Good day, ladies and gentlemen. Thank you for standing by. Welcome to Canadian Solar's first quarter 2022 earnings conference call. My name is Livia, and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Isabel Zhang, Investor Relations Director at Canadian Solar. Please go ahead. Thank you, operator, and welcome everyone to Canadian Solar's first quarter 2022 conference call. Please note that we have provided slides to accompany today's conference call, which are available on Canadian Solar's investor relations website within the Events and Presentation section. Joining us today are Dr. Shawn Qu, Chairman and CEO, Yan Zhuang, President of Canadian Solar's majority-owned subsidiary, CSI Solar, Dr. Huifeng Chang, Senior VP and CFO, and Ismael Guerrero, Corporate VP and President of Canadian Solar's wholly-owned subsidiary, Global Energy. All company executives will participate in the Q&A session after management's formal remarks. On this call, Shawn will go over some key messages for the quarter. Yan and Ismael will respectively review the highlights of the CSI Solar and Global Energy businesses, followed by Huifeng, who will go through the financial results. Shawn Qu will conclude the prepared remarks with the business outlook, after which we will have time for questions. Before we begin, may I remind listeners the management's prepared remarks today, as well as their answers to questions, will contain forward-looking statements that are subject to risks and uncertainties. The company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations. Any projections of the company's future performance represent management's estimate as of today. Canadian Solar assumes no obligation to update these projections in the future unless otherwise required by applicable law. A more detailed discussion of the risks and uncertainties can be found in the company's annual report on Form 20-F, filed with the Securities and Exchange Commission. Management's prepared remarks will be presented within the requirements of SEC Regulation G regarding generally accepted accounting principles, or GAAP. Some financial information presented during the call will be provided on both a GAAP and a non-GAAP basis. By disclosing certain non-GAAP information, management intends to provide investors with additional information to promote further analysis of the company's performance and underlying trends. Management uses non-GAAP measures to better assess operating performance and to establish operational goals. Non-GAAP information should not be viewed by investors as a substitute for data prepared in accordance with GAAP. Now, I'd like to turn the call over to Canadian Solar's Chairman and CEO, Dr. Shawn Qu. Shawn, please go ahead. Thank you, Isabel. Hi, everyone. Welcome, and thank you for joining us today. Please turn to slide 3. In the first quarter of 2022, we delivered 3.63 gigawatt of module shipments, $1.25 billion in revenue, and 14.5% in gross margin. We also achieved a net income attributable to Canadian Solar shareholders of $9 million and diluted earnings per share of $0.14. These results were in line with our guidance, even though the operating environment was very challenging. I want to thank our global team for their focus and execution of our strategy, building Canadian Solar's long-term competitive advantage across all its businesses, including solar module, battery storage, system solutions, and global project development. Please turn to slide 4. One of the things I would like to highlight this quarter is our decision to accelerate upstream capacity expansion plan with the latest state-of-the-art technologies. Specifically, we expect our ingot, wafer, and cell capacity to reach approximately 20 GW by the end of 2022, which is meaningfully higher than what we previously communicated. Our module capacity will be 32 GW, in line with our prior target. This will meaningfully increase the level of vertical integration of our manufacturing capacity, allowing us to better control our costs, technology, and product quality, thereby further improving our pricing power and margin. Our plan is to strategically shift our capacity from the current pyramid structure to a trapezoid structure. We are pushing our vertical integration level to 32%, the highest in the Canadian Solar history. This trapezoid structure will allow us to strike a good balance between greater control over production and cost while still being flexible and responsive to market changes. This flexibility has given us a competitive advantage in the past, and even more important today. Please turn to slide five. Secondly, the registration process with China Securities Regulatory Commission, or CSRC, of our CSI Solar subsidiaries carve-out IPO remains on track. This is despite the slowdown due to the COVID lockdowns in China, and especially in Shanghai. The listing will support our growth strategy and further unlock value for shareholders, and we will continue to update you on our progress as we move forward. Please turn to slide six. Lastly, I would like to comment on a particular resolution passed by our board of directors this last week. This resolution mandates a