Hello, ladies and gentlemen, and thank you for standing by for JinkoSolar Holding Co. Ltd. second quarter 2023 earnings conference call. At this time, all participants are in a 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 now like to turn the meeting over to your host for today's call, Miss Stella Wang, JinkoSolar's Investor Relations. Thank you, operator. Thank you everyone for joining us today for JinkoSolar's second 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 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. Li Xiande, Chairman of the Board of Directors and the Chief Executive Officer of JinkoSolar Holding Company Limited; Mr. Gener Miao, Chief Marketing Officer of Jinko Solar Company Limited; Mr. Pan Li, Chief Financial Officer of JinkoSolar Holding Company Limited, and Mr. Charlie Cao, Chief Financial Officer of Jinko Solar Company Limited. Mr. Li will discuss JinkoSolar's business operations and the company's 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, 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 in- 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. I will translate his comments into English. Please go ahead, Mr. Li. We are pleased to report solid growth as we overcame volatility in supply chain prices and end demand, thanks to our excellent market network, the highly quality products, and our highly effective supply chain management. Module shipments in the second quarter were approximately 17.8 GW, up 36.2% sequentially. Shipments of the competitive N-type module were approximately 10.4 GW, up 74.1% sequentially. We are happy and proud to be the first module manufacturer to reach the milestone of shipping 10 GW of N-type modules in a single quarter. Our shipments to the U.S. market increased from the first quarter, largely reducing demurrage charges. Our efforts in supply chain management, technology advancement, and process improvement also improved our profitability. Net income was $180.1 million in the second quarter, up 65.6% sequentially. Adjusted net income was $196.7 million, up 70.5% sequentially. Diluted earnings per ordinary share were $0.77, up 48.5% sequentially. Due to the substantial release of polysilicon production volumes and excessive inventory, polysilicon prices declined sharply in the second quarter, which also caused a certain volatility in module prices. Since most customers are sensitive to price, they were cautious and slowed down their orders, which to some extent affected our module demand. As the lower supply chain prices stabilized in the third quarter, domestic customers started to place orders and major projects were initiated and started construction in China. The lower prices also led to a surge in demand from some overseas markets. We expect production and sales in the PV market to rebound in the second half. 随 着 越 来 越 多 的 企 业 布 局 TOPCon 的 产 能 ，N 型 TOPCon 技 术 成 为 行 业 主 流 已 经 成 为 了 确 定 性 趋 势 。 但 部 分 企 业 受 制 于 技 术 储 备 不 足 ， 工 艺 技 术 路 线 选 择 了 差 异 ， 出 现 了 项 目 延 期 、 产 能 效 率 爬 坡 不 及 预 期 等 问 题 。 有 竞 争 力 的 N 型 产 能 仍 供 不 应 求 ， 截 止 二 季 度 末 ， 我 们 的 182 N 型 TOPCon 的 量 产 效 率 已 经 达 到 了 百 分 之 二 十 五 点 五 ，N 型 组 件 功 率 达 到 五 百 八 十 瓦 左 右 ， 相 较 同 款 型 的 P 型 ，P 型 高 出 了 二 十 五 至 三 十 瓦 。N 型 一 体 化 成 本 相 较 P 型 仍 保 持 在 有 竞 争 力 的 水 平 。 我 们 有 信 心 通 过 持 续 的 技 术 迭 代 和 工 艺 优 化 ， 保 持 效 率 和 成 本 的 持 续 领 先 。 With more and more players deploying TOPCon production capacity, N-type TOPCon is certain to become the mainstream technology in the industry. However, some of the new entrants experienced product delays and slower than expected production and efficiency ramped up due to insufficient technical know-how and differences in technology and the process, keeping competitive N-type production in short supply. As of the end of the second quarter, the mass-produced efficiency of our 182 N-type TOPCon capacity had reached 25.5%, with N-type module power output of around 580 Wp, which is about 25-30 Wp more than P-type modules of the same variant. The integrated cost of N-type module remains competitive compared to P-type modules. We are confident we will continue to lead in efficiency and cost through technology iteration and process optimization. 五 月 底 ， 我 们 宣 布 了 五 十 六 吉 瓦 一 体 化 山 西 大 基 地 的 建 设 公 告 ， 预 期 建 成 后 将 成 为 光 伏 行 业 最 大 的 N 型 一 体 化 生 产 基 地 。 山 西 一 体 化 大 基 地 是 晶 科 引 领 光 伏 行 业 的 又 一 次 生 产 模 式 创 新 ， 将 充 分 体 现 了 产 品 和 技 术 的 先 进 性 、 投 资 成 本 低 、 运 营 效 率 高 以 及 信 息 化 和 智 能 化 等 优 势 。 同 时 ， 我 们 积 极 应 对 全 球 光 伏 产 业 格 局 的 变 化 ， 加 大 了 海 外 产 业 链 的 建 设 。 美 国 一 个 吉 瓦 组 件 扩 产 预 计 于 九 月 份 开 始 投 产 。 截 至 目 前 ， 晶 科 在 海 外 已 经 形 成 了 行 业 领 先 的 产 业 链 布 局 ， 具 体 从 硅 片 、 电 池 到 组 件 的 一 体 化 生 产 能 力 ， 同 时 具 备 专 业 的 可 追 溯 性 和 卓 越 的 产 品 竞 争 力 。 随 着 下 ， 下 半 年 海 外 N 型 产 能 的 布 局 以 及 N 型 产 能 的 不 断 投 入 ， 年 底 我 们 将 形 成 海 外 一 体 化 十 二 个 G 以 上 的 产 - 产 能 ， 其 中 N 型 占 比 百 分 之 七 十 五 以 上 。 我 们 将 持 续 致 力 于 不 断 完 善 的 全 球 产 业 链 建 设 ， 为 全 球 客 户 提 供 优 质 高 效 的 产 品 和 服 务 。 