Vivian Chen - Investor Relations, Grayling Xiuyong Zhang - Director and Chief Financial Officer Yong Jiang - Corporate Secretary.

Greetings, and welcome to the Fuwei Films Third 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. It is now my pleasure to introduce your host, Ms.

Vivian Chen of Grayling. Thank you. You may begin..

Thank you. 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 the 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. My colleague Xiuyong Zhang will translate Mr. Zhang’s remarks. Sir, please go ahead..

Thank you, Vivian. Hello, everyone and thank you for joining us today. We continue to face the strong competition from emerging and incumbent players, which has created oversupply relative to demand in the marketplace. While this has impacted the company’s 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 end-user applications and our high-quality specialty films of increasing the product portfolio, which we believe will help us to attract new clients and expand relationships with existing customers.

We are encouraged by positive trends in the sales volume and gross margins that we expect to enable us to weather different industry and economic conditions in the periods ahead. Now, Vivian will read to you our financial results for the third 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 third quarter of 2015. Then I will offer some updates on the company’s operations followed by management Q&A.

Net sales during the third quarter ended September 30, 2015 were RMB65.7 million or $10.3 million, compared to RMB69.2 million during the same period in 2014, representing a decrease of RMB3.5 million or 5.1% mainly due to the production of average sales price by 16.2% arising from stronger competition in China and large production in prices of main raw materials.

The reduction of average sales price caused a decrease of RMB12.6 million and the sales volume increase caused an increase of RMB9.1 million.

In the third quarter of 2015, sales of specialty films were RMB18.7 million or $2.9 million representing 28.5% of our total revenues as compared to RMB20.7 million or 30% in the same period of 2014, which was a decrease of RMB2 million, or 9.7% as compared to the same period in 2014.

The reduction in average sales price caused a decrease of RMB2.8 million and the increase in the sales volume caused an increase of RMB0.8 million. Overseas sales were RMB16.1 million or $2.5 million, or 24.5% of total revenues, compared with RMB11.8 million or 17.1% of total revenues in the third quarter of 2014.

This is an increase of RMB4.3 million. The decrease in average sales price caused a decrease of RMB2.6 million and the increase in sales volume resulted in an increase of RMB6.9 million. The increase in overseas sales was mainly due to the increase in sales volume.

Our gross profit was RMB3.8 million or $0.6 million for the third quarter ended September 30, 2015, representing a gross margin of 5.8%, as compared to a gross loss rate of 4.5% for the same period in 2014. Correspondingly, gross profit rate increased by 10.3 percentage points compared to the same period in 2014.

Our average product sales prices decreased by 16.2% compared to the same period last year and the average cost of goods sold decreased by 24.4% compared to the same period last year. Consequently, the amount of decrease in the cost of goods sold was higher than that in the average ales price, which resulted in an increase in our gross profit.

Operating expenses for the third quarter ended September 30, 2015 were RMB14.5 million or $2.3 million, which was RMB2.4 million, or 19.8% higher than the same period in 2014.

This increase was mainly due to depreciation charged to general and administrative expenses in the accounting period when the depreciation expense 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 third quarter ended September 30, 2015 was RMB12.3 million or $1.9 million compared to a net loss attributable to the company of RMB17.8 million during the same period in 2014, representing a decrease of RMB5.5 million for the same period in 2014.

Net sales during the nine-month period ended September 30, 2015 were RMB185.2 million or $29.1 million compared to RMB209.9 million during the same period in 2014 representing a decrease of RMB24.7 million or 11.8% mainly due to the reduction of average sales price by 14.2% arising from stronger competition in China, together with the reduction in prices of main raw materials.

In the nine months period ended September 30, 2015, sales of specialty films were RMB55 million or $8.7 million or 29.7% of our total revenues as compared to RMB57.1 million or 27.2% in the same period of 2014, which was a decrease of RMB2.1 million, or 3.7% as compared to the same period in 2014.

The reduction of average sales price caused a decrease of RMB6.2 million and the increase in the sales volume caused an increase of RMB4.1 million.

Overseas sales during the nine months ended September 30, 2015 were RMB44.3 million or $7.0 million or 23.9% of total revenues compared with RMB33.4 million or 15.9% of total revenues in the same period in 2014. This was RMB10.9 million higher than the same period in 2014.

The increase in sales volume resulted in an increase of RMB18.7 million and the decrease of average sales price plus the decrease of RMB7.8 million. The increase in overseas sales was mainly due to increases in sales volume.

Our gross loss was RMB3.7 million or $0.6 million for the first nine months ended September 30, 2015 representing gross loss figure of 2% as compared to gross loss rate of 6% for the same period in 2014. Correspondingly gross loss rate decreased by four percentage points.

Our average product sales prices decreased by 14.2% compared to the same period last year, while the average cost of goods sold decreased by 17.5% compared to the same period last year.

Consequently, the amount of decrease in cost of goods sold was higher than that in sales revenue during the nine months ended September 30, 2015 compared with the same period in 2014, which resulted in a decrease in our gross loss.

Operating expenses for the nine months ended September 30, 2015 were RMB36.4 million or $5.7 million compared to RMB32.9 million in the same period in 2014, which was RMB3.5 million or 10.6% higher than the same period in 2014.

This increase was mainly due to depreciation charge to general and administrative expenses during the accounting period when the depreciation expense incurred as a result of lack of manufacturing from the third production line in May and June of 2015.

Basic and diluted net loss per share was RMB0.94 or $0.15 and RMB1.36 for the three months period ended September 30, 2015 and 2014, respectively. Total shareholders’ equity was RMB346.9 million or $54.6 million as of September 30, 2015, compared with RMB388.9 million as of December 31, 2014.

As of September 30, 2015, the company had 13,062,500 basic and diluted total ordinary shares outstanding. 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 about our progress. With that Mr. Zhang and Mr. Jiang will be happy to answer your questions. We require your patience as we translate each question and each answer. Operator, please begin the Q&A..

Operator:.

Thank you for joining us on this conference call. We look forward to being in touch with you and we will keep you updated about our progress. Again, thank you very much..

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. And we thank you for your participation..