third-party audit of Canadian Solar's operations and supply chains with respect to the effectiveness of our anti-modern slavery policy, suppliers' code of conduct, and human rights policy. The management team proposed the resolution to the board as a response to certain shareholder proposals, and we fully support the resolution. As we have clearly stated in our prior calls, Canadian Solar does not tolerate forced labor or any form of modern slavery, and is committed to ensuring that modern slavery does not take place anywhere in our business, including our supply chain. We implemented policies and procedures addressing this, and with this board resolution, we expect to further increase our efforts at reasonable cost to conduct a third-party assessment and report to the board of directors on the extent to which our policies and procedures effectively protect against forced labor in our operations, supply chains, and business relationships. This remains a top priority for management and board, and we look forward to engaging with our investors, customers, and partners during this process. With that, let me now turn over to Yan, who will go through our CSI Solar business in greater detail. Yan, please go ahead. Thank you, Shawn. Please turn to slide seven. In Q1, in the CSI Solar division, we delivered 3.63 gigawatt of solar module shipments, $1.21 billion in revenue, and 14.5% in gross margin. Year-over-year, this represents 74% revenue growth and 161% gross profit growth. While we are pleased with the strong performance, the operating environment remains challenging going into Q2. Please turn to slide eight. First, let me give you an update on the latest supply chain and market situation. As you know, polysilicon cost inflation came back in early Q1 due to the strong demand in China and India. While we already anticipated upstream costs to remain high in the first half of the year, the magnitude of the cost increase was greater than expected, and therefore, we had to react quickly. We continued to raise prices where possible, optimize capacity utilization, and further reduce our processing costs. As of now, we believe polysilicon pricing will come down gradually in the second half of the year. Once capacity maintenance activities are over and more supply is added to the market, we expect demand to remain strong, especially once pricing starts to come down. Q1 was also affected by the COVID-related lockdowns in China, which were particularly severe in the greater Shanghai region. On the positive side, the reduced overall shipping activity in the region has triggered a decline in shipping costs, which finally seem to have turned a corner. Unit transportation costs are still significantly higher than historical levels, but have come down close to 20% from their peak. We expect the trend to continue gradually through this year as the world recovers from COVID. Shipping congestion has also improved, although certain ports are still more congested than the pre-COVID normal levels. Finally, currencies are starting to move in, into our favor after 2 years of headwinds. With an operating landscape that is improving but is still challenging, our focus remains on our long-term strategy. Please turn to slide 9. At our core solar module business, our goal is to expand capacity, increase the level of vertical integration, as Shawn discussed, gain global market share, and improve our long-term earning power. Vertical integration allows us to further internalize our supply chain, reduce market risk, and drive innovation and product leadership. Growing from a lean asset base with limited legacy assets, we have an advantage as we implement our growth plans to reach 15% market share in 3-4 addressable markets. We're also excited about the significant in our battery storage business. In Q1, we shipped 290 megawatt-hours of storage systems, and we expect a significant ramp up from Q2 onwards. We're also expanding our market reach from mostly selling to the U.S. market to entering new markets such as the U.K. and China. We're starting to provide a wider range of value-added services and solutions, including battery storage solutions for capacity services and shorter duration frequency regulation. On the product side, we're very close to launching two major battery storage products, a utility-scale product designed to be one of the safest and most competitive in the market, and a beautiful, sleek battery storage system for residential applications, which will enhance our distributed generation market offering. Both products are expected to launch shortly, with plans to start selling them across all major markets in the second half of this year. Now, let me pass it on to Ismael for an overview of the global energy business. Ismael, please go ahead. Thank you, Yan. Please turn to slide 10. In Q1, we delivered $93 million in revenue and 19.2% in gross margin. We delivered approximately 350 megawatts of project sales in the U.S., which were all pre or early construction projects. Hence why the dollar per megawatt was relatively lower, but margin was healthy. We took advantage of a strong buying interest that provided us high price offers