Daqo New Energy Corp ADR

Good day, everyone, and welcome to the DocuNew Energy fourth quarter of fiscal year 2022 results conference call. All participants will be in a listen-only mode. Should you need assistance, please see a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one using a touchtone telephone. To withdraw your questions, you may press star and two. Please also note today's event is being recorded, and at this time, I'd like to turn the conference call over to Kevin Ha, Investor Relations. Please go ahead.

Hello, everyone. I'm Kevin Ha, the Investor Relations of Dr. New Energy. Thank you for joining our conference call today. The company just issued its financial results for the fourth quarter and fiscal year of 2022, which can be found on our website at www.dqcolor.com. To facilitate today's conference call, we also have prepared a PPP presentation for your reference. You can also find a PPP presentation at our website. Today attending the conference call, we have Mr. Min Yang, our Chief Financial Officer, and Mr. Lunga, our Chief Executive Officer, and myself. So today I will read... So before we begin the formal remarks, I would like to remind you that certain statements on today's call excluding 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 Security 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 statements. 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 the preliminary view as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainty. All information provided in today's conference call 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 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, now I will send a call to our CEO, Mr. Zhang.

Thank you, Kevin. Good evening, everyone. We are very pleased to report record results for the year 2022. We would like to thank our entire team for achieving such a strong financial and operational performance. Our annual polysilicon production volume was 133,812 metric tons in 2022, exceeding our guidance of 130,000 to 132,000 metric tons and a 54.4% higher than the 86,587 metric tons produced in 2021. Our sales volume was 132,909 metric tons in 2022, 76.4% higher than 75,356 metric tons in 2021. Thanks to the robust demand for solar PV products globally, Polysilicon STs increased by approximately 50% year-over-year from $21.76 per kg in 2021 to $32.54 per kg in 2022. As one of the most profitable and fastest-growing polysilicon manufacturers in the world, we achieved strong financial results. with a revenue of $4.61 billion in 2022, an increase of 175% compared to $1.68 billion in 2021. Growth margin improved to 74% in 2022 from 65.4% in 2021. And net income attributable to our shareholders was $1.86 billion in 2022, an increase of 148.4% compared to $749 million in 2021. We generated approximately $2.47 billion in operating cash flow for the year and ended the year with a very strong balance sheet with $4.65 billion US dollar in combined cash, cash equivalent, risk-free cash, and banking notes with maturity within six months. For the year of 2022, approximately 99% of our production volume was mono-grade polysilicon. We continue to be one of the world's leading suppliers of ultra-high purity anti-mono polysilicon. The foundation for the next generation N-type solar cell technology. Towards the end of 2022, a temporary seasonal slowdown in solar PV market caused inventory adjustments across the value chain, similar to the year end of 2021. As a result, the downstream sectors, especially waiver, cell, and module manufacturers reduced inventories and significantly lower production utilization rates. These led to widespread price decline across the value chain. In February 2023, lower module prices effectively stimulated market demand, and downstream production utilization rates quickly ramped up back to normal levels, reducing channel inventory significantly and leading to a meaningful recovery of polysilicon SP. Current polysilicon prices of approximately lemon beads, 230 to 250 per kg, are very healthy and reflect the strong demand for solar modules in the range of lemon beads, 1.7 to 1.8 per watt. Global solar PV installations were approximately 268 gigawatts in 2022, a 53% annual increase from approximately 175 gigawatts in 2021, growing faster than most had forecasted at the beginning of the year. The increase in polysilicon supply in conjunction with supportive global climate change policies as well as favorable economic conditions driven by great parity made 2022 one of the industry's fastest-growing years. Meanwhile, solar module price increased from approximately $1.80 per watt in Q1 2022 to $2 per watt in Q4 2022. Despite higher solid module market pricing that many expected would lead to slowdown in China's PV installation, the Chinese PV end market also saw robust growth for the year, with installations of 87 gigawatts, an increase of 59% compared to 2021. These market conditions suggest that the global PV market demand was actually limited by supply, specifically of polysilicon. Key global trends, including the urgent need to address climate change, the driver for greater energy independence, as well as positive economic conditions driven by a grid parity, have led to strong demand momentum for renewable energies, including solar PV. We believe energy transformation is still in its early stage and has opened a huge potential market for solar PV, which is likely to be far beyond expectations. The high-purity polycysticum sector will continue to benefit strongly from these positive developments. Baku's new energy is well-positioned to benefit from the above trends and deliver continued The construction of our Phase 5A 100,000 metric tons polysilicon capacity expansion project in Inner Mongolia is progressed smoothly. We expect to complete the construction and start pilot production in April 2023 and ramp up full capacity by the end of June 2023. Therefore, we expect to produce approximately 190,000 to 195,000 metric tons of polysilicon in 2023, 38% to 46% more than in 2022. Furthermore, our Phase VB project for an additional 100,000 metric polysilicon in Inner Mongolia will start construction in March and is expected to be completed by the end of this year. PolyPV will continue to play a critical role in transforming the global energy infrastructure by powering the world with sustainable, cost-effective, and renewable energy at a pace much faster than thought possible. As a leading player in polycyclic industry, we outperform most of our peers in terms of unit profitability, cost structure, and the product quality in 2022. We believe our focus on our core competitiveness, solid growth roadmap, and our strong financial will allow us to benefit from the long-term growth of global solar PV market. For the future outlook and guidance, We expect to produce approximately 31,000 metric tons to 32,000 metric tons of polysilicon in the first quarter of 2023, and approximately 190,000 metric tons to 195,000 metric tons of polysilicon in the fall year of 2023. Inclusive of the impact of the company's annual facility maintenance, now I will turn the call to our CFO, Mr. Yang, please.