Q4 2019 Earnings Call

Good day, ladies and gentlemen, and welcome to the Fuwei films fourth quarter 2019 earnings Conference call. All lines have been placed in listen only mode. In the floor will be open for your questions and comments following the presentation.

At this time it is my pleasure turn the floor over to your host Mr. shoe again, Sir the floor is yours.

Thank you Jess.

Let me remind you that today's call is being recorded replay of todays call will be made available. Shortly after the conclusion of the cool before we start to remind you that certain statements to or not of historical facts made during the course of this conference call about future events projected financial results constitute forward looking statements are made pursuant.

To the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

No that accompanies actual results may differ materially from those projected in these statements due to a variety of factors affecting the business.

Forward looking statements are subject to risks and uncertainties.

Discussion of the factors that may affect future results is contained in our filings with the US Securities and Exchange Commission.

We undertake no obligation to correct or update any forward looking statements provided as a result of new information future events or changes in our expectations.

Call today is Mr., John Corporate Secretary before I walk you through our financial results Mr., John will deliver his opening remarks.

So please go ahead.

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[noise]. Thank you for joining us today, despite persisting oversupply in the both had plus I can tell this market our revenues and gross margins continued to grow.

Sales of specialty films increased by 9.1% year over year and accounted for 48.4% of our total revenues in 2019.

Our gross margin increased by 8.5 percentage points to 24.9% for the year of 2019 as compared to 16.4% 2018.

Please our focus on innovation enabled the company to extend and user product applications, and attracting new clients and extend relationships with existing customers.

We're encouraged by positive trends in revenues and gross margins, which we expect to enable us to but in aggregate the industrial and economic landscape go ahead.

Now I'll agree to you our financial results for the fourth quarter and full year of to them.

Revenues for the fourth quarter were RMB 86.8 million or US 12.5 million compared with RMB 90.1 million in fourth quarter up 22018, a decrease of RMB 3.3 million or 3.7%.

So as volume accounted for an increase of RMB 3.2 million well decreased average sales price caused a decrease of RMB 6.5 million.

Sales of specialty films for the fourth quarter were RMB 47.7 million or us 6.9 million or 54.9% of total revenues.

Compared with RMB 39.8 million worth 44.1% of total revenue in the fourth quarter of 2018.

So its volume accounted for an increase of RMB 10.9 million, while the decrease of average sales price caused a decrease of RMB 3.0, Michigan.

Fourth quarter were RMB 81.4 million or us 11.7 million or 93.8% of total revenues compared with RMB 80.8 million or 89.7% of total revenues in the fourth quarter 2018.

So the volume accounted for an increase of RMB 7.0 million, while the decrease of average sale price cost a decrease of RMB 6.4 million.

For the fourth quarter were RMB 5.4 million or Qs 0.8 million or 6.2% of revenues compared with RMB 9.3 million or Tim 10.3% of total revenues in fourth quarter 2018.

Quarter over RMB, 31.0 million or us flip and 5 million, representing a gross margin of 35.7% compared with gross profit of RMB 21.3 million, representing a gross margin of 23.7% in the fourth quarter of 2018.

The fourth quarter of 2019 were RMB 15.7 million or use 2.3 million compared with RMB 18.0 million in fourth quarter of 2018, and net profit attributable to the company for the fourth quarter was RMB 10.3 million or US 1.5 million compared with net loss.

Yes, it should be able to the company of RMB three point funding in the fourth quarter of 2018.

Profit per share was RMB 3.3.

3.17, or Usfour 0.46, compared with basic and diluted loss per share of RMB 1.06 in fourth quarter of 2018.

Your results net revenues were RMB 335.6 million US 48.2 million compared to RMB 333.5 million in 2018.

Sentiment increase of RMB 2.1 million or is your 0.6%.

The decrease in average sales price caused a decrease of RMB 2.8 billion, which was more than offset by increases in sales falling patter caused an increase of RMB 2.9 million.

