SOL - NYSE

Hello, ladies and gentlemen. Thank you for standing by for ReneSola Power's Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please note that we are recording today's conference call. I’ll now turn the call over to Mr. Gary Dvorchak, Managing Director of The Blueshirt Group, Asia. Please, go ahead, Mr. Dvorchak.

So, thank you there and hello, everyone. Thank you for joining us on today's call to discuss our third quarter 2021 results. We released our shareholder letter after the market closed today. It's available on the website. There is also a supplemental deck posted on the website that we will reference during our prepared remarks. On the call with me, today are Mr. Yumin Liu, Chief Executive Officer, Mr. Ke Chen, Chief Financial Officer, Mr. John Ewen, CEO of North America. Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other forward information that might be considered forward-looking. These forward-looking statements represent ReneSola Power's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under Risk Factors and elsewhere in ReneSola's Power's filings with the SEC. Please, do not place undue reliance on these forward-looking statements, which reflect ReneSola Power's opinions only as of the date of this call. ReneSola Power is not obliged to update you on any revisions to these forward-looking statements. Also, please note that, unless otherwise stated, all figures mentioned in the conference call are in U.S. dollars. With that, let me now turn the call over to Mr. Yumin Liu. Yumin?

Thank you, Gary. And thank you, everyone, for joining the call. Before we dive into the quarterly results, I need to address the misleading short report that was published last week. I'll use this report to present you some more insights and details about our business. The report was erroneously and misleading, obviously, written by an author with legal understanding of the solar project development, but with a motivation to unfairly slide down our stock price. We will discuss the report today and answer any questions you may have. We will also follow up with any of you as desired. Once you understand how the author manipulate some data points to draw incorrect conclusions, we believe you will have even greater confidence in ReneSola Power, as such report will be quickly dismissed and forgotten. The report basically makes three claims. The first, they claim that we have fake projects, what they call ghost projects. Second, they point out that many of our projects are delayed. Also, they did infer that there's some sort of hidden risks from the Mr. Li family's ownership and support of the company. I want to address all three of these issues now. First of all, the author present many discontinued projects as if they are fake. Project development is a portfolio business and we terminate projects all the time for a variety of reasons. Many of the projects they cite fall into this category. We cancel them and move on to better opportunities. They are not non-existent. Similarly, some of the projects they cite as fake are still very alive. Giving you examples, Castillo in Spain includes three projects totaling 24 megawatts, and is in late stage development with RTB or sales targeted for the second half of 2022. They also say the Tenergie project. We not only won the tender in corporations Tenergie but also are in-charge of the product development activities having a development service agreement with them. Similarly, the author disparities our development partners in Italy, demonstrating a lack of knowledge about typical industry partnerships. Most local development partners are small businesses, our hyper local model seeks out small, energetic and capable businesses with close ties to their communities, such as MP Sicily and Terra Aurea merge in this report. We have over 10 different development partnerships in the EU countries and most of the partners can be categorized as small companies. We had compelling reasons to partner with MP Sicily and Terra Aurea. MP Sicily is the Italian development arm of the Austrian Investment Company, Menasa & Partners, known as MP. Terra Aurea is related to MP Sicily. We have partnered with MP in Poland, who helped us with win 40 of the 172 projects we have secured there and successfully build them. MPs are great partner and it is natural for us to work with them in other European countries. So far, the two Italian partnerships we have already fueled for new practice in Italy. The report is completely off base in test stating us for this partnerships. The author’s math on our pipeline disclosures over time is irrelevant to their fraud thesis. Projects will go into and out of our pipeline constantly as we prune and optimize our portfolio. You should expect us to always upgrade our pipeline with smart resource allocation and robust net growth. The second major claim that we are inflating our pipeline because of delays is laughable. The report cited a bunch of delayed projects without ever conceding that the world was open lockdown for COVID since 2020, and lingering outbreaks as supply chain issues have caused more delays this year across the whole world. In fact, the words COVID and pandemic do not even appear in the report. We believe that an accusation of delays with no acknowledgement of COVID has no credibility whatsoever. For example, they point out that our Caravaca project in Spain is delayed. Correct. Spain was locked down for months, causing delays in government approvals. Caravaca environmental approvals alone, was delayed by about 18 months. It has now been approved and has moved into the sales process. We expect to close the sale soon. People knowledgeable with our industry understand that product development cycles are long. Small projects take one to two years from Greenfield to NTP. To get to NTP for big utility scale projects, it can take five to six years in the US and two to three years in most European countries. The development periods we see in our pipeline are totally normal. In the final claim, the author attempt to create a sense of fear by calling out the Li family’s participation in our company. The fact that Mr. Li, is a large shareholder of our company is hardly new. It is not appropriate for us to comment on his personal affairs. We are a limited liability company. We are not impacted by the individual situation of any -- of our shareholders. We appreciate the Li family's continuing support as a large shareholder. All of our shareholders give us a vote of confidence with their share ownership. The report also threw in some other small items, trying unsuccessfully to build their case. They criticize our non-GAAP adjusted EBIT line such as our GAAP numbers, they talk about our pursuing small projects, which is exactly part of our strategy. This report has no merit. Anyone that understand our business will see through the author's misleading conclusions and false accusations. We are proud of having the industry's best product pipeline closer. We are open, transparent and detailed. We have nothing to hide. The report try to use our transparency against us, but failed miserably. Our shareholders appreciate our detail level of disclosure. We intend to continue this into the future. Okay, now let's move beyond that distraction and cover the important stuff. Our third quarter results. We examine the quarter in detail in our shareholder letter posted on our website. So, I'm just going to call out the highlights that you should study in the letter and also supplemental deck. The first key point is that we are comfortable with our performance in this quarter. We were profitable again. For the sixth consecutive quarter. Profit was a result of good gross margin at the high end of our guidance and good expense control. The gross margin strength shows the value of our strategy to sell projects at NTP which is most profitable. We also generate high margin recurring revenue for our IPP electricity sales. Against the good news, revenue was below our guidance, you should not be concerned we are not, on a quarterly basis sales will move between periods. In Q3, two product sales we expected did not close, but we expect the sales to occur in Q4 or early next year. In general, we analyze our business on a yearly basis and do not worry about quarter to quarter timing issues. The second key point is that we are executing successfully on our pipeline building goals. At the start of the year, we targeted having 2 gigawatts by the year end. We were close to that goal by the end of Q3 with over 1.8 gigawatts in the pipeline and 50 megawatts under construction. Our pipelines dominated by Poland, the US, Spain and the UK. Each of those countries together with other territories, we have activities represent multi 100 megawatts of projects. These are attractive markets with strong investor base and good government support. So we anticipate more growth ahead. We expect to end the year with around 2.2 gigawatts and will soon start aspiring goals for 2022. Let me now turn the call over to our CFO, Ke Chen, for comments and on our financial performance. Ke?

