Gulf Resources Inc (GURE) 2023 Q2 法說會逐字稿

Greetings. Welcome to the Gulf Resources' Second Quarter 2023 Earnings Conference. (Operator Instructions) Please note, this conference is being recorded.

問候。歡迎參加海灣資源 2023 年第二季度收益會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Helen Xu. You may begin.

現在我將會議交給主持人 Helen Xu。你可以開始了。

Thank you, operator. Good morning, ladies and gentlemen and good evening to all those joining us from U.S. And I'd like to welcome all of you to Gulf Resources' second quarter 2023 conference call.

謝謝你，接線員。女士們、先生們，早上好，所有來自美國的與會者晚上好。我歡迎大家參加海灣資源公司 2023 年第二季度的電話會議。

I'm Helen Xu, IR Director and CEO of the company, Mr. Xiaobin Liu will also join this call today. I'd like to remind you to all our listeners that in this call, certain management statements during the call will contain forward-looking information about Gulf Resources, Incorporation and its subsidiary business and products within the meaning of the Rule 175 on the Securities Act of 1933 and the Rule 3b-6 under the Securities Exchange of 1934 and are subject to the safe harbor created by those rules.

我是徐海倫，公司IR總監兼首席執行官，劉曉斌先生也將參加今天的電話會議。我想提醒所有聽眾，在本次電話會議中，某些管理層聲明將包含《證券法》第 175 條規定的有關海灣資源公司及其子公司業務和產品的前瞻性信息1933 年的規則和1934年證券交易所的規則3b-6，並受這些規則創建的安全港的約束。

Actual results may differ from those discussed today, taking into account a number of risk factors, including but not limited to the general economic and business condition in the PRC. The risks associated with COVID-19 pandemic outbreak; future product development and production capabilities; shipments to end customers; market acceptance of new and existing products; additional competition from existing and new competition from the bromine and the other oilfields and other production chemicals; changing technology; the ability to make future bromine assets; and the risk other factors beyond its control.

考慮到許多風險因素，包括但不限於中國的總體經濟和商業狀況，實際結果可能與今天討論的結果有所不同。與 COVID-19 大流行爆發相關的風險；未來的產品開發和生產能力；運送給最終客戶；新產品和現有產品的市場接受度；來自溴和其他油田以及其他生產化學品的現有競爭和新競爭的額外競爭；改變技術；製造未來溴資產的能力；以及其他無法控制的因素帶來的風險。

All forward-looking statements are expressly qualified in their entirety by this cautionary statement and the risk factors detailed with the company's reports filed with the SEC. Gulf Resources assumes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.

所有前瞻性陳述均完全符合本警示性聲明以及公司向 SEC 提交的報告中詳細說明的風險因素。海灣資源公司不承擔修改或更新任何前瞻性陳述以反映本次電話會議之後發生的事件或情況的義務。

Accordingly, our company believes expectation reflecting in Gulf's forward-looking statements are reasonable, and there can be no assurance of such will prove to be correct.

因此，我們公司認為海灣公司前瞻性陳述中反映的預期是合理的，並且不能保證這種預期將被證明是正確的。

In addition, any reference to the company's future performance represents the management's estimates as of today, the 14th of August 2023 Eastern Time. For those of you unable to listen to the entire call at this time, a replay will be available on company's website. The call will also be accessible through the website and a link is accessible through our website too. So please locate our press release issued earlier for the details.

此外，任何對公司未來業績的提及均代表管理層截至今天（美國東部時間 2023 年 8 月 14 日）的估計。對於目前無法收聽整個通話的人，公司網站上將提供重播。也可以通過網站訪問該電話，也可以通過我們的網站訪問鏈接。因此，請查找我們之前發布的新聞稿以了解詳細信息。

So we will review the results of this quarter first. I'd like to return the call back to Mr. Liu for his comments.

所以我們首先回顧一下本季度的業績。我想給劉先生回電話，徵求他的意見。

So firstly, let's look at the Chinese economy for this quarter. The Chinese economy continues to suffer slowdown. Our products were especially impacted. The demand for bromine was weak with the control of COVID-19. The demand for sanitizers dried up, especially since many companies had built up stock anticipating higher demand, the slowdown in construction have impacted the sales of flame retardants. Ever green route, bromine prices based on (inaudible) which has been RMB 69,500 per tonne on October 16, 2021.

首先，我們來看看本季度的中國經濟。中國經濟繼續放緩。我們的產品尤其受到影響。隨著COVID-19的控制，溴的需求疲軟。消毒劑的需求枯竭，特別是由於許多公司預計需求增加而增加了庫存，建築工程的放緩影響了阻燃劑的銷售。長青路線，溴價格基於（聽不清）2021年10月16日為每噸69,500元人民幣。

During the height of COVID, it dropped to RMB 18,000 only on June 30, 2022, a decline of 74 percentage. The company expects bromine prices may improve in the future. In fact, by August 10, 2023, bromine prices had increased to RMB 2000 -- 24,200. However, at this time, it is difficult to estimate the timing of the improvement in addition to the decline in the price of bromine, the RMB decline against the U.S. dollar.

疫情最嚴重期間，僅2022年6月30日就跌至18000元，跌幅達74%。該公司預計未來溴價可能上漲。事實上，到2023年8月10日，溴價已經上漲至2000元——24200元。不過，目前除了溴價下跌、人民幣兌美元匯率下跌之外，很難估計好轉的時機。

Over the extended term, it could be a significant benefit for our company. With a lower RMB, unit cost of chemicals using bromine are more expensive, meaning that domestic producers should gain share for export of pharmaceuticals and other chemicals that may be cheaper. Meaning the opportunities for building and export business will increase. Given the pricing of bromine in the second quarter, the company believes that most companies in the bromine industry and most companies produce chemicals made from bromine have not been profitable. We have yet to see many bankruptcies but we assume many may come. Given the current marketing conditions, we believe that the company currently has strong cash position and balance sheet.