At the end of May, we announced the construction of a major production base of 56 GW integrated wafer cell module capacity in Shanxi, which will become the largest N-type integrated production facility in the industry. Our Shanxi integrated base is another strategic expansion of the production model championed by JinkoSolar in the PV industry that will fully demonstrate our advantages in highly efficient technology and products, lower investment costs, and greater operational efficiency, as well as intelligent and smart manufacturing capabilities. Meanwhile, we proactively responded to shifts in the global PV landscape by expanding our overseas industrial chain. The 1 GW capacity expansion for N-type modules in the U.S. is expected to start production in September this year. So far, we have established an industry-leading overseas industrial chain network with integrated production capabilities from wafer, cell to module, with traceability and excellent product competitiveness. As we continue to invest in N-type capacity expansion overseas, in the second half, we will reach an integrated capacity of over 12 GW overseas by the end of 2023, with N-type accounting for over 75%. We will continuously strengthen and expand our global industrial chain to provide premium and high-quality products and services to our global clients. 作 为 一 全 球 极 具 创 新 力 的 光 伏 企 业 ， 我 们 始 终 勇 担 社 会 责 任 ， 把 ESG 管 理 架 构 的 持 续 完 善 作 为 公 司 可 持 续 发 展 的 重 要 举 措 。 2 季 度 ， 我 们 基 于 科 学 碳 目 标 倡 议 建 议 的 方 法 和 要 求 ， 制 定 的 净 零 排 放 的 目 标 及 路 线 图 ， 积 极 以 实 际 行 动 推 动 全 球 碳 排 放 减 少 以 及 应 对 气 候 变 化 。 我 们 持 续 完 善 供 应 链 的 追 溯 体 系 和 第 三 方 独 立 审 计 制 度 。... 提 升 了 我 们 的 供 应 链 可 靠 性 。 凭 借 在 社 会 责 任 履 行 方 面 的 优 异 表 现 ， 我 们 在 标 普 全 球 企 业 可 持 续 发 展 评 估 中 获 得 了 领 先 行 业 主 流 企 业 的 成 绩 。 同 时 ， 我 们 也 加 强 了 与 全 球 可 再 生 能 源 发 展 的 领 先 机 构 和 专 业 人 士 的 合 作 。 我 们 宣 布 加 入 了 国 际 可 再 生 能 源 机 构 行 动 联 盟 ， 通 过 共 享 最 佳 实 践 和 经 验 ， 我 们 致 力 于 为 全 球 可 再 生 能 源 的 可 持 续 发 展 做 出 积 极 贡 献 。 As one of the largest and most innovative solar module manufacturers in the world, we have always carried on social responsibility and taken a continuous improvement of our ESG management. As a key matter for our sustainable development, in the second quarter, we set up a goal and a roadmap to net zero emissions based on methods and requirements advised by the Science Based Targets initiative, SBTi, actively promoting our global carbon emissions reduction and addressing climate change with concrete actions. With outstanding performance in social responsibility fulfillment, we led the mainstream PV industry in the S&P Global Corporate Sustainability Assessment. We improved our traceability system and independent third-party audit mechanism to enhance our supply chain reliability. Meanwhile, we enhanced our cooperation with leading institutions and professionals in global renewable energy development and joined the International Renewable Energy Agency, IRENA. Through sharing best practices and experience, we are dedicated to making a positive contribution to the sustainable advancement of renewable energy globally. 总 之 ， 我 们 对 光 伏 行 业 的 发 展 充 满 信 心 ， 我 们 会 持 续 强 化 一 体 化 的 运 营 管 理 ， 并 宽 好 光 伏 加 储 能 的 产 业 发 展 前 景 ， 积 极 布 局 储 能 业 务 ， 持 续 增 强 公 司 的 竞 争 力 。 话 题 交 给 Jenna 之 前 ， 我 来 介 绍 一 下 业 绩 指 引 。 预 计 二 零 二 三 年 底 N 型 电 池 量 产 效 率 将 达 到 百 分 之 二 十 五 点 八 。 我 们 看 好 产 业 链 的 价 格 企 稳 下 的 需 求 陆 续 启 动 ， 上 调 全 年 出 货 量 目 标 七 十 到 七 十 五 GW， 其 中 N 型 组 件 出 货 将 达 到 百 分 之 六 十 左 右 。 随 着 全 球 市 场 对 N 型 产 品 的 需 求 不 断 增 加 ， 我 们 持 续 投 资 具 备 技 术 和 成 本 竞 争 力 的 N 型 产 能 。 预 计 二 零 二 三 年 底 ， 单 晶 硅 片 、 高 效 电 池 、 组 件 产 能 将 达 到 八 十 五 、 九 十 和 一 百 一 十 GW， 其 中 N 型 产 能 占 比 百 分 之 七 十 五 以 上 。 二 零 二 三 年 第 三 季 度 ， 公 司 组 件 出 货 量 在 十 九 到 二 十 一 GW 之 间 。 In summary, we are confident in the development of the PV industry. We will continue to enhance our integrated operations and management. We are positive about the long-term prospects of PV plus energy storage model, will continue to grow our competitiveness by actively developing our energy storage business. Before turning over to Gener, I would like to go over our guidance for the third quarter and the full year of 2023. By the end of 2023, we expect to mass produce the N-type cell efficiency to reach 25.8%. We are optimistic that demand will grow as industrial chain prices stabilize and reach our full year module shipments to be in the range of 70-75 GW, with N-type module accounting for approximately 60% of total module shipments. As demand for N-type products continues to increase in the global market, we will move on to invest in N-type capacity, which is competitive both in technology and cost. We expect our annual production capacity for mono wafers, solar cells, and solar modules to reach 85, 90, and 110 GW respectively by the end of 2023, with N-type capacity accounting for over 75% of the total capacity. We expect module shipments to be in the range of 19-21 GW for the third quarter of 2023. Thank you, Miss Li. Total shipments in the second quarter were around 18.6 GW, over 95% of which were module shipments. We are glad that total module shipment in the first half of 2023 exceeds 30 GW, making us the number one in the PV industry for the first half module shipment. In terms of