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spk10: 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.
spk04: 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.
spk03: 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.
spk08: Thank you, Longan, and hello, everyone. Thank you for joining our earnings conference call today. Now I will discuss the company's financial performance for the quarter and for the year. Revenues were $864 million compared to $1.22 billion in the third quarter of 2022. and $295.5 million in the fourth quarter of 2021. The decrease in revenue compared to the third quarter of 2022, as Longan mentioned, was primarily due to a decrease in sales volume mitigated by an increase in average selling price. Gross profit for the quarter was $668.9 million compared to $978.6 million in the third quarter of 2022, and $239.8 million in the fourth quarter of 2021. Growth margin was 77.4% compared to 80.2% in the third quarter of 2022 and 60.6% in the fourth quarter of 2021. The slight decrease in growth profit compared to the third quarter was primarily due to the lower sales volume as well as higher production costs. Self-generated administrative expense was $44 million compared to $280 million in the third quarter of 2022 and $10.2 million in the fourth quarter of 2021. SG&A expenses during the fourth quarter included $28.4 million in non-cash share-based compensation costs related to the company's share incentive plan. And this compares to the third quarter cost of $263.4 million in the third quarter of 2022 of non-cash, share-based compensation costs. Research and development expense for the quarter was $2.7 million compared to $2.5 million in the third quarter of 2022 and $1.3 million in the fourth quarter of 2021. R&D expenses vary from period to period, reflect R&D activities that take place during the quarter. Currently, most of our R&D are expense. primarily on our end-type technology research as well as research to reduce production costs. Income from operations was $623 million compared to $693 million in the third quarter of 2022 and $228 million in the fourth quarter of 2021. Operating margin was 72% compared to 56.8% in the third quarter of 2022. and 57.7% in the fourth quarter of 2021. As a result of the above, net income attributable to DACA New Energy Corp shareholders was $372.9 million compared to $323.4 million in the third quarter of 2022 and $141.3 million in the fourth quarter of 2021. Earnings per basic ADS was $4.78 compared to $4.28 in the third quarter of 2022 and $1.90 in the fourth quarter of 2021. Adjusted net income attributable to DACA New Energy shareholders excluding non-cashier-based compensation costs was $403.3 million compared to $590.4 million in the third quarter of 2022 and $143.6 million in the fourth quarter of 2021. Adjusted earnings for basic ADS was $5.17 compared to $7.81 in the third quarter of 2022, and $1.93 in the fourth quarter of 2021. Shipped off for the quarter was $648.5 million compared to $720 million in the third quarter of 2022, and $251.1 million in the fourth quarter of 2021. EBITDA margin was 75% compared to 59% in the third quarter of 2022 and 63.5% in the fourth quarter of 2021. Now for a review of our full year 2022 results. Revenue for the year 2022 were $4.6 billion compared to $1.68 billion in 2021. The increase was due to higher policy within average selling prices, also a significantly higher sales volume. Growth profit was 3.4 billion compared to 1.1 billion in 2021. Growth margin for the year was 74% compared to 65.4% in 2021. The increase in growth profit was due to higher sales volume and higher selling prices. SG&A expenses for the year was $354.1 million compared to $39.9 million in 2021. The increase of H&A expenses for 2022 compared to 2021 was primarily due to our non-cashier-based compensation costs related to our Share Incentives Plan, which was $299 million for 2022 compared to $8.4 million in 2021. were $10 million compared to $6.5 million in 2021. The income from operations for the year was $3.04 billion compared to $1.05 billion in 2021. Operating margin was 66% compared to 62.6% in 2021. Interest income for the year was $14.5 million compared $20.5 million in net interest expense in 2021. The increase in interest income was primarily due to our cash balance. Income tax expense for the year was $537 million compared to $170 million in 2021. And net income attributable to Zappa New Energy shareholders for the year was $1.86 billion compared to $748.9 million in 2021. Earnings per basic ADS for the year was $24.51 compared to $10.14 in 2021. Adjusted net income match suitable to DACA New Energy shareholders was $2.16 billion compared to $759 million in 2021. Adjusted earnings per basic ADS were $28.50 per share compared to $10.28 in 2021. EBITDA for the year was $3.15 billion compared to $1.13 billion in 2021. EBITDA margin for the year was 68.4% compared to 67.5% in 2021. And now on the company's financial conditions. As of December 31, 2022, the company had three $2 billion in cash equivalents and restricted cash, compared to $3.05 billion as of September 30, 2022, and $724 million as of December 31, 2021. And as of December 31, 2022, the bank's no equable balance, which can be immediately redeemed for