for our projects, even though they were relatively early stage. This helped us avoid placing high amounts of interconnection bonds as it would be covered by the buyers, and we could recycle that capital for higher return investments. Revenue was softer this quarter due to project monetization cycles and seasonality, including certain projects that we accelerated into Q4 last year. We expect Q2 to pick up. This quarter, our global project pipeline remains stable, with 24 gigawatts of solar and 27 gigawatt hours of battery storage. The contracted pipeline was approximately 5 gigawatts and gigawatt hours respectively, which is all construction projects, plus more than 90% of backlog projects on this slide. It is also important to note that the value of our pipeline is not only in its contracts, but also on the quantity and quality of interconnection agreements we have on hand, which currently is at 12 gigawatts for solar and 11 gigawatt hours for storage. In most markets, interconnection is increasingly the greatest hurdle for developers, and the fact that we have a global volume of this magnitude is testament to our pipeline ability to capture value and sustain growth over the long term. Speaking of growth, I'd like to reiterate our growth strategy, which is consistent with what we've been communicating with the market over the past several quarters. Please turn to slide 11. First, we will continue to grow our development platform through project origination, development and sales, proactively managing risk and working with potential partners to leverage our different areas of expertise. We are taking a portfolio management approach, where we are solidifying our market share in places where our position is very strong and growing our market position in other places where it makes sense. For example, we currently have a double-digit market share in places like Brazil and Italy, where we were one of the first movers in the market and have now amassed deep market knowledge and expertise. On the other hand, we see significant share upside potential in markets such as Spain, the U.K., Chile, Australia, and South Korea, among others. The U.S. is also one of our key strategic markets, especially in the battery storage space. Second, we are aggressively growing our operations and maintenance platform, both by contracting projects developed by us and by third parties. By the end of last year, we had just over 2 gigawatts of operational assets under O&M agreements. We are now meaningfully increasing our targets. We expect to more than double this number by the end of this year to 4.5 gigawatts, and grow it by 10 times by 2026, reaching 20 gigawatts. These are ambitious goals, but we are building our capacity to achieve them so that the share of our recurring revenues will be much higher in a few years' time. Third, it's retaining ownership of our project assets, mainly through long-term investment vehicles, which will also allow us to increase the share of recurring income. Recurring earnings from long-term asset ownerships will be above or below the line on our P&L, depending on whether we retain majority or minority ownership. This will be determined by our goal of maximizing the value of our pipeline, subject to risk and capital constraints. Retaining ownership of projects will also allow us to explore and accelerate the learning curve of uncontracted storage development assets. To summarize, we continue to execute on our strategy. That is to grow our development platform with quality assets and to increase the longer-term share of our recurring income as we work to create lasting value for our shareholders. Now, let me pass it on to Huifeng Chang, who will go through the financial results in greater detail. Huifeng Chang, please go ahead. Thanks, Ismael. Please turn to slide 12. In Q1, we delivered $1.25 billion in revenue, up 15% year-over-year, but down 18% from the previous quarter due to business seasonality. Gross margin was 14.5%, as we navigated through higher material costs with tightening control on many other operating expenses, and eventually delivered in the guidance range. It is important to note that our operating expenses were lower by almost 30% sequentially. Within that 30% decrease, selling and distribution expenses declined 16% quarter-over-quarter. Mostly due to lower transportation costs. General and administrative expenses declined 30% quarter-over-quarter due to tightened control. Research and development expenses also declined somewhat this quarter due to the timing of our R&D activities. The foreign exchange positions gained $3 million compared to $1 million in Q4 2021. The benefit was mainly driven by the strong appreciation of the Brazilian real and other currency fluctuations, such as the appreciation of the Australian dollar. As Yan mentioned, currencies are starting to move in our favor after two years of headwinds. Our reported currency is in US dollar, while costs are mostly in renminbi, and revenues are in many currencies, including the US dollar, euro, Brazilian real, Japanese yen, renminbi, and more. Thus, we are currently benefiting from the recent sharp depreciation of the