第四季為損失 80 萬美元，歸因於該季度美元兌人民幣匯率的波動和波動。

Net income attributable to Daqo New Energy shareholders was $15.5 million compared to $53.3 million in the fourth quarter of 2023 and $278.8 million in the first quarter of 2023. Earnings per basic ADS was $0.24 compared to $0.76 in the fourth quarter of 2023 and 3.56 in the first quarter of 2023.

大全新能源股東應佔淨利為1,550 萬美元，而2023 年第四季為5,330 萬美元，2023 年第一季為2.788 億美元。 0.76 美元，2023 年第一季為3.56 美元。

Adjusted net income attributable to Daqo New Energy Corp shareholders, excluding non-cash share-based compensation costs, was $36 million compared to $74.3 million in the fourth quarter of 2023 and $210 million in the first quarter of 2023. Adjusted earnings per basic ADS was 0.55 compared to 1.6 in the fourth quarter of 2023 and 3.96 in the first quarter of 2023.

調整後歸屬於大全新能源公司股東的淨利潤（不包括非現金股份補償成本）為3,600 萬美元，而2023 年第四季為7,430 萬美元，2023 年第一季為2.1 億美元。股基本美國存託憑證收益為0.55，而 2023 年第四季為 1.6，2023 年第一季為 3.96。

EBITDA was $76.9 million compared to $128 million in the fourth quarter of 2023 and $490 million in the first quarter of 2023. The EBITDA margin was 18.5% compared to 26.9% in the fourth quarter of 2023 and 69% in the first quarter of 2023.

EBITDA 為7,690 萬美元，而2023 年第四季為1.28 億美元，2023 年第一季為4.9 億美元。 69%。

Now on the company's financial condition. As of March 31, 2024, the company had $2.689 billion in cash and cash equivalents compared to $3.05 billion as of December 31, 2023, and $4.1 billion as of March 31, 2023. And as of March 31, 2024, the notes receivable balance was $194 million compared to $116 million as of December 31, 2023, and $791 million as of March 31, 2023. No receivables are present bank notes with maturity within six months.

現在介紹一下公司的財務狀況。截至2024年3月31日，該公司擁有現金及現金等價物26.89億美元，而截至2023年12月31日為30.5億美元，截至2023年3月31日為41億美元。日，應收票據餘額為 1.94 億美元，而截至 2023 年 12 月 31 日為 1.16 億美元，截至 2023 年 3 月 31 日為 7.91 億美元。

For the three months ended March 31, 2024, net cash used in operating activities was $113.9 million compared to net cash provided by operating activities of $807 million in the same period of 2023.

截至2024年3月31日的三個月，經營活動使用的現金淨額為1.139億美元，而2023年同期經營活動提供的現金淨額為8.07億美元。

Net cash used in operating activities for the quarter was the result of change in operating assets and liabilities, primarily related to the company's payment of approximately $75 million in tax payable is due during the first quarter as well as an increase in the receivable balance of approximately $78 million and other items that used cash include payments to suppliers in conjunction with the period related to the Chinese New Year holidays as well as the increase in inventory.

本季度經營活動使用的現金淨額是經營資產和負債變化的結果，主要與公司在第一季度支付約 7500 萬美元的應付稅款以及應收賬款餘額增加約7800萬美元和其他使用現金的項目包括與農曆新年假期相關的期間向供應商付款以及庫存增加。

For the three months ended March 31, 2024 net cash used in investing activities was $190.5 million compared to $268.9 million in the same period of 2023. Net cash used in investing activities in the first quarter of 2024 was primarily related to the capital expenditures on the company's Phase 5A and Phase 5B policy can expansion projects in Balto city Inner Mongolia. Due to the recent changes in market condition, the company's Board and management team have decided to temporarily postpone the company's non-polysilicon manufacturing capacity expansion plans to reserve capital.