從長遠來看，這可能會給我們公司帶來重大利益。隨著人民幣貶值，使用溴的化學品的單位成本更加昂貴，這意味著國內生產商應該在藥品和其他可能更便宜的化學品出口中獲得份額。這意味著建築和出口業務的機會將會增加。鑑於第二季度溴的定價，該公司認為，溴行業的大多數公司以及大多數生產溴化學品的公司尚未盈利。我們還沒有看到很多公司破產，但我們認為可能會有很多公司破產。鑑於目前的營銷狀況，我們認為該公司目前擁有強勁的現金狀況和資產負債表。

Accordingly, the company made 2 decisions to protect capital and plan for future operations. It has slowed seeking current approval for its (inaudible) bromine factory. The opening of these factories may require the company to build (inaudible) and drill new wells. This is the current market for bromine. We have sufficient capacity and are not willing to expend additional capital until we see a stronger result in the market. We still expect to receive permission to open these factories. However, there is no point to spend in the capital until they can operate profitably.

據此，公司做出了兩項決定，以保護資本和規劃未來運營。它已經放慢了為其（聽不清）溴工廠尋求當前批准的速度。這些工廠的開業可能需要公司建造（聽不清）和鑽探新井。這是目前的溴市場。我們有足夠的能力，在看到市場有更好的結果之前，我們不願意花費額外的資金。我們仍然希望獲得開設這些工廠的許可。然而，在它們能夠盈利之前，在資本上進行支出是沒有意義的。

As previously announced, the company have also postponed the delivery of the remaining equipment for chemical factors, while it will evaluate the market opportunities. The company is committed to its chemical business and believe it will be profitable over the long term. However, different products will require slightly different final equipment. For example, some products which pollute more heavily may require more complex pollution restricting equipment.

正如此前宣布的，該公司還推遲了剩餘化學因子設備的交付，同時將評估市場機會。該公司致力於化學業務，並相信其將長期盈利。然而，不同的產品需要的最終設備略有不同。例如，一些污染較嚴重的產品可能需要更複雜的污染限制設備。

During this period, where most chemical companies (inaudible), the company is undertaking a thorough review of the potential market. So it can ensure that it is altering the most applicable equipment. Once the review is finalized and the market has stabilized, we will have the remainder of our equipment delivered and assembled. Then we will begin trial and test production.

在此期間，大多數化學公司（聽不清）正在對潛在市場進行徹底審查。因此它可以確保它正在改變最適用的設備。一旦審查完成並且市場穩定下來，我們將交付和組裝剩餘的設備。然後我們將開始試生產。

So now let's look at the financial results. Because of the weakness of the Chinese economy and a huge decline in the bromine price, the company reported an after tax loss of approximately [$681,800] for the second quarter and approximately $1.2 million for the 6 months ended June 30, 2023.

現在讓我們看看財務業績。由於中國經濟疲軟和溴價格大幅下跌，該公司報告第二季度稅後虧損約為[681,800美元]，截至2023年6月30日的六個月約為120萬美元。

However, during the 6-month period, the company generated cash from operations of approximately $11 million. These numbers reflected the potential strength of our business model. At the end of the second quarter, our balance sheet was strong. We have approximately cash of $150 million and approximately representing $11.05 per share. The net-net cash, which is cash minus all liabilities, approximate $97 million, representing $9.32 per share, working capital which is approximately $112.6 million, which represented $10.79 per share. Shareholder equity approximately $260 million and representing $24.95 per share.

然而，在這 6 個月期間，該公司從運營中產生了約 1100 萬美元的現金。這些數字反映了我們商業模式的潛在優勢。第二季度末，我們的資產負債表表現強勁。我們擁有大約 1.5 億美元的現金，相當於每股 11.05 美元。淨現金（即現金減去所有負債）約為 9700 萬美元，相當於每股 9.32 美元，營運資本約為 1.126 億美元，相當於每股 10.79 美元。股東權益約 2.6 億美元，每股 24.95 美元。

We're very pleased to have rather the (inaudible) while generating strong free cash flow and strengthening our balance sheet. So for the coming future goals and objectives, the company expects that the economy in general and the bromine market in particular to improve. As of August 8, bromine prices -- bromine market prices had increased 34% since the end of the second quarter and 11% from the average selling price during the second quarter due in second quarter. Bromine revenues were approximately $7.4 million. If the (inaudible) prices has been 11% higher, bromine revenues would have been approximately $8.2 million. This would have provided us in the additional gross profit of approximately $809,000. In the quarter, our loss before taxes was approximately [$874,500], meaning that the price increase is slightly more than 11% mainly have taken us to breakeven.

我們很高興擁有（聽不清），同時產生強勁的自由現金流並加強我們的資產負債表。因此，對於未來的目標和目標，該公司預計整體經濟，尤其是溴市場將會改善。截至8月8日，溴價——自第二季度末以來，溴市場價格已上漲34%，較第二季度平均售價上漲11%。溴收入約為 740 萬美元。如果（聽不清）價格上漲 11%，溴收入將約為 820 萬美元。這將為我們帶來約 809,000 美元的額外毛利潤。本季度，我們的稅前虧損約為 [874,500 美元]，這意味著價格漲幅略高於 11%，主要使我們實現了盈虧平衡。

At August 14, we can see that market price for bromine was RMB 24,600, which is representing an increase of 37% since the end of the second quarter and (inaudible) from the average selling price during the second quarter. This would bring more extra profit based on our previous projection.

8月14日，我們可以看到溴的市場價格為24,600元人民幣，較二季度末上漲了37%（聽不清），較二季度的平均售價上漲了37%。根據我們之前的預測，這將帶來更多的額外利潤。

So when bromine prices improve further, we will push ahead and to get approval for the company's rest -- remaining bromine factory. The company is still expecting through its Yuxin Chemical Business.

