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spk02: Good day and welcome to the DACU New Energy fourth quarter and fiscal year 2023 results conference call. All participants will be in the 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. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Ms. Anita Xu. Please go ahead.
spk03: Thank you. Hello, everyone. I'm Anita Xu, the investor relations of Tako New Energy. Thank you for joining our conference call today. Dakonew Energy just issued its financial results for the fourth quarter and fiscal year 2023, which can be found on our website at www.dqsolar.com. Today, attending the conference call, we have our chairman and CEO, Mr. Xiang Xu, our CFO, Mr. Ming Yang, and myself. The call today will begin with an update from Mr. Xu on market conditions and company operations, and then Mr. Yang will discuss the company's financial performance for the quarter and the year. After that, we'll 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'll 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. So Mr. Xu will make his remarks regarding current market conditions and company performance in Chinese, which I'll translate into English after he finishes. Now I'll turn the call to our CEO.
spk04: Thank you, Anita. I'm Xu Xiang, the CEO of Dajian. Thank you for attending today's conference. 2023 is a year full of challenges for the solar industry. Global equipment has set new records, but at the same time, because of the market price, The sales volume has also reached 200,000 lights, and in 2022, the 13-year-old 2909-light has grown by 50%. Global solar energy supply products' demand has grown rapidly in 2023, but the price of multi-billion-dollar markets has experienced a significant fluctuation. In 2022, multi-billion-dollar markets will be able to supply the supply of top-down oil. The price continues to be in a high position, and it will be paid back from the beginning of 2023. The price of Doujin Kui began to decline gradually. Therefore, the average sales price of Doujin Kui fell from $32.50 per kg in 2022 to $11.18 per kg in 2023. Although the average price of Doujin Kui fell significantly, our income fell from $46 billion in 2022 to $23 billion in 2023. However, the increase in sales volume has to be underestimated. The company's profit margin in 2023 is still strong. China China China China China In the last quarter, we have increased by 3,350 tons. In the fourth quarter, our high-quality N-type polyurethane products are in strong demand from customers. Our products' inventory is also at a very low level, so that we can effectively resist the next risk during the end of the year. With the release of new materials, the price difference between high-quality manufacturers and newcomers has become obvious in the fourth quarter. Although the market is competitive, But because we are still ahead in terms of cost and quality, we are still able to maintain a win-win situation. Our unit production costs are gradually decreasing. In 2023, the fourth quarter will be about $1.2 per kilogram, which is the same as last year. Our N-SIM material products will be nearly 60% in December. In general, although the market conditions are challenging, but our fourth quarter has received $1.28 billion in inexhaustible pre-sale benefits. and maintain an objective progress rate. We expect that the total production capacity of the first quarter of 2024 will be from 60,000 to 62,000 tons. Compared to the fourth quarter of 2023, we plan to invest in a 5B project in the second quarter of 2022. Therefore, we expect that the total production capacity of the first quarter of 2024 will reach from 280,000 tons to 300,000 tons, which will increase by 40% to 50% in 2023. With more than 10 years of production experience, the production system is fully digitalized and highly integrated. We will further optimize the operation efficiency, In fact, the N-type material is in the proportion of the product combination. At the industry level, from the beginning of 2021 to the end of 2021, due to the slowdown of economic demand and the deterioration of the stock market, the price of goods has dropped. The price of goods has increased from 9 months to 87 yuan per kilogram, down to 12 months to 65 yuan per kilogram. From the demand point of view, since October, the price of goods has dropped due to the deterioration of the stock market, and the stock market has dropped sharply. The N-type component price broke through its peak