截至 2024 年 3 月 31 日的三個月，投資活動使用的現金淨額為 1.905 億美元，而 2023 年同期為 2.689 億美元。和5B期政策可擴建工程位於內蒙古巴爾托市。因近期市場狀況發生變化，公司董事會及營運團隊決定暫時延後公司非多晶矽產能擴張計劃，以儲備資金。

As such, the company's capital expenditure plan has been reduced to approximately $700 million for the year, which is related to the company's Inner Mongolia polysilicon project and this represents a significant decrease from the previous capital expenditure plan for the year of approximately $1.1 billion to $1.2 billion.

因此，公司本年度的資本支出計畫已減少至約7億美元，與公司的內蒙古多晶矽項目相關，較先前的年度資本支出計畫約11億美元大幅減少至1.2美元。

And for the three months ended March 31, 2024, net cash used in finance activities was $6 million compared to net cash provided by financing activities of $59.9 million in the same period of 2023. Net cash used in finance activities in the first quarter of 2024 was primarily related to approximately $5 million used for the company's share repurchase.

截至2024 年3 月31 日的三個月，財務活動使用的現金淨額為600 萬美元，而2023 年同期融資活動提供的現金淨額為5,990 萬美元。淨額主要與用於公司股票回購的約500萬美元有關。

And that concludes our prepared remarks. We will now open the call to Q&A from the audience. Operator, please begin.

我們準備好的發言就到此結束。我們現在將開始觀眾問答環節。接線員，請開始。

We will now begin the question and answer session. (Operator Instructions) Phil Shen, ROTH MKM.

我們現在開始問答環節。 （操作員說明）Phil Shen，ROTH MKM。

Phil, your line is open if you'd like to ask your question. Yes, we seem to be unable to connect to Phil Shen's audio. The next question comes from Alan Lau, Jefferies.

菲爾，如果您想提出問題，您的熱線已開放。是的，我們似乎無法連接 Phil Shen 的音訊。下一個問題來自 Jefferies 的 Alan Lau。

Thanks a lot for taking my question management. So I think as the first question that I've received after the announcement is about the buyback. So I wonder if there's any guidance from the management in regards to buyback or dividends are planned in this year.

非常感謝您接受我的問題管理。因此，我認為公告發布後收到的第一個問題是關於回購的。所以我想知道管理層今年是否有關於回購或股息計劃的任何指導。

Okay. So the Board actually had a discussion about potentially potential a share continue to do the share repurchase program. I think in light of the current market condition where the industry overall is actually looking like going to be making losses were uncertain. How long this might last? so the Board does feel like it's more prudent to conserve capital for now to weather the market downturn.

好的。因此，董事會實際上討論了繼續進行股票回購計劃的潛在潛力。我認為，鑑於當前的市場狀況，整個行業實際上看起來會虧損，這是不確定的。這可能會持續多久？因此，董事會確實認為目前保存資本以因應市場低迷更為謹慎。

And then they would like to see how the market would perform and if the market does improve perhaps later in the year, I think the Board would definitely consider a program at a later date as appropriate. I think to us either because of the market condition I think the Board does feel that we need to conserve capital. I think, including though we significantly reduced our capacity expansion plan.

然後他們想看看市場表現如何，如果市場確實在今年稍後有所改善，我認為董事會肯定會在適當的稍後考慮一項計劃。我認為對我們來說，由於市場狀況，我認為董事會確實認為我們需要節省資本。我認為，包括儘管我們大幅減少了產能擴張計劃。

And separately I think the company is also should strategically looking at potential expansions overseas outside of China, including in areas of the Middle East, where we're actually looking at several locations pretty actively and then also potentially in other areas in Southeast Asia as well. So that also represents a potential use of funds for the company. So the Board is also making some considerations because of that as well.

另外，我認為該公司也應該策略性地考慮中國以外的海外潛在擴張，包括中東地區，我們實際上正在非常積極地尋找幾個地點，然後也可能在東南亞其他地區。因此，這也代表了公司資金的潛在用途。因此董事會也在考慮這一點。

Well, I see. So another question I have is on the US volume. So in terms of the production and actually the company has actually -- will have an upside surprise in the production volume, but it sells things are lower than the production volumes. So would like to know how much is the inventory right now in the company. And also this in regards to the sales volume in the first quarter, was it related to the cut in utilization rate in wafer segment?

