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Hello, ladies and gentlemen. Thank you for standing by for the ReneSola Power’s First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note that we are recording today’s conference call. I will now turn over the call to Mr. Yujia

Thank you, operator and hello everyone. Thank you for joining us today on today’s call to discuss our first quarter 2022 results. We released our shareholder letter after the market closed today and is available on our website at ir.renasolapower.com. There is also a supplemental slide 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; and Mr. John Ewen, CEO of North America. Before we continue, please turn to Slide 2. Let me remind you that remarks made during this call may include predictions, estimates and other 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 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 obligated to update you on any revisions to these forward-looking statements. Also, please note that unless otherwise stated, all figures mentioned during the earnings call are in U.S. dollars. With that, let me turn the call over to Mr. Yumin Liu. Yumin?

Thank you, Yujia and thank you everyone for joining our conference call. As we published our shareholder letter and the supplemental earnings deck already, I would like to keep my comments high level around the macro environment and our business update. Then Ke will cover our financials. I will take your questions. We will be joined by John for Q&A. Overall speaking, our results in Q1 were in line with our outlook provided last quarter. Revenue was $3.5 million as a result of our IPP assets in China and U.S. Gross margin was 32.5% and adjusted EBITDA was $0.6 million. As we guided last quarter, the timing of this year’s product sales is concentrated in the second half of the year. Looking forward, we continue to be excited about our revenue ramp towards the end of this year and beyond driven by our strong project pipeline. The global macro environment has created severe dislocates in markets and industries worldwide and has impacted everyone. For us, we are benefiting from a favorable tailwind and extremely strong demand for solar in our largest market in Europe, but are also seeing some slowdowns in the U.S. and China due to supply chain disruptions and the recent government access. We will go into these three markets in detail. Starting with Europe, our largest market, the solar industry continues to receive extremely favorable policy support to accelerate renewable energy growth, to reduce dependence on Russian fossil fuels and to tackle the climate crisis. For example, in May, the European Commission introduced the EU Solar Energy Strategy, which aimed to more than double the EU’s current solar capacity to 320 gigawatts by 2025 and 600 gigawatts by 2030. Further, we also saw a proposal to recognize renewable energy projects as an overriding public interest and cut permitting time for major renewable energy projects by half which would significantly accelerate our project development process. At the country level, for example, in Germany, renewable energy policy has become one of the most important national agendas as they aim to make Germany’s power system 100% based on renewable energy by 2035. In our recent draft legislation, Germany laid out plan to more than triple solar capacity to 200 gigawatts by 2030 via tenders and improved support for smaller solar projects. There are many more other examples of policies and plans favoring solar market in Europe. I will not list them all for the interest of time. Moreover, we saw European PPA prices for solar in Q1 increased by 27.5% year-over-year, largely driven by demand directly attributable to the conflict between Ukraine and Russia, driving up energy prices across Europe. Additionally, we are also seeing an increase of retail electricity providers purchasing spare capacity to meet their own decarbonization and sustainability goals and provide green electricity offerings to their customers. To put it simple, with the context of our largest market, Europe, benefiting from favorable policies as well as higher PPA prices, we are excited to see the value of our pre-NTP and NTP project pipeline in Europe increasing. Our mid to late-stage product pipeline in Europe in Q1 increased by 107 megawatts from last quarter, with most pipeline increase in Hungary, Spain and UK. In the U.S., our second largest market, solar installations in Q1 increased 11% year-over-year. However, utility-scale solar installations slowed due to continued pandemic-related challenges in supply chain, inflation, fleet risks and lack of regulatory certainty. While this situation has severely impacted large solar project developers, we have not seen any delays to our U.S. based projects that we expect to close this year as the majority of our projects are focused on small to medium-sized utility scale and community solar projects which are targeted to receive during 2024 and beyond. However, one of our mid to late-stage projects was impacted by interconnection challenges during the quarter as a result of the increase in cost and schedule delays. Despite these near-term challenges, the long-term trend towards renewable energy in the U.S. remains intact as solar continues to be the leading technology in the clean energy pipeline, accounting for over 50% of all clean power capacity in the development in the U.S. On top of this, we certainly welcome Biden administration’s decision to waive tariffs on solar panels from 4 Southeast Asian nations for 24 months. In China, the COVID lockdown in April and May has impacted economic activities and caused severe supply chain disruptions. We expect a portion of our previously planned new IPP projects in China to be impacted and therefore anticipate our year end new IPP project target in China to be closer to 50 to 70 megawatts. In 2022, we continue to expect to build on our strong pipeline growth momentum and closed the year at 3 gigawatts with a significant portion of the growth coming from Europe as a result of the favorable policy support. We target to grow the company’s mid to late-stage pipeline to 5 gigawatts by the end of 2024, with a significant portion of the growth coming from Europe. With that, I will now turn the call over to ReneSola Power’s CFO, Ke Chen. Ke?

