Canadian Solar Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's first quarter 2022 earnings conference call. My name is Livia and I'll be your operator for today. At this time, all participants are on a listen-only mode. Later, we will conduct a question and answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Isabel Zhang, Investor Relations Director at Canadian Solar. Please go ahead.

Thank you, Operator, and welcome everyone to Canadian Solar's first quarter 2022 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, Yen Jong, 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 subsidiary Global Energy. 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. Ian 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 represents 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 20S filed with the Securities and Exchange Commission. Management prepared remarks will be presented within the requirements of SEC Regulation G regarding generally accepted accounting principles or GAF. 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 make 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'd like to turn the call over to Canadian Solar's Chairman and CEO, Dr. Shawn Chu. Shawn, please go ahead.

Thank you, Isabelle. Hi, everyone. Welcome and thank you for joining us today. Please turn to slide three. In the first quarter of 2022, we delivered 3.63 gigawatts of module shipment. $1.25 billion in revenue and 14.5% in gross margin. We also achieved net income attributable to Canadian solar shareholders of $9 million and diluted earning per share of 14 cents. These results were in line with our guidance even though the operating environment was very challenging. I want to thank our global team for their focus and execution of our strategy, building Canadian solar's long-term competitive presence across all its businesses, including solar module, battery storage, system solutions, and global project development. Please turn to slide four. One of the things I would like to highlight this quarter is our decision to accelerate upstream capacity expansion plan with the latest state of art technologies. Specifically, we expect our ingot wafer and cell capacity to reach approximately 20 gigawatts by the end of 2022, which is meaningfully higher than what we previously communicated. Our module capacity will be 32 gigawatts, in line with our prior target. This will meaningfully increase the level of vertical integration of our manufacturing capacity, allowing us to better control our cost, technology, and product quality, thereby further improving our pricing power and margin. Our plan is to strategically shift our capacity from the current paramount structure to a trapezoid structure. So we are pushing our vertical integration level to 32%, the highest in the Canadian solar history. This trapezoid structure will allow us to strike a good balance between greater control over production costs while still being flexible and responsive to market change. This flexibility has given us a competitive advantage in the past and even more important today. Please turn to slide five. Secondly, the registration process with China Securities Regulatory Commission or CSRC of our CSI Solar subsidiaries Carbot IPO remains on track. This is despite the slowdown due to the COVID lockdowns in China and especially in Shanghai. The listing will support our growth strategy and further unlock value for shareholders. And we will continue to update you on our progress as we move forward. Please turn to slide six. Lastly, I would like to comment on a particular resolution passed by our Board of Directors this last week. This resolution mandates a third-party audit of Canadian solar's operations and supply chains with respect to the effectiveness of our anti-modern slavery policy, supplier's code of conduct, and human rights policy. The management team proposed the resolution to the board as a response to certain shareholder proposals, and we fully support the resolution. As we have clearly stated in our prior course, Canadian solar does not tolerate forced labor or any form of modern slavery and is committed to ensuring that modern slavery does not take place anywhere in our business, including our supply chain. We implemented policies and procedures addressing this, and with this board resolution, we expect to further increase our efforts at reasonable cost to conduct a third-party assessment and report to the board of directors on the extent to which our policies and procedures effectively protect against forced labor in our operations, supply chains, and business relationships. This remains a top priority for our management and board, and we look forward to engaging with our investors, customers, and partners during this process. With that, let me now turn over to Yan, who will go through our CSI solar business in greater detail. Yan, please go ahead.