嗯，我明白了。我的另一個問題是關於美國的銷售。因此，就產量而言，實際上該公司的產量實際上會出現上行驚喜，但其銷售量低於產量。所以想知道現在公司的庫存是多少。還有第一季的銷量，是否與晶圓板塊的利用率下降有關？

Okay. Yes, I think operationally, the company actually was doing very well this quarter. I think if we exclude the impact of the market condition in the second half of March, I think we produce more than 62,000 metric tons, an increase of the previous quarter. So this is a pretty good improvement. Particularly on the quality side, we made very significant improvements in quality, particularly in Mongolia facility.

好的。是的，我認為在營運方面，該公司本季實際上表現得非常好。我認為，如果我們排除3月下半月市場狀況的影響，我認為我們的產量將超過62,000噸，比上季度增加。所以這是一個非常好的改進。特別是在品質方面，我們在品質方面取得了非常顯著的進步，特別是在蒙古工廠。

So any type of margins now north of 70% of our mix and the same time, we also saw further reduction in production costs, I think just to start in a sense and then March, the industry conditions declined significantly. I think customers delayed their orders, they delayed delivery of polysilicon for production, the lower utilization, I think, in anticipation of lower polysilicon pricing, but also because of the significant wafer inventory sales occurring at the time.

因此，現在任何類型的利潤率都超過了我們組合的 70%，同時，我們也看到生產成本進一步下降，我認為從某種意義上來說只是開始，然後 3 月份，行業狀況顯著下降。我認為客戶推遲了訂單，推遲了用於生產的多晶矽的交付，我認為利用率較低，是因為預期多晶矽價格較低，但也是因為當時出現了大量的晶圓庫存銷售。

Yes. So actually, this situation actually persistent more or less through mid to late April. I think now we're shipping normally, but at a much lower pricing. At the end of the quarter, we had approximately a two weeks, slightly less than two weeks of production of finished goods inventory. So we think that's probably one of the lowest within the industry.

是的。所以實際上，這種情況其實一直持續到4月中下旬。我認為現在我們可以正常發貨，但價格要低得多。在本季末，我們有大約兩週、略少於兩週的產成品庫存。所以我們認為這可能是業內最低的之一。

It's two weeks of inventory is actually quite impressive. So I had a question I have is on the other operating income. So the Q-o-Q change as a relatively significant. So I'd like to know if it relate to the change in the subsidies provided in terms of the power tariff?

兩週的庫存量確實相當可觀。所以我有一個問題是關於其他營業收入的。所以 Q-o-Q 的變化是比較顯著的。那麼我想知道這是否與電價補貼的變化有關？

So actually, I believe we had other. So it's actually an expense for the quarter rather than the income and then related to some of the older equipment that we replaced. So though we equipment needs to be expensed which longer being used. It amounted to about $1.6 million. So it's not too significant as this happens maybe once a year or something like that.

所以實際上，我相信我們還有其他的。所以它實際上是該季度的支出而不是收入，然後與我們更換的一些舊設備有關。因此，儘管我們的設備需要花費更長的時間來使用。金額約 160 萬美元。所以這並不太重要，因為這種情況可能每年發生一次或類似的情況。

I see. So in the first quarter, there isn't any subsidies coming in, right, like in 4Q?

我懂了。那麼第一季沒有任何補貼，對吧，就像第四季一樣？

Yeah. We would expect some subsidy potentially in the second quarter. And the more subsidy likely in the fourth quarter. Usually is in the second half of the year.

是的。我們預計第二季可能會出現一些補貼。第四季可能會有更多補貼。一般是在下半年。

So my last question is regards to the industry like how do you see the poly price going forward this year and then when you will see a turnaround in the industry?

