Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's Second Quarter of 2021 Earnings Conference Call. My name is Rachel, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session.

As a reminder, this conference is being recorded for replay purposes. I would like to turn the call over to Isabel Zhang, IR Director at Canadian Solar. Please go ahead..

Thank you, operator. And welcome everyone to Canadian Solar's Second Quarter 2021 Conference Call. Please note that we have provided slides to accompany today's conference call, which is available on Canadian Solar's Investor Relations website, within the Events and Presentation section. Joining us today are Dr.

Shawn Qu, Chairman, and CEO, Yan Zhuang, President of Canadian Solar's majority-owned subsidiary, CSI Solar. Dr. Huifeng Chang, Senior VP, and CFO. And Ismael Guerrero, former VP and President of the Energy Business. Ultimate executives will participate in the Q&A session after management's formal remarks.

On this call, Shawn will go over some key messages for the Quarter. Yan and Ismael will respectively review the highlights of the CSI Solar and Global Energy Businesses. Followed by Huifeng, who will go through the Financial results. Shawn will conclude the prepared remarks with a business outlook. After which, we will have time for questions.

Before we begin, may I remind listeners that management's prepared remarks today, as well as their answers to questions, will contain Forward-looking statements that are subject to risks and uncertainties.

The Company claims the protection of the Safe harbor for Forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations. Any projections of the Company's future performance represent management's estimate as of today.

Canadian Solar assumes no obligation to update these projections in the future unless otherwise required by applicable law. A more detailed discussion of the risks and uncertainties can be found in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission.

Management's prepared remarks will be presented within the requirements of SEC Regulation G regarding Generally Accepted Accounting Principles or GAAP. Some financial information presented during the call will be provided on both a GAAP and a non-GAAP basis.

By disclosing certain non-GAAP information, management intends to provide investors with additional information to permit further analysis of the Company's performance and underlying trends. Management uses non-GAAP measures to better assess operating performance and to establish operational goals.

Non-GAAP information should not be viewed by investors as a substitute for data prepared in accordance with GAAP. And now I would like to turn the call over to Canadian Solar's Chairman and CEO, Dr. Shawn Qu. Shawn, please go ahead..

Thank you, Isabel. Hi, everyone. Welcome and thanks for joining us today. During the Second Quarter of 2021, we delivered record module shipments and record revenue. We also delivered a gross margin well ahead of our guidance.

We are focused on profitability and improved the performance of our CSI Solar Business division, which helped us deliver a net income of $11 million and diluted earning per share of $0.18. Before I turn to Yan, Ismael and Huifeng will go over a more detailed review of our performance. I would like to highlight three key messages.

Please turn to Slide 3. The first point, I'm pleased that our CSI solar business has turned a corner in the margin trajectory. Delivering Canadian Solar group Gross margin of 13%, which is well ahead of our guidance. We expect Q3 margins to be better than Q2. Back to the mid-teen range.

We're focused on the factors under our control and especially on profitability, even if it meant that we had to forgo certain short-term opportunities. We expect profitability at CSI Solar to continue to improve through the year.

Demand remains strong, and Canadian Solar's leadership position gives us a competitive advantage to capture profitable growth opportunities. We'll continue to gain market share this year and believe that any demand for shelves due to supply chain constraints will set the stage for an even stronger 2022 and beyond.

Let's turn to Slide 4—the second point. Global efforts towards a clean energy transition are generating a surge in demand for battery storage capacity to support a more reliable power grid. We made big progress in Q2 by delivering our first battery storage shipments, approximately 300-megawatt hours or around $17 million in revenue.

At the same time, we continue to grow our global energy total pipeline of storage projects. Reaching 19-gigawatt hours in Q2, of which 1.5 gigawatt-hours is under construction. Storage represents another major long-term growth opportunity for us. We are well-positioned with bankable solutions, strong customer demand, and expect meaningful growth.

The third point, please turn to Slide 5. We recently published our latest ESG Sustainability Report. Our team has been analyzing, understanding, and improving our ESG practices. We have set up structures to incorporate the environmental, social, and governance factors in all our major business decisions.

