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spk15: Hello, ladies and gentlemen. Thank you for standing by for Emarin Group Limited's fourth quarter and full year 2023 earnings conference call. Please note that we are recording today's conference call. I will now turn the call over to Gary Dvorak, Managing Director of the Blue Shirt Group. Please go ahead, Mr. Dvorak.
spk13: Thank you, Operator, and hello, everyone. Thank you for joining us today to discuss our fourth quarter and full year 2023 results. We released our shareholder letter after the market closed today and is available on our website at ir.emron.com. We also provided a supplemental presentation that's posted on our IR website that we will reference during our prepared remarks. On the call with 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 Emarin 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 Emarin Group's filings with the SEC. Please do not place undue reliance on these forward-looking statements, which reflect Emarin Group opinions only as of the date of this call. Emrin 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 conference call are in U.S. dollars. With that, let me now turn the call over to Yumin Du. Yumin, go ahead.
spk17: Thank you, Gary. Thank you, everyone, for joining our call today. I'll begin by providing an overview of our performance in Q4 and the full year of 2023, followed by the main achievements. I'll then talk about our project pipeline. After that, Kerr will deliver a comprehensive breakdown of our financial results for Q4 and our guidance for 2024. We closed 2023 with 104.7 million revenue. 22.2% gross margin, and a 9.3 million net loss. These results were below our full year guidance, primarily due to the delays in closing the sales of six projects in the US and Europe, which are now expected to be pushed up to 2024. Our Q4 results were further impacted by several one-time items, including a 4.1 million assessment the earn our revenue at our 75 megawatt of projects in poland as well as a 5 million of write-offs of project cancellations and bad debt reserves our projects continue to face delays due to a mix of rising interest rates affecting financing terms utility scale project delays stemming from transmission capacity challenges and regulatory uncertainty in the us and europe These challenges underscore the need for adaptability in our project financing strategies, the importance of early engagement with transmission and utility stakeholders, and close monitoring of regulatory development in the US and Europe. Despite these challenges, we are focused on executing our core solar project development strategy, diversifying our global footprint and advancing our position as a leading global renewable energy company. Turning to what we have achieved in Q4. First, we announced the sale of a 53.6 megawatt solar project portfolio in Hungary to Chronospen Douglas Renewables. The portfolio includes six projects at various development stages, with four already operational as of today. This venture contributes significantly to Hungary's photovoltaic capacity and aligns with Amer's mission to enhance solar energy infrastructure. Also, we acquired an 86 megawatt solar portfolio in Spain, comprised of 13 utility-scale projects. These projects are expected to significantly contribute to our energy production capacity, powering thousands of households and enhancing our storage capabilities. Further, we achieved a significant milestone by setting a 703 megawatt battery energy storage system, or BESS, project portfolio in Italy to Matrix Renewables under the Development Service Agreement, or DSA, which combined with the previous sale of the 260 megawatt in Q2 amounted to a total of 963 megawatt of batch projects, with the majority of the portfolio having an eight-hour duration under the DSA structure with Matrix. This achievement marked a substantial advance towards the agreed portfolio target of 1.5 gigawatt in the DSA partnership with Matrix. Finally, we expanded our energy storage portfolio in China. by acquiring a 10.8 megawatt-hour energy storage portfolio. This acquisition, comprised of six energy storage power stations in Zhejiang Province, enhances Ameren's position in the China energy storage market. We plan to generate returns through energy arbitrage and participation in virtual power plant scenarios, leveraging the facilities connected to Huaneng Power International's VPP platform. This strategic move aligns with our global storage expansion and the growing VPP market in China. We acknowledge the results over the past two years have been unsatisfactory, and we fully accept responsibility for not meeting investors' expectations. To address this, we have been working under a development service agreement structured to recognize revenue and receive payments from early stage projects in Italy in the past year and a half. This DSA model is now being implemented in more markets, including several countries in Europe and the US. This strategic move allows us to capitalize more effectively on our early stage project portfolio. Compared to the traditional model of the revenue recognition and payment collection at the notice to proceed or NTP stage. A DSA enables us to better manage our returns and risk throughout the development process, optimizing the timing of the project completions and bolster cash flow. We also implemented strategic cost control initiatives throughout all regions aimed at enhancing efficiency and optimizing resource allocation. These measures include workforce reduction, lead management policies, and halting certain greenfield developments to concentrate efforts and resources on advancing existing project portfolios. This shift aims to reduce overhead associated with new greenfield exploration and allocate personnel more effectively to projects with higher likelihood of success, improved profitability, and shorter development cycles. In addition, in February 2024, we announced that our board of directors approved an accelerated stock repurchase, ASR program, of up to 10 million. This accelerated stock repurchase program underscored board's commitment to our shareholders and confidence in the company's future growth. With our expertise in solar project development, strong industry network, a solid balance sheet, We are making significant progress towards becoming an industry leading global solar and storage developer. Our strategic focus remains on maintaining a lean cost structure and achieving sustainable profitability while monetizing our extensive advanced stage project pipeline. Looking forward to 2024 and beyond, we remain well positioned in the world's fast growing solar markets that are benefiting from increasing demand for clean energy and supportive government policies and technology trends. The solar industry is experiencing strong tailwinds, driven by the global commitment to renewable energy and sustainability. Governments and corporations worldwide are setting ambitious targets for reducing carbon emissions, which in turn fuels significant demand for solar energy solutions. One of the most exciting developments in the renewable energy sector is the booming demand for solar power to support artificial intelligence, AI operations. As AI technologies become increasingly integrated into our daily lives and business operations, the substantial energy needed to power these advanced systems is evident. Solar energy and battery storage with their scalability and decreasing cost profile are becoming a reliable source of power for these high-tech applications, further driving demand in the sector. Moreover, we are witnessing a surge in overall electricity and storage demand. The electrification of transportation, the proliferation of electric vehicles, and the increasing need for energy storage solutions are amplifying this demand. With strong demand for solar energy storage projects globally, We entered 2024 with around 3.1 gigawatt high-quality advanced stage project pipeline. We anticipate monetizing approximately 400 to 450 megawatts in 2024. Furthermore, we accumulated approximately five gigawatt independent storage project pipeline with four to eight hour duration in the planning, which equals to 20 to 40 gigawatt hours at end of 2023. We expect to begin accelerating monetization this portfolio in 2024. We expect 2024 full-year revenue to be in the range of $150 to $160 million. We expect gross margin to be approximately 30%, and net income to be at least $26 million, approximately $0.5 per ADS. We anticipate our 2024 IPP revenue to be between 24 to 26 million and the gross margin to be approximately 50%. We expect gross profit contributed by DSA globally to be at least 6 million. For the first half of 2024, we expect revenue to be in the range of 50 million to 55 million. We expect gross margin to be approximately 30%. Finally, We expect our operating cash flow to be positive throughout the full year of 2024 and cash balance to exceed $100 million at the end of 2024. Now, let me turn the call over to our CFO, Ke Chen, to discuss our financial performance and guidance.
