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Daqo New Energy Corp (DQ) Q3 2021 Earnings Call Transcript

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DQ earnings call for the period ending September 30, 2021.

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Daqo New Energy Corp (DQ -2.33%)
Q3 2021 Earnings Call
Oct 28, 2021, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Daqo New Energy Third Quarter 2021 Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kevin He. Please go ahead.

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Kevin He -- Head of Investor Relations

Hello, everyone. I'm Kevin He, the Investor Relations of Daqo New Energy. Thank you for joining our conference call today. Daqo New Energy just issued its financial results for the third quarter of 2021, which can be found on our website at www.dqsolar.com. To facilitate today's conference call, we have also prepared a PPT presentation for your reference. Today, attending the conference call, we have Mr. Longgen Zhang, our Chief Executive Officer and Mr. Ming Yang, our Chief Financial Officer.

The call today will feature an update from Mr. Zhang on market and operations, and then Mr. Yang will discuss the company's financial performance for the quarter. After that, we will 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 the 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 contained in 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 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 conference call is also 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, I now turn the call over to our CEO, Mr. Zhang. Please go ahead.

Longgen Zhang -- Chief Executive Officer and Director

Thank you, Kevin. Hello, everyone. Thank you for joining our conference call today. We are very excited to report an excellent quarter with a record-high production volume and net profit in the company's history. The strong end market environmental, supported by favorable global policies to address climate change and the rapidly increasing use of green energy, resulted in stronger than expected downstream demand that continue to push polysilicon market prices. Our third quarter polysilicon ASP was $27.55 per kg, a significant sequential improvement of more than 30% from $20.81 per kg in the second quarter.

The end market demand continues to be strong, even under today's high price module environmental, and this has further raised the polysilicon market prices to the current level of $33 to $35 per kg. Our production costs increased 8.4% quarter-over-quarter, primarily due to the increase in silicon powders' cost. Excluding this impact, our production cost actually decreased by approximately 1% quarter-over-quarter. The increasing silicon powder cost will continue to impact our cost structure in the fourth quarter. However, with the strong market demand, so far, we have been able to transfer the majority of such cost increase to our customers.

Over the past three weeks, we have seen silicon powder prices stabilizing, and we expect they will gradually normalize in the first half of next year as the energy and emission controls could be somewhat relaxed compared to the fourth quarter of this year, and new supply of silicon powder will start to enter the market. During the first three quarters of 2021, we generated $653 million in cash flow from operations. We repaid all our banking loans in the third quarter and have reduced our debt to asset ratio to 18.2%. At the end of third quarter, we had USD661 million in cash and cash equivalents, $440 million in short-term investments, which are lower risk financial products and $353.3 million in banking note receivables, which will mature in the next three to six months.

This total liquidation of $1.4 billion is a strong foundation to support our expansion projects and further plans to reward our investors. The construction of our Phase 4B capacity expansion project is going smoothly according to schedule. We expect to complete the construction by the end of 2021 and ramp up the full capacity by the end of the first quarter of 2022. In the third and fourth quarter of this year, we have observed some volatility in the global energy market. Prices of almost all energy resources are going up quickly and significantly, including the prices of natural gas, oil and coal. In many regions in China, many companies are required to shut down production from time to time due to the shortage of electricity supply and carbon emissions control.

Fortunately, the Chinese government quickly responded to the challenging situation by accelerating cost production and allowing electricity prices for industrial users to float according to market, resulting in rising electricity prices. We expect these measures will further stimulate the solar end market for electricity generation in the near term. With solar already at grid parity broadly, higher fossil fuels market solar projects more competitive. In addition, according to the new release policies, the usage of renewable energy will not be counted toward the energy usage quota, which will further promote renewable energy in the future.

