Good morning. Welcome to the Daqo New Energy First Quarter 2023 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the call to Kevin He, Investor Relations for the company. Please go ahead. Hello, everyone. I'm Kevin He, the Investor Relations of Daqo New Energy. Thank you for joining our conference call today. Daqo just issued its financial results for the first quarter of 2023, which can be found on our website at www.dqsolar.com. To facilitate today's conference call, we have prepared a PPT presentation for your reference, which also you can find in our website. Today attending the conference call, we have our CEO, Mr. Longgen Zhang, and CFO, Mr. Ming Yang, and myself. Today, before we begin the formal remark, I would like to remind you that certain statements on today's call, including expected future original and financial performance and industry growth, are forward-looking statements that are made under the safe harbor provisions of the US 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 statement. 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 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. Now, without any further ado, I now will turn the call to our CEO, Mr. Longgen. Thank you, Kevin. Good evening or good morning, everyone. Our efficient operation of polysilicon facilities in the first quarter of 2023 resulted in the production volume of 33,848 metric tons. Our production cost decreased by 5.5% in renminbi terms, primarily due to a reduction in the procurement cost of metallurgical grade silicon powder. For the quarter, we generated $290 million in EBITDA with strong operating cash flow and maintained a healthy balance sheet. Our cash balance further improved to $4.1 billion. Our combined cash and banking note receivable balance reached to $4.9 billion. In April, we completed the construction of our Phase 5A, which is 100,000 metric tons polysilicon project in Inner Mongolia, and successfully started initial production of polysilicon. We expect to ramp up production to full capacity by the end of June 2023, bringing our total polysilicon nameplate capacity to 205,000 metric tons per annum. We expect our total production volume to be approximately 44,000- 46,000 metric tons of polysilicon in Q2 2023, an increase of 30%-36% as compared to Q1 2023, and approximately 193,000- 198,000 metric tons of polysilicon in the full year of 2023, an increase of 44%-48% as compared to last year. Based on the schedule, our new semiconductor-grade polysilicon project with 1,000 metric tons annual capacity is expected to be completed and start pilot production by the end of September 2023. With its new fully digitized and highly automated production system, we believe our Phase 5A Inner Mongolia project will bring in the company to a new level in terms of the overall competitiveness, including its production capacity, lower cost structure, and superior product quality. Polysilicon demand was weak in January due to the seasonal slowdown in the solar PV industry. In February, lower module prices stimulated end market demand, causing a meaningful recovery in demand and price improvement across the solar value chain. In March and April, polysilicon ASPs declined gradually due to increased supplies and constraint short-term demand for wafers caused by the limited supply of high-purity quartz used in silicon ingot production process. Despite the SP decline in the quarter, in our major operational subsidiary, Xinjiang Daqo, we still achieved a very strong gross margin of 71.4% and a robust net income after tax per unit of polysilicon sold of approximately 115 RMB yuan per kg, which we believe are significantly higher than those for many of our competitors and reflect our outstanding quality and cost structure. Recently, we have seen a clear trend that the SP gap between the high quality and lower quality polysilicon has started to enlarge, and the demand for high quality N-type products is increasing. We expect that this trend will enable us to differentiate ourselves from our competitors based on our high quality and lower cost polysilicon ready for the next generation N-type technology. We believe that the overall demand for solar PV will continue to grow in the coming quarters, and that continued capacity expansions by downstream manufacturers will lead to further increases in polysilicon demand. In the second quarter of 2023, our Phase 5A project will start to continue a meaningful output of approximately 10,000 metric tons-12,000 metric tons of polysilicon. We plan to reduce our inventory to approximately 5,000 metric tons by the end of second quarter. To achieve this, we will need to increase our shipment to 59,000 metric tons-61,000 metric tons in Q2, an increase of 133%-141% as compared to Q1. In November 2022, our board of directors