Thank you, Yumin and thanks again, everyone, for joining us on the call today. As a reminder, some of the metrics we will discuss today are 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. Our non-GAAP to GAAP reconciliation is included in our shareholder letter. Let’s begin with our Q1 financial highlights on Slide 17. Revenue was $3.5 million, in line with our guidance as our project sales for this year were not scheduled to begin to ramp until Q2. We did sell one 24 megawatt solar project in the UK to Innova, but was recorded as an investor income of $0.7 million as the project was a 50% joint venture. Gross margin for the quarter was 32.5%, higher than our full year guidance range of 20% to 25% as our revenues were all from our higher margin IPP assets in China and the U.S. In terms of operating expenses, Q1 operating expenses were $3.4 million, down significantly versus $8.7 million in Q4 2021, but somewhat higher than $2.7 million from Q1 of last year. On a non-GAAP basis, Q1 operating expenses were $2.7 million. This is compared to $4.3 million in Q4 2021 and $2.2 million in Q1 2021. Moving down the P&L, you will notice our interest expense is down almost half this year versus Q4 2021 and Q1 of last year as we significantly reduced our debt. You will also notice a $0.7 million gain in investment income and that is related to our joint venture party sale in the UK, as I mentioned above. With that, our GAAP net loss in Q1 2022 was $1.7 million. Net loss per ADS was $0.03 versus net loss per ADS of $0.02 in Q4 2021 and net income per ADS of $0.01 in Q1 2021. Now, let’s review the balance shown on Slide 20. Our financial position remains strong, increasing more flexibility for us to choose any good opportunity. Cash balance was $223 million, slightly lower than end of Q4 2021, primarily due to any operating, continued projects purchase, PP&E purchase and the repayment of financial lease in China. In addition, during the quarter, we purchased $10 million of 2-year U.S. treasury notes. Our debt-to-asset ratio at end of Q4 was a record low of 9.6%. Now let’s cover guidance as shown on Slide 25. For 2022, we are reiterating our expectation for full year revenue to be in the range of $100 million to $120 million. Our project sale for the year began to ramp in Q2 and will accelerate throughout the rest of the year. As such, we anticipate our Q2 revenue will be between $30 million to $60 million and our Q2 gross margin to be between 35% to 40%. We expect our gross margin for the year to be between 20% to 25%. For net profit, we are targeting between $9 million to $10 million for the full year, which is in line with our prior guidance of at least 30% growth. Finally, in regards to our share repurchase plan. As of today, we have completed the repurchase of $20 million of ADS shares outstanding, and we still have $30 million remaining. We believe this share repurchase demonstrates the confidence of our Board and the management team in the strength of our business and the compelling growth opportunity in front of us. Thank you. And now we would now like to open up the call for any questions that you may have for us. Operator, please go ahead.

Thank you. [Operator Instructions] Our first question will come from Philip Shen at ROTH Capital. Please go ahead.

Hi, everyone. Thanks for taking my questions here. First one on the guidance. I think the implied revenue for the back half is about $90 million. And so I was wondering if you could help us understand how much of that might be in Q3 and how much might be in Q4? I know you’re not providing official guidance, but some kind of perspective would be useful. Thanks.

Yes. So again, most of our, like, sales will be in Q4 because most of those sales will be – that relate to the sale in Poland and Hungary. So the risk guidance will be like maybe around $20 million in Q3, rest will be in Q4.

Okay. Got it. And then can you talk about if you have $20 million there, then that’s a pretty big chunk in Q4, roughly $70 million. What’s the risk that some of those projects get pushed out into the beginning of next year. That is – it happens often, right, in solar and in projects where there is a push out. And so when you look at what you expect of that $70 million ish in Q4, how much of that is certain, like in the early part of the quarter? And then how much could be – have a chance to be in ‘23? Thanks.

Yes. This is a good question. The, under the pandemic environment, the delays of the project execution is absolutely expected and many people consider that to be novel. But we do have very high confidence of closing those deals based on our current plan, our current plan milestones. The reasons are, or the key reason really is that the – as Ke mentioned, the major activities of the – I mean, EPC activities are in Europe, and we have already started those activities, including the procurement, signing up the EPC companies, start all the detailed engineering and put the team on the ground to start the groundwork. And we feel that the – we purposely delayed those EPC activities to this time as of the high supply chain cost interest in the past 18 months. But we do have seen the price is going down, and we are confident we are starting at the right time on the procurement of the solar panels and signing up the EPC, literally the EPC companies we have been using in the past years. Those EPC signed contract and the procurement, locked procurement will or is giving us all the confidence. We will deliver the right results as we expect.

