Hello, ladies and gentlemen. Thank you for standing by for JinkoSolar Holding Co Ltd Second Quarter 2022 Earnings Conference Call. At this time, all participants are in listen only mode. After management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded. I would like to now turn the meeting over to your host for today's call to Ms. Stella Wang, JinkoSolar's Investor Relations. Please proceed, Stella. Over to you. Thank you, operator. Thank you everyone for joining us today for JinkoSolar Second Quarter 2022 Earnings Conference Call. The company's results were released early today and available on the company's IR website at www.jinkosolar.com, as well as on newswire services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website. On the call today from JinkoSolar are Mr. Xiande Li, Chairman of the Board of Directors and Chief Executive Officer of JinkoSolar Holding Co Ltd Mr. Gener Miao, Chief Marketing Officer of Jinko Solar Co Ltd Mr. Pan Li, Chief Financial Officer of JinkoSolar Holding Co Ltd and Mr. Charlie Cao, Chief Financial Officer of Jinko Solar Co Ltd. Mr. Li will discuss JinkoSolar's business operations and company highlights, followed by Mr. Miao, who will talk about the sales and marketing, and then Mr. Pan Li, who will go through the financials. They will all be available to answer your questions during the Q&A session that follows. Please note that today's discussion will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding this and other risks is included in JinkoSolar's public filings with the Securities and Exchange Commission. JinkoSolar does not assume any obligation to update any forward-looking statements, except as required under the applicable law. It's now my pleasure to introduce Mr. Xiande Li, Chairman and CEO of JinkoSolar Holding. Mr. Xiande Li will speak in Mandarin, and I will translate his comments into English. Please go ahead, Mr. Li. [Foreign language] We had a good quarter and a difficult market condition. Total solar shipments in the second quarter were 10.5 GW. Module shipments in the second quarter were 10.2 GW, up roughly 27% sequentially, and total revenues were $2.81 billion, up 27.6% sequentially. These upstream costs continue to rise. We actively worked to control internal costs through technical advancement and process improvement, which partially offsets the impact of higher upstream costs on our profitability. Gross margin was 14.7%, relatively flat compared with the first quarter. Excluding the impact of the convertible senior notes and the share-based compensation expenses, adjusted net income in the second quarter was $55 million, improving sequentially. [Foreign language] Driven by accelerating energy transition in several countries and the energy supply crisis caused by the Russia-Ukraine conflict. Demand for solar products has exploded in many markets. According to the statistics and analysis of China's customs export data by InfoLink, China's export of modules in the first half of the year reached 8.7 GW, a year-over-year increase of 102%. Exports to Europe reached a total of 42.4 GW of PV modules, a year-over-year increase of 137%. Demand in the China market was also strong. During the first half, solar PV installations in China reached 30.9 GW, a year-over-year increase of 136%. Given this better than expected growth in demand, released polysilicon production came up short and was further aggravated by annual maintenance programs and power rationing and anti-pandemic restrictions in certain regions of China. As a result, polysilicon prices rose continuously and reached a recent high of RMB 310 per kilogram, sending module prices higher. Regular discussions with our clients indicated that some of them found higher module prices to negatively affect project yields, and as a result, some demand slowed down. We believe polysilicon prices will continue to increase and reach their peak in the third quarter. Then, as polysilicon production ramps up in the fourth quarter, polysilicon price increases are expected to moderate, driving a recovery of downstream demand. [Foreign language]. 近期四川省发布了限电政策。我们在四川的制造工厂的生产暂时受到影响。由于四川限电政策的持续时间，以及我们的四川产能恢复满产运行的时间具备不确定性，预计会对公司2022年的经营业绩产生一定影响。我们积极采取多种措施来降低限电对公司生产经营的影响，包括协调其他资源供应保障，与当地的政府积极沟通等。同时我们灵活调整组件的生产和出货计划，尽最大的努力满足对客户的交付。 Recently, the local government of Sichuan Province has imposed province-wide power rationing measures and the production capacity of our manufacturing facilities in Sichuan Province has been temporarily affected. We are currently unable to evaluate the extent to which our business operations and financial performance for full year 2022 will be affected by the power rationing measures in Sichuan Province. As it remains uncertain how long the power rationing measures will persist and when our Sichuan manufacturing facilities can resume full production. We are actively monitoring the situation and have implemented various measures to minimize the adverse impact from the power rationing on our business operations and financial performance, including, but not limited to having our other manufacturing facilities assume more production and actively communicating with the local government about power supply related matters. We also flexibly adjusted the module production volumes and shipment plans in order to meet delivery to our clients. [Foreign language]. 