Good day, and welcome to the Daqo New Energy second quarter 2021 results call. I would now like to turn the conference over to Kevin He. Please go ahead.
Hello, everyone. This is Kevin He, the investor relations of Daqo New Energy. Thank you for joining our conference call today. Daqo New Energy just issued its financial results for the second quarter of 2021, which can be found on our website at www.dqsolar.com. To facilitate today's conference call, we have also prepared a PPT presentation for your reference. Today, attending the conference call, we have our Mr. Longgen Zhang, our Chief Executive Officer, and Mr. Ming Yang, our Chief Financial Officer. The call today will feature an update from Mr. Zhang on market and operations, and then Mr. Yang will discuss the company's financial performance for the quarter. After that, we will open the floor to Q&A from the audience.
Before we begin the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth, are forward-looking statements that are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission. These statements only reflect our current and preliminary views as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties.
All information provided in today's call is as of today, and we undertake no duty to update such information, except as required under applicable law. Also, during the call, we will occasionally reference monetary amounts in US dollar terms. Please keep in mind that our functional currency is RMB, is Chinese RMB. We offer these translations into US dollars solely for the convenience of the audience. Without further ado, I now turn the call over to our CEO, Mr. Zhang. Please go ahead.
Thank you, Kevin. Hello, everyone. Thank you for joining our conference call today. We are very excited to report an excellent quarter with strong revenue growth and a better-than-expected profitability as the company achieved record high production volume, gross profit, and net income. With the global forecast on addressing the climate challenge with plans to reach carbon neutrality, market conditions remain strong for the polysilicon sector. The strong increase in downstream demand has led to a shortage of polysilicon and the cost of polysilicon ASP to rise significantly from $11.9 per kg in Q1 to $20.81 per kg in Q2. In July and August, the market price for mono-grade polysilicon has remained at approximately $26-$28 per kg. We expect the strong price momentum to continue into the second half of this year.
Despite the rise in solar module prices in the first half of this year, we continue to see stronger-than-expected market demand, even at the new market prices. Recently, the solar value chain has been stable at the new market prices and downstream manufacturers are currently able to pass through price increases to their customers. During the week of August 9, major solar wafer and solar cell manufacturers in China announced the price increases for solar wafers and cells, further demonstrating the strong end market demand. We saw the uptick in polysilicon pricing in the last two weeks with a surge in orders from our diverse customer base. We expect the constrained polysilicon supply to be the main limiting factor to the size of the global solar market this year.
Polysilicon production is a complex chemical process and has the highest barrier to entry in the solar value chain. Based on our research, we expect to see approximately 180,000-220,000 metric tons of additional polysilicon supply in 2022, considering a potential 6-month ramp-up period for other polysilicon producers. This total global polysilicon supply can be used to produce approximately 240-250 GW of solar modules, which can support approximately 200 GW-210 GW of solar installations in 2022. The polysilicon sector will still be the one with most constrained supply across the main solar PV manufacturing value chain in 2022.
On the demand side, more and more countries have set up timetables for peak carbon and carbon neutrality targets that will significantly increase demand for renewable energies, including solar PV. In addition, there is still meaningful room for potential cost reduction across the value chain, which will effectively stimulate large demand, especially given that solar PV has already reached grid parity in many countries and regions in the world. As a result, we believe polysilicon pricing will remain healthy in 2022, making our sector one of the most attractive sectors in the solar PV industries in the run, given its high entry barrier and operational complexity.
On the policy front, during the Politburo Central Committee meeting on July 30 regarding economic activities in the second half of 2021 with China's President, Mr. Xi Jinping, presiding over the meeting, the central government reiterated the urgency for national coordination on carbon peak and carbon neutrality goals and the development of the Peak Carbon 2030 Action Plans and related policies as early as possible. In addition, China recently announced an ambitious program to massive deploy distributed generation solar projects at the local government level, that is the county level. We believe solar will continue to be a strong beneficiary of the government policies and support. With regard to our ESG initiatives, we are in the process of incorporating environmental, social, and governance factors in all of our major business decisions. We published our inaugural ESG sustainability report in July.
We are already making substantial progress on the sustainability front, including installing a new wastewater treatment facilities in 2018 that reduced our wastewater discharge density by 60% in 2020 compared to 2018. Furthermore, by increasing energy efficiency and energy recycling, as well as optimizing our production process, we reduced our comprehensive energy consumption density by 40% in 2020 compared to 2017. We will continue to work on our ESG efforts, including planning for greater renewable energy use as part of our energy sources in the future. We continue to focus on initiatives to strengthen the company's long-term competitiveness. Our major operational subsidiary, Xinjiang Daqo New Energy, successfully completed its IPO listing on China's A-share market and started trading on Shanghai Stock Exchange Sci-Tech Innovation Board. The ticket code is 688303.
On July 22nd, 2021, the total gross proceeds of the IPO are approximately CNY 6.45 billion, which will fund Xinjiang Daqo's polysilicon expansion project and provide additional capital for our future growth plans. Following the Xinjiang Daqo's IPO, Daqo New Energy directly hold approximately 79.6% of Xinjiang Daqo's share and indirectly hold 1.1% of Xinjiang Daqo's shares through Daqo New Energy's wholly-owned subsidiary, Chongqing Daqo, for a total ownership of 80.7% of the A-share listed subsidiaries. There is no variable interest entity, VIE, structure between Daqo New Energy and Xinjiang Daqo. The successful IPO will offer us an additional avenue to access the attractive capital markets in China for future growth and expansion.
With our advantages of competitive cost structure, quality, and technology advancement, outstanding operational expertise, and experienced management team, we have set up a roadmap to increase our capacity to 720,000 metric tons by the end of 2024, representing an approximately 50% annual average growth rate of our production capacity over the next 3 years to better serve the fast-growing global solar PV market. I will discuss outlook guidance for the company for this year. The company produced 41,287 metric tons of polysilicon and sold approximately 42,531 metric tons of polysilicon in first half of this year, representing full utilization level of the company's production facilities. For the second half of this year, the company expects to remain the full utilization with sales volume similar to production volume.
For the full year of 2021, the company raises its production guidance from the previous level of 81,000-83,000 metric tons to the level of approximately 83,000-85,000 metric tons of polysilicon for the full year. Inclusive of the impact of the company's annual facility maintenance, I will turn the call over to our CFO, Mr. Yang, who will discuss the company's financial performance for the quarter. Thank you.
