晶科能源 (JKS) 2023 Q4 法說會逐字稿

Hello, ladies and gentlemen, and thank you for standing by for JinkoSolar Holding Co. Ltd. Fourth Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, today's conference call is being recorded.

各位女士先生們大家好，感謝大家出席晶科能源控股有限公司2023年第四季業績電話會議。 （操作員說明）提醒一下，今天的電話會議正在錄音。

I would now like to turn the meeting over to your host for today's call to Ms. Stella Wang, JinkoSolar's Investor Relations. Please proceed, Stella.

現在我想將會議轉交給東道主今天與晶科能源投資者關係部 Stella Wang 女士的通話。請繼續，史黛拉。

Thank you, operator. Thank you, everyone, for joining us today for JinkoSolar's fourth quarter 2023 earnings conference call. The company's results were released earlier today and are available on the company's IR website at www.jinkosolar.com as well as on newswire services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website.

謝謝你，接線生。感謝大家今天參加我們晶科能源 2023 年第四季財報電話會議。該公司的業績於今天稍早發布，可在該公司的投資者關係網站 www.jinkosolar.com 以及新聞專線服務上查閱。我們也為今天的財報電話會議提供了補充演示文稿，您也可以在 IR 網站上找到該演示文稿。

On the call today from JinkoSolar are Mr. Xiande, Chairman and CEO of JinkoSolar Holding Company Limited Mr. Gener Miao, CMO of JinkoSolar Company Limited; Mr. Pan Li, CFO of JinkoSolar Holding Company Limited; and Mr. Charlie Cao, CFO of JinkoSolar Company Limited. Mr. Li will discuss JinkoSolar's business operations and company highlights, followed by Mr. Miao, who will talk about the sales and marketing; and then Mr. Pan Li, who will go through the financials. We will all be available to answer your questions during the Q&A session that follows.

今天接聽晶科能源電話的有晶科能源控股有限公司董事長兼執行長顯德先生、晶科能源有限公司首席行銷長苗根二先生；潘力先生，晶科能源控股有限公司財務長；以及晶科能源有限公司財務長曹查理先生。李先生將討論晶科能源的業務運作和公司亮點，隨後苗先生將討論銷售和行銷；然後是潘力先生，他將負責財務方面的工作。我們將在接下來的問答環節回答您的問題。

Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding this and other risks is included in JinkoSolar's public filings with the Securities and Exchange Commission. JinkoSolar does not assume any obligation to update any forward-looking statements, except as required under the applicable law. It's now my pleasure to introduce Mr. Xiande, Chairman and CEO of JinkoSolar Holdings. Mr. Li will speak in Mandarin, and I will translate his comments into English.

請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，我們未來的結果可能與今天表達的觀點大不相同。有關此風險和其他風險的更多資訊包含在晶科能源向美國證券交易委員會提交的公開文件中。除適用法律要求外，晶科能源不承擔更新任何前瞻性聲明的義務。現在我很高興向大家介紹晶科能源董事長兼執行長顯德先生。李先生會用國語發言，我會將他的評論翻譯成英文。

Please go ahead, Mr. Li.

請李先生繼續。

[Interpreted] We are pleased to have achieved a very impressive operational and financial results in a challenging year by leveraging our advantages in N-type TOPCon, globalized operations, and integrated capability. Thanks to strong execution by our team, our module shipment for the full year increased 76.4% year over year to 78.5 gigawatts, back to the top position in the industry. Benefiting from our efforts in cost optimization, our profitability for the full year improved significantly year over year, with gross margin at 16% compared to 14.8% in 2022. Net income was $485.8 million, up 4.56x year over year. Adjusted net income was $573.8 million, up 1.93x year over year. Module shipments in the fourth quarter was 26.3 gigawatts, exceeding our guidance as module prices fell more than expected in the fourth quarter and nearly 50% of our modules were sold to the Chinese markets at lower prices. Gross margin for the fourth quarter was 12.5%, a significant decline from 19.3% in the third quarter.

[解讀]我們很高興利用我們在N型TOPCon、全球化營運和整合能力方面的優勢，在充滿挑戰的一年中取得了非常令人印象深刻的營運和財務業績。由於團隊的強大執行力，全年組件出貨量年增76.4%至78.5吉瓦，重回業界第一。受惠於成本優化的努力，我們全年獲利能力較去年同期大幅提升，毛利率為16%，而2022年為14.8%。淨利潤為4.858億美元，較去年同期成長4.56倍。調整後淨利為 5.738 億美元，年增 1.93 倍。第四季組件出貨量為26.3吉瓦，超出我們的指導，因為第四季組件價格降幅超過預期，我們近50%的組件以較低的價格銷往中國市場。第四季毛利率為12.5%，較第三季的19.3%大幅下降。

In China, newly-added PV installation reached 216.88 gigawatts in 2023, up 148.1% year over year to a historical high. At the same time, excess supply in various links of the industrial chain led to price declines. Tender prices for modules at the year-end decreased over 40% to below CNY 1 per watt compared to the beginning of the year. Export volumes of PV products in 2023 increased significantly year over year, whereas export volume [fell] slightly as a result of decreasing prices. In January and February 2024, seasonality combined with extreme competition from certain manufacturers intensified market panic and irrational prices. We remain cautious and irrational in the face of abnormally low tenders. In addition, while some manufacturers without competitive cost or advanced products reduced or suspended production, we maintained our leading utilization rates in the industry as a result of cost advantage and high order visibility.

我國2023年新增光伏裝置216.88吉瓦，較去年成長148.1%，創歷史新高。同時，產業鏈各環節供給過剩導致價格下跌。年末組件招標價格較年初下降超40%至1元/瓦以下。 2023年光電產品出口量較去年同期大幅成長，但受價格下降影響，出口量略為下降。 2024年1月和2月，季節性因素加上部分製造商的激烈競爭加劇了市場恐慌和價格不合理。面對異常低價的投標，我們保持謹慎和非理性。此外，雖然一些沒有競爭力成本或先進產品的製造商減少或暫停生產，但我們憑藉成本優勢和較高的訂單可見性，保持了行業領先的利用率。

Into March, as demand picked up and inventory reduced, module prices gradually stabilized and some bidding prices rebounded slightly. In the short- to mid-term, we expect the decline in module price will significantly improve the economics of solar energy, and we anticipate demand in the global PV markets will continue to increase in 2024. Meanwhile, rapid iteration of new technologies and the elimination of obsolete production capacity will also accelerate the consolidation of the industry. Market share for the top 10 module manufacturers is expected to increase from 70% in 2023 to over 90% in 2024. We are confident to consistently enhance our competitiveness through cyclical fluctuations, and we expect our market share to further increase in 2024.