product mix, N-type Tiger Neo accounted for 58% of the module shipment in the second quarter, a steady increase from nearly 50% in the previous quarter, thanks to its high power output, quality, and reliability. In terms of geographic mix, China and Europe remain the largest regions in the second quarter, accounting for over 50% together. The proportions of other markets remain relatively stable. Most importantly, we are glad and proud to see both the efficiency of customs clearance and the size of our shipment to the U.S. market improve sequentially, benefiting from our dedicated efforts. As we continue to make effective progress, we expect our shipments to the U.S. market to gradually increase in the second half. For orders and the prices, visibility of our order book has reached about 80% for the whole year of 2023, improving compared with the first quarter, with overseas orders making the majority. The declines in raw material prices drove module price lower. Recent prices for our new contracts have fluctuated within a reasonable range in line with market trends, and Tiger Neo retained a competitive premium over P-type. With the gradual release of our N-type capacity, we expect the Tiger Neo to accelerate its penetration into China, Europe, and emerging markets in the second half. The proportion of Tiger Neo shipment for the full year 2023 to reach around 60% of our total module shipments, and its product strengths to continue to lead the industry. Recently, we were awarded the Top Brand PV Europe Seal 2023 by EuPD Research. This recognition by our downstream partners does not only prove that JinkoSolar is one of the preferred European brand for installers to work with, but also reflect our strong reputation and commitment to our customers as a leading supplier and N-type TOPCon technology leader. In addition, we are recognized as 2023 overall highest achiever for the first consecutive year in RETC's PVMI report, a reaffirmation of quality, bankability, and the reliability of our product. In summary, we are happy to navigate through volatility in supply chain prices and end demand in second quarter, leveraging our advantage in terms of global marketing network, industrial chain layout, and product competitiveness. Meanwhile, we continued to improve our mechanism to cope with risks and enhance our customer relations and marketing network. As supply chain prices stabilized recently, we are optimistic about the return of demand in the global market for the second half. In medium and the long term, as the economy of solar power becomes more and more prominent, the PV market will move forward at a healthy and sustainable growth pace. We expect China, the U.S., Europe, and other developed markets to grow at a steady pace, and the emerging markets will continuously expand in size. We are confident we will provide more economic value to our customers with excellent products and services, and continue to grow our market share. With that, I will turn the call to Pan. Thank you, Gener. We're pleased to report strong financial results in the second quarter, with quarterly total revenues, gross profit, income from operations, and net income all reaching historical new high. Recently, our majority-owned principal operating subsidiary, Jinko Solar Co. Ltd., announced its intention to issue ordinary shares for no more than RMB 9.7 billion to fund the construction of our N-type integrated production facility in Shanxi. This expansion of an advanced integrated production capacity will help us to continuously improve our cost structure, increase in equity capital will also help us improve our capital structure. As we keep enhancing our global industrial chain, marketing network, and product competitiveness, we hope to achieve healthy and sustainable profitability. Let me go into more details now. Total revenue was over $4.2 billion, up 32% sequentially, and up 63% year-over-year. Gross margin was 15.6%, compared to 14.7% in the second quarter last year. We continue to make good progress in clearing customs in the U.S. market, significantly reducing the demurrage charges compared with the first quarter this year. Total operating expenses accounted for 11% of total revenues, compared with 12% in the first quarter this year, and 16% in the second quarter last year, improving sequentially and year-over-year. Income from operations was $212 million, compared with income from operations of $176 million in the first quarter this year, and loss from operations of $43 million in the second quarter last year, improving sequentially and year-over-year. Operating margin was about 5%, flat compared with the first quarter this year, and loss margin of 1.5% in 2nd quarter last year, also improving year-over-year. Net income attributable to Jinko Solar Holdings ordinary shareholders was about $180 million, up 66% sequentially, and compared to a net loss attributable to the Jinko Solar Holdings ordinary shareholders of about $93 million, improving year-over-year. excluding