renminbi relative to the US dollar, which is partially offset by other currencies also depreciating against the US dollar. Q1 income tax benefit was $1 million compared to $27 million tax expense in Q4 2021. The benefit was due to lower income before tax and the tax refund in Canada. On an annualized basis, the effective tax rate this year will be around 22%. Total net income and net income attributable to Canadian Solar shareholders was $9 million due to a few offsetting factors. This quarter, both numbers were very close. Please note that the variance between the total and the core net income will increase going forward once we complete the covered IPO of CSI Solar. Canadian Solar's ownership in CSI Solar will decline from 80% to approximately 64%. Basic and diluted earnings per share were both $0.14. Please note that the diluted share count did not include the adjustment for the outstanding convertible bond. Now turning to cash flow and the balance sheet. Next slide, please. In Q1, we strategically increased our inventories in both raw materials as well as finished goods, anticipating the inflationary environment to continue and a higher demand. Q1 CapEx was $90 million. Given the accelerated capacity expansion plans, we expect 2022 full year CapEx to be approximately $850 million, up from our prior expectation of $700 million. We ended the period with a healthy cash balance of $1.7 billion, giving us financial flexibility to manage unexpected risks. Total debt increased to $2.7 billion, mainly driven by increases in long-term debt as financing partners continued to support our growth opportunities despite the tightening financing environment. Twelve-month trading net debt to EBITDA, excluding restricted cash, increased to 4.1 times from 3.3 times the prior quarter. Now, let me pass it back to Shawn, who will conclude with our guidance and the business outlook. Please note that this quarter we are slightly adjusting our shipment disclosures to ensure consistency in future Canadian Solar and CSI Solar disclosures. Our shipment forecast will reflect the total shipments recognized as revenues from the CSI Solar standpoint, and this includes both shipping to third parties and to Global Energy projects that fulfill CSI Solar's revenue recognition criteria. However, at the CSI Solar level, CSIQ level, internal Global Energy shipments should be eliminated as the profit from internal module shipments is only recognized once, which is at the time when the product is sold. Shawn, please go ahead. Thanks, Huifeng. Let's turn to page 14. For the second quarter of 2022, we expect solar module shipments to be in the range of 4.9-5.1 gigawatts, including approximately 150 megawatts to our own projects. As Huifeng just mentioned, from this quarter on, we will disclose shipment volumes based on what CSI Solar expects to recognize in revenues in the quarter. Total revenue are expected to be in the range of $2.2 billion-$2.3 billion, driven by higher volumes in solar modules and battery storage shipments as well as project sales. Gross margin is expected to be between 14.5%-15.5%, reflecting higher material costs. Our guidance remains unchanged for the full year of 2022, with total module shipments of 20-22 gigawatts, battery storage shipments of 1.8-1.9 gigawatt-hours, and total project sales of 2.1-2.6 gigawatts. Total revenue guidance for 2022 also remains unchanged, expected to be in the range of $7-$7.5 billion. Despite the continued market challenges, our business and outlook remain strong, led by robust demand for renewables and greenfield battery storage. We are in a strong market position and focused on building long-lasting shareholder value. With that, I would now like to open the call to our question. Operator? Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press the star then the one key on your touchtone telephone. Our first question coming from the line of Praneeth Satish with Wells Fargo, your line is open. Hi. Good morning. I guess just first to start off on the capacity expansions, can you maybe just give us a sense of how much CapEx you'll spend this year to increase manufacturing capacity? Also on financing, would you need to you know use the at the market program to help fund the increase in CapEx? Yeah. I believe, Huifeng already addressed this question, and so, I would like to let Huifeng to elaborate. This increase, first of all, the CapEx is to meet the demand. We know the global demand almost doubled from slightly above 100 GW in 2019 pre-pandemic to now more than 200 GW a year. We are investing mainly to meet the additional demand, not merely to pay for the sake of taking market share. Second, the CapEx is to scale. That is for us to remain cost competitive, and we aim to remain in Tier 1, not really to be the largest one. Third, we believe the timing to ramp up our capacity is now. Relative to our peers who expanded earlier, our cost for new capacity is cheaper, and we are taking the second mover advantage because all the equipment have become cheaper in the last couple of years. More important, our CapEx plan is dovetailed with our IPO in China, and the IPO proceeds will give us the financial