進入3月份，隨著需求回升、庫存減少，組件價格逐漸穩定，部分招標價格小幅回升。中短期來看，我們預期組件價格的下降將顯著改善太陽能的經濟性，預計2024年全球光伏市場的需求將持續增長。同時，新技術和新產品的快速迭代淘汰落後產能也將加速產業整合。預計前十大組件廠商的市佔率將從2023年的70%成長到2024年的90%以上。我們有信心在週期性波動中不斷增強競爭力，預計2024年市佔率將進一步提高。

Thanks to our integrated manufacturing strategy and our leading position in N-type TOPCon technology in the early stage, by the end of fourth quarter, our N-type capacity exceeded 70 gigawatts, and our cost structure continues to improve. Currently, our mass produced N-type cell efficiency exceeds 26%, while the integrated cost of N-type is almost on par with P-type. With the continuous introduction of new cell technologies and optimization of cost-reducing processes, our cost structure is expected to become more competitive.

由於我們的一體化製造策略以及前期N型TOPCon技術的領先地位，截至第四季度末，我們的N型產能突破70吉瓦，成本結構持續改善。目前，我們量產的N型電池效率超過26%，而N型電池的綜合成本幾乎與P型持平。隨著新電池技術的不斷引入和成本降低製程的優化，我們的成本結構有望變得更具競爭力。

We attach great importance to intellectual property rights and are fully focused on sustaining our technical leadership based on extensive intellectual property rights. By the end of the fourth quarter, we had been granted 330 TOPCon patents, one of the largest portfolios of granted TOPCon patents in the world.

我們高度重視知識產權，並全力致力於以廣泛的知識產權為基礎維持我們的技術領先地位。截至第四季末，我們已獲得 330 項 TOPCon 專利，是全球獲得 TOPCon 專利最多的國家之一。

With the largest overseas integrated capacity of over 12 gigawatts in the industry and an effective supply chain traceability system, we have become the most reliable module supplier to the U.S. market, which is expected to generate significant profits in 2024. Furthermore, our investments in innovative production model is expected to generate returns over time. Phase I and II of our integrated projects in Shanxi will start production in the first half of 2024 as planned and gradually ramp up in the second half. The full integration of automation can greatly improve labor efficiency and operation turnover efficiency and is expected to bring a significant reduction in operating costs after reaching full production.

憑藉著業界最大的超過12吉瓦的海外綜合產能和有效的供應鏈追溯系統，我們已成為美國市場最可靠的組件供應商，預計2024年將產生可觀的利潤。此外，我們對創新的投資生產模式預計會隨著時間的推移產生回報。山西一體化計畫一期、二期將依計畫於2024年上半年投產，下半年逐步投產。自動化的全面整合，可以大幅提高勞動效率和作業週轉效率，預計達產後將帶來營運成本的大幅降低。

In the mid- to long-term, the rapid expansion of AI and electrical vehicles may lead to tight power supply in the world and the demand for clean power generation is expected to further increase. So far, reduced solar cost has significantly increased the competitiveness of solar in the energy sector. In the future, solar as a new quality [productive force] is set to play an increasingly important role in face of energy cris and energy transformation. We are bullish about PV market growth in the mid to long term, and we are confident we will continue to lead the industry with advanced technologies and premium high-efficiency products.

中長期來看，人工智慧和電動車的快速擴張可能會導致全球電力供應緊張，清潔發電的需求預計將進一步增加。到目前為止，太陽能成本的降低顯著提高了太陽能在能源領域的競爭力。未來，太陽能作為一種新的生產力，在能源危機和能源轉型中必將發揮越來越重要的作用。我們看好光伏市場中長期成長，有信心繼續以先進技術和優質高效產品引領產業。

Taking into account supply chain and market conditions, we are reducing investments in capacity expansion in 2024, we are focusing on expanding our advanced N-type capacity, including 28 gigawatts of integrated capacity in our Shanxi plant and about 4 gigawatts of N-type cell and module capacity in Vietnam. We continue to focus on improving working capital efficiency and achieving sustainable growth in operating cash flow.

考慮到供應鏈和市場情況，我們在2024年減少產能擴張投資，重點擴大先進的N型產能，包括山西工廠28吉瓦綜合產能和約4吉瓦N型電池以及越南的組件產能。我們持續專注於提高營運資金效率，實現經營現金流的永續成長。

Before turning over to Gener, I would like to go over our guidance for the first quarter and the full year of 2024. By the end of 2024, we expect the mass produced N-type cell efficiency to reach 26.5%. We expect our annual production capacity for mono wafers, solar cells, and solar modules to reach 120 gigawatts, 110 gigawatts, and 130 gigawatts, respectively by the end of 2024, this N-type capacity accounting for over 90% of total capacity. We expect the module shipments to be in the range of 18 gigawatts to 20 gigawatts for the first quarter of 2024 and 100 gigawatts to 110 for the full year 2024, with N-type accounting for nearly 90% of total module shipments.

在轉向 Gener 之前，我想回顧一下我們對 2024 年第一季和全年的指導。到 2024 年底，我們預計量產的 N 型電池效率將達到 26.5%。我們預計到2024年底，單晶矽片、太陽能電池和太陽能組件的年產能將分別達到120吉瓦、110吉瓦和130吉瓦，其中N型產能佔總產能的90%以上。我們預計2024年第一季組件出貨量將在18吉瓦至20吉瓦之間，2024年全年組件出貨量將在100吉瓦至110吉瓦之間，其中N型組件佔組件總出貨量的近90%。

Thank you, Mr. Li. We are pleased to have achieved historical high in quarterly and annual module shipment, thanks to our excellent global marketing network and the power of our product. Total shipments were 27.9 gigawatt in the fourth quarter with module shipment accounting for approximately 95%. Annual module shipment increased 76.4% year over year to 78.5 gigawatts, and both module shipments in the fourth quarter and the full year 2024 ranked world #1.

謝謝李先生。由於我們卓越的全球行銷網路和產品的強大功能，我們很高興在季度和年度組件出貨量方面取得歷史新高。第四季總出貨量為27.9吉瓦，組件出貨量佔比約95%。全年組件出貨量年增76.4%至78.5吉瓦，第四季及2024年全年組件出貨量均排名全球第一。

We continue to improve product quality and build our customer service network to expand the influence of our brand. By the end of fourth quarter, our accumulated global module shipment exceeded 210 gigawatts, covering more than 190 countries and regions. In terms of geographic mix, China and Asia Pacific became our major shipment regions in the fourth quarter, accounting for approximately 70%. For the full year 2023, shipment to Asia Pacific and North America grew significantly, more than doubling year over year. As we continue to expand our footprint in overseas markets and build our integrated capacity, we move on to invest in North America and emerging markets. Based on our business conditions and market trends, China and Europe will continue to be the major contributor to the shipment in 2024, with North America, emerging markets, and Asia Pacific expected to flourish.

