ReneSola Ltd (SOL) Q4 2013 Earnings Call Transcript

Juliet Yang - IR Senior Manager Laura Chen - IR Director Henry Wang - CFO Xianshou Li - CEO

Brandon Heiken - Credit Suisse Philip Shen - Roth Capital Partners James Medvedev - Cowen & Company Emily Liu - Arete Research Paul Strigler - Esplanade Capital Wei Feng - Luminus Management LLC

Hello, everyone. Thank you for standing by for ReneSola Limited's Fourth Quarter and Full-Year 2013 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. As a reminder, today's conference is being recorded. I will now turn the call over to your host for today, Ms. Juliet Yang, ReneSola's Investor Relations Senior Manager. Ms. Yang, please proceed.

Hello everyone, and welcome to the earnings call. ReneSola's fourth quarter and full-year results were released earlier today and are available on the company's website, as well as by way of newswire services. You can follow along with today's call by downloading a short presentation available on the company's website at www.renesola.com. On the call today are Mr. Xianshou Li, our Chief Executive Officer; Mr. Henry Wang, our Chief Financial Officer; Ms. Laura Chen, our Investor Relations Director, and myself. I will discuss ReneSola's operational highlights and strategy, and Mr. Wang will go through the financials and guidance. We'll all be available to answer your questions during the Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's annual report on Form 20-F and other documents filed with U.S. Securities and Exchange Commission. ReneSola does not assume any obligation to update any forward-looking statements except required under applicable law. Please note, unless otherwise noted, all figures mentioned during this conference call are in U.S. dollars. I will now begin with our business highlights of the fourth quarter and full-year 2013. We achieved strong results in the fourth quarter with record solar module shipments and revenue, leading to a better recognition of profit for the first time in two years. In a year in which the global solar industry showed real signs of recovery amid persistent challenges, we're happy to have not only endured, but to be returning to profitability. In Q4, we achieved module shipments of 505.3 megawatt and gross margin of 10.8%, which was at the upper end of the guidance we provided in Q3. Our module shipments again achieved solid sequential growth. At the same time, module ASPs increased from $0.66 to $0.67 per watt. In all, our net revenue in Q4 were $438.8 million, representing sequential growth of 4.7% quarter-over-quarter. Our module shipments increased from 713 megawatts in 2012 to 1.7 gigawatts in 2013, representing an increase of 142.5%, illustrating our current position as major global module provider and after only 18 months of scale production. Also by strategically targeting regions with higher ASPs, we'll have become one of the top module suppliers in key markets like the United States, Europe and Japan. Our results reflect a global increase in demand for solar products, as well as the success of our international module business, which was driven by the expansion of our OEM capacity, vigorous sales and marketing efforts and opening of new sales and distribution centers in our target markets. As you may know, we started our global OEM deployment two years ago. In 2013, we saw remarkable progress in that strategy. We currently have total overseas OEM module capacity of approximately 1 gigawatt with facilities in Poland, South Africa, India, Malaysia, South Korea, Turkey, and most recently, Japan. Moreover, an increased proportion of our total module shipments came from our OEM facility last year. As such, we are able to grow our business with minimum capital expenditure. We also have great flexibility in terms of capacity expansion, which we can base on actual market conditions. Furthermore, given the potential of extended and additional anti-dumping and countervailing measures regarding Chinese solar products, our global OEM capacity puts us in a very favorable position to manage such regulatory restrains -- constraints. We saw rapid growth in our international business development last year. We now have 15 overseas sales offices with our most recent openings in established markets like France and emerging markets like Panama, Turkey and Thailand. We're also in the process of setting up new offices in Southeast Asia, Latin America, the U.A.E., Africa, Russia and Canada and now we have 27 warehouses around the globe. With our local team and distribution centers serving the majority of our overseas markets, we're able to provide tailor-made local support and solutions, as well as instant product delivery. Moreover, we're