approved a $700 million share purchase program, effective until December 31, 2023. As of now, we have already spent $85.1 million and repurchased approximately 1.688 million ADS. On April 6, 2023, our subsidiary, Xinjiang Daqo's cash dividend plan for 2022 was approved by its shareholders meeting. Therefore, as a 72.7% shareholder of Xinjiang Daqo, we expect Daqo New Energy to receive the dividend distribution in May with an amount of approximately RMB 4.96 billion after tax, which could be the financial resource to implement the improved share repurchase plan. We believe a new era for solar PV has just begun. The continuous cost reduction in solar PV products is expected to create substantial additional green energy demand, likely exceeding most analysis expectations. It is generally expected the solar PV will eventually become one of the most important energy to power the world. In addition, as solar PV technology keeps evolving, we believe that the increasing needs for polysilicon of very purity, very high purity, will help differentiate us from our competitors. Thanks to our ability to produce the type of polysilicon required for the next generation of N-type technology, we will continue to maintain solid growth and make sure to have one of the best balance sheets in the industry in order to capture the long-term benefits of our global solar PV market. Now, let's move to the outlook and guidance. The company expects to produce approximately 44,000 metric tons to 46,000 metric tons of polysilicon during the second quarter of this year. The company expects to produce approximately 193,000 metric tons-198,000 metric tons of polysilicon for the whole full year of 2023, inclusive of the impact of the company's annual facility maintenance. Now, I will turn the call to our CFO, Ming, please. Thank you, Longgen. Good day, everyone. Thank you for joining our earnings conference call today. Let me start with a discussion on our company's balance sheet and our strong cash position. As Longgen indicated, the company ended the first quarter of 2023 with cash balance of $4.1 billion, which is an increase of more than $600 million as compared to the end of 2022. Inclusive of the company's bank note receivable balance of $791 million, total cash and bank note receivable balance reached $4.9 billion at the end of the quarter. These bank note receivables are notes issued by major domestic banks used for trade financing purpose, and can be either immediately redeemed for cash or used to pay suppliers for raw materials and equipment purchases. On a per share basis, reflecting Daqo New Energy Corp's 72.7% ownership of our operating subsidiary, Xinjiang Daqo, this equates to approximately $45.70 per share of ADS. This represents the value of the cash alone and excludes the value of our property, plant, and equipment, which at the end of the quarter, has a $2.8 billion value on the balance sheet and is represented by our two world-class polysilicon production facilities, which has combined nameplate capacity of 205,000 metric tons and continue to generate healthy operating cash flow on quarterly basis with our leading product quality and low cost structure. This is witnessed by more than $800 million in cash flow from operating activities in the first quarter of this year. With regard to our capital expenditure and capacity expansion plans, for the first quarter of 2023, purchase of PP&E was approximately $277 million, which was primarily related to our polysilicon projects in Baotou City, Inner Mongolia. At the end of March, approximately $1.2 billion had already been spent on the Inner Mongolia Phase 1 project, with total planned CapEx of approximately $1.4 billion. We expect the remaining $200 million will be spent by the end of this year. For Inner Mongolia Phase 2, we expect total CapEx will be approximately $1.4 billion as well. We currently expect CapEx related to this project will be approximately $800 million for this year, and the remainder will be paid in 2024 and 2025. For the Inner Mongolia Phase 2 project, the project construction schedule may be adjusted based on market conditions, and we may adjust both project construction schedule and project progress and capital expenditure plans accordingly. I will discuss the company's financial performance for the first quarter of 2023. Revenues were $709.8 million, compared to $864.3 million in the fourth quarter of 2022 and $1.28 billion in the first quarter of 2022. The decrease in revenue compared to the fourth quarter of 2022 was primarily due to a decrease in average selling prices. Gross profit was $506.7 million, compared to $668 million in the fourth quarter of 2022 and $813 million in the first quarter of 2022. Gross margin was 71.4%, compared to 77% in the fourth quarter of 2022 and 63.5% in the