我們不斷提升產品品質，建立客戶服務網絡，擴大品牌影響力。截至第四季末，我們累計全球組件出貨量超過210吉瓦，覆蓋190多個國家和地區。從地域結構來看，中國和亞太地區成為我們第四季的主要出貨地區，佔比約為70%。 2023 年全年，亞太地區和北美地區的出貨量大幅成長，較去年同期成長一倍以上。隨著我們不斷擴大海外市場的版圖和建立綜合能力，我們繼續投資北美和新興市場。根據我們的業務狀況和市場趨勢，中國和歐洲將繼續成為2024年出貨量的主要貢獻者，北美、新興市場和亞太地區預計將蓬勃發展。

On the product front, the competitive high-efficiency [N-type module] (17:24) accounted for 70% of the shipment in fourth quarter with average premium of CNY 0.10 per watt versus P-type modules, and N-type module accounted for approximately 60% of annual global shipment, achieving the goal we set at the beginning of year and accelerated its market penetration globally. Currently, the power output of N-type module modules is more than 30 watt peak higher than that of the similar P-type module, providing our customers with higher power generation yield.

產品方面，具競爭力的高效率【N型組件】（17:24）第四季出貨量佔70%，較P型組件、N型組件每瓦平均溢價0.10元佔全球全年出貨量約60%，實現了年初制定的目標，加速了全球市場滲透。目前，N型組件組件的功率輸出比同類P型組件高出30瓦峰值以上，為我們的客戶提供了更高的發電量。

Shipments of our N-type module were expected to account for over 85% in the first quarter 2024, and its product strength to continue to lead the industry. We are always committed to bring greater economic value to our customer with high efficiency, highly-reliable product, and sustainable solutions. Recently, we unveiled the first Neo Green panels produced with renewable energy. These panels were produced in factories that were awarded the zero-carbon factory certification by TUV Rheinland. JinkoSolar is also the first company in the industry to be awarded with zero-carbon factory certification by TUV for silicon ingot manufacturing, wafer cutting, cell manufacturing, and module manufacturing.

預計2024年第一季我們的N型組件出貨量佔比將超過85%，產品實力持續領先產業。我們始終致力於以高效率、高可靠性的產品和永續的解決方案為客戶帶來更大的經濟價值。最近，我們推出了第一批採用再生能源生產的 Neo Green 面板。這些面板是在獲得德國萊茵TUV零碳工廠認證的工廠生產的。晶科能源也是業界首家獲得TUV矽錠製造、矽片切割、電池製造、組件製造零碳工廠認證的企業。

We also continue to improve our ESG practices and optimize our traceability system. In the first quarter, we were awarded with the ESG Transparency Award from EUPD Research, which recognized our far-reaching commitment to sustainability and transparency. Recently, bidding for some domestic projects began to be activated. EU inventories became depleted, and we have seen additional demand, especially in DG business. With gradually improved PV economics and a growing demand for transmission to clean energy globally, PV demand in the global market is expected to further increase in 2024, but at a relatively slower pace than in 2023. In longer-term, the requirement of AI for computing power will further increase the demand for electricity and the electrical equipment, ensuring strong growth potential for PV plus storage. As a responsible global company, we are always committed to providing clients with reliable and highly-efficient products and solutions, practicing the values we share with our clients, partners, and investors to accelerate to a greener future.

我們也繼續改進我們的 ESG 實踐並優化我們的可追溯系統。第一季度，我們獲得了 EUPD Research 頒發的 ESG 透明度獎，該獎項認可了我們對永續發展和透明度的深遠承諾。近期，國內部分計畫招標開始啟動。歐盟庫存耗盡，但我們看到了額外的需求，特別是在危險物品業務方面。隨著光伏經濟的逐步改善以及全球清潔能源輸送需求的不斷增長，預計2024年全球市場的光伏需求將進一步增長，但增長將較2023年相對放緩。從長遠來看，人工智慧對光伏發電的需求將持續成長。運算能力將進一步增加對電力和電氣設備的需求，確保光伏+儲存的強勁成長潛力。作為一家負責任的全球公司，我們始終致力於為客戶提供可靠、高效的產品和解決方案，實踐我們與客戶、合作夥伴和投資者共享的價值觀，加速邁向綠色未來。

With that, I'll turn the call over to Pan.

這樣，我就把電話轉給潘。

Thanks to solid execution of our operation and management strategies as well as successful efforts in cost optimization, we delivered excellent financial performance. For the full year, key metrics such as total revenues, gross margins, income from operations, and net income, all significantly increased year over year. We also improved working capital efficiency and optimized operating cash flow. By the end of the fourth quarter, we had cash and cash equivalents of $2.75 billion and our net debt decreased by over 20 percentage year over year. In December, we announced the extension of our existing share repurchase program, and by the end of February this year, we had repurchased nearly 1 million ADS in aggregate amount of approximately $28 million.

由於經營管理策略的紮實執行和成本優化的成功，我們取得了優異的財務表現。全年來看，總收入、毛利率、營業收入、淨利等關鍵指標均較去年同期大幅成長。我們也提高了營運資金效率，優化了經營現金流。截至第四季末，我們擁有現金和現金等價物27.5億美元，淨債務年減超過20%。 12月，我們宣布延長現有股票回購計劃，截至今年2月底，我們已回購近100萬股ADS，總金額約2,800萬美元。

With our advantages in N-type TOPCon technology, globalized operations, and integrated capacity, we are very confident in our growth prospect and will continue to improve working capital efficiency and achieve sustainable growth in operating cash flow. Let me go into more details now. Total revenue was $4.6 billion, an increase of 3 percentage sequentially and more than 9 percentage year over year. Gross margin was 12.5 percentage compared with 19 percentage in the third quarter and 14 percentage in the fourth quarter of '22. The decreases were merely due to the decrease in average selling prices of solar modules. Total operating expenses were $526 million. The increases were merely attributable to loss of disposal on PPE and expense in relation to settlement of a dispute with customer. Operating margin was 1.1 percentage compared with 2 percentage last year. Excluding the impact from a change in fair value of the notes and long-term investments and share-based compensation expenses, adjusted net income attributable to JinkoSolar Holding Company ordinary shareholders were 65 million compared with 45 million in the fourth quarter last year, up 73 percentage year over year.

憑藉N型TOPCon技術、全球化經營、綜合產能等優勢，我們對發展前景充滿信心，將持續提高營運資金效率，實現營運現金流的永續成長。現在讓我詳細介紹一下。總營收為 46 億美元，季增 3%，年增超過 9%。毛利率為 12.5%，而 22 年第三季為 19%，第四季為 14%。該下降僅僅是由於太陽能組件的平均售價下降所致。總營運費用為 5.26 億美元。增加的原因只是個人防護裝備處置損失以及與客戶糾紛解決相關的費用。營業利益率為 1.1%，而去年為 2%。剔除票據公允價值變動及長期投資及股權激勵費用的影響，調整後歸屬於晶科能源普通股股東的淨利為6,500萬，較去年第四季的4,500萬成長73%。年比百分比。

Now I'll brief you on our '23 full year financial results. Total module shipments were 78.5 gigawatts, up 76 percentage year over year and total revenues up 43 percentage year over year. For the full year 2023, gross profit was about $2.7 billion, an increase of 55 percentage year over year. Gross margin was 16 percentage compared to 14.8 percentage. The increase was mainly attributed to a decrease in the material cost of solar modules. Total operating expenses were $1.8 billion, up 9 percentage year over year. The increase was mainly due to an increase in impairment loss on PPE, an expense in relation to settlement of dispute with customer, and increase in staff cost. Operating margin for the full year of '23 was 5 percentage compared to 0.5 percentage last year. Excluding the impact from a change in fair value of notes, long-term investments, and share-based compensation expenses, adjusted net income attributable to JinkoSolar Holding's ordinary shareholders was about $574 million, up nearly 2x year over year.