in November, A yuan of RMB is not enough. The price of solar panels and electronic products is almost close to the cost line. From the point of view of supply and demand, the production volume of China's multi-billion-dollar products is relatively high. Most of the production growth comes from the growth of O3T, including some new investors. However, the growth of effective production on high-capacity manufacturing is lower than expected, which leads to a price gap between O3 and O3Y. The price of N-type and P-type multi-billion-dollar products ranges from 65 to 68 yuan per kilogram of RMB. and 55 to 62 yuan per kilogram. In the upper half of 2020, we expect that the price will be affected by the economic impact of China's circular economy and will be stable in the second quarter. As the next-generation manufacturers upgrade to the N-type, they will accelerate the N-type top-con products. The high-priced P-type POC products will push the market and accelerate the full-fledged innovation of the N-type products. We expect that in this trend, in the N-type market in 2020, The demand for the high-intensity N-type transceiver will remain strong. Looking back at the past year, 2023 is a year when renewable energy has achieved a significant breakthrough. The world is accelerating the transformation of renewable energy. Among them, the continued expansion of China's太阳能光伏 market has played a key role. In 2023, the new light bulb capacity of the light bulb reached 216.88GW and reached a historical high of 148% on average. Especially in December, We believe that the new era of N-type products will lead to a new era of N-type products. We think that by further improving We believe that China will have the largest number of multi-border production facilities in the world. 我们已经开始尝试使用人工智能技术, 将这些数据应用于提高产品组合中N型硅胶的笔记, 降低生产成本, 通过识别各个制造流程之间的关系, 最终预测建模得到具有生产模型的输入范围, 再参考。 展望未来, 我觉得我们收集更多的数据点, 并充分利用人工智能正常分析。 现在请Anita替我翻译一下。
spk03: Hello everyone, this is Anita. I'll now translate our CEO, Mr. Xu's remarks. 2023 was a year of unforeseen developments and challenges in the solar industry with record installation volumes worldwide, but also record low prices at the end of the year. Thanks to the dedication and valuable contribution of our team, we reached an annual public production volume of $197 billion. metric tons in 2023, meeting our guidance of 196,000 to 199,000 metric tons and representing a 47.8% year-over-year growth rate compared to 133,812 metric tons produced in 2022. We sold 200,002 metric tons, 50% higher than 132,909 metric tons in 2022. Despite robust demand growth for solar PV products globally in 2023, the high poly prices driven by capacity mismatches between upstream and downstream players and the resulting supply shortages that we have seen in 2022 were alleviated by early 2023. As a result, poly ASPs declined significantly for the year to $11 per kilo from $32.54 per kilogram in 2022. Our revenue was $2.3 billion in 2023 compared to $4.6 billion in 2022 due to much lower ESPs. The decline was partially offset by the higher sales volume. Despite the challenging market conditions, gross margins still came in strong at 39.9% for 2022. The company generated a very strong operating cash flow of approximately 1.6 billion U.S. dollars for the year and continued to maintain a healthy balance sheet with no financial debt. By the end of the year, the company had a cash balance of 3 billion U.S. dollars and a combined cash and bank notes receivable balance of 3.2 billion dollars. During the fourth quarter, continued optimization of operations and improvements in yields and throughput at our two poly facilities resulted in total production volume of 61 and 14 metric tons, an increase of 3,350 metric tons compared to the previous quarter. Fourth quarter saw solid demand from customers for high-quality anti-poly, and as a result, our finished goods inventory was at a very low level, which has allowed us to effectively hedge against downside risks during the off-season period close to the end of the year. In Q4, as new capacity was released, the price disparity became more apparent between high quality manufacturers and new engines. Despite fierce market conditions due to the addition of poly supply, we continue to maintain our leadership in both cost and quality. Compared to the end of last year, our production costs trended down quarter over quarter, reducing by approximately $1.2 per kilo from fourth quarter of 2022 compared to that in fourth quarter