Hello. Thank you for standing by, and welcome to the Q1 2023 JinkoSolar Holding Co., Ltd. earnings conference call. All participants are in the only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to "press the star key followed by the number one" on your telephone keypad. Now let's turn the conference over to Stella Wang. Please go ahead. Thank you operator, thank you everyone for joining us today for JinkoSolar's first quarter 2023 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 our Newswire services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website. On call today from JinkoSolar are Mr. Li Xiande, Chairman of the Board of Directors and Chief Executive Officer of JinkoSolar Holding Company Limited, Mr. Gener Miao, Chief Marketing Officer of JinkoSolar Company Limited, Mr. Pan Li, Chief Financial Officer of JinkoSolar Holding Company Limited, and Mr. Charlie Cao, Chief Financial Officer of JinkoSolar Company Limited. 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 concern forward-looking statements made under the safe harbor provisions of the US 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. Li Xiande, Chairman and CEO of JinkoSolar Holding. Mr. Li will speak in Mandarin and I will translate his comments into English. Please go ahead, Mr. Li. 很 高 兴 取 得 了 同 比 提 升 的 营 业 收 入 、 组 件 出 货 量 和 毛 利 率 。 硅 料 价 格 在 一 季 度 有 波 动 ， 我 们 及 时 调 整 了 供 应 量 策 略 来 降 低 成 本 。 同 时 建 筑 全 球 化 营 销 网 络 的 布 局 和 N-type 产 品 力 的 优 势 ， 有 溢 价 的 N-type 产 品 出 货 量 将 近 50% ， 部 分 贡 献 了 盈 利 的 提 升 。 一 季 度 毛 利 率 为 17.3% ， 相 比 于 去 年 一 季 度 的 15.1% 。 一 季 度 公 司 的 盈 利 能 受 到 美 国 自 保 费 的 拖 累 ， 我 们 已 经 采 取 了 积 极 的 措 施 来 应 对 。 通 关 效 率 和 美 国 市 场 出 货 量 在 逐 步 提 升 。 随 着 我 们 陆 续 取 得 了 有 力 进 展 ， 预 计 美 国 市 场 的 出 货 量 会 逐 季 度 改 善 。 We are pleased to deliver year-over-year improvements in module shipments, total revenues, and gross margins. With polysilicon prices being volatile in the first quarter, we adjusted our supply chain strategy to effectively control our costs. Meanwhile, the ratio of N-type product shipments approached nearly 50% of our total module shipments, thanks to their high efficiency and our strong global marketing network, which partially contributed to the improvement in our profitability. Gross margin was 17.3%, compared with 15.1% in the first quarter last year. Our profitability in the first quarter remained under pressure from the demurrage costs in the US market. We have proactively taken measures to address this, and we have seen both the efficiency of customers' clearance and the size of our module shipments to the US market gradually improve recently. As we continue to make effective progress, we expect our shipments to the U.S. market to gradually increase in the coming quarters. Recently, our majority-owned principal operating subsidiary Jiangxi Jingko, successfully issued convertible bonds in the principal amount of CNY 10 billion to strongly support the expansion of our high-efficient N-type capacity. Growth in PV demand in the first quarter remained strong despite some seasonal factors. The Chinese market benefited from falling prices of PV projects and delays in PV projects from 2022. The new installations of PV reached 33.7 GW AC, an increase of 154.8% year-over-year. As a result, the cumulative installations of PV has surpassed that of hydropower for the first time, making PV the second-largest power source in China. In addition, exports of solar cells and modules from China to overseas markets remained strong in the first quarter. Total overseas shipments of modules and cells reached $13.1 billion in the first quarter, an increase of 15.3% year-over-year. Since the second quarter, as pricing gains between different segments along the supply chain relatively stabilized, we see price of polysilicon started to decrease moderately, and current module prices has been attractive for the economics of PV projects. With more production volumes gradually released during the year, we believe polysilicon price declines will stimulate large market demand. The top manufacturers are expected to increase their market shares thanks to stronger supply chain management, market footprint, and the competitiveness of their R&D and products. We are optimistic about global market demand and the opportunities brought by new technologies in 2023. We will continue to invest in R&D and advance the N-type capacity to enhance our N-type leadership in terms of mass production capabilities, product performance, and cost, while exploring the PV+ area to proactively respond to competition. The second phase of 11 GWg TOPCon cell capacity in Jianshan has reached full production and the average mass produced efficiency of 182 N-type TOPCon cells reached 25.3%. We have also further improved our N-type ecological chain, constantly enhancing our all-around competitive advantages of N-type wafer, cell, and modules. With