二季度大尺寸产能占比环比提升，一体化结构持续优化。年初投产的16个吉瓦TOPCon的电池产能已于二季度末满产，量产效率超过24.8%，良率和成本均符合我们的预期。近期合肥二期约8吉瓦N型电池片产能已经投产。下半年我们将有海宁二期约11吉瓦的N型电池产能投产。高效产能自供力的提升增强公司的竞争力。 In the second quarter, the proportion of large size capacity increased sequentially, further improving our integrated structure. The 16 GW of TOPCon cell capacity that started production at the beginning of the year reached the full production at the end of the second quarter, with a mass production efficiency of over 24.8% and yield rates and integrated costs in line with our expectations. We recently started production at an additional 8 GW of N-type cell capacity in Hefei and commenced construction of another production project with 11 GW of N-type cell capacity in Haining. The increase in our in-house high efficient capacity ratio will continuously improve our competitiveness. [Foreign language]. 我们较早布局了TOPCon技术并持续深耕。近期我们在当前已选定TOPCon的技术路线完成了关键的技术攻关，已具备了工艺、技术等相关壁垒。在大规模量产中实现了行业领先的效率、良率和成本水平。我们认为TOPCon目前是后PERC时代最具商业化量产价值的高效电池，后续提升空间较大。我们将持续通过技术迭代保持领先。 As an industry pioneer embracing the TOPCon technology, we have recently achieved the key technology breakthroughs in the currently selected TOPCon technology route that we believe we have created an entry barrier related to core process and technology with industry-leading mass production efficiency, yield rate, and cost levels. We believe TOPCon is currently the high-efficiency cell with the greatest value for commercialization mass production in the post-PERC era, and has relatively ample development opportunities. We will continue to maintain our leading position through technical iteration. [Foreign language] Our N-type product, the Tiger Neo modules continue to be well received by global customers. So far, we have high visibility in our order books. Compared with P-type products, N-type products command a competitive premium as a result of improved technical parameters and additional power generation gains. We are confident that we will complete our full year N-type shipment goal. In addition, considering the release of new capacity in 2023 and increase in market penetration, we expect that the proportion of N-type shipments to further increase. [Foreign language] In view of the current and expected supply chain and market conditions, we have adjusted our capacity expansion pace for wafer, cell, and modules for the rest of this year. As a result, we are currently expecting the annual production capacity for mono wafers, cells, and modules to reach 60 GW, 55 GW, and 65 GW respectively by the end of 2022. [Foreign language] Before turning over to Gener, I would like to go over our guidance for the third quarter of 2022. We expected that the total shipments to be in the range of 9-10 GW for the third quarter this year, and we reiterate our total shipments of 35-40 GW for the full year of 2022. Thank you, Mr. Li. Total solar shipments in second quarter were 10.5 GW, of which over 97% were module shipments, up nearly 27% quarter-over-quarter and double year-over-year. Since the Russia-Ukraine conflict, global energy transformation accelerated and showed strong growth momentum, especially in Europe. In second quarter, our shipment to European market grew steadily, and the proportion of shipment to Europe remained high, reaching 25%-30% range. In China, the distributed generation business demonstrated strong momentum. Newly added installation in China in the first half grew remarkably by 136% year-over-year. In second quarter, our shipment to the Chinese market grew exponentially year-over-year, more than doubling sequentially. Our shipments to emerging market also registered stable sequential growth. While demand was strong, we also noticed some potential challenges. For example, demand in some European countries for the second half is expected to slow down sequentially as a result of the problem affecting the logistic chain. Some of our domestic clients are waiting to fully assess the impact from continuous rise in supply chain costs. In addition, the execution of some large scale utility projects might be delayed to 2023 due to issues with grid connection and power transmission. Taking these challenges into consideration, we have been adjusting our geographic mix as well as our sales and contract signing strategy while keeping in close communication with our clients. So far, both our contract signing and execution are maintained at a satisfactory level. In U.S. market, tightened supply chain tracking should dampen demand in the short term. In the long run, with President Biden's executive order to spur clean energy manufacturing and the recently passed Inflation Reduction Act of 2022, which include $369 billion in climate and energy-related funding, we expect the demand to remain positive. In order to improve our resilience to risks, we will continue to closely monitor market and policy developments, adjust the production and marketing strategies accordingly, and further strengthen our overseas supply chain and global sales and marketing network. The proportion of large-size product shipments gradually increased to nearly 90% in the second quarter, further optimizing our product structure. Shipments through distribution channels where growth in demand is strong accounted for nearly 50%, with shipments through distribution channels in Europe and some APAC markets accounting for more than