Q1 2021 JinkoSolar Holding Co Ltd Earnings Call

[music] 1.

Hello, Ladies and gentlemen, and thank you for standing by for the June close of a lot of holdings Couldnt meet that Susquehanna thought the indeed, the do you want earnings conference call. At this time all participants are in listen only mode. After management's prepared remarks, there will be a question answer session. As a reminder, today's conference call is being recorded.

Now I'd like to turn the meeting over to your host for today's call to Miss the boat channel Genco sort of last Investor Relations manager. Please proceed ripple.

Thank you operator, and thank everyone for joining us today for Genco. So that's the first quarter 2021 earnings conference call the.

<unk> results were released earlier today and are available on the company's IR website at www dot strength, so the dot com as well as our newswire services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website.

On the call today from Genco soda on Italy, She and the chairman of the board of Directors and the Chief Executive Officer of Genco Solar holding Company Ltd. Mr. Gendron, Miao, Chief Marketing Officer of Ingersoll Rand Company Ltd. Mr. Pan The Chief Financial Officer of Genco Solar holding company Ltd, and the mix of Chinese.

Our Chief Financial Officer of Genco Silva of Company Ltd. Mr. Lee will discuss genco, so the business operations and the company highlights followed by Mr. Miao, who will talk about the sales and marketing and then make the Penny who will go through the financials they were on.

I'll be available to answer your questions during the Q&A session that follows.

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, but what the looking statements involve inherent risks and uncertainties as such our future results may be materially different from the views.

Expressed today further information regarding these and other risks is included in <unk> public filings with the Securities and Exchange Commission Genco solar does not assume any obligation to update any forward looking statements, except as required under the applicable law.

Now my pleasure to introduce Mr. Li Shanda, Chairman and CEO of Ingersoll, the holding Mr. Li will speak in Mandarin and I will translate his comments into English. Please go ahead Mr. Li.

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Thank you.

Doug on that.

But at the time, but Avi.

Is the first quarter of 2021 of our shipments, including wafer cell and module were 5.4 gigawatt total revenues were $1.21 billion of U S dollars and gross margin was $17.1 per cent process of polysilicon and solar glass continued to increase quarter over quarter due to the share.

Just on the other hand macroeconomic conditions continue to impact of commodity prices, which further increased sequentially for several of protection materials, such as solar junction boxes and the E V..8 in the first quarter, we adopted a relatively flexible business strategy and the continued it.

To reinforce the management and the control of our supply chain, while accelerating manufacturing process improvements in order to the east pressure on cost.

Great on the accounting.

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Based on terms of I'll show you a couple of the huge growth that she needs. So the east zone is the volatility in the supply channel caused by the imbalance between polysilicon supply and the strong downstream demand continued in the second quarter and the overhaul of some polysilicon manufacturing plants intensified the shortage of even more the port.

Price of Coty steady kind of which RMB 220 per kilogram of recently more than doubled the compared with the end of last year or the.

So the price of sort of glass declined significantly in the second quarter. It was far from being able to offset the increase in production costs caused by the rising price of polysilicon. In addition, due to the double impact of the Penny.

Pandemics and the Suisse can can now incident transportation capacity worldwide decreased sequentially compared with the first quarter the shortage of containers on some important new routes the less problematic the kind.

The nature of manufacturers have caused module prejudice to increase and the demand from downstream customers who was affected in the short term.

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Yes the zone.

Yeah, Hi, Chantal to something out of news about housing probably face the way. So many challenges we continue to maintain close communication with all our customers to work out through the both solutions. The majority of our customers have a deep understanding of the micro economic and the supply chain on volatility and have more on that.

The flexibility to accept higher module price and lower eye on us. However, the continuous increase in module prices will inevitably affect the demand we noticed that the lower demand has kept the price from rising further and the lowering of the stabilization over the material of a practice should drive up downstream dams.

A positive note polysilicon output is sufficient to support 160 gigawatts of installation of this ear and at least 210 gigawatt of installations in 2022.

Therefore, we believe that because there is no basis for the continued rise of polysilicon prices based on the current high spot price the upstream and downstream fluctuation is expected to stabilize in the second half of this of year considering that the company's shipments might increase significantly in the next few years.

I'll get to in house, the stability of polysilicon material of supply. The company has strategically invested in the member go the ash into energy recently at the same kind of we signed a strategic cooperation agreement with China, Cosco Shipping Corporation, which will help us provide customers with long term high quality.

Transportation solution. We are currently well all of the 60 key accounts of China Cosco shipping worldwide.

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Funding growth yet again the cheap.

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For the day you neither aimed at the edge.

End of the first quarter, we made the judgment call based on the prevailing market conditions and lower the production volumes of modules Lam on the wafers and cells womens at full production levels in terms of business strategy. We continue to never whats the advantages of our integrated of capacity to address it.

No sales of mono wafer and module and reserves on certain volume to support the spot market orders, so as to reduce the impact of price volatility on our profit margin.

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Youll see the challenges faced by the PV industry have accelerated technological advancement such as the wafer selling to say polysilicon on consumption technology improvements to further increase module output and the ramp up of protection of automation to reduce cost and increase efficiency companies.

With advanced technologies can't enjoy a first mover advantages and achieved relatively stable economic benefit despite the rising material costs, our wafer selling capabilities have reached industry, leading standards and our smart factories are optimizing process and improving automation.

Every day this initiative will continuously contribute to our economic benefits and the consolidator of the advantages of our in house manufacturing capabilities. So you can work on from solely against the Chi system debt home pushing buttons causal yeah.

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Plenty of total can do the familiar the pulled us on the Buda Quaff jogging on most of it will go put on the it's usually the G E.

You've got the Buffalo debt paid on time can cause she's on project timber adjusted mastering crystalline silicon sale kick them on the G has been gradually transitioning from Pee Pap to N type cells and the industry is expected to usher in the new face of technological.

Absolutely Pat H and the <unk> technologies are highly cooperative and he'd never changed the systems on the wafer and cell module to assist the assistant and the ability to quickly commercial day commercialize them day results in mass production have prepayment income similar to the top end of weak <unk>.

On year to lead technology breakthroughs in the industry. We started to produce the 800 megawatts N type tough comp sale of 2 years ago and it has become the industry benchmark in terms of lap if roche's efficiency mass production efficiency and of course control. Meanwhile, we have of Jack.

<unk> completed the construction of our highly efficiency, let me may take pool per rough escaped sale of technology platform, which is expected to reach and industry, leading conversion efficiency of over 30% within the ear is of short to medium income we will invest more resource.

This into technology development that will improve product competitiveness.

We will also continue to expand our solar panel business promote kicking on technical and process and process improvement to lower S. L E for all of our global customers.

And of course of up on all of them about the name of the plumbing yeah.

The telephone book weaken against the agenda for the onto the onion funding growth yet.

The agenda on that.

The about my answer to you on August <unk>.

On the you know the types of junk.

Young selling gospel.

To the positive pacing on that point, you mentioned in terms of capacity expansion taking into accounts. This is supply chain of end market conditions. We are the jacket because of expansion of wafers sales and module accordingly, our in house production capacity of mono wafers cells and modules are expected.

2 of which 30 gigawatt 24 gigawatt and the 33 gigawatts respectively by the end of the 'twenty 'twenty, 1 capex will be reduced accordingly, and in line with supply chain situation. This year.

Part of the young of denials of Kim or Jess on that yet.

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Oh yeah.

Before turning over to Jennifer I would like to go over our guidance for the second quarter of 'twenty or 'twenty..1 we expect total shipments to be in the range of.

5 point of 1 to $5.3 gigawatt, including module shipment to be in the range of flat for 2 full points of 2 gigawatts for the second quarter of the <unk> 'twenty 'twenty..1 total revenue for the second quarter is expected to be in the range of $1.2 billion in U S dollars to $1.25 billion U S dollars.