Thank you, Yumin. And thanks again, everyone for joining us on the call today. Our shareholder letter and the supplemental slides accompanying all the figures and the comparisons you need. I'm not going to repeat every number, instead, I'm going to focus on the factor that influenced results. As I speak, please keep in mind that we will discuss certain non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors, along with the GAAP measures. The non - GAAP to GAAP reconciliation is included in our shareholder letter. Let's begin with our Q3 financial highlights on Slide 17. Revenue was up 59% year-over-year well down a bit sequentially. Project Development revenue consists of sales or projects in Maine and Poland. IPP energy revenue came from the 49.4 million kilowatt hour generated by our rooftop DG project in China and in the US. The sequential decrease was caused mostly by the delayed in project sales we've been mentioning earlier. Those sales are delayed into Q4, 2021 and into 2022. I want to emphasize that we even just mentioned about timing. Project sales are large with unpredictable timing and quarterly revenue will often fluctuate significantly. More importantly, they also void some high material cost and construction costs in Q3, 2021. Again, we measure our success by focusing on profit, profitability and growing our pipeline growth. Profitability was driven by two things, gross margin and expense control. Gross margin was at the high end of guidance. Gross margin was driven by our focus on high margin NTP sales, supported by high margin IPP electricity sales. Gross margin was a little bit lower than both Q2 and last year, because gross margin was usually high -- unusually high in both those periods. We were effective in controlling expense. Operating expense was down sequentially and up only modestly year-over-year. The main element of our OpEx, general and administrative costs was off sequentially, and year-over-year as we stack up to support growth. G&A growth was less than pipeline growth, showing that our spending is effective and we have good operating leverage. The strong margin and a disciplined spending regarding operating income around 70% of revenue. Now, operating expense remaining less interested [technical difficulty]. Sorry, there was some echo. Non-operating expense remaining net interest expense and foreign exchange losses, which reduced our net income. Our bottom-line net income attributed to shareholder were approximately 5% of our revenue. This is our sixth conservative profitable quarter. Now, let's review the balance sheet shown on slide 20. Our financial position is strong and we have the ability to fund any number of initiatives and opportunities. Cash was down slightly over the quarter due to investment in the project pipeline. Debt was unchanged. Our debt to asset ratio was 15.8%, a record low over the past year. Given the financial strength and our confidence in the perspective of strong growth, yesterday, our Board of Directors authorized a $50 million share repurchase program. We intend to buy shares in open market when we think they are trading below the intrinsic value of the company. Now, let's cover 2021 guidance as shown on slide 25. In the fourth quarter, we expect revenue of $21 million to 27 million and gross margin in the range of 30% to 40%. Revenue expectations refer our assessment of which product sales will close, including those that slipped from Q3. We also assumed stable elasticity production from our IPP assets. Given this, we expect to be comfortably profitable in Q4. We acknowledge the risk of place for the new COVID Omicron virus. The Q4 guidance puts the full year at $77 million to $83 million of revenue and the full year gross margin better than 40%. We're not yet giving 2022 guidance, but our earlier project in process is parking bottom-line growth of at least 30%. We will give robust new pipeline growth target our next call. We would now like to open the call for any questions that you may have for us. Operator, please go ahead.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Amit Dayal of HCW. Please go ahead.

