Q2 2024 Emeren Group Ltd Earnings Call

August 20, 2024

Okay.

Operator: Hello, ladies and gentlemen, thank you for standing by for Emeren Group Limited's second quarter 2024 earnings conference call. Please note that we are recording today's conference call.

Operator: Hello, ladies and gentlemen.

Operator: Thank you for standing by for Emeren Group Limited's second quarter 2024 earnings conference call. Please note that we are recording today's conference call.

Speaker Change: Hello, Ladies and gentlemen, thank you for standing by for Amarin Group Limited second quarter 2024 earnings Conference call. Please note that we are recording today's call conference call I will now turn over the call to Gary to Wojciech managing director of the Blue shirt group.

Operator: Thank you for standing by for Emeren Group Limited's second quarter 2024 earnings conference call. Please note that we are recording today's conference call.

Operator: I will now turn over the call to Gary Dvorchak, Managing Director of the Blue Shirt Group.

Operator: Please go ahead, Mr. Dvorchak.

Gary Dvorchak: Okay.

Philip Shen: Our next question comes from Philip Shen with Roth Capital Partners.

Operator: Our next question comes from Graham Price with Raymond James.

Operator: I will now turn over the call to Gary Dvorchak, Managing Director of the Blue Shirt Group.

Philip Shen: He may proceed.

Graham Price: He may proceed.

Gary Dvorchak: I will now turn over the call to Gary Dvorchak, Managing Director of the Blue Shirt Group.

Operator: Please go ahead, Mr. Dvorchak.

Graham Price: Grammy line is now open.

Speaker Change: Please go ahead Mr Dvorak.

Gary Dvorchak: Thank you, operator, and hello, everyone.

Gary Dvorchak: Okay, thank you, operator, and hello everyone. Thank you for joining us today to discuss second quarter 2024 results. We released our shareholder letter before the market open today, and it is available on our website at ir.mren.com. We also provided a supplemental presentation that's posted on our website as well, and we'll reference that during our prepared remarks. Yesterday, we filed our forms 10-Q, excuse me, for both the first and the second quarters, so we are now fully compliant with NCC reporting requirements.

Gary Dvorchak: Okay.

Philip Shen: Hey, all.

Graham Price: Hey guys, thanks.

Gary Wojciech: Okay. Thank you operator, and Hello, everyone.

Speaker Change: Thank you for joining us today to discuss second quarter 2024 results, we released our shareholder letter before the market opened today and it is available on our website at IR Dot Ameren Dot Com. We also provided a supplemental presentation. That's posted on our IR website as well and we will reference during our prepared remarks.

Speaker Change: Yesterday, we filed our Form 10-K 10-Q excuse me for both the first and second quarters. So we are now fully compliant with FCC reporting requirements.

Gary Dvorchak: On the call to me today are Mr. Yumin Liu, Chief Executive Officer, and Mr. Ke Chen, Chief Financial Officer. Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent Emeren Group's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in Emeren Group's filings with the FCC. Please do not place undue reliance on these forward-looking statements, which reflect Emeren Group's opinions only as the data from this call.

Gary Dvorchak: Thank you, Operator, and hello, everyone.

Philip Shen: Thanks for the questions.

Speaker Change: On the call with me today are Mr. <unk>, Liu Chief Executive Officer, and Mr. Cliff Chen Chief Financial Officer before we continue please turn to slide two let me remind you that remarks made during this call may include predictions estimates or other information that might be considered forward looking these.

Graham Price: I was the first questioner, so you already got to mine.

Graham Price: Thanks, though.

Speaker Change: Forward looking statements represent Ameren group's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in Ameren group's filings with the SEC. Please do not place undue reliance on these forward looking statements which reflect.

Gary Dvorchak: Thank you for joining us today to discuss second quarter 2024 results.

Graham Price: Oh, thank you, Graham.

Speaker Change: Amarin groups opinions only as of the date of this call Amrita group is not obliged to update you on any revisions to these forward looking statements. In addition, please note that all financial numbers discussed in this call are unaudited also please note that unless otherwise stated all figures mentioned during the call are in U S dollars with that let me now turn the call.

Gary Dvorchak: Emeren Group is not obliged to update you on any revisions to these forward-looking statements. In addition, please note that all financial numbers discussed in this call are unaudited. Also, please note that unless otherwise stated, all sums mentioned during the call are in US dollars.

Gary Dvorchak: Thank you for joining us today to discuss second quarter 2024 results.

Philip Shen: We're taking the questions, your implied Q4.

Gary Dvorchak: With that, let me now turn the call over to Mr. Yumin Liu.

Mr. Human: Over to you Mr. Human Human go ahead.

Yumin Liu: Yumin, go ahead. Thank you, Gary. Thank you, everyone, for joining our call today.

Gary Dvorchak: We released our shareholder letter before the market opened today, and it is available on our website at ir.emeren.com.

Philip Shen: Revenue ramp is pretty high, about $84 million.

Operator: Thank you.

Human: Thank you Gary.

Mr. Human: Thank you everyone for joining our call today.

Yumin Liu: I'll begin by providing an overview of our operational performance in Q2 2024, and could we discuss our financial results for Q2 and our outlook. In Q2, our company achieved solid progress, generating 30.1 million revenue. This performance was underpinned by gross profit of 9.4 million, translating to a robust gross margin of 31.2%. Operating profit was 3 million, and that income attributable to Emeren Group Limited was 0.4 million. This results reflect our disciplined approach to gross, particularly through the execution of our department's service agreements, PSA, strategy across Europe and the US. Our relentless focus on improving efficiency across all regions has paid off, enabling us to maintain strong operating discipline and control cost effectively.

Gary Dvorchak: We also provided a supplemental presentation that's posted on our IR website as well, and we'll reference that during our prepared remarks.

Philip Shen: And so I wanted to understand how confident you feel in that, implied Q4 given reiterated your full year, revenue number, and so.

Operator: And I'm not showing any further questions at this time.

Mr. Human: I'll begin by providing an overview of our operational performance in Q2 2024 and.

Yumin Liu: I'd like to turn the conference back to Mr. Liu for any closing remarks.

And Carl will discuss our financial results for Q2.

Mr. Human: Hello.

Philip Shen: What's the confidence level, how much conservatism is baked in, and what are the risks that you miss?

Yumin Liu: Thank you, operator.

Yumin Liu: The solar industry is experiencing strong momentum due to the global commitment to renewable energy. This shift towards clean energy sources positions solar and battery storage as a key part of the future energy mix.

Carl: In Q2.

Yumin Liu: The growing demand for solar power to support AI and blockchain operations is particularly exciting, as these technologies require substantial energy, and solar plus battery storage offers a scalable cost effective solution.

Carl: Our company achieved solid progress generating circa one meeting in revenue.

Philip Shen: Thank you, Phil.

Carl: This performance was underpinned by gross profit of $9 4 million.

Yumin Liu: It's a very, very good and challenging question, as the team, the teams across the board, has been working on those expected closures, literally speaking, as early as two or three months ago, even for the closings to be expected in Q4 or sometime may happen late Q3.

Speaker Change: <unk> two our robust gross margin of 31, 2%.

Yumin Liu: Okay, that is where our confidence comes from.

Speaker Change: Operating profit was 3 million income attributable to Admiral Group Ltd was point for a minute.

Gary Dvorchak: We also provided a supplemental presentation that's posted on our IR website as well, and we'll reference that during our prepared remarks.

Speaker Change: These results reflect our disciplined approach to growth.

Speaker Change: Equally through the execution of marquee bombers.

Speaker Change: Service agreements Esa strategy across Europe, and the U S.

Gary Dvorchak: Yesterday, we filed our forms 10Q for both the first and the second quarters, so we are now fully compliant with SEC reporting requirements.

Gary Dvorchak: On the call with me today are Mr. Yumin Liu, Chief Executive Officer, and Mr. Ke Chen, Chief Financial Officer.

Speaker Change: Our relentless focus on improving efficiency across all regions has paid off.

Speaker Change: Enabling us to maintain strong operating discipline and control cost effectively.

Yumin Liu: Offsetting our solid operating profit, 9 income was reduced by around 2 million, write-offs, relate to console projects, and unrealize 4.5 million. Despite the sidebacks, our ability to deal with a solid operating profit underscores the resilience and adaptability of our business model.

Speaker Change: Offsetting our solid operating profit 90 income was reduced by around $2 million write offs related to coastal projects and unrealized foreign exchange loss of $8 million.

Speaker Change: Despite this buybacks our ability to deliver a solid operating profit underscores the resilience and adaptability of our business model.

Yumin Liu: In terms of our business lines, first, our DSC structure has established a stable and predictable business model, enabling us to monetize projects at the early stages of development and secure higher-conity contracted revenue. This approach is crucial for managing risk and maximizing cash flow throughout the project lifecycle. By the end of the second quarter of 2024, we had signed over two gigabot projects with eight PSA partners in Europe to monetize these early and mistakes projects. The total contracted revenue of over 16 million is expected to be recognized over the next two to three years based on the development milestones.

Gary Dvorchak: Before we continue, please turn to slide two.

Speaker Change: In terms of our business lines.

Speaker Change: First our DSD structure has established a stable and predictable business model.

Gary Dvorchak: Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking.

Gary Dvorchak: These forward-looking statements represent Emeren Group's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially.

Speaker Change: They bring us to monetize projects at the early stages of development are secure higher quality calls that the revenue.

Gary Dvorchak: Those risks are described under risk factors and elsewhere in Emeren Group's filings with the SEC.

Gary Dvorchak: Please do not place undue reliance on these forward-looking statements, which reflect Emeren Group's opinions, only as of the date of this call.

Gary Dvorchak: Emeren Group is not obliged to update you on any revisions to these forward-looking statements.

Speaker Change: This approach is crucial for managing our risk and maximizing cash flows throughout the product lifecycle.

Gary Dvorchak: In addition, please note that all financial numbers discussed in this call are unaudited. Also, please note that unless otherwise stated, all figures mentioned during the call are in U.S. dollars.

Gary Dvorchak: With that, let me now turn the call over to Mr. Yumin Liu.

Yumin Liu: Yumin, go ahead.

Yumin Liu: We are going to the direction, closing the deal, with the ones, negotiation with the partners, starting from as early as two to three months.

Yumin Liu: Funds of deals to be closed are under the due diligence process, and a bunch of them are on an inclusive basis, with some targeted buyers.

Speaker Change: By the end of the second quarter of 2024, we had signed over two P. Global crop two gigawatt of projects with.

Yumin Liu: Another point to be noted is we do have several COD, plant COD sales, while those projects are either already COD'ed in the past one or two months or will be COD'ed within Q3, that is within the next 45 days.

Yumin Liu: So we have the confidence that those COD assets, are so valuable and people are even today are visiting our COD sites.

Yumin Liu: Thank you, Gary.

Eight USA partners in Europe to monetize this early and mid stage projects.

Speaker Change: The total contracted revenue of over 16 million is expected to be recognized over the next two to three years based algorithm on the milestones.

Yumin Liu: In the first half of 2024, we achieved 8.2 million of PSA revenue, already surpassing the full year of 2023 PSA revenue, total of 6.5 million. Looking ahead, we are committed to expanding our PSA partnerships on a global scale, leveraging our expertise and track record to enter new markets and force strategic lines. Currently, we have over two gigabot of PSA contracts under negotiation. These contracts are expected to close within the next six to eight months, bringing the company an estimated $100 million in revenue to be recognized over the next three to four years.

Yumin Liu: Okay, so we feel good by closing those deals.

Yumin Liu: But definitely, as I see your question is challenging that we do have one deal in Europe.

Speaker Change: In the first half of 'twenty 'twenty four we achieved $8 2 million of Esa revenue already surpassing the full year of 2020 sweep yesterday revenue total of $6 5 million.

Yumin Liu: It's a pretty high revenue expectation and margin the same.

Yumin Liu: So the, I expect some risk.

Speaker Change: Looking ahead.

Speaker Change: We are committed to expanding Rps a partnerships on a global scale, leveraging our expertise and track record.

Speaker Change: In turn will market and forged strategic alliance.

Yumin Liu: But at this time, we have very high confidence, to close all those expected.

Speaker Change: Currently we have over two gigawatts of Esa count contracts under negotiation.

Philip Shen: Great.

Speaker Change: These contracts are expected to close within the next six to eight months.

Yumin Liu: And that, deal in Europe that has high revenue, can you share the megawatts, maybe what country, We cannot go into that detail as those are on an inclusive basis with the buyers, targeted buyers.

Speaker Change: <unk> the company, an estimated $100 million in revenue to be recognized over the next three to four years.

Yumin Liu: In parallel, our best projects are gaining momentum, particularly in Italy. We recently finalized the PSA agreement for best projects with PLT Energy, one of Italy's largest independent renewable power producers, specializing in wind and solar. This transaction comprises a best portfolio totaling 394 megawatt, demonstrating the growth of our best strategy in Italy, where we now have a total of 1.7 gigabot best projects in the PSA structure. In Q2, we signed a contract to sell a 42 megawatt RTP solar project portfolio in Spain to CVE Espana, a subsidiary of French independent power producer CVE. We've added five amrends since 2021.

Speaker Change: In parallel.

Speaker Change: Our fast projects are gaining momentum.

Speaker Change: In Italy.

Speaker Change: We recently finalized at TSA agreement for bass projects with PLT and their tier.

Speaker Change: One of Italy's largest independent renewable power producer specializing in wind and solar.

Speaker Change: This transaction comprises up vast portfolio totaling 394, Michael.

Speaker Change: Assuming the growth of our past strategy in Italy, where we now have a total of one seven gigawatt best projects in the PSC structure.

Speaker Change: Will Q2, we signed a contract to sell our 42 megawatt <unk> solar project for quality will span two C. D E expanding.

Speaker Change: A subsidiary of branch independent power producers CBE.

Speaker Change: Nevada by Ameren <unk> 'twenty 'twenty. One this diverse portfolio is comprised of eight we will field projects ranging from five to six megawatts.