For example, one of these decisions is the expansion of our upstream inbuilt manufacturing capacity. We decided to construct this facility in Qinghai as this province is nearly fully powered by renewable energy. Almost 90% of its installed power capacity is solar, wind, or hydropower—Metal Acadian, energy-intensive in good manufacturing there.

We can further reduce the carbon footprint for our solar module. Actually, based on our estimates, greenhouse gas emissions [Indiscernible] [Indiscernible] for our existing module is 1.1 years. This means our molecules become carbon-neutral assets that can last for 30-40 years or even longer.

We are now making further efforts to bring the module greenhouse gas payback time even lower. This is just one of the many examples that underscore Canadian Solar's commitment to sustainability and E SG improvement. Now, let me turn it over to Yan, who will talk about the performance of our CSI solar business in more depth. Yan, please go ahead..

Thanks, Shawn. In Q2, we delivered 3.7 gigawatts of module shipments and $1.18 billion in revenues. Both record quarterly highs. The gross margin improved by 340 basis points to searching 0.1%, which was above our expectations. I'm pleased by our team's strong execution in challenging market circumstances and thank them for their relentless efforts.

Please turn to Slide 6. As Shawn said, we remained focused on factors within our control, navigating the current supply chain environment. A big part of this is executing on the margin improvement road map we previously laid out.

First, we continued to raise prices on our solar modules in Q2, which are now 15% to 20% higher than the lowest point last year. We believe module pricing is likely to remain strong for the rest of the year as well. We also expanded our market presence in China, which was our top market by shipment volume during the Quarter.

This helped us mitigate some of the pressure from higher shipping costs and uncertainty over foreign exchange moves. We're also starting to benefit from our investment in state-of-the-art capacity and upstream integration.

And we continue to focus on the higher value distributed generation segment, which accounted for more than 50% of our Q2 shipments. Taken together, these factors have allowed us to deliver a notable improvement on last Quarter's performance.

We also adjusted our procurement strategy, given the turn of events from a deflationary to an inflationary market environment. We have tactically and proactively built inventory from raw materials to finished goods to take advantage of more favorable costs and continued ASP increases.

This is proving to be critical in our supply chain and margin management. At the same time, we're also holding more inventory due to the global logistic bottleneck. More inventory is waiting to be shipped, or it is in transit. Overall, larger shipment volume also requires inventory, so our turnover days have not moved up much.

Longer-term, we are executing on our capacity expansion and vertical integration strategy to better control our costs and ensure greater supply chain stability. Slide 7, please. Importantly, we continue to focus on strengthening our long-term competitive positioning, even as we navigate a dynamic near-term supply chain environment.

On the module side, we unveiled our new heterojunction module product during the SNEC Exhibition in Shanghai. And we're now making final certification and production preparations, aiming to start deliveries in October. Battery storage and system integration.

Shawn mentioned that we delivered our first batch of 300 megawatt-hour battery storage shipments last Quarter. On the next slide, you can see pictures of our Mustang solar plus battery storage project located in Kings County, California.

As a reminder, this was a 100-megawatt solar project developed and built by [Indiscernible] a few years ago, which Canadian Solar sold back in 2019. Last year we signed the 300 megawatts hour battery storage retrofit to contract, and last Quarter, in Q2, we delivered on the battery shipments.

Old equipment has been installed, and the team is finalizing the project due to commission this month, turning to slide 9. This is the slate solo plus battery storage project of 300 megawatts plus 561 megawatts hour, which is currently under construction.

We have been delivering the battery shipments from the current Quarter and expect to complete the project before year-end 2021. This adds to our confidence that our battery storage shipping volume will reach 861-megawatt hour by 2021. Overall, our team continues to do a great job in a [Indiscernible] market.

We continue to leverage our competitive advantage, strong brand, bankability, and well-established global market channels while expanding our technological mote to bring additional value to our customers. With that, let me pass it onto Ismael, who will talk about Canadian Solar's global energy business. Ismael, please go ahead..

