Emeren Group Ltd (SOL) 2010 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the second-quarter 2010 ReneSola Limited earnings conference call. My name is Anne and I will be your coordinator for today's call.

As a reminder, this conference is being recorded for replay purposes. At this time all participants are in listen-only mode. (Operator Instructions) We will be facilitating a question-and-answer session following the presentation.

I would now like to turn the presentation over to Mr. Derek Mitchell, ReneSola Investor Relations Consultant. Please proceed, sir.

Thank you. Hello, everyone, and welcome to ReneSola's second-quarter 2010 earnings conference call. ReneSola's second-quarter 2010 earnings results were released earlier today and are available on the Company's website as well as on newswire services. You can follow along with today's call by downloading a short presentation which can also be found on the Company's website at www.renesola.com.

On the call today from ReneSola are Mr. Xianshou Li, Chief Executive Officer, and Miss Julia Xu, Chief Financial Officer. Mr. Li will discuss ReneSola's business highlights and strategy and Miss Xu will go through the financials and guidance, and they will both be available to answer your questions during the Q&A session that follows.

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the Company's results may be materially different from the views expressed today.

Further information regarding these and other risks and uncertainties is included in the Company's annual report on Form 20-F and other documents filed with the US Securities and Exchange Commission. ReneSola does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Before I turn the call over to Mr. Li, please be reminded that unless otherwise noted all figures mentioned during this conference call are in US dollars.

It is now my pleasure to introduce Mr. Xianshou Li, CEO of ReneSola. Mr. Li will give his remarks in Mandarin and Miss Xu will translate into English. Please go ahead, Mr. Li.

(interpreted) Thank you to everyone for participating in today's second-quarter results call. If you have downloaded our presentation, please turn to page four for a snapshot of our highlights for the quarter.

The second quarter of 2010 was another strong period for ReneSola in which we achieved record shipments and capacity, as well as record revenues and net income. We continue to execute on our cost reduction strategy, and have improved production efficiencies by maintaining focus on our wafer manufacturing and OEM module services. Our technological expertise and sound management strategy have positioned ReneSola to capitalize on the robust market demand for solar power products experienced in the first half of 2010.

Please turn to page five. Total solar product shipments in the second quarter of 2010 were a record 258.3 megawatts, an increase of 6.6% from 242.4 megawatts in the first quarter of 2010.

Second-quarter gross profit margin improved drastically from 17.1% in the first quarter to 30.2% in the second quarter as a result of continued cost cutting efforts, improvements in production efficiencies and narrowing our polysilicon prices to market equivalent prices. Net profits surged to $36.1 million in the second quarter, an impressive jump of over 200% when compared to the first quarter of 2010.

Please turn to page seven for an overview of our Wafer business results for the quarter. By continuing to focus our strategy to drive down production costs, we lowered our average wafer processing cost to $0.26 per watt in the second quarter from $0.28 per watt in the first quarter of 2010, a decrease of 7.1%. Coupled with a decrease in polysilicon costs, this helped contributed to decrease our total wafer cost to $0.6 per watt in the second quarter, down 9.7% from $0.62 per watt in the first quarter.

Wafer ASP, excluding tolling business, in the second quarter reached $0.82 per watt. We expect third-quarter pricing to be flat against second quarter.

At our Sichuan polysilicon plant we produced 162 metric tonnes of polysilicon in the second quarter. As we continue our efforts to ramp-up production in order to reduce our in-house polysilicon cost, we maintain our target to lower production costs to $40 to $45 per kilogram by the end of the year. For the full year of 2010 we plan to produce approximately 800 to 1,000 metric tonnes of polysilicon.

Please now turn to page 10 for an update on our Module business.

As we have indicated in our previous conference calls, our OEM Module business is an important piece of our overall strategy. There is tremendous potential in the OEM [and OI label] segment, especially as solar companies move from manufacturing in high-cost regions to manufacturing in low-cost regions. As a result, we delivered module shipments of 50.6 megawatts with an average ASP of $1.75 per watt in the second quarter.

With the record growth of our module business we believe our downstream OEM platform will enhance our competitive edge by strengthening existing customer relationships, as well as attracting new customers. We expect to ship 145 megawatts to 165 megawatts of modules in the second half of the year for a total of 210 to 230 megawatts for the full-year of 2010.