Yumin Liu: This diverse portfolio is comprised of eight green field projects ranging from five to six megawatt. Together, this eight projects will generate approximately 92.8 gigabot hours per year of energy, serving around 28,000 households in the region. The awarded covering missions will amount to about 20,000 tons of carbon dioxide per year. Additionally, in Q2, we completed the delivery of 13 megawatt COD projects in Hungary. further solidifying our presence in the country. This accomplishment views on our December 2023 sale of a 53.6 megawatt solar portfolio in Hungary to Kurnospin Douglas Renewables. The six projects set to power approximately 90-500 households reinforce our commitment to providing sustainable energy solutions across Europe.

Speaker Change: Together this eight projects will generate approximately $92 eight gigawatt hour per year of energy.

Speaker Change: Serving our route 28000 households in the region.

Speaker Change: The awarded Cobbling missiles will amount to about 20000 tons of carbon dioxide per year.

Speaker Change: Additionally, in Q2, we completed the delivery of certain megawatt <unk> project in Hungary.

Speaker Change: Further solidifying our presents in the country.

Speaker Change: This accomplishment views unlock December 2023 sale of our script is three six megawatt solar portfolio. Your highway who can Austin chalk bluffs renewables.

Speaker Change: The six projects tied to power approximately 9500 households, reinforce our commitment to providing sustainable energy solutions across Europe.

Yumin Liu: Furthermore, our IPPSS exhibited strong growth and profitability, contributing approximately 30% of our total revenue for the quarter. We continued to optimize the operation of our solar farms, including Branson in the UK. The IPP segment is a crucial component of our business model, providing a reliable source of stable and predictable cash flow. IPP revenue is balanced between Europe and China, with the modest presence in the US. In Europe, we have 67 megawatt or IPPSS, generating a recurring revenue. Our IPPSS in China, the majority of which are located in the coastal provinces, with variable power prices, strong economies, and robust regulatory environments, are being fortified with the addition of battery storage projects.

Speaker Change: Furthermore, our IPP assets exhibited strong growth and profitability.

Speaker Change: Contributing approximately circuit percent of our total revenue for the quarter.

Speaker Change: We continued to optimize the operation of our solar farms, including breast and in the UK.

Speaker Change: The IPP segment is a crucial component of our business model.

Speaker Change: Providing a reliable source of stable and predictable cash flow.

Speaker Change: IPP revenue is balanced between Europe and China.

Speaker Change: Modest presents in the U S.

Speaker Change: In Europe, we have 67 megawatt of IPP assets generally.

Speaker Change: Our recurring revenue.

Speaker Change: Our IPP assets in China, the majority of which are located in the five coastal provinces with favorable power prices strong economies and a robust regulatory environments are being fortified with the addition of battery storage projects.

Yumin Liu: As of the end of Q2 2024, our battery storage portfolio in China comprised 26 megawatt hours, or integrated into a virtual power plant or by IPP platform, owned and operated by Juan and Power International, one of China's largest IPP operators.

Speaker Change: As of the end of Q2 2020 for our battery storage portfolio in China comprised 26 megawatt hours or integrated into a virtual power plant or <unk> platform.

Speaker Change: And operated by climbing our international one of China's largest IPP operators.

Yumin Liu: In conclusion, the future of solar energy is promising and we are strategically positioned to capitalize on the accelerating adoption of solar and battery storage technology worldwide.

Speaker Change: Looking ahead of the remainder of 2024 and beyond we are well positioned in many of the words.

Speaker Change: This growing solar markets.

Speaker Change: These markets are supported by rising energy demand favorable government policies and advising technologies.

Yumin Liu: With our expertise, industry partnerships, a strong financial foundation, we are advancing towards our goal of becoming a leading global solar and battery storage company.

Yumin Liu: Our priorities include advancing early-states projects, securing additional TSA partnerships in Europe and the US, and optimizing strategies to maximize the value of our development pipeline.

Yumin Liu: We are enthusiastic about the future and proud to be driving the transition to a more sustainable world.

Our priorities include otherwise early stage projects securing additional DSA partnerships.

Speaker Change: Europe, and the U S and optimizing strategies to maximize the value of our development pipeline.

Ke Chen: With that, let me turn the call over to our CFO co-chain to discuss our financial performance and guidance. Tough?

Gary Dvorchak: Yesterday, we filed our forms 10-Q for both the first and the second quarters, so we are now fully compliant with NCC reporting requirements.

Yumin Liu: And the, I think, by the time when we go into next earning call, we do plan to give more details on the closing target.

Speaker Change: With that let me turn the call over to our CFO, Jim to discuss our financial performance and guidance.

Yumin Liu: Thank you, everyone, for joining our call today.

Speaker Change: Okay.

Ke Chen: Yeah, thank you, Yumi, and thanks everyone again for joining us on the call today. Our revenue rose to 30.1 billion, covering quarter over quarter, driven by significant growth in the EPC or COD projects development and DSA segments, viewed by project completion and increased demand for development services. Our revenue declined 11% year-to-year, primarily due to the reduced RTP sales in Europe.

Gary Dvorchak: On the call with me today are Mr. Yumin Liu, Chief Executive Officer, and Mr. Ke Chen, Chief Financial Officer.

Yumin Liu: Okay.

Yumin Liu: Thank you again for joining our call today.

Speaker Change: Yeah.

Jim: Thank you Amy.

Jim: Such are wound down or join us on the call today.

Yumin Liu: I'll begin by providing an overview of our operational performance in Q2 2024, and Kuo will discuss our financial results for Q2 and our outlook.

Gary Dvorchak: Before we continue, please turn to slide two.

Philip Shen: Great.

Yumin Liu: You may now disconnect.

Jim: Our revenue rose to a certain 0.1 billing doubling quarter over quarter driven.

Gary Dvorchak: Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking.

Philip Shen: Thanks, Yumin.

Operator: Thank you.

Yumin Liu: These results reflect our disciplined approach to growth, particularly through the execution of our development service agreements, DSA, strategy across Europe and the U.S. Our relentless focus on improving efficiency across all regions has paid off, enabling us to maintain strong operating discipline and control costs effectively.

Jim: Driven by significant growth in the EPC or <unk> projects.

Philip Shen: Shifting over to your...

Gary Dvorchak: Those risks are described under risk factors and elsewhere in Emeren Group's filings with the FCC.

Jim: And yesterday segments.

Jim: Fueled by project competition, and the increased demand for development services.

Philip Shen: Shifting over to your $2 million of, write-offs of canceled projects.

Jim: Our revenue declined 11% year over year.

Yumin Liu: Offsetting our solid operating profit, net income was reduced by around $2 million, write-offs related to canceled projects, and unrealized foreign exchange loss of $0.8 million.

Jim: Primarily due to the reduced RTP sales in Europe.

Jim: Despite these challenges strong performers in Saudi and DSA highlights the company's strategic focus and the operational resilience.

Yumin Liu: Despite these setbacks, our ability to deliver a solid operating profit underscores the resilience, and adaptability of our business model.

Yumin Liu: In terms of our business lines, first, our DIC structure has established a stable and, predictable business model, enabling us to monetize projects at the early stages of development and secure higher quality contracted revenue. This approach is crucial for managing risk and maximizing cash flow throughout the project, lifecycle.

Yumin Liu: By the end of the second quarter of 2024, we had signed over two gigabyte of projects, with eight DSA partners in Europe to monetize these early and mid-stage projects. The total contracted revenue of over $16 million is expected to be recognized over, the next two to three years based on the development milestones. In the first half of 2024, we achieved $8.2 million of DSA revenue, already surpassing, the full year of 2023 DSA revenue, total of $6.5 million.

Yumin Liu: Looking ahead, we are committed to expanding our DSA partnerships on a global scale, leveraging, our expertise and track record to enter new market and forge strategic alliance.

Philip Shen: I think you guys had a similar amount on the last quarter, Q1, and wanted to see if we should expect $2 million for this coming Q3, maybe even Q4.

Yumin Liu: Currently, we have over two gigawatts of DSA contracts under negotiation. These contracts are expected to close within the next six to eight months, bringing the, company an estimated $100 million in revenue to be recognized over the next three to four years.

Speaker Change: Gross profit was $9 four meaning compared to $4 3 million in Q1 doesn't equal.

Yumin Liu: In parallel, our BAS projects are gaining momentum, particularly in Italy. We recently finalized a DSA agreement for BAS projects with PLT Energia, one of Italy's, largest independent renewable power producer specializing in wind and solar. This transaction comprises a BAS portfolio totaling 394 megawatts, demonstrating the, growth of our BAS strategy in Italy, where we now have a total of 1.7 gigawatt BAS projects in the DSA structure.

Yumin Liu: In Q2, we signed a contract to sell a 42-megawatt RTP solar project portfolio in Spain to CVE, Espana, a subsidiary of French independent power producer CVE. Developed by Amren since 2021, this diverse portfolio is comprised of eight greenfield, projects ranging from five to six megawatts. Together, these eight projects will generate approximately 92.8 gigawatt hour per year, of energy, serving around 28,000 households in the region.

Philip Shen: How much more is there, and what are the root causes of these canceled projects?

Speaker Change: $12 7 million in Q2 2023.

Gross margin was so if you want one 2%.

Speaker Change: Third to 29, 6% in Q1 from Q4.

Speaker Change: And so the seven 4% in Q2.

Speaker Change: Right.

Speaker Change: The year over year decrease in gross margin, what's the price.

Rarely due to shift in revenue mix towards sales with sales.

Ke Chen: Operating expenses were 6.4 million, down from 7.6 million in Q2203, but higher than the 5.5 million in Q124, primarily due to the around 2 million write-off related to cancel projects. Let income attribute to Emeren Group LTV's common shareholder was 0.4 million, a 6.3 million rebound from net loss of 5.9 million in Q124. Throw lower than 8.3 million a year ago. This was impacted by around 2 million right off related to cancel projects, and I'll realize before exchange loss of 0.8 million. Diluted net income attributable to Emeren Group LTV's common shareholder for ADS was 1 cent compared to diluted net loss of 1.6 million in Q124, and diluted net income of 14 cents in Q2203.

Operating expenses were $6, four meaning south Bronx, 7.6, meaning in Q2, 'twenty Ministry, but higher than the $5 5 million in Q1 than before.

Speaker Change: Primarily due to the around two meaning rightful related to cancel projects.

Speaker Change: Net income attribute to Amarin Ltte's common shareholder was <unk> 4 million or.

Speaker Change: $6 3 million rebounded from a net loss of <unk> five 9 million in Q1 and 24.

Speaker Change: Well, Laura eight concentrate meaning a year ago.

Speaker Change: This was impacted by around 2 million write up ready to cancel projects and all.

Speaker Change: Unrealized foreign exchange loss of <unk> 8 million.

Speaker Change: Diluted net income attributable Emerald group LTC common shareholder.

Speaker Change: Yes.

Speaker Change: Boston.

Speaker Change: Compared to diluted net loss of a nonsense in Q answered before and diluted net income of 14 stats in Q2 in history.

Ke Chen: Cash-usling operating activity was 2.2 million. Cash-usling investing activity was 3.8 million, and cash-covid financing activity was 1.5 million. Moving to balance, cash-equivalent at the end of Q2 204 were 50.8 million compared to 55.1 million in Q1 24. That asset value for Emeren Group LTV is approximately $6 per ADS. Our debt-to-ass ratio at the end of Q2 204 was 10.2 per cent compared to 9.9 per cent at the end of Q1 24.

Speaker Change: Cash used in operating activity was $2 2 million cash.

Speaker Change: Cash used in investing activities was $3 8 million.

Speaker Change: Cash provided by financing activities.

Speaker Change: $1 5 million.

Moving to balance as a cash equivalent at the end of Q2 2024.

Speaker Change: $58 million compared to 55 or one beginning in Q1 2024.

Speaker Change: That asset value or.

Speaker Change: As a possibility.

Speaker Change: Yes.

Our debt to asset ratio at the end of Q2 Permian oil was 10 point.

Speaker Change: 2% compared to $9 nine 8% at the end of Q1 sentence before.

Ke Chen: Shifting gears to our outlook, we anticipate that our Q3 revenue will fall within the range of 25 to 28 million, which goes margin between 35 and 38 per cent. For the full year 2024, we reaffirm our expectation for revenue range from 150 to 160 million, and for gross margin of approximately 30 percent. Additionally, we reaffirm our expectation for net income in 24 to be around 22 million. Taking into account the impact of foreign change and respect earnings per ADS to be approximately 43 cents. Operating profit is expected to grow in 9 with revenue, with a continuous focus on cost management and efficiency.

Gary Dvorchak: Please do not place undue reliance on these forward-looking statements, which reflect Emeren Group's opinions only as of the date of this call.

Speaker Change: Shifting gears to our outlook.

Speaker Change: We anticipate that our Q3 revenue will fall within the range of 25 to 28 million.

Speaker Change: Gross margin between 35 and 38%.

Speaker Change: For the full year trend really cool, we re affirmed our expectation for revenue range from $150 million to $160 million.

And for gross margin of approximately 30%.

Speaker Change: Additionally, we reaffirm our section called happening in 74 to be around $22 million.

Speaker Change: Taking into account the impact of foreign exchange and we expect earnings per a desk to beer possibility 43 cents.

Speaker Change: Operating profit is expected to grow in line with.

Speaker Change: Revenue with a continued focus on cost management and efficiency.

Ke Chen: While full-year net income will be affected by the early write-offs and foreign change losses, we remain confident in the nearer solid financial performance for the year. Additionally, we reaffirm our expectation for 10.24 IPP revenue to be between 24 and 26 million, which goes margin of approximately 50 per cent. We expect GSA to be around 20, meaning in the second half of 2024.

Speaker Change: While full year net income will be affected by the early write offs and a foreign exchange losses.

Speaker Change: We remain confident in deliver solid financial performance for the year.

Speaker Change: Additionally, we affirm our patient portal for IPP revenue to be between 24.

And 26 million with gross margin ultimately 50%.

Speaker Change: We expect <unk> revenue to be around 20, meaning in the second half of 2024.

Yumin Liu: The awarded carbon emissions will amount to about 20,000 tons of carbon dioxide per year.

Gary Dvorchak: Emeren Group is not obliged to update you on any revisions to these forward-looking statements.

Philip Shen: Is it like you were saying earlier in terms of Spain?

Operator: This concludes the conference.

Operator: With that, let's open up the call for any questions.

Speaker Change: With that let's open up the call for any questions.