firepower to do so. Of course, on the Global Energy business side, the financing need will all go with the product development. For example, we are doing a lot of projects in Brazil, and as the project takes off, we'll take financing, but that's at the project level. Thank you. Okay. That makes sense. Just broadly, I was wondering if you give an update on the solar development market in Europe, whether you're seeing any acceleration there and whether the governments are accelerating permitting of new projects, just given everything that's going on in Russia and Ukraine. Thanks. Yeah. I would like Ismael to address this question. Ismael? Look, thank you for the question. Look, as you know, energy is a weapon when everything comes into geopolitical movements, right? Europe in general is taking the approach of being independent from the energy point of view, and there are no resources in Europe beyond renewables. What we see is an aggressive shift on all the governments trying to push harder to have renewables deployed in much bigger volume now, and also quicker. This is what we are seeing. Of course, the immediate result is also the spike in the electricity pricing. Those are the main two things that we are seeing, and we believe they are gonna last for quite some time. It's not gonna be something that will go away easily. I don't know if this answered your question. Okay. No, it did. Thank you. Now, next question coming from the line of Philip Shen with Roth Capital Partners. Your line is open. Everyone, thanks for taking my questions. Wanted to check in with you on the U.S. market. In Q1, you had 29% of your shipments to North America. It sounds like, you know, based on our checks, that you're still shipping into the U.S., meaningfully, despite the anti-circumvention risk, as the importer of record. I was wondering if you could talk through, for some of us, around the details of the contracting. For example, are you the importer of record? How much risk are you taking on here? Ultimately, how are you structuring these deals, and how much of it is for serving the DG market versus the utility scale market? Thanks. Okay. Philip Shen, this is Yan Zhuang. To answer your question, first of all, we're actually well aware of all the risks. We had a thorough analysis and we actually first of all, we're shipping to the U.S. continuously and with a different bucket. With some customers we're taking the risk, but with conditions. We sell actually at a premium to cover the risks. We also retain our rights to terminate a shipment in case the policy goes out of certain lines. We have conditions in the contract. Some customers are willing to take that risk themselves by clearing customs themselves. In some cases, we share the risk. For distribution channel, we obviously selling at a higher premium, so that can well protect us from the risks. On top of all of that, we actually also diverted some volume away from U.S. to other markets like Taiwan. We exploring different possibilities. We also have some of the product actually made from Hemlock silicon or REC Silicon, that can also mitigate the risk. Combination of many different measures, and we're confident that the risk is well hedged. Great. Thank you, Yan. That's very useful. Oh, sorry. Let me correct. The silicon is Wacker, it's not Hemlock. Sorry. Okay. Got it. That's important and thanks. Yan, can you talk about the profitability of this opportunity in the US as you balance all the different risks? I guess two questions here. How many gigawatts of product do you think you send to the US in 2022? And what kind of profitability could the US or North America sales have for you? I think the volume we're shipping to the U.S. is not the entire capacity in Thailand. It's less because we're undergoing some upgrading, and we diverted some volume. The exact number, actually, I'm not 100% sure. It's around 3 gigawatts, more or less. I'm not sure. I don't have exact number. It is more profitable than some other markets, depends on the channel. The DG market actually has higher pricing. I hope I answered your question. Thank you. I won't call it higher per se more profitable. It's just that we have to add a risk premium. Yeah. Okay. Thank you, Sean. One last one for me. In terms of capacity expansion, actually I missed the CapEx. I think it was a little bit unclear on my side at least. Huifeng, could you remind us again how much you plan on spending this year? Bigger picture, was wondering if you guys could talk through the timing of making this decision to become a trapezoid structure from your historic pyramid structure. A fter being public for close to maybe 15 years. Y ou guys have historically always kept this pyramid structure. What are the conditions in the market today that are driving you to make this trapezoid decision? Historically, you know, you're evaluating, and I'm imagining every year, maybe multiple times a year. What is it about today's environment that makes the shift necessary from the pyramid structure to the trapezoid structure? Thanks. It's the total investment. In the previous- The total investment. Go ahead, yeah. $850 million. The decision is made, and