Daqo New Energy Corp ADR

Good day, and welcome to the DECU New Energy First Quarter 2022 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I'd now like to turn the conference over to Kevin Ha of Investor Relations. Please go ahead.

Hello, everyone. I'm Kevin Heard, Investor Relations of Dark Union Energy. Thank you for joining today's conference call. Dark Union Energy just issued its financial results for the first quarter of 2022, which can be found on our website at www.bqsolar.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. Ming Yan, 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 first quarter of 2022. 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 U.S. dollar terms. Please keep in mind They are a functional currency. It's a 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. Longgan Zhang. Longgan, please. Hello, Longgan.

Thank you, Kevin. Hello, everyone. Thank you for joining our conference call today. We are very pleased to report exceptional results for the first quarter of 2022, the best ever in the company's history. I would like to thank our entire team for their hard work and dedication in delivering such excellent operational, and financial performance. For the quarter, we achieved a polysilicon sales volume of 38,839 metric tons, more than three times our sales volume for the fourth quarter of last year. We recorded $1.3 billion in revenue, also more than three times of the revenue for the fourth quarter of 2021. and we recorded operating income of $797 million, net income attributable to DACU New Energy shareholders of $536 million, earning per share of $7.17 per share, and EBITDA of $827 million, all representing substantial sequential and year-over-year growth. At the end of the quarter, our combined cash short-term investments and a banknote receivable balance reached $2.6 billion, an increase of $1.2 billion compared to the end of last year. This strong financial performance reflects not only the strength of the end market, but also the trust that our customers place in the quality and reliability of our high-purity monograde polysilicon products. Last December, we began production in our new Phase 4b polysilicon facility. Production ramp-up was successful throughout the first quarter. During the first quarter, we produced 31,383 mesh tons of polysilicon. a 33% increase compared to the fourth quarter of last year, of which 97.2% was monograde. In the first quarter, our production costs were $10.09 per kg, a significant decrease from $14.11 per kilogram in the fourth quarter of 2021. primarily due to the decrease in the cost of silicon powder, as well as manufacturing efficiency improvements and a better economics of scale. We continue to see very strong demand for our solar PV products, both in China and overseas. In the first two months of this year, the new installation of solar PV in China were approximately 10.9 gigawatts. According to China TV Industry Association, new PV installations in China are expected to increase from 53 gigawatts in 2021 to 75 to 90 gigawatts in this year. In the first two months of 2022, based on China's customers' data, China's solar PV module export volume was approximately 26 gigawatts, doubled from the same period of last year. As a result of the strong then expected market demand, product pricing across the entire solar PV value chain increased consistently during the first quarter. Based on statistics from the China Silicon Industry Association, the average market SP, including VET, of small chunk monograde polysilicon increased from lemon B, 231.8 per kilogram in the first week of January to lemon B, 253.3 kilogram in the third week of April. Reflecting healthy demand from our customers and continued tight supplies, We also see healthy growth margin in the downstream waiver sector, which indicates that the solid value chain is able to pass down the impact of strong polysilicon prices to the end market. Global trends continue to favor the solar industry, which particularly benefits the polysilicon sector. We are beginning to witness significant policy shifts to accelerate clean energy adoption and decarbonization around the world. During the month of March 2022, the European Union announced its Repower EU initiative, which calls for an acceleration of clean energy transition under the European Green Deal. Germany, in particular, has announced an ambitious program to significantly accelerate its clean energy transition, which plans to deploy 22 GW of solar installations per year starting in 2026, a four-fold increase from 2021 installations of 5.3 GW. As solar energy has already achieved great parity broadly in many regions globally. The recent spike in high and volatile energy prices will further drive solar energy adoption with attractive economic results. All these factors lead to additional demand for our products, which cannot be met by the current market supply. We believe the polysilicon sector will remain one of the most profitable sectors in the solar PV value chain as polysilicon will continue to be in short supply and determine the actual pace and total volume of global installations. We will continue to focus on the efficient operation of our core business, increase our capacity based on market needs, enhance our competitiveness, in quality and reliability, and further optimize our cost structure to provide consistent returns to our shareholders. Now, let me move to our outlook and the guidance for the first quarter and whole year of 2022. The company expects to produce approximately 32,000 metric tons to 34,000 metric tons of polysilicon in the second quarter. of 2022, and approximately 120,000 metric tons to 125,000 metric tons of polysilicon in the full year of 2022, inclusive of the impact of the company's annual facility maintenance. Now, I would like to turn the call to our CFO, Mr. Ming Yang. Ming, please.