Emeren Group Ltd

Hello, ladies and gentlemen. Welcome. Thank you for standing by for Renesola Power's second quarter 2022 earnings conference call. Please note that we are recording today's conference call. I will now turn over the call to Mr. Yuji Izai, managing director of the Blue Shirt Group. Please go ahead, Mr. Izai.

Thank you, operator, and hello, everyone. Thank you for joining us today to discuss our second quarter 2022 results. We released our shareholder letter after the market closed today. It is available on our website at ir.renesolapower.com. There is 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. Yuen Lu, Chief Executive Officer, Mr. Ke 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, and other information that might be considered forward-looking. These forward-looking statements represent Rena Sola 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 Rena Sola Power's filings with the SEC. Please do not place undue reliance on these forward-looking statements, which reflect Rena Sola Power's opinions only as of the date of this call. Minnesota Power is not obligated to update on any revisions to these forward-looking statements. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to Mr. Yumen Wu.

Yumen? Thank you, Yuja, and thank you for joining our second quarter earning call. Today, I would like to start by giving a quick update on our second quarter results. and then touch on recent trend in solar industry and the general energy market. After that, Ke, our CFO, will review our financial results for Q2 in detail and cover our guidance for Q3 and the full year. Then we'll be joined by our US CEO, John, for the Q&A. Q2 revenue was 8.2 million, driven primarily by the energy production from our China IPP assets, and the project sales in the US. The lower than expected revenue was due to the delays in closing of the project sales in the US. Gross margin for Q2 was 45% on higher mix of IPP revenue. EBITDA was 2.4 million. Looking forward, we are extremely optimistic about growth opportunities as a solar industry is benefiting from strong tailwinds such as rising PPA price and a favorable regulatory environment in Europe and in the US. These tailwinds plus our robust product pipeline and our strong execution track record gives us confidence that we will be able to achieve our strategic goals. To be more specific, Let me start with our largest market, Europe. In Q2, European Power Purchase Agreement or PPA prices for solar projects increased by 19% from the previous sequential quarter and 47% year-over-year. Even with these price increases, solar PPAs continue to remain attractive relative to the significantly higher wholesale energy price. For instance, in June, Poland's average wholesale price of electricity increased over 300% to about 198 euros per megawatt hour from about 55 euro per megawatt hour two years ago, before the Russian-Ukraine conflict began. This emerging energy crisis continues to urgently drive the EU energy policies towards energy independence and is providing a major tailwind to renewable energy projects across Europe. In our second largest market, the United States, we are seeing a similar price trend in solar industry due to high demand for solar PPAs. In Q2, solar prices increased by over 8% from the previous quarter for all U.S. independent system operators in general. Further, on the regulatory front, we welcome the passage of the Inflation Reduction Act into the law in mid-August, which earmarks $369 billion for U.S. energy security and fighting climate change and makes it the biggest investment in clean energy ever made in U.S. history. The law includes many tax incentives for solar and storage deployments, including independent storage facilities, investments in domestic solar manufacturing, and other critical energy provisions. The Solar Energy Industry Association believes this law will create a stable policy environment for solar energy development and will set the foundation to drive the solar industry towards its goal of 30% of the U.S. electricity generation by 2030, about 4% today. We believe this favorable regulatory movement in solar industry will drive up our revenue and margin opportunity of our pre-NTP and NTP project pipeline across Europe and North America. In terms of China, the resurgent COVID and lockdown in Q2 continue to affect our business activities and supply chains. In Q2, we only installed three megawatts and only 6.6 megawatts during the entire first half. Nevertheless, for the remainder of the year, we do expect activities to begin peaking back up. For the full year 2022, we want to reiterate our expectation of building up three gigawatts of project pipeline with a significant portion of the growth coming from Europe due to favorable policy support and increasing energy demand. We target growth of the company mid- to late-stage pipeline to 5 gigawatts by the end of 2024. In addition, as part of our long-term growth plan, We are also building IPP projects and looking for M&A opportunities across Europe to take advantage of our higher solar PPA prices and the favorable regulatory environment. We are targeting to have approximately 100 megawatts in Europe by mid 2023. To sum up, the future looks bright for solar energy. We believe we are well positioned to capitalize on accelerating solar adoption across Europe and North America. Even our deep expertise in developing and operating solar projects, our extensive network of industry partnerships throughout Europe, our well-capitalized balance sheet, and our unmatched track record in closing financing transactions and profitably monetizing projects we are increasingly optimistic about our goal of becoming a leading global solar developer. While we are extremely optimistic about the long term, we are also aware that the current energy crisis and inflation in Europe is causing significant instability in the region and increasing risks of recession. We remain cautious and extremely focused over the near term as the situation in Europe evolves. With that, I will now turn the call to our CFO, Ke Chen. Ke, please.