Fuwei Films (Holdings) Co., Ltd.

Good morning, ladies and gentlemen, and welcome to your Shoei Films first quarter 2020 conference call. All lines have been placed in a listen-only mode, and the floor will be open for questions following the presentation. At this time, it is my pleasure to turn the floor over to Shoei Yu. Please go ahead.

Thank you and welcome. Before we start, I would like to remind you that certain statements that are not of historical facts made during the course of this conference call about future events and projected financial results constitute forward-looking statements that are made pursuant to the safe harbor provisions of the Private Security Litigation Reform Act of 1995. You should know that the company's actual results may differ materially from those projected in these statements due to a variety of factors affecting business. Forward-looking statements are subject to risks and uncertainties. A discussion of the factors that may affect future results is contained in our filings with the US Securities and Exchange Commission. We undertake no obligation to correct or update any forward-looking statements provided as a result of new information, future events, or changes in our expectations. Joining us on today's call is Mr. Yong Zhang, Corporate Secretary. Before I walk you through our financial results, Mr. Zhang will deliver his opening remarks Sir, please go ahead. 张总,您请。 Thank you, 市委。 大家好,感谢各位参加今天的会议。 虽然我们仍然面临共大一球的不利市场环境, 并且新冠病毒的爆发对世界经济产生了不利的影响。 然而令人欣慰的是,我们国模的整体销售收入增加, 特殊模的销售数量持续增长,

which accounts for 47.9% of the total revenue. In addition, we have completed four consecutive phases of the process. We believe that this is due to the company's continued innovation and development and the implementation of a diversified sales strategy to help the company expand its mid-term customer base. We will continue to work hard to make the company in the challenging industry Thank you for joining us today.

Despite the oversupply in the marketplace and the outbreak of COVID-19 pandemic, which has caused significant adverse effects on the world economy, we achieved positive trends in overall sales. specialty sales and specialty firms, which accounted for 47.9% of our total revenues. In addition, we achieved net profit for four consecutive quarters. We believe these results benefit from our commitment to innovation and differentiated marketing strategy, which have expanded the end-user applications of our firm products. We will continue with these efforts and expect that they will enable the company to capitalize on new opportunities for despite challenging industry and economic conditions. Net sales during the first quarter were RMB 83.2 million, U.S. 11.8 million, compared to RMB 81.1 million during the same period in 2019, representing an increase of RMB 2.1 million or 2.6%, mainly due to increased sales price. In the first quarter of 2020, sales of specialty films were RMB 39.9 million, U.S. 5.6 million, or 47.9% of our total revenues, as compared to RMB 32.2 million, or 39.7% in the same period of 2019. The increase was mainly due to increased sales volume. RMB 5.8 million, U.S. 0.8 million, or 6.9% of total revenues, compared with RMB 16.2 million, or 20% of total revenues in the first quarter of 2019, representing a decrease of RMB 10.4 million, or 64.2%. The decrease was mainly due to decreased sales volume. Our gross profit was RMB 29.8 million, U.S. 4.2 million for the first quarter, representing a gross margin of 35.8% as compared to a gross profit of RMB 12.4 million and gross margin of 15.3% for the same period in 2019. Our average sales price increased by 5.4%, while our average cost of goods sold decreased by 20% compared to the same period in 2019. Consequently, our gross profit and gross margin was higher during the period. The first quarter were RMB 15.0 million, U.S. 2.1 million, which was RMB 1.5 million or 11.1% higher than the same period in 2019. This increase was mainly due to the increased accrued allowance for doubtful accounts receivable and increase in transportation expenses. To the company during the first quarter, it was RMB 13.0 million, U.S. 1.8 million, compared to net loss attributed to the company of RMB 3.4 million during the same period in 2019. Net earnings per share was RMB 3.97, U.S. 56 cents for the three-month period ended March 31st, 2020, while basic and diluted net loss per share was RMB 1.03 for the three-month period ended March 31st, 2019. Here was RMB 221.1 million, or U.S. 31.2 million as of March 31st, 2020, compared with RMB 3. $208.2 million as of December 31st, 2019. In March 2020, the company had $3,265,837 basic and that was their ordinary shares outstanding. Cash and cash equivalents on March 31st, 2020 was RMB $55.7 million or U.S. $7.9 million compared with RMB $60.9 million as of December 31st. I'd like to thank our shareholders for their continued loyalty and support. We believe we are well positioned to face the current challenges and are committed to providing value to our shareholders and customers. We will keep you informed of our progress. With that, Mr. General will be happy to answer your questions. Christy, let's begin the Q&A.

Thank you. If you would like to ask a question, please press star then one on your phone keypad at any time to join the queue. And if you're using a speakerphone, please pick up your handset to provide the best sound quality. Again, ladies and gentlemen, if you would like to ask a question, it is star 1 on your telephone keypad. And we'll pause just a moment to give everyone a chance to signal. And I'm showing no questions from the audience at this time, so I'll turn it back over for any closing remarks.

Today's conference call, we look forward to being in touch with you and we'll keep you updated about our progress.

And that does conclude today's conference call. Thank you for attending. You may disconnect your lines at this time and have a great day.