Thank you. Good afternoon everyone. Yumin just to begin with maybe on the IPP revenue side, with the China projects potentially coming online in the near future, how should we think about IPP revenues on a quarterly basis in 2022?

Okay, at the last earnings call -- last quarter, we guided that the we have the target to complete 100 megawatts to 150 megawatts by the end of next year. We have built a pipeline in China as you see the deck and also I mentioned over 110 megawatts and also we have in under construction and we have also completed are connected 3 megawatts in the last quarter, okay. That will continue. I will provide you periodically the quarter-by-quarter our progress in China, okay. But I do believe that the number will absolutely go up. And we will provide you the updates more sound updates in the next couple quarters when we see the progress from China.

Okay, okay. Thank you. And then just a competitive environment. Can you just speak about how you are positioned in terms of the projects you're looking at and new opportunities to win some of these projects in the US and Europe?

Okay. The – absolutely, everybody in the industry all feel lucky that we have strong support from all over the world, all the governments that the market we have activities, not only in the US, not only in China, but also we have almost every good part policy support in the countries we operate in Europe. Okay. Just give you one example that the Germany just a couple of weeks ago announced their target to grow the pipeline to 200 gigawatts by 2030, okay. We are building our strong pipeline, our talented local team now, okay. And we have a growth target in the very important European market, including Germany, as one example as I give. And we will provide you the aspiring and robust target for the pipeline grows in the next quarter, okay. We do believe our fundamental of the strong pipeline grows will be there, supported by all the tailwinds, as we see from all the governments.

Okay. Understood. And then just finally in terms of the cash balance is pretty strong. You're applying some of that potential share buybacks. What are the plans in terms of using this balance sheet to continue for finding maybe acquisition opportunities or leveraging the balance sheet for other growth related efforts? Just to get a sense, how -- what do you plan to do with this balance sheet to drive the opportunities that you’re looking at?

Thank you. Absolutely, we continue developing organically our pipeline through our partnerships, through our greenfield development in multiple markets. At the same time, we have been actively acquiring projects. We are strategically considering acquiring not only projects, but also platforms in strategic markets. And we are in the process reviewing several targets for the platform and portfolios in both US and Europe. And acquiring projects too is a continuous activity throughout the years. In the past year, we have done funds of those acquisitions of project portfolios or projects. But we are also strategically planning to acquire beyond the portfolio or projects, but also capable platforms in both the US and Europe.