Thanks Yan. This Quarter, we closed over 300 megawatts in project sales, another $281 million in revenue. This is in line with our forecast. We are having a very solid year from a project execution standpoint and experiencing significant growth. Please turn to Slide 10.

One of the key trends we've seen over the past several Quarters is the large increase in demand for solar and battery storage projects, both from existing and new investors who have a low cost of capital and ambitious climate mandates.

We believe this is a sign that the capital pool for clean energy infrastructure assets is broadening and deepening as quote-unquote "big money" is now coming into the clean energy sector. We are strongly positioned to benefit as we supply the market with quality solar and battery storage projects, which are becoming increasingly scarce assets.

Strong underlying demand, large capital availability, and low cost of capital in our business means that we can capture more of the value creation from the project while exiting earlier, thereby reducing our capital means.

Meanwhile, PPAs are starting to move up across various markets, which is helping to offset the impact of high-grade equipment costs. Moving to Slide 11. All-in-all, the structural market forces had been very strong, and we tend to develop projects fast enough.

Our total pipeline currently stands at 22 gigawatts for solar and 19-gigawatt hours for battery storage, which is both significant increases compared to this time last year, which were 15 gigawatts and 5-gigawatt hours, respectively. In Japan, we recently won 86 megawatts in the latest solar auction.

This accounted for approximately 0.25 of the total volume auctioned and solidified our position as the number one solar developer in Japan.

Thanks to our strong market presence and execution, we are now negotiating new PPAs in Japan and see attractive opportunities for growth once the market is fully transitioned away from subsidies and feed-in tariffs.

That said, we still have a meaningful portfolio of projects under construction or development which have secured high feed-in-tariffs with nearly 50% of our total portfolio of over 400 megawatts contracted at more than $0.20 per kilowatt-hour.

In the EMEA region, or Europe, Middle East, and Africa, we also signed several new PPA s and have been meaningfully growing our pipeline. Currently, at a total of over 4 gigawatts from 2.5 gigawatt's this time last year.

We had already seen an acceleration in demand growth for renewable energy, particularly in light of the recent European Union climate-related legislations. Importantly, we continue to make significant progress on our battery storage projects. A few days ago, we announced the signing of Phase 2 of our Crimson Project, also located in California.

Crimson is a stand-alone utility-scale battery storage project of 1.4 gigawatt-hours, one of the largest in the world. We previously signed an 800 megawatt-hours storage contract with Southern California Edison. And a few days ago, we signed a resource adequacy agreement with Pacific Gas and Electric or BDNA.

The project is set to start commercial operation by December of 2022 to help improve California's grid reliability. We have a very tight deadline for a project of this magnitude. We see significant growth in demand for battery storage across all global markets. The U.S.

is currently the largest on the most advanced market, but we see significant opportunities worldwide given the widespread need for grid reliability. Particularly with the growing penetration of clean energy and the increasing occurrence of extreme weather events. For instance, we won the first battery storage project in Colombia a few weeks ago.

The project has a capacity of 45 megawatts and 45-megawatt hours. It will help strengthen Northern Colombia's transmission network and support a greater share of renewable energy. Most of our work in battery storage project development to date has been in the contracted markets to provide a capacity of resource adequacy services.

We are also exploring alternatives to participate in un-contracted markets, such as power trading, where we believe that is more long-term value. Separately, turning to Slide 12, we continue to make progress on our strategy to raise the share of recurring income in our global energy business.

We continue to proactively grow our services platform in operations and maintenance or O&M business and investment vehicles in Brazil and Europe. Both vehicles remain on track to be launched as planned. Now, let me turn the call over to Huifeng, who will go through the financial results in greater detail. Huifeng, please go ahead..

Thank you, Ismael. Please turn to Slide 13. In Q2, we delivered a record quarterly revenue of $1.43 billion. The gross margin was 12.9%, well ahead of our guidance of 9.5 to 10.51%. Q1 benefited from both volume and price increases in module shipments, as well as a greater contribution from battery storage shipments and beyond module sales.

