Canadian Solar Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's second quarter of 2021 earnings conference call. My name is Rachel 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 a reminder, this conference is being recorded for replay purposes. I'd like to turn it over to Isabel Zhang, IR Director at Canadian Solar. Please go ahead.

Thank you, Operator, and welcome everyone to Canadian Solar's second 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. Sean Chu, Chairman and CEO, Yan Zhuang, President of Canadian Solar's Majority-Owned Subsidiary, CSI Solar, Dr. Huifeng Chang, Senior VP and CFO, and Ismael Guerrero, corporate VP and president of . All company executives will participate in the Q&A session after management's formal remarks. On this call, Sean will go over some key messages for the quarter. Ken and Ismael will respectively review the highlights of the CSI solar and global energy businesses, 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 the company's future performance represent management's estimate 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 operational goals. Non-GAAP information should not be viewed by investors as a substitute for data prepared in accordance with GAAP. And now, I would like to turn the call over to Canadian Solar's Chairman and CEO, Dr. Sean Chu. Sean, please go ahead.

Thank you, Isabel. Hi, everyone. Welcome and thanks for joining us today. During the second quarter of 2021, we delivered record module shipments and record revenue. We also delivered gross margin well ahead of our guidance. We focused on profitability and improved the performance of our CSI solar business division, which helped us deliver net income of $11 million and diluted earning per share of 18 cents. Before I turn to Ian, Ismael, and Huifeng to go over a more detailed review of our performance, I would like to highlight three key messages. Please turn to slide three. The first point, I'm pleased that our CSI solar business has turned corner in the margin trajectory, delivering Canadian solar growth margin of 13 percent, which is well ahead of our guidance. We expect Q3 margins to be better than Q2, back to the mid-teen range. We focused on the factors under our control, and especially on profitability, even if it meant that we had to forego certain short-term opportunities. We expect profitability at CSI Solar to continue to improve through the year. Demand remains strong, and Canadian solar's leadership position gives us a competitive advantage to capture profitable growth opportunities. We will continue to gain market share this year and believe that any demand push out due to supply chain constraints will set the stage for an even stronger 2022 and beyond. Let's turn to slide four. The second point, global efforts towards a clean energy transition are generating a surge in demand for battery storage capacity to support more reliable power grid. We made big progress in Q2 by delivering our first battery storage shipment approximately 300 megawatt hours or around $70 million in revenue. At the same time, we continue to grow our global energy total pipeline of storage projects. reaching 19 gigawatt hours in Q2, of which 1.5 gigawatt hours is under construction. Storage represents another major long-term growth opportunity for us. We are well positioned with bankable solutions, strong customer demand, and expect meaningful growth. The third point, please turn to slide five. We recently published our latest ESG sustainability report. Our team has been analyzing, understanding, and improving on our ESG practices. We have set up structures to incorporate environmental, social, and governance factors in all our major business decisions. For example, one of these decisions is the expansion of our upstream manufacturing capacity. We decided to construct this facility in Qinghai as this province is nearly fully powered by renewable energy. Almost 90% of its installed power capacity is solar, wind, our hydropower. By locating energy intensive ingot manufacturing there, we can further reduce the carbon footprint for our solar module. Actually, based on our estimates, Greenhouse gas emissions payback time for our existing module is 1.1 years. This means our modules become carbon neutral assets that can last for 30 to 40 years or even longer. We are now making further efforts to bring the module greenhouse gas payback time even lower. This is just one of the many examples that underscores Canadian solar's commitment to sustainability and ESG improvement. Now, let me turn over to Ian, who will talk about the performance of our CSI solar business in more depth. Ian, please go ahead.