This also explains why the demand from industrial users for solar distributed generation is strong even in the current high-price module environment. On the other hand, because of the strong energy quota and the carbon emission control, the overall expansion pace of the polysilicon industry will inevitably slow down. For example, as we are now in the processing of identifying the location and our -- for the next expansion project, the energy quota issues becomes more and more challenging. W

E will be committed to using more renewable energy in our new polysilicon project according to secure energy quota, which will allow us to gradually realize the idea of 'green poly' and 'solar for solar' -- or 'solar for solar'. This October, at the United Nations Biodiversity Conference in Kunming, Chinese President Xi Jinping, announced that the first step had been taken toward the construction of the -- a huge 400 gigawatt wind and solar park. Construction on the first phase comprising 100 gigawatts of wind and solar in deserts in China is already underway. The full 400 gigawatt projects would be half finished by 2025.

The Chinese governments has already -- has also released the policies to promote energy shortage systems especially for -- storage systems, especially for water reservoir storage in the new term. With all these trends and the policies in place, it's very clear that China has made a strong determination supported by initial and detailed plans to build a new national energy infrastructure in which renewable energy will play a critical role.

The newly announced policies and evolving energy market environment illustrate a vast potential market for solar in China, which is much higher, much larger than previously anticipated. Therefore, we are very optimistic about solar PV's demand in the future and expect the polysilicon sector will continue to be one of the most favorable sectors in the foreseeable future, as polysilicon availability will remain as the main constraint and determinant for the future size of solar end market. Let's move to outlook and the guidance.

The company produced 62,970 metric tons of polysilicon and sold approximately 63,714 metric tons of polysilicon in the first three quarters of 2021, representing full utilization level of the company's production facilities. For the full year of 2021, the company's guidance and annual policy production volume is at the level of approximately 83,000 to 85,000 metric tons, inclusive of impact of company's annual facility maintenance. Now let's move to our financial, as CFO, Ming Yang, explains the financial results.

Ming Yang -- Chief Financial Officer

Thank you, Longgen, and good day, everyone. Thank you for joining our earnings conference call today. And this is Ming Yang, I'm the CFO of the company. We are very pleased to report an excellent financial performance for the third quarter of 2021. We had record high revenues of $585.8 million, an increase of 33% sequentially as compared to $441.4 million in the second quarter of 2021 and an increase of 366% year-over-year as compared to $125.5 million in the third quarter of 2020. The increase in revenue as compared to the second quarter of 2021 as well as the third quarter of 2020 was primarily due to higher polysilicon average selling prices and higher polysilicon sales volume.

During the third quarter, market conditions for solar remained robust with strong demand for mono-grade polysilicon that far exceeded supply. Our third quarter polysilicon ASP was $27.55 per kilogram, an increase of 32% sequentially as compared to ASP of $20.81 per kilogram in the second quarter. Gross profit was $435.2 million compared to $303.2 million in the second quarter of 2021 and $45.3 million in the third quarter of 2020. Gross margin was 74.3% compared to 68.7% in the second quarter of 2021 and 36% in the third quarter of 2020. The increase in gross margin was primarily due to higher average selling prices, offset by slightly higher production costs.

As Longgen indicated, higher production costs during Q3 was the result of higher market price for silicon raw material. Selling, general and administrative expenses were $11.4 million compared to $9.3 million in the second quarter of 2021 and $9.2 million in the third quarter of 2020. SG&A expenses during the quarter included $2 million in non-cash share-based compensation costs related to the company's share incentive plan, compared to $2 million in the second quarter of 2021 and $4 million in the third quarter of 2020. The increase as compared to the second quarter of 2021 as well as the third quarter of 2020 was primarily due to expenses related to the IPO of our Xingjiang Daqo subsidiary on China's Asia market.

R&D expenses were $1.9 million compared to $2.1 million in the second quarter of 2021 and $1.7 million in the third quarter of 2020. R&D expenses converted from period-to-period and reflect R&D activities that take place during the quarter. As a result of the foregoing, income from operations was $421.7 million compared to $292.4 million in the second quarter of 2021 and $33.3 million in the third quarter of 2020. Operating margin was 72% compared to 66.3% in the second quarter of 2021 and 26.6% in the third quarter of 2020. Interest expense was $6.4 million compared to $7.2 million in the second quarter of 2021 and $5.4 million in the third quarter of 2020.