Thank you, Longgen, and good day, everyone. Thank you for joining our conference call today. I will discuss our financial performance for the second quarter of 2021. We are pleased to report very strong financial performance for the second quarter with strong revenue growth and record profitability. Revenues were $441.4 million, compared to $256 million in the first quarter of 2021, and $133.5 million in the second quarter of 2020. With strong market demand for our products, ASP was $20.81 per kg in Q2 2021, compared to $11.90 per kg in the first quarter. As Longgen mentioned, for the months of July and August, the market price for mono-grade polysilicon has further increased to approximately $26-$28 per kg.
We expect the strong price momentum to continue into the second half of this year. Gross profit was CNY 303.2 million, compared to CNY 118.9 million in the first quarter of 2021, and CNY 22.7 million in the second quarter of 2020. Gross margin was 68.7%, compared to 46.4% in the first quarter of 2021, and 17% in the second quarter of 2020. The increase in gross margin was primarily due to higher average selling prices. Selling general administrative expenses were CNY 9.3 million, compared to CNY 9 million in the first quarter of 2021, and CNY 10.1 million in the second quarter of 2020.
As G&A expenses during the quarter includes $2.4 million in non-cash share-based compensation costs related to the company share incentive plan, and compared to $3 million in the first quarter of 2021, and four and a half million in the second quarter of 2020. Research and development expenses were $2.1 million, compared to $1.2 million in the first quarter of 2021, and $2 million in the second quarter of 2020. Research and development expenses vary from period to period and reflect R&D activities that take place during the quarter. As a result of the foregoing, income from operations was $292.4 million, compared to $109.2 million in the first quarter of 2021, and $10.8 million in the second quarter of 2020.
Operating margin was 66.3%, compared to 42.6% in the first quarter of 2021, and 8.1% in the second quarter of 2020. Interest expense was CNY 7.2 million, compared to CNY 7.8 million in the first quarter of 2021, and CNY 6.7 million in the second quarter of 2020. Net income attributable to Daqo New Energy Corp shareholders was CNY 232.1 million, compared to CNY 83.2 million in the first quarter of 2020, and CNY 2.4 million in the second quarter of 2020. Earnings per basic ADS was $3.15, compared to $1.13 in the first quarter of 2020, and $0.03 in the second quarter of 2020.
EBITDA was CNY 311.7 million, compared to CNY 128.1 million in the first quarter of 2021, and CNY 26.8 million in the second quarter of 2020. EBITDA margin was 70.6%, compared to 50% in the first quarter of 2021, and 20% in the second quarter of 2020. As of June 30, 2021, the company had CNY 269.7 million in cash and cash ex-equivalent and restricted cash, compared to CNY 227.8 million as of March 31, 2021, and CNY 115.8 million as of June 30, 2020. As of June 30, 2021, notes receivable balance was CNY 97 million, compared to CNY 38.5 as of March 31, 2021, and CNY 8.2 million as of June 30, 2020.
With the company's strong earnings and operating cash flow, we took the opportunity to further reduce our interest-bearing debt balance during the quarter. As of June 30, 2021, total bank borrowings were CNY 156.6 million, of which CNY 70.9 million were long-term bank borrowings, compared to total bank borrowings of CNY 222.2 million, including CNY 100.4 million of long-term bank borrowings as of March 31, 2021, and total bank borrowings of CNY 264.8 million, including CNY 116.9 million long-term bank borrowings as of June 30, 2020. With our strong cash balance and cash generation for this year, we expect that we would pay off all of our interest-bearing bank borrowings before the end of the year.
For the first half of 2021, net cash provided by operating activities was CNY 442.3 million, compared to CNY 47 million the same period of 2020. For the 6 months ended June 30, 2021, net cash used in investing activities was CNY 255 million, compared to CNY 60 million in the same period of 2020. The net cash used in investing activities in 2021 and 2020 was primarily related to the capital expenditures on the company's polysilicon expansion projects. For the first half of 2021, despite the strong increase in capital expenditures related to our polysilicon expansion, the company generated $186 million of free cash flow.
For the six months ended June 30th, 2021, net cash used in finance activities was CNY 37 million, compared to net cash provided by finance activities of CNY 16 million in the same period of 2020. The net cash used in finance activities in 2021 was primarily related to the repayment of bank loans. That concludes our prepared remarks. Operator, we will now open the floor to questions from the audience.
Thank you. We will now begin the question-and-answer session. To ask a question, press star then one on a touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question comes from Philip Shen with ROTH Capital Partners. Please go ahead.
Hi, everyone. Thank you for taking my questions. You mentioned, Longgen, that the outlook for poly pricing remains healthy in 2022. Was wondering if you could talk through how you expect your pricing trend in Q3 and Q4, and then also in 2022. Thanks.
Okay. Basically, you know, by the end of this year, we see didn't have new any capacity or new adding any new poly supply into the pipeline. We see right now, I think, the current price, okay, around the average price around, like, $26-$28 per kg is well transferred to right now to ending the module price. Right now selling around the 175 to even high 109, 1.9 CNY per watt right now. From 1.75 to 1.99 CNY per watt. We see right now, I think, the poly supply is very tight, basically right now.
As we mentioned that, for next year we see from now on to end of this year, I think, the price will continue, I think, with stay the high in the second half of the year. The reason is because I think, the module price is higher than the expected, you know, with the demonstrating strong and expected demand. Also recent price increase in cell and the wafer sector also shows that the demand is very strong.
Good day, and welcome to the Daqo New Energy second quarter 2021 results call. I would now like to turn the conference over to Kevin He. Please go ahead.
Hello, everyone. This is Kevin He, the investor relations of Daqo New Energy. Thank you for joining our conference call today. Daqo New Energy just issued its financial results for the second quarter of 2021, which can be found on our website at www.dqsolar.com. To facilitate today's conference call, we have also prepared a PPT presentation for your reference. Today, attending the conference call, we have our Mr. Longgen Zhang, our Chief Executive Officer, and Mr. Ming Yang, our Chief Financial Officer. The call today will feature an update from Mr. Zhang on market and operations, and then Mr. Yang will discuss the company's financial performance for the quarter. After that, we will open the floor to Q&A from the audience.
