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Hello, ladies and gentlemen. Welcome and thank you for standing by, for Emeren Group Limited Third Quarter 2024 Earnings Conference Call. Please note that we are recording today's conference call. [Operator Instructions] I will now turn over the call to Gary Dvorchak, Managing Director of The Blueshirt Group. Please go ahead, Mr. Dvorchak.

Okay. Thank you, operator, and hello, everyone. Thank you for joining us today to discuss third quarter 2024 results. We released our shareholder letter after the market closed today and it is available on our website at ir.emeren.com. We also provided a supplemental presentation that's posted on our IR website, that will reference during our prepared remarks. On the call with me today are Mr. Yumin Liu, Chief Executive Officer, and Mr. Ke Chen, Chief Financial Officer. Before we continue, please turn to Slide 2. Let me remind you that remarks made during this call may include predictions, estimates or other information that might be considered forward-looking. These forward-looking statements represent Emeren Group'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 Emeren Group's filings with the SEC. Please do not place undue reliance on these forward-looking statements, which reflect Emeren Group's opinions only as of the date of this call. Emeren Group is not obliged to update you on any revisions to these forward-looking statements. In addition, please note that all financial numbers discussed in this call are unaudited. Also, please note that unless otherwise stated, all figures mentioned during the call are in U.S. dollars. With that, let me now turn the call over to Mr. Yumin Liu. Yumin, go ahead.

Thank you, Gary. Thank you, everyone, for joining our call today. To start, I'll provide an overview of our operational performance for Q3 2024. Then, our CFO, Ke Chen, will walk through our Q3 financial results and our outlook. In Q3, our company executed on its bottom line focus, achieving solid profitability despite softer than anticipated revenue resulting from delays in closing scheduled project sales. With $12.9 million in revenue, we achieved a gross profit of approximately $5.6 million, yielding a solid gross margin of 43.8%, $2.1 million in operating profit and $4.8 million in net income attributable to Emeren Group Limited's common shareholders. Strong EBITDA of $8.5 million further reflects our commitment to sustainable profitability and core business resilience. Our net income was supported by foreign exchange gain exceeding $4.6 million, as the euro strengthened during the quarter, offsetting a similar foreign exchange loss early in the year. With Europe generating a majority of our revenue in Q3, we benefited from a strong euro. Besides, our focus on high margin growth remains robust. The independent power producer, or IPP, segment generated $9.4 million, driven by seasonal strength in European assets. Our Development Service Agreement, or DSA, model also expanded in key markets, adding $1.3 million from Italy, $1 million from France and $0.9 million from our first battery energy storage system, our best project portfolio in the U.S. Revenue was lower than anticipated due to timing issue, particularly delays in government approvals for three projects in Europe. This remain in our pipeline and are expected to contribute to revenue once approvals are secured. Let's move to the progress of each of our business segments. First, [indiscernible] DSA. In Q3, we executed a 394 megawatt BESS DSA with PLT energia and completed the sale of 57 megawatt solar projects to Trina through a mixed DSA/SPA structure. Our DSA approach is a game-changing, reliable, and scalable business model that enables us to monetize projects at early to mid-stages while securing high-quality contracted revenue. This strategic model delivers unique benefits, including positive cash flow and effective risk mitigation throughout the project lifecycle. Building on this momentum, we also signed our first DSA contract in the U.S. for a 72 megawatt BEES product portfolio in California. As of September 30, we have secured DSA contracts with nine partners, including Glennmont Partners, Matrix Renewables, and PLT Energia, covering 28 projects totaling over 2.1 gigawatts, with 84% allocated to battery energy storage system or BESS, and 16% allocated to PV, resulting in an expected contracted revenue exceeding $69 million to be monetized within the next two to three years. Additionally, over 2 gigawatt of DSAs are under negotiation, estimated to bring another $100 million revenue. This robust DSA pipeline encompassing both contracted projects and potential agreements and with nearly 90% base in Europe, underlines our strength in markets that favor renewable energy, driving our financial stability and growth. In November, we announced a DSA with Arpinge for a 300 megawatt battery storage portfolio in Southern Italy. This partnership, our fourth with an Italian ESG focused leader, strengthens our position in Italy's battery storage market, where we have approximately 2 gigawatt in the permitting process. The collaboration supports Italy's clean energy transition goals and aligns with our focus on high value growth opportunities in battery storage market. Second, regarding our solar power project development, in Q3, we successfully closed the sale of our solar project portfolio of 42 megawatt in Spain to CVE Espana. Developed over the past few years, this portfolio is projected to generate approximately 92.8 gigawatt hours of solar power annually, offsetting nearly 20,000 tons of carbon-dioxide emissions each year. Additionally, we sold a 57 megawatt solar project portfolio to Trina Solar, showcasing the strength of our European development efforts. Due to project delays, the sales of our U.S. community solar project portfolio and some projects in Spain and Italy did not get closed by the end of Q3. For example, certain closings expected with CVE in Spain were delayed due to lengthy local administrative approvals. Some of these delayed projects sales are expected to close in Q4. Last but not least, our IPP assets demonstrated robust growth and profitability throughout the third quarter, contributing approximately 73.2% of our total revenue for the period. We continue to optimize operations across our solar farms, including Branston, reinforcing the IPP segment as a cornerstone of our business model that offers a dependable, stable and predictable cash flow. In September, we energized a 4.5 megawatt solar power plant at Luxshare iTech, a major facility of Luxshare Precision Industry Co., Ltd, a public company listed in Shenzhen Stock Exchange in China and a prominent Apple suppliers active in Apple’s Supplier Clean Energy program. This collaboration reflects our shared commitment to environmental responsibility and Emeren's expanding renewable energy presence. In Q3 2024, we connected 7.2 megawatt of solar projects across China, while our 35 megawatt hour of battery storage portfolio was fully integrated into Huaneng Power International’s Virtual Power Plant platform. In consideration of our strategy to grow IPP assets, we decided to retain a 52.4 megawatt product portfolio in Hungary previously planned for sale as an IPP asset today. 30 megawatt of the portfolio is already operational, with the remainder set to be energized by the year end. This decision leverages strong project returns, (ph) Hungary's positive economic outlook and significant foreign investment into the country. Hungary's commitment to renewables evident in ambitious solar goals and updated energy plan, further enhances the portfolio's value as an IPP. While this shift impacts full year's revenue, it aligns with our long-term growth and value creation goals amid favorable market conditions. Furthermore, with supportive local policies in Hungary's energy storage market, we see expanding opportunities in the country, and battery storage facilities are now planned for several projects within this portfolio. As we approach the close of 2024 and look to 2025 and beyond, we are strengthening our presence in some of the world's fastest growing solar and battery storage market, which are supported by increasing demand for clean energy, favorable government policies, and advancing technologies. Our primary objectives remain clear: advancing early stage projects, expanding our DSA partnerships across Europe and U.S., and refining our strategies to unlock the full potential of our development portfolio. While certain project sales in Europe may extend into 2025 due to the delays in government approvals, our core business lines remain robust, and we are confident in our ability to deliver substantial growth in the fourth quarter driven by a strong pipeline and favorable market conditions. With that, let me turn the call over to our CFO, Ke Chen to discuss our financial performance and guidance. Ke?