first quarter of 2022. The decrease in gross margin compared to the fourth quarter is primarily due to lower average selling prices, mitigated by lower production costs. SG&A expenses were $41 million, compared to $44 million in the fourth quarter of 2022 and $15.5 million in the first quarter of 2022. SG&A expenses during the first quarter includes $28 million in non-cash share-based compensation costs related to the company's share incentive plan, compared to $28.4 million in the fourth quarter of 2022. R&D expenses was $1.9 million, compared to $2.7 million in the fourth quarter of 2022, and $2.1 million in the first quarter of 2022. R&D expenses can vary from period to period and reflect R&D activities that take place during the quarter, which is primarily related to our quality improvement initiatives. Income from operation was $463.8 million, compared to $623 million in the fourth quarter of 2022, and $796.9 million in the first quarter of 2022. Operating margin was 65.3%, compared to 72% in the fourth quarter of 2022, and 62% in the first quarter of 2022. Net income attributable to Daqo New Energy Corp shareholder was $278.8 million, compared to $332 million in the fourth quarter of 2022, and $535.8 million in the first quarter of 2022. Earnings per basic ADS was $3.56, compared to $4.26 in the fourth quarter of 2022, and $7.17 in the first quarter of 2022. Adjusted net income attributable to Daqo New Energy shareholders, excluding non-cash share-based compensation costs, was $310 million, compared to $363 million in the fourth quarter of 2022, and $538 million in the first quarter of 2022. Adjusted earnings per basic ADS was $3.96 compared to $4.65 in the fourth quarter of 2022 and $7.20 in the first quarter of 2022. EBITDA was $499.2 million compared to $648.5 million in the fourth quarter of 2022, at $826.8 million in the first quarter of 2022. EBITDA margin was 69% compared to 75% in the fourth quarter of 2022 and 64.6% in the first quarter of 2022. On the company's financial condition. As of March 31st, 2023, the company has $4.13 billion in cash and cash equivalent and restricted cash compared to $3.52 billion as of December 31st, 2022, and $1.12 billion as of March 31st, 2022. As of March 31, 2023, notes receivable balance was $791 million compared to $1.13 billion as of December 31, 2022, and $1.5 billion as of March 31, 2022. Now on the company's cash flows. For the three months ended March 31, 2023, net cash provided by operating activities was $807 million compared to $231 million in the same period of last year. For the three months ended March 31, 2023, net cash used in investing activities was $268.9 million compared to net cash provided by investing activities of $170.4 million in the same period of 2022. For the three months ended March 31, 2023, net cash provided by financing activities was $59.9 million, and this was zero for the same period of 2022. The net cash provided by finance activities in the first quarter of 2023 was primarily related to the net proceeds of $140 million from bank borrowings, offset in part by $80.1 million spent in share repurchases. That concludes our prepared remarks. Now, operator, we'd like to open the call for Q&A from the audience. Okay. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Phil Shen with ROTH Capital Partners. You may now go ahead. Hi, everyone. Thanks for taking my questions. First one is on your shipment volumes. You know, I think why have volumes been so low as a percentage of production for two quarters in a row? We thought you might ship more than 100% of your production in Q2 because of the inventory... Sorry, in Q1 because of the inventory that you didn't ship in the prior quarter. When do you think you'll release that inventory? Thanks. I think, Phil, our first quarter still is Chinese New Year. At January, the sales really is very slow. Remember that the downstream, the wafer producer, the capacity, you know, in the last year, November, starting November, December, they almost, you know, reduced the capacity to the minimum capacity, the maintenance capacity we call, maybe 20%-30%. As their capacity, you know, quickly come back, we are starting selling actually is February and March. Some March shipments to the end of the month, we have to move to second quarter. Basically, so far, this quarter, today, as of today, April, we already signed contract, more than 20,000 tons right now. We see, second quarter, the selling volume should be high. We expect, you know, we can reduce our inventory, by the end of last quarter is 20,000 tons. By the end of this quarter, second quarter to the 5,000 tons, just, you know, the regular, shipping goods are in the way, you know. Basically, these months were, you know, sales volume mostly were shipping to this quarter. Great. Thank