Before we begin the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth, are forward-looking statements that are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission. These statements only reflect our current and preliminary views as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties.
All information provided in today's call is as of today, and we undertake no duty to update such information, except as required under applicable law. Also, during the call, we will occasionally reference monetary amounts in US dollar terms. Please keep in mind that our functional currency is RMB, is Chinese RMB. We offer these translations into US dollars solely for the convenience of the audience. Without further ado, I now turn the call over to our CEO, Mr. Zhang. Please go ahead.
Thank you, Kevin. Hello, everyone. Thank you for joining our conference call today. We are very excited to report an excellent quarter with strong revenue growth and a better-than-expected profitability as the company achieved record high production volume, gross profit, and net income. With the global forecast on addressing the climate challenge with plans to reach carbon neutrality, market conditions remain strong for the polysilicon sector. The strong increase in downstream demand has led to a shortage of polysilicon and the cost of polysilicon ASP to rise significantly from $11.9 per kg in Q1 to $20.81 per kg in Q2. In July and August, the market price for mono-grade polysilicon has remained at approximately $26-$28 per kg. We expect the strong price momentum to continue into the second half of this year.
Despite the rise in solar module prices in the first half of this year, we continue to see stronger-than-expected market demand, even at the new market prices. Recently, the solar value chain has been stable at the new market prices and downstream manufacturers are currently able to pass through price increases to their customers. During the week of August 9, major solar wafer and solar cell manufacturers in China announced the price increases for solar wafers and cells, further demonstrating the strong end market demand. We saw the uptick in polysilicon pricing in the last two weeks with a surge in orders from our diverse customer base. We expect the constrained polysilicon supply to be the main limiting factor to the size of the global solar market this year.
Polysilicon production is a complex chemical process and has the highest barrier to entry in the solar value chain. Based on our research, we expect to see approximately 180,000-220,000 metric tons of additional polysilicon supply in 2022, considering a potential 6-month ramp-up period for other polysilicon producers. This total global polysilicon supply can be used to produce approximately 240-250 gigawatts of solar modules, which can support approximately 200-210 gigawatts of solar installations in 2022. The polysilicon sector will still be the one with most constrained supply across the main solar PV manufacturing value chain in 2022.
On the demand side, more and more countries have set up timetables for peak carbon and carbon neutrality targets that will significantly increase demand for renewable energies, including solar PV. In addition, there is still meaningful room for potential cost reduction across the value chain, which will effectively stimulate large demand, especially given that solar PV has already reached grid parity in many countries and regions in the world. As a result, we believe polysilicon pricing will remain healthy in 2022, making our sector one of the most attractive sectors in the solar PV industries in the run, given its high entry barrier and operational complexity.
On the policy front, during the Politburo Central Committee meeting on July 30 regarding economic activities in the second half of 2021 with China's President, Mr. Xi Jinping, presiding over the meeting, the central government reiterated the urgency for national coordination on carbon peak and carbon neutrality goals and the development of the Peak Carbon 2030 Action Plans and related policies as early as possible. In addition, China recently announced an ambitious program to massive deploy distributed generation solar projects at the local government level, that is the county level. We believe solar will continue to be a strong beneficiary of the government policies and support. With regard to our ESG initiatives, we are in the process of incorporating environmental, social, and governance factors in all of our major business decisions. We published our inaugural ESG sustainability report in July.
We are already making substantial progress on the sustainability front, including installing a new wastewater treatment facilities in 2018 that reduced our wastewater discharge density by 60% in 2020 compared to 2018. Furthermore, by increasing energy efficiency and energy recycling, as well as optimizing our production process, we reduced our comprehensive energy consumption density by 40% in 2020 compared to 2017. We will continue to work on our ESG efforts, including planning for greater renewable energy use as part of our energy sources in the future. We continue to focus on initiatives to strengthen the company's long-term competitiveness. Our major operational subsidiary, Xinjiang Daqo New Energy, successfully completed its IPO listing on China's A-share market and started trading on Shanghai Stock Exchange Sci-Tech Innovation Board. The ticket code is 688303.
On July 22nd, 2021, the total gross proceeds of the IPO are approximately CNY 6.45 billion, which will fund Xinjiang Daqo's polysilicon expansion project and provide additional capital for our future growth plans. Following the Xinjiang Daqo's IPO, Daqo New Energy directly hold approximately 79.6% of Xinjiang Daqo's share and indirectly hold 1.1% of Xinjiang Daqo's shares through Daqo New Energy's wholly-owned subsidiary, Chongqing Daqo, for a total ownership of 80.7% of the A-share listed subsidiaries. There is no variable interest entity, VIE, structure between Daqo New Energy and Xinjiang Daqo. The successful IPO will offer us an additional avenue to access the attractive capital markets in China for future growth and expansion.
With our advantages of competitive cost structure, quality, and technology advancement, outstanding operational expertise, and experienced management team, we have set up a roadmap to increase our capacity to 720,000 metric tons by the end of 2024, representing an approximately 50% annual average growth rate of our production capacity over the next 3 years to better serve the fast-growing global solar PV market. I will discuss outlook guidance for the company for this year. The company produced 41,287 metric tons of polysilicon and sold approximately 42,531 metric tons of polysilicon in first half of this year, representing full utilization level of the company's production facilities. For the second half of this year, the company expects to remain the full utilization with sales volume similar to production volume.
For the full year of 2021, the company raises its production guidance from the previous level of 81,000-83,000 metric tons to the level of approximately 83,000-85,000 metric tons of polysilicon for the full year. Inclusive of the impact of the company's annual facility maintenance, I will turn the call over to our CFO, Mr. Yang, who will discuss the company's financial performance for the quarter. Thank you.
Thank you, Longgen, and good day, everyone. Thank you for joining our conference call today. I will discuss our financial performance for the second quarter of 2021. We are pleased to report very strong financial performance for the second quarter with strong revenue growth and record profitability. Revenues were $441.4 million, compared to $256 million in the first quarter of 2021, and $133.5 million in the second quarter of 2020. With strong market demand for our products, ASP was $20.81 per kg in Q2 2021, compared to $11.90 per kg in the first quarter. As Longgen mentioned, for the months of July and August, the market price for mono-grade polysilicon has further increased to approximately $26-$28 per kg.