Please now turn to page 11 for an update on our capacity expansion. We expanded our capacities once again during the quarter and will continue to do so in the coming years through capital expenditures and efficiency improvements in order to meet the market demand for high-quality solar products.

Over the course of the quarter we increased our wafer manufacturing capacity as projected to 1.2 gigawatts. We've also increased our cell and our module capacity to 240 megawatts and 375 megawatts, respectively. All of our capacity targets were achieved in the second quarter.

In 2011 we plan to increase our wafer production capacity to 1.8 gigawatts as we look to expand to scale our core business. We also plan to expand module production capacity to 600 megawatts in 2011 to meet the demands of our downstream OEM business. The planned capacity expansions in 2011 are already fully accounted for by our signed long-term wafer contracts plus the portion internally reserved for our module business.

Finally, please turn to page 11 as I discuss our proposed delisting from the AIM market of the London Stock Exchange. On July 27, we announced a resolution where we proposed to cancel our AIM quotation at the upcoming annual general meeting on August 20, 2010. Since our New York exchange listing, we have seen an increasing number of shareholders move their holdings in ReneSola from AIM to the New York Stock Exchange since the New York Stock Exchange offers higher levels of liquidity.

There are significant costs associated with maintaining our AIM quotation, including annual fees payable to London Stock Exchange, advisor and broker fees and other related professional costs. By canceling our AIM listing, we will reduce recurring and administrative overhead.

As I said before, the vote will take place at our annual general meeting on August 20 this year, at which point 75% of shareholder votes will be required to approve the application for cancellation.

Thank you, Mr. Li. Please turn to page 14, for a snapshot of our financial highlights. The second quarter was an excellent quarter financially. We achieved record revenues and record net income, as well as impressive growth and operating margin, which were also both records for the Company.

Our balance sheet has also been improved as we have generated strong operating cash flows and lowered our financial leverage through prudent capital expenditures.

Now I'd like to run through the details of our financial results. Please refer to page 15 to 17 for a historical comparison of some key figures from our second-quarter financial statement.

Net revenues for the second quarter of 2010 were $253.9 million, an increase of 22.9% sequentially driven primarily by higher wafer ASPs and higher module shipments.

Second-quarter gross profit margin was 30.2%, compared to a gross profit margin of 17.1% in the first quarter. The significant improvement was the result of continued cost cutting efforts, improvements in production efficiencies and narrowing our polysilicon prices to market equivalent prices.

Operating income for the second quarter of 2010 was $52.5 million. This compares to operating income of $21.2 million in the first quarter, an increase of nearly 150%.

Total operating expenses in the second quarter of 2010 were $24.2 million. The sequential increase in operating expenses was primarily attributable to $0.8 million bad debt provision against doubtful accounts receivable, a $1.4 million provision against equipment suppliers' prepayments and other operating expenses, including a $2.1 million in bonus accumulated for 2010.

Second-quarter operating margin was 20.6% compared to an operating margin of 10.3% in the first quarter. We recognized a tax expense of $11.6 million for the second quarter, compared with a tax expense of $3.6 million for the first quarter. For the full year of 2010 we still expect our tax rate to maintain at 24%.

Net income attributable to holders of ordinary shares for the second quarter of 2010 was $36.1 million, compared to net income of $11.8 million for the first quarter. This translates into earnings of $0.21 per ordinary share and $0.42 per ADS for the second quarter of 2010.

On the balance sheet, as of June 30, 2010, although the overall debt of $577 million is similar to that of the first quarter, we have improved debt composition by reducing short-term debt to $388 million from $406.6 million at the end of first quarter and increased long-term debt to $189.1 million from $171.4 million at the end of first quarter. As of June 30, 2010, we had approximately $750 million in committed credit lines.

The Company generated strong operating cash flows of $168.4 million in the first half of 2010 with a net cash and cash equivalent position of $171.2 million, nearly double the net cash and cash equivalent position of $98 million at the end of Q1. The Company also expects to generate strong operating cash flows with similar trajectory during the second half of 2010.

As a result of strong generation of our operating cash flows and controlled capital expenditures, we have significantly reduced our financial leverage over the past year, as you can see on page 18 of our presentation. And we believe we have cash flows in place to reach our net debt to equity ratio target of 75% by the end of 2010.

