IT Tech Packaging Inc (ITP) 2021 Q4 法說會逐字稿

Hello, ladies and gentlemen, and welcome to IT Tech Packaging's Fourth Quarter of 2021 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode.

女士、先生們，大家好，歡迎參加IT Tech Packaging 2021年第四季業績電話會議。在此，我想通知大家，本次電話會議正在錄音，所有與會者請保持「只聽」模式。

Joining us today are the company's Chairman and Chief Executive Officer, Mr. Zhenyong Liu; and the company's Chief Financial Officer, Ms. Jing Hao. Remarks from both Mr. Liu and Ms. Hao will be delivered in English by interpreters.

今天出席活動的嘉賓包括公司董事長兼執行長劉振勇先生和財務長郝菁女士。劉先生和郝菁女士的致詞將由翻譯以英文進行。

IT Tech Packaging announced its fourth quarter of 2021 financial results via press release on March 15, 2022, which can be found on the company's website at www.itpackaging.cn.

艾特科技包裝於2022年3月15日以新聞稿形式公佈了2021年第四季財務業績，可在公司網站www.itpackaging.cn上查閱。

Mr. Liu will start today's presentation with an overview for the fourth quarter of 2021 performance. Then Ms. Hao will share more details about the company's financial results.

劉先生今天的演講首先會概述公司2021年第四季的表現。隨後，郝女士將分享更多關於公司財務表現的細節。

Before we start, I would like to draw your attention to our safe harbor statement. Management's prepared remarks contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact in this announcement, are forward-looking statements, including, but not limited, to anticipated revenues from the corrugating medium paper, tissue paper, offset printing paper and face mask business segments; the actions and initiatives of current and potential competitors; the company's ability to introduce new products; the company's ability to implement capacity expansion; market acceptance of new products; general economic and business conditions; the ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company's filings with the Securities and Exchange Commission.

在開始之前，我想提請您注意我們的安全港聲明。管理階層的準備發言包含《1995年私人證券訴訟改革法》安全港條款所定義的前瞻性陳述。本公告中除歷史事實陳述以外的所有陳述均為前瞻性陳述，包括但不限於瓦楞原紙、薄頁紙、膠印紙和口罩業務部門的預期收入；現有和潛在競爭對手的行動和舉措；公司推出新產品的能力；公司實施產能擴張的能力；新產品的市場接受度；總體經濟和商業狀況；吸引或留住合格的管理人員和其他開發人員的資格管理人員在美國的新企業狀況；

These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the company and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent or current events or circumstances or to changes in its expectation, except as may be required by law. Although the company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that this expectation will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

這些前瞻性陳述涉及已知和未知的風險和不確定性，並基於對公司和行業的當前預期、假設、估計和預測。除非法律另有規定，否則本公司不承擔更新前瞻性陳述以反映後續或當前事件或情況或其預期變化的義務。儘管公司認為這些前瞻性聲明中表達的預期是合理的，但無法保證該預期最終會是正確的，並提醒投資者，實際結果可能與預期結果有重大差異。

There is a presentation document featuring management's prepared remarks, and it is now available for download from the company's website at www.itpackaging.cn.

有一個包含管理層準備好的發言的演示文件，現在可以從公司網站 www.itpackaging.cn 下載。

Please note that there will be discussions on non-GAAP financial measure or EBITDA or earnings before interest, taxes, depreciation and amortization. Please refer to our press release for a complete reconciliation of EBITDA to net income.

請注意，我們將討論非公認會計準則 (Non-GAAP) 財務指標或息稅折舊攤提前利潤 (EBITDA)。請參閱我們的新聞稿，以了解 EBITDA 與淨收入的完整對帳。

As a kind reminder, all numbers in our presentation are quoted in U.S. dollars and all comparisons refer to year-over-year comparisons, unless otherwise stated.

溫馨提示，除非另有說明，我們簡報中的所有數字均以美元報價，所有比較均指同比比較。

At this time, I would like to turn the call over to Mr. Zhenyong Liu, Chairman and Chief Executive Officer of IT Tech Packaging. His overview will be delivered in English by [Connie Tang]. Connie, please go ahead.