所以我的最後一個問題是關於這個行業的，例如你如何看待今年的多晶價格，然後你什麼時候會看到這個行業的改善？

Okay. So the most recent price decline, we believe actually is more of our resolve then the inventory adjustment that's happening, right? So customers delaying orders in line with the expectations of a lower pricing in future periods, right. So people tend to want to take a wait and see mode. And now at the lower price, we're starting to see and orders returning also at a lower pricing level. And we think the pricing level where the industry is right now is actually money-losing probably for costsa 70%, 80% of the industry. So I think almost majority of the players are losing money right now and this certainly cannot be sustainable.

好的。因此，我們認為最近的價格下跌實際上更多的是我們的決心，而不是正在發生的庫存調整，對嗎？因此，客戶推遲訂單是為了符合未來一段時間內較低定價的預期，對吧。因此人們傾向於採取觀望模式。現在，在較低的價格下，我們開始看到訂單也以較低的價格水平返回。我們認為，對於該行業 70%、80% 的成本來說，目前該行業的定價水準實際上是在虧損的。所以我認為幾乎大多數玩家現在都在賠錢，這肯定是不可持續的。

I think of this five-step process, it's a matter of time. The number of players will likely need to shut down or some of the major recent exit of the business are going to be a bankruptcy. I think we're likely to see that as price stays at this low level, but then I will bring the eventual capacity rationalization right. I think that people are expecting.

我認為這五個步驟的過程，只是時間問題。大量的玩家可能需要關閉，或者最近一些主要的業務退出將是破產。我認為，隨著價格保持在如此低的水平，我們可能會看到這種情況，但隨後我將實現最終的產能合理化。我認為人們正在期待。

And at the same time, you also have a lot of opportunity on demand. So also, we think China is likely to be very strong this year because of where the panel prices right now. So it's offering very high return for the solar projects in China, I think globally as well. So we are optimistic that we could see a very significant end market this year. So I think it's the balance of these two. Any timing hard to tell. I think we could see some improvement in the second half of this year.

同時，你也有很多按需的機會。因此，我們認為，由於目前面板價格，中國今年可能會非常強勁。因此，它為中國的太陽能專案提供了非常高的回報，我認為在全球範圍內也是如此。因此，我們樂觀地認為今年我們可能會看到一個非常重要的終端市場。所以我認為這是兩者的平衡。任何時間都很難說。我認為今年下半年我們可以看到一些改善。

Thank you. So I think the -- so let's talk about the a lot of players are actually losing money so are you going to delay your Phase 5B or like what is the capital going to look like in this year, especially at current prices?

謝謝。所以我認為——所以讓我們談談很多玩家實際上都在虧損，所以你會推遲你的第 5B 階段嗎？

So we're delaying everything else, almost everything else, except 5Bs, because 5Bs already ready to go into production because it's been under construction for a year or over a year. So I think, frankly, we're still at least for now as of today, it's still being planned originally scheduled to start production in Q2 in this quarter, actually initial production and then ramp up in Q3.

因此，我們推遲了其他所有事情，幾乎所有其他事情，除了 5B，因為 5B 已經準備好投入生產，因為它已經建造了一年或一年多。所以我認為，坦白說，至少到目前為止，我們仍然計劃原定在本季第二季開始生產，實際上是初步生產，然後在第三季增加。

So that's all. 'll take a pass on. And yeah, I'll pass on to our investors. Thanks a lot for taking my questions.

就這樣。會接受的。是的，我會將其轉達給我們的投資者。非常感謝您回答我的問題。

Okay. Thank you.

好的。謝謝。

Leo Ho, Daiwa Capital Markets.

Leo Ho，大和資本市場。

Thanks, management for your time today. My first question is regarding the FBR granular, a circuit. We noticed as our circle major module makers, including, for example, long G&JK as suggesting that the [FPR] go paying ratio. Now they can do around [50%] for N-type wafer. I just wonder if we can share any update on this SPL use a situation was Altec and Amgen of why we're seeing such a sudden increase in at ratio. Thank you.

