Zhenyong Liu - Chairman and Chief Executive Officer Winston Yen - Chief Financial Officer

Camilla Hempleman - Individual Investor

Good morning and good evening, ladies and gentlemen. Welcome to the Second Quarter 2013 Orient Paper Incorporated Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. With us today are Mr. Liu Zhenyong, Orient Paper’s Chairman and Chief Executive Officer; and Mr. Winston Yen, the company’s Chief Financial Officer. Orient Paper has announced its second quarter 2013 financial results through a press release earlier and is available on the company’s website at orientpaperinc.com. Mr. Liu will brief you on the company’s key highlights, operational and the corporate developments over the second quarter of 2013, and Mr. Yen will walk you through the company’s financial and business review, as well as the company’s outlook and guidance. After that, there will be a question-and-answer session. Before we begin, I would like to draw your attention to our Safe Harbor statement. This announcement contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to anticipated revenues from the digital photo paper business segment, the actions and initiatives of current and potential competitors, the company’s ability to introduce new products, the company’s ability to implement the planned capacity expansion of corrugating medium paper, market acceptance of new products, general, economic and business conditions, the ability to attract or retain qualified senior management, personnel and research and the development staff, and other risks detailed in the company’s filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current exceptions, assumptions, estimates, and projections about the companies and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances or to change in its expectations, except as maybe required by law. Although, the company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct and investors are cautioned that actual results may differ materially from the anticipated results. There is a presentation document featuring management’s prepared remarks and is now available for download from the company’s website at orientpaperinc.com. Please note that there will be discussions on non-GAAP financial measures or EBITDA or earnings before interest, taxes, depreciation, and amortization. Please refer to our press release for the complete reconciliation of EBITDA to net income. As a kind reminder, all numbers in our presentations are quoted in U.S. dollars and all comparisons refer to year-over-year comparisons unless otherwise stated. I would like to now turn the call over to Mr. Liu. Thank you. Please go ahead sir. Zhenyong Liu - Chairman and Chief Executive Officer: Good morning to our investors calling in today for our second quarter 2013 earnings presentation. For the second quarter 2013, we are pleased that Orion Paper reported improved profitability even though the economic environment remains challenging. This is due to the decline in raw material costs and production ramping up steadily from the previous quarter. Another achievement, we made in the second quarter is the $24 million financing we secured for the new household tissue paper business project. This financial arrangement reflects a credible rating of Orion Paper as a company especially in the midst of tightening credit conditions in China. And we will provide adequate working capital for the later stage of our expansion plan which is critical to drive our mid to long-term business growth. Rapid urbanization in Tier 3 and 4 cities represents valuable growth opportunities for Orion Paper to tap into these under penetrated markets and we are getting prepared for this. In the past months construction works at our new household tissue paper project in Wei County Economic Development Zone has been progressing and we are on schedule for the first production line to be ready by the end of next year’s second quarter. We are also pleased that our cash position has continued to improve further and we pride ourselves on the company’s ability to generate cash consistently and remain a competitive cost structure. Again in this difficult economic environment maintaining a healthy level of cash is important to businesses like ours. Finally, the company has just announced the sale of the HQ Compound and related properties yesterday which was approved by the Board of Directors. Our CFO, Winston Yen will cover details of the transaction later in today’s presentation. Going forward we remain strictly focused on delivering solid financial performance for our shareholders and we reiterate our commitment to meeting our 2013 guidance. I would now like to invite Winston to take you through the financial and business review and our business outlook before my interpreter returns to give you my closing remarks. Hello, Winston. Winston Yen - Chief Financial Officer: Alright, yes, thank you, Mr. Liu. So, please be reminded that all numbers are in U.S. dollars and all comparisons referred to year-over-year comparisons unless otherwise stated. The numbering system for our production lines is provided in our earnings press release and slide 27 of this presentation. So, first let’s look at the overall financial performance over Q2 of 2013, and please return to slide 7. Total revenue was $33 million, down 7% due to the suspension of operation of PM1 for modernization since the end of 2012 and suspension of night-time operation of our digital paper production since October last year. Gross profit was $6 million, up 5% while gross margin was 18.5%, up from 16.3%. Income from operations, were $5.2 million, up 2% and operating margin was 15.8% up from 14.4% a year ago. Net income was $3.7 million, up 1%. Net margin was 11%, up from 10%. And this translates to basic and diluted earnings per share of $0.02. So, now moving on to slide 8 on our cash position, as our Chairman, Mr. Liu pointed out, our cash position is higher. As of June 30, 2013, our cash and cash equivalents went up over 70% to $22.5 million compared to $13.1 million at the end of 2012. The net cash flow from operating activities somehow down 34% to $9 million, while investing cash flows was up 114% to $24 million. Maintaining our cash flow is very important to us as it allows company to fund our execution initiatives and business expansion in a credit tight environment