cash, was $1.1 billion, compared to $1.57 billion as of September 30, 2022, and $366 million as of December 31, 2021. These bank notes typically would mature in about a six-month time frame. And now on to the company's cash flow. For the 12 months ended December 31, 2022, net cash provided by operating activities was $2.46 billion compared to $639 million in the same period of 2022. The increase was primarily due to higher revenue and higher gross margin. And for the 12 months ended December 31, 2022, net cash used in investing activities was $1 billion compared to $782 million in the same period of 2021. Net cash used in investing activities in 2022 was primarily related to total capital expenditures on the company's 100,000 metric ton polysilicon project in Balto City, Inner Mongolia. And for the 12 months into December 31, 2022, NIC cash provided by financing activity was $1.47 billion, compared to $736 million in the same period of 2021. The net cash provided by Finance Activities in 2022 was primarily related to net proceeds of $1.6 billion from our Xinjiang DACO's private offerings in China's A-share market. And that concludes our prepared remarks. And now we will open the call for questions from the audience.
spk10: Ladies and gentlemen, once again, if you would like to ask a question, please press star and 1. To withdraw a question, you may press R and 2. If you are using a speakerphone, we do ask you please pick up the handset prior to pressing the numbers to ensure the best sound quality. Our first question today comes from Philip Shen from Roth MKM. Please go ahead with your question.
spk01: Hi, everyone. Thanks for taking my questions. I wanted to start off with your latest outlook on pricing. So specifically, Longin, I think you talked about the rise of module prices, stabilizing polysilicon prices. How do you expect polysilicon prices to trend by quarter for the rest of the year?
spk03: Thank you. Thank you, Philip. I think, you know, the Since the last year, December, that's every year, I think, since the year 2020, and because all the seeds is Thanksgiving, holiday, New Year, Chinese New Year, so the downstream, the weaver, I think, produce, every year, reduce their utility capacity, utilization rate, we call. So last year, same thing happened. The same thing is because Chinese New Year is very close to, I think, you know, the New Year. So basically, in December, last year, December, we didn't sell any, you know, silicon, one per kg silicon. The reason is because I think the player, we have a player almost, you know, the utilization, their capacity is down to, I think, something to zero, even 10%. And they clean all the inventories. So basically then, Chinese media is coming, I think, early February. So January, we also didn't sell anything. So February, we're starting. I think right now, at the end of last year, we have even probably is around the 12,010, 12,210. So we believe, I think, we've given guidance. I think right now, the price, I think, come back from last year, December, almost as low as $120,000 per KG. Right now, it comes back to normal. It's around $210,000 to $250,000 per KG. We sold, I think, more than 10,000 tents in February. The price is higher. We will continue selling. We believe, I think, Q1, the selling price, should be about 220. The reason is because I think in the second quarter of this year, it's not too much new player come in. So it's not too much new output come out. So we think we will continue to digest our inventory, come to normal. So my forecast, I think, before middle of this year, before end of June, the selling price should be about 210, even higher, go to 250. For the Q3, I think the only new capacity is come from our Mongolia phase one come out. But the market demand is continue to go up. So we believe, I think, we can keep silicon price between 150 to 200. Q4, definitely, I think, you know, the picture is not clear. It's like crystal ball. So the silicon price maybe will go down to 100, to 120. So overall, this year, we're still thinking, you know, it's very profitable for DACUs. Second is, we do not think the module price will continue to go down because we see that, you know, high-performance module, like top-con module, Even today in China, we can sell around two lemmings per watt. And overseas, of course, depending on different regions. I think original contract, like Ginkgo, the sign, almost 80% overseas, they are fixed price. So it's very profitable. And yes, maybe the module price will go down in Q4 this year. But that matters. Let's say if the module price is $1.70 per wire, still can support polysilicon price above $200. So the only thing is the growth margin allocation between silicon, waiver, and the shareholder module. But we believe silicon segment still is very, I think, capital-intensive investment, a long-term construction period. still is a challenge. Yes. And I think maybe to next year, then I think it's not only silicon maybe oversupply then demand, but also waiver sale module, the same. So maybe come back, you see the lower module price will stimulate the whole market to come back. So I think it's still a huge volatility. So what I can say is this year, we still think Poly silicon is very profitable, and we will continue to make money.