Now please turn to slide 20 for a discussion on our capital expenditures and guidance. Our capital expenditures cash spending for the second quarter of 2010 was $18.7 million, compared to $24.2 million in the first quarter.

We expect to continue generating strong operating cash flows during the second half of 2010. And total capital expenditure spending for the year is expected to be approximately $150 million, of which approximately $100 million covers the already-implemented increases in wafer, cell and modular capacity to 1.2, 240 and 375 megawatts, respectively, as well as the final amount to be paid for the Sichuan polysilicon facility.

The remaining $50 million from 2010 budget will be used in building capacity towards 2011 targets stated by Mr. Li earlier. A further $140 million of capital expenditures in 2011 is currently budgeted for achieving those targets.

Now turning to our guidance, demand has remained strong going into the third quarter and we expect to continue into the second half of 2010 resulting in stable ASPs and increased shipments for the remainder of the year.

For the third quarter, we expect revenues to be in the range of $300 million to $320 million and shipments to be in the range of 280 megawatts to 310 megawatts. For the full year of 2010, we expect revenues to be in the range of $1 billion to $1.05 billion and gross margin to be in the range of 25% to 27% while maintaining our previously guided gross profit margin range of 28% to 30% for the second half of 2010.

At this time, we are happy to take your questions. Operator, please.

Thank you. (Operator Instructions) And our first question comes from the line of Satya Kumar with Credit Suisse. Please proceed.

Yes, hi. Congratulations on a strong quarter guys. I know you mentioned that pricing is expected to be stable for the rest of the year, but I notice that your Q4 revenue guidance is actually down. Is this conservatism? At this point, how much of Q4 is actually sold out? And if you could provide some color on ASP trends in Q4 between wafers and modules would be great.

Okay.

(interpreted) Okay. Let me touch upon the wafer ASPs first. Although the retail market we have witnessed increases, upticking of wafer pricing against Q2, most of our customers are long-term customers. Therefore, for us, we expect pricing to be fairly flat Q3 versus Q2. We are also completely sold out for the fourth quarter and with only very slight pricing declines in Q4.

All right, so you're being conservative, I take it. I guess another question on your capacity expansion for the wafers, from 1.2 to 1.8 gigawatts. Can you provide some color on the linearity of the capacity guidance, is it more back half weighted or is it fairly linear?

And I notice that you're increasing the capacity mostly by increasing the mono capacity. Can you give us the mono and multi split in 2010, 2011, or I can use my ruler I guess?

Before I turn to Mr. Li, Satya, we mostly increase the multi not the mono, just one correction there.

(interpreted) We expect to increase about 600 megawatts of multi wafer production capacities, and it shall be online by the end of Q1 of 2011.

Okay. Is the slide 12 then incorrect? It shows that mono is going up, just wanted to confirm.

It's multi.

All right, thank you.

You also had a question the module ASPs. I have my COO, Dr. Panjian Li with me as well; he can perhaps touch upon the module ASPs.

The ASP of the Module in Q3 is slightly better than Q2. It is approximately 3% increase as compared with Q2. And as a ASP for the Q4 we expect that is the same as Q2; it's $1.75.

Thank you very much.

And our next question comes from the line of Vishal Shah with Barclays Capital. Please proceed.

Yes, hi. Thanks for taking my question. Your gross margin guidance for Q3, is it 25% to 27%? And if that's the case, can you help me understand the sequential decline in margins?

Oh no, the second half margin is 28% to 30%. Full year is 25% to 27% because of first quarter 17%.

Okay. I see. All right, that makes sense. And then, in general, you made comments around your capacity targets for modules and wafers. What about your cell capacity? What was it in Q2? And for the increase in wafer capacity, are you using domestic suppliers or are you using some of the international suppliers please?

You mean for the equipment?

Yes.

Okay.

(interpreted) As we indicated a little earlier, we have completed this year's capacity expansion targets. By the end of Q2, we have reached 1.2 gigawatts in wafer, 240 megawatts in cell and 375 megawatts in modules. For the additional capacities, 600 megawatts of wafer and also from 375 to 600 megawatts for modules will be implemented by the end of the first quarter of 2010. In terms of cell capacities, we have not yet decided how much to increase yet at the moment.

We expect 50% of the equipment to come from domestic suppliers and the remaining 50% from exports, but no matter whether it's domestically made or internationally made we are asking for all customized equipment.

