Canadian Solar Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's third quarter 2023 earnings conference call. My name is Shamali, and I will be your operator for today. At this time, all participants are in 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 third quarter 2023 conference call. Please note that today's conference call is accompanied with slides that 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 Truong, President of Canadian Solar's majority-owned subsidiary, CSI Solar, Dr. Huifeng Chen, Senior VP and CFO, and Ismail Guerrero, Corporate VP and CEO of Canadian Solar's wholly-owned subsidiary, Recurrent Energy, also formerly 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. Yen and Ismail will review business highlights for CSR Solar and Recurrent Energy, respectively. And Hassan 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, I would like to 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 protection under the safe harbor for forward-looking statements that are contained in the Private Security 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 estimates as of today. Canadian failure assumes no obligation to update these projections in the future unless otherwise required by applicable law. A more detailed discussion of risks and uncertainties can be found in the company's annual report on Form 20-F, 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 non-GAAP basis. By disclosing certain non-GAAP information, management intends to provide investors with additional information to enable 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 preparing according to 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, and thank you to everyone for joining our Q3 call today. Please turn to slide three. We achieved solid Q3 results despite the continued challenging environment. During the quarter, we delivered 8.3 gigawatts in solar module shipment. We generated $1.85 billion in net revenue, a 16.7% growth margin, and total net income attributable to Canadian solar shareholders of $22 million, or 32 cents per diluted share. Let me share a few key takeaways. Please turn to slide four. First, even with the challenging operating environment, the industry is healthy. To give you some color, I have worked in the solar industry for well over 20 years, but only just witnessed total cumulative solar installed capacity finally reached one terawatt worldwide in 2022. As we look ahead, strong global demand is on track to drive that number up to one terawatt in annual installations. I strongly believe this can happen before the end of the decade. over 2030. That is an incredible amount of growth ahead of us. Adding to this, the battery energy storage system market, or fast market, is also growing rapidly. I believe that fast market is also on pace to reach the terawatt generation over the coming decade as it hits its first terawatt hours of cumulative deployment. Of course, short-term market cyclical fluctuations are inevitable with demand and supply constantly rebalancing. However, even with the current high cost of capital, solar and energy storage project returns are more economically attractive today than ever before. This is due to the lower equipment costs and the higher electricity prices. The push towards decarbonization and net zero emissions is stronger than ever before. and the challenges of energy security remain. I strongly believe that the solutions we provide the market are truly the most competitive, impactful, and scalable in the fight against climate change. So long-term, we believe the market fundamentals remain very strong. Turn into slide five. Technology remains a key driver of growth and the progress in the industry. Over the past 20 years, commercial efficiencies improved from less than 15% to well over 25% now. Entype is the next big technology driver, and we have already ramped capacity NTOPCOM cell capacity now accounts for half of our total cell capacity and is expected to reach 60% by the end of this year. This gives us a major competitive advantage over other companies that have far greater exposure to older legacy technologies. Please turn to slide six. The third point I would like to make is on the continued strategic long-term investment we are making in key premium markets, including the US, where we are making major inroads. We recently announced a new five gigawatt solar cell investment in Jeffersonville, Indiana. Jeffersonville is on the northern side of the Ohio River on the border between Indiana and Kentucky. We chose this location after extensive analysis and evaluation of 85 different sites across the U.S. It is going to be one of our largest single investments, which will enable us to not only better serve U.S. customers with the most advanced technology, but also fulfill the local content rules of the Inflation Reduction Act, or IRA. We are excited because Our new 5 gigawatt cell facility will complement the new 5 gigawatt solar module facility in Mesquite, Texas, which we announced earlier this year. The Mesquite facility is on track to start producing modules in a few weeks before the end of the year. In fact, I was there last week and was pleased to see the team fine-tuning and working on the final preparations for mass production. I'm very proud of everyone involved in executing these two important manufacturing plans. We also thank the officials in Indiana and Texas and the local officials in Jeffersonville and Mesquite for their unwavering critical support. We look forward to continuing work with them as we grow in these communities, create important new jobs, and expand our global platform. In addition, we also recently announced a 5 gigawatt solar vapor facility in Thailand, which will complement our investment in the U.S. and allow us to responsibly meet the new requirements related to latest and adjusted ADCDT ruling by the U.S. Department of Commerce. Concurrently, we are adjusting the procurement of our module bill of materials in accordance with the newest regulations. Overall, we are strongly positioning ourselves to deliver long-term profitable growth for our shareholders. Please turn to slide seven. Lastly, we continue to lead in our ESG efforts. Recently, our ESG working group held global internal ESG town halls to socialize our initiatives and seek greater participation from our employees across all our regions. In this process, we continue to gather ideas and feedback from our great talent pool. Over the next year, we plan to focus on setting our SETI, our science-based initiative climate targets. We will also be expanding recurrent energy ESG practices across OS development and construction activities. This includes standardizing ESG procedures, to the strictest levels of biodiversity, archaeological surveying, community engagement, and environmental justice policies, enhanced health and safety, and so on. Historically, we have mostly focused on the manufacturing side of the business. which naturally has the greatest environmental impact. But we are making sure that our efforts cover every inch of our company. We are committed to continual improvement. Reflecting on our leadership efforts in ESG, we recently received the Global Sustainability Reporting of the Year Award by Environmental Finance. Congratulations to the global teams for their hard work. Canadian solar will continue to work on our ESG disclosures, enhance strategy and execution, and seek improvement every year. With that, Let me turn the call over to Yan, who will provide more details on our CSI solar business. Yan, please go ahead.