half. Tiger Neo modules continues to be acclaimed by clients all over the world with high order book visibility and pricing premium in line with our expectations. We estimate that Tiger Neo shipment for the full year of 2022 will reach approximately 10 GW. The transformation to clean energy is now an irresistible trend with the need for energy security. Global PV demand is expected to achieve rapid growth this year. Nevertheless, some markets are experiencing temporary pain this year due to the inevitable short-term volatility that comes with rapid growth. As the market continues to adjust, we remain optimistic about global PV development. We will provide various bill of materials and versions based on Tiger Neo to cater to diversified clients' needs in different countries. We expect to achieve shipment growth that exceeds market growth, further increasing our competitiveness in global market. With that, I will turn the call over to Pan. Thank you, Gener Miao. For second quarter of 2022, both solar module shipments and total revenue increased significantly year-over-year. Nevertheless, gross margin relatively flat with first quarter and decreased year-over-year due primarily to an increase in the material cost of solar modules. Due to significant increase in the company's stock price in the second quarter, we recognized a loss from a change in fair value of the convertible senior notes of $80 million in this second quarter. Excluding the impact of the convertible senior notes and the share-based compensation expenses, adjusted net income attributable to the JinkoSolar Holding Company Limited ordinary shareholders in the second quarter was $55 million, improving sequentially. Let me go into more details. Total revenue was $2.8 billion, up about 27% sequentially, and a significant increase of 137% year-over-year. Gross margin was 14.7%, compared with 15.1% in the first quarter and 17.1% in the second quarter last year. Total operating expenses were $ 457 million, up 40% sequentially. The increases were mainly attributed to an increase in shipping costs for solar modules, an increase in disposal and impairment loss on property, plant, and equipment, and an increase in the share-based compensation expenses. Total operating expenses accounted for about 16% of total revenues in the second quarter, up from about 15% in the first quarter and 13% in the second quarter last year. EBITDA was $ 186 million, compared with $ 126 million in the first quarter this year. Excluding the impact from a change in fair value of the notes and the share-based compensation expenses, the adjusted net income attributable to the JinkoSolar Holding Company Limited ordinary shareholders was $55 million, improving sequentially. Due to the continued appreciation of the U.S. dollar against the RMB, we realized a net foreign exchange gain, including change in fair value of foreign exchange derivative of approximately $34 million in the second quarter this year, compared with the net gain of $12 million in the first quarter. Moving on to the balance sheet. At the end of the second quarter, the company had cash and cash equivalents of $ 2.15 billion, slightly down from $ 2.66 billion at the end of the first quarter and up from $1 billion at the end of the second quarter last year. AR turnover days were 69 days in the second quarter, compared with 66 days in the first quarter. Inventory turnover days were hundred and four days in the second quarter, compared with hundred and seventeen days in the first quarter. Total debt was $ 3.8 billion at the end of the second quarter, down sequentially from $ 4.3 billion. Net debt was $ 1.7 billion, compared with $ 1.6 billion at the end of the first quarter this year. This concludes our prepared remarks. We're now happy to take your questions. Operator, please proceed. Thank you so much, management. I request participants to press zero and then one to ask questions. I'll repeat. To ask a question, you need to press zero and then one. First question of the day we have from Lawrence Sun from ROTH Capital Partners. Your line is unmuted, Lawrence. Please go ahead. Hi, this is Lawrence Sun on behalf of Philip Shen. Thanks for taking the questions. I was wondering if we could get some more color on the Sichuan power shutoff. Specifically, you know, from what we gathered, JinkoSolar has about 18 GW of ingot capacity in Sichuan. That's about, like, half of your total capacity. Given that you've shut down for about 10 days, would that be an estimated, you know, 5% of Q3 ingot capacity offline so far? Thanks. Yeah, I think you are talking about the, you know, the impact from the, you know, China's Sichuan Province, the power cuts, the impact, right, for the production and- Yeah From our factories in for the wafers. You know, it's a pervasive impact, right, for the Sichuan Province, which is because of the, I think the drought-induced power cuts. It did have, I think, 10-15 days impact for our wafer capacities, which is roughly 25 GW for annual capacities. Converting to monthly production, it's 2 GW a month. We estimate it's around 700 MW impact for the wafer. You know, we have global, let's say, four factories for the wafer in different regions, including three factories in China. We try to maximize the productions from other wafer capacities, other regions. From management teams, you