spk14: Ke?
spk18: Thank you, Yiming. And thank everyone again for joining us on the call today. Our revenue of $44 million increased 71% year-over-year from Q4 2022, and 215% sequentially from Q3 2023. Revenue was lower than our guidance, primarily due to delays in closing the sales of six projects in the US and Europe, which are now expected to close in the first half of 2024. Ghost profit was $3.3 million, compared to $5.7 million in Q3 2023 and $6 million in Q4 2022. The gross margin was 7.6% compared to 40.8% in Q3 2023 and 23.3% in Q4 2022. The gross margin was lower than expected, primarily attributed to higher mix of EPC project revenue as well as the previously mentioned project delays. Operating expenses were $9.5 million, lower than $9.6 million in Q3 2023, and higher than $7.2 million in Q4 2022. Our Q4 operating expenses were impacted by $5 million of write-offs of projects, cancellations, and bad debt reserves, partially offset by saving from our cost reduction initiatives. That loss attributed to Emerald Group LTD's common shareholder was $8.1 million compared to lead loss of $9.4 million in Q3 2023 and lead loss of $1.7 million in Q4 2022. Diluted lead loss attributed to Amerigroup LTD's common shareholder per ADS was $0.15 compared to dilute lead loss $0.17 in Q3 2023 and dilute lead loss of $0.03 in Q4 2022. Turn to our cash flow. Cash provided by operating activity was $2.9 million. Cash provided by investing activity was $7 million. And the cash used in financing activity was $7.9 million. Cash and cash equivalent at end of Q4 2023 were $70.2 million compared to $59.2 million in Q3 2023. So we still have a very strong balance sheet. Net asset value, NAV, is approximately 5.91 per ADS. Our debt-to-asset ratio at the end of Q4 2023 was 9.4% compared to 9.9% in Q3 2023. In terms of our share buyback program, we purchased approximately 3.4 million ADS during the quarter and plan to continue to execute on the share buyback program. which has approximately 7.6 million remaining in the authorization. In addition, in February 2024, we announced that our board of directors approved an accelerated stock repurchase, ASR program, of up to 10 million, of which we have repurchased approximately 2.8 million ADS as of March 27, 2024. This underscores our commitment to shareholder value and our optimism about our future prospects. Moving to our guidance, we expect 2024 full-year revenue to be in the range of $150 million to $160 million. We expect gross margin to be approximately 30%, and the net income to be at least $26 million, or approximately $0.50 per ADS. We anticipate our 2024 IPP revenue to be between $24 to $26 million, and the gross margin to be approximately 50%. We also expect gross profit accounted by DSA globally to be at least $6 million. For the first half of 2024, we expect revenue to be in the range of $50 to $55 million. We expect gross margin to be approximately 30%. Finally, we expect our operating cash flow to be positive throughout the full year of 2024 and cash balance to exceed 100 million at the end of 2024. With that, let's open our call for any questions. Operator, please go ahead.
spk15: 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 11 again. One moment for questions.
spk09: Our first question comes from Philip Shen with Rothkamp KM.
spk15: You may proceed.
spk05: Hey, guys. Thanks for taking my question. Hey, I wanted to talk about the, you know, 2024 guidance You know, you guys missed last year, and you're making adjustments to hit your goals for this year. One of them is this development service agreement. Can you give us a little bit more color on how that works? I know you're trying to collect revenue and payments earlier, but what leverage do you have to allow that to happen? And can you just describe the structure versus what you guys had been doing before. So just give us a little bit of color on what you're doing differently. Thanks.
spk17: Okay, thank you, Phil. So very good question. DSA has been a form of structure in Italy market when we acquired the company called Ameren back to a year and a half ago. And we had in the structure of the Italian operation about seven to eight different DSAs And those DSAs partnership are allowing us to provide early stage project portfolios to the buyers based on development milestones. And the changes throughout the company is not only we execute continuously in Italy, those development milestones based on, development milestone based DSAs, for example, announced the almost a gigawatt of the DSA partnership matrix, But also, we are implementing same DSA strategy throughout the whole regions, including other countries in Europe and US. The whole operation or execution of DSA has three big benefits to the company. Number one, the DSA will allow us to recognize revenue for early stage projects based on milestones of so-called in our company structure we have tier zero to tier four based on the advancement of the tiers we will receive the milestone payments from the dsa partners those are non-refundable payments and we can recognize the revenue and profit immediately based on the achievements of the milestones and the second is that will balance our cash reserve as we will have received the cash based on the milestones So the cash situation will be significantly improved in the company. The third, we can also very well balance our risk profile as we are now sharing the development risks with the buyer or DSA partner. So although we are creating a very good VMA situation, many parties are interested in partnering with us under the DSA structure, but we do know that to get to the VMA situation, we are offering a very favorable price at the DSA structure compared to the final NTP sale. Okay, so that's... And also, by the way, one more point is we just guided that we will have minimum $6 million gross profit from the DSAs. That $6 million is under the current DSA structure. We have quite several DSA partnerships under negotiation. So that's why we say minimum $60 million will be foreseen from the DSAs in 2024.
spk05: Right, so you mean for you to get these benefits, that means your customer needs to get something as well. So I think I just heard you say that you charge them at a discount relative to what they would get at NTP, and so they don't have to pay as much by paying you guys earlier. Can you talk about what that discount is? Is it 5%, 15%, or greater? Thanks.