We expect the strong price momentum to continue into the second half of this year. Gross profit was CNY 303.2 million, compared to CNY 118.9 million in the first quarter of 2021, and CNY 22.7 million in the second quarter of 2020. Gross margin was 68.7%, compared to 46.4% in the first quarter of 2021, and 17% in the second quarter of 2020. The increase in gross margin was primarily due to higher average selling prices. Selling general administrative expenses were CNY 9.3 million, compared to CNY 9 million in the first quarter of 2021, and CNY 10.1 million in the second quarter of 2020.
As G&A expenses during the quarter includes $2.4 million in non-cash share-based compensation costs related to the company share incentive plan, and compared to $3 million in the first quarter of 2021, and four and a half million in the second quarter of 2020. Research and development expenses were $2.1 million, compared to $1.2 million in the first quarter of 2021, and $2 million in the second quarter of 2020. Research and development expenses vary from period to period and reflect R&D activities that take place during the quarter. As a result of the foregoing, income from operations was $292.4 million, compared to $109.2 million in the first quarter of 2021, and $10.8 million in the second quarter of 2020.
Operating margin was 66.3%, compared to 42.6% in the first quarter of 2021, and 8.1% in the second quarter of 2020. Interest expense was CNY 7.2 million, compared to CNY 7.8 million in the first quarter of 2021, and CNY 6.7 million in the second quarter of 2020. Net income attributable to Daqo New Energy Corp shareholders was CNY 232.1 million, compared to CNY 83.2 million in the first quarter of 2020, and CNY 2.4 million in the second quarter of 2020. Earnings per basic ADS was $3.15, compared to $1.13 in the first quarter of 2020, and $0.03 in the second quarter of 2020.
EBITDA was CNY 311.7 million, compared to CNY 128.1 million in the first quarter of 2021, and CNY 26.8 million in the second quarter of 2020. EBITDA margin was 70.6%, compared to 50% in the first quarter of 2021, and 20% in the second quarter of 2020. As of June 30, 2021, the company had CNY 269.7 million in cash and cash ex-equivalent and restricted cash, compared to CNY 227.8 million as of March 31, 2021, and CNY 115.8 million as of June 30, 2020. As of June 30, 2021, notes receivable balance was CNY 97 million, compared to CNY 38.5 as of March 31, 2021, and CNY 8.2 million as of June 30, 2020.
With the company's strong earnings and operating cash flow, we took the opportunity to further reduce our interest-bearing debt balance during the quarter. As of June 30, 2021, total bank borrowings were CNY 156.6 million, of which CNY 70.9 million were long-term bank borrowings, compared to total bank borrowings of CNY 222.2 million, including CNY 100.4 million of long-term bank borrowings as of March 31, 2021, and total bank borrowings of CNY 264.8 million, including CNY 116.9 million long-term bank borrowings as of June 30, 2020. With our strong cash balance and cash generation for this year, we expect that we would pay off all of our interest-bearing bank borrowings before the end of the year.
For the first half of 2021, net cash provided by operating activities was CNY 442.3 million, compared to CNY 47 million the same period of 2020. For the 6 months ended June 30, 2021, net cash used in investing activities was CNY 255 million, compared to CNY 60 million in the same period of 2020. The net cash used in investing activities in 2021 and 2020 was primarily related to the capital expenditures on the company's polysilicon expansion projects. For the first half of 2021, despite the strong increase in capital expenditures related to our polysilicon expansion, the company generated $186 million of free cash flow.
For the six months ended June 30th, 2021, net cash used in finance activities was CNY 37 million, compared to net cash provided by finance activities of CNY 16 million in the same period of 2020. The net cash used in finance activities in 2021 was primarily related to the repayment of bank loans. That concludes our prepared remarks. Operator, we will now open the floor to questions from the audience.
Thank you. We will now begin the question-and-answer session. To ask a question, press star then one on a touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question comes from Philip Shen with ROTH Capital Partners. Please go ahead.
Hi, everyone. Thank you for taking my questions. You mentioned, Longgen, that the outlook for poly pricing remains healthy in 2022. Was wondering if you could talk through how you expect your pricing trend in Q3 and Q4, and then also in 2022. Thanks.
Okay. Basically, you know, by the end of this year, we see didn't have new any capacity or new adding any new poly supply into the pipeline. We see right now, I think, the current price, okay, around the average price around, like, $26-$28 per kg is well transferred to right now to ending the module price. Right now selling around the 175 to even high 109, 1.9 CNY per watt right now. From 1.75 to 1.99 CNY per watt. We see right now, I think, the poly supply is very tight, basically right now.
As we mentioned that, for next year we see from now on to end of this year, I think, the price will continue, I think, with stay the high in the second half of the year. The reason is because I think, the module price is higher than the expected, you know, with the demonstrating strong and expected demand. Also recent price increase in cell and the wafer sector also shows that the demand is very strong.
I think, in 2022, based on the, our industry research, we expect to see, I think, approximately 180,000-280,000 metric tons of additional polysilicon supply, in which can be used, to, you know, produce approximately 240-250 gigawatts of solar module. We think, you know, the overall cost reduction will contribution around CNY 0.05-CNY 0.10 per watt and bring down the module price to maybe CNY 1.65 per watt. If the poly price continue go down, let's say, to CNY 22-CNY 23 per kg, the module price can be further lower to CNY 1.55 per watt. Basically you can continue calculation on the module.
We believe, next year, first half next year, the average ASP of polysilicon, we think is around CNY 150 per kg. For the second half of the year, we think it should be around CNY 130. I'm just around, okay. You can range for the 10%. CNY 130 per kg. For next year, as you see that, our Phase 4B capacity will put into production by the end of this year. Next year we think our production will get a 50% increase, so the bottom line continue can get growth. Philip?
Great. Thank you, Longgen. That's really helpful. From the cost side, you know, we've seen your costs increase a little bit. Not much, but just a little bit. What's the outlook for your cost structure, on, you know, cash cost structure, this year and, you know, Q3 and Q4, and then also for 2022?