現在我向大家介紹我們23年全年的財務表現。組件總出貨量為78.5吉瓦，年增76%，總營收年增43%。 2023年全年毛利約27億美元，較去年同期成長55%。毛利率為 16%，去年同期為 14.8%。此成長主要歸因於太陽能組件材料成本下降。總營運費用為 18 億美元，年增 9%。增加的主要原因是PPE減損損失增加、與客戶糾紛解決相關的費用以及員工成本增加。 2023 年全年的營業利益率為 5%，而去年為 0.5%。剔除票據公允價值變動、長期投資及股權激勵費用的影響，調整後歸屬於晶科能源普通股股東的淨利約5.74億美元，較去年同期成長近2倍。

Let's move into the balance sheet. As mentioned, at the end of the fourth quarter, our cash and cash equivalents were significantly higher at $2.75 billion, up from $1.93 billion at the end of the third quarter and $1.64 billion at end of the fourth quarter of '22. AR turnover days were down to 76 days in the fourth quarter from 87 days in the third quarter. Inventory turnover days were down to 57 days from 67 days in the third quarter. The total debt was $4.38 billion at year-end, compared to $4 billion last year. Our net debt was $1.6 billion compared to $2.3 billion last year.

讓我們進入資產負債表。如前所述，截至第四季末，我們的現金和現金等價物大幅增加至 27.5 億美元，高於第三季末的 19.3 億美元和 22 年第四季末的 16.4 億美元。 AR 週轉天數從第三季的 87 天降至第四季的 76 天。庫存週轉天數從第三季的 67 天降至 57 天。截至年底，債務總額為 43.8 億美元，而去年為 40 億美元。我們的淨債務為 16 億美元，而去年為 23 億美元。

This concludes our prepared remarks. We're now happy to take your questions. Operator, please proceed.

我們準備好的演講到此結束。我們現在很樂意回答您的問題。接線員，請繼續。

(Operator Instructions) Your first question comes from Philip Shen with ROTH MKM.

（操作員說明）您的第一個問題來自 ROTH MKM 的 Philip Shen。

First one is on pricing. Was wondering if you could share with us the Q4 ASP. Sorry if I missed it. And then what do you expect that ASP to be in Q1 and Q2 and as we get through the year?

第一個是關於定價。想知道您是否可以與我們分享第四季度的 ASP。抱歉，如果我錯過了。那麼，您預計第一季和第二季的 ASP 會是多少？

Gener, would you like to answer the question?

將軍，您願意回答這個問題嗎？

Philip, can you hear me?

菲利普，你聽得到我說話嗎？

Yes. I can hear you.

是的。我可以聽見你。

I'm traveling. So I didn't get all of your questions, but I heard it's about pricing, right? So actually, the pricing significant job happens across December to January. So that means if we compare the ASP between Q4 and Q1, definitely there will be a big gap because of the market price changes. So detailed number wise, I don't have that with me, right? Sorry for that.

我在旅行。所以我沒有回答你所有的問題，但我聽說這是關於定價的，對吧？所以實際上，重要的定價工作發生在 12 月到 1 月。所以這意味著如果我們比較第四季和第一季的平均售價，由於市場價格的變化，肯定會有很大的差距。這麼詳細的數字，我沒有帶，對嗎？對此感到抱歉。

Okay. Yes. Gener, so can you share what the ASP was in Q4 for the modules? And then can you quantify how much lower Q1 might be?

好的。是的。 Gener，可以分享一下第四季模組的 ASP 嗎？然後你能量化 Q1 可能會低多少嗎？

Charlie, can you take that? I don't have the number with me now.

查理，你能接受嗎？我現在沒帶號碼。

Yes. Philip, I think the most important thing is we believe it's the panic sales of the module recent, let's say, 2 quarters. And we don't believe the price, particularly in China, is sustainable. And we're expecting, and as well as the market is expecting the module point has been stabilized and maybe up a little bit. And back to the pricing, depending on different markets, the U.S. it's pretty significantly in price premium, and Europe is a little bit better than China, and different segments, DG versus utility has different price difference. But to answer your questions, I think, [you want to explore is], for sure, if Q1, Q2 versus Q4 last year, we think the ASP is still in a downward trend, but it's not dramatically, but slightly. And we think it's reaching to the bottom in the first half year of 2024 for the ASP.

是的。菲利普，我認為最重要的是我們相信這是模組最近（比如說，兩個季度）的恐慌性銷售。我們認為這個價格，特別是在中國，是不可持續的。我們預計，市場也預期模組點已經穩定，也許會上漲一點。回到定價，根據不同的市場，美國的價格溢價相當大，歐洲比中國好一點，不同的細分市場，DG 與公用事業有不同的價格差異。但要回答你的問題，我認為，[你想探討的是]，當然，如果第一季、第二季與去年第四季相比，我們認為平均售價仍然處於下降趨勢，但不是大幅下降，而是輕微下降。我們認為平均售價將在 2024 年上半年觸底。

Okay. But you have the average selling price for all the regions for Q4, right? Can you share that price for Q4?

好的。但是您有第四季度所有地區的平均售價，對吧？可以分享一下第四季的價格嗎？

No, we don't disclose, but you can calculate the blended. If you take the total revenue versus modules shipped. And typically, we have 95% of the revenue is coming from module business.

不，我們不會透露，但您可以計算混合值。如果您將總收入與已出貨的模組進行比較。通常，我們95%的收入來自模組業務。

Okay. So it sounds like the bottom could be Q1 or Q2. Or do you think the bottom is more Q2 or more Q1 in terms of module pricing?

好的。所以聽起來底部可能是 Q1 或 Q2。或者您認為就組件定價而言，底部更多的是第二季度還是第一季？

I think different company has different mix, but I think it's relatively stable, Q2 versus Q1, maybe a little bit lower, but it's not significant. And that's what we are looking at. And the most important thing is we think that in China the demand is exceeding the expectations. China demand is very, very good. And Europe, the destock has been completed and they are picking up the stock. So we think there's improved outlook from the demand side, but there's still some oversupply situations. But for Jinko we have more -- 90% is N-type and global sales and manufacturing capabilities, and we think we are relatively better than the other peers. But it takes time for the low [efficiency] (31:25) capacity tier 2, tier 3 companies to phase out, it takes time, but we think it's the most important thing. We focus on our [adaptiveness] throughout a relatively challenging year.