in China. We now take a closer look at our product segment starting from CMP on slide 9. In Q2, we generated $21 million for this business segment taking up 62% of total revenue. Sales volumes were 55,000 tons and ASP was $374 per ton, up 1.4%. During this quarter, new production line, PM6, contributed for all of the CMP sold as PM1 has been suspended for modernization since the end of 2012. Turning to the next page, slide 10, on our offset printing paper segment. In Q2, revenue was $11 million, representing 34% of total revenue. Sales volumes were 16,400 tons and ASP declined by 6% to $686 per ton. Slide 11 provides a chart of our revenue mix, which shows CMP increasing its contribution quarter-by-quarter representing 62.3% for Q2 revenues, digital photo paper decreasing to only 4% in the second quarter. As explained previously, night-time operations at our digital photo paper facility has been curtailed since Q4 of 2012 by increasing restrictions from government, urban planning officials due to their growing presence of residential buildings in the neighborhood. And we will now move on to discussion of our operational and business updates, please turn to slide 13 for an update of our PM6 ramp-up. After the three-week suspension resulting from the countywide government environment through inspection in the first quarter, we have worked on steadily ramping up PM6. The average utilization rate in the second quarter of 2013 was 61.1% compared to 36.8% in the previous quarter. The company we are continuing to focus on increasing the ramp up of PM6 in the second half of 2013 to achieve our goal of an average utilization rate of 70% for the fiscal 2013. We’ll now move on to slide 14. In the second quarter we announced that Orion Paper entry into a sales lease back financing arrangement with China National Foreign Trade Financial & Leasing Company Limited for a total amount of RMB150 million or $24 million. All proceeds from the financing arrangement will be used to finance the company’s business expansion into tissue paper segment including the constructions of the two production lines and other infrastructure of the paper mill in the Wei County industrial park. The financing arrangement involves certain of our paper machines and production facilities. As part of the arrangement, the company will sell and lease back the production facility for a three year term. The aggregate rental payable during the three year term is approximately $26.4 million with an implicit interest rate of 6.15% per annum and up from one-time leasing service fee of 5.55%. Under the terms of the arrangement, the ownership of the production line will be transferred back to the company for a nominal fee of approximately $2400 at the end of the three-year term. So, for purposes of financial statement Orion Paper is deemed to own all the production facilities during the three-year term and will continue to operate its business as usual. No gain or loss is recognized by the company as a result of the financing arrangement. Next, let us look at slide 15 for the household and tissue business expansion project. We started building the factory and other infrastructures for the household and tissue paper production facilities located in the Wei County Economic Development Zone in Hebei Province since February this year after the Lunar New Year and Spring Break. Despite heavy rains in the second quarter, we are pleased that construction has still kept on schedule with the factory building expected to be ready by the end of the third quarter for the installation of PM8. Installation of PM8 which is the first 15,000 tons per year production line is targeted for the completion by the end of Q2 in 2014. We also expect to start the construction of the second production line PM9 by the end of this year. We have also included the latest progress photographs from our Wei County site in slide 16 for your reference. Now, we will like to move to slide 18 to update you on the recent sale of the headquarters compound. Yesterday, we announced a press release that the Board of Directors have approved the sale of the land use rights of the headquarters compound the office building and all industry used buildings and three employee dormitory buildings located within headquarter compound at Juli Road to Hebei Fangsheng Real Estate Development Company Limited on August 7, 2013, for a total a sales price of $8.23 million. And Hebei Fangsheng is a qualified real estate development company in China and it’s wholly owned by Mr. Liu, our Chairman and CEO and his family. The sale was conducted on an arm’s length basis and was reviewed by Orion Paper’s audit committee and then approved by the company’s Board of Directors. Mr. Liu did not participate in the meeting of the Directors at which this decision was taken. When the transaction was initially proposed by Hebei Fangsheng, the Board of Directors determined that because of Mr. Liu’s involvement, it would constitute a related-party transaction. Therefore, the Board and Audit Committee obtained the advice of independent legal and real estate professionals to assist in assessing the company’s options, including available alternatives, if any to the transaction and in the evaluation of the terms and conditions thereof. As we have updated the market earlier this year in March, government authorities in Xushui County, where our Headquarters Compound is located, approved a new urban development plan to rezoning properties that were previously used for industrial purposes to residential use. Since the development plan was announced, the company has evaluated its options to determine the most effective and least disruptive way to comply with the plan’s requirements. Among the alternatives investigated were number one, having Orient Paper establish a land development subsidiary to develop the Headquarters Compound by itself, and number two, attempting to solicit proposals from real estate development companies that may be prepared to purchase the Headquarters Compound from the company and convert the land and buildings to residential use, and number three, surrendering the company’s land use rights to the local governments. And after investigation and analysis of these various options available, the Board of Directors determined its meeting on August 7, 2013, that the proposal of Hebei Fangsheng was the most