For the specialty films were RMB 162.4 million use 23.3 million or 48.4% of our total revenues as compared to RMB 148.8 million worth 44.6% in 2018.

Which was an increase of RMB $13.6 million or 9.1% higher than 2018.

The increase of sounds volume, that's an increase of RMB 14.3 billion.

Offset in part by the decline in average sales price, which caused a decrease of RMB 4.7 million.

Obviously sales were RMB 47.6 million us 6.8 million or 14.2% of total revenues compared with RMB 45.4 million or 13.6% of took revenues in 2018.

The increase of average sales price called an increase of RMB 0.6 million and a decrease of sales volume caused an increase of RMB six Smith.

Because the company for the year was RMB 11.4 million or US 1.6 million compared with net loss of RMB 22.2 million in 2018.

Basic and diluted earnings per share for the year ended December 31st to them.

Right.

For eight or us 50 cents.

Our operating activities was RMB 54.4 million for the year ended December 30, Onest 2019, as compared to net cash provided by operating activities of RMB $25.1 million for the year ended December 30, Onest without leaching.

Cash and cash equivalents at year end was RMB 60.9 million or US 8.7 million compared with RMB 8.9 million as at seven with regards to them aging.

In conclusion, we would like to thank our shareholders for their continued loyalty and support and believe we are well positioned to face. The current challenges and are committed to providing value to shareholders and customers well keep you informed of our progress with that Mr., John we'll be happy to answer your questions.

Thank you ladies and gentlemen, you had a question or comment it is star one on your telephone keypad at this time.

Again star one for any questions or comments.

Well pass on the assembled a roster.

We'll go first to Jamarat.

Yes.

Well, that's very good results.

And I was curious about the cash flow.

For the fourth quarter how much.

Cash was generated from operations and follow up on that you have any plans for.

The cash that you're generating for the company. Thank you.

Part of your question.

Okay.

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Joe So the annual cash flow from operation was 54 million RMB, and we didnt without broken down by the quarter.

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Cash flow for operations at first nine month, it's about 36 8 million RMB. So the difference as the number that you're looking for its about aging.

Okay. Thank you and any plans lastly for.

The cash.

We would like what to use that cash.

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That's it.

Sure. So as you may know so the company we are.

After a couple of years of challenging situation we are.

Starting to turn things around so while you know you see though we are starting to generate positive cash flow again, which is good as you pointed out.

But you know we are being prudent with ER and we're planning to use that cash to consolidate strengthened our balance sheet, our financial situation and also need that cash two rather operation and specifically that means you know to expand our customer and also product base.

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Sure so.

Given the tremendous uncertainty as middle of the virus directly will where you're seeing is that demands for.

Products was down in first quarter in China.

And well probably seemed a across the world as well.

And then on top of that and we have mentioned in her reduce and also.

Call that the overall.

Demand and supply situation in our in our specific industry at this moment in time is that there's still more supply and demand.

So in response to all of these external factors.

Policy is to.

It's a threefold one is it will continue to increase.

The development of differentiated products and this is going to be a focus of our work. This was a focused over does not change and going into and then into 2020. This will continue to be buckets.

Because differentiated products is where it needs that we have of may have an edge on our competitors.

And also where there might be higher.

Hi.

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And then the second phone is set up we are trying to take advantage of the little always price right now to stock up on some raw material.

And then the third one is that Oh, we aim to expand into international markets, such as Japan Europe.

Given the can because because the crisis.

Thank you.

[noise] once again, ladies and gentlemen, if you had a question or comment that is star one on your telephone keypad against our one for any questions.

[noise] and with no other questions signaled I'll turn the conference back to management for any additional or clothing comment.

Thanks for joining us on todays call, we look forward to be in touch with you and keep you updated about progress haven't I'd say.

Thank you, ladies and gentlemen that will conclude today's call. We thank you for your participation you may disconnect at this time and have a great team.

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