Okay. Good. It’s nice to hear that you have that line of sight. And then similarly for margins, when we look at Q3 and Q4, do you expect because of the lower revenue in Q3, that means the higher margin IPP revenues there? Should we see a similar gross margin in Q3 as Q2? And then Q4, should we expect that to come down to the normalized maybe like mid-20s type margin? Thanks.

Yes. As you can see, we guided Q2 with very high margin because majority of that will be NTP sales. And in Q3, we see maybe similar majority NTP sales. So the margin – again, I don’t – we don’t give out margin guidance right now. But again, we expect, again, higher margin, but like I said, in Q4, mainly that will be the COD sales. The margin will definitely coming down to the level we guided for the full year.

Okay, that’s really helpful. So – please.

Adding one point, our project size, we are doing – we are having the EPC activities is small. As you know that we have those smaller-sized projects. And the typical site work from start to end going to COD is about 2 to 3 months. Sometimes it can be longer than, a bit longer than 3 months. That also give us the confidence that starting from now to the end of the year we will be meeting our planned schedule.

Great. Thanks you, Yumin. In terms of 2023, can you talk about what kind of growth you could see? I know there is not official guidance. We’re looking for you guys to grow maybe high single digit, 9% year-over-year. Do you have an ability to talk through what kind of revenue growth we could see in ‘23 without the official guidance because I think it might – you have the visibility on a lot of the project developments, and so just curious if you can share some detail. Thanks.

We absolutely expect very strong growth from both the product pipeline and the bottom line, okay? As we guided that this year we compared to last year, we talk about 30% growth on the bottom line. And also, we added from 2020, double our 1 gigawatt portfolio to 2 gigawatts. And this year, we are still confident through our team in three reasons, we will be reaching our 3 gigawatt pipeline, call it a mid to late-stage pipeline. And this pipeline will support the growth on the top line, bottom line in 2023, okay? And we will be starting our harvest time in 2023, having growth on all fronts. While we are continuing developing new projects, adding the quality process into our pipeline, but at the same time, the existing pipeline, the 2, 3 gigawatts will give us the harvest time on both top line and bottom line. The – in general, we expect a minimum 30% growth from both top and bottom lines.

Great. Okay, that’s very good detail. I appreciate that color, Yumin. I have few more questions but I will pass it on for now and I can jump back in the queue, if need be. Thanks very much.

Thank you.

Our next question will come from Pavel Molchanov at Raymond James & Associates. Please go ahead.

Thanks for taking the question. Let me start with Poland. It’s now almost one-third of your pipeline. And of course, I couldn’t help noticing that Poland is one of the first EU countries to lose all supply of Russian natural gas. Since that happened, that loss of Russian supply in April, have you noticed any acceleration or uplift in demand in the Polish market for your project?

Absolutely. This is a very, very good point. Poland has been our, one of our top market in general. And you are right, we have about 30% of our pipeline at this time from Poland. And our EPC activities also, as I earlier mentioned, also has part of the EPC activities in Poland, okay? The – on two things, I would answer you. Number one, the demand is absolutely, is very, very strong. We are looking at the different level of M&As together with our organic growth of the project development, okay? We are actively acquiring projects and even hiring or improving our team’s talents by hiring more people, okay? We have our largest team in Europe in Poland. We have seven offices in Europe and the activities in seven countries, and Poland is the largest one we have, okay? And more importantly, that’s the second point, we do have built up our experience, not only our team but also the experience, our track record and the partnerships in the Poland market, okay? That also gives me and the team the confidence how we can deliver, okay? Not only we develop the sizable pipeline, but also we can monetize them and deliver results. That is the confidence we have based on our last almost 5 years’ experience in – over 5-year science in Poland.

Pavel, I may add that, again, our brand name in Poland is strongest among all the competitors. And we have the leading position there. So, we are very happy right now to be in that market. And our track record shows that we have success rate to develop project over 80% plus. So, we are confident about this trend and to achieve results from Poland.

Okay. There are several other countries in Europe that for the same political reasons lost Russian gas supply Bulgaria, Finland, Netherlands and Denmark, maybe I am forgetting somebody. Do you have any interest in expanding into any of these markets given the – what you mentioned, the urgency of displacing that gas as quickly as possible?

Absolutely, yes. We are interested, but we are carefully expanding our market coverage. And we are investigating the opportunities for us to go into new territories beyond seven countries we are having now, okay. We are considering currently adding at least one or two more countries in our planned activities by talking to our existing partnerships and the joint venture partners in Europe. As you know, we have over a dozen different joint venture partnerships and also development partnerships in Europe. And through them we can quickly expand our product pipeline in Europe. And you hit the right point. I think the demand from Europe absolutely getting, is getting very, very strong, stronger than we have ever seen in the past. And I am confident we will add more marketing to our portfolios.