know, we try to minimize the impact, and it did have some impact from, you know, from the production side and our cost side in the third quarter. Okay, thanks. Thanks for the details. I believe the impact to cost side, would there be any impact from purchase of external wafers in order to meet your, you know, shipment guidance? If so, do you know what? No. Okay. Yeah. Yeah. I think no. Okay. Because, you know, if you look at our guidance, which is, you know, 9-10 GW, we have taken this situation into consideration. It is. We did, you know, we don't have plan to purchase the wafer from third party. Okay. Great. Thanks for the detail. You know, would it be safe to say the leading indicator for recovery in TOPCon is the recovery of water levels? You guys are mostly driven by hydropower, right? Yeah. It's already, you know, in recovery state, you know, status. The city is getting better, you know, particularly in recent two days. Our capacity are expected to reach to full capacity in the next, I think, in the next couple of days. Okay, that's really great to hear. I had another set of questions on you previously said earlier in the call, you touched on it, tightened supply chain tracing. Does that have to do with the UFLPA? And if it is related to the UFLPA, could you please help us quantify the number of GW that you've maybe shifted from shipping into the U.S. towards E.U. or other countries? I think we're preparing this traceability topic not only for U.S. market, but also for other market as well. In recent months or quarters, we have intensively gotten inquiries from different countries or different customers about traceability topic, right? That's why we believe in the future, we have to prepare the capability of traceability of the product, including the polysilicon and some other key material as a necessary step for the future, right? I think that includes U.S. market. For U.S. market itself, yeah, for U.S. market itself, we are still working hard, you know, together with CBP and our consultant to make sure, right? Currently the customs clearance is not that smooth as usual, especially under UFLPA. We have to work on lots of details to make it happen, and we are working hard on it. Okay. Thanks for the details there. Could I just get a little bit more on? You know, you said it's not smooth, right? For what type of modules is it not smooth? Is German poly, Southeast Asian modules, China poly, Southeast Asian modules, U.S. poly, Southeast Asian modules, or all? Just a little bit more color there would be great. Thank you. Well, let's say based on our knowledge and awareness, I don't see there's any difference between China polysilicon or European polysilicon or American polysilicon, right? We have to provide the right documents to meet the requirement from CBP officials. Okay. One last question before I hand it off. You know, what's the utilization rate of your Southeast Asian facilities? Can you keep it at around the same level by shifting module shipments to other countries? What's the rough like mix, please? Thank you. Yeah. Obviously, we have to look into the different parts across the whole value chain, right? For the upstream, like the wafer and cell, I think it is in short supply. There's a flood of demand, not only for U.S. market, but also for the other market, right? For the module side, you know, since it's targeting the U.S. market, we have to be very careful about, you know, the traceability. We won't ship or manufacture the product if we cannot guarantee the traceability in the right place. Okay, thank you. I'll pass it on. Thank you. Before taking next question, I'll repeat. If you wish to ask a question, you need to press zero and then one. Next, we have Alan Lau from Jefferies. Your line is unmuted, Alan Lau. Please go ahead. Thank you, operator, and thanks a lot, management, for taking my question. My first question is about what is the expectation or the current situation of the TOPCon products, and what is the premium out there like? Is it $0.01 or $0.015 compared to PERC? Yeah. First, firstly, about the product itself. I think the N-type TOPCon product that we call Tiger Neo is highly competitive compared with the standard PERC product, right? I think it's based on the 72 pieces product, Tiger Neo is almost 20 watt peak higher than the standard PERC product, which and also together with other, you know, good features like the degradation and, you know, et cetera. Definitely it's generating extra benefit for the customer end and bring additional value to the project side or to the installations or solar system. That's why we can, you know, getting the premium from the market. Currently, the premium we're expecting or we are looking at is around $0.01-$0.015 range. Sometimes it's up to $0.02, but let's say the broader range will be $0.01-$0.015. Thank you. Thank you. It's actually pretty decent. When it comes to production cost perspective, have we already achieved cost parity versus PERC, in terms of the production cost of TOPCon? What is the current yield rate right now? You know, in the second quarter, the TOPCon capacity is in a ramp-up stage, and our R&D and the operational team is working very hard to improve, you know, the output, you know, efficiencies and as well as the cost. Right now, you know, the integrated cost of the TOPCon, you know, the