And I take it the export is mostly for the wire source, is that right?

(interpreted) Yes, you are right.

Okay. And just can you remind me what your cell external purchases were in Q2? And I'm assuming that all of your cell would be internally sourced in Q3.

(interpreted) Yes, for Q3 the bulk of it, we will be -- because we have 240 megawatts in capacities, in Q3 we expect to produce 50 to 60 megawatts of cells ourselves. For the quarter of Q2, we had about 10 to 15 megawatts of cells which we purchased from third parties.

Thank you very much.

And our next question comes from the line of Sanjay Shrestha with Lazard Capital Markets. Please proceed.

Thank you. First of all, congratulations on a great quarter and the outlook for you guys. A couple of quick questions. First, I think it is already said 2010 is basically done, everything is committed for. So my question is really more on -- so in terms of your wafer capacity expansion for 2011, what sort of an early indication are you guys seeing if there is any for your business pipeline for 2011?

Sure, thanks, Sanjay.

(interpreted) Let me first talk about the commitments. The reason why we expanded our capacities to 1.8 gigawatts was because based on the contracts that we have on hand and plus what we will internally digest for our module business, we are sold out 100% for 2011.

Wow.

(interpreted) Many of the contracts we have also fixed the pricing. In general, I expect our average pricing to decline about 10% year-on-year against 2010. We have given our customers a 5% flexibility in terms of pricing.

Got it. One quick follow-up for me then. So in terms of -- that's great news, congratulations on that as well. So one quick follow-up on that. So when you guys talk about your wafer pricing to be between $0.46 to $0.48, can you give me either what your poly cost expectation or your processing cost expectation for that is, either/or?

Sure.

(interpreted) For our targets for polysilicon, we expect pricing to be between $45 to $50. And for our processing cost, we are hoping to achieve $0.18 per watt by the end of next year.

$0.18, okay. And then so when I run this math then, Julia, for 2011, we're talking about at least stable to increasing margin performance for you guys, despite even 15% ASP reduction. Am I doing the math right?

Okay.

(interpreted) Yes, I think, Sanjay, that you are right. We do expect fairly robust margins into 2011 as well. But as Mr. Li has also mentioned, that's why we expect 10% pricing declines; we do see some pressure into 2011.

Okay, great. Congratulations again, guys.

And our next question comes from the line of Sam Dubinsky with Wells Fargo. Please proceed.

Hey, guys. Congrats on the great quarter. Just a couple of housekeeping questions. How much money would you save per quarter from the AIM delisting, if you were successful?

Say it again, Sam; sorry, I didn't catch your question.

I'm sorry. How much money would you save per quarter from the AIM delisting?

In general, probably $0.25 million to $0.5 million on a full year basis.

Okay. And then, for 2011, I know it's a bit early, but how much of your wafer capacity is allocated to the module business?

We allocate (spoken in Mandarin) around 400 megawatts.

400 megawatts, okay. And then, there has been some chatter that cell and panel manufacturers are willing to give prepayments again, given how tight the market is. Are you seeing this trend? And if so, how does that factor into your CapEx plans?

Sure.

(interpreted) Yes, Sam, you're right; I think we'll probably get over $50 million just in 2010 from prepayments.

Okay. Do you see that trend continuing into 2011?

(interpreted) I think in the future, to win contracts, it's probably more driven by quality and the cost, rather than prepayments.

Okay, great. And my last question, just OpEx as a percent of sales over the next several quarters?

I think somewhere between 8% to 8.5%.

Okay, great. Thank you, guys. Once again, congrats.

Thanks.

And our next question comes from the line of [Lu Young] with UBS. Please proceed.

Congratulations on the results. I want to ask a question on your costs, based on the [$0.56]. How much was the polysilicon cost? And based on your anticipation of [$0.55] next quarter, can you help us reconcile the numbers, based on your reduction in your polysilicon costs going forward?

(interpreted) $0.30 for the polysilicon cost; $0.26 for the processing cost.

And how's that going to trend next quarter?

As indicated in our presentation, we'll be coming down to $0.54 by the end of this year.

And your expected polysilicon costs in third quarter?

Fairly stable.

I see. The last question from me is earlier in the year you indicated you had major global OEM customers. I just wanted to know how is that coming along and any new customers being signed on?