因此，當溴價格進一步上漲時，我們將繼續推進並爭取批准公司剩餘的溴工廠。該公司仍期待通過其裕鑫化工業務。

At the present time, many chemical factories are still struggling. (inaudible) economic in general and bromine products in particular improved will be in a position to identify the best products for our new factory, has a remaining equipment tailored to our needs and delivered complete and (inaudible) can begin trial and the test production. The company is continuing to explore opportunities for exports so that it can gain financial flexibility.

目前，不少化工廠仍在苦苦掙扎。 （聽不清）總體經濟性，特別是溴產品的改進將能夠為我們的新工廠確定最好的產品，擁有根據我們的需求量身定制的剩餘設備並已交付完整，並且（聽不清）可以開始試用和測試生產。該公司正在繼續探索出口機會，以獲得財務靈活性。

At the present time, the export market is quite depressed. The company is looking for products that it can produce and profitably export so company can obtain capital, which we may continue to use so we protect shares and all paid as dividend. The company is still continuing in the discussion with the government of (inaudible). I'm creating a joint venture for the exploration and production of natural gas and bromine product is (inaudible).

目前，出口市場相當低迷。該公司正在尋找可以生產並有利可圖地出口的產品，以便公司可以獲得資本，我們可以繼續使用這些資本，以便我們保護股票和所有以股息形式支付的資金。該公司仍在繼續與（聽不清）政府進行討論。我正在創建一家合資企業，用於勘探和生產天然氣和溴產品（聽不清）。

While there is no guarantee that the joint venture will be created but if the company is successful in partnering with the local government, substantial opportunities could be open to us.

雖然不能保證合資企業一定會成立，但如果公司成功與當地政府合作，我們可能會獲得大量機會。

The financial results, which included -- you will see in our income statement, balance sheet and cash flow statement for the 3 and 6 months ended June 30, 2023. Our 10-Q has been filed with the SEC represent a full description of the segment of our business and the factors contributing to our lower sales and profits.

財務業績，其中包括——您將在我們截至2023 年6 月30 日的3 個月和6 個月的損益表、資產負債表和現金流量表中看到。我們已向SEC 提交的10-Q報告完整描述了我們的業務部門以及導致我們銷售額和利潤下降的因素。

(foreign language)

（外語）

(foreign language)

（外語）

(foreign language)

（外語）

[Interpreted] So I'll do the translation for Mr. Liu's comments. Hi, everyone. I'm Xiaobin Liu, CEO of the company. First of all, welcome all of you to Gulf Resources' 2023 Second Quarter Earnings Conference Call.

[翻譯]那麼劉老師的評論我來翻譯一下。大家好。我是劉曉斌，公司首席執行官。首先歡迎大家參加海灣資源2023年第二季度收益電話會議。

So we can see there has been a difficult time for the company, of our industries and the Chinese economy. We have focused on preserving capital on our long-term strategy and preparing for opportunities we see ahead of us. We believe the economy will improve and bromine and crude salt profits will increase as well. We are carefully refining our plants for Yuxin chemical plant, so we can produce products that generate the higher level of profit.

所以我們可以看到公司、我們的行業和中國經濟都經歷了一段困難時期。我們專注於在長期戰略中保留資本，並為我們看到的機遇做好準備。我們相信經濟將會好轉，溴和原鹽的利潤也會增加。我們正在為裕鑫化工廠精心改進我們的工廠，這樣我們就可以生產出能產生更高水平利潤的產品。

We also continue to focus on identifying products that can be exported, so the company can gain financial flexibility to consider to support initiatives supporting shareholder value. While the company still do not know if it's proposed joint venture in Sichuan will be approved, a potential could be significant, greater than its original plan.

我們還繼續專注於確定可以出口的產品，以便公司可以獲得財務靈活性，以考慮支持支持股東價值的舉措。雖然該公司仍不知道其在四川成立的合資企業是否會獲得批准，但潛力可能很大，比最初的計劃更大。

If the company can partner with the local government, the company should be able to drill more wells for both bromine and -- bromine and natural gas. Currently, the company has approximately $115 million in cash. It could have moved ahead in efforts to support the rest two remaining bromine and crude salt factories. It could also have taken delivery of equipment for our chemical factory, but we are committed to retaining our capital from the opportunities we see ahead of us.

如果該公司能夠與當地政府合作，該公司應該能夠鑽更多的溴井以及溴和天然氣井。目前，該公司擁有約1.15億美元現金。它本可以繼續努力支持剩下的兩家溴和原鹽工廠。它還可以為我們的化工廠運送設備，但我們致力於從我們看到的機遇中保留我們的資本。

The company's investors have asked about actions it will take to increase shareholder value. Company believe that we have very substantial opportunities in front of us. The Chinese economy will get better. Bromine prices will rise and factory will open, and it will find products to export. If company can get off the joint venture established, the opportunities will be higher than we had originally anticipated.

該公司的投資者詢問該公司將採取哪些措施來增加股東價值。公司相信我們面前有非常巨大的機會。中國經濟將會好起來。溴價格將會上漲，工廠將會開業，並且會找到產品用於出口。如果公司能夠擺脫所設立的合資企業，機會將比我們原來預期的要高。

And the company management just wants to remind our investors that management has traded more than 11.5 years of compensation for shares in Gulf Resources. No one wants to see the price of the shares appreciate more than we do.

公司管理層只是想提醒我們的投資者，管理層已經用超過11.5年的薪酬交易了海灣資源的股票。沒有人比我們更願意看到股票價格升值。

We are committed to generating cash from exports. When our business improves, the company will take other steps such as hiring investment bankers or IR firm and consider mergers or acquisitions so that it can produce strong financial returns for you and for us.