Thank you, Yumin, and thanks, everyone, again for joining us on the call today. Our third quarter revenue totaled $12.9 million coming below expectation due to delayed project closing, pending government approvals. Nevertheless, revenue was bolstered by strong performance in our high margin IPP segment and expanding DSA activity across Europe and the U.S. With a robust pipeline, we are well positioned for growth as these delayed projects are sold. Turning to our revenue by segment. IPP was primary driver, contributing 73% of our total revenue, followed by DSA at 10%. Notably, DSA includes revenue generated from development servers throughout the project lifecycle, while revenue from DSA project ownership transfer is generated is generally recognized as project development revenue. Regarding our gross profit in Q3, it was $5.6 million, compared to $9.4 million in Q2 2024 and $5.7 million in Q3 2023. Gross margin was 43.8% compared to 31.2% in Q2 2024 and 40.8% in Q3 2023. The year-over-year increase was due to the favorable margin within the revenue from DSA and IPP projects. Our operating expenses were $3.5 million down from $6.4 million in Q2 2024 and $9.6 million in Q3 2023. The decrease was mainly due to lower G&A expenses, thanks to our continued cost optimization program. Net income attributable to Emeren Group Ltd. common shareholder was $4.8 million, a significant rebound from net income of $0.4 million in Q2 2024, as well as a net loss of $9.4 million in Q3 2023. Diluted net income attributable to Emeren Group Ltd. common shareholders per ADS was $0.09 compared to diluted net income of $0.01 in Q2 2024 and diluted net loss of $0.17 in Q3 2023. Cash used in operating activity was $5.6 million cash used in investing activity was $4.2 million, and cash used in financing activity was $2 million. Moving to balance sheet. Cash and cash equivalents at the end of Q3 2024 were $35.8 million compared to $50.8 million in Q2 2024. Our debt to asset ratio at the end of Q3 2024 was 10.18% compared to 10.22% at end of Q2 2024. Shifting gears to our outlook. For Q4, we anticipate revenue between $40 million and $45 million, with a project gross margin of 20% to 25%, in line with the strategic move from sale to IPP for the 52.4 megawatt Hungary projects and the revised timing of some project sales. We have adjusted our full year revenue guidance to a range of $97 million to $102 million, with an expected gross margin of approximately 30%. We do expect to achieve EBITDA of $15 million to $20 million in 2024. Our IPP and DSA segment are demonstrating solid progress. For 2024, we reaffirm our expectation for IPP revenue to be between $24 million and (ph) $26 million, with gross margin of around 50%. We expect our DSA to be more than $20 million in revenue during 2024. By maintaining a disciplined approach to cost efficiency and operational excellence. We remain focused on advancing our renewable energy initiative and capture new opportunities for sustainable value creation. In 2025, EBITDA contribution from IPP and the DSA segment are expected to exceed $50 million. With that, let's open up the call for any questions. Operator, please go ahead.

