Zhenyong Liu - Chairman and CEO Jing Hao - Chief Financial Officer Victor Kuo - ICR, IR Rene Jiang - ICR, IR

Hello, ladies and gentlemen. And welcome to the First Quarter 2015 Orient Paper Inc. 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. Zhenyong Liu, Orient Paper’s Chairman and Chief Executive Officer; and Ms. Jing Hao, the company’s Chief Financial Officer. Remarks from both Mr. Liu and Ms. Hao will be delivered in English by interpreters. Orient Paper announced its first quarter 2015 financial results via press release yesterday, which can be found on our company’s website at orientpaperinc.com. First, Mr. Liu will brief you on the company’s key operational highlights and corporate developments over the first quarter 2015 and then Ms. Hao will review the company’s financial results. After that, we will take questions. 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 facts in its announcement are forward-looking statements, including, but not limited to anticipated revenues from the corrugating medium paper, offset printing paper and digital photo paper business segments, the actions and initiatives of current and potential competitors, the company’s ability to introduce the new products, the company’s ability to implement capacity expansion, market acceptance of new products, general economic and business conditions, the ability to attract or retain qualified senior management personnel and research and 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 expectations, assumptions, estimates and projections about the company and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent or current events or circumstances or to changes in its expectation, 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 this expectation will turn out to be correct and investors are cautioned that the actual results may differ materially from the anticipated results. There is a presentation document featuring management’s prepared remarks and it’s now available for download from the company’s website at www.orientpaperinc.com. Please note that there will be discussions on non-GAAP financial measures or EBITDA or earnings before interest, taxes, depreciation or amortization. Please refer to our press release for a 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 now like to turn the call over to Mr. Liu. His comments will be delivered in English by Victor Kuo from ICR, the company’s Investor Relations firm. Please proceed.

Hello. This is Victor Kuo of ICR. I will deliver the English version of Mr. Liu’s prepared comments. Good morning and thank you for attending our earnings call. We are pleased to report our first quarter results as we experienced 15.2% revenue growth from our CMP products, largely due to the revenue contribution from our new Light Weight CMP products. Total revenue growth for the first quarter 2015 was only 2.9% because there were no sales from our digital photo paper production lines due to the production line relocation and our offset printing paper products experienced a decrease in sales volume due to a temporary interruption in production resulting from maintenance performed on one of our offset printing paper production lines in March 2015. During the quarter, we focused on execution of our manufacturing and sales operations while continuing to progress on the establishment of our new tissue paper production operations. As we announced earlier in the middle of April, we completed the installation of the tissue packaging equipment and have commenced trial production using base tissue paper source from third parties. We continue to see good progress and are on schedule to begin commercial production of our tissue paper products by early June. Additionally, we continue to focus on the relocation of our digital photo paper production lines. With both of these products expected to commence production in the second half of this year, we are very excited about our prospects in late 2015 and beyond and expect these products to be major drivers of growth for us in the years to come. Now, I will turn the call over to Ms. Hao, who will review our financial results.