We also made significant efforts to improve manufacturing efficiency and reduce unit costs. Selling and the distribution expenses were flat quarter-over-quarter but up year-over-year due to higher shipping costs [Indiscernible] expenses were also flattish, quarter-over-quarter due to continued tight control on discretionary costs.

Total operating expenses were up only 5% despite much faster revenue growth, and it now accounts for 11% of total revenue. The net foreign exchange loss in the Second Quarter was $3 million. Down from a $7 million loss in the First Quarter. We continue to optimize our currency hedges.

The income tax benefit was $2 million in Q2, compared to a tax expense in Q1 of 14 million. The [Indiscernible] was driven by a lower effective tax rate and a lower impact from high tax jurisdictions. Net income attributable to Canadian Solar shareholders was $11 million or $0.18 per diluted share. Slide 14, please.

Now, turning to cash flow and the balance sheet. As Yan mentioned previously, we have adjusted our procurement and working capital management strategy to hold more inventory than we have traditionally. As a result, we increased the inventory by nearly $200 million this Quarter.

This strategy has helped us better manage our costs and mitigate supply chain pressures. We also had an increase in accounts receivable, which is reflective of higher shipments to China-based customers who generally require longer receivable days netted out by an increase in notes payable.

After netting all the moving parts, we used approximately $61 million of cash in operating activities. Q2 CapEx was $138 million. We expect Full Year CapEx to be approximately $650 million, unchanged from our previous guidance. As we support the higher global demand we are seeing across all markets.

At the end of the Second Quarter, we raised approximately $60 million from the At-the-Market equity offering program and, to-date have raised around $110 million roughly. The program is progressing well.

Overall, our total cash position remains strong at $1.3 billion, giving us the financial flexibility to fund capital expenditures and long-term growth investments. Total debts declined moderately to 2.2 billion as we optimize our financing sources.

We also lengthened the overall maturity profile of our total debt with long-term debt, including all long-term borrowings on project assets, accounting for only 40% of our total debt, down from 60% just two years ago. Net debt to EBITDA in Q2, excluding restricted cash, remains at a healthy level of 3.8 times.

Now, let me pass it back to Shawn, who will conclude with our guidance and the business outlook.

Shawn?.

Thanks Huifeng. Let's turn to slide 15. Now for the Third Quarter of 2021, we expect total module shipment to be in a range of 3.8 gigawatts to 4 gigawatts, including approximately 275 megawatts of module shipments to our own project. Total revenue is expected to be in the range of $1.2 billion to $1.4 billion.

The gross margin is expected to be between 14% to 16%. The wider-than-usual revenue and profitability range for the third Quarter reflects the timing of certain project sales, which may be recognized towards the end of this Quarter, or already in the following quarters but should be recognized in the year of 2021.

For the full year 2021, we reiterate revenue guidance of $5.6 billion to $6 billion with a product to $6 billion with product sales of 1.8 gigawatts to 2.3 gigawatt and total battery storage shipment of 810 to 860-megawatt hours.

Were are slightly reducing module shipment guidance from 18 gigawatts to 20 gigawatts to the new range of 16 gigawatts to 17 gigawatts. We kept Full Year revenue guidance unchanged as we expect higher module ASP to offset the impact of the slightly lower shipment guidance.

This is reflective of marginally lowered global demand as a response to higher solar system equipment costs. We remain highly optimistic of the overall demand environment and expect growth to accelerate in 2022 and beyond. Now let's turn to Slide 16. Finally, let me give an update on the progress of the planned carveout listing of CSI Solar.

We have now moved toward the Question and Answer stage with Shanghai Stock Exchange. The feedback process typically takes a couple of months, so we're well on track. With that, I would like to open the call to our questions. Operator..

[Operator Instructions] Your first question comes from the line of J.B.Lowe of Citi, please, ask your question..