you, Longgen. I did see your Q2 shipping guidance there, 59,000-61,000 metric tons. That's great. Can you talk about the outlook for poly pricing for Q2, Q3, and how you're seeing 2024 given the supply-demand situation for poly? Thanks. Basically, you know, I cannot give you the projection of the future. Basically, if you look our Q1, our selling price is $27. We see the selling price, especially the wafer prices go down. If you look at China, the future, Q3, Q4, the module selling price, the contract price, bidding price also is slowed down, you see. Basically, what that tell you is, if from silicon wafer cell module, the cost right now today is around like, RMB 0.98. You're selling module... If Q4, you say you're selling like RMB 1.75, you divide by the value-added tax. The net maybe is around like RMB 1.50. Your gross margin, whole industry is around like RMB 0.50 or even RMB 0.45. Compare last year, you're selling last year is around RMB 0.74. That's in the module selling price to RMB per watt. Basically, we will see second quarter, definitely I think the SP will slightly go down. How much I cannot tell you because, you know, we see right now the price is stable around RMB 180, you know, per kg. Maybe, you know, in the next two months will continue to slow down. I think, you know, still the SP will be, I think, between the U.S. dollar around $20-$25. In the third quarter, it all depends on how many the new, I think, production come out. How big, you know, the demand pickup. Really we think, you know, Q3, the selling SP will be stable, maybe as Q2. Q4 mostly is challenging every year, okay? Not only because of holiday, Western, but also I think in China, the traditional, I think, you know, the bargain between silicon and the wafer. Basically for Q4 is the challenge quarter. Maybe I think it will go down to $150, even $120, you know. I cannot tell you the, you know, the exact figure. If you look at 2024, as we said, you know, the demand is continuing to grow. Of course, silicon output in China also continue to increase. Daqo is differentiate ourselves is to selling more high quality of N-type silicon to differentiate ourselves from other people. We hopefully, our ASP can, you know, selling a little higher than our competitors in China. Today, Wacker, OCI, they're still selling around like, you know, $35, $37, you know, per kg. The reason is because, you know, they use their silicon outside of China, can ship into, you know, U.S. market. The differentiator is already there. You see, that's a logistic differentiate. We are efforts, our efforts is on our quality, our cost. Even though we think that 2024 is challenging year, okay? Let's say the industry maybe gross margin is around like 5% or even 10%. We hope Daqo can achieve, you know, premium 10%, 15%, a little more, so we can do 15%-20%. That's only I can tell you. Okay. All right. That's a lot of color. Thank you, Longgen. You know, you talked about the pricing premium that you think you might be able to get. I think you just talked through that a little bit, but specifically I think in Q1, I think your ASP was close to $27 per kilogram, and the average spot price was closer to $24. Can you talk about you know, what your realized premium is due to your quality? Is it about $4 a kilogram, or is that difference in the first quarter primarily due to better timing of your poly sales versus spot pricing? Thanks. Right now, N-type and P-type, we already see the difference, I think, is there. Around RMB 15 -RMB 20 per kg. We think, you know, that difference will be enlarged, you know, maybe later. You see, as the TOPCon capacity continue to come up, then the demand for N-type were more. Basically, we think in the future, our selling price should be if we can selling 70% of our products is N-type, you know. Basically I think the price may be $5, you know, difference. It's possible, you know. I can tell you see exactly, the future, how the future going, you see. Really, it's a lot of challenge, you know? Yeah. Okay. The most important to us, yeah. The most important to us is we have a fortress balance sheets. As Ming just said, you know, right now today, the banking, you know, notes receivable plus cash is almost $5 billion. We're continue to generate, you know, the cash, operating cash. We try to control our CapEx as the market continue going. For example, if the market go into, you know, more a war scenario, then Mongolia, Inner Mongolia, 5 B, we can slow down, you know, CapEx. We are continuing to focus our, you know, to, I think, strengthen our balance sheets. That's the most important, I think. Great. Okay. Given that, you know, this is my last question here. Are you planning to do additional buybacks this year beyond the $700 million approved? What are your thoughts on that, given the cash that