of 2023. During the month of December, our entire product mix reached approximately 60%. Overall, we maintained profitable despite the challenging market conditions, generating $128 million in EBITDA for fourth quarter and maintained a strong cash flow. We expect our first quarter 2024 total quality production volume to be approximately 60,000 metric tons to 62,000 metric tons, similar to that for fourth quarter 2023 as the company maintains floor production. We plan to begin initial production at our new Inner Mongolia 5B facility in the second quarter of 2024. And as such, we anticipate full year 2024 production volume to be approximately 280,000 metric tons to 300,000 metric tons, approximately 40 to 50% higher than in 2023. With more than a decade of experience in poly production, as well as a fully digitalized and integrated production system that optimizes operational efficiency will further increase anti-production in the product mix. Debriefing on the industry, poly prices in the fourth quarter declined from approximately 87 RMB per kilo for monograde poly in September to approximately 65 RMB per kilo in December, primarily due to a seasonally lower demand. On the demand side, in October, the ingot segment reduced utilization rates due to accumulated inventory and lower wafer prices. In November, N-type module prices dropped below 1 RMB per watt for the first time, and solar cell manufacturers could hardly make a profit. On the supply side, poly production volumes in China continued to increase on a month-over-month basis in Q4, and Tier 2 and Tier 3 manufacturers, including new engines, contributed most of the growth in poly supply. However, leading high-quality manufacturers produce less than anticipated, widening the price gap between high-quality manufacturers and Tier 2 companies. Near the end of December, N-type and P-type poly prices came in at around 65 to 68 RMB per kilogram and 55 to 62 RMB per kilogram, respectively. Going into the first quarter of 2024, we expect poly prices to rebound slightly in Q1 seasonally affected by the Chinese New Year, and then stabilizing Q2. The market transition to N-type products has been accelerating, as downstream producers continue to switch to N-type products, driven by the higher price premium for N-type PropCon products over P-type PERC products. We expect this trend to continue throughout 2024, with strong demand for higher-purity N-type poly in a market with tight supply. Overall, 2023 was an unprecedented year, marking a step change for renewable energy growth. The global acceleration in the transition to renewable energy was primarily driven by China's booming solar market with new solar PV capacity reaching record high at 216.88 gigawatts, a 148% year-over-year growth. This surge was particularly evident in December when China added 53 gigawatts, which is roughly a quarter of the entire year's additional capacity. Solar has become one of the most competitive forms of power generation. The continuous cost reduction in solar PV products and the associated reduction in solar energy generation costs are expected to create substantial additional green energy demand. So with 2023 setting the stage for gradually phasing out P-type products, We believe that 2024 will mark the year when end-type products dominate the industry. We are optimistic that we'll capture the long-term benefits of the growing global solar PV prop market and maintain our competitive advantage by enhancing our higher efficiency end-type technology and optimizing our cost structure through digital transformation. In 2023 alone, we collected more than 20 billion manufacturing process data points at each of our poly production facilities. We believe that we have one of the largest pools of collected and stored poly production data amongst our peers in China. So we have begun to apply AI to this vast amount of data to help increase the proportion of untyping our product mix and reduce our production costs by identifying relationships across discrete processes and ultimately predicting the optimal inputs and parameters that will yield the best production results. We expect that as we collect more data and further leverage our AI-powered analytics to provide additional insights, we'll be able to further reduce cost, achieve higher efficiency, and increase productivity. So now I'll turn the call to our CFO, Mr. Ming Yang, who will discuss the company's financial performance for the quarter. Ming, please go ahead.