現在，我想把電話轉給IT Tech Packaging董事長兼執行長劉振勇先生。他的概述將由[Connie Tang]用英語進行。 Connie，請您開始。

[Interpreted] Thank you, operator, and good morning, everyone. Thanks for joining IT Tech Packaging Fourth Quarter 2021 Earnings Conference Call today. I will provide an overview of the company's performance for the fourth quarter and fiscal year of 2021.

[口譯] 謝謝接線員，大家早安。感謝您今天參加IT Tech Packaging 2021年第四季業績電話會議。我將概述公司2021年第四季及全年的業績。

2021 was a remarkable year for IT Tech Packaging, capped off by record performance. Our business execution was reflected as we achieved $160.9 million in revenue with an increase of 59% year-over-year and $11 million in gross profit with an increase of 93% year-over-year. Once again, we demonstrated excellent revenue growth and improved business efficiency in 2021.

2021年對IT Tech Packaging而言是意義非凡的一年，業績創下新高。我們卓越的業務執行力充分體現在：營收達1.609億美元，年增59%；毛利達1,100萬美元，較去年同期成長93%。 2021年，我們再次展現出卓越的營收成長和業務效率的提升。

In fiscal year 2021, we launched a series of initiatives to optimize our revenue structure and diversify our business. We significantly improved our operating and cost efficiency, reducing our sell, general and administrative expense by 14.3%, while maintaining the solid growth of overall sales volume and average selling prices of CMP products and offset printing paper products.

2021財年，我們推出一系列舉措，優化收入結構，拓展業務多元化。我們大幅提升了營運效率和成本效率，銷售、一般及行政開支降低了14.3%，同時維持了CMP產品和膠印紙產品整體銷售量及平均售價的穩健成長。

We exceeded our objective for 2021, and we could not be more excited about the momentum we are carrying into the first quarter and the year ahead. Through continuing expanding our business scale, we are confident in our ability to execute against our long-term strategy, capitalizing on our investments in demand generation and customer loyalty to accelerate our profit growth.

我們超額完成了2021年的目標，並且對第一季及未來一年的良好勢頭感到無比興奮。透過持續擴大業務規模，我們有信心執行長期策略，充分利用我們在需求挖掘和客戶忠誠度方面的投資，加速利潤成長。

We firmly believe that our business fundamentals will continue to support our leading position in the industry and well in the foreseeable future. Thank you again for all your support and attention.

我們堅信，我們的業務基礎將繼續支撐我們在行業中的領先地位，並在可預見的未來保持良好勢頭。再次感謝您的支持與關注。

Now I will turn the call over to Ms. Jing Hao, our CFO, who will review our financials for the fourth quarter of 2021. Her review will be delivered in English by Connie.

現在，我將電話轉給我們的財務長荊浩女士，她將審查我們 2021 年第四季的財務狀況。她的審查將由康妮用英語進行。

[Interpreted] Thanks, everyone, for being on the call. Next, on behalf of management team, I will summarize some key financial results for the fourth quarter and fiscal year 2021. Also, I will occasionally refer to specific production lines associated with their products. I will make clear which products I'm referring to. For reference, the numbering system for our production lines is provided on Slide #18.

[口譯] 感謝大家的來電。接下來，我將代表管理團隊總結2021財年第四季和全年的一些關鍵財務表現。此外，我偶爾會提到與他們的產品相關的特定生產線。我會明確說明我指的是哪些產品。為了方便參考，我們生產線的編號系統請參考第18張投影片。

Now let's look at our financial performance for the fourth quarter of 2021. Please turn to Slide #7. For the fourth quarter of 2021, total revenue increased by 38.7% to $45.1 million due to the increase in revenue volume -- in sales volume of regular corrugating medium paper.

現在我們來看看我們2021年第四季的財務表現。請翻到第7張投影片。 2021年第四季，由於營收成長（普通瓦楞原紙銷量成長），總營收成長了38.7%，達到4,510萬美元。

Then turning to Slide 8. For the fourth quarter of 2021, the CMP segment, including both regular CMP and light-weight CMP, generated revenue of $39.7 million, representing 88% of total revenue. $32.7 million of revenue was from our regular CMP product and $7 million was from light-weight CMP.