you have? Thanks. At this moment, I think, we just declared $700 million. We already used, I think, around $85 million, so we only left is $650 million. The dividends I think, you know, to slow the foreign exchange, I think, we're heated accounts, I think, you know, the early of May. Even let's say we still have like $650 million compared to the capital market, it's almost, you know, 18% of our total share, outstanding shares. That's a lot. Basically, you know, you know that all the repurchase program, we have to, you know, change to from renminbi to foreign exchange. The only right now reliable sources is the dividends declared. Basically I only can tell you so far only is I think, you know, today by the end of this year, we still just forecast $700 million purchase program. Okay. Thank you very much, Longgen. I'll pass it on. Great. Thanks, Phil. Our next question will come from Gary Zhou with Credit Suisse. You may now go ahead. Yeah. Hello, management. Thank you for taking my questions. This is Gary Zhou from Credit Suisse. Two questions on my side. Firstly, also to follow up on the buyback, as Longgen has mentioned, you know, basically the rest of the amount is quite a significant amount to proceed. Just wondering if the company have a kind of a more, can give us more, more color on the timing, how we gonna, you know, proceed all those buyback or if there is a, you know, kind of a price range that we would think, you know, we would more do more kind of a share buyback. Secondly, a quick question, just wondering, you know, if management can give us some color on the April kind of a polysilicon sales? Have we, you know, kind of start to see our inventory start to going down in April? Basically want to have a more kind of idea on, you know, how confident the management believe that, you know, our inventory can reduce, you know, quite a lot in the second quarter. Thank you. I'll let Ming to answer your first question, buyback color. I answer your second question. Ming. Okay. Hello, Gary. Thank you for your question. As Longgen indicated earlier, we do have a $700 million share purchase program, of which $85 million has been used, and there's $615 million left. This program is really through the end of 2023. We did just receive the dividend distribution from Xinjiang Daqo. It's enrolled right now and needs to be transferred offshore. In total, this will be approximately RMB 4.96 billion or just north of $700 million. Certainly, we do anticipate that this would be the financial source that could be used to fund our share repurchase plan. I think in terms of timing, there's really no specific timing, except that it will be repurchased throughout the year. We will definitely, you know, be take opportunity to look at the share price, especially if share price is really attractive, you know, we would look for opportunities to repurchase that. Gary, I think, you know, I just answered, I think a few question about, you know, the April, the, I think, shipment movement. By the end of first quarter, we have an inventory around the 20,000 tons. In April, I think, we saw the contract right now so far today, is more than 20,000 tons. We see it's very quick, you know, right now, the move out, especially we see a lot of customer, you know, come back, you know, book more silicon. Today the scenario is different from, you know, the history. The history is every month we sign the contracts. Right now, almost every week, we sign the contract with clients because most clients, you know, they're a little worried, you see the fluctuation of the silicon price. We see right now the price is stable, almost stable between 170-200 RMB yuan per kg. We hopefully, I think that price can stick on that or even gradually slow down. Basically, you know, we think, you know, in May next month we will be selling more. Our expectation, the guidance we already give out, I think we will keep at the end of this quarter the inventory to 5,000 tons. That is in the shipments, you know, we can recognize as the revenue, hopefully. Yeah. Thanks a lot. Yeah, this is very clear. I'll pass on. Thank you. Okay. Thank you, Gary. Our next question will come from Alan Lau with Jefferies. You may now go ahead. Thanks, management, for taking my question. Would like to ask from a more long-term perspective. Because some of the peers are having very aggressive capacity expansion plan, more than 400,000 tons next year, and also some of the peers are having very low cost with FBR technology. Would like to know your strategy on maintaining your market share, or will there be acceleration in capacity expansion or there will be partnership with some of your peers to stabilize the price? Thanks. Okay. Alan Lau, thank you for your question. We did see our peers aggressive capacity expansion plan. I think it is