modules, compared to the traditional, you know, P-type modules, it's, you know, the difference is within the range of lower than RMB 0.05. Our plan is, you know, we continue to improve the cost structures, and we target by the end of this year, and the TOPCon integrated cost could reach to, you know, the same level of the PERC by the end of this year. Understood. That will effectively means that you will have same cost and then you'll make an extra $0.01 or $0.015 of net profit on top of PERC rate. Yeah. You're right. We did, you know, when we sell the TOPCon modules, we did have the premium, you know, Gener mentioned. This cost structure, we need to work continuously and to improve, and it's in a good, you know, on the track. We expect our target is by the end of this year, it could be, you know, reach the same level. Understood. Thanks a lot. Another question is about what is your view on one of the major polysilicon player who is entering into the module space? This is one of the hottest topic in the markets recently. What is your view on this? I think, you know, there's a very big market, even for the existing market. The market growth rate in the next, you know, decades. If you look at the top five companies, module companies, the market share now is 60%-65%. There are a lot of tier two, three companies. They are taking 30%-35% market share. If you look at the growth rate, we expect, you know, 30%, you know, in the next, couple of years. We believe this is a lot of, you know, potential. You know, room, you know, for the, let's say, the big players to penetrate the markets. But the module, you know, the business is not purely in production side. We build this, business, for over 10 years. It is more like, you know, global manufacturing and global, you know, marketing, sales, bankability and, you know, strong sales relationship with customers. What we are doing is, we continue to solidify our, you know, the strong branding, you know, marketing and the products and, you know, competitiveness. Thanks a lot. We'll also like to know the management has also mentioned the Inflation Reduction Act in the U.S. One of the key incentives in the act is of course the subsidies on the installation. Also there are a lot of subsidies on building factories in the U.S. Would like to know if JinkoSolar is considering further expansion into U.S. in terms of- Mm-hmm. -factories. Yeah, it's. Yeah. I think it's a very, you know, hot topic as the IRA, you know, to be effective in the U.S., you know, starting from next year. It did provide a lot of subsidies, you know, for manufacturing in the U.S. We already had a very small module capacities, 400 MW, which will be eligible for the incentive. For the expansion topic, we are in early stage to further evaluations. I think it's we expect, you know, there will be more local, you know, U.S.-based, you know, more local capacities in the next couple of years, given, you know, the strong support from the IRA policies. We are at the early stage of evaluations. Understood. I think my last question is, what is your outlook on the solar installation in this year, next year and probably in 2022 through 2025, the global installation, and a brief breakdown if you may provide? Thanks. We estimate roughly, you know, 2.5 GW installations this year. Next year, given, you know, the bottleneck of the policy will be gone, we expect a strong growth in China, U.S., as well as the European markets. We estimate roughly 25-30%, you know, the market growth next year. Understood. That's more than 300 gigawatt. Probably we are talking about like 300-320 gigawatt, right? In general, I think we are optimistic, you know, now because, you know, the policy is at very high level. It did delays, you know, particularly the utility scale projects in China and, as well as in other regions. Given next year, you know, the more volume, you know, input and, we expect the installation will be at a very quick speed. Thanks a lot. The company will benefit from the strong demand and also the upside is the TOPCon product. I'll leave the floor to other investors. Thank you, management. Thank you. I repeat, if you wish to ask a question, you need to press zero and then one on your telephone keypad. Once again, participants, if you have questions, please press zero and then one. We have a question from Rajiv Chaudhri from Sunsara Capital. Rajiv, your line is unmuted. Please go ahead. Good morning, thank you for taking my question. Actually I have a few questions. The first one is just on the module. As I look at the unit shipments that you had in the second quarter and compare them to the unit shipments in the first quarter, it seems that your average price realized per module went down quarter-over-quarter and quite significantly by, you know, by about $0.01 or maybe more than $0.01. Can you explain why that would be happening in an environment where prices in general were stable or up? Sorry, are you asking about the Q1 and Q2 ASP changes? Yes. I think according to our data, the Q1 and Q2 price are pretty close. Our Q2 average price has a very tiny drop compared with Q1 ASPs. Mainly is because in some historical orders, we have to execute it, which is lower than market price. The rest are pretty normal. In our view, we believe the quarterly ASP are staying in a market condition. There's no big