Yumin Liu: Additionally, in Q2, we completed the delivery of a 13-megawatt COD project in Hungary, further solidifying our presence in the country.

Philip Shen: The government's changing some... Gary Dvorchak, Donovan Schafer, Philip Shen, Yumin Liu, Suzanne Wilson, Emeren Group, canceled and written off projects, thanks.

Operator: Thank you for your participation.

Operator: Operator, please go ahead. Thank you.

Yumin Liu: This accomplishment builds on our December, 2023 sale of a 53.6 megawatt solar portfolio in Hungary to Cornhusband Douglas Renewables. The six projects set to power approximately 9,500 households reinforce our commitment, to providing sustainable energy solutions across Europe.

Speaker Change: Operator, Please go ahead.

Operator: You may now disconnect.

Operator: As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. One moment for questions.

Speaker Change: Thank you.

Speaker Change: A reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Gary Dvorchak: With that, let me now turn the call over to Mr. Yumin Liu.

Yumin Liu: Yes, again, the specific right of related to U.S.

Speaker Change: One moment for questions.

Yumin Liu: Furthermore, our IPP assets exhibited strong growth and profitability, contributing approximately, 30% of our total revenue for the quarter.

Graham Price: Our first question comes from Graham Price with Raymond James. You may proceed.

Yumin Liu: Yumin, go ahead.

Yumin Liu: Again, you probably know the challenge of interconnection, those kind of normal stuff happening in the US.

Speaker Change: Our first question comes from Graham price with Raymond James You May proceed.

Yumin Liu: Hi, good afternoon, and thanks for taking the questions. The first one just on the early stage pipeline looks like Spain was revised down by about 1.3 gigawatts versus Q1, just wondering what the reason was for that.

Yumin Liu: We continued to optimize the operation of our solar farms, including Branston in the UK.

Yumin Liu: Thank you, Gary.

Yumin Liu: However, going forward.

Yumin Liu: The IPP segment is a crucial component of our business model, providing a reliable source of stable and predictable cash flow.

Graham Price: Hi, good afternoon, and thanks for taking the questions.

Yumin Liu: IPP revenue is balanced between Europe and China, with a modest presence in the US. In Europe, we have 67 megawatt IPP assets generating recurring revenue.

Yumin Liu: Our IPP assets in China, the majority of which are located in the five coastal provinces, with favorable power prices, strong economies, and robust regulatory environments, are being fortified with the addition of battery storage projects. As of the end of Q2 2024, our battery storage portfolio in China comprised 26 megawatt hours, all integrated into a virtual power plant, or YPP platform, owned and operated by Huanong Power International, one of China's largest IPP operators.

Yumin Liu: Looking ahead of the remainder of 2024, and beyond, we are well-positioned in many of the world's fastest-growing solar markets. These markets are supported by rising clean energy demand, favorable government policies, and advancing technologies.

Yumin Liu: Thank you, everyone, for joining our call today.

Graham Price: First one just on the early stage pipeline.

Yumin Liu: I'll begin by providing an overview of our operational performance in Q2 2024.

Yumin Liu: And Ke will discuss our financial results for Q2 and our alums. In Q2, our company achieved solid progress, generating $30.1 million in revenue. This performance was underpinned by a gross profit of $9.4 million, translating to a robust gross margin of 31.2%. Operating profit was $3 million, and net income attributable to Emeren Group Ltd. was $0.4 million.

Graham Price: <unk>.

Speaker Change: It looks like Spain was revised down by about 1.3 Gigawatts versus Q1.

Yumin Liu: These results reflect our disciplined approach to growth, particularly through the execution of our developments.

Speaker Change: Just wondering what the reason was for that.

Yumin Liu: Okay, that's a good question. We have been facing some challenges in the pool process from the government in Spain. Especially in some reasons, we have activities and balancing the risk and award.

Speaker Change: Okay. Good question.

Yumin Liu: Our priorities include advancing early-stage projects, securing additional DSA partnerships in Europe and the US, and optimizing strategies to maximize the value of our development pipeline.

Yumin Liu: Service Agreements, BSA, Strategy, across Europe and the US.

Yumin Liu: We are not expecting that, especially in the second half, we don't expect any big write-off going forward, in the second half.

Philip Shen: Got it.

Speaker Change: You know we are facing we have been facing some challenges in the approval process from the government space, especially in some regions we have activities and.

Philip Shen: Great.

Philip Shen: Thank you.

Philip Shen: And then one last thing.

Yumin Liu: With that, let me turn the call

Speaker Change: Balancing the risk and reward.

Yumin Liu: The company decided to slow down or even cancel projects in some regions. Okay, that is the reason we lowered our early stage pipeline in Spain. We truly, we canceled those projects. Got it, understood.

Speaker Change: The company decided to slow down or even council <unk>.

Speaker Change: Projects in some regions.

Speaker Change: That is the reason we lowered our early stage pipeline you will spend eternity.

Speaker Change: So those projects.

Speaker Change: Okay.

Speaker Change: Got it understood.

Graham Price: Then, for my follow-up, I guess kind of a two-parter on the DSA sales. First one, just looking at the second half forecast of 20 million. I was wondering what the quarterly cadence is there. And then looking at the contracted versus negotiated. It looks like you've got two gigawatts and kind of each bucket. But it looks like contracted is for $60 million versus negotiated $100 million. So I was wondering if those that are still in negotiation or a bit more involved or later stage projects. Just wondering why the difference in size there.

Speaker Change: And then for my follow up I guess kind of a two parter on the DSA sales first one just just looking at.

Speaker Change: Our second half forecast of $20 million I was wondering what the quarterly cadence is there and then looking at the contracted persons.

Speaker Change: <unk> negotiated it looks like you've got two gigawatts in kind of each bucket, but it looks like contracted is for $60 million versus negotiated 100 million. So I was wondering if those.

Speaker Change: That are still in negotiation or.

Speaker Change: A bit more involved or later stage projects just wondering why why is the difference in size there.

Yumin Liu: over to our CFO, Ke Cheng, to discuss our financial performance and guidance.

Yumin Liu: Yes, Grant. Let me also, the first part; let me also second part. The first part, we do expect 20 million around you coming out of the DSA in the second half. And I will say half more than 50% have already contracted. And again, the second half less than 50% is under negotiation. In terms of quarter to quarter, I think we could expect evenly distributed in the legs the two quarters. And I will, you may also you about the contract and the projected difference. Okay.

Speaker Change: Yes.

Speaker Change: Let me answer the first part of your meal answer second part the first part we do expect 'twenty, meaning revenue coming out of a TSA in the second half.

I will say.

Speaker Change: More than 50% have already contracted.

Speaker Change: Again, the second half Lasalle.

Speaker Change: The 50% is under negotiation in terms of quarter over quarter.

Speaker Change: We could expect.

Speaker Change: Evenly.

Speaker Change: Our distributor in the next two quarters and that will give me answer you about the contracts.

Speaker Change: The projected the difference.

Yumin Liu: The our existing biases mainly comes from the Italy market. and now, in the four-in-month or the four-in-ice-and-mission six to eight-months, we have forward two gigawatts of contracts or DSA contracts. We target to close, and that is on a global scale. It's both on solar and also on the storage, including four to five countries in Europe and plus the US. That portfolio of two gigawatts also include not only early stage but also some middle or even more at one stage as projects. That is why the DSA number will be a lot higher in some cases compared to the early stage ones.

Speaker Change: Okay.

Speaker Change: Our existing cities mainly.

Speaker Change: Comps crown the utility market okay.

Speaker Change: And now in the flurry of months art flooring ISR motion six to eight months, we have over two gigawatts of contracts or DSA contracts.

We target to close and that is our global scale.

Speaker Change: A both our solar and also all the storage.

Speaker Change: Excluding <unk>.

Speaker Change: Four to five countries in Europe, and plus the U S.

Speaker Change: That portfolio of two Gigawatts also include not only early stage, but also some middle or even more at the one stages projects.

Speaker Change: That is why that the FSA number will be a lot higher.

Speaker Change: In some cases compared to the early stage lengths.

Speaker Change: Okay.

Graham Price: Got it. Okay. Perfect.

Speaker Change: Got it okay perfect that's exactly what I was looking for.

Graham Price: That's exactly what I was looking for. Thank you very much.

Graham Price: I'll jump back in the queue. Thank you, Graham. Thank you.

Speaker Change: Thank you very much I'll jump back in the queue.

Graham Price: Thank you Graham.

Graham Price: Thank you.

Philip Shen: Our next question comes from Philip Shen with Roth Capital Partners. He may proceed.

Ke Chen: Ke?

Speaker Change: Our next question comes from Philip Shen with Roth Capital Partners You May proceed.

Ke Chen: Yeah.

Philip Shen: Thanks for the questions. We're taking the questions. Your implied queue for revenue ramp is pretty high, about $84 million. So I want to understand how confident you feel in that implied queue for given you reiterated your full-year revenue number. And so, what's the confidence level? How much conservatism is baked in? And what are the risks that you miss the target? Thanks.

Speaker Change: Yeah. Thanks for the question so we're taking the questions.

Philip Shen: Your implied Q4 revenue.

Speaker Change: The revenue ramp is pretty high about $84 million.

Philip Shen: And so wanted to understand how confident you feel in that.

Implied Q4.

Speaker Change: Given you reiterated your full year revenue number and so.

Philip Shen: Yeah.

Speaker Change: What's the confidence level, how much conservatism is baked in and what are the risks that.

Speaker Change: You Miss the target thanks.

Yumin Liu: Thank you, Phil.

Yumin Liu: It's a very, very good and challenging question, too. As the team, the teams across the board, has been working on those expected closings, literally speaking, as already as two, three months ago, even for the closings to be expected in queue four, or sometime may happen the late queue straight. Okay. That is where our confidence comes from. We are going to the direction closing the deals with at the once negotiation with the partners starting from as early as two to three months ago. Bonds of deals to be closed are under the due diligence process. And bonds of them are under exclusive basis with some targeted buyers.

Speaker Change: Thank you Phil so very very good and challenging question too.

Speaker Change: As to the teams across the board.

Speaker Change: Has been working on those expected closings.

Speaker Change: Literally speaking as early as two or three months ago.

Speaker Change: Even for the closings to be expected in Q4 or sometime may happen late Q3.

Speaker Change: That is where our confidence come from.

Speaker Change: They are going to the direction closing the deals.

Speaker Change: With the ones.

Speaker Change: Negotiation with the partners starting from as early as two to three months ago.

Speaker Change: Bunch of deals to be closed or under the due diligence process.

Speaker Change: And bunch of them are under occlusive basis.

Speaker Change: With some targeted buyers.

Yumin Liu: Another point to be noted is we do have several COD planned COD sales, while those projects are either already COD in the past one or two months, or will be COD within queue three. That is within next 45 days. So we have the confidence that those COD assets are so valuable, and people are even today visiting our COD sites. Okay. So they feel good by closing those deals.

Speaker Change: Another point to be noted is we do have several C O D plant <unk> sales.

Speaker Change: While those projects.

Operator: Hello ladies and gentlemen, thank you for standing by for Emeren Group limited second quarter 2024 earnings conference call. Please note that we are recording today's conference call.

Speaker Change: Or either or.

Speaker Change: Already <unk> in the past one or two months.

Speaker Change: Or will it be seal deed, we deemed <unk> strength that is within the next 45 days.

Gary Dvorchak: I will now turn over the call to Gary Dvorchak, managing director of the blue shirt group. Please go ahead, Mr. Dvorchak. Okay, thank you operator and hello everyone. Thank you for joining us today to discuss second quarter 2020 for results. We release our shareholder letter before the market open today and it is available on our website at IR.emer.com. We also provided a supplemental presentation that's posted on our IR website as well and will reference that during our prepared remarks. Yes, today we filed our forms 10Q, excuse me, for both the first and the second quarters so we are now fully compliant with CC reporting requirements.

Speaker Change: So we have the confidence that those C. O D assets are so valuable and people are even today are visiting our sites.

Speaker Change: So we feel good by closing those deals.

Yumin Liu: But definitely, as I see, your question is challenging; that we do have one deal in Europe. It's a pretty high revenue expectation. I'm marching the same. So, I expect some risk, but at this time, we have very high confidence to close all those expected deals. We're on a crucial basis with the buyers, targeted buyers.

Speaker Change: Definitely as I see your question is challenging not the we do have one deal in Europe.

Speaker Change: It's a pretty high revenue expectation and marching the same.

So the.

Speaker Change: I expect some risk.

Speaker Change: But at this time, we have very high confidence to close all those expected deals.

Speaker Change: Great.

Speaker Change: Deal in Europe that has high revenue can you share the megawatts, maybe what countries soon.

Gary Dvorchak: On the call of me today, Mr. Yumin Liu, Chief Executive Officer, MSR Koo Chen, Chief Financial Officer. Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent Emeren Group's current judgment for the future. However, they are subject to risks and certainties that could cause actual results to differ materially.

Speaker Change: We cannot go into that detail as those are all inclusive basis.

Speaker Change: Is the buyers targeted buyers.

Yumin Liu: And I think by the time when we go into the next earnings call, we do plan to give more details on the closing targets.

Speaker Change: And I think by the time when we go into next earning call.

Speaker Change: They do plan to give more details on the closing targets.

Philip Shen: Okay, great.

Jamie: Okay, great. Thanks, Jamie.

Philip Shen: Thanks, Yumin.

Amit Dayal: Shifting over to your $2 million of write-offs of canceled projects. I think you guys had a similar amount on the last quarter, Q1. And wanted to see if we should expect 2 million for this coming Q3, maybe even Q4. How much more is there? And what are the root causes of these canceled projects? Is it like you were saying earlier, in terms of Spain? You know, the government's changing some of the situation, or, you know, is it like, is it more concentrated in the US or Europe?

Gary Dvorchak: Those risks are described under risk factors and elsewhere in Emeren Group's filings with the FCC. Please do not place under reliance on these forward-looking statements, which reflect Emeren Group's opinions, only as the data this call. Emeren Group is not obliged to update you on any revisions to these forward-looking statements. In addition, please note that all financial numbers discussed in this call are unaudited. Also, please note that unless otherwise stated, I'll say you as mentioned during the call are in US dollars.