If you look at Q2, the cash cost is around CNY 5.41 compared to Q1, CNY 5.37. The cost of goods sold is CNY 6.31 compared to Q1 CNY 6.29. The all cost, you know, plus everything together, I think is CNY 7.30 compared to Q1 CNY 7.15. Yes, I think we slightly increased. The reason is because I think, when the sales price go, ASP go up, the value-added tax also go up. That's adding to the, you know, the operation, you know, expenses. I think, from now on, especially in Q3, we see the polysilicon, you know, the powder, the silicon powder price is go up.
Our cost maybe continue to slightly keep the same, maybe slightly little up 1% for Q3 and Q4. Because of the polysilicon metal powder price jump a lot. Especially this week, right now the prices almost go to CNY 20,000 per ton. For next year, definitely because with additional Phase 4B finished, the scalability of the production, the production line, plus the total output scale, we think we still have 2% to 5% the cost cutting in the future, in the next year.
Great. Okay, thanks. Congratulations on your successful IPO in China. Wanted to get your view on your thoughts on the U.S. ADR. You know, some investors are asking, you know, under what conditions would you consider taking the U.S. shares private, given the cash that you're generating through this cycle and also future capital raises, you know, you'll probably use the A-share entity. You know, your stock has performed well in China, while the, you know, New York Stock Exchange shares have trended lower. You know, under what conditions would you also consider a buyback or a dividend? What, just curious on how you're thinking about the U.S. ADR. Thanks.
It's a good question, you know. Actually, also it's a factor. You know, our share price right now in the U.S. market is, you know, on a value compared to A-share. Basically based on your calculation right now, Daqo New Energy listing in U.S. holds a total ownership of 80.7% of the A-share listed subsidiaries. Right now, almost it's kind of more than 80% on the price, right? There is also, Daqo New Energy is not, you know, the VIE structure between Daqo New Energy and Xinjiang Daqo. Xinjiang Daqo right now is Daqo New Energy's shareholding on Xinjiang Daqo can be traded 3 years in A-shares market after Xinjiang Daqo IPO, which is, I think, July 22, 2024.
That means we can sell shares, you know, I think, you know, the, I think, to pay back the U.S. shareholders. That means from, you know, 3 years from now on, okay? From the IPO. Xinjiang Daqo also has, you know, made a commitment letter to its shareholders that it will pay cash dividends in the next 3 years, no less than 30% of its distributable profit during the 3-year period. In China, A-share is averaging 10% of annual profit as a baseline, okay? We think, you know, Xinjiang Daqo's plan needs to also be approved by its shareholders meeting and announced, you know, together with its 2021 annual report, usually in the middle of April, you know, 2022.
As the 80% shareholder of Xinjiang Daqo, we are expect to receive cash dividends as a financial sources, you know, for potential buyback or even dividends, you know, distributed in the U.S. market. Of course, for the further, you see, developing, expansion, we can continue to raise money in the A-share at a high value, you know, valuation. We need to, you know All these, I think, information, I just also want to, you know, remind you that, you know, we cannot guarantee the dividend plan of Xinjiang Daqo because it needs to be approved by Xinjiang Daqo's shareholders. Basically, yes, we have some channel to arbitrate in the future. Definitely, I think, we are not, you know, the arbitrary player. We are the manufacturer.
We are, I think, you know, the manager company and make all efforts to reward our shareholders of both A-share and U.S. shareholders. Thank you, Sid.
Thank you very much for the detail. One last question. If the Xinjiang Daqo board, Daqo New Energy board approves the dividend plan, how difficult is it to get the cash out of China to pay the U.S. shareholders? Is it no problem, or do you think there might be challenges to get the cash out?
It's no problem because you see, when we listing in the A-shares, you see the China, I think, what you call? China SEC.
CSRC.
CSRC. It's already approved, you know. Daqo New Energy is the foreign holders, the shareholders. When we declare dividends, basically we have to, you know, basically, you know, it's easy to exchange to the US dollar. We just pay the dividend tax. If we set a middle company, Hong Kong, we just pay 10%. If we direct pay the Cayman company, we have to pay 10% dividend tax. With that money we can do either buyback or just continue to distribute our dividend to the US shareholders.
Great. Really appreciate the color. Thank you again, Longgen, and I'll pass it on.
Thank you.
Thanks, Phil.
The next question comes from Gary Zhao with Credit Suisse. Please go ahead.
Hey. Hello. This is Gary from Credit Suisse. Firstly congratulations on the very strong second quarter results. I have 3 quick questions. First one is actually to follow up with the earlier question on the kind of plans for the U.S. listing platform. Just wondering, as you mentioned and also mentioned that currently there's, you know, huge kind of valuation gap between the A-share and the U.S. ADR. Seems like a kind of a big kind of arbitrage opportunity here.
Just wondering, would the company or the, or the kind of control, controlling shareholder been thinking of, you know, kind of like use, some kind of like bridge loans or other kind of financing vehicles, so that, it is actually, you know If, if you kind of prioritize the US ADR, you actually get a much higher kind of valuation, in share stake. Just wondering if it's kind of a possible option the company would think of. Thank you.
Okay, Gary. I think, first of all, from now on because you see, to my knowledge to the board, you know, to the, you know, also the controller, shareholder controllers, from I think at least I think, you know, the short term, we're not interesting, you know, privatization. We know there is a lot of opportunities to do the arbitrage. You know, it's easier to privatization U.S. shares than, you know, transfer to, I think, the A-shares. It's not our purpose because we think right now the company is under, I think, the, you know, up tick, you know, side. We want the U.S. shareholders to enjoy the returns. That's why our strategy is continue to raise capital in A-share market, continue to expansion our future capacity.
You know, in the next 3 years, by average 50% every year continue increase to guarantee or to make sure our bottom line can continue at, you know, 20%-25% increase to maintain the market value, to reward, I think, the shareholders. The meantime, I think what we do is continue to distribute, I think, the dividends to maximize use the Chinese law. I think as you can see, at least 30% of the, you know, distributable profit can be distributed. I think we will do that. I think, you know, declare the dividends and exchange the foreign, you know, U.S. currency to the Cayman company, and either to buyback or continue to declare the dividend to the U.S. shareholders. Ming Yang, do you have any comments
Or questions?
Gary Zhao? Thank you.