changes on that. Yeah, I mean, just based on the revenues and the unit shipments, it looked like the average selling price in the first quarter was around $0.284, and the second quarter was around $0.272. That looked like a pretty decent drop. You are saying that some of it was because of legacy shipments at a lower price. Are those legacy- So, uh- Shipments behind you or are these? Sorry. No. Let me correct you on this. For the revenues, including manufacturers, right? Not only module revenues. Even module revenues are the majority of it, but we're still including other parts included in the revenue. That's why you cannot, you know, use the revenue to divide it the shipment to as ASP. That's not accurate enough. Mm-hmm. I see. Second one, I think. Okay. I think an additional factor is, you know, maybe the RMB depreciations, and you use the U.S. dollar. There's maybe, you know, the reflecting a s well as, you know, second quarter, China is taking more portion. But again, the ASP is stable, and the second quarter is slightly, you know, a little bit down, very small. Sorry, I understand. Along the same lines, can you give us some feeling for what the ASP will be in the third quarter and the fourth quarter for the year? Yeah. For the third quarter, the ASP will be as stable as the first quarter and the second quarter. The fourth quarter even it has not been fully closed, we are still, you know, closely monitoring the market situation. We are expecting a market prices as well, hope that. Sorry, you're expecting fourth quarter to be flat also? Yeah, more or less flat. Since it's still far away from the fourth quarter, there are still, you know, unknown factors to factor in. We don't have any disclosure on the fourth quarter ASPs. My personal expectation will be the fourth quarter ASP, the market price will be more or less stable compared with Q3. Another question is on the stock-based compensation. Can you quantify roughly how much it is per quarter and what it was in the second quarter, and how it is expected to trend in the third and fourth quarters? Okay. The stock-based compensation is, you know, the company granted in, you know, the first quarter, second quarter. It's a one-off item, and given, you know, in the future, we expect that the amount will be very small. For the second quarter, the exact amount you can calculate because, you know, we have disclosed adjusted net income, which is $55 million, and, you know, including the convertible bonds and the stock-based compensation, I think it's roughly $20 million or $25 million. You know, you can do the calculations. $ 25 million, and you're saying that in the third and fourth quarters, that number is gonna go down? Yeah. Very small. Will be very small in the future. Yeah. Okay. The shipment cost, on a per watt basis, did the shipment costs go up quarter-over-quarter on a per watt basis? Yeah. Shipping cost is at high level. I think it's roughly $0.015-$0.02 per watt. Quarter- by- quarter, it's relatively stable. The shipping cost will maintain at, I think, very high level. Given, you know, more mix to China in the second half of the year, blended will be lower in the second quarter. Next year, we expect, you know, given the global economies were weak and we expect next year the shipping logistics will be, you know, the cost will be in a downward trend. Can you also tell us what the depreciation and CapEx numbers were for the second quarter and what your expectation is for the full year now? First, for CapEx in the first half of this year, it's reached $1.4 billion. For the whole year, we forecast it still remains on $3 billion. Depreciation? Depreciation, I think, you know, let's say roughly per watt basis it's 0.05-0.06 RMB per watt. It's roughly RMB 55-60 million for second quarter. The final question is on the Polysilicon business. As you know, the polysilicon gross margins are right now in excess of 70%. Even though they will come down as prices come down, the expectation is that the Polysilicon business will maintain gross margins that are, you know, maybe 35% or 40%, much higher than the Module business. Canadian Solar has expressed an intention to get into the Polysilicon business. Do you have any thoughts about getting into the Polysilicon business yourselves? Yeah. You know, polysilicon, it's a bottleneck in recent two years, but next year, for sure, you know, the supplies were sufficient and it's in a downward trend. From the polysilicon side, we don't believe it's a bottleneck for our business in the future. We are, you know, our supply team, supply chain team is doing a partnership, you know, with the leader of the polysilicon producers and design the long-term, you know, the polysilicon supply contract. As well as we, you know, invest as minority investors, we invest in companies as minority interest and to, you know, to strengthen our relationship for the top polysilicon supplier. We don't have plan, let's say, to do the business, you know, of the polysilicon so far. Okay. My final question is about storage. Can you give us an update on what you are doing in the storage space? What sort of orders and revenues and feedback you are getting from the marketplace? Well, the Storage business is still in the early stage. We believe it's not the right timing to talk about it, and we will share our strategy and our plan once