The margin for the second quarter is expected to be in a range of 12% to 15% the full year 'twenty 'twenty, 1 on shipments guidance, including wafer sales and module is unchanged and expected to be in the range of 25 gigawatt to such a gigawatt.

Thank you Missy.

In the first quarter of 2021 total shipments of modules reached 4.6 gigawatt of new record for the first quarter.

The addition of roughly 800 megawatts of self on the wafers were shipped to China market.

On the original perspective on module shipments shipments to Europe on the emerging markets, both had significant growth sequentially and the year over year.

Shipments to the U S market of remained relatively stable.

Second quarter, that's challenges in the supply chain of intensified we proactively adjusted our strategy for the order book and the responded to supply chain of volatility by fine tuning of the proportional wafer cell and module shipments to maintain profitability.

Faced with challenges in the material cost net of transportation, our sales team kept a close communication with clients to find the mutually acceptable solutions based on their feedback we know that many of Chinese utility investors, including state owned enterprises have moderately lowered the expected.

The patients for you.

Overseas the amount of toward certain installations, how's the strong growth for risk or higher module prices due to advantages in electricity prices or lower cost of the system construction.

Meanwhile, some clients that have accepted the delays in module deliveries.

The expectations are for you the various across different countries project types and the scale, but overall our market demand remains of domestic.

So embarrassed in supply chain is expected to continue for some time. So we are keeping our order book and.

Is it execution at the Expo on the sustainable level.

Our product structure continues to be optimized the according to the demand.

The flexible business model on the relatively higher prices. So if the amount of 4 of distributed generation continues to grow in regions like Europe, Australia, Japan U S.

Where we can leverage our global brand awareness on the reputation.

Clients have been favorable towards our premium quality products, such as on time and Tiger co products.

Which was specifically designed for the residential industrial and the commercial distributed generation facilities.

In terms of annual shipments for 2021 geographical demand has been roughly divided into North America Asia Pacific both for 20% to 25%, while China Europe and the emerging market for 15 to 20 per cent respectively.

This year market amount of has experienced the multiple challenges such as continue the delay caused by the resurgence of COVID-19 in southeast Asia rising cost of PV power station projects due to price hikes of input of syndicate and the bulk of committees.

And the extended the deliberate delays of course, the by logistical disruptions.

We believe these challenges will be gradually well resolved in time. Meanwhile, we are constantly improving our mechanism of dealing with risk.

We are optimistic about the growth in global market demand over the next few years and the reman fully confident about our ability to capture a larger global market share year over year by providing sophisticated of products and the services for our global clients with.

I will turn it over to Pat.

Yeah.

Yes.

Thank you Ginger.

<unk> increased cost of production materials and logistics.

Our major financial metrics, such as the gross margin operating margin on the margin all improved sequentially.

This is due to the sequential increase in our ASP quarter over quarter on our continuous efforts to optimize our cost structure.

Let me go into more details about this quarter now the.

Total revenue was 1.2 on billing at 9 percentage year over year, if we exclude the impact from the disposal of overseas power plants in the first quarter last year.

Gross margin was 17, 1 percentage compared with 16 per.

Same thing in the fourth quarter last year and <unk>.

$19.5 percentage range, the first quarter last year.

Total operating expenses in the first quarter was $184.6 billion.

The decrease of 15, 8 percentage compared with fourth quarter.

Last year the.

The sequential decrease was mainly attributed to of decreasing disposal and impairment loss on property plant and equipment.

Excluding the impairment loss total operating expenses accounted for.

13.7.

7 percentage of total revenues in the first quarter this year compared with 14 in the fourth quarter last year.

We're working with further control of operating expenses with increasing revenues in the second half of the year total operating expenses as the percentage of the total revenues are expected to decrease further.

Operating margin was 1.9 percentage in the first quarter this year compared with <unk>.

8 percentage in the fourth quarter last year.

The EBITDA with 123 million compared with 100 million in the fourth quarter last year net net income was sort of 3.7 million and the non-GAAP net income was $7.5 million both increase the sequentially.

Paired with last quarter.

Earnings per ADR was.

15.

The impact from foreign exchange rates remain.

We recorded a net exchange of loss of $4.1 million in the first quarter this year.

We will continue to hedge against the foreign exchange of risks to mitigate the impact on operating results.

In terms of transportation.

Of consumption demand of matrix the moment.

In the world regain screens.

The pandemic caused further delays on the inefficiencies in port operations.

As a result, we expect that the overall freight rates.

Well not decline on tiers of first quarter next year.

In France.

On the friend of the tough situation, we adopted the if our model for quoting and the continued to foster deeper strategic partnerships with logistic companies.

At the same time.

But the module power on the proportion of large size module shipments continued to increase.

Contained on transportation is expected to improve efficiency and result in the drop in freight cost per watt.

Moving to the balance sheet.

Yeah.

At the end of the first quarter our balance.

Of cash of cash equivalents.

We're 1.

We're all about 1 billion compared with 1.24 billion at the end of Laski from the fourth quarter last year.

Accounts receivable turnover of days.

Were 59 days compared with 50 days in the fourth quarter last year.

Inventory turnover days was 126 days compared to 97 days in the fourth quarter last year.

Total debt was 2 point.

67 billion at the end of the first quarter.

<unk> 2 <unk> 2.8.

8 billing at the end of the fourth quarter last year.

Gradually improving quarter over quarter.

Out of the total debt.

So what type of billing 17 million was related to the international solar projects.

Net debt was 159 billion compared with 1 point of 56 billion at the end of the fourth quarter last year.

In light of the supply chain 1 of the 30 day on the market conditions.

We're reducing capital expenditures and expect total capex to be around.

100 million for the year.

The <unk>.

Concludes our prepared remarks, well now happy to take your questions on.

Operator. Please proceed.

We will now begin the question and answer session of the participants of the question I Suppose Please press the 1 telephone keypad and you will be pushed into Q2 cancer of the queue.

Please press zero to once again, they're all on telephone keypad now.

Yeah.

Especially we have Philip Shen.

The question please.

Hi, everyone. Thank you for taking my questions given the recent the W. R O in the us on.

On <unk> was wondering if you can comment on how much Hershey Congo content do you guys have.

And your.

Modules.

Oh, the Stena, thanks for the question Akshay.

It's pretty latest development of from the top of your outside of the where steel and the internal internal investigation on the reviews about the whole process and the reaction based on the Doctor Oh, sorry, we will keep everyone updated on once we got anything.

Okay. Thank you Jenny.

Is there something else.

Sure.

Okay.

And on.

The.

Yes.

A couple of a few more things.

As it relates to your guidance.

I think of the employer shipments for Q3 for roughly 17 of Giga.

Gigawatts here, what's the mix you think.

Between Q3, and Q4 is it evenly splits or do you think.

Uh huh, it's heavily or more weighted to Q4 and then also if you can comment on the outlook for 2022.

What kind of I know you gave the global market growth do.

Do you expect your shipments to grow in line with that market growth.

So yeah that's of Great question actually.

The SEC.

Kind of half of is all of this peak season for solar, especially Q4 for China market. We are expecting a strong Q4 of demand in China market as well.

Regarding the the.

The portion of why so I'd like to remind you that the total shipment of numbers content both of our modules on the wafers, even small volumes of the cells. So regarding the the detailed breakdown speech range that we will keep ourselves flexible enough to adjusted to the market our market changes.

In Q4, but for me I'm pretty confident that with the strong demand in Q4, we will deliver a less of solid performance for the whole year's of shipment on the profitability.

Regarding 2022 of the market itself of ice.

Believe it is true continue to grow.

And we Genco yourself of we plan to grow organically as well. So we will keep everyone posted on you're still very early to provide any detail number yet.

Okay. Thanks.

I noticed the technology are the details around.

