Weijia Dai - IR Yong Jiang - Corporate Secretary.

Analysts:.

Greetings, and welcome to Fuwei Films Third Quarter 2017 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 call over to Weijia Dai.

Please go ahead Weijia..

Thank you. Let me remind you that 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 trend affecting our 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 is Mr. Yong Jiang, Corporate Secretary. Before I walk you through our financial results, Mr.

Jiang will deliver his opening remarks and I will translate Mr. Jiang's remarks and I would translate Mr. Jiang’s remarks. Sir, please go ahead..

[Foreign Language] Hello everyone and thank you for joining us today. While we continue to face strong competition from emerging and incumbent players in the marketplace which has led to over supply relative to demand in the marketplace. We’re encouraged by positive trend and the increased net sales especially the sales of specialty film.

We believe our commitment to innovation and R&D has extended our end user application that will enable the company to capitalize on these opportunities despite challenging industry and economic conditions. Now we will discuss our financial results for the third quarter of 2017. Then I’ll begin the Q&A session.

Now I will provide you with an overview of our key financial results in the third quarter of 2017, also some update on our operations followed by management’s Q&A.

Last year during the third quarter ended September 30, 2017 were RMB73.9 million or US$11.1 million compared to RMB61.6 million during the same period in 2016 with an increase of RMB12.3 million or 20%. The increase of average sales price cost increased of RMB8.7 million and the sales volume increased cost and increased RMB3.6 million.

In the third quarter of 2017, sales of specialty films were RMB28.5 million or US$4.3 million or 38.6% of our total revenues as compared to RMB22.7 million or 36.8% in the same period of 2016 which was an increase of RMB5.8 million or 25.6% as compared to the same period in 2016.

The increase in average sales price caused increase up RMB0.1 million and increase in the sales volume cost increase of RMB5.7 million. Over the sales were RMB15.2 million or US$2.3 million or 20.6% of total revenues compared with RMB11.4 million or 18.4% of total revenues in the third quarter of 2016. This is an increase of RMB3.8 million.

The increase in average sales price cost increase of RMB1.1 million and increase in sales volume resulting in an increase of RMB2.7 million. Our gross profit was RMB6.7 million or US$1.0 million for the third quarter ended September 30, 2017.

Average earnings gross profit rate of 9.1% as compared to a gross profit margin of 1.7% for the same period in 2016. Correspondingly, gross profit rate increased by 7.4 percentage points compared to the same period in 2016 [indiscernible] with increase of average sales price.

Operating expenses for the third quarter ended September 30, 2017 were RMB16.3 million or US$2.5 million which was RMB3.6 million or 28.3% higher than the same period in 2016. This increase was mainly due to increased expenses on research and development.

Net loss attributable to the company during the third quarter ended September 30th, 2017 was RMB12.1 million or US$1.8 million compared to the net loss attributable to the company of RMB13.4 million during the same period in 2016 [averaging] an increase in loss of RMB1.3 million.

Basic and diluted net loss per share was RMB3.70 or US$0.56 and RMB4.1 for the three months period ended September 30th 2017 and 2016 respectively. Total shareholders' equity was RMB230.32 million or US$34.62 million as of September 30 2017 compared with RMB265.21 million as of December 31st 2016.

As of September 30th, 2017, the company had 33,65,837 basic and diluted total ordinary shares outstanding. Net sales during the nine-month period ended September 30th 2017 were RMB211.9 million or US$31.8 million compared to RMB183 million during the same period in 2016, representing increase of RMB28.9 million or 15.8%.

The increase of average sales price caused increase of RMB21.3 million and increase in the sales volume caused increase of RMB7.6 million.

In the nine months period ended September 30th 2017 sales of specialty films were RMB75.8 million or US$11.4 million, 35.8% our total revenue as compared to RMB68 million or 37.1% in the same period of 2016, which was an increase of RMB7.8 million or 11.5% as compared to the same period in 2016.

The increase of average sales price caused increase of RMB0.1 million, and increase in the sales volume caused increase of RMB7.7 million. Overseas sales during the nine months ended September 30th 2017 were RMB44.2 million or US$6.7 million or 20.9% of total revenue, compared with RMB35.1 million or 19.2% of total revenues in same period in 2016.

This was RMB9.2 million higher than the same period in 2016. The increase in sales volume resulted in an increase of RMB5.2 million, an increase of average sales price caused increase of RMB3.9 million.

Our gross profit was RMB15.5 million or US$2.3 million for the first nine months ended September 30th, 2017 representing a gross profit margin of 7.3% as compared to a gross profit margin of 6.7% for the same period in 2016.

Correspondingly gross profit rates increased by 0.6 percentage points, our average product sales price increased by 11.2% compared to the same period last year while the average cost of goods sold increased by 10.5% compared to the same period last year.

Consequently, the amount of increase in sales price was higher than that in cost of goods sold during the nine months ended September 30th 2017, compared with the same period in 2016, which resulted in an increase in our gross profit.

Operating expenses for the nine months ended September 30th 2017 were RMB44.3 million or US$6.7 million compared to RMB42.2 million in the same period in 2016 which was RMB2.1 million or 5.0% higher than the same period in 2016. This increase is mainly due to increased expenses on research and development.

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 of our progress. With that 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 today’s conference call. We look forward to being in touch with you and we will keep you updated about our progress. .

Thank you. This will conclude today’s teleconference. You may now disconnect your lines at this time. Thank you for your participation..