Excuse me, what does that – what does that imply? I mean, when you suggest platform, does it mean you're moving a little bit more into the technology side. Any – any clarity on you know what you mean by that?

When I mean platform is the – we are opening up, considering opening up some new market in Europe. We are also considering to open – open up our project portfolios with let's put it this way, we are acquiring projects. And now we are also acquiring the development platforms. I'm talking about the talented, capable developers, who together with the portfolios or projects, that is the target we are also looking at.

Okay, okay. Understood. Okay.

More…

My other question…

More – more development pipelines, and together with the development platforms with the – with the capable developers. Amit, we are also – Amit, again, we're also penetrate further in solar plus storage area.

Okay. Okay. Understood. Yeah, I can take these offline as well. Thank you.

Our next question comes from Pavel Molchanov at Raymond James. Please go ahead.

Thanks for taking the question. You referenced a minute ago, the new German coalition government and its 200 gigawatt solar target for 2030. As I look at your existing project pipeline, Germany is a very small amount, only 2% or 37 megawatts. Are you more enthusiastic about potentially expanding your footprint in Germany, given the new political environment?

Absolutely. Thank you. You asked a very good question. Yes, we do have the plan. We not only aggressively expanding our team locally, but also actively building up our partnerships, as we have been doing in the European markets.

Let me also touch on supply chain. I think everybody understands what you know, what's been happening with module prices, steel costs and borrows every commodity over the past 12 months. Are you noticing, perhaps in the last six weeks, some loosening of the supply chain, for example of no reduction in module pricing, which seems to be what the benchmarks are suggesting?

Absolutely. You're right. We do have noticed that. In the last about over a month's time since early – early November, late October, we start to see the comments or announcement by the big module manufacturers and even other suppliers of industry cutting their price target are indicating the price will go down. And our European team and China team, as you know that although we focus on the NTP sale for most of our projects, but we do have portfolios in Europe and China, not only in China, we are building them and holding them for IPP model. But even for Europe, we sold projects. And we work for the partner, we sold project to as the EPC management company. So we are responsible for those construction and procurement of the modules and the whole pole balance of the system. So because of the high price are caused by the delays of the supply chain, we managed to delay the construction of some European projects, that also have some indirect or direct impacts our Q3 numbers, but we believe that's the right thing to do. And now we have also recognized the price of the modules for example, to your European market and China boasts gold lowered as much as over 10% only in last one month. And we have used up our already purchased product in stock early this year at a low-price. But we are planning to buy more modules starting early next year; especially we see the prices going down now.

Okay. My last question is about the year release relationship to China. Your stock has been trading along with other Companies perceive to have a Chinese connection because of restrictions in Beijing and so forth. Can you just clarify as a where is ReneSola domiciled? And what is your relationship to China, beyond simply having those, that small amount of recurring revenue assets that are operating in the Chinese market?

Thank you. This is a very good question. We are a very International Company. It is true; the company was founded back in China about 17 years ago. And that time, we were focusing on manufacturing. But since four years ago, the company split the option of a downstream and the downstream part, which is, SOL is a very International Company. Not only we have our over 90% of the project portfolios, as you can see from the deck or letter to the shareholder is outside of China, but also, we expect the growth -- the strong growth from Europe and US will continue dominating our whole company growth in the long-term in the future. Second, we do believe, that the China presented us some very good opportunities, high-margins from the China prices we are developing and building. And that attractive margin can be recognized as a business operator. And we love it. But we are very disciplined, not only controlling our quality of the projects, but also we have high standard, a critical standard for our economic hurdle for the China projects. The link to China, it was all because that we were founded in China. But now, I will say, I am the CEO. I am in the U.S., our -- Ke Chen, our CFO in the U.S. and the headquarter of the company is in U.S. where I'm sitting in, the Stamford, Connecticut, half an hour away from New York. And our operations, once again, is an international company. We do have China operation, as many companies do, but China is only one of the countries we develop projects, representing about less than 10% of our growth of the company. The portfolio of the IPP in China does represent a high margin recurring revenue. But that is the strategic economic consideration of the company. As those deals are providing very high margin to the company.