The profit guidance so.

Reaching over 30% of efficiency.

That's true.

If you get that this year that's great. So that's incredible can.

Can you talk about when do you think the profit growth so it could be commercially available.

How stable is it now and then I think on the last quarter you talked about the on time.

The capacity for 'twenty, 'twenty, 1 being 800 megawatts.

Do you still with the capacity expansion of of reduction do you continue to see the 800 megawatts for 2021, and then how much do you see in 2022.4 of them. Thanks.

Uh huh.

For N type of I think of we are currently we stick to the.

900 megawatt of we have and the dose per Doctor is super popular in the distribution market. We can we can have we can enjoy.

The higher brand of.

Premium together with higher.

Acceptance of the entire products for the future. We are closely following the divestment of the industrialization of the latest on types.

The technology, even to some of the module technology to decide on our on our roadmap right now is.

We cannot give a very detail.

The numbers or is the options on the table, yet, but definitely we will be 1 of the early mover for the technology for sure.

Thank you ladies and gentlemen.

You address perhaps guidance specifically.

Do you think of it could be crowded out of 21.

That for me is I think that will be.

Even longer term I think the entire definitely it will be earlier than in the the.

The other technologies to become a mature on the massive applied in this industry, but definitely you know we are not only looking to 1 or 2 that's something we are looking for either of those 3.5 years' time definitely we are investing in that.

Great and are in the Q1 quarter you guys had of I think about 800 megawatts of.

Wafer and so sales can you talk about the margins on those sales, especially wafer what kind of margin did you have there was it similar to your peers there.

So let.

Let me look into the numbers, but.

As far as I can remember it should be somewhere around 20% margins for the way per site.

The sale of the numbers are very small the.

The shipment of these first months of I don't have the Mark Martin of yet.

Okay. Thank you Jennifer I'll pass it on.

No problem. Thank you very much.

Thank you Philip.

All participants of this question is to post these parents still want on a steady flow.

Keep it and you'll be placed in the queue.

The next up we have <unk> from Goldman Sachs.

Brian a question, please hey, guys.

Yeah. Good evening, thanks for taking the questions I.

I had a couple on the the guidance, maybe first off of a simple ones as well.

It's the last week of June the quarters almost closed here.

On your revenue on shipment guidance seems pretty tight in terms of the range, but there are still.

300 basis points between the low and high on the gross margins for <unk> can you give us some.

Clarity or a sense of why there is still such a potential GAAP.

The gross margins end up.

The gross margins you realized for the quarter on gonna be.

In terms of our guidance on the go.

<unk> margin.

And of course through the quarter.

The gross margin is due to some impact from the move of polysilicon.

Service revenue of users on a certain price.

Foreign exchange rates the RMB.

On <unk>.

So we just gave on the email.

The.

Relative to me.

No.

The wide range of consensus of 15%.

Thank you <unk>.

The high end of the range.

<unk>.

Okay Fair enough and then I think.

Sticking with the gross margins.

Obviously poly silicon has been more volatile than that.

Much much.

Much faster appreciation than people expected heading into the year.

You and your peers I think are generally we're thinking Q1 could be the bottom for gross margins based on the guidance here.

<unk> is going to be lower how should we be thinking about that on the context of gross margins for the rest of the year or are we in this low teens level until poly's starts to go down meaningfully or could we see another downtick in the Q given the inventory of high cost probably still has some.

From time, bringing that needs to flush out of your cost structure.

We are.

<unk> was the market price, including module.

On the arm.

All of our dreams.

And we are.

Factoring the stabilized the price.

And so on on incentives.

So we think you know it.

We have of the capabilities.

2.2 minutes on the ruble.

Gross margins on behalf of the year.

The.

No.

We hope, it's better compared to the first half of the year because of the stabilization on the silicon.

As we continue to.

The improve our <unk>.

Operating costs.

On mitigate.

To mitigate the.

Yes.

The cost pressures from 1 part of citizens.

We will continue to maintain some flexibility in terms of the.

Shipments of modules, which system.

The mono wafers.

Okay Fair enough and then maybe 2 questions on the revenue.

Portion of the guidance on you guys mentioned some projects are delaying or seeing some timing issues because of the high cost of panels.

And you have been raising prices throughout the year are you having to re price any of these contracts are you seeing pricing back cash for early 'twenty 2 deliveries starting to kind of go down again again, you have a view that polysilicon. The stabilizes. So are you refresh of that and maybe.

Firmer or declining module prices as well moving through the year.

Yeah. Thanks for the question I think of them for that part of it.

The truth at some of the projects or some of our price projects has to accept the some of the delays of the course of the.

As expected the high price.

Not only module actually if you take into the <unk>.

Take the other factors into consideration as well for example of the logistics and all of the.

The labor costs given the.

The cost of the trackers, the you know, sometimes the workers or yes the engine.

So of everything goes up sort of.

That's why some of the project, which has a very tight budget to the.

The IR or capex has to delayed or even the recap to the somehow.

Adaptive south of the 2 to.

The situation right now for the next year. So actually we are expecting a pretty stable years, because even when the weather.

The polysilicon price becomes of stabilized now and also we are expecting more of polysilicon capacity available for mid of 2020 true, but when we compare it with the demand side actually we are expecting of more demand coming off of a comparatively.

Additional new polysilicon capacity, especially when so many projects on the demand the calculate into 'twenty, 2 as well as the even though the new projects coming up on line. So we are expecting a very promising year of 802 as well.

Hope that answer your question.

Yeah. That's helpful. I guess, maybe just to simplify the question are you.

Are you, helping your customers at all with pricing I E. You you raised prices to reflect the poly increases earlier in the year.

Now the poly's, maybe peaking and could start to go down are you anticipating all of you quoting you know more aggressive pricing to keep these projects on track.

On the modules per center.

Yes.

Varies case by case.

It won't be on general ROE you know the solution for everyone, but we are dealing with every customer of case by case.

We have all different kind of the business model is to try to.

Find a mutual solutions for the customers to solve their problems.

Including all of the message you just talked about about the not on a limit to that range.

Okay Fair enough the last 1 from me and I'll pass it on.

You know you're maintaining the 25 to 30 gigawatt of guidance I know that the shipment guidance for 2021.

No. It includes the cells on the way for us as well as the module shipment.

I'm not sure if you if you.

The spoke to this but what's the module portion of the 25 to 30 Gigawatts of just trying to get a sense of how much is baked into second half growth yes.

Right now we are we are.

Specced on majority of it but we don't have a budget as number of yet because we are totally flat for up to the market. If the pull of for example, if the poly silicon market is.

You know keep stable as the market demand start to pick up definitely we are more than halfway to the ship everything in modules instead of the wafer of itself, but the if you know the.

The market itself continues to be volatile as it was in the last 3 of 6 months' time.

We are forced the or we have to be flex flow or 222 exposed.

<unk> more.

Of wafers in order to adapt to the market risk.

Okay. Thanks, a lot guys I appreciate it.

Thank you very much.

Thank you Brian.

Well the all participants on this question is to post please press the 1 telephone keypad and you will be placed in the queue.

Yeah.

On your participants of the questions to pose please press the 1 on the 34 keypad and you will be placed into the queue.

Yeah.

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Audio participants for questions to pose this price so 1 of the day for Keybanc and you will be placed in the queue.

Yeah.

Yeah.

Thanks to the ready from Santana capital.

<unk> please.

Can you hear me.

Yes. Please.

Yes.

My question is about the gross margin on.

You had a very nice positive surprise on the gross margin in the first quarter and I understand that part of it is because the the way per business is higher margin. So is the.

We believe our tank that Youre now of managing the business.

True growth income and to maximize growth income rather than <unk>.

Just the maximizing revenues on.

And therefore for the near term anyway.