謝謝管理層今天抽出時間。我的第一個問題是關於 FBR 顆粒電路。我們注意到，我們圈子裡的主要模組製造商，包括長期的 G&JK，都表明 [FPR] 會支付比率。現在他們可以為 N 型晶圓做到 [50%] 左右。我只是想知道我們是否可以分享有關此 SPL 使用情況的任何更新，Altec 和 Amgen 解釋了為什麼我們看到比率突然增加。謝謝。

I think on the FPR, at least based on feedback from our customers, it continues to have higher levels of contaminants and higher surface metal and the higher hydrogen and higher carbon. So is I think the challenge with most of the wafer producer is that the higher carbon content actually leads to a breaking of the waterfall. So and then also the contamination and also the hydrogen jumping issue means that less amount of poly can be used per program.

我認為在 FPR 上，至少根據我們客戶的回饋，它仍然具有更高水平的污染物和更高的表面金屬以及更高的氫和碳。我認為大多數晶圓生產商面臨的挑戰是，較高的碳含量實際上會導致瀑布的破裂。因此，污染和氫跳躍問題意味著每個程序可以使用更少的多晶矽。

So we use it we are already have a slight reduction in production yield per run on the ingot. So and that's the main reason why customers require discount and currently primarily use it as a mix. In a previous understanding is the mix is between 10% to 30%. You've I think every producer probably has a slightly different mix.

因此，當我們使用它時，鑄錠每次運行的產量已經略有下降。這就是客戶要求折扣並且目前主要將其作為組合的主要原因。之前的理解是混合比例在10%到30%之間。我認為每個製作人的組合可能都略有不同。

I think, some of them, the main player, all these players also our customer, I think, I don't even wanted to diversify their sourcing or maybe they want to lower their costs, right? So they're always looking for lower costs sources. So they can extent that they can use, right? So we're not surprised that there are some kind of agreement. And lease agreements always at least in China and there's always these are kind of framework agreements ratio. So the volume and pricing is adjusted amongst the gates.

我認為，其中一些是主要參與者，所有這些參與者也是我們的客戶，我想，我什至不想使他們的採購多樣化，或者也許他們想降低成本，對嗎？因此，他們總是在尋找成本較低的來源。這樣他們就可以擴大他們的使用範圍，對吧？因此，我們對達成某種協議並不感到驚訝。至少在中國總是有租賃協議，而且總是有框架協議的比例。因此，數量和價格會在各個大門之間進行調整。

Understood. That's very clear. My next question is regarding the price gap for different type of policy, I can say, for example, N-type versus P-type and then also for N-type high-quality polysilicon that we put against at FBR, what are those price gaps going to look high right now and also looking forward? Thank you.

明白了。這非常清楚。我的下一個問題是關於不同類型政策的價格差距，我可以說，例如，N型與P型，然後還有我們在FBR反對的N型高質量多晶矽，這些價格是多少現在和未來的差距看起來會很大嗎？謝謝。

I think consistently the N-type poly has had price premium in the range of maybe RMB5 to RMB10 per kilogram. I think currently is somewhere in the RMB7 to RMB8 per kilogram still even the current pricing. Well FBR is generally priced at a discount to the P-type poly, generally, above the FBR has different grades price, right? But within N-type and P-type, there's is also different grades in generally related to the form factor of the surface structure. Yeah. So it's not like one single price, so it's usually a range of price.

我認為 N 型多晶矽的溢價一直在每公斤 5 至 10 元人民幣之間。我認為目前的價格仍然在每公斤7元到8元之間。那麼FBR的價格一般比P型多晶要打折扣，一般FBR上面都有不同檔次的價格吧？但在N型和P型中，也有不同的等級，一般與表面結構的形狀因素有關。是的。所以它不像一個單一的價格，所以它通常是一個價格範圍。

And my last question is regarding electricity tariffs for about how and what's the capacities? Would there be any like electricity to have changes that we expected for this year of ownership?

我的最後一個問題是關於電價，電價如何以及容量有多大？是否會有像電力這樣的變化來改變我們今年的所有權預期？

No, we expect any electricity tariff adjustments on the electricity rates?