the impact from a change in fair value of notes, a change in fair value of long-term investments and share-based compensation expenses, adjusted net income attributable to the ordinary shareholders was about $197 million, up about 71% sequentially, and up 2.9 times year-over-year. Diluted earnings per share was $0.07 in the second quarter, up about 49% sequentially and compared to diluted loss per share of $0.047 in the second quarter last year, improving year-over-year. Moving to the balance sheet. At the end of the second quarter, our cash and cash equivalents were about $2.35 billion, up from $1.48 billion at the end of the first quarter this year, improving sequentially. Accounts receivable turnover days were 79 days, compared with 95 days in the first quarter. Inventory turnover days decreased to 17 days in the second quarter from 100 days in the first quarter. Total debt was $4.7 billion at the end of the second quarter, compared to $4.4 billion at the end of the first quarter. Net debt was $2.4 billion, compared to $2.9 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. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. The first question today comes from Brian Lee with Goldman Sachs. Please go ahead. Hi, thanks for taking the questions. This is Grace on for Brian. I guess first question around ASP trajectory. Obviously, polysilicon had a big decline in 2Q, though it has stabilized in recent week. At the same time, like, we are hearing some oversupply in certain areas of the market. Just wonder if you can talk about the ASP and maybe the margin trajectory moving through the rest of the year and maybe into 2024. Thank you. Hey, this is Charlie speaking, you know, firstly, I want to talk, you know, this year it's a very big you know, solar market, you know, a lot of markets are very strong, including China, United States, and European markets. We delivered a very strong performance for the first half year. In terms of the, you know, revenue shipments, the next generation N-type TOPCon, we are leading the industries and take about 50% market share, you know, and now 50% of portfolios is from N-type. We, we believe we are continue to the momentums throughout the year. N-type, because of the cutting edge, it's a very strong, you know, great functions, you know, for end customers and have, you know, advanced, you know, more power output for the end customer. We are seeing the market is accepting the, you know, N-type, you know, it's going to dominate the market, and we'll continue the, you know, supply relatively shortage even, you know, throughout next year. Back to your questions on ASP, it's, you know, the first half year, it's pretty, you know, relatively stable. Starting from June this year, because of the polysilicon relatively oversupply situations and make, you know, make the solar modules have the relatively adjustments. It's, if you're looking for, for the midterm perspective, we think it's very good, you know, for the downstream and accelerate the demands from, you know, different markets. It will also generate, you know, you know, solar and storage, you know, the big market in the future. For the ASP trend, it's, it's, it's relatively in line with the industry, you know, the second half year is for sure in a downward trend, but it's, it has, it has been stabilized. We believe, thanks to the very, very strong, you know, China installations, particularly in Q4 this year, the ASP will, you know, maintain and maybe possibly, you know, relatively in upward trends. For the proper margins, you know, profitability, I just said, you know, we strongly believe, you know, we almost closed out the sales order this year, and over 80% is, you know, booked. We are planning, actually, for the next year. For this year, the, we, we, we, we believe the momentum will continue and year-over-year, it's a very good year for Jinko, you know, in, in terms of the profitability, even the second half year. The N-type will take the, you know, more shipments for Jinko in the, in the second half year, 60%-65%, which is 50% in the first half year. On top of that, U.S. market is very positive for us, you know, for the starting from the third quarter. Our modules was detained, you know, starting from last year, and we have do a lot of work, traceabilities, ESG, and communications with relevant, you know, U.S. regulators. Starting from the July, our modules and the speed of the going through the customs has been speed up, and we are expecting, you know, our shipments to U.S. market will be accelerated starting the third quarter. We have also get ready for the overseas capacities, 12 gigawatts integrated, starting from wafer to modules and to for the U.S. market next year. Next year will be a very big, you know, mark, year for Jinko to have the more market share in the U.S. As well as we have been, you know, in expansion for the U.S. module capacities, 1 GW is in place, and we plan to start, you know, operations from this end of 3rd quarter. Yes, that's