spk17: That's a very, very good question. From market to market, this discount will be different. But in general, the buyer or a DSA partner is benefiting from the DSA in two things. One is they are locking into the projects through the DSA. So they guaranteed they will have a portfolio they can work on at the NTP slash RTP stage. The second is they are also managing their risk profile while we are leveraging the risk profile with them together, but they are also based on the milestone payments, managing the risk profile. The third is talking about the discount in price. Instead of paying at the one-time lump sum at the final NTP sale, now they are paying in milestones. So they will get a discount. It's a pretty good discount as I see it. But more importantly, I would balance the two things together. One is the discount price, but also another one is a lock into a project portfolio. Especially in a seller's market, it's not easy to find quality projects in the market. And now the growth companies, especially the companies who are so eager to go into a market, they like those DSA structures so much.
spk05: Okay. So do you expect to make other DSA announcements in the coming quarters?
spk17: Yes, absolutely. In fact, last month just announced another, actually early this month, We just announced another partnership on the independent storage portfolio with Glimmont, one of the largest private investors in Italy.
spk05: And more to come. What's the magnitude of the typical DSA partnership that you can imagine? Are we talking about 100 megawatts? Are we talking about 500 megawatts or gigawatt level? Thanks.
spk17: It's always, we have a big target. For example, with Matrix, when we started DSA a little bit over a year ago, we were setting a target of 1.5 gigawatt of independent storage portfolio. And now we are reaching about 1 gigawatt. And so the team is confident that we'll put more than 500 megawatts into the matrix DSA structure in the next several months. And same thing with Glenmont. The target is a lot bigger than the ones we work on. and the team is working actively to close more deals under the DSA structure with Glamont in the next few weeks.
spk05: Right. So this should smooth out your revenue and cash generation over time. So that's good. Shifting gears to a new topic, FERC in the U.S. recently approved an order, 2023, which could have meaningful positive impacts to the U.S. pipeline, not just for you, but for U.S. pipelines in general, by weeding out a lot of projects that do not yet have site control, in addition to penalizing the RTOs if they don't complete studies on time and forcing the RTOs to group studies together. uh was wondering if you can comment on how you expect FERC order 2023 to impact your us pipeline could you lose some of your pipeline because you don't have site control or do you have site control on all all your uh pipeline assets and uh do you expect this to actually speed things up for you thanks this is a very good point that the uh
spk17: From our company, we embrace or we love this first rule for two reasons. One is not many companies slash developers have our healthy balance sheet. As we mentioned, we do have a strong balance sheet implementing our development strategy. The second is our company does have a very tight control on the tier system we are working on. We use a very tight controlled tier system to value the progress of our projects. And we implemented the tier systems throughout the whole regions in the US and Europe. And we do not count any deal without a site control, even under the tier zero. And tier zero is a typical pre or early stage deal, not really in our three gigawatts or the one stage yet. So we feel so good when we see this new policy coming up. And that will eliminate a bunch of unqualified competitors who can use that irrational philosophy to compete in the market. Now we see it's a good thing is coming up.
spk03: That's great. OK. Last one.
spk18: Phil, just want to add. When we list our pipeline in the U.S. Advanced Pipeline, almost 1.5 gigawatts, they're all Tier 1 above, so we have a very good pipeline here.
spk05: Very good to hear. Last question, and then I'll pass it on. AI and data centers are driving a lot of demand. You highlighted that in your prepared remarks. Can you share what percentage of your U.S. pipeline is going to serve, maybe in the form of PPA, you have a relationship with an AI or data center and market or customer? Thanks.
spk17: We put a strategy internally evaluating the data centers and data center spots and looking at the possibilities to building up or selecting sites for solar, especially storage assets around the data center need. I do not have a story to present at this time. But we are actively working on those very possible stories to support the AI operation in the future. Especially, we talk about the hybrid deals, which can provide the quality and reliable power supply to those AI operations. And that can become a big driver for our growth when we select new deals into our development pipeline.
spk04: Okay. Thank you both. I'll pass it on.
spk09: Thank you, Phil. Thank you.
spk15: Thank you. One moment for questions. Our next question comes from Donovan Schaefer with Northland Capital Markets. You may proceed.
spk07: Hey, guys. Thanks for taking the questions. So, first I want to ask for, you know, for the revenue range that you gave for the first half of 2024. Um, if we just, I want to talk just strictly about kind of the non IPP revenue. Uh, cause like we can kind of estimate IPP revenue and maybe, you know, back that out or something. So when we talk about the first half of 2024 revenue, and again, the non IPP part of that, how much of that is expected to come from the delayed projects that were supposed to happen, you know, be monetized in the second half of this year.
spk17: Okay, let me answer first and then pass to Ke for details. Number one is, as I mentioned, we have six projects delays for the closing from 23 to 24, and most of them will be pushed into first half, or maybe I'm looking at one deal may be pushed to the second half. But I would say the revenues in the first half, other than the IPP and the DSA, Those are considered DSA and IPP are consistent revenue basis instead of a pending on a certain one closing of the sale. But the other, I will say at least three or four closings expected, mostly will be in Q2 this year, are counted into this revenue.
spk18: Yeah, Donovan, about six to eight million is from delay of Q4, 10 to 23.
spk07: Okay. All right. That's helpful. And then another question is, are you guys still planning on filing a 10K for 2023? Okay. And what's the timing on that? Is it a deadline at the end of this month or given your small cap and you're converting from being a foreign filer to 10K? Okay. Do you have until the end of this month or is it until the end of April?
spk18: Right now is the end of the month.
spk07: No, end of April we're talking about. Yeah, which one is it? The end of April or the end of March is the deadline?
spk17: End of April is most likely as now we are the first time becoming the local fighter. So we need to work with the auditor and also work on all 10 countries we covered in the project development and operations. So the most likely will finish the fighting with the 10 K and 10 Q in, uh, in April.
spk07: Okay. Okay. That's helpful. Um, and then I want to ask about the $4.1 million revenue adjustment, the earn out adjustment on the 75 megawatt Poland projects. Um, you know, if I, I believe those projects are usually lower than, uh, then like, you know, the rule of thumb of like a dollar megawatt is probably more like 60 or maybe even maybe 60, 70, 80 cents a watt. But if we assume a dollar a watt, then, you know, then a $4.1 million amount, that becomes five percentage points, sort of a reduction in margin by straight up five percentage points. And, you know, if it's 60 cents a watt, that becomes like a nine percentage point reduction in gross margins. So I'm curious, you know, if you guys can talk maybe about what it is that, that caused that change. Like if I'm thinking about it the right way, why that revenue just, you know, why you didn't get that revenue, uh, and if there's a project you still would have taken on, uh, you know, or if, or if this makes them the economics where you would not necessarily want to do these projects otherwise.