Of a benchmark to evaluate progress needs to be looking at gross income and I noticed that the Brooklyn from number of laws.

Higher than a year ago. Despite obviously.

A decline in the.

On the pricing of our.

Despite the substantial decline in module price gross income year over year was higher.

So that's my first question that debt.

The gross income the better benchmark through the value of progress.

Yes, I think that that's the.

That's very.

Encouraging.

Comments for the company.

<unk> for the company's strategy wise.

We're not only looking to 1 go right to operate or to do our job.

<unk>.

It won't be a balance between the different.

The goal is definitely a growth.

Revenue was on gross margins is very important the factor on the target of 4 of the company's management, but we have to also take.

Take care of the other factors such as seen on market share customers and the long term partnership as well as the revenues.

Growth.

To make sure the company is.

The growing.

In the sustainable way right.

So long story short.

It won't be a profit of <unk> gross margin of only but definitely is that the good angle too.

Look into thank you.

Yes.

And my second question is about the the.

A listing in the Chinese car market can you give us on update on that.

It's still in the.

The reason stage and the best of breed.

Back to.

The 2.

On the move will release the.

Yes.

The significant milestone.

Yeah.

Yeah.

Can you give us a sense of what the timeline might be on that.

No we are not in the position.

Transitioning now to talk.

Talk about the the timetable.

Alright.

Just 1 on debt.

We expect 2 of which some milestone.

Bill.

We need the need for news.

The reasons.

Yes.

Thank you.

Okay.

Thank you very much.

Thank you Eddie thanks to the <unk>.

<unk> Chen from Roth capital.

Your question please.

Hi management of.

Thank you for taking my call. My first question is.

Regarding the whistle in June that many other module makers of cutting down on it.

Each of the production utilization rate of Gan in June due to the high cost.

Got it.

The utilization of <unk> in July of given the Dale will be more.

The new project the lease.

Yeah.

Okay.

The.

So youre talking about the.

Sure.

The company's best of the consideration of the industry.

Of the emissions.

Hello, Bob.

On the polysilicon.

In the high growth of the highest.

On the state.

Realized throughout the year.

No for the index.

The.

Measures to increase the Garrett.

No.

Sure.

But I assume the July 1.

The 1 I can.

Okay.

This is where the steel.

No.

Okay.

Sure.

So when do you think the the.

Production rig count rebound for the sector.

Uh huh.

It has a good indication.

The on aesthetics and the.

The wafers.

So the mines.

The the downstream players.

Moving to 2 of them relatively high module price.

I assume.

The second.

Sure.

We see great.

Growth.

The better.

The first half year.

Oh. Thanks on also on to ask if there Daniel for the.

Cash flow applies to the come on.

All of the way from are we seeing any potential for impairment loss for our inventory.

We don't expect that the test.

First the.

When we close of the <unk>.

Module clients ask the amendment Brooklyn.

Yeah.

Okay.

Ah pressures from the cost perspective.

The.

The second 1.

Yes.

The great news.

On the vaccines.

<unk>.

The relatively low cost.

Compared to.

The players.

They don't have the.

Our mono wafer capacity.

So the only correct.

The.

The inventory risks.

<unk>.

Susan space.

Yeah.

Thanks, and my next question is regarding our commodity.

Capacity expansion plan, we called the plan for around like 3 gigawatt of Q.

Elaborate why we were so cautious on the expense you're right now.

The children, the honest sort of thing.

Hi.

The industry utilization.

Mono wafer.

I see.

The industry of retinopathy, 100%.

The.

Okay.

Okay.

Yes.

The aircrafts the investment landscape.

This momentum make sure we have relatively high utilizations.

Doesn't mean, we go non making the investments and some of the investment.

The investors.

And the early next year.

My last question is.

Do we have any guidance for the operating profit margin because.

Listing from blood improvement in Q1.

All of your margin.

Operating margin, where we can get to the guidance.

Gary.

First of all of it.

Regarding the non.

The comment.

The solar projects and.

On the projects.

And we're going to expense.

Hi.

The comments.

The year.

So.

The operating expenses.

The ramp there.

So percentage of certain percentage.

Oh, thanks for the question.

Okay. Thank you.

Thank you Jan Thanks behalf ready from Santana capital.

The question please.

Okay.

My question is about.

The expectation for the module price is in the SEC.

Half of the year.

Versus the first half of them.

You know obviously, many module companies have lowered their utilization rates.

<unk>.

So you get the margins the Lisa.

Please.

The question is as you have a standoff between customers and suppliers on modules.

While the near term.

Utilization rates have come down.

The customers are unwilling to accept the price that you want to charge them.

Is it fair to think that kind of the second half of the year.

It's just as likely that customers will accept somewhat higher prices than what the op being in the second quarter.

Thank you for the question I think the for the ASP or the market price. So let's talk about sort of second right. So for the market price for the second half of what we have seen firstly the stabilized the polysilicon price in the first half of the polysilicon of raw material price jumped almost the everyday or every week.

Each of brands of huge uncertainty for the in the low.

Downstream, especially for the more module market price it.

Sometimes we have to update our quotes of prices every week or even on every 2 or 3 day.

That price huge answered in the fee for the customer for.

For now we have seen the stabilize the call.

The silicon price it and also the industry is not expecting.

Any huge of volatile polysilicon price in the near future as well. So we have seen of lots of customers start to take actions to.

To build up their budget on the Capex that you've been doing the construction.

Based on the current.

And the market prices.

So that's why we are so confident about the second half demand will continue to be strong.

And the especially we have seen a strong China demand in Q4 of which will which.

Which will become a very huge important cornerstone for the global Kumar on for the second half as well.

Thank you.

Yes.

Thank you.

Yes.

Thank you Eddie.

I will now pass the call to Ms repo.

Okay.

Yeah.

Yeah.

Thank you everyone for joining the call to gain the 9 thank you.

Okay.

Yeah.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Okay.

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Hello, Ladies and gentlemen, and thank you for standing by Celgene closer Holdings Co Ltd. 's first quarter earnings Conference call. At this time all participants are in listen only mode. After management's prepared remarks, there will be a question and answer session.

Reminder, today's conference call is being recorded.

Now I'd like to turn the meeting over to your host for today's call to MS. Ripple, Zhang Jenny <unk> Investor Relations manager. Please proceed with book.

Thank you operator, thank you everyone for joining us today for <unk> first quarter 2021 earnings conference call on the Companys results were released earlier today and are available on the company's IR website at Www Dot <unk>, the dot com as well as our newswire services. We have also provided a supplemental.

The presentation for today's earnings call, which can also be found on the IR website.

On the call today from Genco solar I missed on the Shanda Chairman of the board of directors and the Chief Executive Officer of Genco Solar holding Company Ltd. Mr. Gendron, Miao, Chief Marketing Officer of Genco Silvio Company Ltd. Mr. Pan The Chief Financial Officer of Genco Solar holding company Ltd, and the Mr. Charlie.

Our Chief Financial Officer of Gen. Coastal the Company Ltd. Mr. Lee will discuss genco, so the business operations and the company highlights followed by Mr. Miao, who will talk about your sales and marketing and then mute the pan the who will go through the financials.

I'll be available to answer your questions during the Q&A session that follows.

Please note that today's discussion will contain forward looking statements made on under the Safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties.

Such our future results may be materially different from the views expressed today further information regarding risks and other risks is included in <unk> public filings with Securities and Exchange Commission <unk> does not assume any obligation to update any forward looking statements except <unk>.

The required under the applicable law.

Now my pleasure to introduce Mr. Li Shanda, Chairman and CEO of Ingersoll, the holding Mr. Li will speak in Mandarin and other translate his comments into English. Please go ahead of Mr. Li.

Each of the <unk> zone, so far the al <unk> gas flow.

Yes.

The mid teen model it needs the TCA.

So we are doing.

James Bond portfolio.