attractive available alternative and directed the officers of the company to proceed with the transaction. Details of the sales price determination and valuation obtained by the appraisals are contained in our press release. According to the terms of the agreement, Hebei Fangsheng agrees to lease the industrial building back to Orient Paper at a annual rental of RMB1 million or approximately $162,000 for a term of up to 3 years, while the company explores different options to relocate its office and digital photo paper workshop. To facilitate management’s original plan of using the Dormitories as an incentive to provide affordable housing and ownership opportunities for our qualified employees, Hebei Fangsheng will also sell all 132 units to qualified employees and its acquisition price, which is the company’s construction cost of approximately $4.29 million. So, now let’s turn to slide 19, benefits of the transaction, first and foremost, as the relocation is mandatory, the transaction allows Orient Paper to continue its operation in the current location for a maximum of three years while looking for a new location. Second, it allows the management team to concentrate on company’s core business without being distracted by immediate rezoning issues and property development risks. At the same time, the proceeds would represent another injection of capital into the company’s business expansion amid the current tight credit situation in China. The net proceeds from the sale at above $7.84 million are expected to be used to fund the company’s household and tissue paper business expansion. We now turn to slide 20 for another update. And this is about our PM1 modernization plan. As announced earlier, we have voluntarily shutdown our legacy production line, PM1, as part of our facility upgrade plan. The modernization aims to transform PM1 into a more energy-efficient production line producing higher quality and higher profit margin products. The management is valuating the feasibility of different options for PM1, including the possibility of moving the location of the production line from Baoding to the Wei County industrial park, which is the site of our new tissue paper production facilities. In terms of investors’ communications, we will continue to work alongside our IR advisors to continue building the company’s profile and expand outreach to investors. Regarding outlook and guidance, please turn to slide 22. While the current economic slowdown is not expected to improve anytime soon, we expect demand for packaging paper to recover slightly from last year’s level as we have seen in the first half of this year. However, if we share the view like most industry analysts that paper ASPs are not likely to recover significantly for the rest of the year. At the first sight, raw materials prices have seen a correction, but are expected to be volatile in the second half due to the implementation of the government’s new Green Fence policy which has raised the import standards for all recycled paper. In terms of the regulatory environment, the government expected to continue pushing for industry efficiency and environmental protection. It’s rightly anticipated that the annual mandatory closure of paper capacity for 2013 would exceed the earlier target plan announced this April after the Ministry of Industry and Information Technology released the main list of the first batch of the closure recently in July. We also expect increasingly rigorous environmental monitoring for the industry as well. As a leading player in the fragmented North China packaging paper segment, Orient Paper is committed to both efficiency and environmental conservation, and we believe that we are well-positioned to take the advantage of the mandatory closures to increase market share and further establish our leadership in the industry consolidation. For the second half of 2013, we are maintaining our guidance on most of the financial KPIs or metrics, including net income and earnings per share for the full year of 2013. So, revenues for the full year are expected to be in the range of between $170 million and $129 million, gross profit between $17 million and $19 million, net income between $9 million and $10 million, while basic and diluted earnings per share to be between $0.51 and $0.56. Now, Mr. Liu will give us his concluding remarks for our presentation. He will speak through his interpreter. Zhenyong Liu - Chairman and Chief Executive Officer: Thank you, Winston. Let us now move on to slide 23. In closing, I would like to share my thoughts with all of you. Early on last month, we received a long way to good news that SEC has completed their investigation as the Orient Paper and recommended no action be taken by the Commission. Like myself and the rest of our management team who have preserved the storms in the past few years, I am sure all our shareholders are happy to hear of this news. Secondly, with the sale of our headquarter compound properties approved by the Board of Directors, I am pleased that the company can go forward to execute our business plan and not be encumbered by this reasoning issue, which has taken up much of our management’s time, attention for the past months. With all these behind us, we are very happy to proceed with 100% attention now to focus on our strategic imperatives and to deliver good results for the second half. As we have secured the financial resources to support our business expansion into the tissue paper segment, we will continue construction at our Wei County site for our first tissue paper production line, PM8. We will also continue to ramp up the utilization of PM6 targeting annual production of 220,000 to 240,000 tons for fiscal 2013. At the same time, we need to explore the feasibility and determine the best option for the modernization program of PM1. With a increasingly strict regulatory environment, the company will need to upgrade and enhance our processes and systems to maintain our competitiveness and strengthen our leadership position. Last, but not least, we will work to improve our competitive cost base and maintain strong cash flows to support our investments, which are critical to our sustainable growth in the phase of this challenging operating environment. This ends our prepared remarks. We now would like to open the call for your questions. Operator, please.