subject to, for example, their funding from the A-share capital market in terms of their additional capital raising. Also, I would say a lot of these projects also more or less will be subject to market conditions, for example. As we indicated, right? If market condition is good, for example, if demand in the second half there remains strong and polysilicon pricing remain healthy, then we may decide to, for example, move our Inner Mongolia Phase 2 project on track and looking at additional capacity plans. Let's say if polysilicon pricing and does become less than attractive, then certainly we would delay our project expansions and we would not look to accelerate capacity expansions for us, you know. If that's the case, we also would think that a lot of the planned projects expansion would slow down or cancel. Naturally, some of the new capacities that do not reach either quality or cost targets might actually might shut down or close down as the, as the industry has seen in the past. Okay. With regard to cost, we do believe that, at least in terms of the Siemens process type of polysilicon, in a way we are now more than 99% of our production is mono grade, and we are also one of the largest supplier of N-type poly in the market within China right now. I think we continue to have some of the best quality, and especially for the N-type, I think our products are really accepted by customers. I think our understanding is even though, you know, maybe some manufacturer with different process might have lower costs, we do believe that, you know, the product, I think once going to N-type products, right? Especially I think in the second half of this year and next year, we do believe that as quality becomes more important, right? When one product become more available, we do think that quality will make a big difference, especially with regard to pricing, right? What we're seeing in the market already is that in, you know, the lower quality product that does have much lower pricing than the higher quality product. I think, in fact, what we are seeing in the past months is that as a lot of the price, the gradual price decline that we saw in the market actually was the result of more of these lower quality products moving into the market and they had to offer a lower price to the market. That is pulling down the overall average pricing of polysilicon in the market currently. Understood. Thanks a lot, Ming. Another question from my side is how do you see the costs going forward like? Do you think our production costs can get below RMB 50 eventually with the optimization and ramping up of new plants? Okay. Hello. Actually, Allen, for example, right? If you compare our Q4 production costs compared to our Q1, as we indicated, actually it went down almost 6% quarter-over-quarter on RMB basis. I think in terms of RMB, our Q4 cost was close to RMB 55 per kilogram. Our Q1 cost is actually already close to RMB 51 per kilogram. I would say we do anticipate that once we ramp up our Inner Mongolia facility, right? Which has, I think in terms of one single site and has, in a similar or even better manufacturing efficiency compared to our Xinjiang facility, you know, with less people, right? With an updated process. We do think that we have very good opportunity to see additional price reductions as this facility ramps up. In terms of our internal planning, we do think that it has very good opportunity to reach the price, the cost targets that you've indicated. Thanks a lot. That's very clear. I'll pass on. Yeah, thank you. Great. Thank you. Our next question will come from Rajiv Chaudhri with Sunsara Capital. You may now go ahead. Thank you. Good morning. Congratulations for producing a strong quarter in very challenging circumstances. I just want to follow up on the cost question. You are also beginning to produce the raw materials internally now, or at least the capacity is being built for that. How will that shape your cost structure in the coming quarters? I think, yes, we, I think originally we planning to invest, you know, silicon metal in Mongolia. We're still, you know, in the processing to get to the, you know, the license and, you know, the improvements, you know, the energy improvements. Hopefully right now the schedule is, you know, all those licenses will maybe get, you know, by the end of July. Basically, if we got everything smoothly, then we're starting, I think, to build up the silicon metal plant. Hopefully by the end of this year or the Q1 next year, we can produce silicon metal. I think that will reduce, you know, dramatically reduce our cost maybe. Now I think silicon powder is around like, you know, CNY 20,000 per ton, CNY 18,000 per ton. I think we can go down to RMB 10,000 tens per ton. basically I think the cash cost at least reduce, I think, you