Each of you to Jack <unk>.

So about homeland things is that at the top of banking.

Kevin you may have been centered on pet out on.

On the digital.

Michele della <unk> gaming for the singing the Jos.

And I think bringing net debt quality of I'll call it the Jos.

Therefore, the only guys. Thank you.

On January 10 out of Jack.

About that at the tempo of JV is the first quarter of 2021 chip.

Shipments of including wafer cell and module were $5..4 gigawatt total revenues were $1.21 billion U S dollars and gross margin was 17% of 1%.

The first of polysilicon and silver of glass continued to increase quarter over quarter due to the shortages.

All of a head macroeconomic conditions continue to impact of commodity prices, which further increased sequentially for receivable protection materials, such as solar junction boxes and the E V..8 in the first quarter, we adopted a relatively flexible business strategy and continue the true reinforced the.

Management and the control of our supply chain, while accelerating manufacturing process improvements in order to the east pressure on cost.

The accounting portfolio of Shire was on the huge let's hope of debt at <unk> for the acute.

Yes, Paul.

I'll, let Jason kind of Joshua comprehension.

The hunting to dialogue on biopsy that may be make 1 thing that all of you.

The Chilean Yankee Douglas on Dot com.

1 of them.

And on boarding of the Jack that the Archer.

Half of the shutdown. So we can turn back on.

The yen for the grade of <unk>.

All of that so again and then the thought that the lab. So <unk> co slip with us on pointing zone Chonju Archie to debt and Michelle unique bumpy itchy shot debt.

He is on the chatbot true that won't keep that pulls on filling out has yet.

Uh huh.

Good day.

So thats sort of gesture based.

Great. Thanks, Chen co CIO of careful of the future Thats on <unk>. So the ethos is the volatility in the supply chain caused by the imbalance between polysilicon supply on the strong downstream demand continue.

The end of second quarter, and the overhaul of some polysilicon manufacturing plant intensified the shortly to even more the.

The price of Coty steady some of which RMB 220 per kilogram listen to range more than doubled the compared with the end of last year, although the price of sort of glass declined significantly in the second quarter and it was far from being able to offset the increase in production cost of course by the rising price of polysilicon.

In addition, due to the double impact of the Penny.

And then Nick and the Suisse. Ken can now is the transportation capacity of worldwide decreased sequentially compared with the first quarter the shortage of containers on some important.

And the next problematic the combination of many factors have caused module prejudice to increase and the demand from industrial customers was affected in the short term.

So the accounts that.

The only couple of thoughts of let me kind of bolt on tuck in bolt on <unk>. So in the top on the schedule.

On the Comdata thoughtful careful.

The home launching the.

The board of gas with the ETF in day, so again some of the GSO.

For the of course on the policy.

On top of associates on the book of female the inks Alex.

So on balance sheet channel for men.

The <unk> zones on the forefront.

Absolutely.

Jonathan the tissue sponsor.

Jonathan.

The <unk> channel with decades on buses.

She shifts from cancer imaging in Thai baht.

That's true that we don't believe from Tony back into the queue assets on to <unk>.

Yes.

But you should see a lot of that Sanjay infill of mcginley weighted out more tender volume.

So some of you thought that with <unk>.

On the value of Hawaii, alongside genius share buybacks I bought some day.

<unk> net bonds that sort of on that.

And ladies southern California, the point, our Xinjiang honestly she found no pullout name on pushing term of.

Also of our momentum so yeah.

Cancel in Australia.

The value. So you will not only a total of peak on tons sheet debt yields.

So the audience here.

While most asset zone.

Okay.

I think of the phase III. So many challenges we continue to maintain close communication with all our customers to workout visible solutions. The majority of our customers have the deep understanding of micro economic and the supply chain volatility and have more or less flexibility to access higher.

Module price and lower IRS. However, the continuous increase in module price will inevitably affect the demand will notice from Jackie the lower demand has kept the price from rising further and the lower we understood organization over the material of a practice should drive up downstream demand.

Positive note holding steady.

Output is sufficiently to support 160 days of luck of installations. This year and at least 210 gigawatt of installations in 2020 true yes.

Therefore, we believe that because there is no basis for the continued lack of polysilicon practice based on the current high spot price in the upstream and downstream fluctuation is expected to stabilize in the second half of this year considering that the company's shipments might increase significantly is the net.

Next few years.

I'll get to enhance the stability of polysilicon material of supply. The company has strategically invested in a member of <unk> energy recently at the same time, we signed a strategic cooperation agreement with China, Cosco Shipping Corporation, which will help us provide customers with long term high quality.

<unk> solution. We are currently well all of the 60 key accounts of China Cosco shipping worldwide.

Digital more of Mckee the suit on the Panda non chart highlights of agenda.

Spending growth yet again in the deeper parts of the month, that's on debt team Tony of thought on P. J E. T..5 time in the <unk> <unk>.

<unk>, that's the agenda the lifestyles of the important gains at the time that this is Jeff looking at the <unk>.

For the the need of inkjet at the end of the first quarter. We made the judgment call based on the prevailing market conditions and lower the production volumes of modules Lam on the waivers and the sales Womens X will protection levels in terms of business strategy, we continued to leverage the advantage of.

<unk> of our integrated the capacity to other JAK external sales of mono wafer and module and reserves on certain volume to support spot market orders, so as to reduce the impact of price volatility on our.

The profit margin.

Many of the turbine yet that I'd like to keep the kimco, the jostle who will brief.

At the end of the top Bob Cantwell the Jos.

So again <unk> seen.

The jobs, we kick off.

The key thing.

Sometimes you don't love of Jos we John Santa Elena of <unk>.

Sending the piece of that she air Berlin shy of Sham values in debt Ted Carlson Doug.

Touching on shop.

Joe 1 thing that changed the site.

Well then double accounts high you got on the higher level of intensity.

The Bon tons and debt, you're only impacting the <unk> part of it.

Such issue so John said, we like the shoot the <unk> global woman sometimes.

Youll see the challenges faced by the PV industry have accelerated the technological advancements such as the wafer thinning Tuesday polysilicon the consumption technology improvements to further increase module output and the ramp up of <unk>.

Production of automation to reduce cost and increase efficiency companies with advanced technologies Cat enjoys first mover advantages and achieved relatively stable economic benefit despite the rising material costs, our wafer selling capabilities have of which industry leading standards.

And our smart factories are optimizing process and improving automation every day.

Keith will continuously contribute to our economic benefits and the consolidator of the advantages of our in house manufacturing capabilities.

<unk> gone from total against the G suite of some debt home piecing balance.

Hi, Yang Y as seen on the T cells.

So the chances are the yen Bob King.

<unk>. Thank you again see the Hong Kong to share the homes the yen.

<unk> is the junior box anymore.

So on signing.

The <unk> you mean.

Switching from me.

And of the Onion Chinese telecom, Bob that's all of the ensuing couple of come against the most of them definitely yes of the Shaun the anti <unk> Hudson, Amit Chinese high net gagan on Manuel how are you on the cost out deals and kind of type of against the diesel king kind of bad debt.

Using the Ami.

John.

Sally Evans, the southeast of the higher intensity zone.

Thanks, John.

John.

Of course income closings from Tony the tissue.

1 day of total control of the 3 year and pulled us on both the quality.

Google pulled on the Tiffany <unk> Co Inc.

Okay.

Bob will do that at all time peak seasonal part of that timber adjusted mastering crystalline silicon sale technology has been gradually transitioning from <unk> sales and the <unk>.

Industry is expected to usher in a new phase of taking the logical.

Absolutely cash.

H B.

The technologies are highly cooperative and innovative systems, while wafer sale of module to assist true assistant and the ability to quickly commercial guidance commercialized and the results in mass production have prepared with genco. So I'll go to the top end of we continue to lead technology breakthroughs.

