Emeren Group Ltd

Hello, ladies and gentlemen. Thank you for standing by for Renner Solar Power's third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question at that time, you'll need to press star one on your telephone. Please note that we are recording today's conference call. I'll now turn the call over to Mr. Gary Dvorak, Managing Director of the Blue Shirt Group Asia. Please go ahead, Mr. Dvorak.

So thank you, Tara, and hello, everyone. Thank you for joining us on today's call to discuss our third quarter 2021 results. We released our shareholder letter after the market closed today. It's available on the website. There's also a supplemental 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. Kuo Chen, Chief Financial Officer, and Mr. John Yuen, 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 forward information that might be considered forward-looking. These forward-looking statements represent Renicilla Power's current judgment for the future. However, they're subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in Renicilla Power's filings with the SEC. Please do not place undue reliance on these forward-looking statements, which reflect Renicilla Power's opinions only as of the date of this call. Renicilla 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 in the conference call are in U.S. dollars. With that, let me now turn the call over to Mr. Yumin Liu. Yumin?

Thank you, Gary, and thank you, everyone, for joining the call. Before we dive into the quarterly results, I need to address the misleading short report that was published last week. I'll use this report to present you some more insights and details about our business. The report was erroneously and misleading obviously written by an author with little understanding of the solar project development, but with a motivation to unfairly drive down our stock price. We will discuss the report today and answer any questions you may have. We will also follow up with any of you as desired. Once you understand how the author manipulated some data points to draw incorrect conclusions, we believe you will have even greater confidence in renewable power. And this junk report will be quickly dismissed and forgotten. The report basically makes three claims. The first, they claim that we have fake projects, what they call ghost projects. Second, they point out that many of our projects are delayed. And third, they infer that there is some sort of hidden risks from the Mr. Li family's ownership and support of the company. I want to address all three of these issues now. First of all, the author presents many discontinued projects as if they are fake. Project development is a portfolio business, and they terminate projects all the time for a variety of reasons. Many of the projects they cite fall into this category. We cancel them and move on to better opportunities. They are not non-existent. Similarly, some of the projects they cite as fake are still very alive. Giving you examples, Castillo in Spain includes three projects totaling 24 megawatts and is in late stage development with RTB, or sales targeted for the second half of 2022. They also cite the Tenergy project. We not only want the tender in cooperation with Tenergy, but also are in charge of the project development activities, having a development service agreement with them. Similarly, the author disparages our development partners in Italy, demonstrating a lack of knowledge about typical industry partnerships. Most local development partners are small businesses. Our hyper-local model seeks out small, energetic, and capable businesses with close ties to their communities, such as MPCC and Terra Aurea mentioned in this report. We have over 10 different development partnerships in the EU countries, and most of the partners can be categorized as small companies. We had compelling reasons to partner with MP Sicily and Terra Aurea. MP Sicily is the Italian development arm of the Austrian investment company Mesna and Partner, known as SMP. Terra Aurea is related to MP Sicily. We had partnered with MP in Poland, who helped us win 40 of the 172 projects we have secured there and successfully build them. MPs are great partners and it is natural for us to work with them in other European countries. So far, the two Italian partnerships we have already built four new projects in Italy. The report is completely off base in chastising us for these partnerships. The author's mass on our pipeline disclosures over time is irrelevant to their fraud thesis. Projects will go into and out of our pipeline constantly as we prune and optimize our portfolio. You should expect us to always upgrade our pipeline with smart resource allocation and robust net growth. The second major claim that we are inflating our pipeline because of delays is laughable. The report cited a bunch of delayed projects without ever conceding that the world was open lockdown for COVID since 2020. And lingering outbreaks and supply chain issues have caused more delays this year across the whole world. In fact, the words COVID and pandemic do not even appear in the report. We believe that an accusation of delays with no acknowledgement of COVID has no credibility whatsoever. For example, they point out that our Caravaca project in Spain is delayed. Correct. Spain was locked down for months, causing delays in government approvals. Caravaca environmental approvals alone was delayed by about 18 months. It has now been approved and has moved into the sales process. We expect to close the sale soon. People knowledgeable with our industry understand that project development cycles are long. Small projects take one to two years from Greenfield to NTP. To get to NTP for big utility-scale projects can take five to six years in the U.S., and two to three years in most European countries. The development periods we see in our pipeline are totally normal. In the final claim, the author attempts to create a sense of fear by calling out the Lee family's participation in our company. The fact that Mr. Lee is a large shareholder of our company is hardly news. It is not appropriate for us to comment on his personal affairs. We are a limited liability company. We are not impacted by the individual situation of any of our shareholders. We appreciate the Lee family's continuing support as a large shareholder. All of our shareholders give us a vote of confidence with their share ownership. The report also threw in some other small items. trying unsuccessfully to build their case they criticize our non-gap adjusted ebeta fine judge us on our gap numbers they talk about our pursuing small projects which is exactly part of our strategy this report has no merit Anyone that understands our business will see through the author's misleading conclusions and false accusations. We are proud of having the industry's best project pipeline disclosure. We are open, transparent, and detailed. We have nothing to hide. The report tried to use our transparency against us, but failed miserably. Our shareholders appreciate our detailed level of disclosure. We intend to continue this into the future. OK, now let's move beyond that distraction and cover the important stuff, our third quarter results. We examined the quarter in detail in our shareholder letter posted on our website. So I'm just going to call out the highlights that you should study in the letter and also supplemental deck. The first key point is that we are comfortable with our performance in this quarter. We were profitable again for the sixth consecutive quarter. Profit was a result of good gross margin at the high end of our guidance and good expense control. The gross margin strength shows the value of our strategy to sell projects at NTP, which is most profitable. We also generate high margin recurring revenue from our IPP electricity sales. Against the good news, revenue was below our guidance. You should not be concerned. We are not. On a quarterly basis, sales will move between periods. In Q3, two project sales we expected did not close, but we expect the sales to occur in Q4 or early next year. In general, we analyze our business on a yearly basis and do not worry about quarter to quarter timing issues. The second key point is that we are executing successfully our pipeline building goals. At the start of the year, we targeted having two gigawatts by the year end. We were close to that goal by the end of Q3 with over 1.8 gigawatts in the pipeline and 15 megawatts under construction. Our pipeline is dominated by Poland, the US, Spain, and the UK. Each of those countries, together with other territories we have activities, represent multi-hundred megawatt projects. These are attractive markets. with strong investor base and good government support. So we anticipate more growth ahead. We expect to end the year with around 2.2 gigawatts and will soon set aspiring goals for 2022. Let me now turn the call over to our CFO Ke Chen for comments and on our financial performance.