我認為不同的公司有不同的組合，但我認為它相對穩定，第二季度與第一季相比，可能會低一點，但並不重要。這就是我們正在關注的。最重要的是我們認為中國的需求超出了預期。中國的需求非常非常好。而歐洲，去庫存已經完成，他們正在回升庫存。因此，我們認為需求方面的前景有所改善，但仍存在一些供應過剩的情況。但對晶科來說，我們有更多——90%是N型和全球銷售和製造能力，我們認為我們比其他同行相對更好。但低[效率](31:25)產能的二級、三級公司需要時間才能逐步淘汰，這需要時間，但我們認為這是最重要的。在相對充滿挑戰的一年裡，我們專注於我們的[適應性]。

Shifting over to margins. So you've given us a little bit of a framework for how to think about pricing trends through the year. What do you expect your margins to be for Q1? I know you haven't given official guidance, but just relative to Q4, maybe you can say a little bit up or down or something. And then as it relates to Q2, when do you see a bit of a recovery of the margins?

轉移到邊緣。因此，您為我們提供了一些如何思考全年定價趨勢的框架。您預計第一季的利潤率是多少？我知道你還沒有給出官方指導，但只是相對於第四季度，也許你可以說有一點上升或下降之類的。然後，就第二季而言，您什麼時候會看到利潤率回升？

Yes, we estimate the Q1, Q2, first half year it's a little bit lower, slightly lower versus Q4 last year. It's not dramatic lower for the Q4 versus Q3 last year. It's slightly lower throughout the Q1, Q2, but we believe there's opportunities and for the second half year maybe profitability to expand.

是的，我們估計第一季、第二季、上半年會有點低，比去年第四季略低。第四季與去年第三季相比並沒有大幅下降。第一季和第二季略有下降，但我們相信有機會，下半年獲利能力可能會擴大。

And then finally, I think in your slide, we talked about 2 gigawatts of integrated U.S. capacity. Again, sorry if I missed this, but does that mean you might do wafer, cell, and module in the U.S. and can you share if so, what the locations are? I'll leave it there. And I have one follow up on that topic.

最後，我想在你的幻燈片中，我們討論了美國 2 吉瓦的綜合容量。再次抱歉，如果我錯過了這一點，但這是否意味著你們可能在美國生產晶圓、電池和模組，如果是的話，您能否分享一下，地點在哪裡？我會把它留在那裡。我對這個主題有一個後續行動。

Yes, the U.S. capacity, we started constructions last year and it's getting ready, I think very quickly in March or April to start the operation. It's 100% module, 2 gigawatts, no wafer, cell. But we have integrated capacity in Southeast, Vietnam, Malaysia, the capacity is roughly 12 gigawatts to 14 gigawatts. And in the combinations with the 2 gigawatts, the module capacity in the U.S., I think, we are in a good position and on top of that we have separate independent supply chain from the poly, everything to the module. And we have very good traceability systems and proof of record in the last year. So we think this year we have more market opportunities and to catch up for the next 2 or 3 years for the U.S. market.

是的，美國的產能，我們去年開始建設，現在正在準備中，我認為很快就會在三月或四月開始運作。它是 100% 模組、2 吉瓦、無晶圓、電池。但我們在東南部、越南、馬來西亞都有綜合產能，產能大概是12吉瓦到14吉瓦。我認為，在與美國 2 吉瓦組件產能的組合中，我們處於有利地位，最重要的是，我們擁有與多晶矽、組件的一切獨立的供應鏈。去年我們有非常好的可追溯系統和記錄證明。所以我們認為今年我們有更多的市場機會，並且可以在未來兩三年內趕上美國市場。

Okay, so it's only 2 gigawatts of module or it is 2 gigawatts of module, the way it was written on the Slide 6, sounded like 2 gigawatts of integrated capacity could be in the U.S. But my follow up here and then I'll wind it down, and this might be a bit of a tough question, but what is your view of the discussion around the foreign entity of concern language, which a lot of people are talking about, could be added to the 45X manufacturing PTC, which might make it more difficult for you guys to add or to receive the PTC. You're ramping up your facility basically now, if not maybe in a month in April. To what degree does that concern you? Are you following that topic at all?

好吧，所以它只是2 吉瓦的模組，或者它是2 吉瓦的模組，就像幻燈片6 上寫的那樣，聽起來好像2 吉瓦的綜合容量可能在美國。但我在這裡跟進，然後我會結束這可能是一個有點棘手的問題，但是您對圍繞外國實體關注語言的討論有何看法，很多人都在談論這種語言，可以將其添加到 45X 製造 PTC 中，這可能會讓你們增加或接收PTC 變得更加困難。你現在基本上正在加強你的設施，如果不是的話，也許是在四月的一個月內。這對你來說有多大程度的影響？你有關注這個話題嗎？

Frank speaking, I'm not familiar with the topics you are talking about. The foreign entities the regulations updates, but we will follow up after the call. But I'm not sure you are talking about like the semiconductor, sensitive technology. But we think solar is more pervasive and very common for each countries to develop and it's not data sensitive. But anyway, we will follow up the topic you are talking about, but I'm not familiar with the progress.

弗蘭克，我不熟悉你所談論的話題。外國實體法規有更新，但我們會在電話後跟進。但我不確定你說的是半導體、敏感技術。但我們認為太陽能更普遍，對每個國家來說都很普遍，而且它對數據不敏感。但無論如何，我們會跟進你所談論的話題，但我不熟悉進展。

Your next question comes from Alan Lau with Jefferies.

你的下一個問題來自 Jefferies 的 Alan Lau。

So I would like to know because there's a very detailed capacity expansion plan and just would like to ask a bit on the details. So, by the end of 2024, it would be 120 gigawatts, 110 gigawatts, and 130 gigawatt for wafer, cell, and module. So my question is mainly on the cell. Because the company has 70 gigawatt of TOPCon by the end of 2023 and supposedly the remaining 20 gigawatt is PERC, and then by the end of this year it's 110 gigawatts. So will it be 100 gigawatt of TOPCon plus 10 gigawatt of PERC? If that is the case, then do you mean you would impair the 10 gigawatt of PERC this year?

