Q4 2023 JinkoSolar Holding Co Ltd Earnings Call

Operator: Hello ladies and gentlemen, and thank you for standing by for JinkoSolar Holdings Co., Ltd.'s 4th quarter 2023 ADR. At this time, all participants are in listen only mode.

Hello, Ladies and gentlemen, and thank you for standing by for Genco Solar Holdings Co Ltd fourth quarter 2023 earnings Conference call.

At this time, all participants are in listen only mode.

Operator: After management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Ms. Stella Wang.

After managements prepared remarks, there will be a question and answer session.

As a reminder, today's conference call is being recorded.

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

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

Stella Wang: Thank you operator, thank you everyone for joining us today for a gene called solar first quarter 'twenty 'twenty earnings Conference call. The company's results were released earlier today and are available on the combination of IR website at Www Dot Chico's solar dot com as well as use of wireless services. We have also provided.

Stella Wang: A supplemental presentation for today's earnings call, which can also be found on the IR website.

Stella Wang: On the call today from JinkoSolar and Mr. Li Xiande, Chairman and CEO of JinkoSolar Holding Co., Ltd., Mr. Gener Miao, CMO of JinkoSolar Co., Ltd., Mr. Pan Li, CFO of JinkoSolar Holding Co., Ltd., and Mr. Charlie Cao, CFO of JinkoSolar Co., Ltd., Mr. Li will discuss JinkoSolar's business operations and company highlights, followed by Mr. Miao, who will talk about sales and marketing, and then Mr. Pan Li, who will go through the financials. We will all be available to answer your questions during the Q&A session that follows. Please note that today's discussion will contain forward-looking statements made under the Steve Hubbard Provision of the U.S. Private Securities Litigation Reform Act of 1995.

Speaker Change: On the call today from a single Solar City Center, Chairman and CEO I've been close on a holding company limited Mr. Jim that meal CMO of getting closer to that company limited Mr. Pat The CFO of a gene called pseudo holding company limited and Mr. Charlie Hill, Seattle of a gene called Solar Company limited you're still here.

Speaker Change: I'll discuss equals all those business operations and company highly highlights followed by Mr. Miao, who will talk about ourselves and marketing and then Mr. Peng who will go through the financials. They will all be available to answer your questions. During the Q&A session that follows.

Speaker Change: 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 a 1995 forward looking statements involve inherent risks and uncertainties as such our future results may be materially different from.

Stella Wang: Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding this and other risks is included in JinkoSolar's public filings with the Securities and Exchange Commission. JinkoSolar does not assume any obligation to update any forward-looking statements except as required under the applicable law. It's now my pleasure to introduce Mr. Li Xiande, Chairman and CEO of JinkoSolar Holding. Mr. Li will speak in Mandarin, and I will translate his comments into English. Please go ahead, Mr. Li.

Speaker Change: The view expressed that debate.

Speaker Change: Other information regarding this and other risks is included eating close all of our public filings, but it's the securities and Exchange Commission.

Speaker Change: Because although it does not assume any obligation to update any forward looking statement, except as required under the applicable law.

Speaker Change: It's now my pleasure to introduce me 30 agenda, chairman and CEO of zinc coastal a hoodie me said he will speak in Mandarin and I will translate his comments into English based to go ahead and Houston.

30 Agenda: And gardening. She can give you a couple come that's useful trends so far.

Xiande Li: We are very happy to take advantage of the global operation and integrated production capabilities of the N-Type TopCom technology. We have achieved a very bright operating and financial performance in 2023, which is full of challenges. Thanks to JinkoSolar's very strong execution, the total year-on-year shipment volume has increased by 76.4%, reaching 78.5GW and returning to the top of the industry. Furthermore, thanks to our efforts in cost optimization, the annual profit level has reached a record high.

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Speaker Change: How are you.

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Stella Wang: 16%, 202214.8%,4.856,4.56,5.736,1.93,26.3GW,,,50%,12.5%,19.3 We are pleased to have achieved very impressive operational and financial results in a challenging year by leveraging our advantages in n-type top-con technology, globalized operations, and integrated capability. Thanks to strong execution by our team, our module shipment for the full year increased 76.4% year-over-year to 78.5 gigawatts, back to the top position in the industry. Benefiting from our efforts in cost optimization, our profit ability for the full year improved significantly year-over-year, with growth margins at 16%, compared to 14.8% in 2022. Net income was US$485.8 million, up 4.56 times year-over-year. Adjusted net income was US$573.8 million, up 1.93 times year-over-year.

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Speaker Change: We are pleased to have achieved have already impressive operational and financial results in a challenging year by elaborating our advantages anti popcorn technology global lifestyle operations and integrate data cut apalachi, that's too strong execution by our team our module shipments for the full year increased to 17.

Speaker Change: Fixed four 4% year over year to seven to eight five gigawatts back to the top position in the industry benefiting from our efforts in cost optimization of our profitability for the full year improved significantly year over year with gross margin at 16% compared to.

14.82% in 2020 two.

Speaker Change: Net income was U S dollars 485.8 million up four points to 56 times year over year. Adjusted net income was U S. Dollars five has sort of southern history point 8 million up one point and 19th Street not pace year over year module shipments in the fourth quarter. It was 26 four.

Speaker Change: One three gigawatts exceeding our guidance as a modest prices fell more than expected in the fourth quarter and nearly 50% of our module was sold to the Chinese market.

Speaker Change: Oh your prices gross gross margin for the fourth quarter. It was 12, 4%, 5% I'd say because that's the kind of decline from the 19, 23% in the third quarter.

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Xiande Li: Module shipment in the fourth quarter was 26.3 gigawatts, exceeding our guidance. As module prices fell more than expected in the fourth quarter, and nearly 50% of our modules were sold to the Chinese market at lower prices, growth margin for the fourth quarter was 12.5%, a significant decline from 19.3% in the third quarter. In 2022, China's government-funded new state-of-the-art equipment reached 216.88 gigawatts and increased by 148 percent. Sponsored ADR In 2023, the export volume of official products grew significantly, but the price fell, and exports fell sharply. In January and February of this year, demand for goods plummeted, and some manufacturers' negative competition intensified the fear of the market and the irrationality of the price. Dingge remained cautious and rational in the face of low-priced bids.

Speaker Change: Awesome, Yeah, torrential also pulled off.

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Speaker Change: Oh single piece of capacity at a logical time, and that's how that yeah, Hey, Josh.

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Speaker Change: As Susan said Elon so.

Speaker Change: So it's important but sometimes you don't usually at Hudson yards and services on the Xiaomi counsel you achieve that.

Speaker Change: He tried to newly added PV installation, which the 216.8 T H gigawatt in 'twenty two 'twenty three.

Speaker Change: 448% to 41% year over year to a historical high at the same time excess fly in various links of the industrial trends led to price declines turned on prices for modules at the year end the decrease to over 40% to below RMB one.

Speaker Change: Poets poet come.

Speaker Change: Bad compared to the beginning of the year export volumes other PVA products in 'twenty 'twenty sway increases like an excuse me year over year, whereas export volume fell slightly as a result of a decrease in prices in January and the February 'twenty 'twenty four.

Speaker Change: Let's say you combine the list extreme competition from certain manufacturers intensified in language Panic, Canada irrational prices, we remain cautious in our rationale in the face of abnormally low tenders. In addition, while some manufacturers without competitive cost all advanced products reduced.

Stella Wang: In addition, some manufacturers with insufficient cost and product competitiveness gradually reduced or stopped production. Nevertheless, our operating capacity can maintain a leading level in the industry. In March, as demand warmed up and inventory declined, the price gradually stabilized, and some bid prices rebounded. In the medium term, the decline in the price will significantly improve the economy of Guangdong. It is expected that the demand for global Guangdong markets will continue to grow in 2024. At the same time, the rapid integration of new technologies and the elimination of old factories will also accelerate the integration of the industry. In China, newly added PV installations reached 216.88 GW in 2023, up 148.1% year-over-year, to a historical high. At the same time, excess supply in various links of the industrial chain led to price decline. Tender prices for modules at the year-end decreased over 40% to below RMB1 yuan per watt.

Speaker Change: I'll spend the production, we maintained our leading utilization rates in the industry as a result of our cost advantage and a high order visibility.

Speaker Change: Into March as demand picked up in inventory and reduced module prices gradually stabilized and some bidding prices rebounded slightly in the short to midterm, we expected a decline in module price will significantly improve the economics of solar energy and we anticipate demand in the global PV.

Speaker Change: Market will continue to increase the 'twenty 'twenty four Meanwhile, rapid iteration of new technologies and the elimination of the obsolete production capacity will also accelerate the consolidation of the industry market share for the top 10 module manufacturers is expected to increase from that.

Speaker Change: One 2% in 2023 to over 90% in 'twenty 'twenty four.

Speaker Change: Often to a consensus.

Speaker Change: Consequently, enhance our competitiveness through cyclical fluctuations and the weeks that have a market share to further increase in 'twenty 'twenty four.

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Xiande Li: Compared to the beginning of the year, export volumes of PV products in 2023 increased significantly year-over-year, whereas export volumes fell slightly as a result of decreasing prices. In January and February 2024, seasonality combined with extreme competition from certain manufacturers intensified market panic and irrational prices. We remained cautious and irrational in the face of abnormally low tenders.

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Speaker Change: We'll have our integrated manufacturing strategy and our leading position in the pipe Kafka technology in the early stage by the end of the fourth quarter of a N type capacity extended the southern two gigawatts and our cost structure continues to improve currently of a mass produced the N type cell if I should say.