Okay. Thank you. This is very helpful. Thank you. My second question is on the expansion plan. Earlier you mentioned that by 2024, you target to achieve 270,000 polysilicon capacity. Just wondering if you have a more kind of a specific timeline for this expansion. Secondly, given that your current kind of very strong finance cash position and also the further kind of proceed and already got the proceed from the A-share IPO, is that possible the expansion target can be even kind of raised higher if the solar demand, you know, continue to be?
I think, first of all, if you look our balance sheet, by the end of July 30th, I think the balance sheet is very strong. I think, with the, you know, we want to maintain, I think the market share, continue maintain the market share. Definitely, yes, we want to expansion. First of all, with successful I think IPO, we can be, you know, I think, the phase IVB, name plate is 35,000 tons, metric tons. We were starting, I think, trial production by the end of this year. Next year, we're full capacity, running. We think that will add maybe, you know, 40,000-50,000 metric tons for the next year.
The, the detail figures we will do, I think, you know, late, you know, certain point time of, you know, later of this year. For the, you know, year after, just I mentioned that in order to keep the market share, you know, we see the whole market, the solar market, you know, continue to, and the market continue to at least in every year I think compound grows at 20%. With the A-share market, I think, you know, capital access possible with, you know, the company inside generating the cash. With our strong management team, I think, you know, we have the ability to maintain the market share, continue to, you know, from right now to, I think around, 20%, you know. We planning to looking for, beside Xinjiang, another place in a production base, you know.
I think it's possible inland province, Qinghai province, Inner Mongolia or even, you know, Shanxi. It's another place we can continue expanding around the 200,000 tons. We will divide into the 2 phases. The first phase is 100,000 tons, which I think, you know, the semiconductor, I think the production line is 1,500 metric tons. That's, I think, we are planning. We are right now looking. As soon as we finalize the, I think, you know, finalize the place, we will announce that. Thank you.
Okay. Okay.
Gary.
Okay. Yes. Thank you. Yes. My last question is, I know it might be too early to tell, but just wondering if Mei-Xuan can share with us your view for the kind of a longer-term polysilicon price outlook. For example, by 2023, when there may be, you know, more polysilicon capacity to be commissioned. When do you or where do you think the kind of a more sustainable polysilicon price can achieve? Thank you.
I think I just, you know, answered, Philip, the question about, you know, the ASP of this year and next year. Yes, for 2023, 2024, really we have to considering the demand and the supply. From supply side, we continue to see, I think, you know, China, a lot of, I think, existing player continues expansion, plus some new, I think, comer. You have to consider that as the technology continue to improve, maybe I think, you know, in the next generation is from P-type to change the P-type, you know, silicon cell, P-type cell to change to N-type cell. That's asking for high quality. Who can produce N-type polysilicon? That's most important, you know, the market share. You can continue to have the market share. Second, we just mentioned that this is a CMC.
It's a Chemical Manufacturing Control. It's not easy for newcomer. Even let's say existing player, new hopes. Today, the mono silicon, I think, you know, the structure percentage only, I think around 50%. We can reach almost 99.5%. I think the quality also I think, you know, the it's a chemical, I say the ramp up, you know, to reach the, you know, I think the real supply we call, it take time. I think that's on supply side. From demand side, really, I can't tell you because, you know, look at the, you know, the global, I think, the carbon neutrality targets.
I think we think, at least I think the compound, you know, growth rate should be around 20%. China right now, if you look at the county level distributed generation, it's a very, I think, you know, potential market is very, very big. You know, besides, of course, you know, the U.S. and China, I think the trade war. I think, I still think, you know, new energy, say the renewable energy is the future. It is the major tool to reach the global, I think, the carbon neutrality targets. From, I think, the demand side, really, Gary, you may be the expert, you know, because we really don't know. Some people. The figure is wide.
Some people said that, you know, the 500 gigawatts may be by, you know, 2025. Mr. Li , I think from LONGi, he estimated that is maybe even by 2030 is, you know, 1,000 gigawatts. It's need a lot of, you know, silicon, high quality silicon. It's around like 3 million, you know, 3 million tons, metric tons. We not worry about that. The reason is because we think, you know, we own the largest scale, the world, you know, largest scale capacity in Xinjiang, which is as soon as we finish, I think, you know, phase IVB, our capacity may be around, you know, 120-130 thousand tons.
We have another new place, you know, we are looking for maybe, you know, by the middle of 2022, come to, you know, product into try production. It's around 1,000 tons. Continue, you know, to add another 1,000 tons. We think we have the competitive edge. That's our, I think, long-term strategic plan.
Okay. Okay. Yeah. This is very helpful. This is all the question from me. Thank you.
Great. Thank you, Gary.
The next question comes from Tony Cai with BOCI. Please go ahead.
Hi, good evening management. This is Tony from BOCI. Three questions from my side, and the first one is still regarding the industry capacity expansion. Just yesterday, the NDRC had a conference to update on the energy consumption status in China, according to which there was nine provinces in China has been increase in the energy intensity in the first half this year, including Xinjiang, Qinghai and Ningxia. We know these three provinces hosts most of the new capacity announced by your peers. Do you think this will slow down their pace in terms of new capacity expansion?
Yes. you know, everybody read that, you know, the NDRC, I think, report. It gives 3 level of warning. I think, unfortunately, I think Qinghai, Yunnan and, you know, Xinjiang those I think, you know, have, a hefty energy supply, province, you know, is the 1st, I think the 1st, I think, you know, cause, I think, a warning. You have to thinking about that. China, they have, you know, we put a priority. We think, you know, the polysilicon production line, polysilicon capacity is support, you know, continuous, you know, the solar industry. It's in the 1st priority, I think. The governments, I think definitely will put, you know, any new additional adding new energy. I think it will priority put, I think, a solar, polysilicon, projects as 1st.
Even existing, I think, you know, the energy consumption, some provinces have to change structure to reduce, I think, the carbon, you know, the energy, I think, supply, to increase the green energy, I think, supply. I'm not worried about that because, you know, I think the government is very clear, to reach these targets, they need, I think, the solar continue to growth. You know, the solar growth need, I think, a polysilicon. Tony?
Okay, great. My 2nd question is, follow up on the silicon metal supply. You just mentioned the price has gone up a lot recently. It seems that the smaller producers are troubled by the increasing power tariffs as well as the energy control measures. Of course, the current prices won't be a big problem for your margins given the poly prices right now. Longer term, do you think the silicon metal supply will be a bottleneck to the future poly production if China does not allow new build-up in the silicon metal capacities?