we're going ahead. There's no conditions. We talked about around 20 gigawatts level for ingot, wafer, and cell. That's gonna happen. It started already. It just takes time to complete. Right. Yan, this year you'll spend $850 million. I guess my question is- Eight- Go ahead, yeah. $850 million covers everything. That include what we've done last year and also the upgrade we're gonna do this year and new capacity expansion this year. The part of the spending is for the project that's going to be realized next year. It's a combination of everything. Can you share how much will be spent in 2022? Well, the total budget is $850 million, so that's what we're gonna pay. Okay. I guess my question, Yan, was around why make the decision. I know you mentioned the decision is made. I get that. My question is, what is special or different about the conditions in the market today or now? Oh, okay. To say we will shift from pyramid to trapezoid despite the history of 15 years of being- We believe the industry has come to the stage that we're experiencing a very sustainable growth. Solar cost is not a conditioning for growth anymore. We already reached a scale that we need the stability and need more control on the cost side, and so we can plan our growth. The stability is becoming instrumentally important for our business, and also for us to compete against our peers, 'cause now the industry is so big. For our business, you know, you cannot speculate anymore 'cause the margin is getting thinner as well. The game is more on the vertical integration and the scale side. This is now becoming very clear. That's why we're making this decision. Okay. Thank you for the detailed answer and taking all the questions. I'll pass it on. As a reminder, ladies and gentlemen, if you'd like to ask a question, please press star one. Our next question coming from the line of Colin Rusch from Oppenheimer. Your line is open. Thanks so much, guys. Could you talk a little bit about the geographic mix, and as well as the kind of project size mix that you're seeing with the business right now? I know you've got the direct to installer channel that has been a good margin driver for you historically. I'm wondering if you're able to push more volume through that on an overall basis from a percentage perspective, and how much of your volume is starting to move into Europe and other geographies, given what's going on from a demand perspective. You're talking about shipment volume into different geographies, right? Yeah. The mix of utility scale versus rooftop. We first of all continue to ship more and more into C&I in the residential market. While there's certain volatilities on the utility side due to the impact of multiple factors such as COVID control, inflation, and you know, utility scale project has a lower tolerance on cost increase. That's why recently actually the DG market is getting more and more volume. I think in terms of a stable pattern for us, I would say we will probably continue to maintain more than 50% into the DG market. That includes C&I and residential. The rest is into a utility scale. In terms of geographical shipment, for Q1, we're actually shipping. The European market is growing, and this will continue into Q2. Europe will maintain, will continue to be strong. Japan and Korea and the APAC was high in Q1 because Indian number was high. A s I think, for Q2 and rest of the year, Asia Pacific excluding China will come back to, like a 20% level. North America right now is slow due to the so-called anti-circumvention investigation. However, we believe that in August, if we actually receive more friendly, you know, preliminary findings, I think the market will come back. U.S., we expect the U.S., you know, the uncertainty is there, for sure, but likely to go up after August. Latin America is recovering. China remains to be strong. Right now, due to the COVID control and also the high cost on manufacturing side, so the price is so high, China projects actually showing a sign of slowing down temporarily. We believe that, I think moving to September, October, China demand will come back strong because by then we believe that the price should come down before that. That's super helpful. Thank you. Then on the energy storage side of things, can you talk a little bit about the technology development that you're engaged in and evaluation of other technologies? Obviously, there's a very tight market for chemical storage and looking at ion batteries here. A re you looking at additional versions of chemistries or, you know, things like flow batteries, other configurations that could supplement the portfolio and de-risk some of the cost structure? For battery cell, we do have a lab, and we're actually researching two different directions. However, for the next couple of years, we're still relying on LFP technology. However, we're actually moving pretty quickly on other part of this value chain. For example, our integrated containers for storage, for utility storage, we have around 20 different patents that are some already we received the grants, some of them are still under application. We have a lot of innovations in that product. We're launching