Vivian Chen – Investor Relations, Grayling Xiuyong Zhang – Director and Chief Financial Officer.

Analysts:.

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

It is now my pleasure to introduce your host, Vivian Chen with Grayling. Thank you. You may begin..

Thank you, operator. Let me remind you, today’s call is being recorded. A replay of this call will 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. 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. Zhang will deliver his opening remarks and my colleague Xiaoli Yu will translate Mr. Zhang’s remarks. Sir, please go ahead..

[Foreign Language] Thank you, Vivian. Hello, everyone and thank you for joining us today. We continue to face strong competition from emerging and incumbent players, which has created oversupply relative to demand in the market place.

While this had impacted the Company’s quarterly financial results, we intend to capitalize upon opportunities in international markets. We believe that our focus on continued innovation and R&D will enable the Company to expand our end-user applications.

We witnessed improved the sales volume this quarter, especially with respect to the close of specialty films, which we believe is encouraging. We expect this positive trend to enable us to face different industries and economic conditions in the period ahead. Now Vivian will read to you our financial results for the second quarter of 2015 then Mr.

Jiang and I will begin the Q&A session..

Thank you, Mr. Zhang. I will now provide you with an overview of our key financials for the second quarter 2015. Then I will offer some updates of the Company’s operations followed by management Q&A.

Net sales during the second quarter ended June 30, 2015 were RMB66.7 million or US$10.8 million, compared to RMB70.0 million during the same period in 2014, representing a decrease of RMB3.3 million or 4.7% mainly due to the reduction of the average sales price by 7.2% arising from the stronger competition in China, however there was a 13.9% reduction in prices of main raw materials.

The reduction of the average sales price caused a decrease of RMB5.2 million and the sales volume increase caused an increase of RMB1.9 million.

In the second quarter of 2015, sales of specialty films were RMB21.3 million or US$3.4 million representing 31.9% of our total revenues as compared to RMB16.6 million or 23.7% in the same period of 2014, which was an increase of RMB4.7 million, or 28.3% as compared to the same period in 2014.

The reduction of average sales price caused a decrease of RMB1.5 million and the increase in the sales volume caused an increase of RMB6.2 million. The increase was largely attributable to the increase in sales volume.

Overseas sales were RMB15.1 million or US$2.4 million, or 22.7% of total revenues, compared with RMB1.1 million or 15.9% of total revenues in the second quarter of 2014. The decrease of average sales price caused a decrease of RMB2.1 million and the increase in sales volume resulted in an increase of RMB6.1 million.

The increase in overseas sales was mainly due to the increase in sales volume. Our gross profit was RMB0.3 million or US$0.04 million for the second quarter ended June 30, 2015, representing a gross margin of 0.4%, as compared to a gross loss margin of 13.6% for the same period in 2014.

Correspondingly, gross margin increased by 14 percentage point compared to the same period in 2014. Our average product sales price decreased by 7.2% compared to the same period last year, while the average cost of goods sold decreased by 18.6% compared to the same period last year.

Consequently, the amount of decrease in cost of goods sold was larger than that in sales revenue during the second quarter ended June 30, 2015 compared with the same period in 2014, which resulted in an increase in our gross profit.

Operating expenses for the second quarter ended June 30, 2015 were RMB13.0 million or US$2.1 million, as compared to RMB10.4 million for the same period in 2014, which was RMB2.6 million, or 25.0% higher than the same period in 2014.

This increase was mainly due to the depreciation charged to general and administrative expenses in the accounting period in which they are incurred as a result of lack of manufacturing from the third production line in May and June of 2015.

Net loss attributable to the Company during the second quarter ended June 30, 2015 was RMB14.7 million or US$2.4 million compared to net loss attributable to the Company of RMB23.0 million during the same period in 2014, representing a decrease of RMB8.3 million for the same period in 2014.

Basic and diluted net loss per share was RMB1.12 or US$0.18 and RMB1.76 for the three months period ended June 30, 2015 and 2014, respectively. Total shareholders’ equity was RMB359.2 million or US$57.9 million as of June 30, 2015, compared with RMB388.9 million as of December 31, 2014.

As of June 30, 2015, the Company had 13,062,500 basic and diluted total ordinary shares outstanding. With that, 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:.

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. Thank you for joining us on this conference call.

We look forward to being in touch and we’ll keep you updated about our progress..

Thank you. That does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today..