spk01: Great. Thanks for all that color, Longen. It's really helpful. You mentioned you didn't sell any poly in December or January, and you said you sold 10,000 tons in February. If you're producing 10,000 at least a month, are you saying that incrementally you sold... another 10,000, and also, do you still have any of that excess inventory left over, or have you already sold it all in the month of February? Thanks. Month of February, thanks.
spk03: Basically, I think for the Q1, we're given guidance. I think we were, I think, sell all the production, new production for the Q1. So end of the Q1, we maybe still have inventory around the, you know, 10,000 tons, you know. around about, okay. But, yes, we saw that what we do, I think, produced, still, you know, at a stable price, very high price, yeah, about, let me be, like, around $220 per kg. I'd say February, we saw that more than 10,000, I'm not saying 10,000, more than 10,000. So, for March, we were selling more than 20,000.
spk01: Very good. Thank you, Ongen. Shifting to your bookings, I think on the last call, you're 90% booked for 2023. You can't really move much more than that. I was wondering if you can talk through, you know, what you're contracted for for 23 and perhaps even for 24, and then I'll have one more final follow-up. Thanks.
spk03: Give me the long-term contract. I think for this year, all planning is given guidance is the 1 in 90,000 tenants to, I think, 1 in 95,000 tenants, right? I think for long-term contracts, we almost cover, right now, almost cover more than 90%. So I think we continue, I think, working with the client to sign long-term contracts. So majority, I think, for 23, we're more than 90%. For 2024, we right now is more than, if we didn't have any, not considering any capacity expansion, I think we cover at least, I think next year is 70%. I think the year 2025, we cover more than 65%. But the long-term contract is a rollover.
spk01: Great. Okay. And then the final question I had was on your cost structure. You know, Q4 was a little bit higher. Just curious if you could share how you expect your cost structure to trend by quarter this year. Thanks.
spk08: Okay. Hello, fellas. Ming. So the increase in cost structure for Q4 compared to Q3, primarily due to an increase in raw material costs, particularly the market costs for silicon metal, as well as an increase in electricity rates. So I think, as you know, most investors are aware that China actually broadly did see an increase in electricity rates across all of China, including areas like the United States of China, as well as in Mongolia and Xinjiang as well. All the cost increases have been fully reflected in our updated cost structure for Q4. In terms of our cost trend, we do expect overall our cost structure for the first half of 2023 should be similar to our Q4 cost, while after we ramp up Our Inner Mongolia facility, we expect our costs to trend down. I think based on our latest internal estimate, we do think, for example, our cost in Q4 for 2023 should be about 5% plus lower than, for example, our first half cost, assuming the same electricity and silicon metal cost.
spk01: Great. Okay. Thanks very much, guys. I'll pass it on.
spk05: Great.
spk01: Thank you.
spk10: Our next question comes from Leo Ho from Taiwa Capital Markets. Please go ahead with your question.
spk02: Thanks, management. First of all, congrats on the solid sets of 2022 results, and also we deeply appreciate the clear and encouraging production target for 2023. My first question is on cost. We noticed that there has been some power shortage in Yunnan recently. How do you expect it to affect silicon metal price? And also, do you expect there will be cost-driven poor silicon price hike? This is my first question. Thank you.