spk06: Thank you, Anita. Hello, everyone. This is Ming Yang, CFO of Doctoral New Energy. We appreciate you joining our earnings conference call today. We'll first go over the company's fourth quarter 2023 financial performance, then follow with our full year 2023 financial results. Revenue for the fourth quarter of 2023 were $477 million compared to $484.8 million in the third quarter of 2023 and $864.3 million in the fourth quarter of 2022. The decrease in revenue compared to the third quarter of 2023 was primarily due to decrease in sales volume, mitigated by increasing ASP. As Mr. Shih mentioned earlier, ASP for Q4 was $7.90 per kilogram, which was 3.8% above Q3 ASP of $7.68 per kilogram. Gross profit was $87.2 million compared to $67.8 million in the third quarter of 2023, at $669 million in the fourth quarter of 2022. The growth margin was 18.3% compared to 14% in the third quarter of 2023 and 77% in the fourth quarter of 2022. The increase in growth margin compared to the third quarter of 2023 was primarily due to higher average selling price and lower production costs. Despite an 8% increase in silicon metal procurement costs in Q4 compared to Q3, we managed to reduce costs slightly due to improvements in utilization as well as other improvements in manufacturing efficiency. H&A expenses were $39 million compared to $89.7 million in the third quarter of 2023 and $44 million in the fourth quarter of 2022. H&A expenses during the fourth quarter includes $19.6 million in non-cashed share-based compensation expense related to the company's sharing incentive plan compared to $46.3 million in the third quarter of 2023. R&D expenses were $3.3 million compared to $2.8 million in the third quarter of 2023 and $2.7 million in the fourth quarter of 2022. R&D expenses can vary from period to period and reflect R&D activities that take place during the quarter. Earned activities for the quarter were primarily related to quality improvements and end-type product research. Foreign exchange loss was $0.8 million compared to a gain of $3.1 million in the third quarter of 2023 and is attributed to the volatility and fluctuation in the USD-CNY exchange rate during the quarter. Income from operations was $83.3 million. compared to $22.5 million in the third quarter of 2023 and $623 million in the fourth quarter of 2022. Operating margin was 17.5% compared to 4.6% in the third quarter of 2023 and 72.1% in the fourth quarter of 2022. Net income attributable to DACA New Energy shareholders was $44.9 million compared to net loss of $6.3 million in the third quarter of 2023 and net income of $332.7 million in the fourth quarter of 2022. Earnings per basic ADS was $0.64, compared to loss per basic ADS of $0.09 in the third quarter, and earnings per basic ADS of $4.26 in the fourth quarter of 2022. Adjusting net income attributable to Dr. New Energy shareholders, which excludes non-cashier-based compensation costs, was $66 million compared to $44 million in the third quarter of 2023 and $363 million in the fourth quarter of 2022. Adjusted earnings per basic ADS was $0.94 compared to $0.59 in the third quarter of 2023 and $4.65 in the fourth quarter of 2022. EBITDA was $128.2 million compared to $70 million in the third quarter of 2023 and $649 million in the fourth quarter of 2022. EBITDA margin was 26.9% compared to 14.5% in the third quarter of 2023 and 75% in the fourth quarter of 2022. Now I will go over the company's four-year 2023 financial results. Revenue for 2023 was $2.3 billion compared to $4.6 billion in 2022. The decrease was primarily due to lower Polysilicon average selling prices and partially mitigated by higher sales volume. Gross profit was $920.7 million for 2023 compared to $3.4 billion in 2022. Gross margin was 39.9% compared to 74% in 2022. The decrease in gross profit was primarily due to lower average selling price. SG&A expenses were $213 million compared to $354 million in 2022. The decrease was primarily related to a reduction in non-cashier-based compensation costs related to the company's share incentive plan. Undie expenses in 2023 were $10 million compared to $10 million in 2022. Income operations was $783.4 million compared to $3 billion in 2022. Operating margin was 33.9% compared to 66% in 2022. Net interest income was $52.3 million compared to $14.5 million in 2022. The increase in interest income for 2023 was due to the company's higher cash balance at banks. Income tax expense was $174 million compared to $577 million in 2022. Net income attributable to Darko New Energy shareholders for the full year of 2023 was $421 million compared to $1.8 billion in 2022. Earnings per basic ADS were $5.64 compared to $24 in 2022. Non-GAAP adjusted net income attributable to Darko New Energy shareholders was $554 million compared to $2.1 billion in 2022. Adjusted earnings per basic ADS were $7.42 in 2023 compared to $27.97 in 2022. EBITDA was $918.6 million compared to $3.15 billion in 2022. EBITDA margin was 39.8% compared to 68.4% in 2022. And now on the company's financial condition. As of December 31, 2023, The company has $3 billion in cash, cash equivalents, and interest in cash, compared to $3.28 billion as of September 30, 2023, and $3.5 billion as of December 31, 2022. At the end of 2023, the bank note receivable balance was $116 million, compared to $275.8 million as of September 30, 2023, and $1.13 billion as of December 31, 2022. Notes receivable represent banknotes with maturity within six months. Now on the company's cash flow. For the 12 months ended December 31, 2023, net cash provided by operating activities was $1.61 billion compared to $2.46 billion in the same period of 2022. And for the 12 months ended December 31, 2023, net cash used in investing activities was $1.19 billion compared to $998 million in the same period of 2022. Net cash used in investing activities in 2023 was primarily related to the company's capital expenditures on the company's 5A and 5B policy expansion projects in Balto City in Mongolia. And for the 12 months ended December 31, 2023, net cash used in financing activities was $795 million, compared to $1.47 billion of investments net cash provided by financing activities in the same period of 2022. The net cash used in financing activities in 2023 was primarily related to $486 million in share purchases and $303 million in dividend payments made by the company's subsidiary, Xinjiang.co, to its minority shareholders on the China's A-share market. And that concludes our prepared remarks. We will now open the call to Q&A from the audience. Operator, please begin.
