Hello, ladies and gentlemen, and welcome to participate in IT Tech Packaging's Second Quarter 2019 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. Joining us today are Mr. Zhenyong Liu, IT Tech Packaging'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. IT Tech Packaging announced its second quarter 2019 financial results via press release yesterday, which can be found on the Company's website at www.itpackaging.cn. First, Mr. Liu will brief you on the Company's key operational highlights over the second quarter 2019, 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 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, 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 obligations to update forward-looking statements to reflect subsequent or current events or circumstances or to changes in its expectations except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that this 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 it is now available for download from the Company's website at www.itpackaging.cn. Please note that there will be discussions on non-GAAP financial measure 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 refer to year-over-year comparisons unless otherwise stated. I'd like to turn the call over to Mr. Liu. His comments will be delivered in English by Dan McCarron from Weitian Investor Relations. Mr. McCarron, please go ahead.

Thank you, operator, and good morning, everyone. Thanks for joining our second quarter 2019 earnings conference call. Our second quarter 2019 results highlighted continued recovery of our business as we managed to grow our top line by 1.4% and made a successful turnaround. Despite continued downward trend in ASPs that offset the increase in sales, volume for both CMP and offset printing paper, our second quarter 2019 recorded sales volume of 70,389 tons, an increase of 33% year-over-year, reached the highest level since our first quarter of 2017. Thanks to solid combination, contribution from offset printing paper products and tissue paper products that we commenced production at the end of 2018. Looking ahead, we expect the market demand in ASPs for our paper products will be stable in the upcoming quarters. On June 25, 2019, Dongfang Paper the major operating entity of the company entered into an acquisition agreement with Hebei Tengsheng Paper Co. Ltd. And Dongfang Paper shall acquire 100% equity interest in Tengsheng Paper and all rights titled and interest in to all assets owned by Tengsheng Paper for total consideration of approximately $47 million. Upon the completion of the acquisition, the Company’s PM8 production line will be transferred to Tengsheng Paper as a wholly-owned subsidiary of Dongfang Paper. And Dongfang Paper will hold this on manufacturing and distribution of tissue paper in the future. We believe Tengsheng Paper will optimize a value chain in the paper industry and this synergy will help the Company reduce cost of sales, improve profit margins, and develop more flexible pricing strategies. The acquisition of Tengsheng Paper shows the company's confidence in the prospect of Chinese tissue paper market and we believe it paves the way for the company to further penetrate into the tissue paper market and improve our market share in the North China region. Now I will turn the call over to our CFO, Ms. Jing Hao, who will review the comment of the fourth quarter (sic) [second quarter ] financial results. Her comments will be delivered in English by my colleague, Janice Wang. Janice, please go ahead.