Net income was $255.8 million compared to $242.9 million in the second quarter of 2021 and $21.9 million in the third quarter of 2020. Adjusted for minority interests, net income attributable to Daqo New Energy Corp. shareholders was $292.3 million compared to $232.1 million in the second quarter of 2021 and $20.8 million in the third quarter of 2020. Earnings per basic ADS was $3.95 compared to $3.15 in the second quarter of 2021 and $0.29 in the third quarter of 2020. EBITDA was $441.8 million compared to $311.7 million in the second quarter of 2021 and $51.6 million in the third quarter of 2020. EBITDA margin was 75.4% compared to 70.6% in the second quarter of 2021 and 41.1% in the third quarter of 2020. Now on the company's balance sheet and financial conditions.

As disclosed previously, the company successfully completed the IPO listing of its Xingjiang Daqo subsidiary on China's Asia market in July 2021. Net proceeds of the IPO, minus listing related expenses are approximately RMB 6.1 million or approximately USD935 million, which will fund Xingjiang Daqo's polysilicon expansion project and provide additional capital for the company's future growth plans. Following Xingjiang Daqo's IPO, Daqo New Energy in aggregate holds approximately 80.7% of the A share listed subsidiary. As of September 30, 2021, the company had $660.9 million in cash and cash equivalents and restricted cash compared to $269.7 million as of June 30, 2021 and $109.8 million as of September 30, 2020.

To better utilize the company's cash balance with improved capital efficiency, the company purchased short-term investments during the quarter, which are primarily principal protected short-term interest bearing bank deposits with 3-month and 6-month maturity duration. These term deposits have higher interest rate than the regular bank deposit accounts. As such, at the end of the quarter, the company had $414.2 million in short-term investments compared to $10.4 million as of June 30, 2021. And as of September 30, 2021, bank notes receivable balance was $353.3 million compared to $97 million as of June 30, 2021, and $1.9 million as of September 30, 2020.

Inclusive of our cash and cash equivalents, short-term investments and bank note receivable balance, the company has total capital liquidity of approximately $1.43 billion as of September 30, 2021. With our strong cash balance, we also took the opportunity to repay all of our bank borrowings at the end of the quarter. And as of September 30, 2021, we had no bank borrowings compared to total borrowings of $156.6 million as of June 30, 2021, and total borrowings of $271 million as of September 30, 2020. For the nine months ended September 30, 2021, with our strong earnings, operating cash flow and cash balance, we repaid approximately $195 million of bank borrowings. And with our total capital liquidity of $1.43 billion and no interest-bearing bank loans, we now have what we believe to be one of the best balance sheets in the industry.

And combined with the ability to access the attractive Asia capital markets in China, we are very well positioned competitively for our company's future growth and expansion plans. For the nine months ended September 30, 2021, net cash provided operating activities was $653 million compared to $71 million in the same period of 2020. The increase was primarily due to higher ASPs and higher polysilicon sales volume as well as prepayments of long-term contracts from customers. And for the nine months ended September 30, 2021, net cash used in investing activities was $855 million compared to $80.3 million in the same period of 2020. The net cash using investing activities in 2021 and 2020 was primarily related to the capital expenditures on the company's polysilicon expansion projects.

Purchase of property, plant, equipment and land totaled approximately $444 million in the first nine months of the year, primarily related to our Phase 4B polysilicon expansion project. The remaining balance was primarily related to the company's purchase of short-term investments. For the nine months ended September 30, 2021, net cash provided by financing activities was $741.6 million compared to $1.1 million in the same period of 2020. The net cash provided by financing activities in 2021 was primarily related to the net proceeds of $935 million, contributed by Xingjiang Daqo's IPO in China, offset by net repayments of bank borrowings. And that concludes our prepared remarks. Operator, now we would like to open the call for questions from the audience.

Questions and Answers:

Operator

[Operator Instructions] And the first question comes from Phil Shen with Roth Capital Partners.

Phil Shen -- Roth Capital Partners -- Analyst

Thanks for taking my questions. I'd like to ask about your outlook for polysilicon prices. With the silicon metal pricing going up so high, we've seen, as Longgen, you mentioned in your prepared remarks, pricing as high as $35 per kilogram. So how do you expect the poly pricing to trend in Q1 and in Q2 and for the balance of 2022?