Shifting over to Europe.

Yumin Liu: Our relentless focus on improving efficiency across all regions has paid off, enabling us to maintain strong operating discipline and control cost, offsetting our solid operating profit, net income was reduced by around $2 million, write-offs related to cancelled projects, and unrealized foreign exchange loss of $0.8 million.

Speaker Change: Shifting over to your $2 million of.

Yumin Liu: Despite these setbacks, our ability to deliver a solid operating profit underscores the resilience and adaptability of our business model, in terms of our business line. First, our DIC structure has established a stable and predictable business model, enabling us to monetize projects at the early stages of development and secure higher quality contractual revenue. This approach is crucial for managing risk and maximizing cash flow throughout the project lifecycle.

Yumin Liu: By end of the second quarter of 2024, we had signed over two gigabyte of projects with eight DSA partners in Europe to monetize this early and mid-stage project. The total contracted revenue of over $60 million is expected to be recognized over the next two to three years based on the development milestones.

Speaker Change: Write offs of cancelled projects.

Yumin Liu: In the first half of 2024, we achieved $8.2 million of BSA revenue, already surpassing the full year of 2023 BSA revenue, total of $6.5 million.

Speaker Change: I think you guys had a similar amount on the last quarter Q1.

Speaker Change: And wanted to see if we should expect $2 million for this coming Q3, and maybe even Q4, how much more is there.

And what are the root causes of these cancel projects.

Speaker Change: We're saying earlier in terms of Spain.

Yumin Liu: With that, let me now turn the call over to Mr. Yumin Liu. Yumin, go ahead. Thank you, Gary.

Speaker Change: Government has changed some.

Speaker Change: Some of that.

Yumin Liu: Thank you, everyone, for joining our call today. I'll begin by providing an overview of our operational performance in Q22024. Uncle of what discussed our financial results for Q2 and our outlook. In Q2, our company and achieved solid progress, generating 30.1 million revenue. This performance was underpinned by gross profit of 9.4 million. Translating to our robust gross margin of 31.2%. Operating profit was 3 million and 9.2 million to Emeren Group limited was 0.4 million.

Speaker Change: The situation.

Speaker Change: Sure.

Is it Oh.

Speaker Change: Like is it more concentrated in U S or Europe my guesses, So just give us some more color on what you expect to add further.

Yumin Liu: My guess is, so just give us some more color on what to expect ahead for the cancel of N, right off, right off project.

Speaker Change: Cancel them right off.

Yumin Liu: Thanks. Yes, well, again, the specific right off is ready to US. Again, you probably know the challenge of interacting. Those kind of normal stuff happen in the US. However, going forward, we are not expecting that, especially in the second half, we don't expect any big write-off going forward in the second half. Got it.

Speaker Change: Fair enough.

Speaker Change: Yes.

Speaker Change: Again, the specific write offs ready to U S.

Speaker Change: You probably know the challenger, we're interconnecting those kind of normal stuff happening U S power going forward.

Yumin Liu: Looking ahead, we are committed to expanding our DSA partnerships on a global scale, leveraging our expertise and track record to enter new markets and forge strategic alliances.

Speaker Change: We are not expecting that in especially the second half we don't expect any big write off going forward.

Speaker Change: In the second half.

Amit Dayal: Great. Thank you.

Amit Dayal: And then one last thing, you guys talked about having 100 million of cash by the end of 24 in the past. And being positive, operating cash flow for the remaining, you know, for the year or these certain quarters of this year, what's your, I don't see, we don't see it in this material for this quarter.

Speaker Change: Got it great. Thank you and then one last thing.

Yumin Liu: This results reflect our disciplined approach to gross, particularly through the execution of our department's service agreements, the SA, strategy, across Europe and the US. Our relentless focus on improving efficiency across all regions has paid off. In enabling us to maintain strong operating discipline and control cost effectively. Offsetting our solid operating profit, 9.2 million was reduced by around 2 million. Right-offs relate to cancel projects and I'm realized for an exchange loss of 0.8 million.

Philip Shen: You guys talked about.., having 100 million of cash by the end of 24 in the past and being positive of operating cash flow for the remaining of it you know for the Gary Dvorchak, Donovan Schafer, Philip Shen, Yumin Liu, Suzanne Wilson, Emeren Group, And how much cash do you think you could have by year?

Speaker Change: You guys talked about.

Speaker Change: Having a $100 million of cash by the end of 24 in the past.

Speaker Change: And being positive operating cash flow for the remainder of it.

Speaker Change: Uh huh.

Speaker Change: Year, how are these certain quarters of this year.

Speaker Change: What's your I don't see we don't see it in this material for this quarter can you share. If you think is reasonable still by year end 'twenty four or if not what's the burn that you're expecting and how much cash do you think you could have by year end. Thanks.

Yumin Liu: Can you share if you think 100 million is reasonable still by year and 24, or if not, what's the burn that you expect and how much cash do you think you could have by year and thanks. Yes, based on our forecast again, we're confident about our outlook here. As we mentioned, we mentioned part of this sale details will happen in the fourth quarter, so we're still confident to collect all this cash by end of this year. And also expect on a full year basis, we should be operating cash flow positive. Thank you.

Ke Chen: Yes, based on our forecast, again, we're confident about our outlook here.

Speaker Change: Yes based on our forecast again, we're confident about our outlook.

Speaker Change: I'll look here as we mentioned.

Ke Chen: As we mentioned, Yumin mentioned part of this COD sales will happen in the fourth quarter.

Yumin Liu: Despite the sidebacks, our ability to deal with a solid operating profit underscores the resilience and adaptability of our business model. In terms of our business lines, first, our DSC structure has established a stable and predictable business model, enabling us to monetize projects at the early stages of development and secure higher-conity contracted revenue. This approach is crucial for managing risk and maximizing cash flow throughout the project lifecycle. By the end of the second quarter of 2024, we had signed over two gigabot projects with eight PSA partners in Europe to monetize these early and mistakes projects.

Speaker Change: You mentioned part of this sale the sales will happen in the fourth quarter. So we're still confident to collect all this cash by end of this year and what to expect.

Ke Chen: So we are still confident to collect all this cash by end of this year.

Ke Chen: And we also expect on a full year basis, we should be operating cash flow positive.

Speaker Change: A full year basis, we should be operating cash flow positive.

Amit Dayal: Great. Appreciate that. Okay. I'll pass it on. Thank you, Phil. Thank you.

Philip Shen: Great.

Speaker Change: Great I appreciate that okay I'll pass it on.

Philip Shen: Appreciate that, Ke.

Speaker Change: Thank you Phil Thank you.

Speaker Change: Thank you.

Donovan Schafer: Our next question comes from Amit Dial with H.C. Rainwright.

Philip Shen: Okay, I'll pass it on.

Speaker Change: Our next question comes from Amit Dayal with H C. Wainwright you May proceed.

Ke Chen: Thank you, Yuming, and thanks, everyone, again, for joining us on the call today. Our revenue rose to $30.1 million, doubling quarter over quarter, driven by significant, growth in the EPC for COD projects development and DSA segments, fueled by project completion and increased demand for development services.

Ke Chen: Our revenue declined 11% year-over-year, primarily due to the reduced RTP sales in Europe.

Donovan Schafer: You may proceed. Thank you. So you mean, with respect to the guidance for the remainder of the year. You're saying you could potentially do 28 million in net income on roughly, say, 120 million in sales?

Ke Chen: Despite these challenges, strong performance in COD and DSA highlights the company's strategic focus and operational resilience.

Ke Chen: Gross profit was $9.4 million, compared to $4.3 million in Q1 2024.

Philip Shen: Thank you, Phil.

Amit Dayal: Thank you and good afternoon, everyone.

Ke Chen: And $12.7 million in Q2 2023.

Amit Dayal: It's a human with respect to the guidance for the remainder of the year.

Ke Chen: Gross margin was 31.2% compared to 29.6% in Q1 2024, and 37.4% in Q2 2023.

Ke Chen: The year-over-year decrease in gross margin was primarily due to shift in the revenue, mix towards savings sales.

Ke Chen: Revenue expenses were $6.4 million, down from $7.6 million in Q2 2023, but higher than the, $5.5 million in Q1 2024, primarily due to the around $2 million write-off related to canceled projects.

Philip Shen: Thank you.

Speaker Change: You're saying you could potentially do 28 million and net income on roughly let's say $100 million to $110 million.

Speaker Change: $220 million in field.

Yumin Liu: I'm just trying to get a sense of, you know, what's driving this significant level of profitability for the revenues that you are expecting to recognize in the second half? I think the, I would say three reasons coming to our confidence level. One is, as I mentioned, that we have worked on a bunch of expected closings, starting over two, three months ago. And we do expect to close them in the second half. The second is, the significant part of the revenue may come or will come from the COD sales, and those COD are either rich or are to be rich within QStray.

Philip Shen: Thank you.

Speaker Change: I'm just trying to get a sense of you know what's driving this significant level of profitability for the revenues.

Yumin Liu: The total contracted revenue of over 16 million is expected to be recognized over the next two to three years based on the development milestones. In the first half of 2024, we achieved 8.2 million of PSA revenue already surpassing the full year of 2023 PSA revenue, total of 6.5 million. Looking ahead, we are committed to expanding our PSA partnerships on a global scale, leveraging our expertise and track record to enter new market and force strategic lines.

Speaker Change: That you are expecting too.

Speaker Change: Recognize in the second half.

Speaker Change: I think the I.

Speaker Change: I will say three reasons coming to our confidence level.

Speaker Change: One is as I mentioned that we have worked on bunch of expected closings starting over two or three months ago.

And we do expect to close them in the second half.

Speaker Change: Second is the significant.

Speaker Change: Significant part of the revenue may come or will come from the <unk> sales and those C. L D.

Speaker Change: Are either rich or ought to be rich with <unk> strength.

Yumin Liu: Currently, we have over two gigabot of PSA contracts under negotiation. These contracts are expected to close within the next six to eight months, bringing the company an estimated $100 million in revenue to be recognized over the next three to four years. In parallel, our best projects are gaining momentum, particularly in Italy. We recently finalized the PSA agreement for best projects with PLT Energy, one of Italy's largest independent renewable power producer, specializing in wind and solar.

Yumin Liu: So the COD assets are pretty valuable and hotspot to be changed upon by buyers. And, as I mentioned also, that we even have one COD buyer budgeting our site today. So those are all-inclusive basis, and we are so confident those will be done. And definitely we have all those contracts, including PSAs, under the negotiation, WAPD; we can close them.

Speaker Change: The <unk> assets are pretty valuable and cost spot to be chased upon by buyers.

Speaker Change: And as I mentioned also that you will have one CLO the buyer visiting our site today.

Speaker Change: So those are all inclusive basis.

And we are so confident those will be done.

Yumin Liu: Currently, we have over two gigawatts of DSA contracts under negotiation.

Speaker Change: Definitely we have oldest contracts, including the assays.

Yumin Liu: These contracts are expected to close within the next six to eight months, bringing the company an estimated $100 million in revenue to be recognized over the next three to four years, in parallel, our best projects, our gaming momentum, particularly in Italy.

Speaker Change: Until that negotiation late BD, we coat closed off.

Yumin Liu: And my question is more on margins, you know, so you feel that the price you will receive for these assets will support these levels of margin expectation that you have for the second half. Yes, the, although COD margin is normally lower, but in general, our business model on the NTP or RTP sale, plus the essay, provide a very healthy margin. And including our IPP assets, those are also high-margin views. I mean, again, we talk about COD sale, but the margin are main focuses still be on the RTP, NTP sale, both in Europe and the US.

Speaker Change: Understood.

My question was more around margins you know so you feel that the price you will receive for these assets.

Yumin Liu: This transaction comprises a best portfolio totaling 394 megawatt, demonstrating the growth of our best strategy in Italy, where we now have a total of 1.7 gigabot best projects in the PSA structure. In Q2, we signed a contract to sell a 42 megawatt RTP solar project portfolio in Spain to CVE Espana, a subsidiary of French independent power producer CVE. We've added five amrends since 2021. This diverse portfolio is comprised of eight green field projects ranging from five to six megawatt.

Speaker Change: We will support these levels of margin expectation that you have for the second half.

Speaker Change: Yes.

Yumin Liu: We recently finalized a DSA agreement for BAS projects with PLT Energia, one of Italy's largest independent renewable power producer specializing in wind and solar.

Although <unk> margins nominally lower but in general our business model on the MTBE or RPE cell lost DSA provides very healthy margin.

Speaker Change: Including our IPP assets those are also high margin deals.

Speaker Change: But again, we're talking about 70 sales, but the margin. Our main focus is still be on the RTP NTP sale, both in Europe and the U S. So marketing contribution will also come from our strengths.

Yumin Liu: So margin contribution will also come from our strengths of NTP, RTP sale plus the essay and IPP, which you just mentioned. So we're confident about margin in the second half.

Speaker Change: N T P RFP sale, plus USA and IPP, which you mean just mentioned so we're confident about margin.

Yumin Liu: Together, this eight projects will generate approximately 92.8 gigabot hours per year of energy serving around 28,000 households in the region. The awarded covering missions will amount to about 20,000 tons of carbon dioxide per year. Additionally, in Q2, we completed the delivery of 13 megawatt COD projects in Hungary, further solidifying our presence in the country. This accomplishment views on our December 2023 sale of a 53.6 megawatt solar portfolio in Hungary to Kurnospin Douglas Renewables.

Speaker Change: In the second half.

Amit Dayal: Thank you for that. And you know, related to that again, you know, is any of this dependent on, you know, interest rates going lower? Any of these deals in the second half, you know, our folks may be waiting to, you know, pencil these deals once they have clarity on where interest rates will head in the next few months.

Speaker Change: Understood. Thank you for that.

Speaker Change: And related to that again.

Speaker Change: Any of this.

Speaker Change: Are dependent on interest rates going lower and you know these deals in the second half you know our folks maybe reading too.

Speaker Change: <unk> been through these deals once they have clarity on where interest rates will help.

Speaker Change: In the next few months.

Yumin Liu: Very good question and very good point. I really hope that the buyers will pay a better price with a better interest rate, a lower interest rate environment. And maybe that should be the case. Okay, thank you.