Thanks, Dan 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 2019. Also I will occasionally refer to specific production lines associated with various products. I will make clear which products I am referring to. For reference, the numbering system for our production lines is provided on Slide number 17. Now let's look at our financial performance for the second quarter of '19 -- of 2019. Please turn to Slide number 7. For the second quarter of 2019, total revenue increased 1.4% to $33.6 million due to the increase in sales of volume of CMP products, offset printing paper and tissue paper products, partially offset by the decrease in ASP of both CMP products and offset printing paper. Turning to Slide 8. For the second quarter of 2019, the CMP segment, including both regular CMP and Light-Weight CMP, generated revenue of $26.2 million, representing 77.9% of total revenue. To any point $9 million of revenue was from our regular CMP products and $5.3 million was from Light-Weight CMP. CMP segment volume increased by 26% to 60,576 tonnes, of which 47,994 tonnes was regular CMP and 20,582 tonnes were Light-Weight CMP. Average selling price or ASP for regular CMP decreased by 28% to $435 per tonne, and ASP for Light-Weight CMP decreased 28.1% to $422 per tonne. Turning to Slide 9. For the second quarter of 2019, our Offset Printing Paper segment generated revenue of $6.2 million, representing 18.6% of total revenue. Offset Printing Paper segment volume increased by 74.3% to 8,559 tonnes. Average selling price or ASP for Offset Printing Paper decreased by of 13.4% to 729 per tonne compared to 4,911 tonnes at an ASP of $861 per tonne in the same period last year. We resumed the production of Offset Printing Paper in this April and expect continued revenue stream from this segment in the third quarter of 2019. Turning to Slide 10. We recognized the revenue of $1.2 million from tissue paper products for the second quarter of 2019, resulting from sales of 1,254 tonnes at an ASP of $948 per tonne. We expect to generate continued sales of tissue paper products this year. Slide number 11, summarizes the changes in our revenue mix. For the second quarter of 2019, total cost of sales increased by $0.6 million to $30.7 million leading to total gross profit of $2.9 million, slightly down from gross profit of $3 million from the same period last year, and overall gross margin of 8.7%. For the second quarter of 2019, SG&A expenses decreased by 20.5% to $2.4 million and income from operations were $0.5 million compared to loss from operations of $0.01 million for the same period last year. Operating margin was 1.6% compared to operating loss margin of 0.04% for the same period of last year. For the second quarter of 2019, net income was $0.5 million, resulting in $0.02 per basic and diluted share. This compared to a net income of $0.1 million or $0.01 per basic and diluted share for the same period last year. For the second quarter of 2019, EBITDA increased by $1 million to $4.6 million from $3.6 million for the same period of last year. Now shift year-to-date financial results. For the six months ended June 30, 2019, total revenue increased 45.8% to $51.1 million as a result of increases in sales volume across all product categories. This was partially offset by decreases in ASP of $70 in offset printing paper. For the six months ended June 30, 2019, the CMP segment including both regular and Light- Weight CMP generated a revenue of $41.8 million representing 81.8% of total revenue. So this $3.1 million in revenue was from our regular CMP products and $8.7 million was from Light-Weight CMP. Volume for CMP segment increased by 84.9% to 94,294 tonnes of which 74,287 tonnes was regular CMP. And 20,007 tonnes were Light-Weight CMP. ASP for regular CMP decreased by 26% to $446 per tonne. While ASP Light-Weight CMP decreased by 25.1% to $434 per tonne. For six months ended June 30, 2019, our Offset Printing Paper segment generated a revenue of $6.2 million, representing 12.2 percentage of total revenue. We shipped 8,559 tonnes of offset printing paper for the six months ended June 30, 2019, an increase of 51.8% from the same period last year. ASP for offset printing paper decreased by 15.4% to $726 per tonne. For the six months ended June 30, 2019, we recognized the revenue of $3 million from tissue paper products, resulting from sales of 2,857 tonnes at an ASP of 1,067 per tonne. For six months ended June 30, 2019, total cost of sales increased by $15.5 million to $48.4 million leading to total gross profit of $2.7 million and an increase of 17% from the last year. Overall gross margin of 5.3% reflect decrease of 1.3 percentage points from last year. From the six months ending June 30, 2019, SG&A expenses were $5.4 million compared to $6.8 million from the same period last year. For six months ending June 30, 2019 loss from operations decreased from $4.5 million to $2.6 million, operating loss margin was 5.2%, compared to operating loss margin of 12.9% from the same period last year. For the six months ending June 30, 2019, net loss was $2.3 million, or $1.10 loss per basic and diluted share, compared to a net loss of $4 million, a net loss of $0.19 per basic and diluted share for the same period last year. For the six months ending June 30, 2019, EBITDA increased from $3.2 million to $4.5 million for the same period last year. Moving to Slides 20, 19 and 12, let’s look at the balance sheet and liquidity. As of June 30, 2019, the Company had cash and bank balances, short-term debt, including bank loans, current portion of long-term loans from credit union and related party loans, notes payable and long-term debt, including related party loans of $1.1 million, $6.9 million, $0 million and $9.1 million, respectively, compared to $8.5 million, $14.3 million, $3.6 million and $6.9 million, respectively at the end of 2018. Net accounts receivable was $3.2 million as of June 30, 2019, compared to $2.9 million as of December 31, 2018. Net inventory was $5.8 million as of June 30, 2019, compared to $2.9 million at the end of 2018. As of June 30, 2019, the Company had current assets of $15.3 million and the current liabilities of $52.5 million, resulting in a working capital deficit of $46.1 million. This compared to current assets of $24.2 million, current liabilities of $29.6 million and the working capital deficit of $5.5 million at the end of 2018. Net cash used in operating activities was $0.8 million for the six months ended June 30, 2019, compared to net cash provided by operating activities of $1.1 million for the same period last year. Net cash used in investing activities was $5 million for the six months ended June 30, 2019, compared to $1.2 million for the same period last year. Net cash used in financing activities was $5.3 million for the six months ended June 30, 2019, compared to net cash provided by financing activities of $0.8 million for the same period of last year. We received several questions about our second quarter results from our investors. Now the management is answering the questions as follow. Number one. What was the thinking behind the acquisition of Tengsheng Paper in this June? In response to this question, the management advise you that, we believe Tengsheng Paper will optimize our value chain in the paper industry. And this synergy will help the company to reduce cost of sales, improve profit margin, and develop more flexible pricing strategies. The acquisition of Tengsheng Paper shows the company's confidence in prospect of the Chinese tissue paper industry and markets -- and we also believe it paves the way for the company to further penetrate into the tissue paper market, especially to improve our market share in China region. Number two. We noted in the news that some cities in China started emphasizing sorting and recycling. Do management think this new trend could eventually lead to lower scrap paper cost for the ITP? In response to this question, the management advise you that we anticipate the recently implemented a new rule that emphasize sorting and recycling in a few Tier 1 cities. So we will have limited impact on our raw materials cost in the future as we purchase most of recycled paper board from some special waste recycling companies, which have been stable for part of our raw materials. Number three. How much revenue does the company expect from Tengsheng Paper? In response to this question, the management advise you that Tengsheng Paper, as a major operating entity of our company, contributed almost 80% of our total revenue for the second quarter of 2019. And we also expect Tengsheng Paper will generate revenue of approximately $21 million in the next 12 months after merged into Dongfang Paper. Now if you have any questions, please contact us through e-mail at ir@itpackaging.cn. Management will respond to your questions through e-mails as soon as possible. Operator, please go ahead.

Thank you for attending IT Tech Packaging's second quarter 2019 earnings conference call. This concludes our call today, and we thank you all for listening and goodbye.