Speaker Change: 6%, while the integrated cost of N type, it's almost harvests P type, but the continuous introduction of new cell technologies and the optimization of course are reducing process or cost structure.

Stella Wang: In addition, while some manufacturers without competitive costs or advanced products reduced or suspended production, we maintained our leading utilization rates in the industry as a result of our cost advantage and high order visibility. In March, as demand picked up and inventory reduced, module prices gradually stabilized, and some bidding prices rebounded slightly. In the short to mid-term, we expect the decline in module price will significantly improve the economics of solar energy, and we anticipate demand in the global PV market will continue to increase in 2024. Meanwhile, rapid iteration of new technologies and the elimination of obsolete production capacity will also accelerate the consolidation of the industry. Market share for the top 10 module manufacturers is expected to increase from 70% in 2023 to over 90% in 2024.

Speaker Change: Started to become more competitive Oh, my God, what's almost a day just to touch on that Basel Fungibility tango tons, yet your boss with G cities, Yeah, Jennifer should you do more closely for the door that sound that sounds for the engine to become the suture and Johnny Sandwich, and you'll see what telecom solutions Sony to do that.

Speaker Change: See we.

We attach great importance to intellectual property rights and therefore, only a forecast office penny out of a technique called it a ship based on extensive intellectual property rights, but at the end of the fourth quarter. We had it been granted 330 top calm patients one of the largest portfolios of granting the top comp.

Speaker Change: You know well.

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Speaker Change: So of course, you can say God, that's what you have going forward.

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Stella Wang: We are confident to continue to consistently enhance our competitiveness through cyclical fluctuations, and we expect our market share to further increase in 2024. Sponsored ADR As of the end of April, our N-type batteries have exceeded 70GW, and the cost structure continues to be optimized. At present, the efficiency of the N-type TopCom battery is more than 26%. Compared with the P-type, the cost of the N-type integrated battery is basically the

Speaker Change: There's the largest overseas integrated capacity of over 12, gigawatts in the industry and the effects of slide 10 inches of let's say system, we have become the most reliable module supplier to the U S market.

Speaker Change: It is expected to generate just stick in this kind of profit in 'twenty 'twenty. Four. Furthermore, however investments in innovative products. Your motto is expected to generate the returns overtime phases, one and two of our integrated projects that you shouldn't see well start production in the first half of 'twenty 'twenty four.

Speaker Change: That's correct and gradually ramp up in the second half the full integration of automation tank greatly improve labor efficiency and operation can over efficiency and is expected to brain I'll stick. It never comes a reduction in operating costs after reaching for production.

Xiande Li: With the addition of new battery technology, continuous input, and low-volume process optimization, our cost structure will become more competitive. Thanks to our integrated manufacturing strategy and our leading position in n-type popcorn technology at the early stage, by the end of the fourth quarter, our n-type capacity exceeded 70 gigawatts, and our cost structure continues to improve. Currently, our mass-produced n-type cell efficiency exceeds 26%, while the integrated cost of n-type is almost on par with p-type.

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Speaker Change: Is it a mid to long term the rapid expansion of AI and electrical vehicles need to its highest poverty fly in the walls and the demand for clean power generation is expected to further increase so far reduced us all our costs. It has significantly increased the competitiveness of solar in the energy sector.

Stella Wang: With the continuous introduction of new cell technologies and optimization of cost-reducing processes, our cost structure is expected to become more competitive. We attach great importance to the protection of knowledge production rights and focus on maintaining technological leadership through widespread knowledge production rights. By the end of the fourth quarter, our company acquired more than 330 n-type popcorn authorizations, making it one of the most authorized popcorn companies in the world.

Speaker Change: Future solar as a new quality of productive productive force. It starts to play an increasingly important role in face of energy crashes and energy transformation.

Speaker Change: We're bullish about PV market growth in the mid to long term and we are confident we will continue to lead the industry with advanced technologies and the premium high efficiency products.

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Xiande Li: We attach great importance to intellectual property rights and are fully focused on sustaining our technical leadership based on extensive intellectual property rights. By the end of the fourth quarter, we had been granted 330 TopCom patents, one of the largest portfolios of granted TopCom patents in the world. Sponsored ADR Sponsored ADR, This is the largest overseas integrated capacity of over 12 gigawatts in the industry and an effective supply chain traceability system. We have become the most reliable module supplier to the U.S. market, which is expected to generate significant profits in 2024. Furthermore, our investment in an innovative production model is expected to generate returns over time. Phase 1 and 2 of our integrated projects in Shaanxi will start production in the first half of 2024 as planned and gradually ramp up in the second half. The full integration of automation can greatly improve labor efficiency and operation turnover efficiency and is expected to bring a significant reduction in operating costs after reaching full production.

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Speaker Change: Taking into account the lifespan of market conditions, we are reducing investments in capacity expansion in 'twenty 'twenty four we are focusing on expanding the vasa N type capacity, including 28 Gigawatts of integrated with the capacity you have a sense of your plants and about four gigawatts of N type cell and module.

Speaker Change: T. He Vietnam, we continue to focus on improving working capital efficiency and achieving a sustainable growth in operating cash flow.

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Speaker Change: Before I turn you over to Jenny I would like to go over our guidance for the first quarter and a four year of 'twenty 'twenty four by the end of 'twenty 'twenty four we expect to mass produce N type cell efficiency to reach 26 point of 5%, we expect our annual production capacity for mono wafers solar cell and solar module to H.

Speaker Change: 520, 110, and the 130 gigawatts, respectively by the end of 'twenty 'twenty four there's untie the capacity accounting for over 90% of total capacity.

Stella Wang: In the medium and long term, the rapid expansion of AI and electric vehicles may lead to a tightening of global power supply and a further increase in global demand for clean energy generation. At present, the reduction in light-duty costs has greatly increased the competitiveness of light-duty vehicles in the energy industry. In the future, light-duty, as an innovative production force, will play an increasingly important role in dealing with energy crises and energy transformation. We are optimistic about the light-duty market. Sponsored ADR, In the mid to long term, the rapid expansion of AI and electrical vehicles may lead to tight power supply in the world, and the demand for clean power generation is expected to further increase. So far, reducing solar cost has significantly increased the competitiveness of solar in the energy sector. In the future, solar energy as a new quality productive force is set to play an increasingly important role in the face of the energy crisis and energy transformation.

Speaker Change: We expect the module shipments to be in the range of 18 to 20 Gigawatts for the first quarter of 'twenty 'twenty four and the 100 gig was 210 for the four year 'twenty 'twenty four there's N type accounting for nearly 19% of total module shipments.

Speaker Change: Okay.

Speaker Change: Sure enough.

Speaker Change: Thank you Nikki.

Speaker Change: Thank you.

Speaker Change: We're pleased to have achieved a historical high.

Speaker Change: On an annual module shipments.

Speaker Change: Oh excellent global marquee novel.

Speaker Change: Oh of course.

Speaker Change: Although shipments what 97.9 gigawatt in the fourth quarter with small dealership.

Speaker Change: 24% and 90.

Speaker Change: I appreciate it.

Speaker Change: And you're more efficient and increase was 76, 4% on a year over year to 78.5 gigawatt.

Speaker Change: On the both module shipments in the fourth quarter and this weird CT ranks of what were the number one.

Speaker Change: We continue to improve product quality and our customer service network to expand to influence that.

Speaker Change: By the end of fourth quarter, our accumulated global module shipments exceeded 210 gigawatt.

Speaker Change: Probably more than a 190 countries around the region.

Speaker Change: In terms of geographic mix to China, and the Asia. He became a major shift and retrenching, a fourth quarter accounting for approximately 70%.

Xiande Li: We are bullish about PV market growth in the mid to long term, and we are confident we will continue to lead the industry with advanced technologies and premium high-efficiency products. However, considering the supply chain and market situation, the strength of investment in 2024 is significantly reduced compared to 2023. We are focused on investing in advanced N-type energy, including 28 GW of integrated N-type energy from the Shanxi base and about 4 GW of N-type electrical and building energy from Vietnam. The company will strive to improve operating capital efficiency and achieve sustainable growth in operating cash flow. Taking into account the supply chain and market conditions, we are reducing investments in capacity expansion in 2024.

Speaker Change: For the full year 2023 shipments to Asia Pacific and North America grew significantly more than doubling year over year.

Speaker Change: We continue to expand our footprint in oversea market.

Speaker Change: Integrate the capacity, we move on to invest in North America, and the emerging market.

Speaker Change: So you saw almost business conditions and market trends.

Speaker Change: Europe will continue to be the major contributor to the shipments.

Speaker Change: In 2020, we used most of them are called emerging markets in Asia Pacific, We expect to flourish.

Speaker Change: On the political comparison high efficiency.

Speaker Change: 470% ownership and of course quarter.

Speaker Change: Average premium of RMB 10 cents per watt.

Speaker Change: That's S P type modules.

Speaker Change: And the type of new content for approximately 60% of annual global shipment achieving the goal we set at the beginning and I said I really Chinese market in the next future pulse on it.

Stella Wang: We are focusing on expanding our advanced N-type capacity, including 28 gigawatts of integrated capacity in our Shanxi plant and about 4 gigawatts of N-type cell and module capacity in Vietnam. We will continue to focus on improving working capital efficiency and achieving sustainable growth in operating cash flow. Before the topic is handed over to Jenna, let me introduce the performance guidance. It is expected that the mass production efficiency of N-type batteries will reach 26.5% by the end of 2024. The capacity of the high-efficiency batteries made in Nanjing is 120W, 110W, and 130W, respectively.

