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00:06 Good day, ladies and gentlemen, and welcome to the Fuwei Films Second Quarter twenty twenty one Earnings Conference Call. All lines have been on a listen-only mode and the floor will be open for questions and comments following the presentation.

[Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Shiwei Yin. Sir, the floor is yours..

00:34 Thank you, Kat. Let me remind you that today's call is being recorded. A replay of today's call would be made available shortly after the conclusion of today's call.

Before we start, I would like to remind you that certain statements that are not historical facts made during the course of this conference call about future events projected financial results constitute forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform act of nineteen ninety five.

0:57 You should note that the company's actually results may differ materially from those projected in these statements due to a variety of factors affecting the business. Forward-looking statements are suggested subject to risks and uncertainties, discussion of the factors that may affect future results is continuing in our filing with the U.S.

Security and Exchange Commission. 01:13 We undertake no obligation to correct or update any forward-looking statements provided as a result of new information, future events or changes in our expectations. Joining us today on the call is Mr. Yong Jiang, Corporate Secretary. Before I walk you through our financials, Mr.

Jiang will deliver his opening remarks. Sir, please go ahead. 01:31 [Foreign Language].

01:33 [Foreign Language] 02:39 Hello everyone and thank you for joining us today. We continue to achieve positive trends in our mix of sales, especially sales of specialty films which accounted of for sixty eight point six percent of our total revenues for the second quarter ended June thirty twenty twenty one.

I would believe these results benefited from our commitment to innovation and differentiated marketing strategy which have expanded the end-user applications of our films products. We will carry on with these efforts and expect that they will enable the company to capitalize on new opportunities despite challenging industry and economic conditions..

3:10 Now, I will review to you highlights our financial results for the second quarter – for six months. Net sales during second quarter were RMB million 106, U.S.

fifteen point six million compared to RMB eighty two point nine million during the same period in twenty twenty, representing a year over year increase of RMB seventeen point seven million or twenty one point four percent.

The increase of average sales price caused a year over year increase in RMB fifteen point six million and higher sales volume caused an increase at RMB two point one million. 3:39 In the second quarter, sales of the specialty films RMB 69.0 million, U.S.

ten point seven million dollars or sixty eight point six percent of our revenue compared to RMB forty eight point one million or fifty eight point zero percent in the same period of twenty twenty, which was an increase of RMB twenty point nine million or forty three point five percent as compared to the same period in twenty twenty.

04:00 The increase in sales volume caused an increase of RMB sixteen point zero million and the increase in average sales price caused an increase of RMB 4.9 million. Overseas sales were RMB thirteen point four million or U.S.

two point one million dollars or thirteen point three percent of total revenues compared with RMB seven point five million or 9.1% of total revenues in the second quarter of twenty twenty.

04:24 The increase of average sales price caused an increase of RMB zero point six million and the increase in sales volume resulted an increase of RMB five point three million. Gross profit was RMB thirty nine point nine million, U.S.

six point two million for the second quarter representing a gross profit rate of thirty nine point six percent as compared to a gross profit rate of forty one point six percent for the same period in twenty twenty. 04:47 Operating expenses for the second quarter were RMB fourteen point zero million, U.S.

two point two million dollars as compared to RMB eighteen point seven million for the same period in twenty twenty. This decrease was mainly due to the decrease of accrual depreciation of the third production volume and trial production line as these two production lines were sold.

05:06 Net profit attributable to the company during the second quarter was RMB nineteen point eight million, U.S. three point one million dollars, while net profit attributable to the company was RMB fourteen point one million during the same period in twenty twenty. 05:20 Now moving on to the first six months results.

Net sales during the first six months were RMB two hundred and two point two million, U.S. thirty one point three million dollars compared to RMB one hundred and sixty six point one million in the same period in twenty twenty, representing an increase of RMB thirty six point one million or twenty one point seven percent.

05:39 The increase in average sales price caused an increase of RMB twenty two point zero million and the increase in the sales volume cost increase of RMB fourteen point one million In the first six months, sales of the specialty films were RMB one hundred and thirty three point nine million, U.S 20.7 million or sixty six point two percent of our total revenues as compared to RMB 88.0 million or 53.9% in the same period of 2020, which was an increase of RMB 45.9 million or 52.2% as compared to same period in 2020.

06:11 The increase in sales volume caused an increase of RMB Forty one point six million as the increase in average sales price caused an increase of RMB four point three million. Overseas sales during the first six months were RMB 22.4 million or U.S.

three point five million dollars or eleven point one percent of total revenues compared with RMB thirteen point three million or eight point zero percent of total revenues in the same period in twenty twenty. This was RMB nine point one million higher than the same period in twenty twenty.

06:40 The increase in sales volume resulted in an increase of RMB eight point one million, while higher average sales price caused an increase of RMB one point zero million. Our gross profit was RMB 82.3 million, U.S.

12.7 million for the first six months ended June thirty, twenty twenty one, representing a gross margin rate of forty point seven percent as compared to a gross margin rate of thirty eight point seven percent for the same period in twenty twenty. 07:06 Operating expenses for the first six months were RMB twenty point four million, U.S.

three point eight million, compared to RMB thirty two point eight million in the same period in twenty twenty, which was RMB nine point four million or twenty seven point eight percent lower in the same period in twenty twenty. This decrease was mainly due the decrease of accrual depreciation of the third production line and trial production line.

07:28 Net income attributable to company during the first half of twenty twenty one was RMB fifty one point two million, U.S.

seven point nine million dollars compared to net income attributable to the company of RMB twenty seven point zero million during the same period in twenty twenty representing an increase of RMB twenty four point two million from the same period in twenty twenty due to the factors described above.

07:50 Cash, cash equivalent and restricted cash totaled RMB hundred and seventy six point one million, U.S. twenty seven point three million dollars as of June thirty, twenty twenty one. Total shareholders’ equity was RMB two hundred and seventy nine point zero million, U.S. forty three point two million.

08:08 In conclusion, we would like to thank our shareholders for their continued loyalty and support. We believe we are well positioned to face the current challenges and are committed to providing value to our shareholders and customers. We will keep you informed on our progress. 08:22 With that management will be happy to answer your questions.

Kat, please begin the Q&A..

Operator:.

09:22 Thank you for joining us on the conference call today. We look forward to being touch with you and keep you updated about our progress. Thank you, and have great day..

09:32 Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day..