spk17: The construction of the 75 megawatt projects are in the normal schedule. And in fact, over one-third of them has already reached COD. But this $4.1 million write-off is based on the ERNA structure, which was designed based on the last, especially last year's suddenly price surge in the market. And we are benefiting from the price difference from the traditional PPA market compared to the surged price merchant market. And we designed a structure we can share those additional revenue with the buyer. But the one thing that did not happen is that the surge did benefit the other merchant players, but our construction did not get too much sooner completion to enjoy such a to-be-recognized earn-out. That is why the construction, the finished projects, could not enjoy that much of the earn-out we booked, and now we have to write it off. You see, I don't know if you understand my explanation.
spk07: I think I understand, yeah. Okay, all right, that's great. Thank you, guys. Yeah, I'll take the rest of my questions offline. Thank you.
spk15: Thank you. One moment for questions. Our next question comes from Amit Dayal with HC Wainwright. You may proceed.
spk20: Thank you, Graf and everyone. So you mean, you know, with respect to some of the regulatory uncertainties you highlighted in your press release, you know, you may have faced in 2023 in the U.S. and Europe. Can you give any examples of, you know, what some of these challenges were and, you know, with respect to your outlook in 2024, you know, are these issues resolved? You know, how are you dealing with some of these challenges that may have been in place in 2023 from a project execution perspective?
spk17: Yes, some issues are resolved. Some issues are still pending. I can give you a couple of very typical examples. One is, as you can see, our press release, we closed a deal of 29 megawatts in Spain, setting for photosol back to last year. And we expect to receive the approval by the end of last year, but the approval did not come. And based on the current policy, at that time, we expect the deal will be closed in Q1 this year. But unfortunately, the government, just in Q1, announced a new policy which gives the administrative office a 14-month cycle to make approvals. So now we expect the deal will be closed any time from now till the end of the year, which is the end of the 14 months. That's why I mentioned earlier that one of the six deals we're supposed to close in 2023 will be most likely pushed into second half of this year. I mean this deal. That is the 29 megawatts closing in Spain. The second one is that in Hungary, after experiencing the long delays of the first projects, portfolio 53 megawatts as we announced earlier, we have another 52 megawatts in the sales process and after the government of Hungary issued a right of first refusal language by the local national asset management group. It's hard for us to secure any foreign buyers to buy this portfolio. So our solution is our local team is working with several local investors, which when we do this one, we don't need to have government approvals, although we have to go through the National Equity Asset Management or Asset Investment Corporation for the lawful right of first refusal situation, but the situation will be a lot straightforward. So although the process or the buyer's pool get limited, but our quality projects are really good in the market so people are still fighting to get those deals as even in the local market from the local buyers so those are the two typical examples and similar things happen in other other places that the in italy the uh same thing sim very similar thing the government and administrative approvals delays but the uh In general, I see that all the delays happened last year. We experienced that. We learned from it. We now try to manage that in a more timely to manage all those processes. That is why we feel so confident to present the numbers we present today for the 2024 guidance.
spk20: Got it. Thank you. Last question from me. With the balance sheet we have right now, $113 million in debt and $70 million in cash, what level of revenues on an annual basis with this type of balance sheet, what level of revenues can be generated with this balance sheet? know if you execute you know uh exceptionally well i know your guidance is for 150 to 160 but in a scenario where everything goes well for you you know how much revenues can the company potentially generate with this balance sheet yes yes i mean uh first of all let's look at our pipeline again we have three over three gigawatt advanced solar pipeline five gigawatt
spk18: The storage pipeline and we talking about the monetize Every year 400 to 500 megawatts a year. So that's our target for 2024 that generate 150 260 million Revenue going forward our pipeline actually our focus mentioned we're going to focus on monetize this pipeline and going forward this pipeline is maturing and and we should monetize them all year-over-year. So we do expect, again, 20% to 30% growth from here with this type of balance sheet.
spk17: Adding a couple points on here, Amit, is that we mentioned DSA. We also mentioned IPP. In the future, we will also make those two numbers apparent or transparent to all our investors. that as we said earlier, our IPP gross profit margin will be $24 to $26 million. And we expect our DSA contribution to the company will become more and more beyond $6 million, beyond $10 million. And after we implemented the DSA strategy globally, this number will become the similar backbone to the company as an IPP. The goal for our company is We try to use our limited cash, 70 or 100 million dollars, to build up enough IPP so to secure operating cash flow positive and full year profitability from the production revenue. And then DSA will be adding on top of it, plus our core business of the development and flip. And we see that we are getting into the very healthy cycle. at this time, starting from 2024.
spk20: So is this DSA MRN creation, or is this something that is happening across the industry now?
spk17: Yes and no. In fact, starting from four years ago when Kula and I joined the company, we did not have much cash in our reserve. So we started our DSA model, in the new market, especially in Europe. And now we have about two dozen different DSA models, DSA partners in Europe, and about two-thirds of them are the ones we lock into the projects. So that means we through the DSAs acquiring or lock into the project portfolios, and we are the buyer paying the milestones based on the milestones to the small developers. And one-third of those DSA partners, we go the other way. That is the one, as I mentioned, with Matrix, with Glenmont, and all those are the ones we are supplying projects to the buyer. So it is a pretty typical exercise in the market, especially in Europe. Okay, understood.
spk19: That's all I have, guys. I'll take my other questions offline. Thank you so much.
spk15: Thank you, Amit. Thank you. I'm not showing any further questions in the queue. I'd like to turn the conference back to Mr. Liu for any closing remarks.
spk17: Okay. Thank you, operator. In conclusion, the future of solar energy is extremely promising, and we are positioned to fully capitalize on the accelerating adoption of the solar technology across the globe. With our exceptional expertise in developing and operating solar projects, extensive network of industry partnerships, a strong financial position. We are making great strides towards our goal to become a top global renewable energy company. We are thrilled about the bright future of the solar energy and are excited to be at the forefront of this incredible transformation towards a more sustainable future. Thank you again for joining the call. You may now disconnect.