然後翻到投影片 8。2021 年第四季度，CMP 部門（包括常規 CMP 和輕量級 CMP）創造了 3,970 萬美元的收入，佔總收入的 88%。其中 3,270 萬美元的收入來自我們的常規 CMP 產品，700 萬美元來自輕量級 CMP。

CMP segment volume increased by 21.4% to 69,953 tonnes, of which 57,410 tonnes were regular CMP and the 12,543 tonnes were light-weight CMP. Average selling price, or ASP, for regular CMP increased by 30.8% to $569 per tonne, and ASP for light-weight CMP increased by 32.2% to $558 per tonne.

瓦楞紙（CMP）板塊銷量成長21.4%，至69,953噸，其中常規瓦楞紙（CMP）57,410噸，低克重瓦楞紙（CMP）12,543噸。常規瓦楞紙（CMP）平均售價（ASP）上漲30.8%，至每噸569美元，低克重瓦楞紙（CMP）平均售價上漲32.2%，至每噸558美元。

Then moving on to Slide 9. For fourth quarter of 2021, the offset printing paper generated revenue of $3 million, decreased by $1.9 million or 39.2 million -- 39.2% from the same period of last year. The offset printing paper volume decreased by 50.5% to 3,911 tonnes. ASP for offset printing paper increased by 22.8% to $759 per tonne.

接下來是第9張投影片。 2021年第四季，膠印紙營收為300萬美元，較去年同期減少190萬美元，即3,920萬美元，降幅為39.2%。膠印紙產量下降50.5%，至3,911噸。膠印紙平均售價上漲22.8%，至每噸759美元。

Then turning to Slide 10. For the fourth quarter of 2021, tissue paper products generated revenue of $2.3 million, decreased by $0.4 million or 14%. This resulted from sales of 2,292 tonnes tissue paper products with a 27.6% decrease at an ASP of $994 per tonne with an increase of 18.8%.

然後翻到第 10 張投影片。 2021 年第四季度，衛生紙產品收入為 230 萬美元，減少 40 萬美元，降幅 14%。這歸因於衛生紙產品銷售量為 2,292 噸，下降 27.6%，平均售價為每噸 994 美元，上漲 18.8%。

Turning to Slide 11. We sold 3 million pieces of face masks and generated revenue of $0.1 million from selling face masks for the fourth quarter of 2021.

翻到第 11 張投影片。 2021 年第四季度，我們銷售了 300 萬片口罩，並透過銷售口罩創造了 10 萬美元的收入。

Slide #12 summarizes the changes in our revenue mix. For the fourth quarter of 2021, total cost of sales increased by $9 million to $40.7 million, leading to total gross profit of $4.3 million, 481.8% increase from the gross profit of $0.7 million for the same period of last year. The overall gross margin was for the fourth quarter of 2021.

投影片12總結了我們收入結構的變化。 2021年第四季，總銷售成本增加900萬美元，達到4,070萬美元，總毛利達430萬美元，較去年同期的70萬美元成長481.8%。以上為2021年第四季的整體毛利率。

For the fourth quarter of 2021, SG&A expense decreased by 12% to $2.4 million. And operating income was $2 million compared to loss from operations of $2 million for the same period of last year. Operating margin was 4.3% compared to operating loss margin of 6.1% for the same period of last year.

2021年第四季度，銷售、一般及行政管理費用（SG&A）下降12%至240萬美元。營業利潤為200萬美元，而去年同期營業虧損為200萬美元。營業利益率為4.3%，去年同期營業虧損率為6.1%。

For the fourth quarter of 2021, net income was $4.2 million, resulting in a net income of $0.07 per basic and diluted share. This compared to a net loss of $1.6 million or net loss of $0.06 per basic and diluted share for the same period of last year. For the fourth quarter of 2021, EBITDA increased by $6.1 million to $8.7 million from $2.6 million for the same period of last year.

2021年第四季淨利為420萬美元，基本每股淨利和稀釋每股淨利為0.07美元。相較之下，去年同期淨虧損為160萬美元，基本每股淨虧損和稀釋每股淨虧損均為0.06美元。 2021年第四季，息稅折舊攤提前利潤（EBITDA）從去年同期的260萬美元增加610萬美元，達到870萬美元。

Now shifting gear to year-to-date financial results. For fiscal year 2021, total revenue increased by 58 -- 59.4% to $160.9 million as a result of increase in sales volume of CMP and offset printing paper and increase in ASP of CMP, offset printing paper and tissue paper products, partially offset by the decrease in sales volume of tissue paper products.