Longgen Zhang -- Chief Executive Officer and Director

Yes. I think the voice maybe is not clear, OK? I think a little broken. We see right now, the market prices continue to go up. The reason is because I think a high-efficiency module price also continue can be accepted by the market. So in the fourth quarter, even though the silicon powder cost increased -- dramatically increase even more than 100%, the selling price also go up. So today, current selling price is around $35 to $36 per kg. For the price for the future, we think -- based on our history research, we expect to see approximately, I think, around CNY180 to CNY220 per thousand metric tons -- to the thousand met ton.

Of additional polysilicon supply in which it can be used to produce, I think, approximately 250 gigawatts of solar module, we say -- just based on the research, I think for next year, additional metric tons only 180 to 220 metric tons available. So we believe they will be very strong support to poly price given solar has already reached a great parity and high price module has already been accepted by the market. Which means, we expect to see high price, higher-than-expected model price in 2022. Since the poly will still be the sector in shortage for supply, we believe Poly will continue to generate very healthy profit. So basically, if the mantle silicon price remains today's ASP, we think Poly -- the polysilicon price will remain at around $30 to $36 per kg for the first half of next year and around $30 maybe for the second half of next year.

Phil Shen -- Roth Capital Partners -- Analyst

Let's move on to the capacity expansion plan. So with the strong pricing, I can imagine you're more encouraged to pursue your capacity expansion. I think on the last call, you talked about 180,000 metric tons by year-end '23 and 270,000 metric tons by year in '24. Would you have any plans to accelerate that? What's the latest update on your capacity expansion plans?

Longgen Zhang -- Chief Executive Officer and Director

Okay. Basically, Philip, the 4B, we right now under construction. The name place is 35,000 tons. So we were starting trial production by the end of the year. The first of quarter -- by the end of the first quarter of next year, we reached the -- I think, the capacity. So if we reach because their projects actually output maybe around 50,000 tonnes. So total next year, maybe we're thinking around 120,000 to 130,000 tons, we will give guidance next year. So for the further continued the capacity increase, basically, for example, like 4B, the capex -- the exact capex is from the proceeds of Chinese IPO.

So we think in the future, the Chinese -- because of the high valuation for the company, Xinjiang, the company in Asia, we will continue to show the capital at market to raise more money, and to support the future expansion. So yes, we are looking for the next phase in other places, I think, maybe around 100,000 tons projects. But I think if finalized, we will announce that. So basically, yes, we are looking for future capex, the money will come from the capital market.

Phil Shen -- Roth Capital Partners -- Analyst

Okay. And then as it relates to your cost structure, I know pricing has gone up significantly, but your cost structure is also going up a little bit with the silicon powder increase. We saw a bit of an increase of your cash costs in Q3 versus Q2. As we go through next year, how do you expect that to trend as well? Okay. At least as of now, the cost structure for Q4 is a bit difficult to determine. So we are currently looking at silicon powder pricing of roughly in the range of $8 to $10 per kilogram. So this is up from approximately $2.50 to $3 per kilogram in the previous quarter. And it really depends on how the pricing trends. But so far, what we are seeing is the pricing trend has stabilized for silicon powder and in fact for certain grades, the price has declined, and some of it has declined more meaningfully. So we do believe that over the next two months or so, the second powder pricing should be stable to down. And then with next year, I would say, China -- the power shortage in China should abate a bit and -- which should allow more silicon power production to revamp. So you look at what's really happening in the second half, especially -- I think, since September is the shortage of power and the lack of power that's really led to a forced production shutdown of some silicon powder producers, especially in the Henan province. So there's no shortage of silicon metal production capacity, but the ability for the producer to produce is diminished. So we believe this situation should improve in the first half of next year. So we do look for pricing -- silicon powder pricing could go down as a result.

Longgen Zhang -- Chief Executive Officer and Director

So Philip, I'll just add a comment. For the fourth quarter, we think the silicon powder price will go up, but we think almost we can transfer the increased part, almost 100%, transfer to the selling price.

Ming Yang -- Chief Financial Officer

Yes.