Speaker Change: Turning to power all put all type of MRV, it's more of a 30 watt peak higher turns at all.

Speaker Change: P type market.

I think all customers with higher power generation.

Speaker Change: So I'll take that and you know what.

Speaker Change: Back to four.

Speaker Change: Oh, that's P. He's got person in the first quarter because it had before.

Speaker Change: Or does that.

Speaker Change: Yes continue to lead the industry.

Speaker Change: We are always committed to create greater economic wet until our customer with high efficiency.

Speaker Change: Highly reliable and sustainable solutions.

Speaker Change: So first a new green panels produced with renewable energy.

Speaker Change: These panels, we're producing in factories.

Speaker Change: What it does do you have a couple of factories certification by two B Riley.

Speaker Change: He was also the first company in the industry to be awarded with zero carbon factory certification by two.

Speaker Change: Our silica.

Speaker Change: Manufacturing place a cartoon Selma and Clark training on the Mako manufacturer.

Xiande Li: The N-type battery has a capacity of more than 90%. Before turning over to Jenner, I would like to go over our guidance for the first quarter and the full year of 2024. By the end of 2024, we expect mass-produced N-type cell efficiency to reach 26.5%. We expect our annual production capacity for monowafers, solar cells, and solar modules to reach 120, 110, and 130 gigawatts, respectively, by the end of 2024. This N-type capacity accounts for over 90% of total capacity. We expect the module shipments to be in the range of 18 to 20 gigawatts for the first quarter of 2024 and 100 gigawatts to 110 for the full year 2024. This N-type accounts for nearly 90% of total module shipments. Thank you, Mr. Lee.

Speaker Change: We also continued to improve our ESG practices and optimize all the traceability system.

Speaker Change: In the first quarter, we were awarded Vista ESG transparency, how it work from B U P. D research, which we recognize our far reaching commitment to sustainability and transparency.

Speaker Change: Recently, beating for soft domestic projects began to activate it.

Speaker Change: Hugh you inventories became to be treated.

Speaker Change: And we have seen additional demand, especially in DG business.

Speaker Change: Gradually improve the economics and the growing demand for transformation.

Speaker Change: Oh Boy you.

Speaker Change: You'd be at the moment in the global market is expected to further increase in 2024.

Speaker Change: It's a relatively slower pace.

Speaker Change: The Street.

Speaker Change: And longer term that requirement.

Speaker Change: For computing power, we will tend to increase with demand waned at Christiana electrical equipment.

Speaker Change: Strong growth potential for PV plus storage.

Speaker Change: That's what I'm responsible global company, we are always committed to per watt providing.

Speaker Change: Reliable are the highlights.

Speaker Change: So that kind of stuff.

Speaker Change: Back to scene, so values, we share that with all our clients partners and investors to a Saturday right.

Speaker Change: In the future.

Speaker Change: With that I'll turn the call over to Pat.

Yeah.

Pat: Thanks to solid execution.

Pat: And management strategy.

Pat: While our successful efforts in cost optimization.

Pat: We delivered excellent financial performance.

Gener Miao: We are pleased to have achieved a historical high in quarterly and annual module shipments thanks to our excellent global marketing network and the power of our products. Total shipments were 27.9 gigawatts in the fourth quarter, with module shipments accounting for approximately 95%. Annual module shipments increased 76.4% year-over-year to 78.5 gigawatts.

Pat: For the full year key metrics such as total revenues gross margin.

Pat: Income from operations.

Pat: Net income significantly increased year over year.

Pat: We also improved working capital efficiency and optimize operating cash flow.

Pat: By the end of the fourth quarter.

Pat: Cash and cash equivalents.

Pat: <unk> two point.

Pat: Seven 5 billion and our net debt decreased by over 200 percentage every year.

Pat: In December.

Pat: Now the expansion of our existing share repurchase program and by the end of February. This year, we have repurchased nearly 1 million 88 in the aggregate amount of approximately.

Gener Miao: And both module shipments in the first quarter and the full year 2024 ranked world number one. We continued to improve product quality and build our customer service network to expand the influence of our brand. By the end of the first quarter, our accumulated global module shipment exceeded 210 gigawatts, covering more than 190 countries and regions.

Pat: Stoller 28 million.

Pat: Was that ever advantages and tight tough comp technology.

Pat: Globalized operations and integrated capacity.

Pat: We're very confident in.

Gross prospect and will continue to improve working capital efficiency and achieve sustainable grossing operating cash flow.

Speaker Change: Let me go into more details now.

Speaker Change: Total revenue.

Speaker Change: It was 4.6 billion.

Gener Miao: In terms of geographic mix, China and the Asia-Pacific became our major shipment regions in the fourth quarter, accounting for approximately 70 percent. For the full year 2023, shipment to Asia-Pacific and North America grew significantly, more than doubling year over year. As we continue to expand our footprint in overseas markets and build our integrated capacity, we move on to invest in North America and emerging markets. Based on our business conditions and market trends, China and Europe will continue to be the major contributors to shipment in 2024. With North America, emerging markets, and Asia-Pacific expected to flourish. On the product front, the competitive high-efficiency type renew accounted for 70% of the shipment in the first quarter, with an average premium of RMB $0.10 per watt versus P technology. Tiger New accounted for approximately 60% of annual global shipments, achieving the goal we set at the beginning of the year and accelerating its market penetration globally. Currently, the power output of Tiger Neo modules is more than 30 watts peak higher than that of the similar P-type module, providing our customers with higher power generation yield.

Speaker Change: An increase of 3% sequentially and more than nine percentage year over year.

Speaker Change: Gross margin or to a 0.5 percentage compared with 19 percentage in the third quarter and 14.

Speaker Change: In the fourth quarter of 'twenty two.

Speaker Change: The decreases were mainly due to the decrease in average selling prices.

Speaker Change: Of solar modules.

Speaker Change: Total operating expenses.

Speaker Change: We're 500.

Speaker Change: 26, many increases were mainly attribute to <unk>.

Speaker Change: Loss on disposal on P. P E and expansion in relation to settlement.

Speaker Change: The dispute was customer.

Speaker Change: Operating margin was one 1% as compared with two last year.

Excluding the impact from a change in fair value of the notes.

Speaker Change: And long term investments.

And share based compensation expenses.

Speaker Change: Adjusted net income attribute to Genco solar holding company.

Speaker Change: Fortinet is shareholders for 65 million compared with 45 million in the fourth quarter last year.

Speaker Change: Got.

Speaker Change: 73% year over year.

Speaker Change: Now a brief view I'll never 23 full year financial results.

Speaker Change: Total motor shipments.

Were $78 five gigawatt 76 percentage year over year.

Speaker Change: And total revenues.

Speaker Change: Up 43 percentage year over year.

Speaker Change: For the full year.

Speaker Change: 2023 gross profit was about 2.7 billing disorders and increase of 15 five percentage every year.

Speaker Change: Gross margin was 16 percentage compared to 14.8 percentage.

Gener Miao: Shipments of our Tiger NEO were expected to account for over 85% in the first quarter of 2024, and its product, We are always committed to bring greater economic value to our customers with high efficiency, a highly reliable product, and a sustainable solution. Recently, we unveiled the first new grain panels produced with renewable energy.

Speaker Change: The increase was mainly attributed to a decrease in the material cost of solar modules.

Total operating expenses for one point H building up nine percentage over a year's.

Speaker Change: The increase.

Speaker Change: Well, it's mainly due to an increasing parent lost on P. P E and.

Speaker Change: Expansion in relation to settlement of a dispute with customer and increasing staff cost.

Speaker Change: Operating margin for the full year of 20, 315 percentage compared to <unk> five.

Gener Miao: These panels were produced in factories that were awarded the Zero Carbon Factory Certification by TUV Rheinland. JinkoSolar is also the first company in the industry to be awarded the zero carbon factory certification by TUV for silicon in the manufacturing, wafer cutting, cell manufacturing, and module manufacturing. We also continue to improve our ESG practice and optimize our traceability. In the first quarter, we were awarded the ESG Transparency Award from EUPD Research, which recognizes our far-reaching commitment to sustainability and transparency. Recently, bidding for some domestic projects began to activate. EU inventories decreased, and we have seen additional demand, especially in DGP. We gradually improved PV economics and the growing demand for transmission to clean energy globally. PV demand in the global market is expected to further increase in 2024, but at a relatively slower pace than in 2023.

Speaker Change: Right.

Speaker Change: Percentage last year.

Speaker Change: Excluding the impact from a change in fair value of notes long term investments.

Speaker Change: Share based compensation expenses.

Speaker Change: Adjusted net income attribute to <unk>.

Single solar holding ordinary shareholders.

Speaker Change: It was about 574 million.

Speaker Change: That's nearly two times a year over year.

Speaker Change: It's moving to the balance sheet.

Speaker Change: As mentioned.

Speaker Change: That's the end of the fourth quarter cash and cash equivalents were significantly higher.

Speaker Change: At two point 75 billion half from one point 93 billion at the end of the third quarter, a one point to 60 fulfilling.

Speaker Change: At the end of the fourth quarter of 'twenty.

Two.

Speaker Change: They are to a number of days were down to 76 days in the fourth quarter.

Speaker Change: From 87 days in the third quarter inventory turnover days were down to 50.

Speaker Change: 57 days from 67 days in the third quarter.

The total debt was four point.

Speaker Change: Three 8 billion in your end compared to full billing last year.