able to extend the reach of our brand image and enhance our reputation for quality which is a key to our goal of becoming an integrated service and solution provider. I will now review our shipments. Our module shipments increased 9.1% sequentially to a record high of 505.3 megawatts. The sequential growth was mainly due to an increase in demand in China. Total solar product shipments in Q4 were 784.1 megawatts, a decrease of 7.9% from 851 megawatts in Q3 due to a decrease in our wafer shipments, reflecting our strategy of focusing on module business including using more of our wafer production to support our module assembly. As I mentioned earlier, our total solar module shipments were 1.7 gigawatts, representing a year-over-year increase of 142.5%. Full-year 2013 total shipments rose to a record of 3.1 gigawatts, an increase of 42.4% from 2.2 gigawatts in 2012. The increased shipments was the result of strong overall demand for our solar module, which we attribute to a steady and continue increase in our brand recognition and to our current position as a major module supplier. As noted, our module ASPs increased again in Q4, rising to $0.67 per watt compared to $0.66 per watt in Q3 and $0.63 per watt in Q4 of 2012. The annual growth in module ASPs reflects the success of our strategy to increase our share of shipments to region with higher ASPs as well as an overall recovery of the global solar markets. For full-year 2013, average module ASP was 65% per watt. In Q4, in terms of the geographic breakdown of our module shipments, the United States and Europe accounted for 27% each, Japan 5%, China 22% and the rest of the world 19%. For full-year 2013, the United States accounted for 20%, Europe 42%, Japan 2% -- Japan 6%, China 16% and the rest of the world 16%. We expect our shipments to Japan to increase proportionally in 2014. Our shipment data reflects the success of taking our module business global marked by a significant increase in the share of our shipments to the United States. We will continue to work on expand our shares of shipments to our target markets, and are confident our recent operational developments will support this goal, particularly in Japan. Nevertheless, given the likelihood of continued trade frictions between the United States and China regarding solar products, we've remained cautious in our U.S. shipments since this March. I will now review our R&D developments. During the fourth quarter we began trial production of the new A+++ wafer, and expect to begin mass production in Q2 of this year. The new A+++ wafer will have an average efficiency increase of 0.25% compared to the A++ wafer. We also expect to launch a new Virtus III module using our own A+++ wafer in Q2. The increased efficiency of the new module is expected to result in a slightly lower cost per watt compared to the Virtus II module. We began mass production of our full-black mono-cell module during Q4. This is the high-end, limited supply module designed for residential rooftop use. The full-black module blends seamlessly with the black back panel and provides high efficiency along with the sleek appearance. The design of our newly developed glass-glass module, which features exceptional reliability in terms of fireproof performance, as well as great durability under hostile natural environments such as desert conditions and salt and snow exposure. It is expected to start the certification process and enter the trial production soon. Our micro-inverter now features remote regulation functionality, which enable the customer to regulate the voltage and the frequency range of the grid to meet field requirements. In Q4, we obtained certification for our string inverter across a number of markets, including Germany, South Africa, and the United States. We now have developed 600 models of LED products, and expect to obtain TUV-CE, UL and CUL, SAA and CTICK certification for over 100 of these models in Q2 of this year. Our full line of LED products is currently being marketed globally. I will now give you an update on our polysilicon factory. Our total output of polysilicon for full-year of 2013 was 2,875 metric tons, including an output of 1,768 metric tons in Q4. Operation of our Sichuan polysilicon factory was temporarily suspended in Q1 of this year for equipment maintenance and optimization purposes, and has returned to full operations this month. With polysilicon price recently going up and remaining stable, we expect to benefit from our in-house polysilicon capacity going forward and see this as a distinct advantage over our fellow module manufacturers. I will now turn the call over to Henry who will discuss our financial results in more detail.