Longgen Zhang -- Chief Executive Officer and Director

So that we can maybe can continue to keep the gross profit remain the same as fourth quarter -- remain same as the third quarter. That's our planning. For next year, as just Ming mentioned, because the capacity almost increased more than 50%, even though the selling price is -- we think will be a little slowdown as the silicon powder also go down. But the supply is still very tight. So really, it's difficult to forecast finally, how much money -- cash flow we can make it. But our planning is to keep at least 20%, 25% increase based on this year.

Phil Shen -- Roth Capital Partners -- Analyst

Great, thank you very much. I'll pass it on.

Operator

Next question comes from Gary Zhou with Credit Suisse.

Gary Zhou -- Credit Suisse -- Analyst

Thank you for taking my questions.Congrats again on the very strong results. So three quick questions from me. So firstly, I want to ask, do you see any kind of a risk for your company's production or your peers kind of production into, let's say, November or December due to China's energy control policy and the power shortage issues? And secondly, so based on my calculation, I think the current polysilicon ASP hike, actually more than cover the silicon metal cost hikes.

So basically that's even a little bit margin expansion. So just wondering, into November, December, do you see room that the polysilicon price can ease or come down a little bit to, let's say, to help the downstream demand? And lastly, I think you mentioned earlier -- so basically, we were talking about possible dividends in the next inning results. So just -- and now, we have seen very strong results in earnings and cash flows. So just wondering if there's any guidance for the dividend payout ratio or absolute dividend amount?

Longgen Zhang -- Chief Executive Officer and Director

Gary, first of all, I thank you very much to the first question about the -- I think yesterday, power control, emission control affected China, a lot of province. I think six province because of two red lights and put a very strict, I think, policy on the yesterday supply side. Because we, right now, currently, the production site is in Xinjiang Shihezi. So use local electricity grids. At the beginning, I think September, yes, we got some government call and also remind maybe need to cut the electricity supply. But later, because I think we are one of the, I think, important company, I think, a producer in local city.

Also, we are green energy, the upstream solar industry. So the governments understand. So in a word, so far, we didn't feel any electricity cutting and also the government guarantees the further no cutting electricity supply and to guarantee us to continue to full capacity running. So that's why we've given guidance on the fourth quarter. We don't think that will affect our current production. Second question about the -- I think the ASP -- our products and also silicon powder price continue to go up. We find long-term contracts with one of the silicon powder supply. And we think majority of time, the supply is compliance with the contract, supply the powder.

So that's why you see our third quarter, our silicon powder price actually is lower than market. But for the fourth quarter, because of the new year beginning, so our -- right now, the cost of silicon is more close to the market. For the October, I think our silicon powder, maybe around CNY80 to CNY85 per kg. And for the November, we see the price is stable. So we try to control under CNY80. That's what we try, OK? So I think December definitely will be under CNY75. So overall, I think silicon cost -- powder costs that were accounted for, for the fourth quarter, I now kind of estimated maybe around CNY70 to CNY75, plus other cash cost.

So our fourth quarter cash costs will go up maybe around -- I give a little bigger range around CNY90 to CNY105 per kg. But I think at least right now, selling module price, October is, I think, around -- I think average is about CNY265 per kg average selling price. So then the November, we see the price continue to go up, maybe CNY3 to CNY5 per kg continue up. And that's why we think we can transfer the polysilicon price increase part to the selling price. So we try -- the gross margin maybe will go down compared to the third quarter. But as a gross profit, we try to keep remaining the same, OK?

I think that's the answer to your second question. For the third question, I think about the dividends. The dividend is because we basically Xinjiang energy is right now is listed in China, Asia Company. So we need to follow their law or rules. So basically, I think after the annual report come out, I think right now, the Asia company, the January rule is minimum 30% we have to declare dividends. So our percentage is not sure because a certain time the government they see the Board will approve that. So we will announce that. So basically, that's your three questions answered.

Gary Zhou -- Credit Suisse -- Analyst

Okay yeah, this is very helpful. Thank you and I'll pass it on.

Operator

The next question comes from Dennis Ip with Diawa.

