Zhenyong Liu - Chairman and Chief Executive Officer Jing Hao - Chief Financial Officer

Q -

Hello, ladies and gentlemen, and welcome to participate in Orient Paper’s Second Quarter of 2016 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in listen-only mode. Joining 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 second quarter 2016 financial results via press release yesterday, which can be found on the Company’s website at www.orientpaperinc.com. First, Mr. Liu will brief you on Company’s key operational highlights over the second quarter of 2016, and then Ms. Hao will review the Company’s financial results. Before we start, I would like to draw your attention to our Safe Harbor statement. Management’s prepared remarks contain forward-looking statements within the meaning of Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts and its announcement are forward-looking statements, including, but not limited to anticipated revenues from the corrugating medium paper, tissue 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 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 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, and Amortization. Please refer to our press release for a complete reconciliation of EBITDA to net income. As a kind reminder, all numbers in our presentation are quoted in U.S. dollars and all comparisons refers to year-over-year comparisons unless otherwise stated. I’ll like to turn the call over to Mr. Liu. His comments will be delivered in English by Tony Tian from Weitian Investor Relations. Ms. Tian, please go ahead.

Thank you, operator, and good morning, everyone. Thanks for joining our second quarter 2016 earnings conference call. The overall business environment remained challenging for us during the second quarter of 2016, as China’s economy growth continued to slow down and the Renminbi depreciation against the U.S. dollar as a result or total revenue were down 8% compared with the same period of last year. And some highlights for the second quarter sales of tissue paper products remain solid and generated $1.5 million in revenues. Sales volume of offset printing paper also increased both sequentially and year-over-year. Looking ahead the macroeconomic environment and the state of the paper industry in China will continue to have a significant impact on our financial performance. We expect that our tissue product segment will continued to experience strong growth. Now I’ll turn the call over to CFO, Ms. Jing Hao, who will review and comment on the second quarter financial results. Her comments will be delivered in English by my colleague Tina Xiao. Tina please go ahead.