所以我想知道，因為有一個非常詳細的產能擴張計劃，只是想詢問一些細節。因此，到 2024 年底，晶圓、電池和組件的產能將分別達到 120 吉瓦、110 吉瓦和 130 吉瓦。所以我的問題主要是在細胞上。因為到2023年底，該公司將擁有70吉瓦的TOPCon，據稱剩餘的20吉瓦是PERC，然後到今年年底，規模將達到110吉瓦。那麼是 100 吉瓦的 TOPCon 加 10 吉瓦的 PERC 嗎？如果是這樣的話，那麼你的意思是你今年會減損10吉瓦的PERC嗎？

The answer is we will phase out 20 gigawatts per capacity throughout the year. That's the plan. And everything we have disclosed by the end of the year, the capacity is 100% N-type, there's no P-type capacity. The cell capacity is 110 gigawatts. And the major part is the 28 gigawatts, the Shanxi super factories plus what we are talking about in Vietnam 4 gigawatts, as well as we have some improvement of production volume in existing capacity. So total is 110 gigawatts for the entire TOP capacity. We did have 28 gigawatts PERC capacity, and we don't have plan to upgrade. And we think it's not economically makes sense. And the most important thing is we have depreciated the capacity over 5 years. So we don't believe we have significant burden for the 20 gigawatts, the PERC. And we focus on the new technology and new product. I think, that is the smart decision.

答案是我們將在全年逐步淘汰每容量 20 吉瓦的容量。這就是計劃。我們到年底揭露的一切，產能都是100%N型，沒有P型產能。電池容量為110吉瓦。主要是28吉瓦，山西的超級工廠加上我們所說的越南的4吉瓦，還有我們現有產能的產量有一些提高。因此整個 TOP 容量總計為 110 吉瓦。我們確實有28吉瓦的PERC產能，而且我們沒有升級計畫。我們認為這在經濟上沒有意義。最重要的是我們已經對容量進行了五年折舊。因此，我們認為 20 吉瓦 PERC 不會給我們帶來重大負擔。我們專注於新技術和新產品。我認為，這是明智的決定。

So just to confirm, basically, for the 20 gigawatt of PERC, they are fully depreciated. So basically, they were built in 2019 and then by now they are fully depreciated. So you do not see major impairment risk this year, right?

因此，為了確認，基本上，對於 20 吉瓦的 PERC，它們已完全折舊。所以基本上，它們是 2019 年建造的，現在已經完全折舊了。所以您認為今年不會有重大減損風險，對吧？

Yes, roughly, yes. And we did have some residual value, but it's not significant. Most of the assets have been depreciated.

是的，大致上，是的。我們確實有一些剩餘價值，但並不重要。大部分資產已提列折舊。

Yes. That's impressive because a lot of peers in this industry might have a lot of impairment this year. So my next question is what is the new signed ASP for the contracts that you are signing in the U.S. market? Because I have been hearing different feedback saying that prices for utility projects in the U.S. are declining from $0.30 to below $0.30 since 4Q. So I'd like to learn your view on this front.

是的。這令人印象深刻，因為今年這個行業的許多同行可能會遭受很大的損失。所以我的下一個問題是，你們在美國市場簽訂的合約的新簽訂的平均售價是多少？因為我一直聽到不同的反饋稱，自第四季度以來，美國公用事業項目的價格從 0.30 美元下降到 0.30 美元以下。所以我想了解您對這方面的看法。

There's, I think, public index for the U.S. The price range is, I think, very regularly big high $0.20, low $0.30 kind of range. And it looks like it's in the downward trend, but relatively stable. And different customers, different preference. And we think we are in a good position and because we traceability, and we have separate poly through the modules, and we think we can sell relatively at price premium with some peers.

我認為，美國的公共指數價格範圍非常規律，高 0.20 美元，低 0.30 美元。而且看起來雖然處於下降趨勢，但相對穩定。而且不同的客戶，不同的偏好。我們認為我們處於有利地位，因為我們具有可追溯性，而且我們透過模組擁有獨立的多晶矽，我們認為我們可以以相對溢價與一些同行進行銷售。

So you have mentioned overseas polysilicon. So we'd like to have an update on the overseas polysilicon price. Is it rebounding or it's still trending down?

所以你提到了海外的多晶矽。所以我們想了解一下海外多晶矽價格的最新情況。是在反彈還是仍在下跌？

I think in recent 3 months it's relative stable, because the polysilicon out of China is around 100,000 metric tons, no new capacity are expected in the next 1.5 year. The other thing is there may be some China poly. But I think there's relative risk and there's a very complicated compliance. And so we don't see significant downward and relatively stable.

我認為近3個月相對穩定，因為中國多晶矽出口量約10萬噸左右，預計未來1.5年不會新增產能。另一件事是可能有一些中國聚。但我認為存在相對風險且合規性非常複雜。所以我們沒有看到顯著的下降並且相對穩定。

So switching gear to the European market because you have mentioned destocking has basically completed. So would like to follow up on this. Are you receiving orders in a normalized manner? Is it from the residential market or its mainly from the utilities market in Europe?

所以轉向歐洲市場，因為你提到去庫存基本上已經完成。所以想跟進​​此事。您是否以正常方式接收訂單？是來自住宅市場還是主要來自歐洲的公用事業市場？

I think both, but in the recent quarter I think the majority is the DG market. But this year both utility and the DG will grow year over year.

我認為兩者都有，但在最近一個季度，我認為大部分是 DG 市場。但今年公用事業和分散式發電都將逐年成長。

So you don't see inventory as an issue even in the DG market anymore because last year it was a huge issue.

因此，即使在 DG 市場上，您也不再將庫存視為一個問題，因為去年這是一個大問題。

Yes. And last year the first half year, they built the stock for the DG distributors and destock, so I think 5 or 6 months. And it looks like on top of that, not only in European market as well as other markets, the customers, they are [really] to the bottom of the module price, but it looks like stabilized. I think the price is not sustainable. A lot of customers accelerate the purchase decisions as well as destock, the stock level is going back to normalized level in Europe. And plus the logistic issue. That's the issue. So we see the rebound from the European market and the second quarter pretty sure is a strong quarter for the European market.

是的。去年上半年，他們為 DG 分銷商建立了庫存並去庫存，所以我認為需要 5 到 6 個月。最重要的是，不僅在歐洲市場，還有其他市場，客戶，他們的模組價格[確實]已經觸底，但看起來已經穩定。我認為這個價格是不可持續的。許多客戶加速採購決策並去庫存，歐洲庫存水準正在恢復正常水準。再加上物流問題。這就是問題所在。因此，我們看到歐洲市場的反彈，第二季肯定是歐洲市場的強勁季度。

And in your PowerPoint, I think, it's the first time that you have officially put ESS into the whole press release. So we'd like to know do you have any quantitative shipment target on ESS? Because I know you have capacity for more than 10 gigawatt-hour. So would like to know on that front

我認為，在您的 PowerPoint 中，這是您第一次正式將 ESS 納入整個新聞稿中。所以我們想知道你們在ESS上有定量的出貨目標嗎？因為我知道你們的容量超過10吉瓦時。所以想知道這方面的狀況

For storage, we build up the capabilities, the teams, products, capacities and majority from last year. And the key focus is we develop our R&D capabilities and products and focus on some key markets. And so far it's in the relatively early stage. But we are confident, and we will discuss maybe the full year the guidance later this year, maybe in the second quarter, third quarter. But this year we think it's a good opportunity to catch up the markets and build a strong foundation for the next few years. So that's the key focus, not the focus for the shipment of this year.