spk08: OK. So actually, interestingly, silicon metal cost in Q4 of last year was substantially higher than Q3 of last year, I think primarily due to higher energy costs within China. And silicon metal price briefly declined in January of this year, and now it's a little bit on the trend, a rising trend, but we haven't really seen any significant increase of flippant metal costs due to the issue with V9. That's what we're seeing currently. So as a result, we do think our Q1 cost should be relatively stable compared to our Q4 cost.
spk02: Thank you so much. That's very clear. My second question is on, can you request a little bit color on the industry inventory level for polysilicon? Thank you.
spk08: Industry inventory level for polysilicon? Yes.
spk02: I think, you know,
spk03: China, as you know, that every month our production output is around 1,010. For the inventory, we cannot calculate everyone, but I think the end of last year, the inventory is around less than 50,010. The reason is because Tongwei, they are continued vertically integrated. and also, I think, just send the material outside to do the processing, and then take the waiver back, continue to produce sales. Up to right now, because I think the market come back to normal, I think Tongwei, Tebian, and us, I think the inventory gradually digest. If you ask me, by the end of Q1, How much inventory is there? I think it should be less than 50,000 times.
spk02: Thank you. My first question is on some technological development. We noticed that one of our peers is announcing some breakthrough over continuous crystal growth technology over the course of fourth quarter and also the first quarter of this year. How do you expect the competitiveness of advanced semen method that we use in comparison with the FBR granular silicon that they propose.
spk07: Thank you.
spk08: OK, hello. So I believe your question is, for example, granular silicon, right, the FBR process, versus our cement, traditional cement process, right? Yes. Yes. Okay, so I'll take it from two perspectives. Okay, so I think one is really from quality perspective. Okay, the FBR process, because it has much higher contamination of both hydrogen and also because it uses a graphite stack for heating, so a lot higher carbon. contamination, as well as because of the high surface area compared to the intrinsic area, a much higher surface metal contamination. So if you compare the quality of the advanced Siemens process, especially in high purity supplies like us, compared to a typical FBR type of process, our purity is around 100 times higher. Okay, so a lot of our purities are now on the parts per billion by parts per trillion level, right? So from a purity perspective, I think if you look at what's happening in the market is that, you know, companies, our customers will use our product as their primary use of silicon, and FDR only generally used as a mix. Because that's what I think... I think if the market grows, I think it does have a relatively more limited addressable market. And then in terms of cost structure, I think even ideally if you're talking about maybe saving 20 to 30 kilowatt hour of electricity, you're talking about 6 to 8 RMB per kilogram of cost reduction. But what we're seeing in the market is that FBR generally offers between 15 to 20 RMBs, but more in cost discount or price discount. So I think that's fully reflected in that kind of environment.
spk02: Thank you. My last question, and then we'll jump back to the queue. Can you show first the price premium of N-type polycycline over P-type polycycline right now, either in absolute term or in percentage term? And where do you expect to enlarge or narrow ?
spk03: I think right now, the N-type and the P-type, the price, I think, is not too much different. The reason is because the selling price is high. Right now it's around, you know, every selling like last year, $32. Right now, lemming B is around $220, $230. So the end type of maybe three lemming B per KG higher. But I think the silicon price, you know, back to normal. And then as the demand continue for high quality, high purity of end type, I think the difference will become larger. So when silicon price go down, let's say to 100, I think N and T type will be more than 10 lemmings per kg difference. That means maybe $1, $2 difference is there.
spk02: That's right, Clay. Thank you so much. Great. Thank you.
spk10: Our next question comes from Alan Lau from Jefferies. Please go ahead with your question.
spk07: Please go ahead with your question.
spk09: So my first question is about the progress of your Inner Mongolia plan. So it is supposed to be completed in April, right, and take three months to ramp up. Is it correct? And I would like to know, you have also mentioned that in Tokyo there's not much supply addition. So I would like to know if you may share with us more color on those. there are a lot of peers or new players are scheduled to have their plans to be built, to be completed in Tokyo.