spk02: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Phil Shen with Roth MKM. Please go ahead.
spk00: First one is on the outlook for price. You said in your prepared remarks that Poly prices could rebound in Q1 and then stabilize in Q2. Can you quantify what N-type and P-type pricing could be in Q1? When you say rebound slightly, what does that mean? And then would you expect that to just be flat in Q2 and then If you have any view on what Polly pricing does in the back half of 24, that would be very helpful. Thanks.
spk03: The price of 2023 and 2024, according to the market,
spk04: The demand of the market and the research of the entire supply chain, I think the price in the upper half of the year should be between 70 and 75 yuan. The P type should be around 65 yuan. In the second half of the year, it is expected that the market will warm up. The N type should be around 80 yuan. The P type should be around 75 yuan.
spk03: So based on our understanding of the market supply and demand and our own forecast, we expect that in the first half, N-type will range between 70 to 73 RMB per kilogram, while P-type will be around 65 RMB per kilogram. And in the second half, depending on demand and whether it will exhibit a slight recovery and a growth, we expect that N-type might rebound to 80 RMB per kilogram and P-type around 75 RMB per kilogram.
spk00: Got it. And can you explain the dynamics for what's going on and why there could be that expansion of price? Is it – have you seen, from an industry structure standpoint, have you seen many players exit or shut down? And do you expect utilization – to be lower as a result of having limited supply, or do you expect demand to be the offsetting factor resulting in the higher price? Thanks.
spk03: I'll fill in for Mr. Xi.
spk06: dynamic, right? So, if we look at the current market, we are actually in a period of relatively low end market demand. We think the current end market movements in terms of module production utilization is probably only 60 to 70 percent compared to, say, the September level of last year. So, but this already brings us to end type poly in the 70 to 73 RMB range and P-type in the 60s range. Much improvement from the December level of pricing. So we do think going into the summer when the demand level recovers, let's say that they can recover to the level that we saw in the August-September timeframe, then certainly we think N-type can easily go back to the 80s R&B level, while P-type probably in the 70s R&B level. And in terms of what we're seeing in the market, overall we are seeing a relative oversupply of poly relative to demand. But specifically, we look at the N-type poly. Based on industry statistics, We think there's only around 60,000 to 70,000 metric tons of supply per month, while the demand we think actually exceeds 100,000 metric tons a month based on the amount of N-type cell capacity that has been put in place in the market. So we do believe we will continue to see a very strong demand, robust demand for N-type in a tight supply market. going forward. And actually, that's what we're seeing today even for N-type products.
spk00: Great. Thank you, Ming. Do you think, from a capacity standpoint for N-type, do you see others trying to ramp up that N-type poly capacity? And do you think they can be successful to try to close the gap? Or do you expect this difference between supply and demand the undersupply situation, how long could that last? Could that last about a year, or do you think it's maybe just six months, or could it last for a number of years? Thanks.
spk06: 问这个,现在N型的产能,就是现在比方说新金入子,还有我们的一些同行,他们目前产能型的一些情况到底是什么情况? 我们新型的N型是占百分之二,
spk04: 60% to 70%. Our production capacity is now between 60% to 70%. This is the N-type production capacity. Our copper industry is almost the same as ours. But the new business owners should say that the N-type quality is relatively low. It's very low. We haven't reached the production capacity yet. So our anti-production in a product mix is in between 60% to 70% as of now. And based on our awareness, our peers, especially the top players like Tongwei, it's somewhat similar to our anti-production level.