improving supply chain management for key and auxiliary materials, iteration of core technologies, and process improvements. As our technology, product performance, and cost are all improving continuously, we expect to maintain our leading position in the industry. Recently, we were ranked in the highest AAA category in the Q1 edition of PV Tech's PV ModuleTech Bankability Report, a recognition by the industry of our advantages from outstanding manufacturing, finance, and technology. By the end of the first quarter, our accumulated N-type module shipments exceeded 16 GW, providing support for hundreds of projects globally in the past year. In January this year, we launched the second-generation Tiger Neo panel family. The module efficiency of the upgraded Tiger Neo family of 445 watts peak for 54 cell, 615 watts peak for 72 cells, and 635 watts peak for 78 cells were up to 22.27%, 23.23%, and 22.72%, respectively. Meanwhile, we increased investments in energy storage business, furthering its development and continuously provided our clients with high efficient, reliable, and safe solutions at competitive cost to lead the clean energy transformation. In conclusion, future competition will be based on comprehensive strength. We are confident in our ability to further increase our competitiveness and profitability in the global market. With our continuously improved global industrial chain and cutting-edge N-type technology and products. Before turning over to Gener Miao, I would like to go over our guidance for the second quarter and full year of 2023. By the end of this year, we expect mass-produced N-type cell efficiency to reach 25.8% and high efficient N-type cell capacity to account for over 70% of our total solar cell capacity. We are confident we will achieve our module shipment target set at the beginning of the year, with N-type modules accounting for about 60% of total module shipments. We expect the module shipments to be in a range of 16-18 GW for the second quarter of 2023. Thank you. Total shipment in the first quarter reached about 14.5 GW, of which about 90% are module shipment, setting a new high. From a regional perspective, China and Europe accounted for over 60% of the total shipment. Shipment to China market increased more than twofold on a year-over-year basis, while that to Europe market grew over 50% year-over-year. In addition, emerging markets like Latin America and the Middle East, North Africa also made a remarkable contribution. Recently, the industry value chain price has gradually returned to a normal level, and the domestic utility scale PV projects have started their big invitation. The current module price is acceptable to clients, which can support them to achieve their predetermined installation target at a stable order pace. We expect the decrease of industrial supply chain price will drive the growth of utility-scale PV demand, especially in China market. The European PV market has vast potential. The decrease in industrial chain prices is expected to further drive demand for distributed and utility-scale power stations. The US market has robust demand. Some utility-scale power station demand may be delayed until 2023 due to price factors and supply constraints, with an expected 40 GW DC of PV installed capacity in US by 2023. Over the past year, we have continuously improved our risk management capabilities, continuously improved our supply chain visibility system, and maintained close communication and coordination with customers, suppliers, and other parties to jointly promote the efficiency of the customer clearance in US. Based on the experience of supply chain construction and the marketing network layout, we are committed to meeting our customer delivery with outstanding products and services. Regarding the products, Tiger Neo achieved a shipment volume of near 60 GW in the first quarter, maintaining a competitive premium. China, Europe, and emerging markets have become the main contributors to shipments. At the same time, we observed that Tiger Neo is accelerating its penetration in markets like Asia. Recently, we were awarded the title of Australia number one module brand for 2022 by Sunwiz. Tiger Neo not only has multiple advantages such as high conversion efficiency, high power output, and the bifacial factor, but also leads the industry in terms of degradation rates, temperature coefficient, and weak light performance, meeting customers' demand for household scenarios. With the release of N-type capacity and the continuous improvement of Tiger Neo's product performance, Tiger Neo's penetration rate and premium are expected to continue to lead the market. In terms of business, distribution market accounted for more than 40% in the first quarter. Considering the sustained demand for utility scale power station this year, we expect that the