Speaker Change: And net debt was.

Speaker Change: One 6 billion compared to 2.3 billion last year.

Speaker Change: This concludes our prepared remarks, we're now happy to take your questions.

Operator: Operator right proceed.

Speaker Change: Thank you if.

Gener Miao: In the longer term, the requirement of AI for computing power will further increase the demand for electricity and electrical equipment, ensuring strong growth potential for PV plus storage. As a responsible global company, we are always committed to providing clients with reliable and highly, practicing the values we shared with our clients, partners, and investors to accelerate to a greener future. With that, I turn the call over to Pat.

Speaker Change: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press star two.

Speaker Change: If you're on a speakerphone please pick up the handset to ask your question.

Speaker Change: Your first question comes from Philip Shen with Roth and K M. Please go ahead.

Philip Shen: Hi, everyone and thank you for taking my questions. The first one is on pricing I was wondering if you could.

Speaker Change: Uh huh.

Philip Shen: Share with us the Q4, two sorry, if I missed it and then what do you expect that ASP to be in Q1.

Philip Shen: And Q2 and as we go through the year.

Philip Shen: [noise] dinner would you like to.

Speaker Change: The answer to your question.

Speaker Change: Right.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: It does.

Uh huh.

Speaker Change: So I'm traveling or I I didn't get all of your question, but I I heard pricing right so or is it.

Haiyun Cao: Thanks to solid execution of our operations and management strategies, as well as successful efforts in cost optimization, we delivered excellent financial performance. For the full year, key metrics, such as total revenues, gross margin, Income from operations, and net income, all significantly increased year over year. We also improved working capital efficiency and optimized operating cash flow.

Speaker Change: The pricing actions our pricing.

Drop happens across at December to January So does that mean, it's equally compared to S. P times Q2 was definitely there will be a.

Speaker Change:

Speaker Change: The course over the market price changes.

Speaker Change: So number wise I don't have that way when we say right for it.

Speaker Change: Sorry, Paul.

Speaker Change: Okay, Yeah, Hey, Janet Thanks for that so can you share what the ASP was in Q4 for demand for modules and and then.

Haiyun Cao: By the end of the fourth quarter, we had cash-on-cash equipment of $2.8 billion. 75 billion, and our net debt decreased by over 20% year-over-year in December. We announced the extension of our existing shared repurchase program, and by the end of February this year, we had repurchased nearly 1,000,000 ADs in an aggregate amount of approximately U.S. dollar 28 million. With our advantages in n-type TopCon technology, Globalized Operations and Integrated Capacity, We are very confident in our growth prospects and will continue to improve working capital efficiency and achieve sustainable growth in operating cash flow. Let me go into more details now. Total Revenue was 4.6 billion, an increase of 3% sequentially and more than 9% year-over-year. Gross margin was 12.5%, compared with 19% in Q3 and 14% in Q4 of 2022. The decreases were many due to the decrease in average selling prices of Solar Modules.

Janet: Quantify how much Laura.

Janet: Thanks.

Janet: I'm trying to kind of take that I don't have the number with me now.

Janet: Yeah.

Speaker Change: Yeah, I think the most important thing is what we believe is kind of all the panic sales you know the module.

Speaker Change: They said no, let's say two quarters.

Speaker Change: And.

Speaker Change: I don't believe that you know.

Speaker Change: The parts, particularly in China, as a sustainable kind of well.

Speaker Change: We are expecting in the us, whereas the market expecting to audio pines has been stabilized and maybe I'll, let off a little bit you know and back to pricing depending on different market.

Speaker Change: You know the U S. It's pretty you know significantly apart from him.

Speaker Change: You know Europe is a little bit better.

Speaker Change: And.

Speaker Change: And in China and to a different segment you know D G wishes.

Speaker Change: It has different.

Speaker Change: This difference and.

Speaker Change: And but I also heard a crash things I was thinking.

Speaker Change: Want to explore.

Speaker Change: Oh sure you know if Q1 Q2, which is Q4 last year, where you think that S. P. You know, we're still in a downward trend, but it's a not dramatically but slightly.

Speaker Change: And we think you know that it's reaching to a bottom.

Speaker Change: First half here Tony therefore.

Speaker Change: S P.

Speaker Change: Yeah.

Speaker Change: Okay. So.

S P: So, but you have the average selling price for all the regions for Q4 right.

Haiyun Cao: Total operating expenses were 26 million. The increases were mainly attributed to loss of disposal on PPE and expenses in relation to sector management. Our Dispute with Customers, Operating margin was 1.1% compared with 2% last year, excluding the impact from a change in the fair value of the note and Long-Term Investments and share-based compensation expenses. Adjusted Net Income Attribute to JinkoSolar Holding Company, Ordinary shareholders were 65 million compared with 45 million in the fourth quarter last year. Good night.

S P: Sure that price for Q4.

Speaker Change: No. We don't go we don't disclose but you can calculate the blended it you know if you would take the total revenue module.

Speaker Change: And typically they would have gotten 95, sandoz, our seminaries coming for our module business.

Okay. Thank you.

Speaker Change: So it.

Speaker Change: So it sounds like the bottom could be Q1, or Q2 and or do you think the bottom is more Q2 or more Q1 in terms of module pricing.

Speaker Change: [laughter] I think it's a different kind of company has definitely mix, but.

Speaker Change: I think as a relatively stable.

Stable Q2 versus Q1, maybe a little bit.

Lower but it's not significant.

Speaker Change: And.

Yeah, that's why.

Speaker Change: Why why why do we are looking at.

Speaker Change: Most important thing is what you're saying is that China is it.

Haiyun Cao: Seventy-three percentage year-over-year. Now I'll brief you on our 23 full-year financial results. Total Motor Shipments were 78.5 gigawatts, up 76% year-over-year, and Total Revenue was up 43% year-over-year for the full year. In 2023, gross profit was about $2.7 billion, an increase of 55% year-to-year. Gross margin was 16%, compared to 14.8%.

Speaker Change: It's exceeding.

Speaker Change: The expectation as you know China demand really good.

Speaker Change: Europe, you know the destock has been completed.

Speaker Change: Picking up the stock.

Speaker Change: So we think there's a kind of the.

Speaker Change: Improves.

Speaker Change: Look.

Speaker Change: From the demand side.

Speaker Change: It still sounds like there's some you know the oversupply situations.

Speaker Change: 14, co we have more.

Speaker Change: So 90% is.

<unk> and global sales and manufacturing capabilities.

Speaker Change: We were thinking we are.

Speaker Change: Relatively better.

Speaker Change: And.

Then the other peers and it takes time you know for the.

Speaker Change: Low no even facing say capacity you know tier two tier should company as it plays out but it takes time, but what are you seeing as the most important thing we can book or some of our other families and swaps.

Haiyun Cao: Total operating expenses for 1.8 billion at 9% of a year. The increase was mainly due to an increasing payment loss on PPE and its expense in relation to settlement of disputes with customers and an increase in staff costs. Operating margin for the full year of 2023 was 5% compared to 0.5% last year, excluding the impact from a change in fair value of notes, long-term investments, and share-based compensation expenses.

Speaker Change: The relatively challenging.

Speaker Change: Yeah, Okay. Thanks shifting over the margins so you've given us a little bit of a framework for how to think about pricing.

Speaker Change: Trends through the year, how do you expect like what do you expect your margins to be for Q1, I know you haven't given official guidance, but you know just relative to Q4, you know maybe.

Speaker Change: Maybe you can say, a little bit up or down or something and then and then as it relates to Q2 or do you see like when do you see a bit of a recovery of the margins. Thanks.

Speaker Change: Yeah, It's oh.

Speaker Change: We estimate the Q.

Speaker Change: Q1 field to the first half of the year, it's a little bit.

Speaker Change: Lower slightly lower versus Q4 last year, it's not dramatic but lower for the Q4 versus Q3 last year.

Haiyun Cao: Adjusting Net Income Attribute to, JinkoSolar Holding Co., Ltd. was about 574 million, and we milked it two times a year a year. Let's move into the balance sheet. Affirmation. At the end of the fourth quarter, our cash and cash equivalents were significantly higher, at $2.75 billion, up from $1.93 billion at the end of the third quarter, and at $1.64 billion at the end of the fourth quarter of 2020. AR turnover days were down to 76 days in the fourth quarter from 87 days in the 3rd quarter, and even turnover days were down to 57 days from 67 days in the 3rd quarter. The total depth was 4.8 meters.

So I'd say the lower you know.

After the Q1 Q2, but we believe there's opportunities.

Speaker Change: For the second half of year, maybe a perfect ability to expense.

Speaker Change: Yeah.

Speaker Change: Got it that's very helpful. And then finally I think in your slides you talked about two gigawatts of integrated U S capacity.

Speaker Change: Hi, guys I'm, sorry, if I missed this but.

Speaker Change: Does that mean, you might be wafer cell and module in the U S and I'm sure you know, it's sort of like what the locations are and Oh, and then right. So I'll leave it there I have one follow up on that topic.

Speaker Change: Yeah, the U S capacity.

We are we started construction last year and it's getting really I'd say, we're quickly in March or April to have started the operation.

Speaker Change: Y percent module too.

Speaker Change: Two gigawatts mono wafer sale and we have integrated capacity himself.

Uh huh.

Speaker Change: Well now Malaysia, you know the capacity is off the shelf to 14 Gigawatts.

Speaker Change: Combinations, you know at least a two gigawatt some.

Speaker Change: Yeah.

Speaker Change: The module capacity in the U S.