Pavel, I want to add, again, our company is domiciled in BVI. We don't have VIE structure. So every shareholder will holding the same right of the assets of this company. So it's very clean. And like Yumin mentioned, again, 70% of revenue and gross profit is coming from U.S. and Europe. So, again, we are focused on the growth of this area. And I also want to go back to your question about the cost. Again, people focus on cost, yes, the cost did went up. But I will also want to emphasize the PPA price went up as well, even at a -- even higher multitude. A costs-free market we operate on Europe, U.S. including China, PPA price went up. So I think those will benefit us in the long term.

Thank you very much.

Thank you, Pavel.

[Operator Instructions] Our next question comes from Philip Shen at ROTH Capital Partner. Please go ahead

Hi, everyone and thanks for taking my questions. Thank you also for the straightforward Q3 letter and opening comments, addressing the egregious short report and the disclosures overall, you do provide a lot of information and I think they’re help -- it's helpful. On the buyback, you guys put that in place after the short report. And there was some damage from the short report with the stock price. I think you highlight your cash per share is basically $4 a share, which is interesting, relative to the current $6 share price with a book value, also $6 per share. Given that, can you share with us right now, how much of the buyback -- $50 million of buyback approval, how much have you used?

Phil, we just approved this, so we are in the process of, again, start this buyback process.

Okay.

We have -- that was zero, Phil, as we are not -- we will not do this before the earning call.

Got it? Okay. That makes sense. And so, I can imagine, you might be using it sometime soon. Actually, what is your view on the opportunity right now?

Yes, Phil. I think, we are going to be aggressive here. First of all, again, as I mentioned, our stock is undervalued. Secondly, we see a lot of growth here. And we have strong pipelines, strong balance sheet. So, we're proud of what we're doing. And we see a lot of potential for our growth here. So we're confident.

Great. Okay. That's really helpful. Let's look into 2022. I know, you talked about issuing more detailed information in your year end shareholder letter. That said, I think this year, I think through Q2, you guys had done 65 megawatts. I think I've – sales, I don't exactly recall seeing in the Q3 materials, what you sold in Q3. So if you can talk about that, that'd be great. And then basically, it seems like, maybe it's about 100-ish megawatts for this year, but when I look at the COD information in your detailed PowerPoint, there's a lot of 2022 COD, or NTP, if you will. And so, I'm thinking, 2022 is 250 or 300 megawatt level of sales. Am I off base on that in -- are we in the right ballpark?

I think the -- you touched on two points. One is, our 2021 number, one is 2022. Okay. I think the -- what you just said basely, are both are right in the ballpark. Number one 2021, we are, in the last two years, Ke and I, and also all the senior management of the current senior management, all came on board about two years ago. One of our focuses is to build a solid strong pipeline to secure the growth -- long term growth of the company. And we are getting there. We build a gigawatt last year. We have two gigawatts target this year and now, we have 2.2 gigawatts target this year and looking at our quality portfolio with a very high success rate of the portfolio as lots of risks have been minimized or product got the to certain level derisked. The development cycle are monetizing in cycle from today to the time we sell the projects will be two to four years. And do a simple maths, what you said for the 2022 and beyond will continue to grow, not only at one side grow our development pipeline, but also the other side, grow the megawatts we will sell each year. 200 megawatts to 250 megawatts is a reasonable, but low end estimate, as we see growing from next year. And this year, as we mentioned in -- let me finish this one in this year, we delayed our two products sales, one in the US, one in Europe -- in Spain, okay. Those two together, that is about 60 megawatts, 70 megawatts right there. And we hope we can close them in Q4 or no later than Q1 next year. So, that's the overall picture of our sales and project closings.

Great. And so at the beginning of this year, you gave the target to reach and add two gigawatts to your pipeline, or at least reach two gigawatts for the pipeline. What do you think you could see at the end of 2022, given Germany, as you discussed with Pavel just now, it's a new wide open market that could see very nice and aggressive growth. And there is just a robust potential outlook, the US market could get a boost from the build back better plan. So, what's your stance as to where the pipeline could end up? Could we see three gigawatts or maybe even more?