Speaker Change: Very good question and very good point, I really hope that the buyers will pay a better price with <unk>.

Speaker Change: Interest rate, a lower interest rate environment.

Yumin Liu: The six projects set to power approximately 90-500 households reinforce our commitment to providing sustainable energy solutions across Europe. Furthermore, our IPPSS exhibited strong growth and profitability, contributing approximately 30% of our total revenue for the quarter. We continued to optimize the operation of our solar farms, including Branson in the UK. The IPP segment is a crucial component of our business model, providing a reliable source of stable and predictable cash flow. IPP revenue is balanced between Europe and China, with the modest presence in the US.

Speaker Change: And we believe that should be the case.

Speaker Change: Okay. Thank you.

Amit Dayal: Just last one from me with respect to these DSA revenues looks like you're getting good traction on that front. Are these DSA revenues, you know, 30% margin, gross margins or higher lower? Can you give us a sense of what kind of gross margin we should expect from DSA revenues. I could not release this margin number, but it is absolutely a very good model.

Speaker Change: Just last one for me with respect to the DSA revenues looks like Youre getting good traction on that front.

Speaker Change: Are these DSA revenues.

Speaker Change: The 30% margin gross margins or higher or lower can you give us a sense of what kind of gross margin we should expect.

Speaker Change: From DSA revenues.

Speaker Change: I cannot release this margin number but it is absolutely a very good model literally speaking in our company I say, our suite keywords solar battery storage and BSA.

Yumin Liu: Literally speaking, in our company, I say there are three keywords: solar, battery storage, and BSA. It is very important to the company operation, but unfortunately I don't think I can release the margin number. And by the way, as we are doing BSA in multiple countries, also on both PV and storage projects, the margin varies really pretty quickly. Okay, understood.

Speaker Change: It is very important to the company operation but.

Speaker Change: Unfortunately, I don't think I heard at least a margin number and by the way.

Yumin Liu: In Europe, we have 67 megawatt or IPPSS, generating a recurring revenue. Our IPPSS in China, the majority of which are located in the coastal provinces, with variable power prices, strong economies, and robust regulatory environments, are being fortified with the addition of battery storage projects. As of the end of Q2 2024, our battery storage portfolio in China comprised 26 megawatt hours, or integrated into a virtual power plant or by IPP platform, owned and operated by Juan and Power International, one of China's largest IPP operators.

Speaker Change: As we are dual BSA in multiple countries also on both PV and storage projects. So the margin varies really.

Speaker Change: Pretty bakery.

Speaker Change: Okay understood.

Amit Dayal: So that's all I have to say. I really did my other questions. Thank you. Thank you very much.

Speaker Change: That's all I'm, Dave I will take my other question, but thank you. Thank.

Speaker Change: Thank you very much.

Amit Dayal: Thank you.

Speaker Change: Thank you.

Donovan Schafer: Our next question comes from Donovan Schafer. With more than capital markets, he may proceed.

Amit Dayal: Our next question comes from Amit Dayal with H.G.

Our next question comes from Donovan Schafer with Northern capital markets. You May proceed.

Donovan Schafer: Thank you, guys. My first question is just for the 1.7 gigawatts of DSA contracts for BSA in Italy. Is that a subset within the two gigawatts of contracted DSA that you have? So the implications that you know 85 90% of the two gigawatts you have time contracted for DSA at the 85% of that is DESS in Italy or are these like different buckets?

Donovan Schafer: Hey, guys.

Donovan Schafer: First question is just for the one seven gigawatts of DSA.

Donovan Schafer: Yes.

Speaker Change: Contracts are b assets in Italy, you have is that a subset within the two gigawatts of contracted GSA that you have so.

Yumin Liu: Looking ahead of the remainder of 2024 and beyond, we are well-positioned in many of the world's hottest growing solar markets. This markets are supported by rising clean energy demand, favorable government policies, and advancing technologies. Our priorities include advancing early-states projects, securing additional TSA partnerships in Europe and the US, and optimizing strategies to maximize the value of our development pipeline.

Is the implication.

Speaker Change: Yes.

Speaker Change: <unk>, 85% to 90%.

Speaker Change: Of the two Gigawatts you have time contracted for DSA.

Speaker Change #100: 85% of that is b assets in Italy or are these like different buckets.

Yumin Liu: You are right. In fact, it is the case.

Speaker Change #100: You are right in fact, it is the case.

Yumin Liu: Our BSA under batch projects, storage projects represent over 80% of the whole DSA portfolio. Okay, got it.

Our Esa under best projects starts projects represent over 80% of the whole DSA portfolio.

Ke Chen: With that, let me turn the call over to our CFO co-chain to discuss our financial performance and guidance. Tough?

Donovan Schafer: That was all. Thank you.

Speaker Change #101: Okay got it helpful. Thank you.

Donovan Schafer: And then for, let's see, the write-off, can you clarify just what it was that triggered the write-off? Was it specifically an interconnection delay or what was the specific bottleneck or parameter or event that triggered the write-off?

Ke Chen: Net income attributed to Emeren Group Ltd.'s common shareholder was $0.4 million, a $6.3, million rebound from a net loss of $5.9 million in Q1 2024, though lower than $8.3 million a year ago. This was impacted by around $2 million write-off related to canceled projects and unrealized, foreign exchange loss of $0.8 million.

Speaker Change #100: And then.

For let's see the write off can you clarify just what it was that triggered the write off was.

Ke Chen: Yeah, thank you, Yumi, and thanks everyone again for joining us on the call today. Our revenue rose to 30.1 billion, covering quarter over quarter, driven by significant growth in the EPC or COD projects development, and DSA segments, viewed by project completion and increased demand for development services. Our revenue declined 11% year-to-year, primarily due to the reduced RTP sales in Europe.

Speaker Change #102: Was it specifically in interconnection delay or what was the specific bottleneck, our parameter or event that triggered the write offs.

Yumin Liu: I think the write-off comes mostly from. By the way, it's a norm for any development company. When we have failed projects, then we have to have the write-offs on the crude TNAs or the capitalized costs on the projects. But those 2 million dollars specifically are connecting to the interconnection non-approval or challenges we are seeing. Just as I mentioned, for example, in Spain, for example, in US. The interconnection approvals got delayed and delayed. So for some cases, some deals will have to be written off as of those interconnection challenges. Okay, got it.

Speaker Change #103: Thank the write off comps mostly from.

Speaker Change #104: By the way is a norm for any development company. When we have slave projects then we have to lap the write offs.

Speaker Change #104: Crude gn.

Speaker Change #104: Dnase R&D capitalized cost on the projects.

Ke Chen: Despite these challenges, strong performance in COD and DSA highlights the company's strategic focus and operational resilience. Ghost Profit was 9.4-meaning compared to 4.3-meaning in Q1-24, and 12.7-meaning in Q2-2023. Goes margin was 31.2% compared to 29.6% in Q124, and 37.4% in Q2203. The year-to-year decrease in Goes margin was primarily due to shift in the revenue mix towards saving sales. Operating expenses were 6.4 million down from 7.6 million in Q2203, but higher than the 5.5 million in Q124, primarily due to the around 2 million right off related to cancel projects.

Speaker Change #104: But those $2 million, specifically are connecting to the interconnection none approval our challenges we are seeing.

Speaker Change #104: Okay, just as I mentioned for example in Spain for example in U S.

Speaker Change #104: The interconnection approvals got delayed and delayed.

Speaker Change #104: So for some cases, some deals will have to be written off as of the those interconnection challenges.

Okay got it.

Donovan Schafer: And then, if I can squeeze one more in, in the past, you've talked about monetizing 400 to 500 megawatts this year. I noticed in the letter to shareholders, it says that the priority, let's see, is... Let's see. You know, it says your priorities include advancing early stage projects, securing additional DSA partnerships in Europe and US, and, you know, maximizing value of development pipeline. Does that include monetizing advanced stage? It just seems like advanced stage projects. You've got a lot of megawatts in the advanced stage category. Do you plan on monetizing those? Is that part of, do you still see 400 to 500 monetization of advanced stage?

Speaker Change #104: And then if I can squeeze one more in.

Speaker Change #106: The past you've talked about monetizing 400 to 500 megawatts.

Speaker Change #106: This year.

Speaker Change #107: Is that.

Speaker Change #107: I noticed in the letter to shareholders and says.

Speaker Change #108: The priority, let's see.

Speaker Change #108: Okay.

Speaker Change #108: Let's see.

Speaker Change #109: It says that your priorities include advancing early stage projects, securing additional DSA partnerships in Europe and U S.

Ke Chen: Let income attribute to Emeren Group LTV's common shareholder was 0.4 million, a 6.3 million rebound from net loss of 5.9 million in Q124. Throw lower than 8.3 million a year ago. This was impacted by around 2 million right off related to cancel projects, and I'll realize before exchange loss of 0.8 million. Diluted net income attribute to Emeren Group LTV's common shareholder for ADS was 1 cent compared to diluted net loss of 1.6 million in Q124, and diluted net income of 14 cents in Q2203.

Speaker Change #108: And.

Yes, maximizing value of development pipeline.

Speaker Change #108: Hi.

Speaker Change #110: Does that include monetizing advanced stage. It just seems like advanced stage projects, you've got a lot of megawatts in the advanced stage category.

Speaker Change #111: Are you do you plan on monetizing those is that part of it do you still see 400 to 500 monetization of advanced stage.

Yumin Liu: Yes, absolutely true. And is it a priority?

Speaker Change #112: Yes, absolutely true.

Yumin Liu: Wait, do not really mention that because monetizing or setting the other stage pipeline is in our, we consider as normal business, okay. We have been doing so in the past years, but the DSA is new. So we mentioned the DSA more, and especially monetizing or the ones in the early stage portfolio is also the focus, eternally speaking, in the last almost 12 months. Okay, okay, that's helpful.

Speaker Change #111: Rudy.

Speaker Change #113: <unk> did not really much on that because monetizing or selling the otherwise stays pipeline is in are we consider as normal business. We have been doing so in the past years, but the TSA is new.

Ke Chen: Cash-usling operating activity was 2.2 million. Cash-usling investing activity was 3.8 million, and cash-covid financing activity was 1.5 million. Moving to balance, cash-equivalent at the end of Q2204 were 50.8 million compared to 55.1 million in Q124. That asset value for Emeren Group LTV is approximately 6 per ADS. Our debt-to-ass ratio at the end of Q2204 was 10.2 per cent compared to 9.9 per cent at the end of Q124.

Speaker Change #114: So we mentioned the PSA more a vastly monetizing or the ones in the early stage portfolio is also a focus each hurting speaking into lost almost 12 months.

Speaker Change #115: Okay. Okay. That's helpful. All right I'll take the rest of my questions offline. Thanks, guys.

Donovan Schafer: All right, I'll take the rest of my questions offline. Thank you, guys. Thank you, Donald.

Donovan Schafer: Thank you Donovan.

Operator: Thank you.

Operator: And, as a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced.

Thank you and as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced.

Graham Price: Our next question comes from Graham Price with Raymond James. He may proceed. Graham, your line is now open.

Graham Price: Our next question comes from Graham price with Raymond James You May proceed.

Ke Chen: Shifting gears to our outlook, we anticipate that our Q3 revenue will fall within the range of 25 to 28 million, which goes margin between 35 and 38 per cent. For the full year 2024, we reaffirm our expectation for revenue range from 150 to 160 million, and for gross margin of approximately 30 per cent. Additionally, we reaffirm our expectation for net income in 24 to be around 22 million. Taking into account the impact of foreign change and respect earnings per ADS to be approximately 43 cents.

Speaker Change #116: Graham Your line is now open.

Graham Price: Hey, guys, thanks. I was the first questioner, so you already got to mind. Thanks, though.

Graham Price: Hey, guys. Thanks.

Graham Price: I was the first questionnaire. So so you already got to mind. Thanks Deb.

Operator: Oh, thank you, Graham. Thank you.

Speaker Change #117: Well, thank you Graham.

Operator: And I'm not showing any further questions at this time.

Speaker Change #118: And I'm not showing any further questions.

Yumin Liu: I'd like to turn the conference back to Mr. Lou for any closing remarks. Thank you, operator. The solar industry is experiencing strong momentum due to the global commitment to renewable energy. This shift towards clean energy sources positions solar and battery storage at the key part of the future energy next. The growing demand for solar power to support AI and blockchain operations is particularly exciting, as these technologies require substantial energy, and solar plus battery storage offers a scalable, cost effective solution. In conclusion, the future of solar energy is promising, and we are strategically positioned to capitalize on the accelerating adoption of solar and battery storage technology worldwide with our expertise, industry partnerships, and strong financial foundation.

Speaker Change #118: At this time I'd like to turn the conference back to Mr. Lu for any closing remarks.

Ke Chen: Diluted net income attributed to Emeren Group Ltd.'s common shareholder for ADS was $0.1, million, compared to diluted net loss of $0.11 in Q1 2024, and diluted net income of $0.14 in Q2 2023.

Ke Chen: Cash used in operating activity was $2.2 million.

Yumin Liu: This transaction comprises a vast portfolio totaling 394 micrograms, demonstrating the growth of our best strategy, where we now have a total of 1.7 gigawatt batch projects in the DIC structure.

Amit Dayal: Wainwright.

Ke Chen: Cash used in investing activity was $3.8 million, and cash provided by financing activity was, $1.5 million.

Yumin Liu: In Q2, we signed a contract to sell a 42 megawatt RTP solar project portfolio in Spain to CVE Espana, a subsidiary of French independent pop producer CVE. Developed by Emeren since 2021, this diverse portfolio is comprised of eight greenfield projects, ranging from five to six megawatts. Together, these eight projects will generate approximately 92.8 gigawatt hour per year of energy, serving around 28,000 households in the region, the awarded carbon emissions will amount to about 20,000 tons of carbon dioxide per year.

Mr. Lu: Thank you operator, the solar industry is experiencing strong momentum due to the global commitment to renewable energy.

Ke Chen: Moving to balance, cash and cash equivalent at the end of Q2 2024 were $50.8 million compared, to $55.1 million in Q1 2024.

Yumin Liu: Additionally, in Q2, we completed the delivery of a 13 MW COD project in Hungary, further solidifying our presence in the country.