spk03: But for the new players, they are almost incapable in producing the untyped at the current stage. So we believe that this year it will still be a market where there's tight untyped supply.
spk00: Okay, great. Thank you. One last one, and then I'll pass it on. You know, the stock is down 30% year-to-date. What's your view or thoughts? thinking around another buyback program. Could you add more to the program or restart it? And is that something that you're interested in doing? Thanks.
spk03: I'd like to ask the management team if they have any thoughts on whether to continue to buyback or increase the buyback.
spk04: I'd like to ask the management team if they have any thoughts on whether to continue to buyback or increase the buyback. 我认为我们的公司是非常健康的一个公司,目前我们也有充足的现金流。 刚才我们的CEO杨也会跟大家详细的介绍这方面的问题,有些问题可以找我们杨总。 但是同时来讲呢,我们今年董事会也在考虑,因为现在市场面临着挑战,还有很多没有预测的这个, This is a variety of this situation Difficult situation So our board of directors is now talking about that We want to see the changes in the market The changes in the market See if there are any new challenges in the market But we have to maintain our market We have to maintain the health growth of our company now We want a very good one Our asset burden table So we think We as our big company Our big company We have to rely on our stock Thank you.
spk03: Thank you, Phil. First of all, we are very confident in our company's operations, and we have sufficient cash flows that Min has mentioned previously. However, as the market is currently undergoing tremendous challenges and there are a lot of unforeseeable market dynamics happening, the board is keeping a close eye on the current market conditions and see how it evolves as time goes. And we believe that we still want to maintain a very healthy balance sheet to survive in this market and to undergo the current conditions. That being said, we are still considering the share repurchase plan, but that will be contingent upon the A-share dividend plan, which the A-share board will discuss and post they decide on the A-share dividend plan for 2023, we believe that we will get back to our investors about whether we'll release another share repurchase program or via other methods to increase shareholder confidence like dividends.
spk00: Okay. Thank you very much. I'll pass it on. Okay. Thanks, Phil.
spk02: Thank you. The next question comes from Alan Lau from Jefferies. Please go ahead.
spk05: Thanks a lot for taking my question. And actually the 4K result is decent amid the challenging market situation. So a couple of questions. So first of all, so what is the CAPEX plan for 2024? Okay.
spk06: Hi, Alan, this is Ming. So, regarding the CapEx plan this year, so if you look at our ongoing CapEx projects, right, so primarily this year will be for the Inner Mongolia Phase II. That's where we're spending most of our CapEx, as well as some of the remaining payments on the Inner Mongolia Phase I. And there's Some small payments on the semiconductor project that's expected to start production this year, and then our silicon metal projects in both Inner Mongolia and Xinjiang. So from that perspective, our current CapEx budget for the year is around 8 billion to 9 billion RMB. for 2024 to implement the above projects, and we're expecting that. So in terms of U.S. dollars, roughly 1.1 to 1.3 billion U.S. dollars, and certainly the CAPEX fully funded.
spk05: Thanks a lot. So following the question from Phil, because some of the investors are also asking as to there's 200 million remaining from the 700 million buyback program last year. So this amount of cash is sitting offshore already and it's not contingent to any of the distribution from the Asia level. So is there any preliminary plans like if dividends is open for consideration because some of the peers, some of the ADRs have also announced dividend payouts, which has resulted in good reaction from the market.
spk03: We can all think about it. We can all think about it. Regarding the $2 billion last year, we haven't...
spk04: We haven't been able to complete our original plan. So we think, as I said just now, after the Chinese stock market goes up, after the Chinese stock market goes up, we will consider our fund-raising plan and our return fund-raising plan. I think we will definitely do this. We will definitely do this to earn the confidence of our mayor and to earn the confidence of our management and the company.