spk03: I think in Mongolia, I think we, I think phase one we call 5A, we are planning, I think, to put into tri-production in April this year. We believe we can full capacity running, I think, in May of this year. So these we're adding for this year, I think, more capacity to our total guidance. So we're giving guidance $190,000 to $195,000. So it's around, I think, we're already calculating, it's around, I think, $60,000 this year, maybe adding to our total guidance. For the phase two, I think we're starting, I think, we already announced that we're starting design. And for this month, we're also starting, I think, So we are planning to early, maybe end of this year or early next year, starting to try production. So that will help us, I think, in next year capacity. Then total together, I think in Mongolia, is 200,010 projects. That's for N type. If for the P type, we'll maybe produce a little more, maybe 5% to 10% more. So the Mongolia capacity, I think, that 200,000 measured tenths of polysilicon. We also, I think in ,, we do the silicon metal. Silicon metal, because I think we are waiting for the energy pool, supply pool. We believe maybe by the end of this year or next year, I think 150,000 to 200,000 measured tenths were put into production. Then meanwhile, the semiconductor, I think, I think in the phase 5A, we're starting maybe production semiconductor in this year, September of this year. This is our total planning for, I think, Mongolia.
spk09: Would you share updates on your peers, some of your peers like Li Hao or other players, because they are supposed to have their plans completed in Q1 and Q2. Do you think that will add to the quality supply and may cause quality prices to drop?
spk03: We have comments on our peers, especially those newcomers, right? So we're not doing any comments. But as you will see, I think, as the timing continues going on, we believe, I think, for newcomers, some challenges there, both, I think, product quality and on-time schedule delivery, et cetera. So we're not going to comment on all of this.
spk09: Thank you. Thank you. So I would like to check our On the dividend ratio, because the company has posted an excellent result in 2022, and also the company has also announced the $700 billion of buyback in 2023 in the U.S. level. So I wonder if it implies what level of dividend ratio in order for the U.S. ADR to have the required amount of cash to carry out the buyback.
spk03: Basically, I think next month, the Asia company, we have a shareholders meeting, and at that time, we will announce the, I think, dividends declared. But we also, I cannot give you a detailed figure, but as we already announced, we will buy back, basically, we own, I think, a U.S. company owns the Asia 73%, and we will buy back 700 million U.S. dollars. So you can easily do a calculation. We believe we should be between 35% to 40%. Our net profit will be distributed as a dividend. Be clear, yeah. But the figure is not finalized. Thank you.
spk09: Thank you. Thank you. My last question here is on the TCAOB investigation. How do you see that? And will this be a positive catalyst to the company?
spk03: I think, you know, the four bigger firms, I think two years already passed, you know, basically. Of course, the report still is not on the website, PGLB website. But I think they're already starting, I think, you know, Deloitte and PwC right now. I think the Chinese government is very cooperative, and we're also very open as, you know, a public company. I don't think any challenge. and so far. I think, you know, hopefully, we may, the PCLV can go through, you know, their regular, I think, regularly inspections for their members. So, we believe, I think, the big four firms in China, the branches will be okay.
spk09: Thanks a lot for taking my question. Thank you. Thank you.
spk10: Our next question comes from Gary Chow from Credit Suisse. Please go ahead with your question.
spk07: Hello, Benjamin.
spk06: Thank you for taking my question. So just a quick follow-up on our Share Back Back program. So firstly, I want to ask in terms of the timing, so when do we expect to receive the dividends from A-Share subsidiary? And secondly, for the buyback, so is it possible that we would consider to do some small buyback before receiving the A-share dividends? Or is it probably going to be after we receive the dividends from A-share? And lastly, because I did a simple calculation, so 700 million US dollars, that's almost kind of 20% of our current market cap, and probably even bigger in terms of our competition. So just wondering, does this surprise, it implies that, you know, how do we get the funding? The fact that it could be a little bit kind of relatively aggressive.