proportion of distribution to be around 40% for the whole year. In 2023, our order book visibility exceeds 60%, with the majority being overseas orders. As upstream raw material costs decrease, we expect the module market price to experience a slight decline. Our signing price will fluctuate within a reasonable range in line with market trend. We will continue to focus on customer-centric approaches to provide high-quality products and services to our customers. At the same time, we will adjust our marketing strategies flexible according to market conditions. With that, I will turn the call over to Pan. Thank you, Gener. We are pleased to report a year-over-year increase of about 73% in our shipments in the first quarter with strong demand from global markets. In response to the polysilicon price decline, we adjusted our procurement strategy and achieved significant year-on-year growth in key financial metrics, including revenue, gross profit, and operating margin. Let me go into more details now. Total revenue was $3.4 billion, an increase of 58% year-on-year. Gross margin was 17.3% compared with 14% in the fourth quarter and 15.1% in the first quarter of last year. The sequential and year-on-year increase were mainly due to the decrease in the cost of polysilicon and the increase in the shipment of N-type modules, which have a premium compared with P-type modules. Total operating expenses were $412 million, down 21% sequentially and up 29% year-on-year. The sequential decrease was mainly due to a decrease in shipping cost for solar modules and a decrease in impairment loss on PPE. The year-over-year increase was mainly attributed to an increase in loss of disposal on PPE and an increase in demurrage charges. Total operating expenses accounted for about 12% of total revenues compared with even in the fourth quarter and 15% in the first quarter last year, improving year-over-year. Operating margin was over 5% compared with 2% in the fourth quarter. Excluding the impact of the change in fair value of notes, a change in fair value of long-term investments, and our share-based compensation expenses, adjusting net income attribute to JinkoSolar Holding Co., Ltd., ordinary shareholders was over $121 million, up over 2 x sequentially and up 1.5x year-over-year. Moving to the balance sheet. At the end of the first quarter, our cash and cash equivalents were about $1.5 billion, down from $1.6 billion at the end of the fourth quarter and compared with $2.7 billion at the end of the first quarter of last year. Total debt was about $4.4 billion at the end of the first quarter compared to $4 billion at the end of the fourth quarter last year. Net debt was about $2.9 billion compared to $2.3 billion at the end of the fourth quarter of last year. Our total debt per share has improved. This concludes our prepared remarks. We're now happy to take your questions. Operator, please proceed. Yes. Thank you. If you wish to ask a question, "please press star then one" on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, "please press star then two". If you are on speakerphone, please put up your handset before asking the question. The first question comes from Brian Lee with Goldman Sachs & Company. Hey, everyone.[audio distortion]. Thanks for taking the question. Hi. I guess the first question I had was just around the ASP environment. I know you guys have seen some good margin expansion here quarter-on-quarter. It sounds like most of that was driven by the, you know, the decline in polysilicon costs. I guess, what's the status of that? How much more sort of leverage do you have to lower polysilicon costs relative to what you're shipping out and your inventory base today? Can you kind of give us a sense of what you expect module ASP trends to look like into 2Q and maybe the back half of the year? We are hearing there's, you know, sort of double-digit declines in certain markets for solar panels. Wondering where your pricing strategy kind of is trending for the next few quarters. Thanks. Hey, Brian. This is Gener. Thanks for the question. Firstly, about the price side. The market price is somehow stable in Q1 and Q2, mainly in first half. I don't see there's too much, let's say, different opinion across the industry about the first half module price. For the second half module price, we have seen some different opinions about based on different expectation of the polysilicon price. However, in our opinion, the polysilicon price might steadily going down step by step. We are not expecting. Significant free fall over the second half, but we are more expecting a stable, you know, stepping down quarter-over-quarter. Based on that expectation, I think that's how we expect the market price will go for the rest of the year. And I hope that answer your question. Yeah, no, that's helpful. Maybe just, I know you