spk03: So regarding the $200 million remaining of our $700 million share repurchase program announced, like Mr. Hsu has mentioned previously, that will be discussed after the A-share dividend plan is set in stone. And we will definitely consider whether to give off dividends or to roll out another share repurchase. We believe that we will definitely consider these plans to increase confidence in our company and in our management team. This issue is also a board member and the payout ratio for 2023 is still not decided yet as they have not convened to have the board meeting for the Asia. Given that we cannot say for sure what program we are going to roll out or what the amount will be, but we hope that our investors could understand and once the Xinjiang Dakou announces their dividend plan for the year, we will announce at the same time and our board will discuss further on the topic.
spk05: Thanks a lot. That's very clear. So switching gear to some of the technical questions. Since recently there's some trial in the downstream players in regards to cauliflower type anti-poly. So I wonder if that may help to release the shortage in anti-poly and also are new players able to achieve that type of purity, even for the cauliflower type policy. Thanks.
spk03: Thank you.
spk04: So we have been talking with our downstream players
spk03: very fervently. Based on our understanding, it's still very difficult to produce and type with other, let's say, cauliflower-type poly. There's still a very high barrier to tackle, and we are keeping an eye on the new technology. But based on our understanding, there's still a huge step toward making un-type with cauliflower poly.
spk05: Thank you. That's very clear. My last question is in regards to the power tariffs. Because I think quite a lot of investors have inquired the power tariff hike in Sichuan. And actually, that's a general situation in China. The power prices have been increasing. So we would like to know in relation to our deal in Xinjiang and also our power prices in Inner Mongolia. What is our view on that and will there be risk of further power tariff hike and will that lead to increase in production cost? Thanks.
spk03: So investors want to know whether Xinjiang and Inner Mongolia's electricity prices have increased or not, whether there is such a possibility for us.
spk06: I don't know.
spk04: Because the current market power is unified, because the market power of the electricity network is the national electricity network. The national electricity network is now a unified market. Its electricity price, it has no power to determine the price of electricity in the market power. So it's normal to go up. Because it's the national electricity network's unified electricity price. And in Xinjiang, we have our own power supply. We have our own power supply contract. So it's different from Sichuan Power. I heard that the price of Sichuan Power has increased to 7,000 yuan. So I think our price will not change in the future. We are aware of the electricity cost increases in Sichuan. However, because Sichuan uses state grid and the local
spk03: government has limited power on the electricity cost. And based on our information, the increase in electricity costs will increase production costs for players located in that region up by 7,000 RMB per ton. Yeah, 7,000 per ton. So, however, for us, Xinjiang uses local grid, and we signed an exclusivity agreement with the government. We are not very worried about electricity costs. Similarly, for Inner Mongolia, they rely on local grid as well. Actually, the primary reason why we chose these two locations at the first place was because they use local grid, so we can enjoy the preferential electricity agreement and the lower electricity costs.
spk05: Thanks a lot, Mr. Xu, Anita, and Ming. Very clear answer. I'll pass on. Thanks.
spk06: Great. Thank you, Alan.
spk02: Thank you. The next question comes from Andrew Corporate with Private Investor. Please go ahead.
spk01: Hello. So my question is, when is exactly the Xinjiang A-type dividend declared? Like what month this year? Is it May? Is it April? July? This is my first question.
spk03: According to China's legal regulations, the A-type dividend should be around March.
spk04: Based on the Asia regulation and disclosure requirements, we expect to announce sometime near the end of March.
spk03: As we have said previously, after the A share, Shenzhen Daco announces their dividend plan for the year. We will discuss among our board, again, whether to roll out another share purchase program or to distribute dividends.
spk01: Okay. Okay. So like in March, April, we should hear also from the DACO New York Stock Exchange listed company a response on the dividend or the extended buyback or special dividend from the cash balance or something like that. So April, let's say, April start to mid-April.
spk06: Yeah, that will be the likely timeline, yes, after Acer announced their dividend level.
spk01: Okay, thank you very much. Also, I want to congratulate you for the increasing production. I think it was 50-60%, I don't remember, and also the guidance. Very great, whilst also decreasing the cost. So, very great result. My last question is, for 2025 CapEx investments, are there any? How much would CapEx be in 2025? So, in 2024, we have 8 billion. $8 billion to $9 billion RMB, so $1.1 billion or $1.2 whatever. So what would be 2025? Do you expect to increase CapEx to have huge products like this year or lower CapEx, $500 million downwards?