I think we absolutely will present you a more robust and aspiring pipeline growth target by -- when we released the year end result. But we think it will be great as the fundamental support from older governments and older policies. Just give you one example, that as we mentioned, the four top markets providing most megawatts us to our company's portfolio at this time, are US, Poland, UK, and Spain. We have many more megawatts in those countries and also in other countries too. We all have many more of those, we call early stage projects. In countries, as I mentioned, those four countries, sometime, we not only give a big attention from our management to build up the team, as Pavel mentioned about how we build up a team in Germany, how we expand the team in Poland, in Spain, in UK, in US. But at the same time, we are actively developing, maturing our current portfolios at early stage. One small example I want to give you is, we cited 300 megawatts in Spain. What the status of this 300 megawatts? In Spain, typically, we see five things, you have the land lease, then you have the application for the interconnection, then you put the deposit, then you get the -- the fourth one is you've got the confirmation from the authority to say the capacity will be available to your application. The last one will be you are approved for your applied capacity. You know, some of the portfolio of this 300 megawatts already have all the five steps done. We are working on the final step which is the environmental approval and that are about 270 megawatts, we have put -- total 300 megawatts. We already have the four steps done, just waiting for the final confirmation of the approved capacity. Just give you one example that we have more than a lot bigger early stage portfolio. We also put in the application, but we are waiting for the final confirmation of the available capacity. Just one example. And also as I mentioned earlier, we have over 10 different partnerships in Europe and every one of them we believe is capable of bringing new projects to us. For example, I mentioned earlier, our -- we have to development partnerships in Italy. They have brought us four new projects total. We have not included in Q3 as they are we consider maybe middle stage projects. But the -- we will refresh our pipeline, quarter-by-quarter and year-by-year. And we see great potential in every market. We are developing projects. And that pipeline can be very promising.

Great. Thank you, Yumin. As it relates to…

Thank you, Philip.

[indiscernible] enforcement action in the US. We are seeing limited module availability from Genco, Trina and I believe Longji [ph]. And so I was wondering, what kind of impact you could see in 2022 installations as a result of that. Have you --maybe you already addressed that when in your prior answer? Apologies if I missed it. But to what degree have you been able to diversify away from the impact, there’s modular suppliers? And have you been able to substitute those modules with other ones or are you still in the process of doing that?

Hey, Phil, it's John. So the answer has a couple of different answers; one, just right after that, it's absolutely true ultimately that, if the projects get more expensive on the EPC side, eventually that works its way up to us. But fundamentally, the strategy of being an NTP seller, we are insulated through that process because; one, subtlety of that is important to appreciate is, at any one project sale we don't walk into that project with locked-in financing, locked-in EPC or locked in procurement. And we're able to take, for the moment we have the luxury of being able to take the most competitive bid in that market for that project for that COD Day for that market. And what that means is, on the ground what we've seen is that some of the bidders have a view that they'll buy the project and by the time they build it, six or nine months from now, they'll be in a different position. And they'll basically take some risk on EPC cost that they don't push to us. In other cases, we dealt with buyers that have Safe Harbor procurement and a very solid subcontractor relationship network that they believe they we get the projects built on a labor front where they're not overly exposed. I'm sure there are some small movement. It's a roundabout way of saying, we acknowledge that there – we have some exposure, but there's some derivatives to that, that we're a little bit insulated. And there's some real subtlety as to how that expresses itself. As panel prices stayed high for the next 10 years, ultimately, yes, obviously, would our margins be hit. But then, like Ke said earlier, we've seen PPA prices creep up too. So, there's some -- I go back to the same thing and I'll end it here. But I go back to the same thing that I firmly believe that high quality development is the rarest resource in renewables. And if we're controlling, high quality development and doing a good job of it, I think there will always be a strong bid for it. Now, exactly how that translates or the transfer function between EPC pricing and our margin, ultimately, we are exposed, but we've seen a number of things that separate us, at least in this recent short-term, when I say, recent quarters.

Yes. Appreciate that, John. And I think that's super important to highlight that you guys are much more insulated to in from the WROs because you're not making those modules commitments per se. That said, your customers are and ultimately they have that impact. And so you guys have mentioned that PPA prices have gone up. Can you just talk about the buyers’ environment and have you seen any buyers step away for example, or quite the contrary, have you seen more buyers possibly come into the market so that can result in that pricing going higher? Maybe speak to some of those dynamics as that are driving the PPA pricing higher. I know obviously supply chain is driving, but what else might be supporting it? Thanks.

