Daqo New Energy Corp ADR

Hello and welcome to the DocuEnergy third quarter 2020 results conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Kevin He, Investor Relations for DaQ Energy. Please go ahead.

Hello, everyone. I'm Kevin He, the Investor Relations of DaQ New Energy. Thank you for joining our conference call today. DaQ New Energy just issued its financial results for the third quarter of 2020. which can be found on our website at www.dqsolar.com. To facilitate today's conference call, we have also prepared a PPT presentation for your reference. Today attending the conference call, we have Mr. Longgeng Zhang, our Chief Executive Officer, and Mr. Mingyao, our Chief Financial Officer. The call today will feature an update from Mr. Zhang on market and operations, and then Mr. Yang will discuss the company's financial performance for the third quarter of 2020. After that, we will open the floor to Q&A from the audience. Before we begin the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth, are forward-looking statements that are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act, of 1995. These statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those containing any forward-looking statement. Further information regarding these and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission. These statements only reflect our current and preliminary view as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. All information provided in today's call is as of today and we undertake no duty to update such information except as required under applicable law. Also during the call, we will occasionally reference monetary amounts in US dollar terms please keep in mind that our functional currency is the Chinese RMB. We offer these translations into U.S. dollars solely for the convenience of the audience. Without further ado, I now turn the call over to our CEO, Mr. Zhang. Please, Yongle.

Thank you, Kevin. Hello, everyone. Thank you for joining our constant call today. During the third quarter of 2020, We successfully completed the annual maintenance and several technology improvement projects at our polysilicon manufacturing facilities. We resumed full production in August with excellent operational results. For the third quarter, we produced 18,406 metric tons of polysilicon, among which approximately 97.7% was was more than great. We continued our relentless drive to lower production cost and reached to a record lower cost in 11B terms. During the third quarter, we completed our digital transformation project with a fully digitized manufacturing system that allowed us to continuously improve our process control and analyze our manufacturing data so as to achieve better results in system stability, manufacturing efficiencies, production cost, and the product quality in the future. As our facilities are now running with increased efficiency, we expected to achieve a higher production volume of approximately $19,500 to $20,500 in the fourth quarter, with a potential cost reduction by approximately 3% as compared to the third quarter. During the quarter, polysilicon ASPs increased rapidly due to the quick recovery in solar PV demand from both domestic and foreign markets. Our ASP was $9.13 per kg, a significant improvement from approximately $7.04 per kg in the second quarter. With robust market demand for monograde polysilicon, we expect our ASP to improve meaningfully in the fourth quarter as compared to the third quarter. In recent weeks, because of strong solid module and installation demand, we began to see solid glass capacity shortage becoming a bottlenecker for the solid industry and limiting module production. We expect the shortage of solid glass to ease over the coming months as additional solid glass capacity comes online. The temporary constraint on the industry's utilization rate will be removed which eventually will increase demand for polysilicon. Solar is now becoming one of the most competitive sources of energy, even compared to traditional power generation methods. Globally, we are seeing strong momentum around the world in adopting and implementing renewable energy policies that would strongly benefit the solar and market. Last month, Mr. Xi Jinping, the president of China, announced China's initiative to scale up the national contributions to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060. We believe favorable policies benefiting solar will be implemented during the upcoming fourth five-year plan driving a substantial increase in solar installations in China. In addition, a growing number of countries and regions, including the most important economies in the world, have announced goals and plans to reduce carbon emissions and widely adopt renewable energies, in particular we are starting to see the trend of utility-scale solar generation combined with power storage providing base load energy and replacing and displacing coal power plants. We believe this is the beginning of a lot of solar displacing traditional fossil fuel-based generation driven by both economics and renewable energy mandates. We are strongly committed to contributing our efforts as a raw material provider for mainstream solar TV modules and are fully confident we will benefit from this fast-growing market. Now I will discuss outlook and guidance for our company. The company expects to produce approximately 19,500 to 20,500 metric tons of polysilicon and is selling approximately 20,500 metric tons to 21,500 metric tons of polysilicon to external clients during the fourth quarter of 2020. For the fall year of 2020, the company expects to produce approximately 75,800 metric tons to 76,800 metric tons of polysilicon, inclusive of the impact of the company's annual facility maintenance. Now, I will turn the call over to our CFO, Mr. Yang, who will discuss the company's financial performance for the third quarter of 2020.