Thank you. We will now open the floor for questions. (Operator Instructions) The first question comes from the line of Camilla Hempleman, who is an Individual Investor. Please ask your question. Camilla Hempleman - Individual Investor: Hello, Winston. Good morning. I have a couple of quick questions, actually two, and they mainly deal with the cash position of the company which congratulations is looking very good. It sounds like you have about $24 million or so from financing that’s available. Has any of that been tapped yet? Have you used that money yet or is that still waiting in the wings so to speak to be used towards that latter end of the Wei County project or has some of that $24 million already been tapped?

Right. Since we signed the financing agreement with the leasing company, we have up until today, appropriate maybe over $20 million for the Wei County project. So, I would assume, I mean, if you take all of the payments that we made since the signing of the lease agreement, then I would say that most of the proceeds have been used at the construction of the Wei County tissue paper project. Camilla Hempleman - Individual Investor: So, the remainder of the cost for the Wei County tissue paper plant will primarily be coming from cash from operations, is that correct?

That is correct. If you look at our capital expenditure plan for this year, we will of course the priority is to complete the Wei County tissue paper facility. And of course, we also plan to renovate our PM1. So, I believe that between these two projects, we will use the proceeds from the sale leaseback and also the proceeds of the sale of the land use rights and the industrial buildings at our Headquarters Compound. And of course, the difference between these financial sources and a total CapEx will be supported by our cash flow from business operations. Camilla Hempleman - Individual Investor: And do you have a guesstimate kind of a rough idea of what that grand total – cost of – the total cost of building the TP lines, and then also renovating PM1 kind of your projects that you have going right now?

We previously announced the budget for the Wei County industrial part to be around $43 million. And we also estimated the cost of renovating or the modernization of PM1 to be about $20 million, but I have to say that since we are evaluating a lot of different options right now, for example, we have to relocate the digital photo paper and possibly even PM1 could be relocated from the current site to Wei County. This budget has been changed, but I believe right now, we may have to adjust up or down for each of these projects, but overall I believe it should be safe for us to look at a total capital expenditure of $43 million plus $20 million just between these two projects. And of course, we expect these two projects to be completely finished by the third quarter of 2013. Camilla Hempleman - Individual Investor: Okay. And then I guess my follow-on question is just as a shareholder, thank you for instituting a dividend, I think it’s a small one, but it’s step in the right direction as far as shareholders are concerned. And just that do you have any idea at what point you might be able to increase – start to increase that dividend or make some other type of just investment in the shares of the company like a share buyback something along those lines?