made some comments around the U.S. market. Can you give us your latest thoughts around shipping into the country? You know, how you're navigating the UFLPA, and then also any thoughts around manufacturing or expanding your manufacturing base domestically in the U.S.? For the U.S. market side, I think we are closely working with our suppliers to even, you know, sub-suppliers to make sure we can provide the document or traceability document needed for the UFLPA. We have successfully done that based on quite a lot of shipment in the last quarters. We are expecting, you know, with more and more get experience, and we can ship or we can get more approved based on what we are doing right now. At least that's the expectations. Based on that, we are planning to resume our shipment in U.S. market gradually. We hope we can get back to a relatively stable or let's say, or make the situation under control in the next quarters, let's say two to three quarters. Okay, understood. Last question from me. I might have missed it, maybe you didn't provide it. Can you get the, what the CapEx was in the quarter, what the free cash flow was in the quarter? Any thoughts on kind of, the financing needs and strategy for the rest of the year to cover the CapEx year? Thank you. Hey, Brian, this is Charlie. You know, we have, you know, the subsidiary, you know, the Jinko Solar, we have completed the CNY 10 billion convertible bonds in Chinese capital markets recently. Second one is, the CapEx, you know, it's a range of CNY 1.5 billion-CNY 2 billion in R&D. The focus is to solidify our leading position in N-type, you know, the supply chain, including the, you know, wafer cell and module capacities. We're expecting, you know, the performance. You know, it's, if you look at the Q1 performance, it's pretty good and we continue to expand. Expect, you know, the expansion of the gross margin and our profitabilities. The operating cash flows last year, you know, it's a kind of the. I think it's, around RMB 0.4 billion and continue to improve. The financing is already there and, you know, it's sufficiently enough, you know, to meet our needs for the CapEx. Okay, fair enough. I'll pass it on. Thanks, guys. Thank you. Thank you. Once again, if you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. The next question comes from Philip Shen with Roth MKM. Hi, everyone. Thanks for taking my questions. First one, as a follow-up to Brian on the UFLPA question. How many gigawatts have been released thus far in the U.S.? How many gigawatts do you have detained total? Philip, I think, you know, we have significant, you know, starting from Q4 last year, you know, our modules and under UFLPA has started to, you know, go through the customs and, you know, ship to our customers. We have, I think, achieved a significant amount of the module, you know, shipments. For the detained, I don't think, you know, we have or very small and tiny. The most important thing is looking forward, we think, you know, the mechanism has already been there, and we have traceability, very strong traceability capabilities. We expect, you know, quarter by quarter, our shipments to the US will improve, you know, gradually and hopefully, we think it's possible in the third quarter, our shipments to the US will be back to normal situations. Great. Thanks, Charlie. Of the more than 60% of the order book visibility, can you talk about how much of that do you expect to go to the US? Thanks. Philip, this year, the total volume we are planning to send to U.S. will be around 5% across the whole year's shipment plan. You know, like Charlie saying, we are gradually, you know, resume our shipment plans and revenue recognition. Because of the, you know, time consuming of the logistics and the UFLPA, et cetera. The revenue side, it won't be too much. That's why we say around 5%, maybe 5%-10%, between 5%-10%.%. I mean%. Got it. Right. So 5%-10% of the, annual guidance is roughly 65 GW. Yeah. Good. Thank you. You know, our work suggests that, you know, the non-China, module, non-China poly modules that you have, that can access the U.S. market is roughly 5 GW annually. Does that sound right? Is it the case that you can smoothly import modules that contain non-China poly now, so there's no issue there at all? Thanks for the question, Bill. currently, we are planning with multiple resources of polysilicon. At least that we are trying to do, because if we rely on single resource of polysilicon, it might significantly constrain the capability of the supply for US market. personally, I still believe that might be a challenge for the US customers as well. that's what we are trying to do. Okay. Got it. Then shifting back to margins for a bit, or to margins for a bit. Can you give us a sense for how do you expect margins to trend in Q2 and Q3? Especially given the ASP comments that you