The industry will start to produce the 800 megawatts N type of tough comp sale of 2 years ago and it has become the industry benchmark in terms of lap if roche of efficiency mass production efficiency and of course control. Meanwhile, we have Jack <unk> is the construction of our highly.

Efficiency, let me may take 4 per rep stake sale technology platform, which is expected to reach an industry, leading conversion efficiency of over 30% within the ear you guys. Joe to medium term, we will invest more resources into technology development of exactly when.

The improved product competitiveness.

We'll also continue to expand our solar panel business promote taken the kick.

Technical and process and process improvement to lower <unk> for all of our global customers.

On the call non linear.

The name the plumbing, surpassing all non California weakness again sort of Canada.

The quarter on CFO on yet.

Funding growth yet.

The agenda on that.

Thanks for the.

The <unk> items for the day.

On the dealer junior debt.

The gentlemen, shiny gaslog.

But the <unk> pacing at the point you guys from Paul in terms of capacity expansion taking into accounts. This is supply chain and market conditions, we have adjusted to the expansion of wafers sales and module accordingly, our in house production capacity of mono wafer sales and module expected.

2 of which 30 gigawatt 24 gigawatt and of surgeries to of Gigawatts, respectively. By the end of 'twenty 'twenty, 1 capex will be reduced accordingly, and in line with supply chain situation. This year.

As a young of Genesco, Kim or Jess on site yet.

The screen.

Yes.

So of all that debt.

Yes on the swap with them.

He is also again thats of water on site with us.

Yes.

Yes.

In meeting the lockdown.

Imaging Molly.

But 1 of the thought Bob Evans.

On the island the churn Yeah. That's also of water Bob Yes, yes, yes.

Also the south.

So that's the you asked before.

Before turning over to January of I would like to go over our guidance for the second quarter of the 'twenty 'twenty..1 we expect total shipments to be in the range of.

5 point of 1 to $5.2 8 gigawatt, including module shipment to be in the range of flat 4.2 for the 2 gigawatts of for the second quarter of 2021 total revenue for the second quarter is expected to be in the range of $1.2 billion to $1.25 billion U S dollars growth.

The margin for the second quarter is expected to be is a range of 12% to 15%.

<unk> 2020, Walsh of nice guidance, including wafer sales and module is unchanged and expected to be in the range of 25 gigawatt to such a gigawatt.

Okay.

Thank you Miss the.

In the first quarter of 2021 total shipments of modules reached the $4.6 gigawatt of new record for the first quarter.

In addition, the roughly 800 megawatt of cells and the wafers was shipped to China market.

From a regional perspective on module shipments shipments to Europe, and the emerging markets, both had significant growth sequentially and the year over year, while shipments to the U S market remained relatively stable.

The second quarter as challenges in the supply chain of intensified.

Proactively adjusted our strategy for the order book and the responded to the supply chain of volatility.

Fine tuning the proportion of wafer cell and module shipments to maintain profitability.

Faced with challenges in the material cost net of transportation, our sales team cap the close communication with clients to find the mutually acceptable solutions based on their feedback we know that many Chinese utility investors, including state owned enterprises have moderately lower to date.

<unk> for you.

<unk> the amount of certainty installations helps the strong growth for the risk for higher module prices due to the advantages in electricity prices are lower cost of the system of construction.

Meanwhile, some clients that have accepted the delays in module deliveries.

Expectations for you the various across different project.

Perfect types and the scale, but overall our market demand remiss of domestic.

So embarrassed in supply chain is expected to continue for some time. So we are keeping our order book and is ex.

The execution at <unk> on the sustainable level.

Our product structure continues to be optimized the according to the demand.

With flexible business model on the relatively higher prices. So that the amount of 4 of distributed generation continues to grow in regions like Europe, Australia, Japan U S.

Where we can leverage our global brand awareness and the reputation.

Clients have been favorable towards our premium quality products, such as on time and Tiger Pro products.

Which was specifically designed for the residential industrial and the commercial distributed generation facilities.

In terms of annual shipments for 2021 geographical demand has been roughly divided into North America Asia Pacific both for 20% to 25%, while China, Europe and emerging market for 15%, 20% respectively.

This year market demand has experienced the multiple challenges such as continue the delay caused by the resurgence of COVID-19 in southeast Asia, the rising cost of PV power station projects due to price hike input of syndicate and the Barco committees.

And extended the delivery delays of course, the buyer logistic of disruption.

We believe these challenges will be gradually well when you solved the in time.

Well, we are constantly improving our mechanism of dealing with risks.

We are optimistic about the growth in global market demand over the next few years and the reman fully confident about our ability to capture a larger global market share year over year by providing sophisticated of product and the services for our global clients with.

I will turn it over to Pat.

Okay.

Thank you ginger despite.

Despite increased cost of production material risks and logistics.

Our major financial metrics, such as the gross margin operating margin on net margin.

Improved sequentially.

This is due to the sequential increase in our ASP quarter over quarter on our continuous efforts to optimize of cost structure.

Let me go into more details about this quarter now.

The total revenue was 1 point.

2 on billing at 9 percentage year over year, if we exclude the impact from the disposal of overseas power plants in the first quarter last year.

Gross margin was.

17, 1 percentage compared with 16% of fees in the fourth quarter last year and.

The $19.5 percentage in the first quarter last year.

Total operating expenses in the first quarter was $184.6 billion.

The decrease of 15, 8 percentage compared with fourth quarter last year the.

The sequential decrease was mainly attributed to a decrease the disposal and impairment loss on property plant and equipment.

Excluding the impairment loss total operating expenses accounted for.

13.7.

7 percentage of total revenues in the first quarter this year compared with 14 in the fourth quarter last year.

We're working with further control operating expenses with increasing revenues in the second half of the year total operating expenses as the percentage of the total revenues are expected to decrease further.

Operating margin was 1.9 percentage in the first quarter this year compared ways.

8 percentage in the fourth quarter last year.

The EBITDA with 123 million compared with 100 million in the fourth quarter last year net.

Net income was sort of 3 point sort of a milling and the non-GAAP net income.

7.5 million, both increase the sequentially compared with last quarter diluted earnings per ADR was.

15.

The impact from foreign exchange rates remain.

We recorded a net exchange of loss of $4.1 million in the first quarter this year.

We will continue to hedge against the foreign exchange of risks to mitigate the impact on operating results.

In terms of transportation.

Of consumption demand of matrix the moment.

In the world regain screens the.

The pandemic caused further delays on late in the efficiency of import operations.

As a result, we expect that the overall frac rates.

We will not decline on tier the first quarter next year.

Yes.

In France.

In the face of the tough situations, we adopted CFR model for quoting and the continued to foster deeper strategic partnerships with logistic companies.

At the same time.

At the module power and the proportion of large size module shipments continued to increase.

Contained on transportation is expect to improve efficiency and result in the drop in price cost per watt.

Moving to the balance sheet.

Yes.

At the end of the first quarter our balance.

Of cash of cash equivalents.

We're 1.

We're all about 1 billion compared with 1.24 billion at the end of last year from the fourth quarter last year.

Accounts receivable turnover of days.

Were 59 days compared with 50 days in the fourth quarter last year.

Inventory turnover days was 102006 compared to 97 days in the fourth quarter last year.

Total debt was 2 point.

67 billion at the end of the first quarter cash.

<unk> 2.8.

8 billion at the end of the fourth quarter last year.

Gradually improving quarter over quarter.

Out of the total debt.

So it will take billing 17 million was related to international solar projects.

Net debt was 1 point 15, 9 billion compared with 1 point of 56 billion at the end of the fourth quarter last year.

In light of the supply chain 1 of the city at the end of market conditions.

We're reducing capital expenditures in the.

Total capex to be around 800 million for the year.

The <unk>.

Concludes our prepared remarks, we'll now happy to take your questions.

