Zengyong Wang - Chairman and Chief Executive Officer Xiuyong Zhang - Director and Chief Financial Officer Yong Jiang - Corporate Secretary Vivian Chen - IR, Grayling.

Analysts:.

Greetings. Welcome to the Fuwei Films First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Vivian Chen with Grayling. Thank you. Ms. Chen, you may begin..

Thank you. Just a reminder, a replay of this call will also 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 of historical facts made during the course of this conference call about future events and projected financial results constitute forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

You should note that the company's actual results may differ materially from those projected in these statements due to a variety of factors affecting the business. Forward-looking statements are subject to risks and uncertainties. Discussion of the factors that may affect future results is contained in our filings with the U.S.

Securities and Exchange Commission. 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 on today's call are Mr. Zengyong Wang, Chairman and Chief Executive Officer of the company; Mr.

Xiuyong Zhang, Director and Chief Financial Officer of the company; and Mr. Yong Jiang, Corporate Secretary. Before I walk you through our financial results, Mr. Wang will deliver his opening remarks. My colleague [indiscernible] will translate Mr. Wang's remarks. Sir, please go ahead,.

[Translated] Thank you, Vivian. Hello, everyone and thank you for joining us today. The first quarter financial results continue to reflect weakened market conditions due to significant competition which caused oversupply and excess capacity in the marketplace.

However, we continue to believe that our focus on innovation will enable the company to better approach the current down cycle while increasing the ratio of high value films. We will continue to focus our efforts on R&D of thick films to include base films for solar back sheets and other thick films.

Now Vivian will read to you our financial results in the first quarter of 2015 and Mr. Zhang, Mr. Jiang and I will begin the Q&A session..

Thank you, Mr. Wang. Thank you [indiscernible]. I will now provide you with an overview of our key financial numbers in the first quarter of 2015 then I will offer some updates on our operations followed by the management Q&A.

Net sales during the first quarter ended March 31, 2015 were RMB52.8 million or US$8.5 million, compared to RMB70.7 million, during the same period in 2014, representing a decrease of RMB17.9 million or 25.3%, mainly due to the reduction of average sales price and sales volume arising from stronger competition in China and a reduction in the prices of raw materials.

The decrease of output caused by the repair of the production lines from February 2015 to March 2015 also contributed to the reduction of sales volume. In the first quarter of 2015, sales of specialty films were RMB15 million or US$2.4 million, or 28.4% of our total revenue as compared to RMB19.8 million or 28% in the same period of 2014.

The decrease was largely attributable to decrease in sales volume and sales prices for dry films and heat shrinkable films due to the entrances of new competitors.

Overseas sales were RMB13.1 million or US$2.1 million, or 24.8% of total revenues, compared with RMB10.5 million or 14.8% of total revenues in the first quarter of 2014, representing an increase of RMB2.6 million or 24.8%.

The reduction of average sales price caused a decrease of RMB3.1 million and the increase in sales volume resulted in an increase of RMB5.7 million. The increase in overseas sales was mainly due to the increase in sales volume.

Our gross loss was RMB7.8 million or US$1.3 million for the first quarter ended March 31, 2015, representing a gross loss margin of 14.8%, as compared to a gross loss margin of 0.1% for the same period in 2014.

Our average product sales prices decrease by 19.5% compared to the same period in 2014 while the average cost of goods sold decreased by 7.7% compared to the same period last year.

Consequently, the decrease in average product sales prices was significantly higher than the decrease in the average cost of goods sold during the first quarter ended March 31, 2015, which contributed to the increase of the gross loss margin compared with the same period in 2014.

Operating expenses for the first quarter ended March 31, 2015 were RMB8.8 million or US$1.4 million, which was RMB1.6 million, or 15.4% lower than the same period in 2014. This decrease was mainly due to decreased general and administrative expenses in the first quarter of 2015.

Net loss attributable to the company during the first quarter ended March 31, 2015 was RMB15 million or US$2.4 million compared to net loss attributable to the company of RMB13.3 million during the same period in 2014, representing an increase of RMB1.7 million.

Basic and diluted net loss per share was RMB1.15 or US$0.19 and RMB1.02 for the three-month period ended March 31, 2015 and 2014, respectively. Total shareholders' equity was RMB373.9 million or US$60.3 million as of March 31, 2015, compared with RMB388.9 million as of December 31, 2014.

As of March 31, 2015, the company had 13,062,500 basic and diluted ordinary shares outstanding. In conclusion, we would like to thanks our shareholders for their continued loyalty and support. We believe we are well positioned to face the current challenges and are committed to providing [indiscernible]. We will keep you updated about our progress.

With that Mr. Wang, Mr. Zhang and Mr. Jiang will be happy to answer your question. We require your patience as we translate each question and each answer. Operator, please begin the Q&A..

Q - :.

[Operator Instructions] There are no questions at this time. I will turn the call back to Vivian Chen for additional comments..

Thank you for joining us on this conference call. We look forward to being in touch with you and we'll keep you updated about our progress. At this time, we now conclude this call..

Thank you. You may now disconnect your lines at this time and thank you for your participation..