Thank you, Tony, and thanks everyone for being on the call. Next on behalf of the management team I will summarize some key financial results for the second quarter of 2016. Also, I will occasionally refer to specific production lines associated with various products. I will make clear to which products I am referring to. For reference though, the numbering system for our operation lines is provided in our earnings press release on the Slide number 17 of the earnings call presentation. Now let’s look at our financial performance for the second quarter of 2016. Please turn to Slide number 7. For the second quarter of 2016, total revenue decreased 8% to $38 million due to the decreasing sales of CMP and was partially offset by increasing sales of tissue paper products and digital photo paper. Turning to Slide number 8, for the second quarter of 2016, the CMP segments including both regular CMP and light-weight CMP generated revenue of $25.8 million representing 67.8% of total revenue. $21.5 million of revenue was from our regular CMP products and $4.3 million was from light-weight CMP. Volume for CMP segment decreased by 3.8% to 78,487 tonnes of which 65,620 tonnes was regular CMP and 12,867 tonnes was light-weight CMP. Average selling price or ASP for regular CMP decreased by 13.2% to $327 per tonne, while ASP for light-weight CMP decreased 13% to $334 per tonne. Turning to Slide number 9, for the second quarter of 2016 our Offset Printing Paper segment generated revenue of $10.4 million representing 27.5% of total revenues. We shipped 15,984 tonnes offset printing paper in the second quarter, increased 6.7% from the same period last year. Average selling price for offset printing paper also decreased slightly by 6.3% to $654 per tonne. For the second quarter of 2016, Tissue Paper segment generated sales of $1.5 million. Volume of tissue paper was 1,194 tonnes and ASP was $1,250 per tonne. For the second quarter of 2016 Digital Photo Paper segment generated revenue of approximately $0.3 million or 0.8% of total revenues. During the second quarter, we shipped 160 tonnes of digital photo paper. ASP for Digital Photo Paper segment was $1,793 per tonne. Slide number 10, summarizes the changes in our revenue mix. For the second quarter of 2016, cost of sales increased by $0.3 million to $31.1 million leading to gross profit of $6.9 million, a decrease from last year and gross margin of 18.1% decreased by 7.3 percentage points from last year. For the second quarter 2016, SG&A expenses was $2.7 million compared to $1.8 million for the same period of last year. The increase was primarily due to the increase in the depreciation expenses for our temporarily PPE and our new tissue paper plant in Wei County. For the second quarter of 2016, income from operations was $4.2 million compared to $8.6 million for the same period of last year. Operating margin was 11% compared to 21% for the same period of last year. For the second quarter of 2016, net income was $2.6 million or $0.12 per diluted share for the second quarter of 2016. This compared to net income of $5.6 million or $0.28 per basic and diluted share for the same period of last year. For the second quarter of 2016, EBITDA decreased by $3.3 million to $8 million from $11.3 million for the same period of last year. Now let’s shift gear to year-to-date financial results. For the six months ended June 30, 2016 total revenue decreased 2.8% to $65.9 million due to the decrease in sales of regular CMP in the second quarter and was partially offset by increase in sales of tissue paper products and digital photo paper. Turning to Slide number 8, for the six months ended June 30, 2016, the CMP segments including both regular CMP and light-weight CMP generated revenue of $44.6 million representing 67.7% of total revenue. $37.4 million of revenue was from our regular CMP products and $7.3 million was from light-weight CMP. Volumes for CMP segment increased by 1.3% to 136,487 tonnes of which 114,622 tonnes was regular CMP and 21,865 tonnes was light-weight CMP. ASP for regular CMP decreased by 12.8% to $326 per tonne while ASP for light-weight CMP also increased by 12.6% to $333 per tonne. Turning to Slide number 9, for the six months ended June 30, 2016 our Offset Printing Paper segment generated revenue of $17.6 million representing 26.7% of total revenue. We shipped 26,869 tonnes offset printing paper for the six months ended June 30, 2015, increased 8.1% from the same period of last year, average selling price for offset printing paper decreased slightly by 5.9% to $654 per tonne. For the six months ended June 30, 2016 Tissue Paper segment generated sales of $3.1 million. Volume of tissue paper was 2,461 tonnes and ASP was $1,254 per tonne. For the six months ended June 30, 2016 Digital Photo Paper segment generated revenue of approximately $0.6 million or 0.9% of total revenues. In October 2014, we shutdown and disabled our digital photo paper products facility for the relocation and mandated by the local government to a new workshop that we built across the street from our main production base, Xushui Paper Mill. We completed the relocation and resumed commercial production of digital photo paper in August 2015. In June 2016, we shutdown the production due to the market contraction and we expect that our digital photo paper production will remain suspended for the rest of 2016. For the six months ended June 30, 2016 we shipped 344 tonnes of digital photo paper. ASP for digital photo paper segment was $1,795 per tonne. Slide number 10 summarizes the changes in our revenue mix. For the six months ended June 30, 2016 cost of sales increased by $2.9 million to $55.3 million leading to gross profit of $10.7 million, a decrease from last year and gross margin of 16.2% decreased by 6.7 percentage points from the last year. For the six months ended June 30, 2016, SG&A expense was $7.1 million compared to $3.5 million for the same period of last year. The increase was primarily due to the increase in the depreciation expense for our temporary PPE at our new tissue paper plants in Wei County and 1,133,916 shares of common stock granted under compensatory incentive plans valued at $1.4 million. For the six months ended June 30, 2016, income from operations was $3.6 million compared to income from operations of $11.9 million for the same period of last year. Operating margin was 5.4% compared to 17.6% for the same period last year. For the six months ended June 30, 2016, net income was $1.2 million or $0.06 per basis and diluted share for the six months ended June 30, 2016. This compared to net income of $7.7 million or $0.38 per basic and diluted share for the same period of last year. For the six months ended June 30, 2016, EBITDA decreased by $5.8 million to $11.6 million from $17.4 million for the same period of last year. Moving to Slide number 19, let’s look at the balance sheet and liquidity. As of June 30, 2016, the Company had cash and cash equivalent, short-term debt, current obligations and capital lease, long-term debt and long-term obligation and capital lease of $4 million, $16.7 million, $9.5 million, $12.6 million respectively. This compared to $2.6 million, $28.1 million, $6.9 million, $19 million, and $3.2 million respectively at the end of 2015. Slide number 20, reflects our operation cash flow. Net cash used in operating activities was $0.8 million for the six months ended June 30, 2016, compared to net cash provided by operating activities of $6.4 million for the same period of last year. Net cash used in investing activities was $2.1 million for the six months ended June 30, 2016 compared to $5.9 million for the same period of last year. Net cash provided by financial activities was $4.4 million for the six months ended June 30, 2016 compared to net cash used in financing activities of $2.2 million for the same period of last year. If you have any questions regarding the earnings press release and earnings results, please contact us through emails at ir@orientpaperinc.com, management will respond to your questions through emails as soon as possible. Operator, please go ahead. Q -:

Thank you for attending Orient Paper’s second quarter 2016 earnings conference call. This concludes our call today. And we thank you all for listening. Good bye.