Our customer base is continuing to expanding and our new customers include Samsung and the big utility company in Czech, and (inaudible) in Italy. So our customer base is significantly expanding.

Could you also remind me how much of a module shipment do you expect in the third quarter?

90 megawatts.

90 megawatts. Okay. Thank you very much.

And our next question comes from the line of Eric Chen with Deutsche Bank. Please proceed.

Hi, Julia; (inaudible). Thanks for taking my question. I have just one question regarding the admin, surrounding admin expense; it's around $13 million in second quarter. I was wondering if the high poly costs from the Sichuan facility has been incorporated somewhere in the general administrative expense, or it has been in the [gross margin]?

(interpreted) Eric, we have incorporated the Sichuan loss at a GP line, not in the administrative costs.

I see.

And our next question comes from the line of Pranab Sarmah with Daiwa Capital Markets. Please proceed.

Thank you for taking my questions; great quarter. I have a couple of questions. The first one is, could you give us a split between mono versus multi output on the second quarter?

Yes, sure. Just give me one second.

Thank you.

Around 30% is mono.

And this split will continue to go down as and when you move to 4Q, right?

That's correct.

Okay. Then the second thing on the equipment order for next capacity expansion. Have you placed all the order for first quarter 2011 delivery or are some orders still left?

(interpreted) We are in the process. However, we are fairly confident and we will have all the deliveries by first quarter of next year.

Okay. And your ASP comment is really a very fantastic comment. Is this ASP already fixed or if the spot price goes to a lower level will it be linked to the spot price next year?

(interpreted) I think there are two fronts on this question. Firstly, even in the worst case scenario wafer price do drop, let's say, to dramatically $0.60 or so, given our $0.46 to $0.48 targeted total wafer cost, we will still be making very robust margins.

But more importantly, on a lot of the contracts we have signed we are building about 5% up and down movements with our customers [in term] pricing. So we should expect fairly stable pricings, even against very dramatic market movements next year.

My question was, whether -- is your pricing agreement is linked to the spot price, or it is totally agreed upon 10% plus minus 5%?

No, it's linked to this year's price, 2010 price.

Sorry?

It's linked to 2010's pricing.

No, 2011 pricing, you said that ASP will be down 10% year-on-year, plus minus --

Right. So 10% is based on 2010's targets, right?

Okay, got it. And my last question is just second half margins of margin guidance, 28% to 30%. But if I take out your costs down and stable ASP, your margins would be higher than 30% because you already got over 30% on the second quarter.

(interpreted) Because as second half comes along, we will have even more significant contributions coming from the module business. And that will slightly balance out our margins to below 30%. And plus, we also factor in some losses coming from our Sichuan plant. So I think we're comfortable with our margin guidance.

Okay. Thank you.

And our next question comes from the line of Vishal Shah with Barclays Capital. Please proceed.

Yes, hi. Thanks for taking my follow-up. Can you talk about your expectations of poly pricing in the back half of the year and also next year? And also, can you remind us what percentage of your poly is linked to spot market pricing and what percentage is fixed? Thank you.

Okay.

(interpreted) For the back half of 2010, we expect -- we have already locked in our polysilicon prices between $50 to $55. For the full year of 2011, we have locked in about 90% of pricing between $45 to $50 and we will have 10% which we'll buy from spot market.

Great, thank you. And then, I think you filed a shelf offering document some time back. Can you remind us of your CapEx funding plans for 2011, please?

Sure. CapEx funding plan for 2011 is $140 million.

And how do you plan to achieve that?

Internal cash flow generation. We will be generating similar cash flows as we did in the first half of this year. And as you see, we've generated $168 million in the first half so we do expect our cash position to significantly improve by the end of this year.

Great. Thank you very much.

And our next question comes from the line of Mark Davis with Panmure Gordon. Please proceed.

Hi. Just a couple of questions on your Sichuan polysilicon facility, please. Can you just update us as to how the ramp up of Phase II is going? And also, whether you have -- whether any of your customers have sampled the wafers based on this polysilicon?

(interpreted) Just very quickly on the polysilicon, obviously the situation is not as ideal as we had expected or anticipated. We are changing and also adjusting some of the equipment after a year of production, because we have seen problems and we wanted to address them right away. As a result, we don't expect much of the production coming out in the month of August. But starting in September we do expect both phases of production going back to normal.