know, $7-$8. Yeah. Okay. $7-$8. So that would reduce your. RMB. RMB per kg. RMB. Right now, for example, our cash cost right now, first quarter is $45. If we produce our own, I think silicon metal, we can reduce to maybe around $37-$38. RMB. RMB per kilogram. Yeah. Got it. Thank you. Great. Thank you. Again, if you have a question, please press star then one. Our next question will come from Rocky Lin with AIIN Investments. You may now go ahead. Hey. Hi, congratulations for the good earnings. My first question is, could you tell me our repurchase program, like the pace of our repurchase program? I mean, will you repurchase all your $600 million in this year? Yeah, I think the current plan is still to complete the program for the current year. I think in terms of pace, it should be more or less stretched out over the year. At least that's the current plan right now. Okay, got it. My second question is, you know, the all your competitors is expanding their capacities. I think it's maybe somehow oversupply. Is there any possible that you will stop your expanding plan for the second phase of the expanding plan in Inner Mongolia? Okay. I would say overall there is no oversupply of polysilicon in the market today. I think right now the supply and demand is relatively balanced overall, and there's actually a very healthy demand from the end market. What we are seeing is because right now we're in April, right? The peak market demand installation and timeframe hasn't really reached. It's generally in the summer and starts from June really through October. Okay. We think really Q2 and certainly Q3 demand should be much stronger than Q1. What we are seeing, at least in the very near term, is as a polysilicon manufacturer, we do sell our products to wafer manufacturers. Other wafer manufacturers are running at very high utilization levels. You know, we're looking at production from industry estimates somewhere in the range of 40-45 GW per month. Because the right now their overall capacity is actually or production is actually constrained by the availability of high quality or high-purity quartz used to make these quartz crucibles. In the very near term, that's limiting their total production and availability or their ability to utilize polysilicon to be made into a wafer. We do estimate that the industry current consumption on a monthly basis of polysilicon is somewhere between 100,000-110,000 metric ton. That's actually similar to the amount of production of polysilicon currently in the market. I think the demand and supply condition is relatively balanced right now. I think unless we see, you know, substantial, you know, let's say increase in polysilicon production availability, but you know, without an increase in, say, end market demand or in wafer production capacity, for example, then that might have the kind of scenario that you've indicated. We're not seeing that currently. Yeah, I mean, if the polysilicon price down really low, like less than, maybe less than $6. I mean, less than, maybe like $10 after maybe. Okay, I mean, will you stop your expansion plan? If polysilicon pricing, let's say, yeah, goes down to less than $10 per kilogram, you know, as assumption basis, yeah, I think we will slow down our capacity expansion. Okay, got it. That's all my questions. Great. Thank you. Our next question will come from Chao Ji with Goldman Sachs. You may now go ahead. Hi. Thank you for taking my question. Can I ask if you would have any guidance for the production cost for the second quarter? Also, would it be possible for you to share your current and second quarter expected cash cost level? Thank you. Okay. Chao, thank you so much for your question. This is Ming, the CFO. I would say that for our Q2 costs, I think looking at the most recent trends of our raw materials, especially for silicon metal as well as for electricity, for example, we expect these to be very stable. Overall, we believe our Q2 costs, even though we're ramping up in Inner Mongolia currently, we do think that our Q2 costs should be fairly similar in RMB basis compared to our Q1 cost structure. Actually going to Q3 the cost should decline as Inner Mongolia starts to be close to fully ramp. The second quarter, the cash operation, you know, operation cash should be higher than, you know, few, you know, I think than Q1. The reason because the sales volume is higher. You know, it's almost 133%-141% increase compared to Q1. Understood. Thank you so much. Yeah. Great. Thank you. Oh, sure. Thank you. This concludes our question and answer session. I would now like to turn it over back to Kevin He for any closing remarks. Thank you everyone again for participating in today's conference call. Should we have any further questions, please don't hesitate to contact us. Thank you and bye-bye.