我們致力於通過出口創收現金。當我們的業務改善時，公司將採取其他措施，例如聘請投資銀行家或投資者關係公司，並考慮合併或收購，以便為您和我們帶來豐厚的財務回報。

So now we are open for the Q&A section.

現在我們開始問答部分。

(Operator Instructions) The first question comes from Jay Bueller, Private Investor. Jay, please proceed.

（操作員說明）第一個問題來自私人投資者 Jay Bueller。傑伊，請繼續。

Yes. I had a question for Mr. Liu. I wanted to ask, are you guys going to repurchase shares?

是的。我有一個問題想問劉先生。我想問一下，你們會回購股票嗎？

Sorry, I didn't...

抱歉，我沒有...

Are you trying to repurchase shares?

您是否正在嘗試回購股票？

Repurchase shares?

回購股票？

Yes. Because that would be the best use of cash rather than speculating on a factory or exporting goods, you could just repurchase shares and increase the value for shareholders.

是的。因為這將是現金的最佳用途，而不是對工廠或出口貨物進行投機，所以您可以只回購股票並增加股東的價值。

Okay. (foreign language)

好的。 （外語）

(foreign language)

（外語）

[Interpreted] Okay, so, Hi Jay. This question has been asked previously by investors as well and as company explained before, because due to the China government restrictions on the money going overseas and because the company does not have U.S. dollar in overseas bank account, so the company is trying to find a way to maintain dollar in overseas.

[解釋] 好的，嗨，傑伊。這個問題之前也被投資者問過，正如公司之前所解釋的，因為由於中國政府對資金流向海外的限制，並且公司在海外銀行賬戶中沒有美元，所以公司正在試圖尋找一個在海外維持美元的方式。

Then it's trying -- that's why we explained that the company is trying to find a product with higher profit margin and which can be exported. Then we can retain dollar in overseas accounts and then to consider -- do any like improve our shareholders' value, including share repurchase and/or share (inaudible) dividends that the way which can initiate our shareholders' value.

然後就是嘗試——這就是為什麼我們解釋說該公司正在努力尋找利潤率更高且可以出口的產品。然後我們可以在海外賬戶中保留美元，然後考慮做任何類似的事情來提高我們的股東價值，包括股票回購和/或分享（聽不清）股息，這樣可以啟動我們股東的價值。

Okay. The next question comes from [Alan Parka], private investor.

好的。下一個問題來自私人投資者 [Alan Parka]。

The question I have is, of course, I mean, regarding share price. You will hear certainly what the investors calling are really concerned. Since you announced the delay in the chemical factory, the share price went down the drain and now we are at the lowest ever and ridiculous price compared to the book value of the company.

當然，我的問題是關於股價。您肯定會聽到投資者真正關心的是什麼。自從你們宣布推遲建設化工廠後，股價就一落千丈，現在與公司的賬面價值相比，我們的股價處於歷史最低且荒謬的水平。

So if we wait an additional time for the chemical factory to be the solution to shareholder value, I don't know whether the share price will be because investors are losing patience. So my question is, is the company looking in particular, I would say the CEO and the CFO must get a lot of pressure from the Chairman. Are they looking at other ways of creating shareholder value or pushing the share price up. I've heard you talk to investment bankers. You mentioned that, which I was happy to hear. But is there a kind of task force like you have in for the chemical factory? Is there a task force looking at the possibility of taking action to add the share price?

因此，如果我們再等一段時間，讓化工廠成為股東價值的解決方案，我不知道股價是否會因為投資者失去耐心而下跌。所以我的問題是，公司是否特別看重，我認為首席執行官和首席財務官必須從董事長那裡受到很大的壓力。他們是否正在尋找其他方法來創造股東價值或推高股價。我聽說你和投資銀行家交談過。你提到了這一點，我很高興聽到。但是有像化工廠那樣的特別工作組嗎？是否有一個特別工作組正在研究採取行動提高股價的可能性？

Sorry, Alan, maybe my understanding is not clear. Can you just like slow down, so...

抱歉，艾倫，也許我的理解不太清楚。你能不能喜歡慢一點，所以...

Sorry for my French accent too. So I'm just asking, is there any kind of action taken by the CEO and the CFO that would be the main people to look at ways of improving the share price until we have a chemical factory that will create some export business to provide dollars. So is there -- and you said, you mentioned you talked to investment banks. So I mean, is there an action or is there a firm action some people being in charge of looking at that?

也很抱歉我的法國口音。所以我只是想問，首席執行官和首席財務官是否會採取任何行動，他們將成為主要人員來研究提高股價的方法，直到我們擁有一家化工廠，該工廠將創造一些出口業務以提供美元。你說，你提到你與投資銀行進行了交談。所以我的意思是，是否有一些人負責關注這個問題，或者是否採取了堅定的行動？

Okay. Okay. I got it. (foreign language)

好的。好的。我得到了它。 （外語）

(foreign language)

（外語）

[Interpreted] Okay. First of all, thank you for your question, Alan. So as you know, these years, in recent years, the company has been in discussion, few discussions. But we did not sign any like formal agreements with any bankers, investment bank or IR firm yet. Because like we all know that due to 2 major reasons, the COVID-19 for this year, which just like happened for the past few years. And the company's current projects, which did not perform and completed well yet. So when all these projects, we have a more clear view where we can talk to the investment bank or IR firm to see how we can go, and we will have more bargaining power in this discussion.