不，我們預期電價會有所調整嗎？

Thanks so much. Exactly. Thank you.

非常感謝。確切地。謝謝。

Okay. I think first thing, Xiang, we're expecting the rate to be a very stable. I think the rate has been fixed. The previous adjustments was mostly related to -- I think of a policy issued by NDRC that kind of a bid, single entity type of energy price structure. At the same time, we also -- of course, at a time where and the coal prices, which was at a higher price. So our utility company actually was losing money on the power sales to us, on the power generators.

好的。我認為首先，Xiang，我們預計利率將非常穩定。我認為利率已經確定了。先前的調整主要與──我認為國家發展委員會發布的政策，那種招標、單一實體類型的能源價格結構有關。同時，當然，當時煤炭價格也較高。因此，我們的公用事業公司實際上在向我們銷售電力、發電機方面虧損了。

So after the rate adjustment, that's no longer the case and we continue to have the most favorable utility rate for that local utility for the region and very still competitive. But we don't expect that to change or the rate to change. And some noise for in Mongolia, in the Mongolia already had an adjustment, I think around in the first half of 2023, I believe. Also based on the NDRC rule.

因此，費率調整後，情況不再如此，我們繼續享有該地區當地公用事業最優惠的公用事業費率，並且仍然具有競爭力。但我們預期這種情況或利率不會改變。蒙古的一些噪音，蒙古已經進行了調整，我認為大約在 2023 年上半年。亦以國發改委規定為依據。

So now the Inner Mongolia restructure is actually a market-based structure, were actually the rays not actually floating based on market supply and demand for the utility market. But because we buy or a significant portion of our power comes from renewables and renewable pricing utility is lower than coal for the Inner Mongolia grid. So and also, we have the most preferential pricing for the whole local grid there. So we do have think we have a very, very utility price there and we don't expect that to change, because it's already being adjusted.

所以現在內蒙古的重組其實是一個市場化的結構，實際上光線不是根據公用事業市場的市場供給來浮動的。但因為我們購買或很大一部分電力來自再生能源，而內蒙古電網的再生能源定價效用低於煤炭。因此，我們對整個當地電網有最優惠的定價。因此，我們確實認為那裡的公用事業價格非常非常高，我們預計這種情況不會改變，因為它已經在調整。

Thank you so much for the additional color. These are all from my side. Thank you.

非常感謝您提供額外的顏色。這些都是我這邊的。謝謝。

Yeah great. Thank you.

很好。謝謝。

(Operator Instructions)

（操作員說明）

Phil Shen, ROTH MKM.

Phil Shen，羅斯 MKM。

Hi, everyone. Thanks for taking my questions. I'm sorry about the technical difficulties earlier. I'd like to explore price just a little bit more. Can you give us a sense of pricing beyond this year as well. Do you think there could be some recovery next year and we've seen price decline recently and some of the experts that we've been consulting with, suggests that prices will continue to decline as we go through the year. So wondering if you can give us a view of 2025. Thanks.

大家好。感謝您回答我的問題。對於之前的技術困難，我深感抱歉。我想進一步探討一下價格。您能否為我們介紹一下今年以後的定價狀況？您認為明年可能會出現一些復甦嗎？所以想知道您能否為我們介紹一下 2025 年的情況。

Okay. I -- we do think pricing is probably it is at the bottom, if not at the bottom near the very bottom, this ready below cash breakeven price for a lot of the producers. We think 70% to 80% -- we think starting in the next two months or so, we will start to see -- we are already starting to see shutdowns and we will see more shutdowns going forward. If this persists through Q3 and we think on some of the producers will arrive to cash problem and then if it goes into next year, we'll and I mean, we might see an OCI like what type of shutdown, right I think some investors might remember [osage], -- was kind of gave up.