Right, I know, many of our investors have been recommending that we increased the dividend payout rates. Since we now have successfully raised more cash from debt financing transactions. But I have to say that the decision to pay dividend or to adjust dividend policy belongs to our Board of Directors. And we are now working or preparing for the 2013 Annual Shareholder Meeting to take place perhaps in October. And I believe the Board of Directors will convene right around the time of the Annual Shareholder Meeting. And I believe that’s the time when the issue of our dividend policy will be discussed among the directors. But as a member of the management, my personnel view is that even though we have increased cash in hand at this point, but we really have to evaluate our cash flow condition very carefully in the next 12 to 18 months. As many of you know that China’s government has a very different policy toward its fiscal discipline right now. Just a few months ago, China had a credit crunch and that has significantly affected the borrowing power of many, but probably enterprises. So, I would have to say that I’d expect the Board Director would have to consider the credit situation in China among other considerations when they make the dividend policy decision for 2013. Camilla Hempleman - Individual Investor: Thank you. I don’t have any other questions.

Thank you

Thank you very much Camilla.

The next question comes from the line of (John Bach of Bach Capital). Please ask your question.

Hello this question is for Mr Yen. As I recall the original plans for renovation of PM1 completion were for, I think it was second half of this year. And it seems from the comments that that plan has been pushed out a bit further, I just want to confirm that the guidance you’ve issued is not including PM1 coming online this year? And I have the follow up question.

Thank you for the question John. And I am a little bit surprised that you have the impression that PM1 was supposed to be completed during this year, I believe we in all of our previous communications we had consistently said that the target line sometimes between the second quarter and third quarter or even the fourth quarter of 2014. But to answer your question no we do not take into consideration any profit or revenue contributed by PM1 for 2013 in our financial model where we delivered the guidance for this year.

Thank you. I was in the impression of 3Q, ‘13 but it could have been wrong. My next question is with regards to PM4 and PM5, I mean obviously there has been some re-zoning of the land with respect to where 4 and 5 reside. Given the recent deal of the sale lease back do we – what should we expect for the volumes of PM4 and PM5 going forward, is it realistic to expect sort of the similar volumes that we see coming out of PM4 and PM5 for the next there years or how – what is I guess what I am asking is what’s the priority with respect to management in relocating PM4 and PM5 so that the they can continue night time operations?

Well, PM4 and PM5, if we have the option we certainly will – would like to relocate these two production lines to a new location, but relocating industrial operations especially something like the digital photo paper operation is never easy to move to production line, it itself is not that much complicated. However, we – if you’ve ever visited our facility you know that that is right at the end of the production line we have in area that is totally closed, that area is where the engineers worked on the preparation of chemicals for the coating of digital photo paper. That facility – to relocate that facility, the chemical preparation station takes a lot of time. So, I think the only thing that I can say right now is that we are evaluating a lot of options as to where is the best location for PM4 and PM5 to be reassembled and to be produced. Of course logically Wei County is one option and perhaps moving digital photo paper lines to the – to our manned production to our Xushui paper mill is also a possible option. But at this time we are still working with the specialists and our engineers to make the final position. And of course the purpose of that is for us to be able to get back to the original level of production before government start to put restrictions on our production activity. I mean even though digital photo paper does not constitute a large portion of our revenue and net income, but operating from the current location does have a lot of restrictions which we want to get rid of. So, I guess we will keep evaluating the options and we will come out to report to our investors where we make a decision.

So, is it realistic to expect the current level of volumes say in all through Fiscal ’14?

I don’t think I have the crystal ball to say for how long we will see reduce our output at PM4 and PM5, but at least in my fresh model we don’t really forecast PM4 and PM5 to get back to the previous level of production and kill after 2014.

That’s very helpful. Thank you very much. I will get back in line.

Thank you.

Thank you. And your next question comes from the line of (indiscernible) who is a Private Investor. Please ask your question.

Good morning Winston.

Good morning (indiscernible).

