Hello ladies and gentlemen and welcome to participate in IT Tech Packaging's Second Quarter 2021 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, 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 2021 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 2021, 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, and offset printing 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 change -- or to changes in its expectation 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 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 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 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 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 Dahong Zhou from EverGreen Investor Relations. Ms. Zhou, please go ahead.

Thank you, operator and good morning everyone. Thanks for joining our second quarter 2021 earnings conference call. We continue to make improvements in the sales volume of CMP and offset printing paper products for this quarter. Our total revenue increased by 76.5% to $46.5 million resulting from a 33.9% growth of overall sales volume and a 36% increase in average selling prices over all categories of products. We recorded a 18.4% increase of gross profit and operating income of $0.43 million. The average selling prices of overall categories of products for this quarter, increased 1.4% for the first quarter 2021 and recorded a new high since Q4 2018. Amid robust domestic market demand for tissue paper products and improved production efficiency, we continue to expand our capacity by launching a new tissue paper production line PM10 that will greatly boost our overall performance. The company has obtained approval for surgical mask products from local food and drug administration, and has completed all preparation and testing works at the mass production line with an annual estimated production capacity of 45 million pieces of masks, potentially creating promising financial returns. The company obtained the first batch of new utility papers to keep its great work on technology innovation in the future. In addition, we're also expanding the business to hire new technology business, such as combined heat and power generation project utilizing biomass technology project. Biomass CHP Project and expect to diversify our sources of revenue and ensure our stable modes of profit making. Now I will turn the call over to our 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 Janice Wang. Janice, please go ahead.