it is ready. Right. Thank you for your attention. Thank you. Thank you very much. Thank you. Next we have Gary Zhou from Credit Suisse. Your line is unmuted. Yeah. Hello, management. Thank you for taking my questions. I have three questions. Firstly, on the module shipment. Just wondering if the company has a breakdown of our module shipment for this year, for the China market and overseas market. If possible, can we talk a little bit on the unit profit difference between China domestic sales versus overseas module sales? The second question is on the TOPCon. I noticed that, you know, some of our competitors, they also have some TOPCon capacity coming out in the first quarter this year. Just wondering, do we believe this $0.01-$0.015 ASP premium can be maintained going forward? Also, you know, comparing our N-type, our TOPCon product versus peers, can management talk about what's the advantage of our products? Lastly, a quick question on the polysilicon side. Basically, the near-term polysilicon price is still high, you know, probably supported by the Sichuan kind of supply disruption. Just wondering if the management has a view on at what time or which months can we kind of start to see the polysilicon price to drop? Thank you. Thank you. That's a lot of question. I will try to cover it as much as I can, right? Firstly, about the geographic mix for the full year, we are expecting the China and the Europe market are the two largest contributor to JinkoSolar's shipment for the full year, and which accounted around 25%-30%. Followed by emerging market, which will be contributing, we're expecting contributing a lot between 20%-25%. The APAC market will be around 15%-20%. The rest will followed by other market, including North America and Middle East, Africa, et cetera, right? The second question about this Tiger Neo, the N-type product premium. The way we are pricing the product is by sharing the benefit together with the customer. It's not a competition for, let's say, a gaming negotiation. It's really a benefit sharing model, which means that approximately, let's say, around by using Tiger Neo N-type products, the customer's project can get additional benefit of around $0.025-$0.03 per watt. We are establishing the business model to share the benefit by approximately half to half with the customer. That's why we believe such business model is sustainable and consistent, and it doesn't have to go through the price competitions. Even with more and more peers joining the TOPCon group, we believe we can jointly, you know, leading the technology innovation and you know create a bigger market for solar industry. We don't have to go through the price competitions. Compared with our, you know, followers or our peers at TOPCon technology, we believe, you know, as a pioneer in this area, our cost structure and our efficiency, including our product performance, will continue to have a competitive advantage, or at least a leading position in this market, and we are so confident on that. Lastly, about the polysilicon prices, we believe, you know, in the long run, like Charlie saying in the previous conversations, we believe the polysilicon will be debottlenecked in the next coming, let's say, quarters, and which will create a bigger market for solar installation in the downstream, especially for the utility project, which has been significantly delayed due to the CapEx problem. We are having a big hope on that. Hope that answer your question. Yes. Okay. Thank you, management. This is very helpful. I'll pass on. Thank you. Thank you very much. Next question is coming from Brian Li from Goldman Sachs. Your line is unmuted. Hi. Thanks for taking the questions. This is Grace on for Brian. Just quick question on the margin expectations. Just given the elevated poly pricing and also the power control in Sichuan, which may impact your utilization rate, how should we think about your gross margin in 3Q and also for the next couple of quarters? Thanks. Yeah. The growth margin we expect, you know, expanding a little bit, you know, in the next quarters. We did face, you know, the elevated price of the polysilicon and as well as the power cuts, you know, from Sichuan Province. Our TOPCon, you know, module sales capacity is operating in a very good status and will contribute more portions of our revenue and product mix, and which has a relatively higher gross margin profit contributions. We have the confidence and the margin will be expanded, you know, in the second half year compared to the first half year. Yeah. Okay. Understood. Thank you. On your OpEx, your OpEx increased pretty significantly in 3Q. I guess that's partially due to TOPCon. I think you mentioned TOPCon will be very minimal in 3Q. Can you talk about your OpEx expectation in the second half? Thanks. You're talking about operating expense, right? Operating expenses. You know, operating expenses, I think, you know, it's given we'll have more shipments, you know, in the second half year, you know, and compared to first half year, we expect the operating expenses against the revenue will be slightly lower, you know, in the second half year. Okay. Thank you. I'll take the rest offline. Thank you. At this time, there are no further questions. That does conclude our second quarter conference call. You may all disconnect now. Thank you so much.