Hey, good morning, everyone. My first question is on the module shipment guidance reduction.

I'm just wondering if you could give us a sense -- if you could break it down between how much of the reduction was foregoing sales because we wanted to keep pricing higher, how much of it was demands-driven, and how much of it, if any, was due to timing if some shipments do you think are being pushed from '21 into '22?.

Yan?.

Yes. So if I'm hearing your question correctly, I think majority of the projects coming to our information and our market feedback is going to be still plan to be connected this year. So we have observing some signs of the market remark.

And although the module demand is actually changed -- the change on module side is always behind the upstream suppliers -- upstream materials. So we think that in second half, the demand will remain to be strong. Strong -- much stronger than first-half..

Right. But I guess the reduction in guidance, I guess what was the main driver of it? In terms of [indiscernible].

Reductions. Yes. So the reduction -- it's -- we actually think that the second half, especially in Q4, we are expecting a very tight balance between ASP and supply chain costs. So we believe to maintain the right balance and optimize our margin, we need to have a more controlled pace on sales. So that's what we ask me to know, so yes, indeed.

There are some volume pushing out to next year. But still, we need to make sure that the pricing can give us the volume with balance to pricing can give us the right margin..

Hi, J.B, this is Shawn speaking. See, we only reduce the annual shipment guidance a little bit. From previous 18 to 20 gigawatt, to 16 to 17 gigawatt. So well, it just like 2-gigawatt adjustment. That's all. And I would say probably 1/3 of the reduction is due to our insistence ASP and a profit.

Maybe another 1/3 is due to some customer say, okay, we still want Canadian Solar module, let's wait for next year. So as you said, some project, some demand get pushed on to next year.

And maybe another 1/3 is due to logistic and the cost of the global logistic issues, the shipping time, and the time to deliver from a factory to the project site get much longer. Though some of the December or even November shipment may now end up in the customer's site before December 31, but have become a 2022 shipment.

I would say maybe [Indiscernible] I hope this will give you more color -- other than what's Shawn -- what Yan just discussed..

Yeah, no, that's exactly what I was looking for, thank you. My other question was just gross margins on the -- I mean the storage side is obviously becoming a bigger part of the business.

What were the gross margins on storage in 2Q? And what do you expect them to be -- to trend over the next couple of Quarter s?.

one is the upfront installation -- system integration installation; the other one is a long-term service agreement to both have their revenues and their profits. So by nature, the system integration business. In terms of CapEx and OpEx are both low, much lower than module business.

So on the Gross margin side, it may not be that high, but the proportion of net profit is actually significantly better than module business. Of course, from project to another -- from project to project, you may see some variations on the profitability. But in general, they are significantly better than module business..

Hi, J.B. this Shawn again. Again, I would like to add some colors other than what Yan just discussed. Pure Gross margin wise, the battery storage EPC until those solution business for us, this moment will give us low-teen to mid-teen Gross margin.

However, as Yan said, it's different because there's no CapEx, therefore no depreciation costs for this business. So we can turn a low to mid-teen Gross margin into a high-single-digit net margin contribution. It's pretty good. It's a different business the module and the net contributions very good.

And I also want to highlight that this is only the beginning. At the beginning, as you know, we always have higher costs in product certification, in bank competitors study all that kind of stuff. And also we are pickings some -- some products on the battery storage product OEM.

Now, as we continue to grow this business, also continue to bring more of the manufacturing in-house, I expect the margin, both Gross margin and net margin for our battery storage business to increase..

All right. That was excellent. Thank you so much..

Thank you, J.B.

Your next question comes from the line of Philip Shen of ROTH Capital. Please ask your question..

Hi, everyone. Thank you for taking my questions. As a follow-up on the margins for the energy business was wondering if you could just talk about the -- give us a little bit more color on what happened with the 4% in the global energy business margin in Q2.

Historically, you've gotten as high as 32%, so just a little bit more color as to why it may have been so low in Q2. And then how do you expect that overall margin to trend in Q3 and Q4. And also for the global energy business, can you talk about which countries you sold projects in in Q2? Thanks..