You know Phil, you made a very interesting comment on this. You already said fact, I want to say. In the long-term not only we have, we believe the buyer has a -- we have a big buyers pool and they offer a long-term view into the solar industry, okay. But also, they have absolutely a big commitment investing in the long ownership of the solar farms. Just give you one example, I mentioned about the two delays of our projects sales, Y in Europe, Spain, Y in US, that US is the portfolio projects, the Spain is also Caravaca, two projects, 12 megawatts, okay. That deal was supposed to close in Q3. The buyer was a EPC company supposedly. With a supply chain issues, EPC companies could not continue the transaction, as they see the margins are fading away. But we immediately restarted the process. And we found buyers who gave us equal a lot or a lot better pricing, and we are looking to close it in the next two weeks. And the buyers, we are talking to now, literally speaking, are committing to invest in solar. We have a serious buyers’ pool, and they are absolutely willing to work with us in the long-term basis. Many of them hope to become our strategic partner, long term. And we enjoy the growth together with the long-term owners of the solar farms.

Okay, thank you very much for taking my detailed questions. I'll pass it on.

Thank you, Phil.

Our next question comes from Marisa Hernandez at Sidoti & Co. Please go ahead.

Hi, good afternoon and thank you for taking my questions.

Hi, Marisa.

Hi, Marisa.

Can you hear me?

Perfect.

Yes.

Okay, great. I apologies I don't have a great connection today. So first of all, thank you for your opening comments and the disclosures that you make that I as an analyst find very useful. And thank you also for the clarifications on your ownership structure. I apologies if these questions have been asked already. So number one, on the third quarters specifically, I got that you got a couple of projects delayed 60 megawatts to 70 megawatts. But how many megawatts did you sell in the third quarter and what was the mix of NTP and COD sale?

Ke, do you want to take this?

Sure. Marisa, we sold about 6 megawatts in Maine, that's NTP and we sold Poland, 6 megawatts that’s the COD sale.

So total of 12 megawatts in the quarter?

Roughly, yes, yes.

Okay. And do you have a range of what you expect for the full 2021, in terms of megawatts and I understand that there's a big six components in there?

You are talking about how much we're going to sell in first quarter, you’re right?

Yes, yes. 2021, whichever you are referring.

Let's put it this way, Marisa that we are in the process, selling quite several portfolios in US and Europe. As I mentioned, in earlier that we do -- we are in the process starting old projects. And we target to close bunch of them. And we are in the closing mode, several projects and we hope we can get them done all before Christmas time. But we also give a wide range of guidance for the Q4 results. As we are able to leave the some unpredicted -- unpredictable events as of the holiday season.

And just to start -- can you just give us a flavor

So, although it's only a month away. But our team is every day working hard in the closing mode for quite several portfolios in both US and Europe.

So I understand. Thank you, Yumin for that. And now in terms of mix, can you make any comments on all of those targets you're working on of NTP, modality or all of them COD or is there a mix?

Most of them, if not all of them, they'll be NTP sales.

Got it. Thank you for that. So moving on to pricing. You –

And also Marisa, before…

You referred about PPA pricing. Yes.

Before you move to next question. Just want to mention to you that the when I give the remarks at earlier that our revenue is on the low end, but we don't believe our investors need to be concerned as we are not either because we are perfectly executing our NTP sales strategy. Every time we do NTP sales, we see a lower -- higher margin, a lower revenue. While early in the year every quarter, we expect we put a expectation -- some buyers, they say ReneSola I want to buy your deal, but I want the transaction to be done at a COD. So we put in some perspectives on the COD sale. But every time when you'll see if we close the deal every single one at NTP sale stuff like -- last quarter in Q2, you will quickly see very high gross margin. Like last one we have over 60% gross margin in Q2. And for this quarter..

Right.

…the margin goes lower to 40% because we have a mixture of NTP sale and COD sale.

Understood. Thank you for that, Yumin.

Okay.