had earlier, you know, do you expect margin expansion in Q2 and then Q3, perhaps your margins to compress a little bit with similar to back half pricing? Thanks. I think the margin-wise, we have the confidence to gradually improve. At least that's what we believe. Thanks to the new technologies, you know, N-type TOPCon-based Tiger Neo, which is highly appreciated by the end market, and it did create additional values to the customers. Based on the value, additional value sharing business models, we are definitely have the confidence to gradually improve our growth margins. Thanks. Okay, great. One last question. As it relates to US expansion, I think Brian asked the question. Just wanna check in to see if you can give a little more color on the timing of that. My guess is you have to wait for the domestic content rules to be out. What do you see for US module pricing trends? Do you think, you know, maybe by year between, you know, this year, 2024 and 2025? Thanks. Thank you. Again, if you wish to ask a question- Sorry. I think we missed the last question. I can briefly talk about it, then we can pick up the next one, right? Yes. Yes. Regarding the U.S. expansion, we have the confidence, we have the plan to do it. For sure, we are still waiting for some more clarification on the policy side and/or approval on the policy side. We are closely following that. Hopefully, we can get some clearance, good to go, in the next coming weeks or months. We will see. Thank you. Let's take the next one. Thank you. Again, if you wish to ask a question, please press star then one on your telephone, and wait for your name to be announced. The next question comes from Alan Lau with Jefferies. Thanks a lot for taking my question. Congratulations for the really great results and the margin expansion. My first question is, I'd like to know, how much did the port charges related to the demurrage in the U.S. border has went down? If this is going to be zero going forward, then how much would that contribute to the margin expansion? In the first quarter, we have roughly CNY 300 million-CNY 400 million. You know, the demurrage and the additional storage costs for the US, you know, shipment situations. It's roughly, I think it's 2%, 1.5%-2% gross margin, you know, impact. We're expecting in Q2, you know, will dramatically decrease to maybe 25% of the Q1 level. It's going to contribute, I think, at least 1% gross margin expansion. Thanks a lot. Another question is, would like to know how much is the poly prices for the polysilicon purchased from Wacker? Is it going down at the same pace as the polysilicon price in China, or it's going down a bit slower? Yeah. you know, it's really typically confidential, but, you know, it's a separate market, right? It's the poly out of the China, the main purpose is for the US markets. it's, you know, no expansion or capacity for the poly outside of China. it's kind of very, let's say. Short of supply. Yeah, short of supply situations, the prices were is very sticky. But the different situation in China, the poly is the supply is sufficient, and we expect maybe some, you know, relatively oversupply situation in your fourth quarter this year. It's a kind of different pricing depending on, you know, depending on, you know, different situations. Understood. Is it possible that, if the US customs accepted some of the Tongwei polysilicon, then your shipment to the US will get even higher margin because you get effectively cheaper polysilicon, right? I think it will really depends on the market principles, right? The supply and demand, like Charlie saying, the polysilicon of non-China polysilicon is in serious short of supply. The end market is very strong. Definitely this create, you know, favorable market for the upstream players. If we have additional polysilicon supply approved, definitely it will, you know, make the situation easier. How far it will go, it depends on, you know, finally still the supply versus demand. We will see. Thank you. That's clear. I think my last question is in relation to the Southeast Asia capacity expansion plan. What is the latest plan in terms of the Southeast Asia capacity expansion? Thank you. Oh, yeah. Yeah. Currently, we have, you know, 7 GW integrated capacity, but we have planned to expand the capacity in Vietnam. You know, it's possibly reach to maybe, you know, 11%, 12 GW integrated capacity by the end of this year. Thanks a lot. That's very clear. Looking forward for the great result in second quarter ahead. Thank you. Thank you. Thank you. Once again, if you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. Once again, as a reminder, if you wish to ask a question, please press star then one and wait for your name to be announced. Okay. That does conclude our conference for today. Thank you for participating. You may now disconnect your lines.