the product, we're set start to ship the product, starting from Q3, I believe in June and July timeframe. We have confidence that the product is actually one of the best in the industry. On the residential side, our product also has a lot of innovations. It's actually an upgrade based on today's market offerings. It has a lot of innovations from different angles. It's a lot of details. I don't have time to really go into all the details, you know. We can talk about that at product launch in July in the US. It's really a lot of innovation since it's an upgrade based on today's market offering. That's super helpful. We'll take it offline. Thanks, guys. Now our next question coming from the line of Brian Lee with Goldman Sachs. Your line is open. Hey, guys. Thanks for taking the questions. I had a couple more, I guess, modeling ones. F irst, maybe for Huifeng. You mentioned the OpEx was controlled pretty well here this quarter. If I look at it on a% of sales basis, you haven't really been this low in a while. How should we be thinking about OpEx trends, just given the environment, given, you know, higher costs on shipping, even though they've come off the peak, still elevated? Just what's the trend line here, as we move into the next couple of quarters on OpEx, whether it's on a% of sales basis or how we should be thinking about maybe absolute dollar growth, off the base in Q1 here? Hi, Huifeng. Oh. Hi, Brian. We just lost Huifeng. Maybe, we address your second question. I'm back. Oh, Huifeng. Huifeng, did you get the question? No, I didn't get the question. What's the question? Hey, Huifeng, it's Brian. Yeah, just asking about OpEx. You know, Q1 was a good quarter for you guys in terms of OpEx control. A lot of other of your peers have not been able to control OpEx that well here in this environment. Wondering what we should be thinking about for Q2 in terms of OpEx? I guess moving through the rest of the year, just sort of as a percent of sales or what sort of cost mitigation efforts you have that'll spill over from what you were able to achieve in Q1. OpEx, right? OpEx. You're asking OpEx. Correct. I mentioned in my call script today, on the call today that the biggest driver of OpEx decrease is the transportation cost. Now we are seeing that, especially on the international routes, everything is returning to normal. In the US, there's a decrease, and other routes also there are decrease. We expect that to continue. That was the largest factor. On the other hand, we are also tightening every side of our operation. Personnel cost and all the expenses, we are cutting every corner. O ur business volume has almost doubled over the last three years. Our team, all these operating costs remain almost unchanged. We'll continue to be very disciplined in terms of expenses, and that will help us to keep the price less change than the cost and remain competitive. With the capacity expansion plan, we will make more profit for the company. Okay, fair enough. Just maybe one housekeeping item. I think last quarter you guys had talked about a one-time incentive plan related to the IPO here. IPO is still on track for you know Q1 Q2 so I would assume this is gonna be a number that ends up in Q2. Will that be you know sort of $40 million showing up in OpEx in Q2? Is that the way we should be thinking about you know at least a one-time bump up in OpEx for this quarter? Yes. That will be determined by the exact timing of the China IPO, because a lot of RSUs are dependent upon the success of IPO. Right now, we are in the last stage. Registration of the CSRC remain on track. Unfortunately, the ongoing shutdown in China slows down many things in China. We remain optimistic the listing will be done. We haven't seen any red flags. We're just waiting. Also it depends on the vesting schedule, I guess. Yes. Yes. Fair enough. Sure. Fair enough. That will be basically costs we'll see flow through the model in the next couple quarters, whether it's all concentrated in Q2 or over the next two quarters. Is that fair? Yeah. Either we hope it will happen in Q2. Also very possible it will be dragged into Q3. Okay, great. Maybe two last ones for me, one on revenue seasonality. If I take your full year guidance and I look at what you did in Q1 and what you're guiding for in Q2, it does suggest a pretty sizable downtick implied for Q3 and Q4 if I just kind of flatline it. I know this has to do with project timing, but anything else in sort of the revenue seasonality here? It looks like Q2 actually will be, potentially the peak quarter for the year and then, a little bit softer top line trends through Q3, Q4. Maybe speak to that a little bit. Yeah. Hi. This is Shawn speaking. On the CSI Solar side, we actually expect the shipment continue to grow in Q3 and Q4. Of course, that also depend on some other factors. For example, the COVID lockdown in China may affect the scheduled panel project. Other than that, we expect CSI Solar's volume will grow in Q3 over Q2, and then grow in Q4 over Q3. Now, in terms of project, indeed, it depend on the schedule, on the project sale schedule. Maybe last one for me just on the gross margins, you know, whether