Hello. I am Rene Jiang of ICR, the company’s Investor Relations firm. I will deliver the English version of Ms. Hao’s prepared remarks. Thank you everyone for being on the call. Before I begin, please remember that all figures are in U.S. dollars and all comparisons are year-over-year unless stated otherwise. Also, I will occasionally refer to specific production lines associated with various products. I will make clear to which product I am referring. To reference those, the numbering system for our production line is provided in our earnings press release and on slide number 18 of the earnings call presentation. Now, let’s look at our financial performance for the fourth quarter of 2015. Please turn to slide number seven. Total revenue was up 2.9% to $26.5 million as a result of the new revenue stream for our Light-weight CMP product. Turning to slide eight. The CMP segment generated sales of $19.7 million representing 74% of total revenue. $16.5 million of revenue was from our regular CMP product and $3.2 million was from our new Light-Weight CMP. Volume was up 17.5% to 53,271 tonnes, 8,500 of which was Light-Weight CMP. Average selling price or ASP for Regular CMP decreased 2.1% to $369 per tonne. ASP for Light-Weight CMP was $376 per tonne. The offset printing paper segment generated sales of $6.8 million, representing 25.7% of total revenue. Volume was 9,874 tonnes, down 9.1% due to a temporary interruption in production resulting from maintenance performed on the PM3 production lines in March 2015. ASP was $689 per tonne, up 1.6% from the prior year period. There were no digital photo paper sales during the quarter. Relocation of the digital photo paper production line remains on schedule to be completed in the second half of this year. Slide number 10 summarizes the progression of change in our revenue mix. Gross profit was $5 million compared to $4.7 million in the prior year period while gross margin was 18.8%, up from 18.1% in the prior year period. The improvement in margin was due to the production launch of Light-Weight CMP product, which is a higher margin product compared to our Regular CMP product. Income from operations was $3.3 million and operating margin was 12.4%, down from 14.6% a year ago. Net income was $2.1 million and net income margin was 7.9%, down from 9.8%. Basic and diluted earnings per share was, $0.10, compared to $0.14 for the corresponding period of 2014. Moving to slide 11, just look at the balance sheet and liquidity as of March 31, 2015. Cash equivalents was down 34.6% to $2.5 million, compared to $3.9 million at the end of 2014. Decrease in cash was mainly from cash used in operating activities, which was $2 million, compared to a net cash flow from operating activities of $7.8 million in the first quarter of 2014. Short-term debt was $22.4 million, including note payable of $10.1 million. Long-term debt was $15.5 million. Debt represents 23% of our total capitalization. We believe this is very manageable and is within a normal range for the domestic paper industry. Let me now turn the call back over to Mr. Liu who will update you on the progress we are making in our key capital project and offer some comments on certain industry conditions that could impact our results in the remainder of 2015.

Thank you. Slide 13 has our most recent photos related to the Tissue Paper Expansion Project. The construction of the office building, factories and warehouses at the Wei County sites remains on track and are in final stages. We completed the installation of the tissue paper packaging equipment, which functions independently from the waste tissue paper production line and have begun trial production using wastepaper sourced from third-parties. We now expect commercial production to launch by early June of 2015. On slide 14 you will find an update on the relocation of our digital photo paper production lines. You could change us through the country government zoning policy we were required to move these production lines to new a location right across the street from our Xushui Paper Mill, which we called as Xushui Mill Annex. The two production lines have already been disassembled and equipment is being transferred for installation and remains on schedule. We continue to expect production to resume in the second half of 2015. Finally, let me offer some comments on general industry conditions that could impact our results in the next several months. We continue to view the regulatory environment as favorable. The government is expected to continue pushing for industry efficiency and environmental protection. The Ministry of the Industry and Information Technology of China or MIIT is expected to continue reinforcing mandatory closure outdated paper manufacturing capacity in China, which we expect to help to keep ASPs for CMP and other packaging paper relatively stable. Looking at raw material costs, we had previously estimated at the end of 2014 that prices for owned corrugated cardboard or OCC will remain relatively stable throughout 2015. However, in January of 2015, Chinese customs repelled the green fest policy, which will limit the importation of solid waste contaminated shipments into China. As a result, OCC prices fell in the first quarter compared to the same period of last year. Meanwhile, recycled white scrap paper cost slightly went up. We expect that as demand for wood pulp and recycled white scrap paper increases in China, prices for white scrap paper may continue to increase. We expect prices for both OCC and recycled white paper to be somewhat volatile in the coming months. We are now ready for the question-and-answer session. Operator?

Thank you. [Operator Instructions] : :

There are no questions on the line at this time. I will now like to hand the call back to Ms. Rene Jiang. Please continue.

Thank you, Operator. In closing, we will like to reiterate our optimism for the remainder of 2015 and beyond. We will continue to focus on the timely execution of building out our new tissue paper product operations and on the relocation of our digital photo paper production line to ensure that we capitalize on these additional revenue streams to fuel our growth. If you have any additional questions, please contact us. We strive to answer all investor inquiries and invite you to address your questions to our Investor Relations contact at ir@orientpaperinc.com. This concludes our call today and we thank you all for listening in. Goodbye.

Thank you, ladies and gentlemen, that does conclude the call for today. Thank you for participating. You may all disconnect.