Thanks Juliet, hello everyone. I will now walk through our financial results. We achieved record shipments and revenue during the fourth quarter, with both shipments and gross margin coming in at the upper end of the guidance we've provided in the third quarter last year. Our revenue growth and the cost control efforts led us to recognize positive net income in the first time in the two years. We have been actively managing our balance sheet items. As a result, as of first quarter 2013 we saw a quarter-over-quarter decrease in both accounts receivable and accounts payable. Also [Sansui] [ph] signed an agreement to sell our China project. We saw reduced total borrowings at the end of 2013. We are confident in working to improve our financials, and believe we will have a more solid and sustainable financial positions in year 2014. I will now review some of our financial highlights. Net revenues for the fourth quarter were $438.8 million, representing a sequential increase of 4.7% from $419.3 million, and a year-to-year increase of 43.2% from $306.5 million in the first quarter 2012. Net revenues for full-year 2013 were $1,719.6 million, representing a year-on-year increase of 56.8% from $969.1 million in year 2012. Gross profit for fourth quarter was $47.4 million, compared to gross profit of $34.1 million in the third quarter, primarily due to the increased sales of our solar modules which have higher margins than those of our wafer business. Full-year 2013 gross profit was $103.3 million, compared to a gross loss of $35.7 million in year 2012. The return to gross profit in year 2013 was driven by an increase in solar module shipments and an overall recovery in the global solar market. Gross profit margin for fourth quarter was 10.8%, compared to a gross margin of 80.1% in the third quarter. Full-year 2013 gross profit margin was 6.8%, compared to a gross margin of negative 3.7% in 2012. Total operating expenses for the fourth quarter were $39.2 million, down 15.2% from $46.2 million excluding the impairment charge and the one-time gain in the third quarter. The sequential decrease in operating expenses was primarily due to more efficient research and development investment and the effective control of our general, administrative expenses, operating expenses representing the [80.9%] [ph] of total revenues in fourth quarter compared to 11% in the third quarter. Excluding the impairment charge and one-time gain, operating income for fourth quarter was $80.2 million, compared to an operating loss of $180.3 million in the third quarter. Full-year operating expenses were $325.3 million, excluding the impairment charge of $202 million, primarily associated with Sichuan polysilicon factory and a one-time gain of $34.7 million related to a forfeiture regarding a long-term supply contract in the third quarter. Operating expenses were $158 million, representing 10.4% of total revenues, compared to $127 million and 13.1% in 2012. Full-year operating loss was $222.1 million, compared to an operating loss of $179 million in 2012. Excluding the impairment charge operating loss was $20 million in year 2013. Operating margin for the fourth quarter was 1.9% compared to negative 43% in the third quarter. Full-year operating margin was negative 14.6% compared to negative 18.5% in 2012. Operating margin excluding the impairment charge for 2014 was negative 1.3%, compared to an operating margin excluding impairment charge of negative 16.8% for 2012. Net income attributable to holders of ordinary shares for the fourth quarter was $0.8 million, compared to a net loss of $200.3 million in the third quarter. The basic and diluted earnings per share of almost $0.00, and basic and diluted earnings per ADS of $0.01 for the fourth quarter. Net loss attributable to holders of ordinary shares for full-year 2013 was $259.5 million, compared to $242.5 million for full-year 2012. The basic and diluted loss per share was $1.42, and the basic and diluted loss per ADS was $2.85 for 2013, excluding the impairment charge, net loss was $57.5 million for 2013. As of the end of Q4, we had total debt of $742.6 million, excluding $111.6 million due in convertible notes, compared to $831.2 million at the end of third quarter 2013, and the $790.2 million at the end of 2012. Our net cash and cash equivalent plus restricted cash totalling $348.9 million at the end of fourth quarter 2013, compared to $438.5 million at the end of third quarter 2013, and $268.1 million at the end of 2012. Our net cash outflow from operating activities in the fourth quarter was $29.3 million, compared to a net cash inflow of $79.6 million in the third quarter. Net cash inflow from activities for full-year 2013 was $119.8 million, compared to a net cash outflow from operating activities of $94.7 million in 2012. Now please turn to our guidance. For the first quarter of 2014, we expect total solar module shipments in the range of 500 gigawatts to 520 gigawatts. Gross margin is expected to be in the range of 9% to 11%. For full-year 2014 we expect total solar module shipments to be in range of 2.3 gigawatts to 2.5 gigawatts. For the full-year 2014 we currently do not have any plans for internal capacity expansion. This concludes our prepared remarks. We will take your questions you may have. Operator, please go ahead.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Your first question comes from the line of Brandon Heiken from Credit Suisse. Please ask your question. Brandon Heiken - Credit Suisse: Hello. Congratulations on reaching profitability, and thanks for taking the question.