How you doing? Just going through the numbers I think in your presentation you were talking about the cash balance has increased significantly in the past six months, but if you do cash net of debt effectively we’ve gone from our – we’ve gone to a position where the debt is now significantly more than cash which was not the case till the end of last year. So, it seems like we are investing more and more into building up the business, so with that premise, my question was you’ve spoken about these two CapEx programs that you have the PM8 and the PM1 line, what else do you anticipate might be in the pipeline for this company which is being investing heavily for the last 3 to 4 years? And as such the real free cash flow which would be when you don’t have any more CapEx to undertake has been illusive for the last 3 or 4 years. I am trying to understand is there – with these two projects are you guys done or would you continue to keep on investing in your business? And well, we might feel on the top line that that is the last cash balance, but the net cash is not really available to do anything shareholder friendly as of now.

Certainly I previously mentioned two CapEx projects, which is PM8 of the tissue paper and the renovation of PM1. In the next 12 to 18 months I believe we will start the construction of our PM9 which is the second tissue paper production line. So, but the good thing is we are spending money right now to build not only the tissue paper production line at Wei County the industrial park, we are also building all of the infrastructures to support all of these future expansion plans right there. So, as we move to build PM9, I believe that the capital expenditure requirement or the incremental capital expenditure requirement will probably go down would not be a significant as we have to deal with right now. So, but beyond PM8, I do not know of anything else in our pipeline certainly in China right now allow people are getting concerned about overcapacity in many industries. I think increasingly people are saying paper industry is yet another sector of the economy where overcapacity might create some real problems. So, I believe a lot of paper manufactures are very careful in implementing to expansion plans and I think that’s very interesting. We certainly what we’ll like to make sure that the tissue paper project get a very good start and of course I think the renovation of PM1 is also a priority, but we now don’t have anything new in the pipeline at least before the end of 2014.

Great. If I may follow-up just to make sure I got this right. As of now by end of 2014, you should be able to finish your PM line and anything that you need to do with PM1. So, from 2015 onwards, we could start analyzing this company and looking at this company as someone which throws out meaningful amount of free cash flow, which probably we have used first to pay down all the debt that you have accumulated over past 3, 4 years, and then it becomes a steady-state business, which is easy to value and understand in terms of your ability to do whatever is required in terms of distribution to shareholders, whether it’s dividends or share buybacks or anything else. Is that a fair statement or we might be looking at 2016/2017 before you guys reached that stage of steady cash flow which is more than you CapEx?

Well, I think that’s also my assumptions in my own financial model that after 2014, we really should be done with the capital expenditure projects. And starting with 2015, we should be able to slowdown the expansion and looking at a positive cash flow situation from the operation. And of course right now, the PM9 is being scheduled to launch between the end of this year and the beginning of the next year. I’m not sure if we will stick to that plan, but certainly PM9 would definitely be launched sometime during no later than may be the first half of 2014. So, going into 2015, we might have to – we may have the completion of PM8 and PM1 with PM9 still being worked on, but certainly I don’t have anything new after PM9 is completed.

Okay, that’s helpful. And how about the relocation to the new headquarters if there is any CapEx involve with that, would that also be a 2014 event or that could get pushed into a little bit?

That could be a 2014 event. If we do build a new office, it could be on the land that we acquired rather across the street from our Xushui paper mill or it could be in Wei County. So, we have not made a final decision yet or who knows maybe we will figure out the way with the county government to try to keep the office building from being converted. That way we will probably still choose to stay where we are for all of the admin staffs. But relatively speaking, the construction of office building is much smaller the amount of money that, that is involved is much smaller than the construction of the new production line.

Okay.

Thank you. The next question is a follow-up question from the line of (John Bach of Bach Capital). Please ask your question.

Hi. I didn’t expect to come on so soon. I have a follow-up question. You spoke a little bit, you spoke a lot actually on CapEx, I was wondering if you can give some hard numbers for CapEx guidance for fiscal ‘13. I know that there is supposed to be maybe about $60 million coming by through say third quarter ‘14. I was wondering how much of that hits this year as opposed next year? Thanks.