spk15: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. Thank you.
spk01: Thank you.
spk15: Hello, ladies and gentlemen. Thank you for standing by for Emarin Group Limited's fourth quarter and full year 2023 earnings conference call. Please note that we are recording today's conference call. I will now turn the call over to Gary Dvorak, managing director of the Blue Shirt Group. Please go ahead, Mr. Dvorak.
spk13: Thank you, operator, and hello, everyone. Thank you for joining us today to discuss our fourth quarter and full year 2023 results. We released our shareholder letter after the market closed today and is available on our website at ir.emron.com. We also provided a supplemental presentation that's posted on our IR website that we will reference during our prepared remarks. On the call with 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 Emarin 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 Emarin Group's filings with the SEC. Please do not place undue reliance on these forward-looking statements, which reflect Emarin Group opinions only as of the date of this call. Emrin 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 conference call are in U.S. dollars. With that, let me now turn the call over to Yumin Du. Yumin, go ahead.
spk17: Thank you, Gary. Thank you, everyone, for joining our call today. I'll begin by providing an overview of our performance in Q4 and the full year of 2023, followed by the main achievements. I'll then talk about our project pipeline. After that, Kerr will deliver a comprehensive breakdown of our financial results for Q4 and our guidance for 2024. We closed 2023 with 104.7 million revenue. 22.2% gross margin, and a 9.3 million net loss. These results were below our full year guidance, primarily due to the delays in closing the sales of six projects in the US and Europe, which are now expected to be pushed up to 2024. Our Q4 results were further impacted by several one-time items, including a 4.1 million assessment the earn our revenue at our 75 megawatt of projects in poland as well as a 5 million of write-offs of project cancellations and bad debt reserves our projects continue to face delays due to a mix of rising interest rates affecting financing terms utility scale project delays stemming from transmission capacity challenges and regulatory uncertainty in the us and europe These challenges underscore the need for adaptability in our project financing strategies, the importance of early engagement with transmission and utility stakeholders, and close monitoring of regulatory development in the US and Europe. Despite these challenges, we are focused on executing our core solar project development strategy, diversifying our global footprint and advancing our position as a leading global renewable energy company. Turning to what we have achieved in Q4. First, we announced the sale of a 53.6 megawatt solar project portfolio in Hungary to Chronospen Douglas Renewables. The portfolio includes six projects at various development stages, with four already operational as of today. This venture contributes significantly to Hungary's photovoltaic capacity and aligns with AMER's mission to enhance solar energy infrastructure. Also, we acquired an 86 megawatt solar portfolio in Spain, comprised of 13 utility-scale projects. These projects are expected to significantly contribute to our energy production capacity, powering thousands of households and enhancing our storage capabilities. Further, we achieved a significant milestone by setting a 703 megawatt battery energy storage system, or BESS, project portfolio in Italy to Matrix Renewables under the Development Service Agreement, or DSA, which combined with the previous sale of the 260 megawatt in Q2 amounted to a total of 963 megawatt of batch projects, which majority of the portfolio having an eight-hour duration under the DSA structure with Matrix. This achievement marked a substantial advance towards the agreed portfolio target of 1.5 gigawatt in the DSA partnership with Matrix. Finally, we expanded our energy storage portfolio in China. by acquiring a 10.8 megawatt-hour energy storage portfolio. This acquisition, comprised of six energy storage power stations in Zhejiang Province, enhances Ameren's position in the China energy storage market. We plan to generate returns through energy arbitrage and participation in virtual power plant scenarios, leveraging the facilities connected to Huaneng Power International's VPP platform. This strategic move aligns with our global storage expansion and the growing VPP market in China. We acknowledge the results over the past two years have been unsatisfactory, and we fully accept responsibility for not meeting investors' expectations. To address this, we have been working under a development service agreement structure to recognize revenue and receive payments from early stage projects in Italy in the past year and a half. This DSA model is now being implemented in more markets, including several countries in Europe and the US. This strategic move allows us to capitalize more effectively on our early stage project portfolio. Compared to the traditional model of the revenue recognition and payment collection at the notice to proceed or NTP stage. A DSA enables us to better manage our returns and risk throughout the development process, optimizing the timing of the project completions and bolster cash flow. We also implemented strategic cost control initiatives throughout all regions aimed at enhancing efficiency and optimizing resource allocation. These measures include workforce reduction, lead management policies, and halting certain greenfield developments to concentrate efforts and resources on advancing existing project portfolios. This shift aims to reduce overhead associated with new greenfield exploration and allocate personnel more effectively to projects with higher likelihood of success, improved profitability, and shorter development cycles. In addition, in February 2024, we announced that our board of directors approved an accelerated stock repurchase, ASR program, of up to 10 million. This accelerated stock repurchase program underscored board's commitment to our shareholders and confidence in the company's future growth. With our expertise in solar project development, strong industry network, a solid balance sheet, we are making significant progress towards becoming an industry leading global solar and storage developer. Our strategic focus remains on maintaining a lean cost structure and achieving sustainable profitability while monetizing our extensive advanced stage project pipeline. Looking forward to 2024 and beyond, we remain well positioned in the world's fast growing solar markets that are benefiting from increasing demand for clean energy and supportive government policies and technology trends. The solar industry is experiencing strong tailwinds, driven by the global commitment to renewable energy and sustainability. Governments and corporations worldwide are setting ambitious targets for reducing carbon emissions, which in turn fuels significant demand for solar energy solutions. One of the most exciting developments in the renewable energy sector is the booming demand for solar power to support artificial intelligence, AI operations. As AI technologies become increasingly integrated into our daily lives and business operations, the substantial energy needed to power these advanced systems is evident. Solar energy and battery storage with their scalability and decreasing cost profile are becoming a reliable source of power for these high-tech applications, further driving demand in the sector. Moreover, we are witnessing a surge in overall electricity and storage demand. The electrification of transportation, the proliferation of electric vehicles, and the increasing need for energy storage solutions are amplifying this demand. With strong demand for solar energy storage projects globally, We entered 2024 with around 3.1 gigawatt high quality at one stage project pipeline. We anticipate monetizing approximately 400 to 450 megawatts in 2024. Furthermore, we accumulated approximately five gigawatt independent storage project pipeline with four to eight hour duration in the planning, which equals to 20 to 40 gigawatt hours at end of 2023. We expect to begin accelerating monetization this portfolio in 2024. We expect 2024 full-year revenue to be in the range of $150 to $160 million. We expect gross margin to be approximately 30%, and net income to be at least $26 million, approximately $0.5 per ABS. We anticipate our 2024 IPP revenue to be between $24 to $26 million, and the gross margin to be approximately 50%. We expect gross profit contributed by DSA globally to be at least 6 million. For the first half of 2024, we expect revenue to be in the range of 50 million to 55 million. We expect gross margin to be approximately 30%. Finally, we expect our operating cash flow to be positive throughout the full year of 2024. and cash balance to exceed 100 million at end of 2024. Now, let me turn the call over to our CFO, Ke Chen, to discuss our financial performance and guidance. Ke.