Dennis Ip -- Diawa -- Analyst

Congratulations for a very strong result. Basically, most of the answer question is already been well answered. But I would like to know more the long-term capacity growth. So we have a plan to achieve 250,000 tons by 2024. So do we have more concrete plan, timeline? Or when are we going to able to have more details in terms of the site selections and also the timetable, given that our competitor also aggressively adding capacity in 2022 and 2023 as well?

Ming Yang -- Chief Financial Officer

Okay. So just to be clear, so you're talking about our long-term capacity expansion plans, right?

Dennis Ip -- Diawa -- Analyst

Yes, after 4B, yes.

Ming Yang -- Chief Financial Officer

Okay. So right now, these plans are quite preliminary, and we will make further announcements when they become more concrete when we have more details. So it is very preliminary. So beyond Phase 4B, we do plan to continue to expand our capacity. As you can see, we have a very strong balance sheet to support that. And also the ability to access the Asia market with a very attractive valuation. And we expect to -- we do expect to reach our plan of 270,000 metric ton by the end of 2024, and this will represent approximately 50% average annual growth rate.

And we are already in the process of negotiating with various different localities for our next expansion project, including in the Mongolia, as an example. And then right now, getting the energy quota, it is a big challenge. And we are looking at potentially -- looking to source green energy to produce polysilicon in the future. So that one is it would allow us to secure the energy quota, as you know, the coal quotas has now been pretty much over allocated. And also, this would also give us the ability to produce poly to do what's called 'green poly' or Poly with green energy.

And we are seeing that getting the energy quota is a challenge in China, and this will very much likely slow down the overall pace of the expansion in the polysilicon sector. Going forward, as many of our competitors of the new projects will find it challenging to be able to secure the energy quota. And we will disclose more details upon finalizing the plan for our next project.

Dennis Ip -- Diawa -- Analyst

Okay, thank you.

Operator

[Operator Instructions] The next question comes from Alan Lau with Jefferies.

Alan Lau -- Jefferies -- Analyst

Congratulations to the management and for the performance of the results. And I would like to know, first of all, what is your view on granular silicon, meaning FBR, as one of your competitors are having aggressive plans ahead.

Longgen Zhang -- Chief Executive Officer and Director

I think Ming maybe answer the question.

Ming Yang -- Chief Financial Officer

Okay. Okay. So about the FBR or granular Poly, so best on understanding of the current market situation. So including some of the production and quality data, the existing granular producers have provided, we do see that the quality and purity levels of granular poly compared to particularly Daqo's mono-grade poly -- churn polysilicon, we do see that there are material differences in quality, OK, and purity. And on the application level -- OK, different downstream manufacturers do have different perspectives on this. But basically, over all the feedback that we have received is that there is a material quality difference, of granular compared to churn poly. And most producers if they are using are only using as a mix as far as the mix right now.

Alan Lau -- Jefferies -- Analyst

And my last question is about the power tariffs. So to my understanding, one of the key mode of the company is to low-power cost in Xinjiang. And would like to know -- just to reconfirm, the Phase 4B will get the same Xinjiang low tariff for the next 10 years along with 4A. Is that correct?

Longgen Zhang -- Chief Executive Officer and Director

Now, basically, I think we find with the local governments and also -- actually, it's not the powder supply company, OK? And also the city distribution developing zone authority and also city. The contract is including the 4A and 4B, that's mean the name place 70,000 metric tons. I think the price was fixed, I think, in 15 years. So basically, will be the same.

Alan Lau -- Jefferies -- Analyst

Thanks a lot, thanks a lot.

Operator

This concludes our question-and-answer session. I'll now turn the conference back over to management for closing remarks.

Ming Yang -- Chief Financial Officer

Thank you, everyone. Thank you for participating in today's conference call. If you have any further questions, please don't hesitate to write and -- write us emails or make a phone call. Thank you, everyone. Bye-bye.

Operator

[Operator Closing Remarks]

Duration: 44 minutes

Call participants:

Kevin He -- Head of Investor Relations

Longgen Zhang -- Chief Executive Officer and Director

Ming Yang -- Chief Financial Officer

Phil Shen -- Roth Capital Partners -- Analyst

Gary Zhou -- Credit Suisse -- Analyst

Dennis Ip -- Diawa -- Analyst

Alan Lau -- Jefferies -- Analyst

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