back to your questions, you know, overall. Thanks, Charlie. That's super. Thanks, Charlie. That's super. Maybe I missed it. Can you provide us your updated CapEx number for 2023? Also, you talked about, like, 12 GW for overseas capacity next year. Just wondering if you can provide us the CapEx number, and how are you thinking about funding it, because I think you mentioned, like, these, the, the equity that or the capital that you raise in China cannot be used in the U.S. Just wonder how you think about the capital raise here. Thank you. Yes,. You know, for the CapEx this year, it's roughly RMB 15 billion. We estimate, you know, first half year, we have generated around, you know, roughly 50, let's say, 55 billion, RMB 5.5 billion in operating cash flows. This year, we estimate over RMB 10 billion operating cash flows, you know, this year. As well as we have completed the convertible loans, you know, in the second quarter in a year. We have sufficient cash, you know, to support the CapEx. Next year, you know, the overseas capacities, almost we, you know, will complete it by the end of this year. We don't foresee any, you know, additional cash needs next year for the 12 GW integrated capacities. Thank you. I'll take the rest offline. Thank you. The next question comes from Philip Shen with Roth MKM. Please go ahead. Hey, guys, this is Matt on for Phil. Thanks for taking the questions. Looking at the U.S. market, there is this expectation in the industry that modules made with China poly that was not from Xinjiang could get into the U.S., but we haven't really been seeing that yet. Do you know what might be taking so long, and when non-Xinjiang China poly modules made in Southeast Asia might get cleared by CBP? Yes, you know, we, you know, for Jinko, we focus on, you know, 100%, you know, polysilicon out of China to serve the U.S. markets. You know, just like I said, you know, we are very, you know, pretty smooth and speed up the process, starting from the third quarter. For the China-based polysilicon and, the probabilities of the, you know... We're not sure, but, you know, it's, it's possible and possible, but from, from Jinko perspective, we will continue. We have signed long-term contract with, you know, the, the Tier one and the polysilicon makers out of China, and we will, continue to increase the, you know, the out, you know, the source and the, the volume from the polysilicon producers. The, the poly out of China, the, you know, the volume is roughly 10,000 metric tons, which we believe is sufficient to supply, you know, the U.S. market. As Tier 1 companies, we can, you know, take the, take the advantage, and we, we have the largest integrated capacity, 12 gigawatts, including, you know, including 75% TOPCon, you know, the N-type. I think, you know, we, we can, we can take the lead, you know, in terms of the, the, the, the market share, as well as the poly, you know, sourcing from the, the, the suppliers out of China. ... do you think it's possible that non-China poly, not made in Xinjiang, ever makes it into the U.S.? I'm just kind of curious on your view. I'm not in, in a position to make, you know, the predictions or the judgment, but, you know, from the legal perspective, you know, the traceability is, and if you can do, you know. From the implementation perspective, from the relevant regulators, we are not sure of their positions. Okay. Thank you for the color. I'll pass it along. 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 Rajiv Chaudhri with Sunsara Capital. Please go ahead. Good morning and good evening. First of all, congratulations on a superb quarter and for the very strong guidance. One question that has not been asked yet, and is about the inventory reserve that you have taken in the quarter. Normally, your inventories tend to go up every quarter because you are growing the business, and they grow up by $200 million-$250 million a quarter. This time, your inventories sequentially were down about $200 million quarter to quarter. My first question is, is it reasonable to think that the inventory reserve that you took was actually in the neighborhood of $400 million? Which would make sense given the sharp decline in the prices of poly, and obviously, at any point in time, you, you have a lot of poly in your working process. The first question is: Is the inventory reserve in the ballpark of $350 million-$400 million, and that your gross margin without this inventory reserve would actually be in the mid-20s in the second quarter? . Hello, Rajiv, this is. Yes. As I mentioned to the inventory reserve, yes, actually, we made some inventory reserve in the second quarter. This is also impacted our margin, gross margin.. This is only a temporary treatment of the inventory. We don't think it will be a long-term treatment to our inventory. I, I understand that part. obviously, it's a one-time thing. The question is: Was it in the ballpark of $400 million? That your... If, if the reserve was not taken, your true