[解釋]好的。首先，謝謝你的提問，艾倫。所以大家知道，這些年，近幾年，公司一直在討論，很少討論。但我們尚未與任何銀行家、投資銀行或投資者關係公司簽署任何類似的正式協議。因為我們都知道，由於 2 個主要原因，今年的 COVID-19 與過去幾年發生的情況一樣。而該公司目前的項目，尚未執行並完成得很好。因此，當所有這些項目進行時，我們有一個更清晰的觀點，我們可以與投資銀行或IR公司交談，看看我們可以如何進行，並且我們在這個討論中將有更多的議價能力。

Okay. So -- but is somebody in charge of looking at helping the share price. I mean the CEO or the CFO, is there somebody who has been appointed to do that? To really focus on this? I mean we need somebody to be looking at it and having that as a priority, okay, for sure. So is it the CEO or the CFO?

好的。那麼，有人負責幫助股價上漲嗎？我的意思是首席執行官或首席財務官，是否有人被任命來做這件事？真正專注於此？我的意思是，我們需要有人來關注它，並將其作為優先事項，好吧，當然。那麼是首席執行官還是首席財務官呢？

Yes, yes. We did have. Yes.

是的是的。我們確實有。是的。

And you will do something before the chemical factory -- and you will do something before the chemical factory is ready because it could take a year or two before we get that? So are you going to do something or you're going to let the stock price keep falling like it has fallen for the last several months now?

你會在化工廠建成之前做一些事情——你會在化工廠準備好之前做一些事情，因為我們可能需要一兩年的時間才能做到這一點？那麼你會採取什麼措施，還是會讓股價繼續下跌，就像過去幾個月一樣？

Okay. (foreign language)

好的。 （外語）

(foreign language)

（外語）

[Interpreted] Hi Alan, for the share price, the company management has always been looking at it including CFO and CEO who will pay attention. We see the price of the share dropped. The major reason is due to if we're looking at bromine price, which dropped from RMB 60 -- more than RMB 60 at the highest and to recently more than RMB 18,000. There is more than 70% drop in this bromine price. And it looks like the bromine price has been reflected to our share price.

【解讀】艾倫您好，對於股價，公司管理層一直在關注，包括CFO和CEO都會關注。我們看到股價下跌。主要原因是溴的價格，從最高的60多元，到最近的18000多元。此次溴價跌幅超過70%。看起來溴的價格已經反映到了我們的股價上。

The company management also quite worried about our share price. So we think we have the 2 -- that's why we have 2 major ways to do. Firstly, if we look at our chemical business and our chemical products because this area, the product is now with very low, very low profit margin. So the company that's why it stopped its rest equipment to be delivered because the company wants to find new ways with other products, which can have higher margin in order to bring the company with more net profit.

公司管理層也很擔心我們的股價。所以我們認為我們有 2 個——這就是為什麼我們有 2 個主要方法要做。首先，如果我們看看我們的化工業務和化工產品，因為這個領域的產品現在的利潤率非常非常低。所以公司才停止了剩餘設備的交付，因為公司希望在其他產品上找到新的出路，這些產品可以有更高的利潤率，從而為公司帶來更多的淨利潤。

By doing this way, we may increase our share price and the company's profit. Secondly, company is in deep discussion with [Sichuan Daying] with its best -- company's best to improve this process and to get it down as soon as it can. By doing this, it will provide a continuous, much higher opportunities in this area in exploring and producing bromine, halogen and natural gas, and try to bring the company with more opportunities and more possible net profit.

通過這樣做，我們可能會增加我們的股價和公司的利潤。其次，公司正在與【四川大鷹】進行深入討論，盡最大努力改進這一流程，並儘快將其落實下來。此舉將為該領域在溴、鹵素、天然氣的勘探和生產方面提供持續的、更高的機會，並力爭為公司帶來更多的機會和更多可能的淨利潤。

Okay. I'll let other people ask questions. I'll write to you a little bit more because the price of bromine has been coming back up and the share price has kept going down. So this is more than that. But I'll do it in writing to you later on, and I'll let other people ask questions.

好的。我會讓其他人提問。我會再給你寫一點，因為溴的價格已經回升，而股價卻一直在下跌。所以這還不止於此。但稍後我會寫信給你，讓其他人提問。

The next question comes from Frank Manning, private investor.

下一個問題來自私人投資者弗蘭克·曼寧。

Your balance sheet shows cash of $115 million at the end of Q2. Your income statement shows interest income of $72,500 approximately for Q2. That's under 0.3% annual interest for average cash. Why is that interest so low? And is there a conservative way to increase the interest?

您的資產負債表顯示第二季度末的現金為 1.15 億美元。您的損益表顯示第二季度的利息收入約為 72,500 美元。平均現金年利率低於 0.3%。為什麼利息這麼低？有沒有保守的方法來增加利息？

Okay. (foreign language)

好的。 （外語）

(foreign language)

（外語）

[Interpreted] So because the company is more like conservative on its cash, so like that's why it did not do any less finance production event, but we just put the money there for its safety and even we did not put money in trust or any other finance products. For example, last trust, which had a big problem and because it's put the money to real estate industry and now they have very lesser (inaudible) risks and cannot be back.

[解釋]所以因為公司在現金方面比較保守，所以這就是為什麼它沒有做任何減少融資生產活動的原因，但我們只是把錢放在那里以確保其安全，甚至我們沒有把錢存入信託或任何其他機構。其他金融產品。例如，上一個信託公司有一個大問題，因為它把錢投入了房地產行業，現在他們的風險非常小（聽不清），而且無法回來。

So based on the company's way of doing this is always conservative to make sure it's cash in a safe position and -- but not only looking for higher interest of return. That's why we have low, like you said, interest rate.

因此，公司的做法始終是保守的，以確保現金處於安全位置，而且不僅僅是尋求更高的回報率。正如你所說，這就是為什麼我們的利率很低。

The next question comes from (inaudible).

下一個問題來自（聽不清）。

I have a few questions. Question number 1, from the last quarter report, Mr. Liu, the CEO, talked about exploring the export of your chemical products. Can you share some light on what concrete plan or have you hired people with knowledge to explore the export opportunities for your chemical products?