好的。我——我們確實認為定價可能處於底部，即使不是接近底部的底部，對於許多生產商來說，這已經低於現金盈虧平衡價格。我們認為 70% 到 80%——我們認為從未來兩個月左右開始，我們將開始看到——我們已經開始看到停工，我們將看到更多的停工。如果這種情況持續到第三季度，我們認為一些生產商將遇到現金問題，然後如果進入明年，我的意思是，我們可能會看到OCI，例如什麼類型的關閉，對吧，我認為一些投資人可能還記得[osage]，——有點放棄了。

So I think it is price stays low, we will see this kind of condition. We don't think price can stay this low until, say through next year. Certainly, you would have much lower production of poly than in this plan is not sufficient to service the market and the demand growth, because I know some of that the current market conditions due to inventory adjustments, right.

所以我認為價格保持在低位，我們會看到這種情況。我們認為價格不會保持在這麼低的水平，直到明年。當然，你的多晶矽產量會比這個計劃低得多，不足以滿足市場和需求增長，因為我知道當前的市場狀況是由於庫存調整造成的，對吧。

So and then ultimately in the downstream, customers will need to restart, buying again, right? Because they bought, probably more than they need in, say, in the first half of the quarter. And then when -- they expected demand or price increase did not materialize in second half of March that's when they slow down or stop ordering. So it's kind of market behavior that's creating kind of the volatility that we're seeing in the market.

那麼最終在下游，客戶將需要重新啟動，再次購買，對吧？因為他們購買的東西可能比他們需要的東西多，例如在本季的上半季。然後，當他們預期的需求或價格上漲在三月下半月沒有實現時，他們就會放慢或停止訂購。因此，正是這種市場行為造成了我們在市場上看到的波動。

Got it. Thanks Ming Yang. Can you talk about the amount of channel inventory that's in the market now. And then do you expect that to continue to grow for the near term? And then when do you think that peaks? Thanks.

知道了。謝謝明陽。能談談現在市場上的通路庫存量嗎？那麼您預計這一數字在短期內會持續成長嗎？那你認為什麼時候會達到頂峰？謝謝。

We've heard various amounts of you call it statistics or number of -- we've heard it somewhere in the range of 150,000 to 180,000 metric tons right now of channel inventory and we're very insignificant part of that as some of our peers. I mean peer actually have a lot of inventory currently. So we'll see how that works.

我們聽說過你們稱之為統計數據或數量的各種說法——我們聽說過目前渠道庫存在150,000 到180,000 公噸的範圍內，而與我們的一些同行相比，我們在其中的比例非常微不足道。我的意思是同行目前實際上有很多庫存。那麼我們將看看它是如何工作的。

Okay. And then you talked about 70%, 80% are losing money. What's your guess as to what percentage of the industry could be shut down by the end of the year. I mean you think it could be as much as a quarter of the industry could be. Well, what percentage of the business of the industry could go out of business and maybe you could go away or what are your thoughts on that? Thanks.

好的。然後你談到70%、80%都在賠錢。您猜想今年年底該行業有多少比例可能會被關閉？我的意思是，你認為這個比例可能高達整個產業的四分之一。那麼，該行業有多少比例的業務可能會倒閉，也許您可能會離開，或者您對此有何想法？謝謝。

This is very ballpark. I think about half would shut down.

這是非常大概的。我認為一半會關閉。

Thank you. you mean exit?

謝謝。你的意思是退出？

Yeah. I mean, yeah, I think capacities that's kind of in China is definitely not competitive capacity at the current market and even some capacity in Mongolia it's can then compare to the current price.

是的。我的意思是，是的，我認為中國的產能在當前市場上絕對不是有競爭力的產能，甚至蒙古的一些產能也可以與當前價格進行比較。

Okay, last question --

好吧，最後一個問題——

Because not produce the sustainability. Okay.

因為不產生可持續性。好的。

Thank you. What are your thoughts on the Chinese government stepping in to influence or regulates maybe setting price caps or something like that we were reading and seeing some potential for that module industry. Do you think there could be something like that for poly where the government steps in to avoid this some overcapacity in the future?

謝謝。您對中國政府介入影響或監管、可能設定價格上限或類似的事情有何看法，我們正在閱讀並看到該模組產業的一些潛力。您認為保利是否會出現類似的情況，政府會介入以避免未來產​​能過剩？

We haven't heard about that at all. We haven't seen any government action.