Okay, so does that mean that no one has actually sampled any of the polysilicon yet? I guess that's the case, is it?

(interpreted) We are also in the process of improving our polysilicon qualities. As you can see, we only produced a limited amount but we do expect in Q4 the situation will significantly improve.

Okay. Can you give us an idea of some of the issues that you've been having?

(interpreted) The most important issues we have encountered was because some of the leakings that we've experienced from the valves that we have bought from domestic suppliers. And we are changing all the valves, therefore expecting to fixing the leaking issues, therefore improving the yields and also the purities of the polysilicon.

Okay, that's great. And then just one final question for you, Julia. You said that the tax rate for this year should be about 24%. What should we assume for next year, is it a similar rate, 25%?

No, next year, I think you should expect around 18%.

Okay. And the difference -- why is it going down to 18%?

Because the reason why we have a 24% tax rate this year was because the loss making status last year and a deferred tax [how it] was calculated. Therefore, we actually do not pay down cash taxes for 2010. In 2011, we will revert to the high tech status of our wafer company, which is a 15% tax rate. For our module business we are still, because this is the first year of operation, so we are applying for the national high tech company status, and we don't know yet when that will be approved. So for conservative purposes, we've guided 18%, but it could be lower.

Okay, that's great. Thanks very much.

You're welcome.

And our next question comes from the line of Adam Weitzman with Luminus. Please proceed.

Hey, guys, just a quick question on the module side. I know you mentioned that you're shipping 400 megawatts of wafers to your module business in 2011. Is that a good estimate for what your module output and sales will be in 2011?

(interpreted) Yes.

Okay. And then just to make sure I understand on the CapEx side, that can all be funded with internally-generated cash flows, no need for equity for that?

(interpreted) Yes.

Okay. Thanks, guys.

And our next question comes from the line of Paul Leming with Soleil Securities. Please proceed.

Good evening and thanks for taking my question. I was wondering if you could make any comments at all on the significant amount of wafering capacity that we are seeing announced, additional wafering capacity announced throughout the industry. There has been some very large ramp-ups of wafering capacity just over the last few months. And I'm wondering if you were seeing that have really any effect at all on the supply/demand balance, either currently or looking out over the next couple of quarters. Thank you.

(interpreted) Yes. As you've mentioned, we have seen large scale expansions in the wafer segment. But, based on my experiences in running a wafer business, I do not believe the wafer capacities can be ramped up to a competitive capacity in a very short period of time. And scale building takes time.

Secondly, I'd also like to mention, although the wafer segment has been expanding, but we have also witnessed very big capacity expansions in the downstream cell capacities. And perhaps in this year, also next year, we could see over 10% gigawatts of cell capacities coming online. And based on this kind of capacities, the wafer capacities may not even be sufficient.

And lastly, I'd also like to say, if the industry expands at this fast pace then the bottleneck could be at polysilicon segment going into 2012.

Thank you very much.

And our final question today comes from the line of John Segrich with Gabelli. Please proceed.

Hi guys. Just couple quick questions. One, can you just give us an idea of what the underutilization charge was in the poly division for the quarter? And maybe what you see for the rest of the year, as the ramp is a little bit slower?

Sorry, I didn't catch your question. Could you repeat, please?

Sure. Can you give us an idea of how much the underutilization charge was for the polysilicon division in the quarter? And what it would be for the rest of the year, given the poly ramp is a bit slower?

Oh, sure.

(interpreted) For the second quarter of 2010 we had about $4 million losses coming from Sichuan and for the full year we expect around $11 million/$12 million loss.

Okay, so it's going to go down pretty significantly over the next two quarters.

Yes, more so in the fourth quarter as we ramp up.

Great. Okay, thank you.

Q3 will still be high.

Ladies and gentlemen, this concludes our question-and-answer session today. I would now like to turn the call back to Ms. Julia Xu for closing remarks.

Thank you, everyone. In conclusion, we're very pleased with our second-quarter results and hope to continue delivering value to our shareholders through consistent bottom-line results. Going forward, we will continue to execute on our cost reduction and efficiency improvement strategies to further solidify our leadership as a cost competitive, high quality wafer manufacturer supported by OEM module services.

Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact us. Thank you.

Ladies and gentlemen, we thank you for your participation in today's conference. This concludes the presentation and you may now disconnect. Have a good day.

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