Emeren Group Ltd

Ladies and gentlemen, thank you for standing by and welcome to Q3 2020 Venezuela Limited Earnings Conference Call. At this time, all participants are listening on the mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Gary DeBarge. Thank you. Please go ahead, sir.

Thank you, Operator, and hello, everyone. Thank you for joining us on today's call to discuss third quarter 2020 results. We released our shareholder letter after the market closed today. It is available on the website. There's also a supplemental slide deck posted on the website that we will reference during our prepared remarks. On the call with me today are Mr. Yumin Liu, Chief Executive Officer, Mr. Ke Chen, Chief Financial Officer, and Mr. John Yu, CEO of North America. Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent Renesola Power's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in Renesola Power's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect Renasola Power's opinions only as of the date of this call. Renasola Power is not obliged to update you on any revisions to these forward-looking statements. Also, please note that unless otherwise stated, all figures mentioned during the conference call are U.S. dollars. With that, let me now turn the call over to Mr. Yumin Liu, who will discuss the Court's operating highlights. Yumin?

Thank you, Gary, and thank you, everyone, for joining the call. I will summarize our financial performance and review our operating highlights in the quarter. I will then turn the call over to Ke, who will cover financial results in more detail and will provide 2020 guidance. We will then open the call to questions. Revenue came in at $9.7 million, which was at high end of the guidance. Gross margin of 61%. was well above guidance we provided on our last call. Our operating expenses on GAAP basis was down more than 60% from a year ago, and we continue to manage costs prudently. As a result, we reported GAAP operating income of nearly three million. Importantly, we maintain a healthy balance sheet, providing the financial flexibility propel growth in the quarters ahead. As of November 30, 2020, our total project pipeline was about 800 megawatts, including about 732 megawatts in late stage. Based on our activity level, we are confident we will achieve one gigawatt project pipeline by the end of this year. The momentum in our business is accelerating, and from a customer engagement perspective, we have seen a significant level of business activity in the last several months. I will now discuss recent operational highlights. First, we completed the previously announced acquisition of certain assets from NOAA Development Management last month. We used about $3.8 million of cash on hand to complete the acquisition. which gives us a pipeline of solar projects and an experienced team. The all cash transaction aligns our strategic priorities with the interests of our current shareholders. And we believe this deal is complimentary to our existing project development business. The development team we have acquired is based in California. They are a reputable US-based project developer that focuses on project development, project finance, EPC management, and asset investment in the US. They have a pipeline of about 200 megawatts of projects under development, including 130 megawatts of middle to late stage projects. Their focus is small scale utility projects across several states, including Pennsylvania, California, New York, Maine, Illinois, and Arizona. The experienced project development team we have acquired will strengthen our position as a leading global solar energy developer and operator. Over the years, we have built a track record of success in developing small-scale projects, especially DG and community solar. However, we have not participated very actively in the utility scale segment of the market. Because of that, we have virtually no overlap with the acquired development team. The acquisition of their solar assets is very complimentary to what we do today. The transaction is synergistic and additive in expanding our addressable market. Also, it provides us with immediate access to battery storage and enables us to deliver a more complete set of service capabilities to our customers. The acquisition of their project pipeline fits very nicely into our strategy to accelerate our growth and improve our profitability long term. Solar and battery storage have great potential in many markets internationally. We view this as a statistically compelling acquisition that increases our footprint in project development in the U.S. and significantly expands our addressable market. Following the closing of the acquisition, this morning we announced that we signed a solar plus storage PPA with California-based Valley Clean Energy, or VCE. VCE is a local public electricity provider formed by Yolo County and the cities of Woodland and Davis. The PPA has a duration of 20 years. The project is located in the town of Madison in Yolo County, California. We expect commercial operation by the third quarter of 2022. Importantly, the project will add 20 megawatt of solar power and 26 megawatt hour of battery storage. We are excited to build a strong relationship with VCE through this transaction. This project also marks a major milestone for us. It is our first long-term PPA for a solar plus storage system that will provide significant benefits to the local customers. In summary, this acquisition exemplifies the execution of our long-term strategy as we reallocate capital to accelerate growth and profitability. Second, we set up multiple joint ventures in Europe in the past several months. Specifically, in late September, we entered into a strategic partnership agreement with Vodafone to co-develop a market ready to build ground-mounted solar projects in Germany. Vodafone is based in Munich, Germany, and specialize in developing and constructing solar parks. In the near term, SGAV intends to develop