Hi. Thank you. Brandon Heiken - Credit Suisse: I was wondering if you could clarify the outlook for pricing and cost for the first quarter and the rest of the year, please.

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Okay. So Brandon, for the Q1 ASPs, Mr. Li expects to increase from the current $0.67 per watt to a range of $0.68 to $0.69 per watt. And the cost will remain around the same level. And for full-year, we expect our ASP remain stable, and as for -- starting from Q2 will be benefit from our polysilicon production. Our cost will decrease, so our margin will increase in a good way starting from Q2. Brandon Heiken - Credit Suisse: Okay.

Okay. Brandon Heiken - Credit Suisse: For shipments, I know you've guided module shipments for the quarter and the year, what do you expect wafer shipments to be? And what do you expect for shipments of new products like the LEDs?

You mean, Q1 or the full-year? Brandon Heiken - Credit Suisse: Both please, if possible.

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Okay Brandon. Mr. Li said our total module shipments guided around 2.3 gigawatts to 2.5 gigawatts. We have abandoned a few lower ASPs market. So our shipment of module is still gradually increased. As for the wafer, there will be less and less long-term contracts and will -- more of our internal wafers for our own module production. For full-year, we are guiding around 800 megawatts for module -- for wafer shipments. As for Q1, the wafer shipment is going to below 200 megawatts, probably around 180 megawatt, 190 megawatts. And for the LED products, we did not include in our broadcast we are still doing a lot of marketing efforts. So you can mark zero as for this year. Brandon Heiken - Credit Suisse: Okay. Thanks. And just to clarify, when you said stable pricing this year, did you mean flat with the Q1 pricing, or do you mean flat year-over-year with last year?

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It is compared to the Q1 ASP. Brandon Heiken - Credit Suisse: Great. Thank you.

Thank you. Your next question comes from the line of Matt Koranda from Roth Capital. Please ask your question. Philip Shen - Roth Capital Partners: Hi guys, congrats. This is Phil Shen on for Matt.

Hi, Philip. Philip Shen - Roth Capital Partners: I want to -- hi Laura.

Hello. Philip Shen - Roth Capital Partners: To follow-up on one of the -- can you hear me?

Yes. Philip Shen - Roth Capital Partners: Great. You guys talked about what the potential or lock up potential for LED revenues might be in the year. Can you talk to us about what kind of shipments you could see in the micro-inverter product?

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So as for the micro-inverter shipments, we remain at stable shipment of 5,000 to 10,000 piece per month. But compared to the module shipment, it’s still a very small fraction. So, we did not predict in our forecast and our outlook. Philip Shen - Roth Capital Partners: What geographies are you primarily shipping the micro-inverters to?

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The top three country will be U.S., Australia and Mexico. Philip Shen - Roth Capital Partners: Okay, great. You talked about ASP stability through the year. How do you expect gross margins to trend as we go through 2014?

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Okay. As for Q2, we're expecting to increase to 13% and gradually go up to 15%. However, the gross margin is going to be slightly affected by the Sichuan suspended production. So, Q1 will be a little bit lower. But overall, we hope to achieve annual gross margin of 13%. Philip Shen - Roth Capital Partners: Great. Speaking of polysilicon and what you're doing there, you guys had a nice production quarter in Q4. Can you help us understand what the cash cost were in Q4, and then what kind of production could you see relative to nameplate of polysilicon in 2014?

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Hi Phil, as for theQ4 cash cost was around 19 per kg, that's the cash cost. Plus depreciation, it will be around 21.5 per kg as for the full year 2014, because we're doing the annual maintenance work. It’s going to be slightly effected the annual production, but the full year is expected to around 7,000 metric tons. Philip Shen - Roth Capital Partners: Great. Thank you. One more from me and I'll jump back in queue. You guys have a certainly differentiated module strategy relative to many of your peers. Can you talk to us about what your CapEx expectations are in 2014?

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Okay, Phil let me take this question. This is Henry speaking. Our estimated CapEx cash -- CapEx for cash payment in year 2014 will be $80 million which mainly contain the payments which we already invested in the year 2013 and also in that figures will contain about $20 million for the maintenance CapEx. But we will not have any plan to -- for any new U.S. -- new capacity expansion. Philip Shen - Roth Capital Partners: Okay, great. Thank you, Henry. And thank you Chairman Li and Laura as well. I'll jump back in queue.

Okay. Thank you.

Thank you. Your next question comes from the line of James Medvedev from Cowen & Company. Please ask the question. James Medvedev - Cowen & Company: Good evening folks and congratulations on achieving profitability in the fourth quarter.

Thank you.

Thank you. James Medvedev - Cowen & Company: My question. What is -- could you refresh us what is your wafer and module capacity now?

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The wafer is 2-gigawatt and module is 1.2-gigawatt internally. James Medvedev - Cowen & Company: Okay, so that's what I thought. So, then the question is how will you achieve twice that amount of module production in 2014?

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Hi Jim. The OEM capacity -- currently we have overseas OEM capacity up to 1 -- around 1 gigawatt overseas. And we also have 1 gigawatt OEM capacity optional in China. So, we don't have -- we don't need to expand any of our internal capacity. And that's how we achieve our annual target. James Medvedev - Cowen & Company: What is the difference in margin when you use outsourced module production?

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So, for our in-house production, our gross margin will be around 15% and for OEM production, it's a little bit lower, around 11% to 12%. James Medvedev - Cowen & Company: Okay. Just one more here. What was the -- actually, a couple more, if I may. What was the ASP on wafers this quarter in Q4?