Operator. Please proceed.

We will now begin the question and answer session of the participants of the questions to pose. Please press the 1 telephone keypad and you will be placed in the Q2 cancer of the queue.

Please press zero 2 once again the on that.

No.

First we have Philip Shen.

Your question please.

Hi, everyone. Thank you for taking my questions.

Given the recent W Aro and the U S.

On <unk> I was wondering if you can comment on how much ocean content do you guys have.

And your.

Modules.

Hi, Phil This is gena thanks for a question Akshay.

It's pretty latest divestment of from the top of your outside of the where steel and the internal internal investigation on the reviews about the whole process and the reaction based on the type of Oh, sorry, we will keep everyone updated once we got anything.

Thank you okay. Thank you Jenny.

Is there something else.

Sorry.

Okay.

Good day.

The.

Yes.

A couple of few more thanks.

As it relates to your guidance.

I think the implied shipments for Q3 for roughly 17 ish gigawatt.

Gigawatts of whats the mix you think.

Between Q3, and Q4 is it evenly splits or do you think.

Uh huh, it's heavily or more weighted to Q4 and then also if you can comment on the outlook for 2022.

What kind of.

I know you gave the global market growth do.

Do you expect your shipments to grow in line with that market growth.

So yeah, that's a great question actually.

The second half of his August peak season for Sabra, especially Q4 for China market, we are expecting a strong Q4 of demand in China market as well.

Regarding the the.

A portion of why so I'd like to remind that the total shipment numbers content both.

Module on of wafers, even small volumes of the cells. So regarding the detailed breakdown b Trans AD, we will keep ourselves flexible enough to adjusted debt to the market our market changes.

In Q4, but for me I'm pretty confident that with the strong demand in Q4, we will deliver.

The solid performance for the whole year's of shipment on the profitability regarding 2022 of the market itself.

Believe it's to continue to grow.

And we Genco yourself of we.

Grass to grow organically as well.

We will keep everyone posted on you're still very early to provide any detail number yet.

Yes.

Okay. Thanks.

Thank you.

The risk.

The technology.

Retail is around.

The profit guidance so.

Right.

Reaching over 30% of inefficiency.

Got that.

If you get that this year that's great. So that's incredible can.

Can you talk about when do you think the promised growth so it could be commercially available.

So stable is it now and then I think on the last quarter you talked about the on type.

The capacity for 'twenty, 'twenty, 1 being 800 megawatts.

Hum.

Do you still with the capacity expansion of the reduction do you continue to see 800 megawatts for 2021, and then how much do you see in 2022 for 1 type of thanks.

For N type I think of we currently we stick to the.

900 megawatt that we have and the <unk>.

The product is super popular in the distribution market. We can we can have we can enjoy.

The higher brand pre.

Premium together with higher.

The acceptance of the on type products for the future. We are closely following the divestment of the industrialization of the latest on.

<unk>.

The technology, even to some of the module technology to decide the hour on.

Our roadmap right now is.

We cannot give a very detail.

The numbers or is the options on the table, yet, but definitely we will be 1 of the early mover for the technology for sure.

Thank you ladies and gentlemen.

Can you address perovskite specifically.

Do you think of it could be cash that is.

'twenty 1.

That for me is I think that will be.

Even longer term I think the N type definitely it will be earlier than in the.

So the other technologies to become a mature on the massive applied in this industry, but definitely you know we are not only looking to 1 or 2 SaaS something we are looking for ebay in Australia 5 years' time definitely we are investing in debt.

Great.

In the Q1 quarter you guys had of I think about 800 megawatts of.

Wafer and so sales can you talk about the margins on those sales, especially wafer what kind of margins that you had there was it similar to your peers there.

So.

Let me look into the numbers, but.

As far as I can remember it should be somewhere around 20% margins for the wafer side.

The sale of the numbers are various more of the.

Shipment of these various Marshall I don't have the Mark Martin yet.

Okay. Thank you Janet ill pass it on.

No problem. Thank you very much.

Thank you Philip.

The other participants with questions to pose please press star 1 on Anthony from Keybanc, and you'll get placed on the acute.

Next we have Brian from Goldman Sachs.

Brian a question, please hey, guys.

Yeah. Good evening, thanks for taking the questions.

I had a couple on the the guidance maybe first off of a simple 1 just.

It's the last week of June the quarters almost closed the year Euro.

Revenue on shipment guidance seems pretty tight in terms of the range, but there is still 300 basis points between the low and high end on gross margins for Q2 can you give us some.

Clarity or a sense of why there is still such a potential GAAP.

The gross margins end up.

The gross margins you realized for the quarter on I'm going to be.

In terms of the guidance on the go.

Marvin.

On a close through the quarter.

The gross margin impact from the the part.

<unk> kind of the users.

On a certain price as we ask the.

Foreign exchange rates the RMB.

Gary.

So we just gave on email.

Steve.

Relative to me.

No.

The wind ridge percentage of 15%.

Thank you <unk>.

The high end range.

Okay Fair enough and then I think sticking.

Sticking with the gross margins.

Obviously poly silicon has been more volatile than seen much.

Much faster appreciation than people expected heading into the year.

You and your peers I think we're generally we're thinking Q1 could be the bottom for gross margins based on the guidance here.

The key is going to be lower how should we be thinking about that on the context of gross margins for the rest of the year or are we in this low teens level.

Until probably starts to go down meaningfully or could we see another downtick in the Q given the.

The inventory of high cost probably still has some of them some time, bringing that needs to flush out of your cost structure.

We are observing the market price, including module.

During the.

Half of on screen.

We are expecting the stabilized the pie.

So on <unk>, So we think.

We have the COVID-19 whether it is.

You mentioned the renewable.

Gross margins on behalf of the year.

Okay.

Okay.

Hope, it's better compared to the first half of the year because of the stabilization on the syndicates.

As we continue to.

The improve.

Operating costs.

The mitigate.

To mitigate the the.

Yes.

The cost pressures from the pilot and.

We will continue to maintain some flexibility in terms of the.

Shipments of modules, which system.

The mono wafers.

Okay Fair enough and then maybe 2 questions on the revenue.

Portion of the guidance on you guys mentioned on some projects are delaying or seeing some timing issues because of the high cost of panels.

And you have been raising prices throughout the year are you having to re price any of these contracts are you seeing pricing back half or early 'twenty 2 deliveries starting to kind of go down again again, you have a view that poly silicon stabilizes. So are you requesting of that and maybe.

On firmer or declining module prices as well moving through the year.

Yes. Thanks for the question I think for that part of it.

Choose at some of the projects or some of our price projects has to accept the some of the delays have the course of the.

As expected the high price.

Not only module actually if you take into the takes the other factors into consideration as well for example of the logistics and all of the.

The labor costs given the.

The cost of the trackers that give us sometime seen warehouses or in.

In general or sort of everything goes up sort of.

That's why some of the project, which has a very tight budget to the.

The IR or capex has to delayed or even the recap to the somehow.

Adaptor south of the 2.

The situation right now for the next year, so actually we are expecting a pretty stable years, because even when the.

The polysilicon price becomes a stable as of now and also we are expecting more of polysilicon capacity available for mid of 2022, but when we compare with the demand side actually we are expecting of more demount of coming up of comparatively.

Additional new polysilicon capacity, especially when so many projects on the demand the calculated into 'twenty, 2 as well as of the new projects coming up on line. So we are expecting a very promising year of 802 as well.

Hope that answer your question.

Yeah. That's helpful. I guess, maybe just to simplify the question are you.

Are you, helping your customers at all with pricing I E. You raised prices to reflect the poly increases earlier in the year.

Now the poly may be peaking and could start to go down are you anticipating or are you quoting more aggressive pricing to keep these projects on track.

On the module space.

Yes.

Varies case by case.