earnings would be $400 million higher. You mean 400 million is 1, 1, 1 number. It's, we, we provided roughly, I think, 500 million RMB inventory provisions. But the second quarter, I think we do pretty good, and we anticipated, let's say, the poly decline starting from June. We speed up, you know, the inventory, you know, goods delivery and control the inventories very tight. That is why you are seeing, you know, our total inventory, the numbers is relatively lower, you know, quarter-over-quarter. But we, we still have some kind of the orders and targeting the residential markets. The residential markets, as you know, the, it's a kind of the to see customers and, they, you know, they are typically, when the, when the supply chain, particularly the end price, has a significant, let's say, adjustment, which we typically we will offer some price discounts to the residential customers. That is why, from the accounting perspective, by the end of the second quarter, we, we, we recorded additional inventory, one-time, you know, provisions, and we don't believe, you know, that is a recurring items in the future. Charlie, I understand it is not an ongoing thing. My question simply is reflecting the what was the true earning power of the company in the second quarter? What I'm trying to get at is, that if the poly, if you exclude the impact that the sharp decline in poly prices has had on the, on the, on the inventory reserve, that your earnings would have been a lot higher, not just somewhat higher, but a lot higher, maybe as much as $400 million higher. Oh, you mean, you know, if, let's say, the poly price has relatively stabilized, and the module price is, you know, is relatively stable, and, for sure, you know, if that is the case, and we are able to generate more earnings,, significantly. Is it fair to say that, without this inventory reserve, the gross margin could have been in the mid-twenties, 24-25%? Well, I think it is roughly, I think, without that, it's, roughly up to 20%. ... and you expect it to be higher in the third quarter because the rate at which the price of modules is coming down is slower than the rate at which the poly price is coming down? , we expect, you know, continuous strong earnings, and because of the, you know, the N-type modules, they have strong earning generation power, we get more percentage shipments. Second-wise, we have higher shipments in the U.S. markets. That is a combination of the two key factors. Of course, the poly is down to be, you know, stabilized. Module, you know, is still, you know, it's reaching kind of the stabilized point. Also, my next question is about the storage business. Did the storage business contribute any revenues in the second quarter? What should we expect for the full year? Yes, storage is, you know, from long-term perspective, it's our kind of the way to fix it. It's got going to be a very big, very important business unit from the long term, 3 to 5 years. This year is a kind of investment year. We invest on the, the, the, you know, teams, sales channels, and R&D, you know, even we still invest some small capacities. The revenue contribution for this year is not significant, and we even make some, you know, we are expecting this year to become an investment year. We, we, you know, we will make some kind of, you know, small losses for the business. For the future, and it's looking to the next year, it's going to be a very big, you know, let's say, you know, high growth, you know, segment for, for Jinko. Will, will you hit a few hundred million dollars this year or not really? Not this year. No, not this year. You know, this year, I think, you know, maybe I think, you know. We, we don't disclose the, the numbers, but again, it's a kind of the early investment, you know, segment, the big business unit. We have, roughly reached our, you know, sizable teams, including the key functions, and by the end of this fourth quarter, and we think we are in a good position, and for next year, you know, to penetrate the storage markets. Right. Also, going back to the, the cost of polysilicon, is it fair to think that the average cost of the polysilicon in the second quarter was roughly $0.03 lower than the cost of polysilicon that you had in the first quarter? Sorry, could you repeat your question? . My, my question is on the cost of polysilicon. I'm talking not about the cost of polysilicon in the, in the market, but the cost of polysilicon that you embedded in your operations and, and therefore, your earnings. Is it fair to think that the cost of polysilicon in the second quarter was roughly $0.03 excluding the inventory reserve, was roughly $0.03 lower than the first quarter cost of polysilicon? I didn't have the numbers. I know your questions. Q1, I think, you know, the poly starting January is a kind of very big rebound, and slightly down month-over-month, and significantly decline starting from June. I think it's, you know. Starting in June, it's a small impact on the Q2 financial figures