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It's $0.22 in Q4. James Medvedev - Cowen & Company: Okay. And the -- I'm sorry, the poly and non-poly costs in Q4? And also Q3 if you have them?

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[Foreign language] James Medvedev - Cowen & Company: Hello.

Yes, for Q4, the non-polysilicon cost is around $0.10 and the processing cost is around $0.10. James Medvedev - Cowen & Company: Okay. Thank you. And congratulations again.

Thank you.

Okay. Thank you.

Thank you. Your next question comes from the line of Emily Liu from Arete Research. Please ask your question. Emily Liu - Arete Research: Hi. Thanks for taking my question. I think previously you mentioned your cash costs for polysilicon manufacturing is $19 and I just wonder based on -- what's your expectation on the poly spot pricing? And where do you source your polysilicon, from the spot or long-term contracts? Do you have a breakdown? Any color would be appreciated. Thank you.

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Okay. Emily, I think you understand that. Emily Liu - Arete Research: Yeah, I just wondered --

Let me just translate-- Emily Liu - Arete Research: Yeah, it would be great.

I’ll just translate for everybody else that's on the call. Our cash cost in Q4 is $19 and the cash cost is expected to be further reduced, starting from Q2. The cash costs will reduce to around $17 per kg. And as for the spot market, right now for the poly is around $22.50 per kg, and Mr. Li think it's going to go up to $24 to $25 per kg starting from this May. As for our long-term contracts, we originally have two long-term contracts with Wacker and OCI. We have already finished the long-term contract with Wacker, so we only have the OCI contract. For the 2014, we'll probably have 15% of our polysilicon be supplied internally and 25% is going to be long-term contract and the 25% rest is going to be purchased from the spot market. Emily Liu - Arete Research: Just a quick follow-up. Can I know why gentleman Li expects the poly spot price to go up in May, and if it does, would that impact your gross margin as a whole for your module business?

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Emily, I think you understand that, but for everybody else that's on the call. Mr. Li explained why he projects the polysilicon cost to be around $24 to $25 per kg starting from May. It's because January to April is the traditional slow, slow season and also Europe and China, it's very slow this year. Starting from the spring, the demand from China will increase significantly, so as the European market. The European market demand is going to be much larger than the demand was in the second half of last year. So with those two factors, we expect the polysilicon price to increase starting from May. As for us, because we have our internal poly capacity and our ASP is quite stable, the effect to our gross margin is very limited.

All right. Thank you, Emily. Emily Liu - Arete Research: Thank you.

Your next question comes from the line of Paul Strigler from Esplanade. Please ask your question. Paul Strigler - Esplanade Capital: Hey, guys. Congrats on the great quarter. It looks like you guys have done a fantastic job maintaining a huge presence in Europe, and it looks like you expect that to grow more in 2014 to maybe 60% of your shipments. Obviously, that's a very high priced market. Can you talk about your pricing in non-European markets and sort of Mr. Li, if you could update your view on the Chinese market? I think on the Q3 call, you were one of the few CEOs that were not quite as bullish on China as some of your peers and I was wondering if you see any tangible signs that would change that view. Thank you.

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Hi, Paul. Mr. Li wanted to first give you an overlook of our 2014 shipments. In 2014, we expect the European shipments to take around 35% of our total shipments. That's going to be around 800 megawatts and Japan is going to increase significantly. We already have 600 megawatts order in hand, which represents around 25% of the total shipments. And the U.S. still remains a large portion of our shipments, which is around 400 megawatts; that takes around 15%. And we also remain the leading position in the Australian market. In Australia, we still have 100 megawatt shipments this year, and India, another 100 megawatts. That total takes around 85% of our total annual shipments. And China will take a portion around 10% to 12%, and the rest is going to be South Africa, Turkey and other emerging markets. And I'll let Mr. Li to get back to your pricing question.

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For our premier target markets, European, Japan and the U.S., the ASP will be around $0.70 per watt. And as for Australia, Mexico and South Africa, it's a little bit lower. It's from $0.63 to $0.65 per watt. And China will be lowest; it's only around $0.60 per watt. Paul Strigler - Esplanade Capital: And so has Mr. Li's view on China changed since the Q3 call, or is he still not quite as optimistic as some of his peers?

Yeah, I'll let him to get back to you on that.

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China still has a lot of potential to grow. Especially in the second half of this year, it's going to be looking good, but not in the first half of this year, because there's weather issues. One uncertainty will remain on the policy regarding distributed generation. As the policy encouraging and pushing, we might be looking at a very promising second half of the year in the China market. Paul Strigler - Esplanade Capital: Great. And just one last quick question. How much poly capacity does Mr. Li estimate is in Sichuan? Just because electricity prices are typically lower in Q2 and Q3, and I'm wonder if as we head into Q2 and Q3, we might see more polysilicon, not just from you guys in Sichuan, but from some of your other peers, with even more capacity.