Speaker Change: I think we are in a good position.

Speaker Change: And.

Operator: $38 billion at year-end compared to $4 billion last year, and A net debt was $1.6 billion compared to $2.3 billion last year. This concludes our prepared remarks. We are now happy to take your questions. Operator, please proceed. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be called. If you wish to cancel your request, please press start.

Speaker Change: On top of that you know we have separate you know independent of the supply chain from that party everything you know through the module and we have very good traceability.

Speaker Change: Distance and the proof of record in the last year. So we think you know this series a plea weekend.

Speaker Change: We have more off market opportunities.

Speaker Change: To touch off you know for the next two or three years.

Speaker Change: S market.

Speaker Change: Got it okay. So it's only two gigawatts of module or it is.

Speaker Change: Gigawatts of module the way it was written on the slide slide six sounded like two gigawatts of integrated capacity could be in the U S. But my follow up here and then ill wind it down is.

What is and this might be a bit of a tough question, but what is your view of the discussion around the foreign entity of concern language, which a lot of people are talking about could be added to the 45 ex manufacturing PTC, which might make it more difficult for you guys to add or to receive the PTC.

Philip Shen: If you're on a speakerphone, please pick up the handset to ask questions. Your first question comes from Philip Shen with Ross. Please go ahead. Hi, everyone.

Speaker Change: You're ramping up your facility basically now if not may be in a month in April.

Philip Shen: Thank you for taking my questions. The first one is on pricing. I was wondering if you could share with us the Q4 ASP. Sorry if I missed it.

Speaker Change: To what degree does that concern you or are you following that.

Speaker Change: Topic at all.

Speaker Change: Thank you.

Speaker Change: I'm not speaking I'm not familiar with this topic I started talking about this.

And as you know.

Speaker Change: The regulations are in place but.

Speaker Change: But way real falloff.

Gener Miao: And then what do you expect that ASP to be in Q1 and Q2 as we get through the year? Hey, General, would you like to... That answer your question? Hey, Philip, can you hear me?

Speaker Change: After the call but.

I think I'm not sure you are talking about you know some lacks the civic thought that are you know the I.

Speaker Change: Sensitive you know.

Speaker Change: Taking all of this but I always think solar is small.

Speaker Change: You know pervasive and where our common unit four.

Philip Shen: Yes, we can hear you. Okay, thank you. I'm traveling, so I didn't get all of your questions, but I heard it's about pricing. Actually, the significant drop in pricing happens across December to January. So that means if we compare the ESP between Q4 and Q1, there will definitely be a big gap because of the market price changes. The details on the numbers, I don't have that with me.

Speaker Change: Therefore, each country's too to divide up and it's not that sensitive.

Speaker Change: But anyway, we will fall off the topic you are talking about.

Speaker Change: Familiar faces.

Speaker Change: The progress.

Speaker Change: Okay. Thank you Charlie I think I know I asked a lot of questions I appreciate it.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Thank you. Your next question comes from Alan Law with Jefferies. Please go ahead.

Alan Lau: Thank you for taking my question, so I would like to know because there's a very detailed our capacity expansion plan.

Alan Lau: And just would like to ask a bit on the details.

Gener Miao: All right. Okay. Yeah. Hey, Gener, thanks for that.

Philip Shen: So, can you share what the ASB was in Q4 for modules? And then, can you quantify how much lower Q1 might be? Thanks. Charlie, can you take that?

Alan Lau: So by the end of $200 for it would be 120 <unk>.

Alan Lau: And then 110 and I Wonder I got 30 gigawatt for wafer cell and module. So my question is mainly on the cell.

Alan Lau: Because the company has 70 gigawatt of popcorn by the end of 201 or three.

Haiyun Cao: I don't have the number with me now. Yeah, Philip, I think the most important thing is, we believe it's kind of the panic cells, you know, the module, you know, let's say two quarters. And we don't believe the price, particularly in China, is sustainable, and we are expecting, and as well as the market, expecting the module price has been stabilized, and maybe up a little bit. And back to pricing, depending on different markets, you know, the U.S. is pretty, you know, significantly priced premium. You know, Europe is a little bit better than China, and different segments, you know, DG versus utility has different price difference, but answer your questions, I think you want to explore is for sure, you know, if Q1, Q2 versus Q4 last year, we think the ASP, you know, is still in the downward trend, but it's not dramatically, but you know, slightly, you know, and we think, you know, it's reaching to the bottom, you know, in the first half year of 2024, for the S.P.

Those supposedly the remaining 20 gigawatt as puck.

Alan Lau: So and then by the end of this year. It's 110, so it would be 100 gigawatt of popcorn plus pengxi cover of puck. If that is the case then do you mean.

Alan Lau: You would impair to 10 gigawatt of book this year.

Alan Lau: Hmm.

Alan Lau: The answer is we will phase out the free software. They did go out and say you know the terror capacity is ross's years, that's at the plan and the way we have one everything we have these costs by another 10 years of capacity small higher peso anytime there's not.

Alan Lau: No and you know a few times capacity the cell capacity is 110 and is a major part as you know.

Alan Lau: Was it 28 Gigawatts your essentially your shelf refractories plastic water without talking about it.

Alan Lau: One four gigawatts, that's why we have some equivalent of production.

Alan Lau: The wall in your existing capacity.

Alan Lau: So total is the highest time no for the N type capacity, we did have 28 gigawatts of PERC capacity.

Haiyun Cao: Okay, but you have the average selling price for all the regions for Q4, right? Can you share that price for Q4? No, we don't want this cost, but you can calculate the blended cost, you know, if you take the total revenue with this budget. And typically, we have I think 95% of the revenue coming from the module business. Okay, thank you.

Alan Lau: We don't have fun to upgrades and we're serious.

Alan Lau: Not economic.

Speaker Change: Makes sense.

Speaker Change: The most important things that we have depreciated.

Speaker Change: Capacity over five years, so we don't really we have cigarette.

Significant burden you know for 20 Gigawatts.

Speaker Change: The PERC and we focus on the technology as a new technology and new products Nowadays.

Haiyun Cao: So, it sounds like the bottom could be Q1 or Q2, or do you think the bottom is more Q2 or more Q1 in terms of module pricing? I think different companies have different mixes, but I think it's relatively stable in Q2 versus Q1. Maybe a little bit lower, but it's not significant.

Speaker Change: I think.

Is that is.

Mark: This is mark.

Mark: The decision.

Speaker Change: Okay. So just to confirm you basically the 420 gigawatt of puck.

Speaker Change: They are fully depreciated, so basically they were.

Speaker Change: Built in 2019.

Haiyun Cao: [inaudible] So we think there's a kind of the. [inaudible] For Jinko, we have more, you know, 90% is n-type and global sales and manufacturing capabilities, and we think we are relatively better than our peers.

Speaker Change: By now they're fully depreciated. So you do not see a major impairment risk this year right.

Speaker Change: Yeah, it's roughly yes, we did have some kind of residual value, but it's not significant most of the assets her screen depreciated.

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

Speaker Change: Yes, I've got this impressive because a lot of peers in this industry might have a lot of impairment. This year. So my next question is Oh, what is that do.

You signed.

Speaker Change: Signed a S P O.

Speaker Change: For the for the contracts that you're signing in the U S market because had been her hearing different.

Speaker Change: Feedback, saying that.

Speaker Change: Prices for utility projects in the U S declining from 30 cents to below 30 since she is full queue. So I'd like to learn you'll feel went on this front.

Haiyun Cao: It's a, you know, we estimate the Q1, Q2 first half year, it's a little bit lower, you know, slightly lower versus Q4 last year. It's not dramatically lower for the Q4 versus Q3 last year. It's slightly, slightly lower, you know, throughout Q1, Q2, but we believe there are opportunities and for the second half year, maybe profitability will expand. Got it.

Speaker Change: Yeah.

Speaker Change: Yes, there's there's kind of assumed property index ended for the U S. The price ranges.

Speaker Change: I think that we're a little.

Speaker Change: It would be no hyphen to those are the kind of the.

Speaker Change: You've got a range and.

Speaker Change: It looks like it's a downward trend, but relatively stable and you know the difference.

Philip Shen: That's very helpful. And then, finally, I think in your slides you talked about two gigawatts of integrated U.S. capacity. Again, sorry if I missed this, but does that mean you might do wafer, shell, and module in the U.S.? Can you share, you know, if so, like where the locations are?

Speaker Change: One customer is different.

Speaker Change: And the way we think we are in a.

Speaker Change: Good position.

Speaker Change: Because we trace it but it is and we have some surface.

Speaker Change: Holly, which just shows the modules and we think we can see how aggressively.

Haiyun Cao: And, and then, So I'll leave it there, and I have one follow-up on that topic. The U.S. capacity. We started the construction last year, and it will get ready, I think, very quickly in March or April to start the operation. It's a 100% module, 2 gigawatts, no wafer cell, but we have integrated capacity in the South. The well-known Malaysia, you know; the capacity is roughly 12 to 14 gigawatts.

Speaker Change: No the price premium resound peers.

Speaker Change:

Speaker Change: So oh, yes mentioned overseas polysilicon, so we would like to.

Speaker Change: I have an update on the overseas polysilicon price is.

Speaker Change: Is it rebounding or it's still trending down.

Speaker Change: Yes.

Speaker Change: I assume that the reason you know three or three months is it's.

Speaker Change: We have stable because we know the polysilicon.

Speaker Change: Although China is a wrong 100 psi.

Speaker Change: All of the metrics house, it's known.