現在來看看年初至今的財務表現。 2021財年，總收入成長58-59.4%，達到1.609億美元，這得益於瓦楞紙和膠版印刷紙銷量的增長以及瓦楞紙、膠版印刷紙和薄頁紙產品平均售價的上漲，但薄頁紙產品銷量的下降部分抵消了這一增長。

For fiscal year 2021, the CMP segment, including both regular and light-weight CMP, generated revenue of $134.5 million, representing 83.6% of total revenue. $111.1 million in revenue was from our regular CMP products, and $23.4 million was from light-weight CMP.

2021 財年，CMP 部門（包括常規 CMP 和輕質 CMP）創造了 1.345 億美元的收入，佔總收入的 83.6%。其中，常規 CMP 產品的收入為 1.111 億美元，輕質 CMP 的收入為 2,340 萬美元。

Volume for the CMP segment increased by 31.9% to 259,691 tonnes, of which 213,490 tonnes were regular CMP and 46,201 tonnes were light-weight CMP. ASP for regular CMP increased by 28.7% to $520 per tonne, while ASP for light-weight CMP increased by 29% to $507 per tonne.

瓦楞紙 (CMP) 板塊銷量成長 31.9%，至 259,691 噸，其中常規瓦楞紙 (CMP) 213,490 噸，低克重瓦楞紙 (CMP) 46,201 噸。常規瓦楞紙 (CMP) 平均售價上漲 28.7%，至每噸 520 美元；低克重瓦楞紙 (CMP) 平均售價上漲 29%，至每噸 507 美元。

For fiscal year 2021, our offset printing paper segment generated revenue of $17.1 million. We shipped 24,513 tonnes of offset printing paper for fiscal year 2021, an increase of 20.4% from the same period of last year. ASP for offset printing paper increased by 15.4% to $696 per tonne.

2021財年，我們的膠版印刷紙業務收入為1,710萬美元。 2021財年，我們的膠版印刷紙出貨量為24,513噸，較去年同期成長20.4%。膠版印刷紙平均售價上漲15.4%，每噸696美元。

For fiscal year 2021, tissue paper products generated revenue of $8.8 million, increased by $0.4 million or 4.2%. We shipped 8,255 tonnes tissue paper products with an 18.2% increase at an ASP of $1,062 per tonne with an increase of 27.3%.

2021財年，衛生紙產品營收為880萬美元，成長40萬美元，成長4.2%。我們共出貨8,255噸衛生紙產品，增幅18.2%，平均售價為每噸1,062美元，增幅27.3%。

For fiscal year 2021, face masks generated revenue of $0.5 million with sales volume of 12.7 million pieces of face masks. For fiscal year 2021, total cost of sales increased by $54.6 million to $149.9 million, leading to total gross profit of $11 million and an increase of 93.2% from last year. Overall gross margin of 6.9% reflects an increase of 1.2 percentage points from last year.

2021財年，口罩業務收入50萬美元，銷售量達1,270萬隻。 2021財年，總銷售成本增加5,460萬美元，達到1.499億美元，總毛利達1,100萬美元，較去年同期成長93.2%。整體毛利率為6.9%，較去年同期成長1.2個百分點。

For fiscal year 2021, SG&A expenses were $9.6 million compared to $11.2 million for the same period of last year. For fiscal year 2021, operating income increased from loss from operations of $5.5 million to $1.5 million. Operating margin was 0.9% compared to operating loss margin of 5.4% for the same period of last year.

2021財年，銷售、一般及行政費用（SG&A）為960萬美元，去年同期為1,120萬美元。 2021財年，營業利潤由550萬美元的營業虧損增加至150萬美元。營業利益率為0.9%，而去年同期的營業虧損利潤率為5.4%。

For fiscal year 2021, net income was $0.9 million or $0.02 earnings per basic and diluted share compared to a net loss of $5.6 million or $0.02 loss per basic and diluted share for the same period of last year. For fiscal year 2021, EBITDA increased from $10.2 million to $22.9 million for the same period of last year.