Pavel, I would like to add again, we are in Germany, we are in France, Italy, Spain, UK, those markets, even though they haven’t lose Russia gas yet, but the demand is so strong, and we try to catch up and all these opportunities in the existing market.

Right. Lastly, did you say earlier that revenue in Q3 will be $20 million?

Yes, around that range. Again, we have not given official guidance. Again majority of our COD sales will be fourth quarter. So, again, Q3 is still mainly NTP sales.

Okay. Thank you very much.

Thank you, Pavel.

[Operator Instructions] Our next question comes from Sameer Joshi of H.C. Wainwright. Please go ahead.

Thanks. Thanks for taking my questions. I think in your prepared remarks you mentioned that you have not faced any delay mainly because you have small and medium-scale utilities. Can you explain that phenomenon? And then part two of that question is given that Biden has now moved the tariffs, do you see any additional upside to your guidance going forward for 2022?

Yes, absolutely. John, do you want to take this one?

Sure. Can you hear me Sameer.

Yes.

Perfect. Yes. Just making sure since I hadn’t spoken yet. So, the first question, to be specific to the questions, on the small to medium-scale stuff, the reality is some of the buyers had already safe harbored panels. And so during this entire process here, granted while these were sales that go back to a couple of quarters. For example, a number of our projects were completed, like physically completed during the process because panels had been safe harbored and then so that’s – but if these projects were behemoths, a lot of that safe harboring wouldn’t have been possible due to just cost and parking capital and storage and everything. So, these are projects on the order of small numbers of megawatts. So, that’s the direct answer there where – and we sold to multiple parties. So, we had transactions in construction. And keep in mind, we are not the builder, but it’s good to note that our projects weren’t sold and then people were sitting on them. They were sold and constructed through not only the first quarter, but like I said, referencing projects that were sold in quarters past. But recent quarters past, like directly relevant to the conversation. And that’s really the first part of it. So, maybe articulate the second question.

Yes. The second question is about the waiving of tariffs and how it impacts a lot of folks, you guys in the U.S., especially for 2022, is there not going to be any short-term upside?

Right. So, the reality on the tariffs, it’s always the answer we give, and it’s kind of – it’s not passing the buck, but it’s the truth, that we sell to folks who have their own strategies in terms of equipment supply, procurement strategies, safe harboring. And fundamentally, it’s not – we are affected by it in sort of the first derivative of the tariff issue, and that is their bids reflected to us. So, if we are still producing high-quality projects, we will still see high-quality bids. They might come from different places because the highest bid for a certain market, the benefit of selling NTP is we can basically take the best bidders in different markets. That said, obviously in all truth, all of those bids are impacted by a very long run confusion, or obviously markets don’t like confusion. And if there were long-running confusion on tariffs or more damaging is the risk that retroactive tariffs would have placed on people. And the fact that now there is sort of some certainty there on these four markets where a lot of panels flow through and that there is not going to be a retroactive slap during the next 2 years, that will definitely help with bids. I don’t want to say it’s going to change our guidance, but it won’t hurt our guidance from current stated levels, if that makes sense.

Right. Yes. Thanks for that. And then on China, I know some of the projects are not meeting your IRR requirements. Does this change your longer term view of IPP in China, or will you continue being selective and continue to grow that installed base as well? I think now it is expected to be 50 megawatts to 70 megawatts during 2022 versus 100-ish previously?

Yes. You are right that we previously guided we target complete by the end of the year 100-plus megawatts in China on the IPP front. But now realistically, after those lockdown set-downs greatly impacted our delivery schedule and some projects got literally further delayed. That’s why we took them up. They are not that yet. We took them out from our middle to late-stage pipeline and put them to the early stage, and we are continuing developing those projects, okay. But currently, as we guided, that the – we are confident by the end of the year we will finish 50 megawatts to 70 megawatts – additional 50-plus megawatts in China. That’s our target. And also, we are confident to achieve that target. But I will see that the China is picking up their speed of opening up from the lockdowns. I hope they will continue opening up more instead of lockdown more.

Sameer, we will – we are selectively – China, again we only put we are – criteria for profitability in China, so we will continue that criteria, to selectively do project in China.

Got it. So, just to paraphrase, the pullback now is only because of prevailing conditions, it is not the long-term statement on strategy going forward? The strategy in China remains intact?

That is correct.

Okay. And then just one last question. Given that your revenues will be Q4 loaded, is there going to be any variance in operating expenses through the next three quarters, or should we expect similar levels with slightly elevated levels in the fourth quarter?

I think for G&A expense, you should expect similar like 3.4 to 3.6 range. So, we don’t expect a huge change there.

Okay. Thanks for taking my questions.

[Operator Instructions] There appears to be no further questions. So, I will hand back to management for closing remarks. Thank you.