spk18: Thank you, Yiming. And thank everyone again for joining us on the call today. Our revenue of 44 million increased 71% year-over-year from Q4 2022. and 215% sequentially from Q3 2023. Revenue was lower than our guidance, primarily due to delays in closing the sales of six projects in the US and Europe, which are now expected to close in the first half of 2024. Ghost profit was 3.3 million compared to 5.7 million in Q3 2023 and 6 million in Q4 2022. Growth margin was 7.6% compared to 40.8% in Q3 2023 and 23.3% in Q4 2022. The growth margin was lower than expected, primarily attributed to higher mix of EPC project revenue, as well as the previously mentioned project delays. Operating expenses were $9.5 million, lower than $9.6 million in Q3 2023, and higher than $7.2 million in Q4 2022. Our Q4 operating expenses were impacted by $5 million of write-offs or projects cancellations and bad debt reserves, partially offset by saving from our cost reduction initiatives. Lead loss attributed to Emerald Group LTD's common shareholder was $8.1 million, compared to lead loss of $9.4 million in Q3 2023 and lead loss of $1.7 million in Q4 2022. Diluted lead loss attributed to Amerigroup LTD's common shareholder per ADS was $0.15, compared to dilute lead loss $0.17 in Q3 2023 and dilute lead loss of $0.03 in Q4 2022. Turn to our cash flow. provided by operating activity was $2.9 million. Cash provided by investing activity was $7 million. And the cash used in financing activity was $7.9 million. Cash and cash equivalent at end of Q4 2023 were $70.2 million compared to $59.2 million in Q3 2023. So we still have a very strong balance sheet. Net asset value, NAV, is approximately 5.91 per ADS. Our debt-to-asset ratio at the end of Q4 2023 was 9.4% compared to 9.9% in Q3 2023. In terms of our share buyback program, we purchased approximately 3.4 million ADS during the quarter and plan to continue to execute on the share buyback program. which has approximately 7.6 million remaining in the authorization. In addition, in February 2024, we announced that our board of directors approved an accelerated stock repurchase, ASR program, of up to 10 million, of which we have repurchased approximately 2.8 million ADS as of March 27, 2024. This underscores our commitment to shareholder value and our optimism about our future prospects. Moving to our guidance, we expect 2024 full-year revenue to be in the range of $150 million to $160 million. We expect gross margin to be approximately 30%, and the net income to be at least $26 million, or approximately $0.50 per ADS. We anticipate our 2024 IPP revenue to be between $24 to $26 million, and the gross margin to be approximately 50%. We also expect gross profit accounted by DSA globally to be at least $6 million. For the first half of 2024, we expect revenue to be in the range of $50 to $55 million. We expect gross margin to be approximately 30%. Finally, we expect our operating cash flow to be positive throughout the full year of 2024 and cash balance to exceed 100 million at the end of 2024. With that, let's open our call for any questions. Operator, please go ahead.
spk15: 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 11 again.
spk09: One moment for questions. Our first question comes from Philip Shen with Rothkamp KM. You may proceed.
spk05: Hey, guys. Thanks for taking my question. Hey, I wanted to talk about the, you know, 2024 guidance You know, you guys missed last year, and you're making adjustments to hit your goals for this year. One of them is this development service agreement. Can you give us a little bit more color on how that works? I know you're trying to collect revenue and payments earlier, but what leverage do you have to allow that to happen? And can you just describe the structure? versus what you guys had been doing before. So just give us a little bit of color on what you're doing differently. Thanks.
spk17: Okay, thank you, Phil. So very good question. DSA has been a form of structure in Italy market when we acquired the company called Ameren back to a year and a half ago. And we had in the structure of the Italian operation about seven to eight different DSAs And those DSAs partnership are allowing us to provide early stage project portfolios to the buyers based on development milestones. And the changes throughout the company is not only we execute continuously in Italy, those development milestones based on, development milestone based DSAs, for example, announced the almost a gigawatt of the DSA partnership matrix But also, we are implementing same DSA strategy throughout the all regions, including other countries in Europe and US. The whole operation or execution of DSA has three big benefits to the company. Number one, the DSA will allow us to recognize revenue for early stage projects based on milestones of so-called in our company structure we have tier zero to tier four, based on the one spend of the tiers, we will receive the milestone payments from the DSA partners. Those are non-refundable payments and we can recognize the revenue and profit immediately based on the achievements of the milestones. And the second is that will balance our cash reserve as we will have received the cash based on the milestones So the cash situation will be significantly improved in the company. The third, we can also very well balance our risk profile, as we are now sharing the development risks with the buyer or DSA partner. So although we are creating a very good win-win situation, many parties are interested in partnering with us under the DSA structure, but we do know that to get to the VMA situation, we are offering a very favorable price at the DSA structure compared to the final NTP sale. And also, by the way, one more point is we just guided that we will have minimum $6 million gross profit from the DSAs. That $6 million is under the current DSA structure. We have quite several DSA partnerships under negotiation. So that's why we say minimum $60 million will be foreseen from the DSAs in 2024.
spk05: Right, so you mean for you to get these benefits, that means your customer needs to get something as well. So I think I just heard you say that you charge them at a discount relative to what they would get at NTP, and so they don't have to pay as much by paying you guys earlier. Can you talk about what that discount is? Is it 5%, 15%, or greater? Thanks.