Thank you. [Operator Instructions] Our first question comes from the line of Philip Shen of Roth Capital Partners. Please go ahead.

Hi, everyone. Thanks for taking my questions. First one is on the election results. We have a red sweep officially now and the Inflation Reduction Act could be changed. So I was wondering, you just signed a DSA with -- in the U.S. with a partner in the U.S. And was wondering, if you have any automatic adjusters or how are you accounting for this potential risk to the ITC as you try to sign more DSAs in the states? Thanks.

It's a very good question. In fact, we do have planned for this election results. And our action in the U.S. or the whole team's practice remains unchanged. We see that the -- all the changes, potential upcoming changes, will cause significant negative -- will have significant negative impacts, especially to upstream. But to the downstream, we believe we do have time to execute our available DSAs and the contracts to be negotiated. And the DSAs we just signed in California, including one very near term project, which will be executed starting early next year. In our humble opinion, we don't think that will be much impacted and others will continue the development path. And I think if it's an impact to the whole industry, our portfolio will remain to be valuable in the whole development process.

Okay. You mean in terms of the potential changes, we published on Monday that the base 30% ITC may require domestic content just to get the 30%. So, if that kind of a change happens, have you factored that into your planning?

In fact, after we signed the DSA, the development risk has been passed to the investor. Although, we are planning ahead with our partner/investor to face the upcoming challenges, but at this time, I think we have a good handle for it. Especially, we do see the significant downside or down the -- the price cut from the CapEx side.

Okay. Thank you.

And, Phil, I will say, we mentioned this DSA is related to the storage space. So the investors are looking at, again, the pricing overcharge. They are not depending on the credit at this moment.

Okay. So your battery DSA does not require the ITC?

It does require ITC.

Okay. So if the ITC requires domestic content, do you think you have the ability to meet domestic content for that battery solution?

We are actively seeking solutions to prepare for this challenge. At this time, we are working on it.

Yeah. And ultimately, we don't know the details yet and we're still very early. Okay. So let's shift gears to the revenue miss for Q3, those projects that were pushed out into Q4. I think, Yumin, you said that you expect that these projects should get approved in Q4. What is the risk that these delays sustain?

I want to give you one small example that the -- I don't know if you remember that over 12 months ago, about 14 months ago, we closed a deal in Spain, 29 megawatts solar power we sold to a party. And we forecasted the deal will be finally closed by the end of this year. But, unfortunately, after 14 months, we are still waiting. Although, we do have received just last week the positive news that the final approval is to be expected as early as within this month. But the holiday season is coming, so we do expect the, most likely the closing will happen in Q1 next year. So this is one example that the extended delay of more than 14 months or 15 months drag along the whole closing of the projects. And that's one example, and, also, we have other three projects. We received approvals in the last two weeks, but we need time to get the final use permit, which take about six to eight weeks. If we are lucky, we can get them done by the end of the year. If not, it has to be pushed into January. So those are the examples that the, extremely long approval process was never expected by the management team and local team. So that that's the reason.

Okay. So I understand. And so when we look at your 2025 guidance, do you think you have factored enough conservatism into your guidance?

Yes.

So have you increased the conservatism for this guide relative to maybe one year ago or six months ago?

Yes. Phil, again, when we're talking about the EBITDA for next year, over $50 million. Again, we're looking at IPP/DSA business model only because those two are very predictable. And, our IPP business is very stable and growing steadily, so we were confident that will be around $18 million to $20 million EBITDA next year. And, we're looking at our DSA contract. We're looking at all the milestones going to happen in the 2025. We're very confident the rest of them will come from the DSA business model we're talking about, like, contract is $69 million and the potential to be signed another $100 million. So we're conservative in terms of the rest of DSA contribution of EBITDA in 2025. So we believe that's very conservative.

Okay. Thank you. In terms of the $50 million, what percentage is IPP versus DSA for ‘25?

Like, I said, $50 million around, I will say, $18 million to $20 million is from IPP, rest of it will be DSA.

Okay. And then so let's say it's, $20 million for IPP and then $30 million for…

Yeah.

Yes. $30 million for DSA. Yes. And what percentage of that $30 million is U.S. versus Europe?

About 90% of the whole total is coming from Europe and only a little bit less than 10% from U.S.

Okay. Great. Okay. As the U.S. goes through changes, I think that's -- that mix focus on Europe is good. Great. Well, thank you for taking many questions. I'll pause here and pass it on.

Thank you, Phil.

Thank you. [Operator Instructions] I’m not showing any further questions in the queue. I'd like to turn the conference back to Mr. Liu for any closing remarks.

Okay. Thank you, operator. The global shift towards renewable energy is fueling strong momentum in the solar industry, positioning solar and battery storage as a key component of the future energy mix. The demand for solar power to support energy intensive technologies like AI and blockchain is especially promising as solar provides a scalable cost effective solution. Looking ahead, we are well positioned to capitalize on accelerating adoption of the solar technology. With our expertise, strategic partnerships and strong financial foundation, we are advancing towards our goal of becoming a global leader in renewable energy and excited to drive a more sustainable future.