The next question is related to pricing trends. I think it was mentioned earlier how you're seeing a higher crisis from buyers, which I'm very glad to hear about. You also mentioned that you have COD projects sell later on. So my question is around, you know, given all the cost inflation some we've seen this year on the material side and now we are starting to see the better PPA prices. For your COD check, when do you think the margin can catch up? Is it going to be first half of 2022? Is pricing good enough to offset the cost inflation that we've seen or you need for cost to go down or prices to go up further any flavor you can give us about the industry?

I would address your question in two ways. One is the immediate market reaction to the high price. For example, the high price not only meaning the high price from the modules or BOS, okay, but also from the overall industry, the material costs, the steel and everything or energy cost. You know, I came back from UK about three weeks ago, visited bunch of customers and also contacts. I know the solar market UK goes as high as almost 20 cents per kilowatt hour, as a heard of that for years. But unfortunately, that's the spot market price in Europe. That represents the reaction of the market to the, high-energy price, high-cost of raw materials, and owe everything. And I don't expect that will continue. But the overall trend of the PPA absolutely reflect the near-term, or last 12 months, or maybe going off another five, six months high-price in the solar industry. As we see not only in the US, but also in Europe the PPA price continuously going up by 10%,15%, 20% or more percent. In bunch of the PPA negotiations we have, we have seen that. The second point is we do believe there are many very active long-term investors in the solar industry. They carry their long-term commitment to invest in solar. And they not only will be supported by the developers like us, but also by the supply chain. As we discussed earlier, the price of the modules start to go down. In the last one month only we see more than 10%. And if you read the news from those fake module companies, no matter its [indiscernible] or whoever. They have all forecasted, but price of modules will go down. Starting now, going into Q1, Q2, and some aggressive estimate, it will go back to normal before too long, or before the end of the year, next year. So, whoever our partners, look, literally I more like to talk to our partners are the long-term investors in general, they commit to the solar industry, I believe they will benefit from it. Now is the best time to get into the spot business, and then harvest when the supply chain provides them the strong support for their profitability. And we want to be are we have been part of this success story.

Thank you for that, Yumin. I also wanted to ask about what's the theme about project [indiscernible], because of the cost inflation this year on the COD type of projects, and the whole industry. Is that something that you would expect to start eating in the next couple of quarters or is it hard to tell?

In general sense, it's hard to tell. But, two points I'd like to mention. One is, we have been pretty successful, managing our product development process and managing the risk of the potential delays. Not only our team works hard, but also our partners, our -- we are interacting with all different parties in the development process. We try to find creative ways working with them. Okay? And that is one part of the story. The second is, we still -- people still rely on the supply chain coming down to the level people feel more comfortable. At this time, the good part of our development pipeline is we do not have PPAs. We have cliff PPA guarantee COD date. If we have PPAs, having the cliff date, so called guarantee COD date, we would be in difficulties. But we are not in those positions at this time. Okay? And many customers are even many of the solar developers, as we know they are also developing their strategies. And everyone, I hope is supporting the growth of the solar industry with the hope the supply chain will come down. And I'm optimistic as currently if you do the math of the new installations of the manufacturing facilities for modules or even polysilicon, wafers, everything, we will see overcapacity or oversupply in less than six months time. The market will adjust itself for the price.

Got it. So, you guys spoke about a wide range, perhaps 200 up to 300 megawatts, if I heard correctly for next year sales. What is the assumption of mix behind that, NTP versus COD just reflecting on the fact that you've said multiple times that, if you do NTP, you should do more and vice versa?

Yes, the -- I will say, the majority of the sales will be NTP sales.

And if I can squeeze in our last one on the ownership structure, thank you for reminding us of your BVI jurisdiction. I think at some point, we were talking about potentially becoming a 10-Q as opposed to a 6-K filer. What's the status with that?

Marisa, we are again starting the structure of our shareholder. Again, we will be based on that study to decide, how soon we'll ship it to -- I mean, not before environment. Again, we will update all the shareholders here.

So that depends on the jurisdiction of the shareholders, yes.

Yes, again, we believe again, we are we're close to about 50% of shareholder are here in the US, but we need to do a thorough study to make sure that's the case.

Understood. Thank you very much.

Thank you. In the interest of time, let me turn the call back to Mr. Liu to conclude the call.