spk06: Okay. So this is Ming. So I will address the CapEx issue. I want to answer that question. So I think 2025 CapEx will be mostly the remaining payments on the Inner Mongolia Phase II and some of the remaining payments on our Silicon Metal project. The current estimate is roughly 3 to 4 billion RMB. So I think that's maybe 400 to 600 million U.S. dollars.
spk01: Yeah, yeah.
spk06: Yeah.
spk01: And considering this, so at the end of 2024, because you're trading at a quick ratio of 5 or 4.5. I don't know if it decreased a bit because you used some of your cash. It's a huge quick ratio. You never had a quick ratio this high. So my question is, after this $1.1 billion in CapEx in 2024, would the cash decrease? Let's say we're staying at current prices or at your current forecast rate. Polysilicon will not increase either on 50% or something. So at the current prices, how much would cash and equivalents decrease this year? To $2.5 billion? So now they're $3 billion, right? To $2.5 billion or to $2.1 billion? After the $1.1 billion CapEx this year. Yeah.
spk06: There's going to be a really rough estimate because it's very much subject to pricing for the beginning of the year. We think based on our estimate, operating cash flow should be in the range of maybe 4 to 4.5 billion RMB, something in that ballpark. So we should be close to, say, 2.5 billion RMB. R&B... Yeah, yeah. Oh, US dollar, actually. If I go on US dollar, it's something on that range.
spk01: Okay. Okay, and considering the discount from Shanghai-listed DACO, which we own, 72.4%, if I remember, or 73%. Yes, that's correct. Your repurchasing, did you continue it in Q1? Like, now we're in February 28th, so... 50 days passed. Did you repurchase any shares at the current DACO prices? So at $21, $24 today?
spk06: For the U.S. shares?
spk01: For Q1, yeah, U.S. shares. Did you repurchase?
spk06: So our repurchase program ended at the end of last year, end of 2023. So we don't have a repurchase plan right now. But I think the board is considering a repurchase plan for the full year. So that's why we want to see what the dividend looks like from the Xinjiang DACO. So once that comes out, then the full year.
spk01: I thought you had 20% left or 30% left out of the $700 billion. I thought you had $200 billion, as the first analyst said. Yeah.
spk03: Regarding the shared person plan, when it was announced in November in 2022, the expiration date of this program is until the December 31, 2023. Yeah. So that means because of the date, the program ended in 2023. And we have completed the plan for the $700 million shared person program.
spk01: Can you repeat again? You have completed?
spk03: Before the program expired by the end of 2023, we have completed approximately 70% of the entire program.
spk01: Okay, and I think just so investors know, I think this was due to not being able to buy more at current prices because you can buy only 25% of the volume on your stock exchange, I think. You couldn't have bought more, right?
spk03: Yes, primarily.
spk01: Okay. Last recommendation would be if you could do a special dividend or a dividend yield, maybe it will attract investors. I think DACO is very underpriced considering you have net debt zero and you own the Shanghai listed shares, so a dividend, a big dividend, with a big yield like 10, 20%, special dividend or a normal dividend, I think it would attract investors. Yeah, that's the rest thing.
spk06: Okay.
spk01: After, of course, you've risen from the Shanghai.
spk06: Okay. That's well noted. We'll share that with our board as well. Yeah, okay.
spk01: Great. Because you're trading at a 0.3 price to book and you're increasing revenue by 40-50% actually volume so you should issue a big dividend to attract investors. Thank you very much and have a wonderful year and continue doing what you do.
spk06: Great. Thank you so much. Thank you for your interest in the company.
spk02: Thank you. This concludes our question and answer session. I would like to turn the conference over back to Ms. Anita Shu for any closing remarks.
spk03: Thank you everyone again for participating in today's conference call. Should you have any further questions, please do not hesitate to contact us. Thank you and have an awesome day. Good night.
spk04: Good night.
spk02: The conference has now concluded. Thank you for attending today's presentation.
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