Daqo New Energy Corp ADR

and welcome to the DocuNew Energy fourth quarter and fiscal year 2020 results conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note this event is being recorded. I would now like to turn the conference over to Alex Hook, Investor Relations. Please go ahead.

Hello, everyone. I'm Kevin He, the investor relations of DarkU New Energy. Thank you for joining our conference call today. DarkU New Energy just issued its financial results for the first quarter of fiscal year 2020, which can be found on our website at www.dqsolar.com. To facilitate today's conference call, we also have prepared a PPT presentation for your reference. Today, attending the conference call, we have Mr. Longgen Zhang, our Chief Executive Officer, and Mr. Ming Yang, 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 fourth quarter and fiscal year 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. maturely from those contained in 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 and applicable law. Also, during the call, we will occasionally reference monetary amounts in U.S. 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 for the audience. Without further ado, I now turn the call over to our CEO, Mr. Zhao. Thank you, Kevin.

Hello, everyone. Thank you for joining our conference call today. We are very pleased to report a strong quarter in terms of operational and financial results to bring a successful close of the year 2020. I would like to thank our entire team for their hard work, commitment and dedication in achieving these excellent results. During the quarter, we produced 21,008 metric tons of polysilicon, a record high in our company's history. Our production cost was reduced by 2.7% in Lemming B terms, primarily due to our efforts in additional energy savings, offset by a higher than expected rise in the cost of silicon raw materials. In the fourth quarter, The increase in our cost in U.S. dollar terms compared to the third quarter was a result of exchange rate fluctuations due to lemming bee appreciation. In 2021, we will continue our efforts to reduce cost as we begin to benefit from our newly implemented digital manufacturing system to maximize our output optimize our production process, and further improve our operational sustainability and product quality. During the months of November and December 2020, we saw significant pickup in polysilicon demand from our customers to meet their increasing production needs to serve the growing solar end market. During the fourth quarter, we saw the 23,186 metric tons of polysilicon, which is the highest quarterly sales volume the company ever achieved. Since the beginning of 2021, we continue to see rising polysilicon market prices, and most recently, MarketPoly ASP has reached a range of $15 per kg to $16 per kg. As our model waiver customers continue their capacity expansion plans, supported by a robust downstream market demand, We believe that the supply of polysilicon will continue to be very tight throughout the year, given very limited additional polysilicon supply this year. Regarding the status of proposed initial public offering of our Xinjiang Daku subsidiaries in China's stock market, the Stock Listing Committee of China Stock Exchange stock market reviewed Xinjiang Daku's application in February 2, 2021, and determined that Xinjiang Daku has already met the offering, listing, and disclosure requirements related to its potential star market IPO. As the next step, Xinjiang Daku will need to go through the registration process with China Securities Regulatory Commission before the star market IPO can take place. The proceeds of its potential IPO will be used to fund our Phase 4B polysilicon project with an annual capacity of 35,000 metric tons. We have already started the preparation works for Phase 4B, including the design and the procurement process. We plan to start the construction in middle March and expect to complete the project by the end of 2020. and ramp it up to full capacity by the end of Q1 2022. I have been in the solar industry for over a decade, and the prospects for the solar industry have never been bright. Driven by the new trends of solar grid parity and the urgent need to address climate change, the industry is on the of ongoing tremendous growth over the next few years without the need for government subsidies. Solar energy is now one of the most competitive forms of power generation ever, even compared to fossil fuel, and we are beginning to see real-world applications where solar is the optimal choice to meet growing energy needs and to replace less carbon-based generation. Major economies around the world have also begun to implement ambitious policies and initiatives to support and mandate the use of renewable energy for power generation. The European Union has announced its Green Deal to fight climate change through progressive policies for a climate-neutral and sustainable EU with the goal of no net emissions of greenhouse gases by 2050 and to decarbonize the energy sector. Over the next few years, the European climate law is expected to turn this political commitment into a legal obligation. In China, President Xi Jinping has announced China will aim to hit peak emissions before 2030 and reach carbon neutrality by 2060, and we expect various government agencies, including the NEA and the NDRC, to introduce and implement policies to mandate and support the use of renewable energy. For 2021, The NEA has indicated its intention to accelerate the development of wind and solar energy with a goal of adding a combined 120 gigawatts of wind and solar in 2021. In the U.S., with the Biden administration's commitment to fight climate change and plan for clean energy revolution, With a goal of achieving a 100 percent clean energy economy and reaching net zero emissions no later than 2050, we believe favorable policies are forthcoming to support renewable energy growth in the U.S. We are standing at the beginning of a new era that will demand more and more clean, renewable, and cost-effective energy resources, among which solar PV is one of the most competitive. We will focus on our core business, continue to expand capacity and further improve quality to better serve the fast-growing solar PV market. Now let me discuss our outlook and guidance for our future. The company expects to produce Approximately 19,500 metric tons to 20,500 metric tons of polysilicon. And the sale approximately 20,000 metric tons to 21,000 metric tons of polysilicon to external customers during the first quarter of 2021. For the full year of 2021, the company expects to produce approximately 80,000 to 81,000 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 fourth quarter and the fiscal year 2020.