對於存儲，我們從去年開始增強了能力、團隊、產品、能力和大部分。重點是我們發展我們的研發能力和產品，並專注於一些關鍵市場。到目前為止還處於相對早期的階段。但我們有信心，我們可能會在今年晚些時候，也許在第二季、第三季討論全年指引。但今年我們認為這是一個趕上市場並為未來幾年打下堅實基礎的好機會。所以這是重點，而不是今年出貨的重點。

(Operator Instructions) Your next question comes from William Grippin with UBS.

（操作員說明）您的下一個問題來自 UBS 的 William Grippin。

My first question was just on your 300-plus patent portfolio. I was wondering if you could provide a little more color on where those patents are granted. Are any of them international? And one of your peers is out there asserting their IP rights related to some TOPCon technologies? Just maybe how are you thinking about that? How do you view that relative to your patent portfolio?

我的第一個問題是關於你們的 300 多項專利組合。我想知道您是否可以提供更多有關這些專利授予地點的資訊。其中有國際的嗎？您的一位同行正在維護與某些 TOPCon 技術相關的智慧財產權？也許你是怎麼想的？相對於您的專利組合，您如何看待這一點？

These patents, we put a lot of R&D efforts in recent couple of years, and we developed and disclosed over 300 TOPCon patents, which we developed by ourselves. On top of that, we have additional more TOPCon patents by acquisition from others. And the patent is our key differentiators and the key strategies. And we licensed to one of the top 10 module company and one of the top 5 solar cell companies. And it's an illustration how very strong and capable our R&D teams on the cutting edge technology.

這些專利，我們這幾年投入了大量的研發工作，我們開發並公開了300多項TOPCon專利，這些專利都是我們自己開發的。除此之外，我們也透過從其他公司收購獲得了更多 TOPCon 專利。專利是我們的關鍵優勢和關鍵策略。我們向排名前 10 的組件公司之一和排名前 5 的太陽能電池公司之一進行了授權。這也說明了我們的研發團隊在尖端技術方面的實力和能力。

Appreciate that. And then just on the 26% mass production N-type cell efficiency that you referenced in the press release, how do you expect that to translate into mass production module efficiency? And when do you think that would ultimately be realized in mass production?

感謝。然後，就您在新聞稿中提到的 26% 的量產 N 型電池效率而言，您預計如何將其轉化為量產模組效率？您認為這最終會在量產中實現嗎？

26% cell capacity, we have reached to that level, the mass productions. And our target is end of this year, 26.5%. Sorry, I think for the standard, the 182 mm, I think, we are targeting roughly 610 watt to maybe 620 watt for standard 182 mm modules.

26%的電池容量，我們已經達到了這個水平，已經量產了。我們的目標是今年年底，26.5%。抱歉，我認為對於標準 182 毫米，我們的目標是標準 182 毫米模組的功率約為 610 瓦到 620 瓦。

(Operator Instructions) Your next question comes from [Rajiv Chaudhry with Intrinsic Edge].

（操作員說明）您的下一個問題來自[Rajiv Chaudhry with Intrinsic Edge]。

I have a few questions. First of all, just in terms of housekeeping. Can you tell us what the depreciation number was in the fourth quarter and what you expect it to be in 2024?

我有幾個問題。首先，僅就家務而言。您能否告訴我們第四季度的折舊數字是多少以及您預計 2024 年的折舊數字是多少？

So, sorry, could you repeat again?

那麼，抱歉，您能再說一次嗎？

Yes, the question was about depreciation in the fourth quarter and what the expectation is for 2024.

是的，問題是關於第四季度的折舊以及 2024 年的預期。

Depreciation, it's roughly, I think, CNY 16 billion to CNY 17 billion for 2024. So each quarter, roughly, CNY 1.5 billion to, I think, CNY 1.8 billion.

我認為，到 2024 年，折舊大約為 160 億元到 170 億元。因此，每季大約為 15 億元到 18 億元。

Sorry, can you repeat that? CNY 1.5 billion to CNY 1.8 billion.

抱歉，您能再說一次嗎？ 15億元至18億元。

Yes, depreciation.

是的，折舊。

And that's in 2024. What about the fourth quarter.

那是 2024 年。第四季呢？

Last year, right?

去年，對吧？

Yes, '23. Yes, sorry.

是的，'23。是的，抱歉。

Yes, similar amount. It's not significant different.

是的，類似的數量。這並沒有顯著的差異。

So around CNY 1.5 billion in the fourth quarter?

那麼第四季的營收約為15億元？

Yes, roughly.

是的，大約。

And then what was the total CapEx, capital spending in 2023, and what is the expectation for '24?

那麼 2023 年的總資本支出和資本支出是多少，對 24 年的預期是什麼？

For CapEx, yes, let me go into some details. And for 2023, our total CapEx is around CNY 18 billion. And we expect a range in 2024 is from CNY 11 to CNY 15 billion. Depends on the market.

對於資本支出，是的，讓我詳細介紹一下。 2023 年，我們的總資本支出約為 180 億元。我們預計 2024 年的範圍為 11 至 150 億元。取決於市場。

I see. Okay. And out of this CNY 11 billion to CNY 15 billion, is it almost 100% related to the module business or is there anything related to the storage business as well?

我懂了。好的。而這110億到150億元中，是幾乎100%與模組業務相關，還是也與儲存業務相關？

It's related to our integrated solar manufacturing.

這與我們的太陽能整合製造有關。

Okay. The next question is about the charges that you had in the operating expenses. You mentioned that the write-down of assets as well as the settlement with the customer, if they had not happened, then the total operating expense would have been the same as the third quarter. So by my calculation, that is about CNY 0.6 billion, or about $85 million. Is that the correct number?

好的。下一個問題是關於您在營運費用中的費用。您提到資產減記以及與客戶的結算，如果沒有發生，那麼總營運費用將與第三季相同。據我計算，大約是 6 億元人民幣，約 8,500 萬美元。這是正確的數字嗎？

You're right. We did have some special onetime items in the fourth quarter last year. One is some kind of customer dispute, it's around $30 million. We have some impairment for the equipment around $10 million. So we did have $40 million, I think, one-off items, nonrecurring items.

你說得對。去年第四季我們確實有一些特殊的一次性商品。其中之一是某種客戶糾紛，金額約 3,000 萬美元。我們對設備有約 1000 萬美元的減損。所以我認為我們確實有 4000 萬美元，是一次性項目、非經常性項目。

Okay. And comparing your cost structure to the tier 2 manufacturers, can you give us an idea? My calculation is that your cost structure in the fourth quarter was about 10 percentage points better than the tier 2 and tier 3 manufacturers. So, for example, if you did 12.5% gross margin, the tier 2 and tier 3 were operating at 2 to 3% gross margin. Can you comment on that?