Speaker Change: Capacity are expected in the next one half of the year.

Haiyun Cao: And in combination with the 2 gigawatts, you know, the module capacity in the U.S., where I think we are in a good position, you know. And on top of that, you know, we have a separate, you know, independent supply chain from the polymer to the module. And we have very good, you know, traceability systems and a good proof record from the last year. So we think, you know, this year is a really, really kind of good year.

Speaker Change: There's other things that maybe some China Poly you know China Pone, you know so the.

Speaker Change: But I think that there's a you know exactly who they are.

Speaker Change: Yeah.

Speaker Change: Risk you know.

Speaker Change: There's a word.

Speaker Change: Complicated compliance center so.

Speaker Change: We don't see significant downward and there's actually a stable yeah.

Speaker Change: Right.

Speaker Change: So switching gear choose I'd say the European market. Because you have mentioned Destocking has basically completed so wed like to follow up on this slide are you having receiving orders.

Philip Shen: We have more market opportunities to catch up for the next two or three years for the U.S. market. Okay, so it's only two gigawatts of module, or it is two gigawatts of module. The way it was written on the slide, slide six, it sounded like two gigawatts of integrated capacity could be in the U.S. But my follow-up question here, and then I'll wind it down, is, What is, and this might be a bit of a tough question, but what is your view of the discussion around the foreign entity of concern language, which a lot of people are talking about could be added to the 45X manufacturing PTC, which might make it more difficult for you guys to add or receive the PTC? You know, you're ramping up your facility basically To what degree does that concern you? Are you following that topic at all?

Speaker Change: In a normal nice normalized menno like one of the how about is it from the residential market all its maybe from the utilities market.

Speaker Change: Europe.

Speaker Change: Yeah.

Speaker Change: I think both in the recent quarter I think the majority is the D G.

Speaker Change: And the market about what we're seeing.

Speaker Change: Yeah Bose you know you had said at the end of the D. G.

Speaker Change: Well you know.

Speaker Change: Oh, Yeah, we're a year.

Speaker Change: Okay.

Speaker Change: So so you don't see Oh inventory S. An issue even in the DG market anymore, because last year. It was a huge issue.

Speaker Change: Yeah, Yeah, yeah in the last year, the first half of year as it builds the stock rises for the D. G. Just reorders and destock you know, so I think five or six months.

Speaker Change: It looks like you know.

Haiyun Cao: Thank you. I'm not familiar with the topics you are talking about, the foreign aid, you know, the regulations update, but we will follow up, you know, after the call. But I think, I'm not sure what you are talking about, you know, like the semiconductor, you know, the sensitive technology, but we think solar is more, you know, pervasive and very common for each country to develop, and it's not data sensitive.

Speaker Change: Yeah.

Speaker Change: No.

Speaker Change: On top of that even not only the European market as well as our other markets.

The customers reading through the bottoms of the module price, but it looks like you know stabilize I think that was the price is not sustainable and not all customers.

Speaker Change: <unk> accelerates the purchase decisions.

Speaker Change: That's why I said destock you know just talk.

Speaker Change: Going back to normalized level in the Europe and the.

Speaker Change: Passive logistic Asia five that's C.

Now issue, so we really see no.

Speaker Change: The bonds are from.

Speaker Change: Sounds good.

Haiyun Cao: But anyway, we will follow up on the topic you are talking about, but I'm not familiar with it. Okay. Thank you, Charlie.

Speaker Change: The European market in the second quarter for sure is.

Some quarter for the European market.

Speaker Change: Sure.

Uh huh.

Philip Shen: I know I asked a lot of questions. Appreciate it. We'll pass it on.

Speaker Change: And I and in your pop on I think it's a it's the first time that you have officially put yes, yes.

Alan Lau: Your next question comes from Alan Lau with... Please call us, the capacity expansion plan, and I just would like to ask a bit about the details. So, by the end of 2024, it would be 120, 110, and 130 gigawatts for wafer cell modules. So, my question is mainly about the cells, because the company has 70 gigawatts of popcorn by the end of 2023, and supposedly the remaining 20 gigawatts are PERC. So, and then by the end of this year, it'll be 110.

Speaker Change: In two days.

Speaker Change: Is that the whole price range, so well let to know do you have any quantitative shipment target on Oh, yes, that's because I know you have capacity for more than 10 gigawatt, how so we'd like to know.

Speaker Change: Absolutely.

Speaker Change: Oh, sorry, no storage.

Speaker Change: You know we.

Speaker Change: We built the capabilities you know the teams products capacities.

Speaker Change: And the majority of from last year.

Haiyun Cao: So, will it be 100 gigawatts of popcorn plus 10 gigawatts of PERC? If that is the case, then do you mean you would impair the 10 gigawatts of PERC this year? The answer is we will phase out 20 gigawatts of PERC per capacity throughout the year. That's the plan.

Speaker Change: The key focus is the way we develop.

Speaker Change: You read about R&D capabilities, and a focus on some key markets and.

Speaker Change: Ah so far I'd say, either stay where they are in stage faster we are confident.

We will just go so maybe.

Speaker Change: The full year, you know the the guidance.

Haiyun Cao: And everything we have discussed by the end of the year, the capacity is 100% n-type. It's not... [inaudible] 20 gigawatts. The Smart Decision.

They know that.

Speaker Change: This year, you know, maybe second quarter third quarter, but this year, we think it's a good opportunity to catch up as the market markets and to build a strong foundation for the next next few years. So that's that's a key focus in south of the focus for the human those this year.

Alan Lau: I see. So just to confirm, basically, for the 20 gigawatts of PERC, they are fully depreciated. So basically, they were built in 2019, and then by now, they are fully depreciated. So you do not see any major impairment risk this year, right? Yes, roughly, yes, and we did have some kind of residual value, but it's not significant. Most of the assets have been depreciated.

Speaker Change: Thanks, Thanks, a lot.

Speaker Change: For the components of our information so I'll pass it on thank you.

Speaker Change: Thank you.

Speaker Change: He once again, if you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change: Your next question comes from William Griffin with UBS. Please go ahead.

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

William Griffin: Excellent. Thank you very much. My first question was just on your 300 plus patent portfolio. I was wondering if you could provide a little more color on where those patents are granted are any of them international win.

William Griffin: One of your peers is out there asserting their IP rights related to some top contact apologies just maybe how are you. How are you thinking about that how do you view that relative to some of your patent portfolio. Thank you.

Speaker Change: Oh the patents.

Speaker Change: Yeah, we've put a lot of R&D you know.

Speaker Change: Our efforts.

Alan Lau: The price range is a little bit, I think, a little bit big, you know, high 20, low 30, what kind of range in ours. And it looks like it's in a downward trend but relatively stable. And, you know, different customers have different, you know, their preferences. And we think we are in a good position because we track abilities and we have separate, you know, parties through the modules. And we think we can sell relatively, you know, the price premium with our peers. Sponsored ADR You have mentioned overseas polysilicon, so we would like to have an update on the overseas polysilicon price. Is it rebounding, or is it still trending down? I think in the last, you know, three or three months, it's, uh...

Speaker Change: A couple of years.

Speaker Change: Reis has developed and the scope of Friday Street over 300 tough comp patents, which we developed a power itself on top of that we have additional.

Uh huh.

Speaker Change: More top of.

Speaker Change: Patents by a physician from auditors and ER.

Speaker Change: The passenger is our key you know differentiator center.

Speaker Change: You know the key strategies underway licensed.

Speaker Change: Two hours is tough to a module company in the World was a top five you know solar sail under the companies and it's illustrating how strong and.

Speaker Change: Craveable, our R&D teams.

You know the cutting edge technology.

Speaker Change: Uh huh.

Speaker Change: Yeah.

Speaker Change: Okay. Yeah, I appreciate that and then just on the 26%.

Speaker Change: Mass production N type cell efficiency that you referenced in the press release.

Speaker Change: How do you expect that to translate into mass production module efficiency and when do you think.

Speaker Change: That would ultimately be realized in mass production. Thank you.

Alan Lau: Relatively stable because the polysilicon out of China is around 100,000 metric tons. It's known new capacity is expected in the next one and a half years. The other thing is maybe some Chinese poly, Chinese poly, but I think there is a relatively high risk. And there is a very complicated compliance, and so we don't see significant downtime, and it's relatively stable. I see, I see.

Speaker Change: Uh Huh six.

Speaker Change: 6% cell capacity, we have reached to that level you know the math without seeing center, our targets are and though this year 26, 5%.

Speaker Change: Alright, well I appreciate the time, thank you alright.

Speaker Change: Yes.

Speaker Change: Oh, Yeah, sorry, sorry, I was thinking you know that's a.

Speaker Change: For the standard or the 182 I think you know we are traveling and doing a roughly 610 to maybe 600 trained 20 watt for a standard 182.

Speaker Change: Modules yeah.

Speaker Change: Thank you.

Speaker Change: Once again, if you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change: Your next question comes from Rajeev, <unk> Chaudhry with intrinsic edge. Please go ahead.

Haiyun Cao: So, switching gears to the European market, because you have mentioned the stocking has basically completed. So, I would like to follow up on this, like, are you receiving orders in a normalized manner? Like, what are the, is it from the residential market, or is it mainly from the utilities market in Europe? I think both, but in the recent quarter, I think the majority is DG and market value. We see both, you know, utility and the DG will go up year-over-year.

Rajiv Chaudhri: Yes, good morning, I have a few questions.