Ke Chen: That asset value, or NAV, is possibly $6 per ADS.

Ke Chen: Our debt-to-asset ratio at the end of Q2 2024 was 10.2%, compared to 9.99% at the end of, Q1 2024.

Ke Chen: With that, let's open up the call for any questions.

Ke Chen: Shifting gears to our outlook, we anticipate that our Q3 revenue will fall within the range, of $25 to $28 million, with gross margin between 35 and 38%.

Ke Chen: For the full year 2024, we reaffirm our expectation for revenue range from $150 to $160 million, and for gross margin of approximately 30%. Additionally, we reaffirm our expectation for net income in 2024 to be around $22 million. Taking into account the impact of foreign exchange and we expect earnings per ADS to, be possibly $0.43. Operating profit is expected to grow in line with revenue, with a continued focus on cost, management and efficiency.

Ke Chen: Our full year net income will be affected by the early write-offs and foreign exchange, losses.

Ke Chen: We remain confident in delivering solid financial performance for the year. Additionally, we reaffirm our expectation for 2024 IPP revenue to be between $24 and, $26 million, with a gross margin of approximately 50%.

Yumin Liu: This accomplishment builds on our December 2023 sale of a 53.6 megawatt solar portfolio in Hungary to Cornhusband Douglas Renewables.

Amit Dayal: You may proceed.

Ke Chen: We expect GSA revenue to be around $20 million in the second half of 2024.

Yumin Liu: These six projects set to power approximately 9,500 households reinforce our commitment to providing sustainable energy solutions across Europe.

Amit Dayal: Thank you, good afternoon everyone.

This shift towards clean energy sources persistence solar and battery storage as a key part of the future energy mix.

Yumin Liu: Furthermore, our IPPSs exhibited strong growth and profitability, contributing approximately 30% of our total revenue for the quarter, we continued to optimize the operation of our solar farms, including Branston in the UK.

Amit Dayal: So Yumin, with respect to the guidance for the remainder of the year, You're saying you could potentially do $28 million in net income on roughly, say, $100 to $120 million in sales?

Yumin Liu: The IPP segment is a crucial component of our business model, providing a reliable source of stable, unpredictable cash, IPP revenue is balanced between Europe and China with a modest presence in the U.S. In Europe, we have 67 megawatt IPP assets generating recurring revenue, or IPP assets in China, the majority of which are located in the five coastal provinces with variable power prices, strong economies and robust regulatory environments are being fortified with the addition of battery storage projects.

Amit Dayal: I'm just trying to get a sense of, you know, what's driving this significant level of profitability for the revenues, that you are expecting to recognize in the second half?

Operator: Operator, please go ahead.

Yumin Liu: As of the end of Q2 2024, our battery storage portfolio in China comprised 26 megawatt hours, all integrated into a virtual power plant, or YPP platform, owned and operated by Huanong Power International, one of China's largest IPP operators.

Amit Dayal: I think the, I will say three reasons, coming to our conference.

Operator: Thank you.

Amit Dayal: My question is more on margins.

Yumin Liu: One is, as I mentioned, that we have worked on a bunch of expected closings, starting over two, three months ago, and we do expect to close them in the second half.

Operator: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced.

Yumin Liu: Do you feel that the price you will receive for this asset, who will support these levels of margin expectations that you have for the second half?

Yumin Liu: The second is the significant part of the revenue may come or will come from the COD sales.

Operator: To withdraw your question, please press star 11 again.

Yumin Liu: And those COD are either reached or are to be reached within Q3.

Operator: One moment for questions.

Yumin Liu: So the COD assets are pretty valuable and a hot spot to be chased upon by buyers.

Operator: Our first question comes from Graham Price with Raymond James.

Yumin Liu: And as I mentioned also, that we even have one COD buyer visiting our site today.

Yumin Liu: Looking ahead of the remainder of 2024 and beyond, we are well positioned in many of the worst, What is growing in the solar market?

Yumin Liu: Yes.

Graham Price: You may proceed.

Yumin Liu: So those are all inclusive basis, and we are so confident those will be done.

Yumin Liu: These markets are supported by rising clean energy demand.

Yumin Liu: The COD margin is normally lower, but in general, our business model on the NTP or RTP sale plus DSA provide a very healthy margin, and including our IPP assets, those are also high margin deals.

Graham Price: Then, for my follow-up, I guess kind of a two-parter on the DSA sales.

Graham Price: Hi.

Speaker Change #120: Growing demand for solar power to support AI and blockchain operations is particularly exciting.

Yumin Liu: And definitely, we have all those contracts, including DSAs, under the negotiation.

Yumin Liu: Favourable Government Policies and Advancing Technology.

Yumin Liu: Amit, again, we talked about CLD cell, but the margin, our main focus will still be on the RTP, NTP cell, both in Europe and the US, so margin contribution will also come from our strengths of NTP, RTP cell plus DSA and IPP, which Yumin just mentioned.

Graham Price: First one, just looking at the second half forecast of $20 million.

Graham Price: Good afternoon, and thanks for taking the questions.

Yumin Liu: We believe we can close.

Yumin Liu: Our priorities include advancing early stage projects, securing additional DSA partnerships in Europe and the U.S., and optimizing strategy, to maximize the value of our development pipeline.

Ke Chen: So we're confident about margin in the second half.

Graham Price: I was wondering what the quarterly cadence is there.

Graham Price: First one, just on the early stage pipeline, looks like Spain was revised down by about 1.3 gigawatts versus Q1.

Ke Chen: Operating profit is expected to grow in 9 with revenue, with a continuous focus on cost management and efficiency. While full-year net income will be affected by the early write-offs and foreign change losses, we remain confident in the nearer solid financial performance for the year. Additionally, we reaffirm our expectation for 10.24 IPP revenue to be between 24 and 26 million, which goes margin of approximately 50 per cent. We expect GSA to be around 20, meaning in the second half of 2024.

Yumin Liu: With that, let me turn the call over to our CFO, Ke Chen, to discuss our financial performance and guidance.

Ke Chen: Thank you for that.

Graham Price: And then, looking at the contracted versus negotiated, it looks like you have got 2 gigawatts in kind of each bucket.

Operator: With that, let's open up the call for any questions.

Amit Dayal: You know, 30% gross margins or higher or lower?

Graham Price: Just wondering what the reason was for that.

Ke Chen: Yeah.

Amit Dayal: And, you know, related to that again, you know, is any of this... A dependent on, you know, interest rates going lower, any of these deals in the second half, you know, our folks may be waiting to, you know, pencil these deals once they have clarity on where interest rates will head in the next few months, very good question and very good point.

Graham Price: But it looks like contracted is for $60 million versus negotiated, $100 million.

Operator: Operator, please go ahead.

Yumin Liu: Can you give us a sense of what kind of gross margins we should expect from DSA revenues?

Yumin Liu: Okay, good question.

Ke Chen: Thank you, Yumin, and thanks everyone again for joining us on the call today. Our revenue rose to $30.1 million, doubling quarter over quarter, driven by significant growth in the EPC for COD projects development and DSA segment, fueled by project completion and increased demand for development servers.

Yumin Liu: I really hope that the buyers will pay a better price with a better interest rate or lower interest rate environment, and we believe that should be the case.

Graham Price: So, I was wondering if those that are still in negotiation are a bit more involved or later stage projects.

Operator: Thank you.

Yumin Liu: I could not release this margin number, but it is absolutely a very good model.

Yumin Liu: You know, we have been facing some challenges in the approval process from the government in Spain, especially in some regions we have activities. And balancing the risk and award, the company decided to slow down or even cancel projects in some regions.

Ke Chen: Our revenue declined 11% year-over-year, primarily due to the reduced RTP sales in Europe.

Amit Dayal: Okay, thank you.

Operator: As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced.

Yumin Liu: That is the reason we lowered our early stage pipeline in Spain. Literally, we canceled those projects.

Graham Price: Just wondering why the difference in size there.

Ke Chen: Despite these challenges, strong performance in COD and DSA highlights the company's strategic focus and operational resilience.

Amit Dayal: This last one for me with respect to these DSA revenues, looks like you're getting good traction on that front.

Operator: To withdraw your question, please press star 1 1 again.

Graham Price: The first one, just on the early stage pipeline.

Yumin Liu: Literally speaking, in our company, I say there are three keywords, solar, battery storage, and DSP.

Graham Price: Got it.

Speaker Change #120: As these technologies require substantial energy and solar plus.

Yumin Liu: Yes, Grant.

Ke Chen: Gross profit was $9.4 million compared to $4.3 million in Q1 2024, and 12.7 million in Q2 2023. Gold's margin was 31.2% compared to 29.6% in Q1 2024, and 37.4% in Q2 2023.

Amit Dayal: Are these DSA revenues...

Operator: One moment for a question.

Graham Price: Looks like Spain was revised down by about 1.3 gigawatts versus Q1.

Yumin Liu: It is very important company operation, but the unfortunately, I don't think I can release the margin number and by the way, as we are doing BSA in multiple countries, also on both PV and storage projects, so the margin varies really pretty big.

Graham Price: Understood.

Ke Chen: The year-over-year decrease in gross margin was primarily due to a shift in the revenue mix towards sales-to-sales.

Graham Price: Our first question comes from Graham Price with Raymond James.

Amit Dayal: Understood.

Ke Chen: Operating expenses were $6.4 million, down from $7.6 million in Q2 2023, but higher than the $5.5 million in Q1 2023, primarily due to the around two-minute write-off related to the cancer project.

Graham Price: You may proceed.

Amit Dayal: So that's all I have.

Ke Chen: That income attributed to Emeren Group Ltd.'s common shareholder was $0.4 million, a 6.3 million rebound from a net loss of 5.9 million in Q1 2024, lower than 8.3 million a year. This was impacted by around 2 million write-off related to cancer projects, unrealized foreign exchange loss of 0.8 million, diluted net income attributed to Emeren Group Ltd.'s common shareholder for ADS was $0.01, compared to diluted net loss of $0.11 in Q1 2024 and diluted net income of $0.14 in Q2 2023.

Graham Price: Hi, good afternoon and thanks for taking the questions.

Ke Chen: Cash using operating activity was $2.2 million.

Graham Price: Just wondering what the reason was for that.

Amit Dayal: I will take my other questions up.

Ke Chen: Cash used in investing activity was $3.8 million, and cash provided by financing activity was $1.5 million.

Speaker Change #120: Battery storage offers a scalable cost effective solution.

Yumin Liu: Okay, that's a good question.

Amit Dayal: Thank you very much.

Ke Chen: Moving to balance, cash and cash equivalent at end of Q2 2024, were 50.8 million compared to 55.1 million in Q1 2024.

Yumin Liu: Let me answer the first part.

Yumin Liu: You know, we are facing, we have been facing some challenges in the approval process from the government in Spain, especially in some regions, we have activities and, Balancing the Risk and Award, the company decided to slow down or even cancel projects in some region.

Amit Dayal: Thank you.

Ke Chen: That as a value of NAV is possibly 6 per ADS.

Yumin Liu: Okay, that is the reason we lowered our early stage pipeline in Spain.

Ke Chen: Our dare-to-ask ratio at the end of Q2 2024 was 10.

Yumin Liu: Literally, we canceled those projects, got it understood.

Ke Chen: 2% compared to 9.99% at end of Q1 2020.

Graham Price: Then for my follow-up, I guess kind of a two-parter on the DSA sales.

Donovan Schafer: Our next question comes from Donovan Schafer with Northland Capital Markets, you may proceed.

Ke Chen: Shifting gears to our Outlook.

Graham Price: First one, just looking at the second half forecast of $20 million.

Donovan Schafer: My first question is just for the 1.7 gigawatts of DSA contracts for BESS in Italy that you have.

Speaker Change #120: In conclusion, the future of solar energy is promising and we are strategically positioned to capitalize on the accelerating adoption of solar and battery storage technology worldwide with.

Ke Chen: We anticipate that our Q3 revenue will fall within the range of $25 million to $28 million with gross margin between $35 million and $38 million.

Graham Price: I was wondering what the quarterly cadence is there.

Donovan Schafer: Is that a subset within the 2 gigawatts of contracted DSA that you have?

Ke Chen: For the full year 2024, we reaffirm our expectation for revenue range from $150 to $160 million, and for gross margin of approximately 30%.

Yumin Liu: 85-90% of the 2 gigawatts you have time contracted for DSA, 85% of that is BESS in Italy, or are these like different buckets?

Yumin Liu: And you may want to answer the second part.

Ke Chen: Additionally, we reaffirmed our expectation for net income in 2024 to be around $22 million, taking into account the impact of foreign exchange and we expect earnings per ADS to be a possibility for this reason.

Yumin Liu: The first part, we do expect $20 million revenue coming out of DSA in the second half. And I would say more than 50% has already contracted.

Ke Chen: Operating Profit is back to grow in nine with, Revenue with a continued focus on cost management and efficiency, while full-year income will be affected by the early write-offs and foreign exchange losses.

Yumin Liu: And again, the second half, less than 50%.

Ke Chen: We remain confident in Geneva's solid financial performance for the year.

Donovan Schafer: You are right.

Yumin Liu: It's under negotiation.

Ke Chen: Additionally, we affirm our expectation for 2024 IPP revenue to be between $24 million and $26 million, with a gross margin of approximately 50 percent.

Yumin Liu: In fact, it is the case.

Yumin Liu: In terms of quarter over quarter, I think we could expect evenly distributed in the next two quarters.

Ke Chen: We expect GSA revenue to be around $20 million in the second half of 2024.

Yumin Liu: Our DSA under BAS projects, storage projects, represent over 80% of the whole DSA portfolio.

Yumin Liu: And I will answer you about the contract and the projected difference.

Yumin Liu: Our existing DSAs mainly come from the Italy market.

Yumin Liu: Okay.

Yumin Liu: And now in the four months or the four, as I mentioned, six to eight months, we have over, two gigawatts of contracts or DSA contracts.

Yumin Liu: We target to close, and that is on global scale, both on solar and also on the storage, including four to five countries in Europe and plus the US.

Graham Price: And then looking at the contracted versus negotiated.

Donovan Schafer: Okay, got it, helpful, thank you.

Yumin Liu: That portfolio of two gigawatts also include not only early stage but also some middle or even more, advanced stages projects.