You mean just in Q2 or in the whole -- Paul Strigler - Esplanade Capital: I mean what's his estimate of how much polysilicon capacity exists among all suppliers in Sichuan Province? Just because in Q1, none of those guys produced, because electricity prices are too high. But as we enter the high water season and electricity prices come down, I just wonder how much potential poly capacity could come back online from Sichuanese producers and potentially help supply a starved market.

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Okay Mr. Li says the overall layout for the polysilicon manufacturing has already settled. A lot of polysilicon manufacturing has ran out of business. A few years ago, we have 60 to 70 manufacturing in China. Now, there are less than 10 poly manufacturing. As far as know, there are only us in the Sichuan that's still producing polysilicon right now. Paul Strigler - Esplanade Capital: Great. Thank you very much.

Thank you. Your next question comes from the line of Wei Feng from Luminus Management. Please ask your question. Wei Feng - Luminus Management LLC: Hi. Just one short question on operating expense? Can you give us a guidance or color for the year, operating expense trending as a percentage of revenue, please?

Okay, let me take this question. From our plan, in line with our revenue growth, totally, the operating expenses will be down a little bit compared to year 2013. As I told the average percentage could be like 9.5%, something like that. Wei Feng - Luminus Management LLC: 9.5% for the full-year, right? Hello?

Yes, 9.5%. Wei Feng - Luminus Management LLC: Yeah. Got you. And on the product, means I saw you sold your product in China, but it's not -- the sales is not complete. Can you talk about the sales completion timeline? And you still have some product asset for sale on your balance sheet, what is the timeline for that sales and also the gross margin, if you can.

Okay. Actually we already announced that we signed agreement to sell our Chinese solar project. We try to complete the transaction in the first quarter, okay. That's the main news about the 60 watts. And after this Chinese solar project, we still have 25 megawatts which could be -- which can be sold in the future which is mainly located in Romania and Bulgarian countries. Wei Feng - Luminus Management LLC: And your targeted gross margin for those products, both Chinese and oversea products, please?

Okay. For Chinese projects, the gross margin could be like about 15% something like that, 15%. And for those overseas projects, because we still not getting exact quotation for those projects, we -- it is difficult to speak now. Wei Feng - Luminus Management LLC: Thank you. That's all my questions.

Okay. Thanks.

Thank you. Your next question comes from the line of Brandon Heiken from Credit Suisse. Please ask the question. Brandon Heiken - Credit Suisse: Excuse me. I was wondering if you could talk about your view on projects. Is you view still that you'd like to minimize further project development in China and elsewhere?

You mean our -- as ReneSola or overall Chinese manufacture? Brandon Heiken - Credit Suisse: Yeah. Your own project development.

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This really -- it's a little bit hard to say right now. But overall, he thinks the project business is better than manufacturing business. However, it is more of a financial situation related to the banks and the interest rate. So as for the Chinese project, we will be involving in developing some of the projects, but we'll not invest in any investment or EPC. However, for the overseas project like U.K., we may be participating in some of the BOT -- BOT-type of transaction because we wish to do such business in very stable environment, with very stable law environment. Brandon Heiken - Credit Suisse: Got it. And can you talk about your relationships with banks? It sounds like some of the lending criteria have tightened in China. Is it still relatively easy to roll over loans? And can you talk about your expectations for the convertible notes that maybe puttable?

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Okay. Actually, if you look at the -- if you download our PPT probably you can -- under our press release you can find that from the cash flow statement that in year 2013 we already -- we borrowed $1.4 billion from the bank and we returned $1.24 billion back to the bank, so which means that almost all the loans we already rolled over from the banks. So till now although the bank will control the new facility, but we still -- we can bring you to facility we already borrowed from the bank. I think with the encouraging -- and also the government also encouraging the banks to give the facility to the manufacturers to survive the difficult time. Definitely we think ReneSola can be roll over other loans in the next year -- within this year. For the convertible -- for the CBs I think probably we'll get to find other finance solution to deal with that repayment. Maybe we get a new CB something like that.

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Thank you, Brandon. Brandon Heiken - Credit Suisse: Thank you.

(Operator Instructions) All right. This concludes today's conference call. Thank you for your participation. You may now disconnect the lines.