Hi, Philip. I will let Ismael to answer your question..

Thank you, Shawn. Thank you Philip for your question. Looking in -- related to gloss margin to project sales in immediate is very tricky because this is fully dependent on how you do the accounting treatment. So what you're seeing, we are delivering in Q2, is the last stage of projects that were under construction.

So most of the margin of those projects was already booked. What you should expect to see around the year this -- the typical solid gloss margin that we usually get as the average of the year. So please don't get fooled by the accounting treatment on Q2. All the projects that we booked were in the U.S., and they were all under construction already..

Okay. Thank you, Ismael. In terms of the module business, was wondering if you could comment on the geographic mix of the 3.7 gigawatts shipped in Q2. And then how do you expect that mix to change in Q3 and Q4, and what are your expectations for the geographic mix in 2022? Thanks..

First of all, in terms of the split of the shipment, I want to add that it is as huge as in the past Quarter s that around half of the volume goes to the DG market, residential and DG market. In terms of geographical, so we have the leading -- the leading market is China, actually.

In Q2, we expand our presence in China to deal with the uncertainties on exchange rate. And also the higher shipping costs, ocean shipping costs. So China became number 1 in Q2. So this is a little different from past quarters. And secondly, North America and EMEA are both more than 20%. So the rest is in APAC and the Latin America..

Thanks, Yan.

And can you share what the percentage was in Q2 for China?.

It was 27%,.

Great.

And then looking into Q3 and 4, do you expect those mixes to or percentages to remain the same?.

Similar..

Great.

And what about 2022?.

2022. I think they will probably stable or maybe slightly higher. That's my estimate. But I cannot be so clear for now. In general, we want to increase our presence in China given the high shipping cost and also the exchange rate trend. However, I don't have detailed number for you, it's going to be similar..

Got it. And then as it relates to the U.S. which is -- it sounds like it might be more than 20%, can you talk about if you've seen any changes in the U.S. markets, whether it's with customers or with other aspects of shipping into the U.S.

since the WRO on Hushang was put in place? Again, whether it's customers or if you've changed your approach to the market, talk about the U.S. market a little bit. Thanks..

The demand we're seeing is high, so there's strong demand from U.S. and we have many customers talking -- discussing with us or trying to sign supply agreement with us, on multi-year large volume deals. We see the demand is very strong.

And in terms of [Indiscernible] we're actually been working very hard to deal with that and we're pretty confident that we can overcome that constraint..

Okay, thanks for all the detail. I'll pass it on..

[Operator Instructions] Your next question comes from the line of Colin Rusch of Oppenheimer, please ask your question..

Thanks so much, guys. Could you give us some insight into how non-silicon costs are trending and availability of materials.

Are you seeing any significant tightness or changes in terms of cost and availability?.

You talking about processing costs, non-silicon processing costs.

Right?.

No. I'm talking about glass, aluminum, silver paste, all those sorts of things that are going into the [Indiscernible] materials..

Okay, it was --.

[Indiscernible].

Yes. Yes. It was going up pretty fast from Q4 to Q1, and in Q2 actually came down -- has been stabilized and going down a little bit. So that's the overall trend..

Okay.

And then in terms of your strategic focus around different system sizes, you talked about the distributed power market having a little bit better pricing, do you see this going forward? On the development side, are you looking at the community solar kind of tender 250 megawatt-type projects being a real growth marketer? Are you still really highly focused on some more larger investments?.

I think in Second Half, we are observing that in mature and developed market that the rooftop market is actually warming up, is coming back. It was affected more than the utility scale because of COVID, and now it's actually coming back. That market will continue to be better on profit, so it will continue to be our focus.

You talked about 1 or 2 megawatts ground-mounted. Did you say that? I couldn't hear --.

No, more like 10 to 50. I'm talking about the medium size ground mount systems and whether that's a real growth market, where you can plug into the 65 KV lines or 64 KV lines and support the grid in little bit different way..