2021財年淨利為90萬美元，即基本每股盈餘和稀釋每股盈餘均為0.02美元，去年同期淨虧損為560萬美元，即基本每股虧損和稀釋每股虧損均為0.02美元。 2021財年息稅折舊攤提前利潤（EBITDA）從去年同期的1,020萬美元增至2,290萬美元。

Now moving to Slide 20 and 21, let's look at the balance sheet and liquidity. As of December 31, 2021, the company has cash and bank balances, short-term debt, including bank loans, current portion of long-term loans from credit union and related party loans, and long-term debt, including loans from credit union of $11.2 million, $13.5 million and $3 million, respectively, compared to $4.1 million, $12.2 million and $4.6 million, respectively, at the end of 2020.

現在翻到第 20 和 21 張投影片，我們來看看資產負債表和流動性。截至 2021 年 12 月 31 日，該公司的現金及銀行存款、短期債務（包括銀行貸款、來自信用社的長期貸款的當前部分和關聯方貸款）以及長期債務（包括來自信用社的貸款）分別為 1,120 萬美元、1,350 萬美元和 300 萬美元，而 2,020 40 萬美元和 2,600 萬美元。

Net accounts receivable was $4.9 million as of December 31, 2021, compared to $2.4 million as of December 31, 2020. Net inventory was $5.8 million as of December 31, 2021, compared to $1.2 million at the end of 2020.

截至 2021 年 12 月 31 日，應收帳款淨額為 490 萬美元，而 2020 年 12 月 31 日為 240 萬美元。截至 2021 年 12 月 31 日，庫存淨額為 580 萬美元，而 2020 年底為 120 萬美元。

As of December 31, 2021, the company had current assets of $55.5 million and current liabilities of $20.4 million, resulting in a working capital of $35.1 million. This was compared to current assets of $14.9 million and current liabilities of $18.3 million, resulting in a working capital deficit of $3.4 million at the end of 2020.

截至2021年12月31日，該公司流動資產為5,550萬美元，流動負債為2,040萬美元，營運資本為3,510萬美元。相較之下，2020年底，該公司流動資產為1,490萬美元，流動負債為1,830萬美元，營運資本缺口為340萬美元。

Net cash used in operating activities was $2.4 million for the year ended December 31, 2021, compared to net cash provided by operating activities of $16.1 million for 2020. Net cash used in investing activities was $25.1 million for the year ended December 31, 2021, compared to $20.5 million for 2020. Net cash provided by financing activities was $34.2 million for the year ended December 31, 2021, compared to net cash provided by financing activities of $2.1 million for 2020.

截至 2021 年 12 月 31 日止年度，經營活動所用淨現金為 240 萬美元，而 2020 年經營活動提供的淨現金為 1,610 萬美元。截至 2021 年 12 月 31 日止年度，投資活動所用淨現金為 2,510 萬美元，而 2020 年為 2,050 萬美元。截至 2021 年 12 月 31 日止年度，融資活動提供的淨現金為 3,420 萬美元，而 2020 年融資活動提供的淨現金為 210 萬美元。

That's all for IT Tech Packaging Fourth Quarter of 2021 Earnings Conference Call. I would like to thank everyone for joining us today. If you have any other questions, please contact us through e-mail at ir@itpackaging.cn. We appreciate your interest and support in IT Tech Packaging and look forward to speaking with you again next time.

以上就是IT Tech Packaging 2021年第四季財報電話會議的全部內容。感謝各位嘉賓今天的參與。如有任何其他疑問，請發送電子郵件至ir@itpackaging.cn與我們聯繫。感謝您對IT Tech Packaging的關注與支持，期待下次與您再次相聚。

Thank you. Operator, please go ahead.

謝謝！接線員，請繼續。

Thank you again for attending IT Tech Packaging's Fourth Quarter of 2021 Earnings Conference Call. This concludes our call today, and we thank you all for listening in. Goodbye.

再次感謝大家參加IT Tech Packaging 2021年第四季財報電話會議。今天的電話會議到此結束，感謝大家的收聽。再見。

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

[本記錄中標記為 [已翻譯] 的部分由現場翻譯人員朗讀。 ]