Graham Price: It looks like you've got two gigawatts in kind of each bucket, but it looks like contracted is for $60 million versus negotiated $100 million.

Donovan Schafer: And then...

Yumin Liu: That is why the DSA number will be a lot higher in some cases compared to the early stage ones.

Speaker Change #120: With our expertise industrial partnerships a strong financial foundation, we are the one thing towards our goal of becoming a leading global solar and battery storage company.

Graham Price: So I was wondering if those that are still in negotiation, or a bit more involved, or later stage projects.

Donovan Schafer: For, let's see, the write-off, can you clarify just what it was that triggered the write-off?

Graham Price: Got it.

Graham Price: Just wondering why the difference in size there.

Donovan Schafer: Was it specifically an interconnection delay or, you know, what was the specific bottleneck or parameter or event that triggered the write-off?

Graham Price: Okay.

Ke Chen: Yes, Grant, let me answer the first part.

Yumin Liu: I think the write off comes mostly from it's a it's by the way it's a norm for any development company.

Graham Price: Perfect.

Yumin Liu: We are the one focusing towards our goal of becoming a leading global solar and battery storage company. We are enthusiastic about the future and proud to be driving the transition to a more sustainable world.

Ke Chen: Yumin Liu will answer the second part.

Yumin Liu: When we have failed projects, then we have to have the write offs on the accrued DNAs or the capitalized costs on the project.

Graham Price: That's exactly what I was looking for.

Ke Chen: In terms of quarter over quarter, I think we could expect evenly distributed in the next two quarters.

Donovan Schafer: And then if I can squeeze one more in, you know, in the past you've talked about monetizing 400 to 500 megawatts, this year, is that, and I noticed in the letter to shareholders, it says, you know, that the priority, let's see, Let's see, it says your priorities include advancing early stage projects, securing additional DSA partnerships in Europe and the U.S. and, you know, maximizing value of development pipeline.

Ke Chen: The first part, we do expect $20 million revenue coming out of DSA in the second half, and I will say half, more than 50% has already contracted.

Yumin Liu: But those $2 million specifically are connecting to the interconnection, non-approval, or challenges we are seeing.

Graham Price: Thank you very much.

Yumin Liu: And I will answer you about the contract and the projected difference, are existing PSAs, mainly, comes from the Italy market.

Donovan Schafer: So it's not, does that include monetizing advanced stage?

Ke Chen: And again, the second half, less than 50%, is under negotiation.

Yumin Liu: Just as I mentioned, for example, in Spain, for example, in the U.S.

Graham Price: I'll jump back in the queue.

Yumin Liu: And now in the flooring months, or the flooring, as I mentioned, six to eight months, we have over two gigawatts of contracts, or DSA contracts.

Yumin Liu: The interconnection approvals got delayed and delayed.

Yumin Liu: Thank you, Graham.

Yumin Liu: We target to close, and that is on global scale, both on solar and also on the storage, four to five countries in Europe and plus the U.S.

Yumin Liu: So for some cases, some deals will have to be written off as of the those interconnection challenges.

Yumin Liu: Thank you.

Yumin Liu: That portfolio of two gigawatts also include not only early-stage, but also some middle or even more advanced stages projects.

Donovan Schafer: Okay, got it.

Operator: Our next question comes from Philip Shen with Roth Capital Partners.

Yumin Liu: That is why the DSA number will be a lot higher, in some cases, compared to the early states.

Amit Dayal: Good afternoon, everyone.

Philip Shen: He may proceed.

Amit Dayal: So, Yumin, with respect to the guidance for the remainder of the year, You're saying you could potentially do 28 million, in net income on roughly, let's say, 100 to 120 million in sales.

Graham Price: That is okay.

Donovan Schafer: It just seems like advanced stage projects, you've got a lot of megawatts in the advanced stage category.

Philip Shen: Hey, all.

Amit Dayal: I'm just trying to get a sense of, you know, what's driving this significant level of profitability for the revenues that you are expecting to recognize in the second half?

Graham Price: Perfect.

Donovan Schafer: Do you plan on monetizing those?

Operator: With that, let's open up the call for any questions. Operator, please go ahead. Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. One moment for questions.

Philip Shen: Thanks for the questions or taking the questions.

Yumin Liu: I think the, I would say three reasons, coming to our confidence level.

Speaker Change #120: We are enthusiastic about the future and proud to be driving the transition to a more sustainable world.

Graham Price: That's exactly what I was looking for.

Donovan Schafer: Is that part of it?

Philip Shen: Your implied Q4, revenue ramp is pretty high, about $84 million. And so I wanted to understand how confident you feel in that implied Q4 given you reiterated your full year revenue number.

Yumin Liu: One is, as I mentioned, that we have worked, on a bunch of expected closings starting over two, three months ago. And we do expect to close them in the second half.

Graham Price: Thank you very much.

Donovan Schafer: Do you still see 400 to 500 monetization of advanced stage?

Philip Shen: And so what's the confidence level, how much conservatism is baked in, and what are the risks that you miss the target?

Yumin Liu: The second is the significant part of the revenue, may come or will come from the COD sales.

Graham Price: I'll jump back in the queue.

Yumin Liu: Yes, absolutely true.

Philip Shen: Thanks.

Yumin Liu: And those COD are either reached, or are to be reached within Q3.

Graham Price: Thank you, Graham.

Yumin Liu: And is it a priority?

Yumin Liu: Thank you again for joining our call today.

Yumin Liu: Thank you, Phil.

Yumin Liu: So the COD assets are pretty valuable, and hotspot to be chased upon by buyers.

Yumin Liu: We did not really mention that because monetizing or selling the one stage pipeline is in our, we consider as normal business.

Yumin Liu: You may now disconnect.

Yumin Liu: It's a very, very good and challenging question, too, as the team, the teams across the board, has been working on those expected closings, literally speaking, as early as two, three months ago.

Yumin Liu: And as I mentioned also, that we even have one COD buyer, which is in our site today.

Yumin Liu: We have been doing so in the past years, but the DSA is new.

Operator: Thank you.

Yumin Liu: Even for the closings to be expected in Q4, or sometime may happen late Q3.

Yumin Liu: So those are all inclusive basis, and we are so confident those will be done.

Yumin Liu: So we mentioned the DSA more and especially monetizing or the ones in the early stage portfolio is also the focus literally speaking in the last almost 12 months.

Operator: This concludes the conference.

Yumin Liu: Thank you again for joining our call today.

Yumin Liu: Okay.

Yumin Liu: And definitely we have all those contracts, including DSAs under the negotiation, we believe we can close them.

Donovan Schafer: Okay, okay, that's helpful.

Yumin Liu: That is where our confidence comes from.

Speaker Change #121: Thank you again for joining our call today you may now disconnect.

Amit Dayal: Understood, and my question is more on margins.

Donovan Schafer: All right, I'll take the rest of my questions offline.

Yumin Liu: We are going to the direction, closing the deals with the ones, negotiation with the partners, starting from as early as two to three months ago. A bunch of deals to be closed are under the due diligence process. And a bunch of them are on an inclusive basis with some targeted buyers.

Amit Dayal: So you feel that the price you will receive for these assets, will support these levels of margin expectation that you have for the second half?

Operator: You may now disconnect. Thank you.

Donovan Schafer: Thanks, guys.

Yumin Liu: Another point to be noted, is we do have several COD, plant COD sales, while those projects are either already COD-ed in the past one or two months, or will be COD-ed within Q3. That is within the next 45 days.

Yumin Liu: Yes, although COD margin is normally lower, but in general, our business model on the NTP or RTP sale, plus DSA provide a very healthy margin and including our IPP assets, those are also high margin deals.

Operator: Thank you for your participation.

Donovan Schafer: Thank you, Donovan.

Yumin Liu: So we have the confidence that those COD assets are so valuable, and people are, even today, are visiting our COD sites.

Yumin Liu: Let me, again, we talk about COD sale, but the margin, our main focus will still be on the RTP, NTP sale, both in Europe and the US.

Operator: You may now disconnect.

Yumin Liu: Okay.

Yumin Liu: So margin contribution will also come from our strengths, of NTP, RTP sale plus DSA and IPP, which we just mentioned.

Yumin Liu: So we feel good by closing those deals.

Graham Price: Thank you.

Donovan Schafer: Thank you.

Yumin Liu: So we're confident about margin in the second half.

Operator: This concludes the conference. Thank you for your participation. You may now disconnect.

Yumin Liu: But definitely, as I see your question is challenging, that we do have one deal in Europe, it's a pretty high revenue expectation and margin the same.

Operator: And as a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced.

Amit Dayal: Understood, thank you for that.

Speaker Change #122: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.

Yumin Liu: So I expect some risk, but at this time we have very high confidence to close all those expected deals.

Amit Dayal: And related to that, again, is any of this dependent on interest rates going lower any of these deals in the second half?

Yumin Liu: Great.

Amit Dayal: Are folks maybe waiting to pencil these deals, once they have clarity on where interest rates will head in the next few months?

Philip Shen: In that deal in Europe that has high revenue, can you share the megawatts, maybe what country it's in?

Yumin Liu: Very good question and very good point.

Yumin Liu: We cannot go into that detail as those are on an inclusive basis with the buyers, targeted buyers, and I think by the time when we go into next earning call, we do plan to give more details on the closing targets.

Yumin Liu: I really hope that the buyers will pay a better price, with a better interest rate, a lower interest rate environment.

Yumin Liu: Okay, great.

Yumin Liu: And we believe that should be the case.

Philip Shen: Thanks Yumin.

Amit Dayal: Okay, thank you.

Philip Shen: Shifting over to your two million dollars of write-offs of cancelled projects, I think you guys had a similar amount on the last quarter Q1 and wanted to see if we should expect two million for this coming Q3, maybe even Q4.

Amit Dayal: This last one for me with respect to these DSA revenues, looks like you're getting good traction on that front.

Philip Shen: How much more is there and what are the root causes of these cancelled projects?

Amit Dayal: Are these DSA revenues, 30% gross margins, or higher or lower?

Philip Shen: Is it like you were saying earlier in terms of Spain, the government's changing some of the situation or is it more concentrated in the U.S. or Europe, my guess is.

Amit Dayal: Can you give us a sense of what kind of gross margin, we should expect from DSA revenues?

Philip Shen: So just give us some more color on what to expect ahead for the cancelled and write-off projects.

Yumin Liu: I could not release this margin number but it is absolutely a very good model.

Yumin Liu: Thanks.

Yumin Liu: Literally speaking, in our company, I say there are three keywords, solar, battery storage, and BSA.

Yumin Liu: Yes, well again the specific write-off related to U.S. Again, you probably know the challenge of interconnection, those kind of normal stuff happening in the U.S.

Yumin Liu: It is very important to the company operation but unfortunately I don't think I can release the margin number.

Yumin Liu: However, going forward, we are not expecting that, especially in the second half, we don't expect any big write-off going forward in the second half.

Yumin Liu: And by the way, as we are doing BSA in multiple countries, also on both PV and storage projects, so the margin varies really pretty big.

Graham Price: Our first question comes from Graham Price with Raymond James. You may proceed. Hi, good afternoon and thanks for taking the questions.

Yumin Liu: Got it, great.

Amit Dayal: Okay, understood.

Philip Shen: Thank you.

Amit Dayal: That's all I have.

Speaker Change #122: Okay.

Philip Shen: And then one last thing, you guys talked about having a hundred million of cash by the end of 2024 in the past and being positive operating cash flow for the remaining, of it, you know, for the year or at least certain quarters of this year.

Amit Dayal: I will take my other questions offline.

Philip Shen: What's your, I don't see, we don't see it in this material for this quarter.

Speaker Change #122: [music].

Amit Dayal: Thank you.

Philip Shen: Can you share if you think a hundred million is reasonable still by year end 24 or if not, what's the burn that you expect and how much cash do you think you could have by year end?

Yumin Liu: Thank you very much.

Philip Shen: Thanks.

Yumin Liu: Thank you.

Ke Chen: Yes, based on our forecast, again, we're confident about our outlook here.

Operator: Our next question comes

Ke Chen: As we mentioned, we mentioned part of this COD sales will happen in the fourth quarter, so we are still confident to collect all this cash by end of this year.

Donovan Schafer: from Donovan Schafer with Northland Capital Markets.

Ke Chen: And we also expect, you know, on a four-year basis, we should be operating cash flow positively.

Donovan Schafer: You may proceed.

Speaker Change #122: Okay.

Philip Shen: Great, appreciate that, Ke.

Donovan Schafer: Hey, guys.

Philip Shen: Okay, I'll pass it on.

Speaker Change #122: Okay.

Yumin Liu: The first one just on the early stage pipeline looks like Spain was revised down by about 1.3 gigawatts versus Q1, just wondering what the reason was for that. Okay, that's a good question. We have been facing some challenges in the pool process from the government in Spain. Especially in some reasons we have activities and balancing the risk and award. The company decided to slow down or even cancel projects in some regions. Okay, that is the reason we lowered our early stage pipeline in Spain. We truly, we canceled those projects. Got it, understood.

Donovan Schafer: My first question is just for the 1.7 gigawatts of DSA contracts for BSS in Italy, that you have.

Philip Shen: Thank you, Phil.

Donovan Schafer: Is that a subset within the two gigawatts of contracted DSA that you have?

Speaker Change #122: Okay.

Yumin Liu: Thank you.

Donovan Schafer: So, is the implication that 85%, 90% of the two gigawatts you have contracted for DSA, that 85% of that is BESS in Italy or are these like different buckets?

Speaker Change #122: [music].

Yumin Liu: Thank you.

Yumin Liu: You are right.

Operator: Our next question comes from Amit Dayal

Yumin Liu: In fact, it is the case.

Amit Dayal: with HC Wainwright.

Yumin Liu: Our DSA under BAS projects, storage projects, represent over 80% of the whole DSA portfolio.

Amit Dayal: You may proceed.

Donovan Schafer: Okay.

Amit Dayal: Thank you.

Donovan Schafer: Got it.

Donovan Schafer: Helpful.

Donovan Schafer: Thank you.

Donovan Schafer: And then, for the write-off, can you clarify just what it was that triggered the write-off?