我有幾個問題。第一個問題，上一季度報告中，劉總談到了你們化工產品出口的探索。您能否分享一些具體計劃，或者您是否聘請了有知識的人員來探索您的化學產品的出口機會？

(foreign language)

（外語）

(foreign language)

（外語）

My next question is that the bromine price has fluctuated and then declined dramatically from [69,500] per tonne in October 2021 and then it went down to approximately [18,000] per tonne in October '23. My question is that what are the driving forces for that -- for this dramatic price fluctuation?

我的下一個問題是，溴價格波動，然後從 2021 年 10 月的每噸 [69,500] 急劇下降，然後在 2023 年 10 月降至每噸約 [18,000]。我的問題是，這種劇烈的價格波動的驅動力是什麼？

Okay. (foreign language)

好的。 （外語）

(foreign language)

（外語）

[Interpreted] Okay. So maybe for fairness to other shareholders, I think I will transfer -- translate Mr. Liu's comments. The reason for the big drop in this price of bromine because of the real estate industry, the very patent product is the first reason. Second reason is because of COVID-19. Before the demand was high for bromine, but after it's -- like past, then the demand for -- which drives up the bromine price. The third reason because the export of pharmaceuticals from China to overseas.

[解釋]好的。所以也許為了對其他股東公平，我想我會轉讓——翻譯一下劉先生的評論。此次溴價之所以大幅下跌，是因為房地產行業，專利產品是第一個原因。第二個原因是新冠肺炎 (COVID-19)。在溴的需求很高之前，但之後——就像過去一樣，然後——這推高了溴的價格。第三個原因是中國藥品向海外出口。

(foreign language)

（外語）

[Interpreted] Okay. So another reason for the very high price, like almost RMB 70,000 a tonne because of the market reason. Normally, the market speculation because normally bromine price wouldn't be that much high (inaudible) market speculation.

[解釋]好的。所以價格非常高的另一個原因是，由於市場原因，幾乎每噸7萬元人民幣。通常情況下，市場猜測是因為通常溴價不會那麼高（聽不清）市場猜測。

Do you anticipate from your perspective or experience that the bromine price is going to be kind of stabilized in short term or maybe the long term? Is that really the driving force of the revenue and the -- and also related to the shareholder price?

從您的角度或經驗來看，您是否預計溴價會在短期或長期內趨於穩定？這真的是收入和股東股價的驅動力嗎？

Okay. (foreign language)

好的。 （外語）

(foreign language)

（外語）

Are you very optimistic in terms of the price stabilization?

您對物價穩定非常樂觀嗎？

(foreign language)

（外語）

(foreign language)

（外語）

[Interpreted] Okay. So (inaudible) because bromine resources is funding -- a major fundamental chemical raw material, and this resource is limited. So as this -- if it's more than RMB 60,000 their -- have a reason for the market speculation, but if there is very too low price like below like RMB 10,000 or about approximately RMB 10,000, this is realistic to the market reflection as well. So (inaudible) the price for bromine will be stabilized and go up slowly. And this is what the company be happy to see as well. Because we are in this industry, and we do not want -- do not want to see there is big fluctuation in the pricing of the bromine.

[解釋]好的。所以（聽不清）因為溴資源是一種主要的基礎化工原料，而這種資源是有限的。所以這個——如果超過6萬人民幣——有市場炒作的理由，但如果價格太低，比如低於1萬人民幣或大約1萬人民幣左右，這對市場反映也是現實的。因此（聽不清）溴的價格將穩定並緩慢上漲。這也是公司樂見的。因為我們身處這個行業，我們不希望看到溴的價格出現大幅波動。

My last question is the -- for your petroleum and natural gas product, you're working out a partnership with the government. Also, do you anticipate the approval and then start the production of the petroleum and natural gas product. And then what is the expected revenue and a profit margin if the production starts? You've done any consulting to do an estimate on this future revenue and then profit or margin, et cetera?

我的最後一個問題是——對於你們的石油和天然氣產品，你們正在與政府建立合作夥伴關係。另外，您是否預計獲得批准，然後開始生產石油和天然氣產品？那麼如果開始生產，預計的收入和利潤率是多少？您是否做過任何諮詢來估算未來的收入、利潤或利潤率等？

(foreign language)

（外語）

(foreign language)

（外語）

Do you anticipate a timeline for this?

您預計這方面的時間表嗎？

(foreign language)

（外語）

(foreign language)

（外語）

No, because this is a discussion with the government. So we do not have the timeline yet.

不，因為這是與政府的討論。所以我們還沒有時間表。

The next question comes from Randy Liggett, private investor.

下一個問題來自私人投資者蘭迪·利格特。

Sorry for all my e-mails, by the way. But obviously, everybody -- shareholders are frustrated. We've gone through this for several years, no matter what the price of bromine was. Why are we being so stubborn about hiring investment bankers and the PR firm? I just don't understand we've been talking about it for quarter after quarter. And the price of bromine was $70,000. And the stock really did not reflect the value of the company.

順便說一下，我對我所有的電子郵件感到抱歉。但顯然，每個人——股東都感到沮喪。無論溴的價格是多少，我們已經經歷了好幾年了。為什麼我們對聘用投資銀行家和公關公司如此固執？我只是不明白我們已經每個季度都在談論這個問題了。溴的價格是7萬美元。而且股票確實沒有反映公司的價值。

And I would think management, including yourself and the Board of Directors would want the stock to go up. My second question is, and I'll make this very short and sweet. Have you all received any unsolicited offers to purchase the company or make it private or anything like that?