because we have, you know, the inventory turnover is 60 days, you know, 30 days. It's, we can get back to you, you know, after the call, but I think it's slightly lower, you know, the poly from the financial statement perspective. And, uh- Second quarter, which is Q1. One last question: Is it fair to say that at this point in the third quarter, your average cost, your total cost per watt is under $0.15? You know, we, we don't disclose the, the numbers. It's a kind of competitive, you know, advantage, and, let's say, information. You know, it's a significant improvement, you know, back to your questions, in second quarter, starting from July. As well as, you know, the, you know, we continue to improve our internal, you know, operations with the supply chain, you know, the cost. It's a significant improvement, and, but we don't disclose the cost structure, even the, including the total, you know, flashing costs.. Right. A final question, Charlie. You know, First Solar has made a point of noting that they have a lot of long-term contracts going out multiple years, going out 2, 3, 4 years, and Maxeon has said the same thing. These contracts are for prices in the high twenties, high twenties going out multiple years. Do you think that that kind of pricing that far out is really sustainable given what is actually happening to prices in the market right now? . I, I think, you know, U.S. market generally is a very big market, sustainable long growth. There are a lot of disruptions, you know, for from the recent 2 years because of the, let's say, the WRO, UFLPA, makes the supply, you know, tight. Some of the, let's say, the local producers takes that advantage, sign a lot of, you know, long-term contract. From the long-term perspective, we still, the silicon-based technology, you know, has the absolute, you know, 100% advantage, you know, versus other technology. Now the, the focus is overseas polysilicon supply, you know, relative shortage. We are able to, let's say, next year will work, it's going to be a very big year for Jinko, we have secured the sufficient, I think, you know, poly out of China. We are able to sign, you know, very, I think, a very decent, you know, contracts. With, let's say, the policy stabilized, and we are able to, you know, get more contracts not only next year, maybe next two or three years. You know, historically, we take the majority of very big market share in U.S., 20-25%, because of disruptions, but we have overcome the, the disruptions. For the long term, we, we think, you know, we, we are in a good, good positions with our peers. Final question: Will you be able to take advantage of the IRA in terms of the production that you are starting with the 1 gigawatt N-type of product in the U.S.? You mean IRA, you know, you mean, if, you know, Jinko is, let's say, applicable or not? We think it's, IRA is, kind of very transparent, you know, policies, it's, for the local productions in the U.S. When we do that, we, we don't, let's say, depend on 100% IRA. We think, relatively size, you know, local productions and, you know, local content makes, you know, Jinko the more, you know, competitive in the, in the market. We, we, we strongly believe the IRA is, we are, you know, qualified, let's say, the IRA. Okay. You expect that you will be able to benefit from it, but you're not counting on it? , we don't account it as we, we do very conservative accounting. I, I know some peers, you know, the U.S. producers, they do accrue basis, even the, the recording on the cost of goods sales. You know, that's, that's a different, you know, accounting perspective, but we, we didn't do that. We, we want to do it on cash basis, you know, based on the, you know, the, the, the application and the, the, the fund of the IRA in future. Okay. Thank you. Congratulations again. Thank you. Thank you. As a reminder, if you wish to ask a question, please press star, then one to enter the question queue. Once again, if you have a question, please press star, then one on your telephone and wait for your name to be announced. The next question comes from Alan, Alan Lau with Jefferies. Please go ahead. Thanks for taking my question, and congratulations for- congratulations for the great results. A couple of questions to follow up. First of all, I would like to clarify, so the amount- because, in Asia reporting, the overall impairment in 2Q was around CNY 1.6 billion. In U.S. reporting, around $500 million is recorded in cost of revenue, and the remaining is under the, the impairment of long-l ived assets. Is this understanding correct? , you're right. There's a kind of different presentations in different, you know, the accounting standards. In the U.S., the inventory provisions is typically an item of cost of goods sold. In China, the PRC standards, they have separate, you know, line called, you know, kind of the assets impairment, including everything, the, you know, the, the fixed assets and as well as the inventories. That's a kind of the