Yeah. Those size of project in terms of -- if you're talking about EPC and module sales, so we don't see that anything better than the large projects, in terms of pricing for module. But on development side, Ismael may have a different light in terms of development and investment..

Okay. That's super helpful guys, thanks so much..

[Operator Instructions] Your next question comes from the line of Mark Strouse of JPMorgan. Please ask your question..

Yes. Thank you very much for taking our questions. Most of them have been answered. I just wanted to see if you could give us a bit more high-level color on your capacity plans, right? You're taking down your module capacity, in the Second Half of this year, but increasing your wafer and cells.

As we think about that over the next several years, has this whole supply chain disruption made you rethink your historical methodology of having significantly more module capacity?.

Well, we actually continue to believe in a flexible vertically integration. We believe that the industry is in the stage that the P-type, the existing perc technology it has reached to a limit while we still do not have consensus on N-type. And starting from next year, we're going to see probably a strong oversupply on some of the materials.

We actually -- of course, we will continue to execute on our existing CapEx plan as we have published in the past. However, we're not --.

so in terms of next year's additional CapEx, we still don't have a tangible plan yet. We try -- we want to be more cautious. And while we -- we'll still grow our market share next year. So we had market share of 8% last year, 10% this year, and our market share will continue to grow year by year..

Okay. That's it for us. Thanks, Yan..

Your last question comes from the line of Philip Shen of ROTH Capital. Please ask your question..

Hi, everyone. Thanks for taking my follow-ups here.

In terms of storage, how much of a well in terms of the 1.5 gigawatt-hours under construction, can you give us a sense for how much might either COD or be sold by Quarter in the coming quarters?.

Oh, Ismael?.

Oh, no it's not Ismael it's --.

Okay. My question. Okay. So in terms COD time. Okay. So we have -- what we had, the 300 -- no, we had a 300 megawatts hour shipped to a new stock in Q2 and the rest of the almost 900 megawatts hour would be connected in the second half of the year. So in terms of Q3 and Q4, I don't have the exact split yet because the timing can be somehow of uncertain..

Great. Thanks, Yan. And then, with all --.

Philip, this is Shawn speaking. We have the numbers, but I'll follow up with you later to provide you with some -- more detailed breakdown by borders..

Okay. Thank you, Shawn. And then in terms of the cost inflation that we've seen, you guys obviously sell the modules and -- but then you also build projects, and we've seen inflation across the board.

Just wondering if you've delayed any of your projects as a result of higher input costs? And if so, what kinds of delays are we seeing -- maybe a quarter, maybe longer? And then, are you -- as a project developer, are you seeing asset owners? Are they willing to take less return 50 Basis points or something meaningfully less to help absorb some of this cost inflation or are you seeing pushback from them? And is the preference again to delay projects and push out the COD s?.

Philip, this is Shawn speaking. Like fortunately, we don't have much solar project to start NTP this year. We are not that much affected, so far, by the implement costs increase. We do have some project that we may reach NTP by the end of this year in a [Indiscernible] we will see. We think we will go ahead with those projects.

Because the investors or the Project buyers, are also willing to pay higher cost to us. Now, this is our situation. In terms of third-party project developers, I guess, we see both. We do see some developers delay their project to next year. But we also see some developers who are willing to taking higher cost and build a project this year.

Also, as we showed you in one of our slide, we're actually start to see the PPA, the power purchase agreement, start to move up in recent months. As we all said, the inflation is everywhere. So if the inflation is on the electricity, Apollo price as well. So we seem to see that the PPA for renewable also responded..

Great. Thank you for the color, Shawn, and I will pass it on..

Seeing no more question in the queue, let me turn the call back to Dr. Shawn Qu, Chairman and CEO for closing comments, please go ahead..

Thank you. And thanks everyone for joining us today. And also, thank you for your continued support. Now if you have any questions or would like to set up a call, please contact our Investor Relations team. Take care and have a nice day..

This concludes today's conference call. Thank you for participating. You may now disconnect..