this is for Sean or Huifeng. The CSI Solar margins have been pretty consistent here, except for maybe, you know, one quarter out of the past four or five. You've been hanging around the mid-teens gross margin percentage range. You're guiding for that again in Q2, and then you've got this increasing CapEx budget and increasing vertical integration. Should we be assuming that you get some gross margin expansion benefits from that vertical integration in 2022? I guess what I've seen with some companies is as they go through a larger capacity ramp, sometimes they take a little bit of a step back in the early ramp-up on margins before they see the full margin benefits realized after the capacity ramp-up is more, fully materialized. How should we be thinking about the impact on your gross margins as you know, embark on this vertical integration and the capacity ramp over the next few quarters? Well, we believe our margin will continue to improve rest of the year and even moving to next year. There are multiple reasons for that. First of all, our improved vertical integration and capacity expansion will actually improve our cost structure. We actually perceive that the upstream cost, although will go down over time with increasing capacity of silicon, it will go down, but will stay at a relatively higher level. It will go down gradually. It will not go down suddenly dramatically. Going upstream and improve for vertical integration will help us on margin. Secondly, as I said, the demand is very strong. With the current ongoing situation on the power market and the energy security concerns, we believe that we can command premium pricing from the project side. The tolerance to cost increase on the project side has been high, has been improved significantly. Silicon price will go down, so upstream costs will go down. On project side, the tolerance to cost increase is going up. We see that shipping cost is gonna go down. We also observing that you know the overall size of demand is also going up. That will help to reduce the percentage of OpEx. Overall speaking, I think the profit will continue to improve into second half of the year and even into next year. Okay. Sounds good. Thanks, guys. I'm passing on. Thank you. We have time for one last question coming from the line of Mark Strouse with J.P. Morgan. Your line is now open. Great. Thank you very much for taking my questions. I'm sorry if I missed this, but excuse me. It will be coming online this year. Are you gonna say where that is located? And then just kind of a high level follow-up to that would be with all of the focus lately on energy security, what are your thoughts over time of eventually expanding more significantly into European or U.S. manufacturing? Thank you. You're talking about the growth, the main growth, out of which geographical location, right? Can you repeat your first question? Yeah, something. Yeah. I'm sorry. From your Yeah. I'm sorry. The first part of the question was just more near term. The incremental capacity that you're bringing on this year for ingots, wafers, and cells, will that capacity be in Asia, or will that be, you know, some new market, new area? Not necessarily the customers. Well, Just the manufacturing itself. Yeah. We have cell and we have ingot and capacity built up in Xining, and we have cell Xining and Baotou, and we also have cell expansion in Suqian and Yancheng, Suining. Yancheng is for next year. We also have some CapEx expansion in Thailand. We're also closely monitoring the situation and you know, we have a lot of discussions on overseas manufacturing in other geographical locations, such as you know, U.S. and Europe. There's a lot of discussions, but we're actually monitoring the situation until it's ready. Hope that answer your question. Mark, the capacity plan announced in this earnings call are all located in Asia. Okay. I mean, it maybe it's hard to say, but do you think tariffs alone are enough to influence behavior, or do you need to see some kind of a domestic manufacturing tax credit to influence or kind of incentive? Well, that's a very good question. I believe that tariff alone, if you're talking about manufacturing in U.S., then I don't think tariff alone can force a manufacturer into U.S. Some good and long-lasting local incentive may be able to attract capacity into U.S. Just tariff is not enough. Yeah. Another topic is once we have a factory in the U.S., and it would take long time for the U.S. to build a complete value chain. During which we still have to import upstream components from China or other countries. We want to make sure that is secured, right? Otherwise we're gonna have continuous problem even we have factory in the U.S. Right. Yeah. That makes sense. Thank you very much. All right. Thank you, Mark. That should be enough for the question. I'll turn it back to management. All right. Thank you. Thanks everyone for joining us today and for everyone's continuous support. If you have any question or would like to set up a call, please contact our Investor Relations team. Take care and have a nice day. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect. Speakers, please hold your line.