spk03: Thank you. Gary, let me answer the first question, then Ming answer the second question. Basically, we know right now we cannot complain anything to the market. The market is always correct. So right now, our stock price, we also cannot do anything. But we know this is totally below our, I think, equity value. So we just finished, I think, raised $140 million US dollar. Basically, it used our Chongqing, I think, the 100% subsidiaries in Chongqing, the money is deposited to China Merchant Bank. Then we got the loan, I think is around 140 million US dollar. So yes, in this window open, we will buy back. The amount is around 140 million. Then we already declare the dividends I think next month That will be, you see, $700 million. Then you take $140 million away. You have like $560 million left. That's for the next window. That means May and June, the window open, we'll buy back. So basically, I only can tell you that. We were two windows. We're going to execution our stock buyback program. We'll really do that.
spk08: Yeah, so like Longan has mentioned, right, so I think both our board and our management team believe our current share price in the U.S. is extremely undervalued. It's trading at a huge discount, whether it's to the company's cash level or equity value or future potential earnings. I think we announced our results for 2022. You can see our cash generation, our current cash balance on hand. I think you forecast any expectations of poly pricing for this year, given that it's still around $30 per kilogram. Today in the market, we will continue to generate significant cash flow for this year and likely for future periods because we are the lowest cost. producer in the world effectively, right, with some of the highest quality, especially when N-type products become likely to become the mainstream market over the next year or so. And we are going to be one of the primary suppliers of N-type poly as well. So we do believe, you know, now it is really a good opportunity for the company to be very active in terms of our Share Buy Bad program. So I think in terms, your comment in terms of the market cap, while it does look like it's a fairly high percentage, I think it's because our market cap is extremely low compared to our cash flow generation and also the capital that we have. So that's the comment from me.
spk06: Yeah, thanks a lot. And secondly, just a very quick question on our future capacity expansions. So will we consider or study the kind of possibility to expand in other countries outside China? So if we go in the future, if we see kind of more kind of a trade restrictions.
spk03: Yes, we always research all the situation and including the overseas capacity, especially, I think, the market, global market, the module price, also the regional, political, I think, the conference, et cetera. So, yes, we will compare. The reason that we go to overseas, we have to consider the local business tactics, all the resources, and the people, the talent, and so on. So, definitely, if any opportunities, we do the study, and it will work now.
spk05: Okay, thank you. That's all my questions. Thank you.
spk10: Our next question comes from Alan Pond from J.P. Morgan. Please go ahead with your question.
spk00: Hi, congratulations on a set of great results. I have just one question on your CapEx. Can you share with us, like, what is the CapEx commitment for Phase 5A and Phase 5B? How much is already spent, and how much are you expected to spend this year?
spk08: Okay. So, I have the numbers in RMB first, and I'll kind of translate to US dollars. So, CapEx for 5A, total CapEx is around 9.5 billion RMB or so. And then for 9B total capex, it's expected to be about 9 billion RMB.
spk07: So, let's see if that really fits now.
spk08: So I guess 5A is around $1.4 billion, and then 5B is around $1.3 billion or so. And then actually for the full year of 2022, we spent approximately $1.3 billion in CapEx.
spk07: Most of it is related to Inner Mongolia. Project 5A, but some of it was also the remaining payments for 4B and for technology upgrades.
spk08: And in terms of capex for 2023, I think for the full year, we're expecting roughly $1.2 billion of capex for the full year, of which roughly $900 million to $1 billion is for Phase 5b in the Mongolia, and around $300 million is for the remaining payment for our Phase 5a in the Mongolia.
spk00: Got it. Thanks very much.
spk10: Ladies and gentlemen, at this time, we'll end today's question and answer session. I'd like to turn the floor back over to Kevin for any closing remarks.
spk04: Thank you, everyone, again for participating in today's conference call. Should you have any further questions, please don't hesitate to contact us. Thank you, and bye-bye.
spk10: Ladies and gentlemen, that does conclude today's conference call. We do thank you for joining. You may now disconnect your lines.
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