Rajiv Chaudhri: First of all just in terms of housekeeping can you tell us what the depreciation number was in the fourth quarter and what do you expect it to be in the 'twenty 'twenty four.

Rajiv Chaudhri: Yeah.

Rajiv Chaudhri: So sorry could you repeat that again.

Speaker Change: Yes. The question was about.

Speaker Change: <unk> in the fourth quarter and are and what the expectation is for 2024.

Speaker Change: Oh depreciation.

Speaker Change: Uh huh.

Speaker Change: It's roughly I think you know six fitting to southern thing Amit.

Haiyun Cao: So you don't see inventory as an issue even in the digital market anymore because last year it was a huge issue. Yeah, yeah, and last year, the first half year is to build the stock, right, for the digital distributors, and this stock, you know, so I think five or six months. And it looks like, you know, on top of that, not only in the European market, but also in other markets, customers are waiting for the bottom of the module price. But it looks like, you know, stabilized. I think, you know, the price is not sustainable.

Speaker Change: Fortunately therefore.

Speaker Change: So it's it's corner of roughly a 1.1.

1.5 to I think at one point.

Speaker Change: Sorry, I didn't hear it.

Speaker Change: That one five to $1 8 billion RMB RMB.

Speaker Change: Depreciation.

Speaker Change: And that's been Pinky painful.

The fourth quarter.

Speaker Change: Last year right.

Speaker Change: Yes, 23, yeah, sorry, yeah.

Speaker Change: Similar a similar amount, but it's not significantly different different.

Speaker Change: So around one 5 billion.

In the fourth quarter.

Speaker Change: Yeah roughly.

Speaker Change: Okay and.

Speaker Change: And then.

Haiyun Cao: A lot of customers... As well as the D-Stock, the stock level is going back to a normalized level in Europe. And plus the logistic issue, the credit fee issue, so we see the rebound from the European market. And the second quarter, I'm pretty sure it's a strong quarter for the European market.

Speaker Change: What was the total capex spend.

Speaker Change: Spending in 2023, and what is the expectation for 'twenty pool.

Speaker Change: Our capex yeah.

Speaker Change: They will go into some.

Speaker Change: On the first 2023, our total capex is around.

Alan Lau: Thank you. Thank you. And in your PowerPoint, I think it's the first time that you have officially put ESS into the whole price release. So, we'd like to know, do you have any quantitative shipment target for ESS? Because I know you have capacity for more than 10 gigawatt hours. So, we'd like to know on that one.

Speaker Change: RMB 18 billion.

Speaker Change: And we expect to end of a.

Speaker Change: Our range in 'twenty 'twenty four is from $11 billion to $15 billion depends on the market.

Speaker Change: I see okay, and and out of this 11% to 15 billion is at the almost 100% related to our to the module business or is there anything related to the storage business as well.

Haiyun Cao: Storage. We built up the capabilities, the teams, products, capacities, and the majority from last year. And the key focus is to develop our R&D capabilities and products and focus on some key markets. And so far, it's in a relatively early stage, but we are confident, and we will discuss maybe the full year, you know, the guidance and later this year, you know, maybe in the second quarter or third quarter. But this year, we think, you know, it's a good opportunity to catch up with the market and build a strong foundation for the next few years. Thanks. Thanks a lot for the comprehensive information, so I'll pass it on.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: It's really it is our integrated silver manufacturing.

Speaker Change: Okay.

Speaker Change: The next question is about.

Speaker Change: The the charges that you had in the AR and the operating expenses you mentioned that Oh.

I don't know if assets as well as the the settlement with the customer if.

Speaker Change: If they had not happened then.

Speaker Change: But the total operating expense would have been the same as the third quarter. So by my calculation that was about 60.

William Grippen: Thank you. Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name. Your next question comes from William Grippen with UBS. Go ahead. Excellent. Thank you very much.

Speaker Change: 60 billion RMB at about $85 million.

Speaker Change: Is that Oh, sorry.

Speaker Change: Ah the point 6 million RMB or about $85 million is that the correct a number.

Speaker Change: Or is it youre right. We did have some kind of a special well one time items in the fourth quarter last year.

William Grippen: My first question was just on your 300-plus patent portfolio. I was wondering if you could provide a little more color on where those patents were granted. Are any of them international?

Speaker Change: So there's some kind of a customer dispute.

Speaker Change: It's a it's a wrong you know the.

Speaker Change: Sort of a man U S dollars.

Speaker Change: So is this are we have some impairment.

Haiyun Cao: And one of your peers is out there asserting their IP rights related to some top-con technologies. Just maybe, how are you thinking about that? How do you view that relative to your patent portfolio? Thank you. There's a patent on the... You know, we put a lot of R&D efforts in the recent couple of years, and we developed and discovered over 300 top-con patents, which we developed ourselves. On top of that, we have additional more top-con patents through acquisition from others. The patent is our key differentiator and the key strategy, and we have licensed it to one of the top 10 module companies and one of the top 5 solar cell companies.

Speaker Change: Uh huh.

Speaker Change: And then for the.

Speaker Change: Equipment or around 10 minutes or so so we do have 40, well anyway. So you want one off items.

Speaker Change: Non recurring items.

Okay.

Speaker Change: Hum.

Speaker Change: Comparing your cost structure too.

Speaker Change: Tier two manufacturers.

Speaker Change: Can you give us an idea my calculation is that your cost structure in the fourth quarter was about a 10.

Speaker Change: 10, gross or 10 percentage points better than the the tier two and tier three manufacturers. So for example.

Speaker Change: If you did 12.5% gross margin like the tier two and tier three are operating at 2% to 3% gross margin.

William Grippen: And it illustrates how strong and capable our R&D teams are on the cutting-edge technology. Okay, yeah, appreciate that. And then just on the 26% mass production n-type cell efficiency that you referenced in the press release, how do you expect that to translate into mass production module efficiency, and when do you think that would ultimately be realized in mass production? Thank you.

Speaker Change: Any comment on that.

Speaker Change: Yeah.

Speaker Change: I'm confident our cost structures are leading the.

Speaker Change: We have a wrong is.

Speaker Change: Uh huh.

Speaker Change: By the way, we don't comment on the T cell numbers in different countries.

Speaker Change: Company has different situations right Youre right.

Speaker Change: We are let's say.

Speaker Change: Making low profit levels I think a lot of our companies.

Haiyun Cao: 26% sale capacity, we have reached that level, you know, mass production, and our target end of this year is 26.5%. All right. Appreciate the time. Thank you. Yeah, Yes. Sorry, sorry.

Speaker Change: So are you assuming on fitness.

Speaker Change: Well do some monies that is.

Wherever it may come with it.

Speaker Change: But again I assume he is.

Speaker Change: So it takes time you know the phase out of the tier two tier three companies.

Haiyun Cao: I think, you know, that for the standard, it is 182. I think, you know, we are charging roughly 610 to maybe 620 watts for standard 182. Once again, if you wish to ask a question... Your next question... Please.

Speaker Change: It's after.

Speaker Change: The consolidation on the pre salt on the waste and career, where you can't get more a market issue.

Speaker Change: It makes a decent profitability this.

Speaker Change: Right.

Speaker Change: Next time.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Do you think at this point your cost structure is better than other tier one manufacturers.

Speaker Change: I don't you know.

Speaker Change: Oh, two wipers and guaranteed by <unk>.

Yeah.

Speaker Change: So you're confident that your cost structure is already equal to or better than the other tier one manufacturers.

Rajiv Chaudhri: Yes, good morning. I have a few questions. First of all, just in terms of housekeeping, can you tell us what the depreciation number was in the fourth quarter and what you expect it to be in 2024? Sorry, could you repeat that? Yes, the question was about depreciation in the fourth quarter and what the expectation is for 2024. Oh, depreciation! [inaudible] It's roughly, I think, 6 billion to 7 billion RMB for 2024. So each quarter, roughly, one for... 1.5 to, I think 1.8 billion. Sorry, can you repeat that?

Speaker Change: Yeah, well, we're cognizant of is as you know our.

Speaker Change: Our cost structure capacity taken out as if needed.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Can you elaborate on.

Speaker Change: The expected loss improvements that are likely to happen as a result of the integrated production that youre going to rollout next year of the defense B plant.

Speaker Change: How are how much of a cost advantage that you're going to create as a result of the integration.

Speaker Change: Anything happening in one location.

Speaker Change: Yeah, that's a.

Speaker Change: It's not purely cost or the wound is it's essentially you know sugar of factories.

Speaker Change: Digitalized.

Speaker Change: And automated.

Speaker Change: And.

Speaker Change: You know that yes, the traceability is low carbon.

Haiyun Cao: 1.5 to 1.8 billion RMB? Yes, depreciation, and that's in 2024. What about the fourth quarter? Last year, I... yes, 23, yes, sorry, a similar, similar amount; it's not significant. So around $1.5 billion in the fourth quarter. Yeah, roughly. What was the total capital spending on CapEx in 2023 and what is the expectation for 2024? Are they for CapEx, yeah. Let me go into some details, and for 2023, our total capex is around R&BA 18 billion. And we expect a range in... 2024 is from $11 to $15 billion, depending on the market. I see.

Speaker Change: Everything on the.

Speaker Change: Okay, great and a lot of other wants the equipment.

Speaker Change: The streamlined a lot of the even.

For yourself, some productive face to face stage and to have a significant.

Speaker Change: The.

Speaker Change: The work force infrequency.

Speaker Change: Uh huh.

Speaker Change: Hi, Tim over our ratios.

A very good position locations.