我們根本沒聽過這個。我們還沒有看到任何政府行動。

Okay. Thank you very much. I'll pass it on.

好的。非常感謝。我會把它傳遞下去。

Okay. Thank you.

好的。謝謝。

[Alan Hahn], JPMorgan.

[艾倫·哈恩]，摩根大通。

Hi, this Alan from JP Morgan. I have like -- questions on the amount of capacity in the system right now and also like the outlook in the next one to two quarters and on other than you who else would be adding capacity? That would be my first questions.

大家好，我是摩根大通的艾倫。我對系統目前的容量有類似的疑問，也喜歡未來一到兩個季度的前景，以及除了您之外還有誰會增加容量？這是我的第一個問題。

Our standing a capacity in the system is around maybe 1.8 million to 2 million tons per year.

我們系統的常備產能約為每年 180 萬噸至 200 萬噸。

Got it. And my second question is like how do you -- what do you expect your cost structure will be with the new plant commencing in second quarter or for the new plant what do you expect the new plant's cost structure will be?

知道了。我的第二個問題是，您預計第二季啟動的新工廠的成本結構將如何，或者您預計新工廠的成本結構將是什麼？

Okay. I think at least as of today, okay. So we are expecting our costs to continue to decline. So I think preliminarily because we're ramping up in a Mongolia Phase 2. So costs for Q2, it is probably similar to slightly less than in Q1. And then we think costs will continue to trend down forward Q3 and Q4?

好的。我想至少從今天開始，好吧。因此，我們預計我們的成本將繼續下降。所以我認為，初步是因為我們正在蒙古第二階段加大力度。然後我們認為成本將在第三季和第四季繼續下降？

Well, I guess, like what's driving the cost down with the commencement of the new plan in second quarter that will be fully ramp up in Q3, right. So do you have like a target for the cost structure of the new plant?

嗯，我想，就像第二季新計劃開始時推動成本下降的原因一樣，新計劃將在第三季全面增加，對吧。那麼您對新工廠的成本結構有目標嗎？

Okay. Right. So I don't think we've discussed this earlier. So for the first time, Inner Mongolia cost is now below washing down cost, right. I don't know if you remember, so they know Mangolia costs, design was to be below the Gamba was higher than in -- franchise, I think. Q3, Q4 until this quarter. Sales, we had very same thing for improvements in quality as well.

好的。正確的。所以我認為我們之前沒有討論過這個問題。所以，內蒙古的成本現在第一次低於沖洗成本，對吧。我不知道你是否還記得，所以他們知道 Mangolia 的成本，設計是低於 Gamba 的，我認為比特許經營的要高。第三季、第四季直到本季。銷售方面，我們也有同樣的事情來提高品質。

So I think that gave us further confidence that once in the Mangolia phase 2 start, it should be able to see similar or even better trajectory in terms of cost reduction and quality improvements. Because of now we've done this one. So we know where all the issues are.

因此，我認為這給了我們進一步的信心，一旦 Mangolia 第二階段開始，它應該能夠在成本降低和品質提高方面看到類似甚至更好的軌跡。因為現在我們已經做到了這一點。所以我們知道所有問題出在哪裡。

Got it. Thanks. And there are automate all the question?

知道了。謝謝。並且有自動化所有的問題嗎？

Great. Thank you, Alan.

偉大的。謝謝你，艾倫。

This concludes our question and answer session. I would like to turn the conference back over to Anita Zhu for any closing remarks.

我們的問答環節到此結束。我想將會議轉回由 Anita Zhu 發表閉幕詞。

Thank you, everyone again for participating in today's conference call. Should you have any further questions please don't hesitate to contact us. Thank you and have an awesome day. Goodbye.

再次感謝大家參加今天的電話會議。如果您還有任何疑問，請隨時與我們聯繫。謝謝您，祝您有美好的一天。再見。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。

Editor^ Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

編輯^ 本筆錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。