It won't be Gen. On ROE you know the solution for everyone, but we are dealing with every customer of case by case, yes, we were.

Have all different kind of the business model is to try to.

Find a mutual solutions for the customers to solve their problems.

Including all of the message you just talked about about the not on a limit to that ray.

Okay Fair enough last 1 from me and I'll pass it on.

You're maintaining the 25 to 30 gigawatt guidance I know that shipment guidance for 2021.

No. It includes the cells on the wafers as well as the module shipment.

I'm not sure if you if you.

The spoke to this but whats the module portion of the 25 to 30 Gigawatts of just trying to get a sense of how much is baked into second half growth yes.

Right now where we are.

Specced on majority of it but we don't have a budgeted number of data because we are totally flat for up to the market. If the pull of for example, if the price silicon market is key.

Keep stable as the market demand start to pick up definitely we are more than half day. So the ship everything in modules instead of wafer of itself, but the <unk>.

The market that you saw continued to be volatile as it was in the last 3 of 6 months' time.

We are forced the or we have to be flexible or 2 to expose.

<unk> more.

Wafers in order to adapt to the market risk.

Okay. Thanks, a lot guys I appreciate it.

Thank you very much.

Thank you Brian.

Well the all participants with questions to pose please press the 1 telephone keypad and you will be placed in the queue.

Yeah.

On your participants for the question as to post. Please press the 1 of the telephone keypad and you will be placed into the queue.

The cancel the queue. Please press Joseph.

Audio participants for questions to pose this question the 1 of the day from Keybanc and you will be placed on the Q.

Yeah.

Okay.

Next to the ready from Santana capital Your question. Please.

Can you hear me.

Yes. Please.

Okay.

Yes.

My question is about the gross margin and you had a very nice positive surprise on the gross margin in the first quarter.

I understand that part of it is because of the wafer business is higher margin. So is it.

Greg will believe are things that you are now of managing the business.

True gross income and to maximize growth income rather than just the maximizing revenues.

And therefore for the near term anyway.

Benchmark to evaluate progress needs to be looking at gross income and I noticed that the gross income number was.

Higher than a year ago. Despite obviously.

A decline in price.

Missing of dispatch.

The substantial decline in module prices gross income year over year was higher.

So that's my first question debt.

The gross income the Bachelor of benchmark to value of progress.

Yeah, I think that Thats the.

That's very.

Encouraging.

Comments for the company.

<unk> for the company's strategy wise.

We're not only looking tool 1 go right sort of 2 to operate or to do our job actually.

It will be a balance between the different.

Most definitely the growth.

Revenue was on gross margins is a very important factor on the target of 4 of the company's management, but we have to also in the.

Take care of the other factors such as soon as on market share customers and the long term partnership as well as the revenues.

Growth are to make sure the company is.

The growing.

In the sustainable way right. So.

So long story short.

It won't be a profit only on gross margin on it but definitely the debt.

Good day and go to.

Look into thank you.

Yes.

And my second question is about the.

The lifting of the Chinese stock market can you give us an update on that.

It is.

Sure.

So the reason the states.

The break back too.

On the move will release.

We reached a significant milestone.

Okay.

Can you give us a sense of what the timeline might be on that.

No.

Not in the position now to the notes.

Talk about the the timetable.

Yes.

Just 1 on debt.

We expect to reach some milestone.

We will.

We need the ease of use.

The resets.

Okay.

Thank you.

Thank you very much.

Thank you Eddie Thanks to the Willow Chen from Roth capital.

Question. Please.

Hi management.

Thank you for taking my call. My first question is.

Regarding the whistle in June that many other module makers of cutting them.

Each of the production utilization rate of Gan in June due to the high cost.

Sue.

Expect the utilization of rig count with bump in July of given the Dale will be more new.

New projects released.

Yeah.

Okay.

So yes to me about the the.

The company, especially of the consideration of all of the industry.

The emissions activity.

I assume you the.

Polysilicon.

In the high relative to the highest on nice day.

Stabilized.

So it's stabilized wage growth.

<unk>.

For the English.

Yes.

The.

Measures to increase the Eric.

The business.

No.

The third quarter.

I assume the July 1.

The 1 I can.

Okay.

This is where the steel.

No.

To the second.

Sure.

So when do you think the the.

Production rig count rebound for the sector.

It has a good indication that actually looked at the on athletic in the.

The wafers.

So.

<unk>.

On the.

The downstream players.

Moving to take the relatively high margin.

I assume.

Hi, Charles second half price.

Okay.

Each of our Lucy.

Okay, great growth.

The better than.

The first last year.

Oh, Thanks from also on to ask if there Daniel for zone.

Cash flow apply for the.

All of the way from.

I was saying and the potential for impairment loss for our inventory.

We don't expect that the tests.

Sure.

First the.

When we caught the.

The clients, we asked the major potential.

Okay.

Ah pressures from the cost perspective.

The.

The second 1.

Got it.

Integrated the vaccines so.

The relatively low cost.

Sure.

The players.

They don't have the.

Our mono wafer capacity.

Correct.

The.

The inventory risks.

Makes sense.

The solution space.

Okay.

Thanks, and my next question is regarding our.

The capacity expansion plan with the.

For around like 3 gigawatt.

Can you elaborate why we were so cautious on the expansion of right now.

The 2 the honest set of things.

The times.

The industry utilization.

The amount of wafer.

I see.

As you know these are saying, we're not the 100%.

The.

Okay.

Thanks.

Okay.

The aircrafts co investment.

The slowness in the mixture of we have relatively high utilizations.

I mean, we were non making the investments and some of the investment.

Sure.

The foods.

The investors.

The next year.

My last question is.

Do we have any guidance for the operating profit margin because we're seeing from blood improvement in Q1, but still much lower than last year. So of William have any guidance on the.

Oh, okay.

Okay.

Operating margin, we can get to the guidance.

Gary.

First of all of it.

Regardless of the.

1 of the comment.

The solar operating projects and projects.

We don't expect to have.

The comments.

Comments.

On the year.

So.

The.

The operating expenses.

The Rockville.

The answer.

13%.

No for the question.

Thank you.

Thank you Jan Thanks for the half ready from Santana capital.

Your question please.

Okay.

My question is about.

The expectation for the module price is in the second half of the year.

Versus the first half.

Obviously, many module companies have lowered their utilization rates.

<unk> the.

The strength at the margins.

Okay.

The question of as you have a standoff between customers and suppliers on modules.

While the near term.

Utilization rate has come down.

The customers are unwilling to accept the price that you want to charge them.

Is it fair to think that kind of the second half of the year.

It is likely that customers will accept somewhat higher prices than what the operating in the second quarter.

Thank you for the question I think the for the ASP or the market price. So let's talk about sort of second right. So from the market price for the second half of what we have seen firstly the stabilized the polysilicon price in the first half of the polysilicon of raw material price jumped almost the everyday or every week.

Each of our brands of huge uncertainty for the in the low.

Downstream, especially for the.

The module market price it.

Sometimes we have to update our quotes of prices every week or even on every 2 or 3 day alright.

There is huge uncertainty for the customer and for.

For now we have seen the stabilized the Paul.

The silicon prices and the also the industry is not expecting.

Any huge of volatile polysilicon price in the near future as well. So we have seen of lots of customers start to take actions to.

To build up their budget on the Capex that you've been doing the construction.

Based on the current.

And the market prices.

So that's why we are so confident about the second half demand will continue to be strong.

And the especially we have seen a strong China demand in Q4 of which will which.

Which will become a very huge important cornerstone for the global Kumar on for the second half as well.

Thank you.

Thank you.

Yeah.

Thank you Eddie.

I will now pass the call to Mr. Mittal.

Okay.

Yeah.

Yeah.

Thank you everyone for joining on the call today.

Thank you.

Okay.

Yeah.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.