Thanks, Ms. Zhou and thanks everyone for being on the call. Next, on behalf of the management team, I will summarize some key financial results for second quarter of 2021. Also, I will occasionally refer to specific production lines associated with various products. I will make clear which products I'm referring to. For reference, the numbering system for our production line is provided on Slide #17. Now, let's look at our financial performance for the second quarter of 2021. Please turn to Slide #7. For the second quarter of 2021, total revenue increased 76.5% to $46.5 million due to the increase in sales volume of CMP and offset printing paper, and increase in average selling price of CMP and tissue paper products. Turning to Slide 8. For the second quarter of 2021, the CMP segment including both regular CMP and light-weight CMP generated revenue of $36.8 million, representing 79.1% of total revenue. $30.3 million of revenue was from our regular CMP products and $56 million was from light-weight CMP. CMP segment volumes significantly increased by 204.2% to 73,998 tonnes, of which 50,507 tonnes were regular CMP and 30,491 tonnes were light-weight CMP. Average selling price, or ASP for regular CMP increased by 35.1% to $500 per tonne and ASP for light-weight CMP increased by 36.2% to $486 per tonne. Turning to Slide 9. For the second quarter of 2021, we recognized revenue of $7.2 million from offset printing paper products, resulting from sales of 10,415 tonnes and an ASP of $690 per tonne. Turning to Slide 10. We recognized revenue of $2.4 million from tissue paper products for the second quarter of 2021, resulting from sales of 2,196 tonnes and an ASP of $1,106 per tonne. Turning to Slide 11. We sold 2,635 thousand pieces of face masks and generated revenue of $0.11 million from selling face masks for the second quarter 2021. Slide number 12 summarizes the changes in our revenue mix. For the second quarter of 2021, total cost of sales increased by $19.7 million to $43.5 million leading to total gross profit of $3 million, 18.4% increase from $2.6 million for the same period of last year and our gross profit margin of 6.5%. For the second quarter of 2021, SG&A expenses decreased by 22.6% to $2.6 million and income from operations were $0.4 million compared to loss from operations of $0.8 for the same period of last year. Operating income margin was 0.9% compared to operating loss margin of 3% for the same period last year. For the second quarter of 2021, net loss was $0.5 million, resulting in a net loss of $0.01 per basic and diluted share. This compare to a net loss of $1 million or net loss of $0.04 per basic and diluted share for the same period last year. For the second quarter of 2021, earnings before interest, taxes, depreciation and amortization increased by $6.1 million to $9.03 million from $2.9 million for the same period last year. Now shift gear to year-to-date financial results. For 6 months ended June 30, 2021, total revenue increased 101.5% to $70.7 million as a result of increase in sales volume of CMP products and also the printing paper products, and the increase in average selling price of CMP and the tissue paper products. For 6 months ended the June 30, 2021, the CMP segment including both regular and light-weight CMP generated a revenue of $57.5 million, representing 81.3% of total revenue. $47.2 million in revenue was from our regular CMP products and $10.3 million was from light-weight CMP. Volume for CMP segment increased by 47.3% to 150,294 tonnes, of which 94,133 tonnes were regular CMP and 21,161 tonnes were light-weight CMP. ASP for regular CMP increased by 32.1% to $502 per tonne. While ASP for light-weight CMP increased by 30.5% to $487 per tonne. For 6 months ended June 30, 2021, tissue paper products -- sorry, our offset premium paper segment generated a revenue of $9.3 million, which shipped 30,557 pounds of offset printing paper was 6 months ended June 30, 2021, an increase of 524% from the same period last year. ASP for offset printing paper increased by 18.7% to $686 per tonne. For 6 months ended June 30, 2021, tissue paper products generated revenue of $3.7 million, increased by $0.3 million, or 8.7%. This resulted from sales of 3,317 pounds tissue paper products with 18.5% decrease, and an ASP of 1,108 per tonne, with an increase of 33.3%. For 6 months ending the June 30, 2021, facemasks generated revenue of $0.2 million with sales volume of 6,417,000 pieces of face masks. For 6 months ended June 30, 2021, total cost of sales increased by $33.2 million to $75.9 million leading to gross profit of $4.9 million and an increase of 103.5% from last year. Our gross margin of 6.9% which led an increase of 0.1 percentage points from last year. For 6 months ended June 30, 2021, SG&A expenses were $5.2 million compared to $6.1 million for the same period last year. For 6 months June 30, 2021, loss from operations decreased from $3.7 million to $0.3 million. Operating loss margin was 0.4% compared to 10.5% from the period last year. For 6 months ending June 30, 2021, net loss was $4.8 million or $0.10 loss per basic and diluted share compared to net loss of $3.4 million or $0.40 loss per basic and diluted share for the same period last year. For 6 months ended June 30, 2021, EBITDA decreased from $9 million to $4 million for the same period of last year. Moving to Slide 18 and 20, let’s look the balance sheet and the liquidity. As of June 30, 2021, 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, and long-term debt, including related party loans of $30.3 million, $10.3 million and $6.6 million respectively, compared to $4.1 million, $12.2 million and $4.6 million, respectively, as end of 2020. Net accounts receivable was $5.6 million as of June 30, 2021, compared to $2.4 million as of December 31, 2020. Net inventory was $11.7 million as of June 30, 2021 compared to $1.2 million at the end of '20. As of June 30, 2021, the company had current assets of $63.7 million and current liabilities of $17.2 million, resulting in a working capital of $46.6 million. This was compared to current assets of $40.9 million and current liabilities of $18.3 million, resulting in a working capital deficit of $3.4 million at the end of 2020. Net cash used in operating activities was $15.6 million for the first half of 2021, compared to net cash provided by operating activities of $5.9 million for the same period last year. Net cash used in investing activities was $0.17 million for the first half of 2021 compared to $0.98 million for the same period last year. Net cash provided by financing activities was $41.7 million for the first half of 2021, compared to net cash from financing activities of 2.3 for the same period last year. Now if you have any questions, please contact us or e-mail at ir@itpackaging.cn. management will respond to your questions through email as soon as possible. Operator, please go ahead.

Thank you for attending IT Tech Packaging's second quarter 2021 earnings conference call. This concludes our call today and we thank you all for listening in. Goodbye.