an initial project portfolio of 50 to 100 megawatts. Long term, it expects to develop an additional 50 to 100 megawatts of new projects per year. In October, we established a joint venture with Norwergy to co-develop utility-scale projects in the UK. Norwergy is a solar project development platform specializing in the origination, development, design, optimization, construction, and commissioning of solar projects in the UK. The joint venture expects to develop the current pipeline of 100 megawatts in the near term and intends to develop at least another 100 megawatt of utility-scale projects in the next couple of years. Layering on top of that, we formed another JV in UK last month. As we highlighted in our precedes, we enter into a partnership agreement with Innova to co-develop utility-scale projects in the UK. Innova invests in and operates a diversified portfolio of renewable energy assets in UK. They focus on utility-scale ground-mounted and commercial rooftop solar installations located at agricultural, industrial, and commercial sites. As part of the agreement, the JV company expects to develop the existing pipeline of 50 megawatts and plans to develop at least another 50 to 100 megawatts of utility-scale projects in the next few years. Looking at these partnerships, I am proud of our team and our business progress. We believe the combined strengths of Renie Solar Power and our partners will create tremendous synergy and provide new opportunities to further expand our presence in Europe. We also believe that These JVs will position us to grow our global pipeline in the next several quarters and beyond. It is also noteworthy that all these three portfolios have built-in storage options to meet the local customers' demand. Third, we recently closed the sale of a portfolio of operating projects located in the UK. Through utmost clear investment, and European Renewable Energy and Cleantech Private Equity Group. The portfolio comprises 1,509 residential rooftop projects located in Scotland with a combined capacity of 4.3 megawatts. These projects are qualified under the Fijian Tariff Scheme and have been in operation since 2015. Importantly, this transaction once again demonstrate our ability to optimize our solar assets through strategic sales, enabling us to generate cash flow, realize profits, and further strengthening our balance sheet. As I mentioned earlier in my prepared remarks, we are committed to grow our project pipeline by a gigawatt by year end. We have faced some challenges and project development delays as we navigate the COVID impacted environment. While we are taking a more conservative approach, we are confident that we will add at least 800 megawatts this year, which will allow us to have over one gigawatt pipeline by the year end, as shown on slide five. Let's now discuss the highlights from certain key geographies. First, Let's turn our attention to the U.S., shown on slide seven. Our latest project pipeline stands at around 300 megawatts, of which 53 megawatts are community solar in Maine, Minnesota, and New York. Additionally, we have projects under development with a mix of corporate, municipal, and utility uptakers in other states, such as Utah and Florida. Meanwhile, We operate 24 megawatts of small scale utility projects in North Carolina. In Poland, shown on slide eight, our key asset is a portfolio of project rights. We have a pipeline of 56 megawatts of ground-mounted projects under development and construction. Slide nine refers to Hungary, where we also invest in small scale DG projects. Our late-stage pipeline has several micro-projects. Each is about half megawatt, bringing total micro-project capacity to about 12 megawatts in the country. Those projects are under construction and are expected to reach COD by the year end. On top of that, we also added 28 megawatts of small-sized ground-mounted utility-scale projects in the country. Slide 10 and 11 detail our pipeline in France and Spain. We have 100 megawatts in France and 36 megawatts in Spain, all of which are ground-mounted and currently under development. We are getting traction in Germany, as shown on slide 12. We have a project pipeline of 50 megawatts, all of which are ground-mounted projects under development. In UK, shown on slide 13, we have a pipeline of 150 megawatts, all of which are ground-mounted projects under development. Over the years, we have successfully developed 16 portfolios of small-scale projects and sold a total of 127 megawatts of projects in the UK. In addition to our development pipeline, we currently operate a portfolio of 189 megawatts of solar projects that generate high margin recurring revenue. As you see on slide 15, our operating assets, including 149 megawatts of commercial rooftop in China, 24 megawatts of utility solar in US, 15 megawatts of ground mounting in Romania, while we have sold 4.3 megawatts of rooftop projects in UK last month. Before I turn the call to Ke, I would like to conclude with a few key strategic highlights. We are advancing in the multi-year transformation process from a negative cash flow equipment maker to a positive operating cash flow and asset light solar project developer. We realigned our long-term growth strategy from focusing on our traditional market in China to a global expansion roadmap. We now focus on promising markets in the US and Europe. Last year, we moved our corporate headquarters to Stanford, Connecticut, where our senior management team is now based. We are pleased with the operational progress we have made. With a growing pipeline of business activity, we see our momentum accelerating and remain optimistic about outlook for the remainder of 2020 and beyond. The global solar industry is large and growing. We are committed to our mission to become a leading global project developer by focusing on high-quality and high-return projects in the core countries. Let me now turn the call to our CFO, Ke Chen, for comments on our financial performance.