presentation, different, accounting standards. If we add back $500 million of inventory, impairment, so the, the, the gross margin in Q2 was actually improving compared to Q1, right? Yes. Yes, you're right.. .... Another thing is, the impairment of long-life assets to minus ending are those equipment, which we can also expect it is a one-off thing, right? Because the impairment of equipment won't happen every quarter. , it's a, it's a one-off, and we, we provided, you know, for the small, you know, size, you know, and, small size module cell capacities. You know, we, to, to make our assets to be more competitive, you know, on the balance sheets. Thank you. Another question is in relation to the port charges, because, I recall that in 4Q last year and first, in the first quarter this year, there were port charges affecting the market. What is the situation of the port charges in the U.S. in 2Q? What do you expect in 3Q with the acceleration in the clearance of the products? You know, for the port charges and in the first quarter, we have RMB 400 million, in the port charges. It's for the U.S., and because it's detained modules and very high, you know, storage costs. The second quarter, and it increased a lot to RMB 200 million, one quarter. Starting from the third quarter, we, we believe, you know, the port charges will be a very small numbers, and because our modules have been, you know, cleaned up and speed up the, you know, the, on, on the U.S., you know, this customs side. Thanks a lot. This is an exciting, exciting development actually. It leads to the next question as to how much U.S. shipment has been sold to the U.S. in the first and second quarter? Oh, you mean the shipments percentage, right? The total, US shipments, against the total shipments, it's, 5%-10% in that range. Understood. for this year, after we raise our guidance to 70-75 GW, 5-10% is around, like, 4-7 GW. next year, our, our target is 12 GW. Is it, is it correct? you know, it's, it's roughly 10% of market, shipment next year, and it could be in a range, let's say, let's say, you know, above 10 GW, and depending on, you know, the, let's say, the, particularly the supply side, you know, the poly side. We are confident with 10, 10 GW is a kind of the base, the base case. Base case, right. Yep, thank you. That's actually quite a strong improvement from this year, like 4-7 GW to 10 GW still. Would like to know, what, what is your expectation on US installation next year on, on this basis? Because this year, probably, US, I think the, the base case is like around 30 GW. I, I think the company is implying market share gain in next year, right? It's kind of a go back to normal strategy, right? In the last two years' time, we have got, let's say we got stuck by different regions, different reasons. Now we see, we have seen, you know, positively, you know, things start to go back to normal. That's why we are expecting a kind of normal market share or normal, stable supply from Jinko to U.S. market. That's why we expect, you know, around 10% of our total shipment that goes to U.S. market next year. so it's... what would your, what is your expectation on U.S. installation in 2024 then, like, approximately? Well, it depends. It's, it's really, we, we see a robust demand there, so it's really a question of whether the supply will be normal or it will be, let's say, strictly under the UFLPA inspection, right? That will- That will decide what could be the size of U.S. market. It could be somewhere from 30 GW to even up to 50 GW. It really depends on the supply side. Thank you. Thank you. My last question is basically for the polysilicon supply correspondingly, because 12 GW approximately, you, you still need quite a lot of polysilicon, like, probably around, like, 20,000-30,000 tons. Have you locked in that supply already? The majority of product we have locked, the overseas capacity is 100, you know, 100,000 sorry, 10,000 metric tons, 100,000 metric tons, which can support, let's say, you know, I think roughly 50 GW. We take 20% market share from the, let's say, the poly supply side, we are, confident. As well as some of the overseas you know, capacity, we, we still have some, flexibility to increase the capacity. We're thinking, you know, we can achieve that. Thanks a lot. I, I've got a final question on A-share placement. Will that eventually lead to dilution of the U.S. share, U.S. shareholding? Yes, yes. If, you know, it's probably maybe 7% to 9% dilutions, but it's, it's not significant. We, we take,, the U.S., you know, has, 58%, you know, the shareholding of the A-share. Yep. If, if, let's assume 10%, you know, the maximum, maybe it should be lower. It's roughly $53, right? 5%, you know, the difference, the, the lower. Understood. Understood. Thanks a lot, for taking my question, and congratulations again for the great results. Thank you. Thank you. This does conclude our question and answer session and our conference for today. Thank you for participating. You may now disconnect.