Yumin Liu: Was it specifically an interconnection delay or what was the specific bottleneck or parameter or event that triggered the write-off?

Speaker Change #122: Yes.

Yumin Liu: I think the write-off comes mostly from – by the way, it is a norm for any development company.

Speaker Change #122: [music].

Yumin Liu: When we have failed projects, then we have to have the write-offs on the accrued GNAs or the capitalized costs on the projects.

Yumin Liu: But those $2 million specifically are connecting to the interconnection non-approval or challenges we, are seeing.

Yumin Liu: Just as I mentioned, for example, in Spain, for example, in U.S., the interconnection approvals got delayed and delayed.

Yumin Liu: So, for some cases, some deals will have to be written off as of those interconnection challenges.

Donovan Schafer: Okay.

Donovan Schafer: Got it.

Donovan Schafer: And then, if I can squeeze one more in.

Donovan Schafer: In the past, you've talked about monetizing 400 to 500 megawatts this year.

Donovan Schafer: Is that – and I noticed in the letter to shareholders, it says that the priority – let's see – is Let's see.

Donovan Schafer: It says your priorities include advancing early stage projects, securing, additional DSA partnerships in Europe and US, and maximizing value of development pipeline.

Donovan Schafer: Does that include monetizing advanced stage?

Donovan Schafer: It just seems like advanced stage projects, you've got a lot of megawatts in the advanced stage category.

Donovan Schafer: Do you plan on monetizing those?

Yumin Liu: Is that part of – do you still see 400 to 500 monetization of advanced stage?

Yumin Liu: Yes, absolutely true.

Yumin Liu: And is it a priority?

Yumin Liu: We did not really mention that because monetizing or selling the advanced stage pipeline is in our, we consider as normal business.

Yumin Liu: We have been doing so in the past years, but the DSA is new.

Speaker Change #122: Okay.

Yumin Liu: So, we mentioned the DSA more, and especially monetizing or advancing the early stage portfolio, is also the focus, literally speaking, in the last almost 12 months.

Donovan Schafer: Okay.

Speaker Change #122: [music].

Donovan Schafer: Okay.

Donovan Schafer: That's helpful.

Donovan Schafer: All right.

Donovan Schafer: I'll take the rest of my questions offline.

Donovan Schafer: Thanks, guys.

Yumin Liu: Thank you, Donovan.

Yumin Liu: Thank you.

Operator: And as a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced.

Operator: Our next question comes from Graham Price with Raymond James.

Graham Price: He may proceed.

Graham Price: Graham, your line is now open.

Graham Price: Hey, guys.

Graham Price: Thanks.

Graham Price: I was the first questioner, so you already got to mine.

Graham Price: Thanks, though.

Graham Price: Oh, thank you, Graham.

Graham Price: Thank you.

Operator: And I'm not showing any further questions at this time.

Operator: I'd like to turn

Yumin Liu: the conference back to Mr. Liu for any closing remarks.

Yumin Liu: Thank you, operator.

Yumin Liu: The solar industry is experiencing strong momentum due to the global, commitment to renewable energy. This shift towards clean energy sources positions solar and battery storage as a key part of the future energy mix.

Yumin Liu: The growing demand for solar power to support AI and blockchain operations is particularly exciting, as this technology requires substantial energy, and solar plus battery storage offers a scalable, cost-effective solution.

Yumin Liu: In conclusion, the future of solar energy is promising, and we are strategically positioned to capitalize on the accelerating adoption of solar and battery storage technology worldwide.

Speaker Change #122: Phil.

Yumin Liu: With our expertise, industry partnerships, a strong financial foundation, we are advancing towards our goal of becoming a leading global solar and battery storage company.

Yumin Liu: Then for my follow-up, I guess kind of a two-parter on the DSA sales. First one, just looking at the second half forecast of 20 million. I was wondering what the quarterly cadence is there. And then looking at the contracted versus negotiated. It looks like you've got two gigawatts and kind of each bucket. But it looks like contracted is for $60 million versus negotiated 100 million. So I was wondering if those that are still in negotiation or a bit more involved or later stage projects.

Speaker Change #122:

Yumin Liu: We are enthusiastic about the future and proud to be driving the transition to a more sustainable world.

Speaker Change #122: Yeah.

Speaker Change #122: [music].

Yumin Liu: Just wondering why the difference in size there. Yes, Grant. Let me also, the first part, let me also second part. The first part, we do expect 20 million around you coming out of the DSA in the second half. And I will say half more than 50% have already contracted. And again, the second half less than 50% is under negotiation. In terms of quarter to quarter, I think we could expect evenly distributed in the legs the two quarters.

Speaker Change #122: Okay.

Speaker Change #122: [music].

Speaker Change #122: Okay.

Speaker Change #122: [music].

Yumin Liu: And I will, you may also you about the contract and the projected difference. Okay. The our existing biases mainly comes from the Italy market, and now, in the four-in-month or the four-in-ice-and-mission six to eight-months, we have forward two gigawatts of contracts or DSA contracts. We target to close and that is on global scale. It's both on solar and also on the storage, including four to five countries in Europe and plus the US. That portfolio of two gigawatts also include not only early stage but also some middle or even more at one stage as projects.

Graham Price: That is why the DSA number will be a lot higher in some cases compared to the early stage ones. Got it. Okay. Perfect. That's exactly what I was looking for. Thank you very much. I'll jump back in the queue. Thank you, Graham. Thank you.

Philip Shen: Our next question comes from Philip Shen with Roth Capital Partners. He may proceed. Thanks for the questions. We're taking the questions. Your implied queue for revenue ramp is pretty high, about $84 million. So I want to understand how confident you feel in that implied queue for given you reiterated your full-year revenue number. And so what's the confidence level? How much conservatism is baked in? And what are the risks that you miss the target? Thanks. Thank you, Phil.

Yumin Liu: It's a very, very good and challenging question, too. As the team, the teams across the board, has been working on those expected closings, literally speaking, as already as two, three months ago, even for the closings to be expected in queue four, or sometime may happen the late queue straight. Okay. That is where our confidence come from. We are going to the direction closing the deals with at the once negotiation with the partners starting from as early as two to three months ago.

Yumin Liu: Bonds of deals to be closed are under the due diligence process. And bonds of them are under exclusive basis with some targeted buyers. Another point to be noted is we do have several COD planned COD sales, while those projects are either already COD in the past one or two months, or will be COD within queue three. That is within next 45 days. So we have the confidence that those COD assets are so valuable and people are even today are visiting our COD sites. Okay. So they feel good by closing those deals.

Yumin Liu: But definitely, as I see your question is challenging, that we do have one deal in Europe. It's a pretty high revenue expectation. I'm marching the same. So, I expect some risk, but at this time, we have very high confidence to close all those expected deals. We're on a crucial basis with the buyers, targeted buyers. And I think by the time when we go into next earnings call, we do plan to give more details on the closing targets. Okay, great. Thanks, Yumin.

Yumin Liu: Shifting over to your $2 million of write-offs of canceled projects. I think you guys had a similar amount on the last quarter, Q1. And wanted to see if we should expect 2 million for this coming Q3, maybe even Q4. How much more is there? And what are the root causes of these canceled projects? Is it like you were saying earlier in terms of Spain? You know, the government's changing some of the situation, or, you know, is it like, is it more concentrated in the US or Europe?

Yumin Liu: My guess is, so just give us some more color on what to expect ahead for the cancel of N, right off, right off project. Thanks. Yes, well, again, the specific right off is ready to US. Again, you probably know the challenge of interacting those kind of normal stuff happen US.

Yumin Liu: However, going forward, we are not expecting that especially the second half, we don't expect any big right off going forward in the second half. Got it. Great. Thank you. And then one last thing, you guys talked about having 100 million of cash by the end of 24 in the past. And being positive, operating cash flow for the remaining, you know, for the year or these certain quarters of this year, what's your, I don't see, we don't see it in this material for this quarter.

Yumin Liu: Can you share if you think 100 million is reasonable still by year and 24 or if not, what's the burn that you expect and how much cash do you think you could have by year and thanks. Yes, based on our forecast again, we're confident about our outlook here, as we mentioned, we mentioned part of this sale details will happen in the fourth quarter, so we're still confident to collect all this cash by end of this year. And also expect on a full year basis, we should be operating cash flow positive. Thank you. Great. Appreciate that. Okay. I'll pass it on. Thank you, Phil. Thank you.

Amit Dayal: Our next question comes from Amit Dial with H.C. Rainwright. You may proceed. Thank you. So you mean with respect to the guidance for the remainder of the year. You're saying you could potentially do 28 million in net income on roughly, say, 120 million in sales? I'm just trying to get a sense of, you know, what's driving this significant level of profitability for the revenues that you are expecting to recognize in the second half?

Amit Dayal: I think the, I would say three reasons coming to our confidence level. One is, as I mentioned, that we have worked on a bunch of expected closings, starting over two, three months ago. And we do expect to close them in a second half. The second is, the significant part of the revenue may come or will come from the COD sales and those COD are either rich or are to be rich within QStray.

Amit Dayal: So the COD assets are pretty valuable and hotspot to be changed upon by buyers. And as I mentioned also, that we even have one COD buyer budgeting our site today. So those are all inclusive basis and we are so confident those will be done. And definitely we have all those contracts, including PSAs, under the negotiation, WAPD, we can close them. And my question is more on margins, you know, so you feel that the price you will receive for these assets, we will support these levels of margin expectation that you have for the second half.

Amit Dayal: Yes, the, although COD margin is normally lower, but in general, our business model on the NTP or RTP sale, plus the essay, provide a very healthy margin. And including our IPP assets, those are also high margin views. I mean, again, we talk about COD sale, but the margin are main focuses still be on the RTP, NTP sale, both in Europe and the US. So margin contribution will also come from our strengths of NTP, RTP sale plus the essay and IPP, which you just mentioned.

Amit Dayal: So we're confident about margin in the second half. Thank you for that. And you know, related to that again, you know, is any of this dependent on, you know, interest rates going lower, any of these deals in the second half, you know, our folks may be waiting to, you know, pencil these deals once they have clarity on where interest rates will head in the next few months. Very good question and very good point. I really hope that the buyers will pay a better price with a better interest rate, a lower interest rate environment. And maybe that should be the case. Okay, thank you.

Yumin Liu: Just last one from me with respect to these DSA revenues looks like you're getting good traction on that front. Are these DSA revenues, you know, 30% margin, gross margins or higher lower, can you give us a sense of what kind of gross margin we should expect from DSA revenues. I could not release this margin number but it is absolutely a very good model.

Yumin Liu: Literally speaking in our company, I say there are three keywords, solar, battery storage and BSA. It is very important to the company operation but unfortunately I don't think I can release the margin number and by the way, as we are doing BSA in multiple countries also on both PV and storage projects so the margin varies really pretty quickly. Okay, understood.

Amit Dayal: So that's all I have to say. I really did my other questions. Thank you. Thank you very much. Thank you.

Donovan Schafer: Our next question comes from Donovan Schafer with more than capital markets he may proceed. Thank you guys. My first question is just for the 1.7 gigawatts of DSA contracts for BSA in Italy. Is that a subset within the two gigawatts of contracted DSA that you have? So the implications that you know 85 90% of the two gigawatts you have time contracted for DSA at the 85% of that is DESS in Italy or are these like different buckets? You are right. In fact it is the case. Our BSA under batch projects, storage projects represent over 80% of the whole DSA portfolio.

Yumin Liu: Okay, got it. That was all. Thank you.

Yumin Liu: And then for, let's see, the write-off, can you clarify just what it was that triggered the write-off? Was it specifically an interconnection delay or what was the specific bottleneck or parameter or event that triggered the write-off? I think the write-off comes mostly from, by the way, it's a norm for any development company. When we have failed projects, then we have to have the write-offs on the crude TNAs or the capitalized costs on the projects.

Yumin Liu: But those 2 million dollars specifically are connecting to the interconnection non-approval or challenges we are seeing. Just as I mentioned, for example, in Spain, for example, in US. The interconnection approvals got delayed and delayed. So for some cases, some deals will have to be written off as of those interconnection challenges. Okay, got it.

Donovan Schafer: And then, if I can squeeze one more in, in the past, you've talked about monetizing 400 to 500 megawatts this year. I noticed in the letter to shareholders, it says that the priority, let's see, is... Let's see. You know, it says, your priorities include advancing early stage projects, securing additional DSA partnerships in Europe and US, and, you know, maximizing value of development pipeline. Does that include monetizing advanced stage? It just seems like advanced stage projects.

Donovan Schafer: You've got a lot of megawatts in the advanced stage category. Do you plan on monetizing those? Is that part of, do you still see 400 to 500 monetization of advanced stage? Yes, absolutely true. And is it a priority?

Yumin Liu: Wait, do not really mention that because monetizing or setting the other stage pipeline is in our, we consider as normal business, okay. We have been doing so in the past years, but the DSA is new. So we mentioned the DSA more, and especially monetizing or the ones in the early stage portfolio is also the focus, eternally speaking in the last almost 12 months. Okay, okay, that's helpful.

Donovan Schafer: All right, I'll take the rest of my questions off line. Thank you guys. Thank you, Donald. Thank you.

Operator: And as a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced.

Graham Price: Our next question comes from Graham Price with Raymond James. He may proceed. Graham, your line is now open. Hey, guys, thanks. I was the first questioner, so you already got to mind. Thanks, though. Oh, thank you, Graham. Thank you.

Operator: And I'm not showing any further questions at this time.

Yumin Liu: This shift towards clean energy sources positions solar and battery storage at the key part of the future energy next. The growing demand for solar power to support AI and blockchain operations is particularly exciting, as these technologies require substantial energy and solar plus battery storage offers a scalable, cost effective solution.

Yumin Liu: In conclusion, the future of solar energy is promising and we are strategically positioned to capitalize on the accelerating adoption of solar and battery storage technology worldwide with our expertise industry partnerships and strong financial foundation. We are the one focusing towards our goal of becoming a leading global solar and battery storage company. We are enthusiastic about the future and proud to be driving the transition to a more sustainable world. Thank you again for joining our call today. You may now disconnect. Thank you.

Operator: This concludes the conference. Thank you for your participation. You may now disconnect.

Q2 2024 Emeren Group Ltd Earnings Call

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