spk17: That's a very, very good question. From market to market, this discount will be different. But in general, the buyer or a DSA partner is benefiting from the DSA in two things. One is they are locking into the projects through the DSA. So they guaranteed they will have a portfolio they can work on at the NTP slash RTP stage. The second is they are also managing their risk profile while we are leveraging the risk profile with them together, but they are also based on the milestone payments, managing the risk profile. The third is talking about the discounting price. Instead of paying at the one-time lump sum at the final NTP sale, now they are paying in milestones. So they will get a discount. It's a pretty good discount as I see it. But more importantly, I would balance the two things together. One is the discount price, but also another one is a lock into a project portfolio, especially in a seller's market it's not easy to find quality projects in the market. And now the growth companies, especially the companies who are so eager to go into a market, they like those DSA structures so much.
spk05: Okay. So do you expect to make other DSA announcements in the coming quarters?
spk17: Yes, absolutely. In fact, last month just announced another, actually early this month, We just announced another partnership on the independent storage portfolio with Glenmont, one of the largest private investors in Italy.
spk05: And more to come. What's the magnitude of the typical DSA partnership that you can imagine? I mean, are we talking about 100 megawatts? Are we talking about 500 megawatts or gigawatt level? Thanks.
spk17: It's always, we have a big target. For example, with Matrix, when we started DSA a little bit over a year ago, we were setting a target of 1.5 gigawatt of independent storage portfolio. And now we are reaching about 1 gigawatt. And so the team is confident that we'll put more than 500 megawatts into the matrix DSA structure in the next several months. And same thing with Glenmont. The target is a lot bigger than the ones we work on. and the team is working actively to close more deals under the DSA structure with Glamont in the next few weeks.
spk05: Right. So this should smooth out your revenue and cash generation over time. So that's good. Shifting gears to a new topic, FERC in the U.S. recently approved an order, 2023, which could have meaningful positive impacts to the U.S. pipeline, not just for you, but for U.S. pipelines in general, by weeding out a lot of projects that do not yet have site control, in addition to penalizing the RTOs if they don't complete studies on time and forcing the RTOs to group studies together. uh was wondering if you can comment on how you expect FERC order 2023 to impact your us pipeline could you lose some of your pipeline because you don't have site control or do you have site control on all all your uh pipeline assets and uh do you expect this to actually speed things up for you thanks this is a very good point that the uh
spk17: from our company, we embrace or we love this first rule for two reasons. One is not many companies slash developers have our healthy balance sheet. As we mentioned, we do have a strong balance sheet implementing our development strategy. The second is our company does have a very tight control on the tier system we are working on. We use a very tight controlled tier system to value the progress of our projects. And we implemented the tier systems throughout the whole regions in the US and Europe. And we do not count any deal without a site control, even under the tier zero. And tier zero is a typical pre or early stage deal, not really in our three gigawatts or the one stage yet. So we feel so good when we see this new policy coming up. And that will eliminate a bunch of unqualified competitors who can use that irrational philosophy to compete in the market. Now we see it's a good thing is coming up.
spk03: That's great. Okay. Last one.
spk18: Phil, just one add. When we list our pipeline in the U.S. advanced pipeline, almost 1.5 gigawatts, they're all tier one above. So we have a very good pipeline here.
spk05: Very good to hear. Last question, and then I'll pass it on. AI and data centers are driving a lot of demand. You highlighted that in your prepared remarks. Can you share what percentage of your U.S. pipeline is going to serve, and maybe in the form of PPA, you have a relationship with an AI or data center and market or customer? Thanks.
spk17: We put a strategy internally evaluating the data centers and data center spots and looking at the possibilities to building up or selecting sites for solar, especially storage assets around the data center need. I do not have a story to present at this time. But we are actively working on those very possible stories to support the AI operation in the future. Especially, we talk about the hybrid deals, which can provide the quality and reliable power supply to those AI operations. And that can become a big driver for our growth when we select new deals into our development pipeline.
spk04: Okay. Thank you both. I'll pass it on.
spk09: Thank you, Phil.
spk04: Thank you.
spk15: Thank you. One moment for questions. Our next question comes from Donovan Schaefer with Northland Capital Markets. You may proceed.
spk07: Hey, guys. Thanks for taking the questions. So, first, I want to ask for, you know, for the revenue range that you gave for the first half of 2024. If we just, I want to talk just strictly about kind of the non-IPP revenue, because we can kind of estimate IPP revenue and maybe back that out or something. So when we talk about the first half of 2024 revenue, and again, the non-IPP part of that, how much of that is expected to come from the delayed projects that were supposed to happen, be monetized in the second half of this year?
spk17: Okay, let me answer first and then pass to Ke for details. Number one is, as I mentioned, we have six projects delays for the closing from 23 to 24, and most of them will be pushed into first half, or maybe I'm looking at one deal may be pushed to the second half. But I would say the revenues in the first half, other than the IPP and the DSA, Those are considered DSA and IPP are consistent revenue basis instead of a pending on a certain one closing of the sale. But the other, I will say at least three or four closings expected mostly will be in Q2 this year counted into this revenue.
spk18: Yeah, about six to eight million is from delay of Q4, 10 to 23.
spk07: Okay. All right. That's helpful. And then another question is, are you guys still planning on filing a 10K for 2023? Okay. And what's the timing on that? Is it a deadline at the end of this month or given your small cap and you're converting from being a foreign filer to 10K? Okay. Do you have until the end of this month or is it until the end of April?
spk18: Right now it's the end of the month. No, end of April we're talking about.
spk07: Yeah, which one is it?
spk17: The end of April or the end of March is the deadline? End of April is most likely as now we are the first time becoming the local fighter. So we need to work with the auditor and also work on all 10 countries we covered in the project development and operations. So the most likely will finish the fighting with the 10 K and 10 Q in, uh, in April.
spk07: Okay. Okay. That's helpful. Um, and then I want to ask about the $4.1 million revenue adjustment, the earn out adjustment on the 75 megawatt Poland projects. Um, you know, if I, I believe those projects are usually lower than, uh, then the rule of thumb of a dollar a megawatt is probably more like 60 or maybe even 60, 70, 80 cents a watt. But if we assume a dollar a watt, then a $4.1 million amount, that becomes five percentage points, sort of a reduction in margin by straight up five percentage points. And if it's 60 cents a watt, that becomes like a nine percentage point reduction in gross margins. So I'm curious, you know, if you guys can talk maybe about what it is that, that caused that change. Like if I'm thinking about it the right way, why the revenue just, you know, why you didn't get that revenue, uh, and if there are projects you still would have taken on, uh, you know, or if, or if this makes them the economics where you would not necessarily want to do these projects otherwise.