We think, this situation right now, I think momentum-ly, I think, you know, the poly powder price go up is the short-term, I think, situation. Reason is because in China, the silicon metal, majority produced, I think, in Yunnan province and also Sichuan, Xinjiang. Yunnan, because because of the shut off water. A lot of water power, plant shut down.
A lot of polysilicon metal plant shut down. Secondly is also the new hope, for some, you know, accidents. They are closed. They are temporary closed their silicon metal plants. That's why cost, you know, short-term silicon metal price go up. You know, in the future will go down. Secondly is we also pay a very attention to this situation. To us, we are also looking for, you know, upstream, vertically integrated to, you know, upstream. That mean the silicon metal projects. We are looking for that.
Also possible maybe we go to, you know, investment, 1 of 30, 1 is 300,000 tons projects in the future or maybe acquire some existing, I think, you know, plants to maintain. I think, you know, the, I think, sustainability, the poly powder supply is not just, you know, from, I think, existing supply like successful, you know, poly powder manufacturers. Basically, we are looking for that. Yes. In the future, definitely we.
Okay.
We will, I think, also invest in this area. 300,000.
Yeah. Great.
-tons, total investment is only like around CNY 3.5 billion, you know. It's the best invest is not too much. Plus, the technology also is not the bigger deal. I think the silicon metal, the key issue is the stone resources. Second is the, I think, you know. The density, I think, you know, supply.
Do you think?
Tony?
Will energy quota be a issue for the powder supply?
I don't think so. The reason is because I think they also in the value chain for the solar industry. Also, I think, you know.
I think, the silicon metal basically is not only just provide, I think, the powders for our solar industry, but also provide, I think,
silicone.
Silicone. Silicone.
Yeah.
it to some, you know, the, other, you know, irons. The.
Aluminium alloy.
Yeah. Aluminium. Aluminium iron. Yeah. It's a lot of, you know, usage area. Yeah.
Okay, great. That's good to know. My last question is on your incentive plan. We all know that you had a very great incentive plan in place in the past for the U.S. ADRs. Now that you have listed in Asia and moved, you know, most of your staff to the Asia entity, is it fair to guess that in the future you will also have a new incentive plan at the Asia level and reduce your incentives, share base compensation at the U.S. ADR levels?
We think, you know, the I think a strong execution team need to, you know, match, I think have, you know, in, I think incentive, you know, policy. I think this is very important. Our U.S., I think, you know, the incentive plan, I think, you know, help us to maintain our strong team, you know, together, and continue to expansion, you know, help the people to continue expansion. To today, you see, our team, management team, no one leave. Because in China, you know that, it's a lot of, you see, attractive outside, you know. I think, you know, for Asia today, we didn't have new, I think, incentive plan. Yes, in the future, we will do that. Look, the valuation is so big, right? It's almost CNY 120 billion.
I think we have call second the share plan, you know. We can issue employee- at half price of the, you know, at half share price of the market price to issue to the employee. You know, the vesting period from 3 years to 5 years. I think, yes, we were thinking, consider, you know, that in the second half of this year.
Okay, great. Thank you very much, Longgen Zhang. I'll pass it down.
Great. Thank you, Tony.
The next question comes from Lu Wang with Bernstein. Please go ahead.
Thank you for taking my questions. This is Lu from Bernstein. I have two questions. Firstly, do you have a targeted market share in terms of solar grade polysilicon by 2024? Secondly, can you please share the progress and future plans of your semiconductor-grade polysilicon production? Thank you.
Thank you, Lu. Basically, you know, if you look our, I think first half of this year, our market share I think is around, you know, 18% to 20%. I didn't have, you know, actual figure, frank speaking, on the, I think, solar polysilicon side. In the future, yes, we are continue to keep 50% capacity, you know, annually, average, okay, growth. We think, you know, all player maybe, you know, expansion quicker than us. We think by the year 2024, our capacity can reach 270,000. Our market share can maintain around 18%, you know. That's our target. Second is, yes, we are starting to do the, I think, you know, semiconductor polysilicon.
First project I think is 1,500 metric tons. We'll wait, I think, that new project, I think, 1,000 tons polysilicon production line together. We have to taking at least 2 to 3 years to make, you know, this production line successful. I mean, successful is not only produce the polysilicon in a semiconductor polysilicon, but also to, I think to.
Qualify.
To qualify by the downstream, I think, the user. It take time, as you know that. The semiconductor chip, you know, chips and also the wafers I think take, at least I think, 2-3 years. In China right now, the good thing is in China right now, the downstream on the semiconductor is very, expansion very quickly. It give us opportunity, maybe can shorter the, I think, the qualification period down to maybe 1-2 years. Yes, in the future, I cannot, you know, tell you how much market share of, you know, in the future, the, you know, semiconductor side we can take in the market share. I can tell you right now the total, I think around 50,000 tons semiconductor, I think, polysilicon supply.
We think in China right now is around, I think, 20,000 tons right now, the usage. We want first to replace the import. That's our first target. Thank you, Lu.
Thank you. To follow up on the targeted market share, I think one potential problem is that the faster mover and the first mover is probably going to secure the areas or the provinces where they have the cheap electricity and also the energy quota in terms of total energy consumption and energy intensity. Potentially, which makes Daqo left with provinces with higher electricity prices and also some bottleneck in terms of securing this energy quota. Do you think that can be a potential problem? Even if we are, you know, Daqo is able to expand capacity, will that be the case that the new capacity's cost will have to be higher than existing capacity in Xinjiang?
Lu, I think, you know, it's good question. If you look at our history, Daqo always, you know, I think did more than said. Frank speaking, you know, we are very conservative. The reason is because, you see, we starting looking for another place is not today. I think, 2 years ago. Like, semiconductor, we are 3 years ago. You know, 5 years ago, we are starting, you know, collect the technology. For the, I think, a new place, we already starting feasibility study, contact local is more than, I think, 1 and a half years. Don't worry about that.