Speaker Change: To serve the customers' needs are.

Speaker Change: The rest of China as well.

Speaker Change: The glow.

Speaker Change: Global market customers, so the cost sources.

Speaker Change: It's a <unk>.

Speaker Change: And he said I don't want it and it's a it's a bigger amounts I would believe you know Bob we don't disclose that what we think is a.

It's big out along with as our existing production.

Speaker Change: Production structures for the industry.

Rajiv Chaudhri: And out of this $11 to $15 billion, is it almost 100% related to the module business, or is there anything related to the storage business as well? It's related to our integrated solar manufacturing.

Speaker Change: And finally I want to confirm a number that I can bring to the game.

Speaker Change: The total what are you most shipments of N type in the fourth quarter was 70% of total shipments.

Rajiv Chaudhri: The next question is about the charges that you had in the operating expenses. You mentioned that the write-down of assets as well as the settlement with the customer, if they had not happened, then the total operating expense would have been the same as the third quarter. By my calculation, that is about $0.6 billion RMB, or about $85 million. Is that the correct number? Rajiv, you're right; we did have some kind of special one-time items, you know, in the fourth quarter last year. One was, I think, some kind of customer disputes. It's worth around 30 million U.S. dollars.

Speaker Change: Uh huh.

Speaker Change #100: That's 70% 70%.

Speaker Change #100: And did you say that in the first quarter it could be 85%.

Speaker Change #100: Okay.

Speaker Change #100: Okay.

Speaker Change #100: Okay.

Speaker Change #100: What was the full year full year lets say as full year, it's a wrong, 90%. So gradually if I'm so many percent.

Speaker Change #100: 95% a quarter by quarter and this year so.

Speaker Change #100: Q1, you'll see I assume is roughly 80%.

Speaker Change #100: Okay.

Speaker Change #100: Okay.

Speaker Change #100: So in terms of going back to the gross margin.

Speaker Change #100: So you are suggesting that the first quarter gross margin could be slightly lower than the fourth quarter. So obviously looking at a number around 12%.

Rajiv Chaudhri: $30 million, which is we have some empowerment. Sponsored ADR, Okay, and comparing your cost structure to the Tier 2 manufacturers, can you give us an idea? My calculation is that your cost structure in the fourth quarter was about 10 percentage points better than the Tier 2 and Tier 3 manufacturers. So, for example, if you achieved 12.5% gross margin, the Tier 2 and Tier 3 manufacturers were operating at 2-3% gross margin. Can you comment on that?

Speaker Change #100: Okay.

Speaker Change #100:

Speaker Change #101: Absolutely lumber.

Speaker Change #102: Yeah, the actual gross margin.

Speaker Change #103: Yeah, we don't disclose that but I said you know what he says we're slightly.

Speaker Change #103: Slide down worse, but not dramatically.

Speaker Change #103: What we're seeing is a boston and especially at Borger.

Speaker Change #103: For the first half of it.

Speaker Change #103: So.

Speaker Change #103: So is the gross margin is around 12% in the in the first quarter.

Speaker Change #104: And the prices stabilize from marquee prolonged would is it reasonable to think that gross margins would improve in the second quarter, because we of course will keep on coming down.

Rajiv Chaudhri: We are confident that our cost structure is leading and we have an advantage. We don't comment on detailed numbers, and different companies have different situations. You're right, but if we are, let's say, making low profit levels, I think a lot of companies, You know, doing your seminar business, We are very confident that we will lose the money. Transcripts provided by Transcription Outsourcing, LLC.

Speaker Change #104: And and also your shipments to the U S. They've got higher ASP will go up.

Speaker Change #104: We've seen you know are we have a more likelihood to improve second half the year.

Speaker Change #105: I don't know if you know the demand outlook and ER.

Speaker Change #105: I took my U S shipments in the second half of the year loaded.

Rajiv Chaudhri: Do you think at this point your cost structure is better than other Tier 1 manufacturers? I don't, you know, do 100% guarantee, but we are confident. Sponsored ADR, We are confident that our cross-structure capacity technology is leading. Can you elaborate on the expected past improvements that are likely to happen as a result of the integrated production that you are going to roll out next year of the Shanxi plant? How much of a cost advantage are you going to create as a result of the integration and everything happening in one location? Yeah, that is not purely cost advantage, it's the fancy, you know, superfactories, it's digitalized, and Automatic, and you know, the ESP traceability is low carbon, everything and we integrated a lot of advanced equipment and streamlined a lot of the even phase out some production phase stage, and have significant workforce efficiency and very high turnover ratios and very good location to serve the customers in the West China as well as the global market customers.

And I think it's roughly that maybe.

Speaker Change #105: Okay.

Speaker Change #105: 60%, 65% shipments in the U S. You know second half of the year as far as you know.

Speaker Change #105: So obviously, we feel for our factories is doing the pilot production.

Speaker Change #105: First half of your traffic will be.

Speaker Change #105: Hi, if I shouldn't operational by the end of the third quarter.

Speaker Change #105: So everything.

Speaker Change #105: Together, we think is a.

Speaker Change #105: Uh huh.

Speaker Change #105: No.

Speaker Change #105: Marty.

Speaker Change #105: King.

Speaker Change #105: So I paid too.

Speaker Change #105: Second half year.

Speaker Change #105: Yeah.

Speaker Change #105: And what do you think the impact of you mentioned that in.

In the fourth by the fourth quarter, you expect that tier one companies are top 10 manufacturers will have as much as 90% of the market.

Speaker Change #105: That basically means the deal.

Speaker Change #105: You will have to shut down on.

Speaker Change #105: You too will be oh, selling as much lower output than they are selling right now.

Speaker Change #105: What do you think that does to pricing by the fourth quarter.

Haiyun Cao: So the cost structure is, you know, it's reflecting the advantage and it's a big amount, we believe, you know, but we don't disclose it, but we think it's a big advantage, you know, with its existing production structures for the industry. And finally, I want to confirm a number that I think General gave. The total volume of shipments of the n-type in the fourth quarter was, was it 70% of total shipments? That's 70%. Yes, 70%. And did he say that in the first quarter it would be 85%? The full year, let's say it's a full year, it's around 90%, so gradually from 20% to 95% quarter-by-quarter, and this year, so Q1 this year, I think it's roughly 80%. Okay.

Speaker Change #105: For the fourth quarter this year right.

Speaker Change #105: Yes.

Speaker Change #105: Yeah.

Speaker Change #105: Is it's difficult to estimate.

Speaker Change #105: Is there.

Speaker Change #105: It will be stabilized and on top of the most important things that I think by the end of the fourth quarter.

Speaker Change #105: I believe a lot of industry players for tier two tier three and as far as the companies they've never.

Speaker Change #105: In the solar industry by the center.

Speaker Change #105: He said one or two years those guys are going to the capacity will be phased out 100%. So.

Speaker Change #105: So that's my estimation.

Speaker Change #105: Okay.

Speaker Change #106: Okay, great. Thank you very much.

Speaker Change #107: And good luck with plenty of money pool.

Speaker Change #107: Okay.

Speaker Change #108: Thank you.

Speaker Change #109: There are no further questions at this time and that does conclude our conference for today.

Speaker Change #110: You for participating you may now disconnect.

Speaker Change #110: [music].

Rajiv Chaudhri: In terms of going back to the gross margin, you are suggesting that the first quarter gross margin should be slightly lower than the fourth quarter. Are we still looking at a number around 12%? Give me the absolute number.

Rajiv Chaudhri: Yeah, the actual gross margin. Yeah, we don't disclose that, but I said, you know, it's the worst likely. Slightly, you know, downwards, but not dramatically, but we think it's at the bottom, and it's reaching the bottom, for the first half of the year. So.

Speaker Change #110: [music].

Rajiv Chaudhri: So if the gross margin is around 12% in the first quarter, and the prices stabilize from March-April onwards, is it reasonable to think that gross margin could improve in the second quarter because your costs will keep on coming down, and also your shipments to the U.S., which are higher ASP, will go up? We think we have more likelihood to improve in the second half of the year. The input outlook, the demand outlook, and you are talking about U.S. shipments, it's the second half of the year, low rate, and I think roughly maybe, let's say, [inaudible] So everything, you know, together, we think the margin, the expansion is likely to happen in the second half of the year. And what do you think the impact will be? You mentioned that by the fourth quarter, you expect that Tier 1 companies or the top 10 manufacturers will have as much as 90% of the market.

Speaker Change #110: Okay.

Speaker Change #110: [music].

Speaker Change #110: Yes.

Speaker Change #110: Yes.

Speaker Change #110: Yeah.

Speaker Change #110: Okay.

Speaker Change #110: [music].

Rajiv Chaudhri: That basically means Tier 3 will have shut down, and Tier 2 will be selling much lower output than they are selling right now. What do you think that will do to pricing by the fourth quarter? It's the fourth quarter of the year, right? Yeah. It's difficult to estimate, but I think it should be stabilized. And on top of that, the most important thing, I think by the end of the fourth quarter, I believe a lot of industry players for Tier 2, Tier 3, as well as the companies that have never been in the solar industry but entered it in this one or two years, those guys are going to. That's my estimation.

Speaker Change #110: Okay.

[music].

Rajiv Chaudhri: Okay, great. Thank you very much and good luck in 2024. There are no further questions at this time. And that does conclude our conference for today. Thank you for participating. You may now disconnect. Produced by Adaptec With support from Adaptec Produced by Adaptec Produced by Adaptec Produced by Adaptec Produced by Adaptec Produced by Adaptec