Canadian Solar Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's first quarter of 2021 earnings conference call. My name is Annie, and I'll be your operator for today. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session. As we know, this conference is being recorded for replay purposes. I would now like to turn the call over to Isabel Zhang, IR Manager at Canadian Solar. Please go ahead.

Thank you, operator, and welcome, everyone, to Canadian Solar's first quarter 2021 conference call. Please note that we have provided slides to accompany today's conference call, which are available on Canadian Solar's investor relations website within the events and presentation section. Joining us today are Dr. Shawn Chu, Chairman and CEO, Yan Zhuang, President of Canadian Solar's majority-owned subsidiary, CSI Solar, Dr. Huifeng Chen, Senior VP and CFO, and Ismael Guerrero, Corporate VP and President of Canadian Solar's wholly-owned energy business. All company executives will participate in the Q&A session after management's formal remarks. On this call, Sean will go through an overview of Canadian solar strategy. Ismael and Yen will respectively review the highlights of the global energy and CSI solar segments, respectively, followed by Huifeng. who will go through the financial results. Sean will conclude the prepared remarks with the business outlook, after which we will have time for questions. Before we begin, may I remind listeners that management's prepared remarks today, as well as their answers to questions, will contain forward-looking statements that are subject to risks and uncertainties. The company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations. Any projections of companies' future performance would present management estimates as of today. Canadian Solar assumes no obligation to update these projections in the future unless otherwise required by applicable law. A more detailed discussion of the risks and uncertainties can be found in the company's annual report on Form 20F filed with the Securities and Exchange Commission. Management's prepared remarks will be presented within the requirements of SEC Regulation G regarding generally accepted accounting principles, or GAAP. Some financial information presented during the call will be provided on both a GAAP and a non-GAAP basis. By disclosing certain non-GAAP information, management intends to provide investors with additional information to permit further analysis of the company's performance and underlying trends. Management uses non-GAAP measures to better assess operating performance and to establish operating goals. Non-GAAP information should not be viewed by investors as a substitute for data prepared in accordance with GAAP. I would now like to turn over the call to Canadian Solar's Chairman and CEO, Dr. Shawn Xu. Shawn, please go ahead.

Thank you, Isabelle. Hi, everyone. Welcome and thanks for joining us today. We started 2021 with a strong quarter. We delivered 3.1 gigawatt of module shipment. 1.1 billion U.S. dollars in revenue and 17.9 percent in gross margin. We also achieved net income of 23 million U.S. dollars and a diluted EPS of 36 cents. Our results came in towards the high end of our guidance, and we delivered a good balance of growth and profitability. I want to thank our team for their focus and execution to make this happen. While Q1 remained a challenging quarter, our team continued to execute our strategy and strengthen our long-term competitive advantages. Now let's turn to the slide three of our presentation. Over the past several quarters, we have embarked on a transformational journey to accelerate the demand for our battery storage services, including the recent strategic partnership and investment agreement with Habitat Energy. This partnership will help us strengthen our capabilities in artificial intelligence, and machine learning to focus and manage energy demand and execute real-time power trading and dispatch decisions for our battery storage assets. This means our battery storage solution will deliver higher value to our customers by bringing in higher revenue. These tools will help us expand our storage solutions into non-capacity market to offer services like frequency regulation and other salary services, and also market arbitration opportunities. We think these advanced capabilities will give us a significant long-term capacity a competitive advantage as battery storage assets gain shares of the overall energy mix. These technologies will make merchant battery storage investable at scale and even more attractive to investors. Importantly, they will make the power grid more reliable, more efficient, cleaner, and smarter. In addition, we are rapidly expanding global storage project development efforts. We found that virtually all our solar projects under development can co-host energy storage facilities, and we have done so during the first quarter of 2021. This approach has helped us nearly double our energy storage pipeline to almost 17 gigawatt hours during the quarter. This allows us to further synergize and boost the value of our total project pipeline, as solar and battery storage can utilize the same piece of land and same interconnection points. About total storage pipeline, 1.2 gigawatt hour of the storage pipeline of the storage project are currently under construction. So the big takeaway here, yes, all storage initiatives in both of our energy, both of our business segments are growing as fast with further growth expected. Now please turn to slide four. Staying on the topic of technology, our new N-type hydrojunction, our HJT solar cell line of 250 megawatts is now fully up and running. We produced our first HJT cell in Q1 and currently have achieved conversion efficiency of well over 24.5%, with more improvements targeted by our in-house CSI Solar HJT Research Institute scientists. In support of our HJT cell research and production, we brought online a new state-of-the-art 250 megawatt N-type ingot pooling line. to start delivery of our HJT solar module in Q3 of this year, which will help further improve our pricing power and brand recognition. This will make Canadian Solar the first global solar module brand to deliver HJT solar modules of large wafer size and half-cut cells. and will make another important innovation leadership milestone for us. Finally, let me say a few words about our supply chain and our strong commitment to human rights. Modern slavery, including forced labor, is a crime and a violation of fundamental human rights that Canadian solar We are fully committed to ensuring that modern slavery does not take place anywhere in our business, including our supply chain. We expect all of our third-party suppliers, contractors, and other business partners to act similarly to prevent modern slavery. We do not tolerate any parties directly or indirectly engaging in modern slavery. We reasonably believe that there is no forced labor involved in our supply chain, and we will make further efforts in auditing our suppliers. I will encourage you to review our anti-modern slavery policy, which is available on Canadian Solar's investor relations website under the governance section. With that, let me turn over to Ismail, who will talk about the performance of our global energy business. Ismail, please go ahead.