spk17: The construction of the 75 megawatt projects are in the normal schedule. And in fact, about one-third, over one-third of them has already reached COD. But this $4.1 million write-off is based on the ERNA structure, which was designed based on the last, especially last year's suddenly price surge in the market. And we are benefiting from the price difference from the traditional PPA market compared to the surged priced merchant market. And we designed a structure we can share those additional revenue with the buyer. But the one thing that did not happen is that the surge did benefit the other merchant players, but our construction did not get too much sooner completion to enjoy such a to-be-recognized earn-out. That is why the construction, the finished projects, could not enjoy that much of the earn-out we booked, and now we have to write it off. You see, I don't know if you understand my explanation.
spk07: I think I understand, yeah. Okay, all right, that's great. Thank you, guys. Yeah, I'll take the rest of my questions offline. Thank you.
spk15: Thank you. One moment for questions. Our next question comes from Amit Dayal with HCWainwright. You may proceed.
spk20: Thank you, Graf and everyone. So Yumin, with respect to some of the regulatory uncertainties you highlighted in your press release, you may have faced in 2023 in the US and Europe. Can you give any examples of what some of these challenges were? And with respect to your outlook in 2024, are these issues resolved? How are you dealing with some of these challenges that may have been in place in 2023 from a project execution perspective?
spk17: Yes, some issues are resolved. Some issues are still pending. I can give you a couple of very typical examples. One is, as you can see, our press release, we closed a deal of 29 megawatts in Spain, setting for photoshop back to last year. And we expect to receive the approval by the end of last year, but the approval did not come. And based on the current policy, at that time, we expect the deal will be closed in Q1 this year. But unfortunately, the government, just in Q1, announced a new policy which gives the old administrative office a 14-month cycle to make approvals. So now we expect the deal will be closed anytime from now till the end of the year, which is the end of the 14 months. That's why I mentioned earlier that one of the six deals we're supposed to close in 2023, will be most likely pushed into second half of this year. I mean this deal. That is the 29 megawatts closing in Spain. The second one is that in Hungary, after experiencing the long delays of the first projects, portfolio 53 megawatts, as we announced earlier, we have another 52 megawatts in the sales process and after the government of Hungary issued a right of first refusal language by the local national asset management group. It's hard for us to secure any foreign buyers to buy this portfolio. So our solution is our local team is working with several local investors, which when we do this one, we don't need to have government approvals, although we have to go through the National Equity Asset Management or Asset Investment Corporation for the lawful right of first refusal situation, but the situation will be a lot straightforward. So although the process or the buyer's pool get limited, but our quality projects are really good in the market so people are still fighting to get those deals as even in the local market from the local buyers so those are the two typical examples and similar things happen in other other places that the in Italy the same thing very similar thing the government administrative approvals delays but the In general, I see that the older delays happened last year. We experienced that. We learned from it. We now try to manage that in a more timely to manage all those processes. So that is why we feel so confident to present the numbers we present today for the 2024 guidance.
spk20: Got it.
spk17: Thank you.
spk20: Last question from me. With the balance sheet we have right now, $113 million in debt and $70 million in cash, what level of revenues on an annual basis with this type of balance sheet, what level of revenues can be generated with this balance sheet? know if you execute you know uh exceptionally well i know your guidance is for 150 to 160 but in a scenario where everything goes well for you you know how much revenues can the company potentially generate with this balance sheet yes yes i mean uh first of all let's look at our pipeline again we have three over three gigawatt advanced solar pipeline five gigawatt
spk18: the storage pipeline, and we're talking about the monetized every year 400 to 500 megawatts a year. So that's our target for 2024. That generates 150 to 160 million revenue. Going forward, our pipeline, actually our focus mentioned we're going to focus on monetizing this pipeline. And going forward, this pipeline is maturing. and we should monetize them all, year over year. So we do expect, again, 20 to 30% growth from here with this type of balance sheet.
spk17: Adding a couple points on here, Amit, is that we mentioned DSA. We also mentioned IPP. In the future, we will also make those two numbers apparent or transparent to all our investors. that as we said earlier, our IPP gross profit margin will be $24 to $26 million. And we expect our DSA contribution to the company will become more and more, beyond $6 million, beyond $10 million. And after we implemented the DSA strategy globally, this number will become the similar backbone to the company as an IPP. The goal for our company is We try to use our limited cash, 70 or 100 million dollars, to build up enough IPP so to secure operating cash flow positive and full year profitability from the production revenue. And then DSA will be adding on top of it, plus our core business of the development and flip. And we see that we are getting into the very healthy cycle. at this time, starting from 2024.
spk20: So is this DSA MRN creation, or is this something that is happening across the industry now?
spk17: Yes and no. In fact, starting from four years ago when Kula and I joined the company, we did not have much cash in our reserve. So we started our DSA model. in the new market, especially in Europe. And now we have about two dozen different DSA models, DSA partners in Europe, and about two-thirds of them are the ones we lock into the projects. So that means we through the DSAs acquiring or lock into the project portfolios, and we are the buyer paying the milestones based on the milestones to the small developers. And one-third of those DSA partners, we go the other way. That is the one, as I mentioned, with Matrix, with Glenmont, and all those are the ones we are supplying projects to the buyer. So it is a pretty typical exercise in the market, especially in Europe. Okay, understood.
spk19: So that's all I have, guys. I'll take my other questions offline. Thank you so much.
spk15: Thank you, Amit. Thank you. I'm not showing any further questions in the queue. I'd like to turn the conference back to Mr. Liu for any closing remarks.
spk17: Okay. Thank you, operator. In conclusion, the future of solar energy is extremely promising, and we are positioned to fully capitalize on the accelerating adoption of the solar technology across the globe. With our exceptional expertise in developing and operating solar projects, extensive network of industry partnerships, a strong financial position. We are making great strides towards our global, our goal to become a top global renewable energy company. We are thrilled about the bright future of the solar energy and are excited to be at the forefront of this incredible transformation towards a more sustainable future. Thank you again for joining the call. You may now disconnect.
spk15: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
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