我認為管理層，包括你自己和董事會，都會希望股價上漲。我的第二個問題是，我會讓這個問題變得非常簡短而甜蜜。你們是否都收到過任何主動提出的收購公司或將其私有化或類似的要約？

(foreign language)

（外語）

(foreign language)

（外語）

[Interpreted] Okay. So first question, like as we previously explained that we want to have like a discussion with investment bank or IR firm, but still not progress yet, because if we do go to discuss with investment bank, and they will want to see real company's development value and how we want to discuss with you to improve your value, right? But based on the current currency position, our projects, which did not -- on the standards of position to perform our development value yet. So until our projects, which become more clear, then we can see how we're going to do this discussion with investment bank.

[解釋]好的。第一個問題，就像我們之前解釋的那樣，我們希望與投資銀行或IR公司進行討論，但還沒有進展，因為如果我們真的去與投資銀行討論，他們會希望看到公司的真實發展價值以及我們想與您討論如何提高您的價值，對嗎？但根據目前的貨幣狀況，我們的項目還沒有——根據狀況的標準來履行我們的發展價值。因此，在我們的項目變得更加清晰之前，我們可以看到我們將如何與投資銀行進行討論。

Yes. How about my second question. Have you'll received any offers [unsolicited]?

是的。我的第二個問題呢？您會收到任何[主動提供的]報價嗎？

(foreign language)

（外語）

(foreign language)

（外語）

[Interpreted] Okay. So for the second question, because the company never think about to sell it because even though now we have low share price. But we really have big potential, and we are confident in it.

[解釋]好的。所以對於第二個問題，因為公司從來沒有考慮過出售它，因為即使現在我們的股價很低。但我們確實有很大的潛力，而且我們對此充滿信心。

So you all have not had any interest from outside parties?

那麼你們都沒有受到外界的任何興趣嗎？

No.

不。

Okay. One last thing, thank you again, Helen. I appreciate all your help. Please update the website, and please continue the communications update. Sometimes, I feel like we're going back to the old days. And I think it's good for shareholders to hear from you all and just kind of let us know what's going on, not asking much there.

好的。最後一件事，再次感謝你，海倫。我感謝你的所有幫助。請更新網站，並請繼續通訊更新。有時候，我感覺我們又回到了從前的日子。我認為股東們聽到你們所有人的聲音是有好處的，只是讓我們知道發生了什麼，而不是問太多。

[Interpreted] Okay. I checked for all the information. The website will be updated right after the quarter recruiting the CEO (inaudible) and CFO (inaudible). And because sometimes for the fairness of public information to all shareholders, so we wanted to make sure, it's fair and transparent to all our investors. Thank you, Randy.

[解釋]好的。我查了所有的信息。該網站將在招聘首席執行官（聽不清）和首席財務官（聽不清）的季度後立即更新。因為有時為了公開信息對所有股東的公平性，所以我們想確保它對所有投資者來說都是公平和透明的。謝謝你，蘭迪。

Okay. We have a question coming from Bill Bender, private investor.

好的。我們有一個來自私人投資者 Bil​​l Bender 的問題。

This question is in general, but I've been an investor for over 10 years and shared many of the thoughts that previous callers had. But if you look back over the last 5 years, we discovered natural gas. Then you had a Tsunami and we replenished and really made state-of-the-art bromide factories, even though there's a few not open yet.

這個問題很籠統，但我已經做了十多年的投資者，並且分享了之前來電者的許多想法。但如果你回顧過去五年，我們發現了天然氣。然後發生了海嘯，我們進行了補充並真正建造了最先進的溴化物工廠，儘管還有一些工廠尚未開業。

And then we were really banking on this new chemical factory for 2023 that was to open in January, it's now August. And to mine, there were delays in equipment that was for COVID. There's no more delays. You can get anything in the world today. And the frustration is building and building because we keep going quarter to quarter with the same story. And I'm sorry, but the bromide price is not the problem, Helen.

然後我們真的指望這座新化工廠在 2023 年開業，原定於 1 月開業，現在是 8 月。對我來說，用於新冠肺炎的設備出現了延誤。沒有更多的延誤了。今天你可以獲得世界上的任何東西。挫敗感越來越大，因為我們每個季度都在講同樣的故事。抱歉，海倫，溴化物價格不是問題。

The problem is we are losing investor confidence. And I think that the management and -- Mr. Liu and the Board have put their own money on the line, I know they did. They want the share price to go higher. You hear all the callers here who are just investors. I've been an investor for 40 years. It really doesn't take much in 3 months to make a promise of something and we have a brand-new state-of-the-art chemical factory that should be making something and making money and delivering product, that's 8 months of sitting there. I saw the pictures. So the confidence from an investor when every quarter tells us it's something else, we have not done anything with natural gas. And I don't even hear a reason why.

問題是我們正在失去投資者的信心。我認為管理層以及劉先生和董事會已經把自己的錢投入到了風險之中，我知道他們確實這麼做了。他們希望股價走高。你聽到這裡所有的來電者都是投資者。我做投資者已有 40 年了。在 3 個月內做出某事的承諾確實不需要太多時間，我們有一家全新的、最先進的化工廠，應該能夠生產一些東西、賺錢並交付產品，那是坐在那裡的 8 個月。我看到了這些照片。因此，當每個季度都告訴我們情況不同時，投資者的信心是，我們沒有對天然氣採取任何行動。我什至沒有聽到原因。

We discovered we have natural gas, and we can't sell it. It's one of the most largest demand items in the world. So my question is this simple. If I remain an investor, I've been in this 10 years, if I want to remain an investor for the next 3 months, I would like Mr. Liu to tell me why I should remain an investor and not finally sell my shares at $2 a share. Thank you.

我們發現我們有天然氣，但我們不能賣它。它是世界上需求量最大的項目之一。所以我的問題就是這麼簡單。如果我繼續做投資者，我已經在這10年了，如果我想在未來3個月繼續做投資者，我希望劉先生告訴我為什麼我應該繼續做投資者，而不是最後在每股2美元。謝謝。

[Interpreted] Maybe I explain first because for our chemical factory, bromine prices have dropped from almost RMB 70,000 to RMB 18,000, more than 70 percentage decrease, and this is similar to chemical industries as well. Chemical products also dropped a lot. So the company, even though its chemical factory is almost completed for the (inaudible) completion. But the equipment, which can be [customized], for example, the flame retardants, which have much lower profit margin now have different equipment requirements than paper-making chemicals, because paper-making chemicals is more polluted and which require more strict equipment.