好的。並將你們的成本結構與二級製造商進行比較，您能給我們一個想法嗎？我算了一下，你們第四季的成本結構比二、三線廠商好10個百分點左右。因此，舉例來說，如果您的毛利率為 12.5%，那麼二級和三級的毛利率將為 2% 到 3%。你能對此發表評論嗎？

We are confident that our cost structure is leading, and we have advantage. By the way, we don't comment on detailed numbers and different company has different situations. But you're right that if we are, let's say, making low profit levels, I think a lot of companies doing a similar business will lose their money. That we're very confident, but again, I think it takes time to phase out the tier 2, tier 3 companies, and after the consolidation and phase out, then we think we can get more market share and make decent profitability. But it takes time.

我們有信心我們的成本結構是領先的，我們有優勢。順便說一下，具體數字我們不做評論，不同的公司有不同的情況。但你是對的，如果我們的利潤水平很低，我認為很多從事類似業務的公司都會賠錢。我們非常有信心，但同樣，我認為逐步淘汰二級、三級公司需要時間，在整合和逐步淘汰之後，我們認為我們可以獲得更多的市場份額並獲得可觀的盈利能力。但這需要時間。

Do you think at this point, your cost structure is better than other tier 1 manufacturers?

您認為目前您的成本結構是否優於其他一級製造商？

I don't do 100% guarantee, but we are confident.

我不做100%的保證，但我們有信心。

So you're confident that your cost structure is already equal to or better than other tier 1 manufacturers?

那麼您有信心您的成本結構已經等於或優於其他一級製造商嗎？

Yes, we are confident that our cost structure, capacity, technology is leading, yes.

是的，我們有信心，我們的成本結構、產能、技術是領先的，是的。

Can you elaborate on the expected cost improvements that are likely to happen as a result of the integrated production that you're going to roll out next year of the Shanxi plant? How much of a cost advantage are you going to create as a result of the integration and everything happening in one location?

您能否詳細說明一下您明年將在山西工廠推出的一體化生產可能帶來的預期成本改善？透過整合以及所有事情都在一個地點進行，您將創造多少成本優勢？

It's not purely cost advantage. It's the Shanxi super factories, it's digitalized and automatic. And the [EST] traceability is low carbon everything. And we integrated a lot of advanced equipment and streamlined a lot of even phase out some production stage and have significant workforce inefficiency, and very high turnover ratios and very good locations to serve the customers in the West China as well as the global market customers. So the cost structure is reflecting the advantage and it's a big amount, we believe, but we don't disclose. We think it's a big advantage with this existing production structures for the industry.

這不僅僅是成本優勢。這是山西的超級工廠，數位化、自動化。而【EST】溯源就是低碳一切。我們整合了許多先進的設備，精簡了許多甚至淘汰了一些生產階段，勞動力效率顯著低下，週轉率非常高，地理位置非常好，可以為中國西部的客戶以及全球市場的客戶提供服務。因此，我們認為成本結構反映了優勢，而且金額很大，但我們沒有透露。我們認為這是該產業現有生產結構的一大優勢。

And finally, I want to confirm number that I think Gener gave. The total volume of shipments of N-type in the fourth quarter, was it 70% of total shipments?

最後，我想確認一下我認為 Gener 給出的數字。第四季N型的總出貨量是不是總出貨量的70%？

That's 70%, yes. 70%.

那是 70%，是的。 70%。

And did he say that in the first quarter it will be 85%.

他有沒有說第一季會達到85%？

Full year.

全年。

That is full year, it's around 90%. So gradually from 70% to 95% quarter by quarter and this year. So Q1, this year, I think is roughly 80%.

那是全年，大約是90%。所以逐季和今年逐漸從 70% 上升到 95%。所以今年第一季度，我認為大約是 80%。

Okay. So in terms of going back to the gross margin. So you are suggesting that the first quarter gross margin should be slightly lower than the fourth quarter. So are we still looking at number around 12%?

好的。回到毛利率方面。所以你建議第一季的毛利率應該略低於第四季。那我們還在關注 12% 左右的數字嗎？

You mean the absolute number?

你說的是絕對數量？

Yes. The actual gross margin.

是的。實際毛利率。

Yes, we don't disclose that, but I said it was slightly downward but not dramatically. We think it's reaching the bottom for the first half year.

是的，我們沒有透露這一點，但我說過略有下降，但不是大幅下降。我們認為上半年已經觸底。

So if the gross margin is around 12% in the first quarter and the prices stabilize from March, April onwards, is it reasonable to think that gross margin could improve in the second quarter because your costs will keep on coming down, and also your shipments to the U.S., which are higher ASP, will go up?

因此，如果第一季的毛利率在12% 左右，並且從3 月、4 月開始價格穩定，那麼是否有理由認為第二季的毛利率可能會有所改善，因為你的成本將持續下降，而且你的出貨量也會降到美國，哪些ASP較高，會漲嗎？

We think we have more likelihood to improve in the second half year, the improved demand outlook. And you are talking about U.S. shipments, it's the second half year loaded. And I think roughly maybe, let's say, 65% shipments in the U.S. in the second half year as well as the Shanxi super factories is doing the pilot productions the first half year, but will be 100% operational by the end of the third quarter. So everything together, we think the margin expansion is likely in your second half year.

我們認為下半年需求前景改善的可能性較大。你說的是美國的出貨量，這是下半年的情況。我想大概是，下半年美國的出貨量有65%，山西超級工廠上半年正在進行試生產，但到第三季末將100%投入營運。因此，綜合考慮，我們認為下半年利潤率可能會擴大。

And what do you think the impact of -- you mentioned that by the fourth quarter, you expect that tier 1 companies or top 10 manufacturers will have as much as 90% of the market. That basically means tier 3 will have shut down and tier 2 will be selling much lower output than they are selling right now. What do you think that does to pricing by the fourth quarter?

您認為影響是什麼——您提到到第四季度，您預計一級公司或十大製造商將擁有高達 90% 的市場份額。這基本上意味著第 3 梯隊將關閉，而第 2 梯隊的產量將遠低於現在的產量。您認為這對第四季的定價有何影響？

The fourth quarter this year, right?

今年第四季吧？

Yes.

是的。

It's difficult to estimate, but I think it should be stabilized. And on top, the most important thing is, I think by the end of the fourth quarter, I believe, a lot of industry players for tier 2, tier 3 and as well as the companies, they never in the solar industry but entered in recent 1 or 2 years, those guys are going to -- the capacity will be phased out 100%. So that's my estimation.

很難估計，但我認為應該會穩定下來。最重要的是，我認為到第四季度末，我相信很多二級、三級行業參與者以及公司，他們從未涉足太陽能行業，而是進入了最近一兩年，這些人將會——產能將被100% 淘汰。這就是我的估計。

Thank you. There are no further questions at this time. And that does conclude our conference for today. Thank you for participating. You may now disconnect.

謝謝。目前沒有其他問題。我們今天的會議到此結束。感謝您的參與。您現在可以斷開連線。