I think today, most right now because I think, the governments, local governments put, I think, you know, the solar industry is the first priority, just I said. From the electricity, the power, the power price right now, as we contact, you know, 4 to 5 places, I think, outside of Xinjiang. Mostly is around CNY 0.25 to CNY 0.30 per kWh. We don't think in the future, I think, the power price is the major competitive, I think, key factor. Rather than I think the polysilicon quality and the cost control and the scalability, I think is most important. Also, the labor, I think, the management, you know.
As you can see, our cost structure, our cost, you know, cutting map in the history, also in the future, we are, I think, are the number 1 in the China. We're not worried about that, frank speaking, you know. Even though some people is already signed some agreements, I think it's not for example, like Qinghai right now, the price is around $0.26. Right now, we talked local governments, they are, they will come us to there. The price also the same, you know. The only thing is, you know, some stimulation policy may be different, but we just like we said, we also want to, you know, it's a ESG. We also want to contribute to the society, the governance in the local people. We're not want to taking.
Basically, we're not worried about that. The reason because even today, we all of capacity in Xinjiang, we're shipping to the wafer manufacturing center, for example, like Inner Mongolia or Yunnan Province or Gansu Province. The shipping cost almost, you know, CNY 2 per kg. Thinking about that, today, polysilicon consume, and every consume in Q2, Q1 is around 60 kWh per kg. It's almost CNY 0.03, you know, extra, you know. Because we do the shipments from Xinjiang to our wafer producer. If we can move to, let’s say, Inner Mongolia, Yunnan Province, so we can save that CNY 0.03 per kWh from the power price, all right? To pay to the local government.
I'm not worried about that.
Thank you. That's really helpful.
The next question comes from Colin Yang with Daiwa Securities. Please go ahead.
Good evening, management. This is Colin from Daiwa. I got three questions. The first one, can you share the cost, the difference between current P-type and N-type polysilicon? Do you have any expectations of the potential price difference between the P-type and N-type processing price? Because it's relevant to the ASP for 2023 and beyond.
Colin Yang, I think it's a good question. Basically, right now, I just mentioned that, you know, today we're already starting, provide N-type silicon to our four major clients. The only thing is right now the N-type cell production line in China is not massive. It's still, in the research It's not commercial, a very high commercial, you know, level. For example, we provide our four major clients is around, like, every month is around, like, you know, 200 tons per, you know, total is around like 600-800 tons per month. The price is not adding too much. It's around like only add CNY 2 per kg.
Today, I think basically we can, from our output, we can I think N-type is around like 30%-40%. If, let's say in the future, you know, the shift from P-type to N-type as the, I think, HJT, IBC, TOPCon, I think at the downstream, I think, you know, the N-type, you know, cell production line, I think, popular. We think we can continue to increase N-type, you know, to 70%, 80% based on today our technology. It's not a big issue. The cost, we don't think the cost will add too much. Maybe around like, you know, CNY 1 or CNY 2 per kg. The only thing is, the volume, okay, the output, maybe will go down. The reason is because take more time to depository, to put the furnaces.
That will affect the output maybe around 5% to, you know, 8%. It's not big, you know, deal to shift for us, okay? Today, for our knowledge. I'm not talking about other player, you know. To us, because we very digitalize also AI, I think, calculation on the, you know, furnaces. It's a very modern, I think, technology. It's easy for us to shift. Thank you, Colin Yang.
Thank you. Thank you. I'm involved here. My second question, you know, we have been adding it to the U.S. Entity List for like almost 2 months. I'm just wondering what is the actual inspection from the U.S. customers. Do we have, you know, any products which contained Hoshine Silicon Industry's silicon powder was actually contained by the U.S. customer? Just wondering if any updates from that.
We didn't have, you know, the exact information. Basically, we only can read some information from U.S., you know, some, you know, allowed, a researcher. You know, basically we see some, you know, some, the module producer right now, some shipments, in the U.S. customers. Basically U.S. customers are holding, want to see the traceability. To us, you know, we are manufacturing polysilicon. Our customer is China, most all in China. It's a wafer producer. We're not any product, you know, finally shipping outside to, especially to U.S. Yes, currently, no effect to us.
Of course, I think, we see the Hoshine product maybe export to U.S., maybe holding. Also maybe in the future, on the module side, the module manufacturer has to show the traceability. I don't think it's a good idea to doing that. The reason is because the impact will to us will be temporary and very limited. If this issue prolongers, I think the negative impact to the U.S. market will be much bigger than if, I think, to China solar players. You see, approximately 85% of poly and 98% of wafer, I think, are made in China. Currently, there is no alternative source for U.S. to replace.
We believe, I think it is common interest to both U.S. market and China, you know, solar producers, I think, to address the issue, ASAP, especially to reach the common, I think, interest area. That means the, you know, the carbon neutrality LED targets. I'm not worried about that.
Thank you. Thank you, Longgen. Lastly, can I confirm one thing? Because I think I heard you mention a bottom-line growth of about 20%-25% year-over-year in the long run. Is this company's official guidance for like at least a 20%-25% year-over-year growth for net profit for 2022, 2023 and beyond?
Okay, I want to emphasize that we cannot give, given, you know, the future, I think, you know, forecast. The only thing is I say that because we just, you know, assume, let's say, next year the capacity we can continue 50% expansion, okay? As soon as we finish the Phase 4B, around 40,000-50,000 metric tons we're adding to the existing plans. I think for next year, I just mentioned that assume the selling price for the first half of next year is around like CNY 150. Second half of next year is around like CNY 130. We believe the bottom line, definitely we can achieve 20%-25% increase.
In the future, we can only do is we'll make efforts to continue expansion at the annual average, I think a rate of 50% to expansion the capacity. We cannot guarantee the bottom line. Really is because I cannot, you know, crystal ball the demand and the supply of polysilicon in the future. Just I mentioned that, you see, we on the supply side have two factors. All right? How much real polysilicon we can supply? How much, you know, as if the technology from shifted from, just like you said, from P to N, you know, how much we can provide the N-type silicon? From demand side, we really don't know the potential market in the future, the growth. Basically, you know, I cannot, you know, answer your question in the future. Yes, we make efforts.
Got it. Very clear. Thank you, Longgen Zhang. That is all my question.
This concludes our question and answer session. I'll now turn the conference back over to Kevin He for any closing remarks.
Okay. Thank you everyone for participating in this conference call. Should you have any further questions, just feel free to send us email or give us a call. Thank you. Bye-bye. Have a nice day.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.