Okay. For fiscal ‘13, we have $43 million CapEx budgeted for the Wei County project and we have in our $20 million for the renovation of PM1. So, toward the Wei County project, we have put in probably $26 million, $27 million. So, we have less than $20 million for the Wei County project to be paid and then the $20 million for PM1 is still not spend. So, I would say just pertaining to the two projects, we will probably put in another $35 million to $40 million. And as to how much of that $35 million to $40 million is for the rest of the 2013 and how much is that is in 2014. I think that depends on when we can start officially the renovation project of the PM1 renovation. Certainly, the PM8 or the Wei County project will take that the first cash available from the company. So, I would assume that the $15 million to $20 million CapEx that has not been paid for Wei County to be paid maybe by the end of this year. Certain part of that $20 million for PM1 renovation could be spent by the end of 2013, but right now, judging on the issues that we have to deal with, maybe a majority of the PM1 capital expenditure budget will fall in 2014.

Great. Also this is the last exact question, but can you just give your views of on the ground, what the credit environment is like after the sort of credit scare in June, what is it like to secure credit, what is it say about your operational capacity to actually get these deals done in this environment? Thank you.

Right. Actually we have a firsthand experience of the credit crunch in June, because as I remember correctly, the credit crunch first came to China at the end of June this year. And we actually had one of the loans I believe that’s a long-term loan that we had with a local credit union that was up for renewal during the month of June of this year. So, it actually of course, we renewed the loan in July, but it actually took us quite a long time to negotiate with the bank and to make sure that bank or the creditor has the funds to renew this loan. And going forward, I would imagine that every time we have to renew a loan, the bank might be asking more questions. They might be more conscientious about our financial position. And I guess they would probably have to look at their own lending policy, which has a lot to do with what the government policy currently is at that time. So, I guess, it’s really hard to predict when it come off in China when it comes to borrowing from the bank, but we certainly believe that it’s going to be a lot more difficult going forward. That said I don’t believe that we have to really worry about any of our loan not getting renewed. I think we have very good working relationship with the banks that we deal with which are ICBC and our local credit union. And also we hope our relationship with the China foreign trade financial leasing, which is the leasing company that is $24 million sale leaseback for us in July. We fully expect this relationship to be long-term. So, right now, even though the credit we have to closely monitor the credit situation in China, but I do not believe that we are in danger of any difficulty getting any new loans financed by the banks.

Thank you. Thank you for that. And the final question I promise is I was wondering if you knew what Chairman Liu’s thoughts were on with respect to share buybacks as opposed to dividends or in addition to dividends, especially considering that you are at a current run rate of about say $1 million a year or just shy of $1 million with respect to dividends and that represents a current levels about 2.5% of market cap. I mean, it seems like compared to a lot of other companies that’s a very large number as a percentage of market capital. And if you just run some of the numbers with respect to some assumptions of share price and accretive value, you get that – you made up in about three years and anything after three years is (indiscernible). I was wondering what his thoughts were on those numbers and what the general feeling of the board is in your submission? Thank you.

I do not believe I can speak for our board on this issue. And as I had explained the board will probably be convened in October when we hold the Annual Shareholder Meeting, and I fully expect them to discuss this issue or to review the issue of the pros and cons of paying dividend versus doing a share buyback. So, before that, I just believe that I can stipulate or I could say anything when we are or the other. But what I can do is I can forward the question to some of our board members and see if they have any thoughts about this. And so hopefully we will if they will be able to get a decision prior to the October meeting, maybe we will come out and announced the news, but right now, I just don’t have any information that I can disclose at this time.

Thank you so much. Great job this quarter. Thank you very much.

Thank you.

Thank you. And ladies and gentlemen, we have now come to the end of the question-and-answer session. I would like to hand the call back to Mr. Winston Yen, CFO of Orient Paper Inc. for closing remarks. Thank you. Please go ahead, sir. Winston Yen - Chief Financial Officer: Thanks, operator. And we would like to thank you all for joining the conference call. We invite investors to contact us if you have any further questions, please feel free to contact our IR team at ir@orientpaperinc.com. And we wish everyone a good day. Thank you.

Ladies and gentlemen, this concludes our presentation. Thank you for your participation. You may all now disconnect. Have a great day.