【解讀】也許我先解釋一下，因為我們化工廠，溴價從近7萬元降到了18000元，降幅超過70%，這和化工行業也差不多。化工產品也跌幅較大。因此，該公司儘管其化工廠已接近竣工（聽不清）。但那些可以定制的設備，比如利潤率低得多的阻燃劑，現在對設備的要求與造紙化學品不同，因為造紙化學品污染更大，對設備要求更嚴格。

So that our company stopped based on current market condition, stopped the delivery of the rest equipment because company now cannot see clearly where it will go in this industry, which specific products it want to produce and which can produce and bring more value to our company and our shareholders. That's why for this chemical factory.

所以我們公司根據目前的市場情況停止了生產，停止了剩下的設備的交付，因為公司現在看不清自己在這個行業會走向何方，具體要生產哪些產品，哪些產品可以生產並為我們公司帶來更多的價值和我們的股東。這就是這家化工廠的原因。

Secondly, if we look at our natural gas project in Sichuan Province. Firstly, because the Sichuan old province was doing the land and the resourcing planning. Until the government finish the planning, then company can continue its further application with government. That's why this process is delayed. And now company because there is a huge opportunity in this industry, et cetera. And the company wants to bring governments to join us, maybe we establish a joint venture company, then can bring the company with more opportunities in this industry in Sichuan area.

其次，看看我們在四川省的天然氣項目。首先，因為四川老省份正在做土地和資源規劃。在政府完成規劃之前，公司可以繼續向政府進一步申請。這就是這個過程被延遲的原因。現在公司是因為這個行業有巨大的機會等等。而且公司希望拉動政府加入我們，也許我們成立一家合資公司，這樣可以給公司在四川地區這個行業帶來更多的機會。

And overall, we see company, still a conservative view of company and which is not very aggressive, we can see.

總的來說，我們看到的公司仍然是一個保守的公司，我們可以看到，它並不是非常激進。

Helen, the conservative view, quite honestly, I was an investor when bromide was $2,000 and you were very profitable. But the bromide prices are going to go up and are going to go down for the next 10 years. We're building a company here that is going to be in the bromide business, and we can adapt accordingly. We can't put off and wait for -- bromide's never going to go to [RMB 70,000] again.

海倫，保守派觀點，老實說，當溴化物價格為 2,000 美元時，我是一名投資者，而且你非常有利可圖。但未來 10 年溴化物價格將會上漲並下降。我們正在這裡建立一家將從事溴化物業務的公司，我們可以做出相應的調整。我們不能再拖延和等待——溴化物永遠不會再漲到[人民幣70,000元]。

So the delays of the chemical factory are very concerning. To me, an investor, the time it takes to make any decision to partner, to do anything, the patience of -- just look at the volume of your shares, without earnings, the shares have been going down because people are selling. That's it. It's that simple. And they're losing hope and there's not one quarter that we get on this call and hear really good news. Last year, we were profitable and the stock went to [$3].

所以化工廠的延誤是非常令人擔憂的。對我來說，作為一名投資者，做出任何合作決定、做任何事情所需的時間、耐心——只要看看你的股票數量，如果沒有盈利，股票就會因為人們拋售而下跌。就是這樣。就是這麼簡單。他們正在失去希望，我們沒有四分之一的人在這次電話會議上聽到真正的好消息。去年，我們實現了盈利，股價上漲至 [3 美元]。

We need to know that there are actions being taken to keep your investors who've been with you for many, many years, keep us engaged and I've been on the call for 1 hour, and it seems to me, I'm hearing the same story of delays and whys and the 6-year plan is becoming a 10-year plan. And in the meantime, the markets are recovering. Interest rates are high. I agree with the gentlemen that having $115 million in cash earning $70,000. In America, you would earn $570,000.

我們需要知道正在採取一些行動來留住與您合作多年的投資者，讓我們保持參與，我已經接聽了 1 個小時的電話，在我看來，我正在聽到同樣的延誤和原因的故事，六年計劃正在變成十年計劃。與此同時，市場正在復蘇。利率很高。我同意先生們的觀點，即擁有 1.15 億美元現金可以賺取 7 萬美元。在美國，你將賺取 570,000 美元。

So I just would like some action from the Board to take this call tonight from all your investors seriously because it seems like we all have the same concerns, Helen. And I know you've been here for 10 years with us. I know that. So we're all frustrated, but we have to take this serious to make some progress in the next 3 to 6 months.

因此，我希望董事會採取一些行動，認真對待今晚所有投資者的電話會議，因為似乎我們都有同樣的擔憂，海倫。我知道你已經和我們在一起十年了。我知道。所以我們都很沮喪，但我們必須認真對待這個問題，才能在接下來的 3 到 6 個月內取得一些進展。

Okay. Thank you for your comments.

好的。謝謝您的意見。

Okay. I would like to turn the floor back to Helen for any closing remarks. It looks like we've reached the end of the top of the hour. Do we have any questions?

好的。我想請海倫發表結束語。看來我們已經到了最後時刻了。我們還有什麼問題嗎？

Hi, John, I think that's all for today, and it's been our time closing.

嗨，約翰，我想這就是今天的全部內容，現在是我們的結束時間了。

Thank you. Ladies and gentlemen, this does complete the question-and-answer session. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

謝謝。女士們先生們，問答環節到此結束。今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。

Thank you, John and have a good night.

謝謝你，約翰，祝你有個美好的夜晚。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。]