Ladies and gentlemen, good day, and thank you for joining this Fuwei Films' Second Quarter 2020 Earnings Conference Call. As a reminder, all phone lines are in a listen-only mode, but after today's prepared remarks, you will have the opportunity to ask questions.

To get us started with opening remarks and introduction, I am pleased to yield the floor to Shiwei Yin. Please go ahead, sir..

I'd like to remind you that, today's call is being recorded. Replay of today's call will be available shortly after the concluding the today's call.

I'd also like to remind you that certain statements 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 know 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 call today is Mr. Yong Jiang, Corporate Secretary. Before I walk you through our financial results, Mr.

Jiang will deliver his opening remarks. Sir, please go ahead..

Thank you for joining us today. Despite the oversupply in the marketplace and the outbreak of COVID-19 pandemic, which has caused significant and adverse effects on the global economy, we achieved positive trends in our mix of sales, especially sales of specialty films which accounted for 58% of our total revenues.

In addition, we achieved net profit for five consecutive quarters. We 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 continue with these efforts and expect that they will enable the Company to capitalize on new opportunities despite challenging industry and economic conditions.

Moving to our financial results for the second quarter of 2020, net sales during the quarter were RMB82.9 million, $11.7 million, compared to RMB88.1 million, during the same period in 2019. The decrease of our average sales price caused a decrease of RMB3.6 million and lower sales volume caused a decrease of RMB1.6 million.

In the second quarter of 2020, sales of specialty films were RMB48.1 million $6.8 million or 58% of our total revenues, as compared to RMB42.0 million or 47.6% in the same period of 2019, which was an increase of RMB6.1 million or 14.5% year-over-year.

The increase in sales volume caused an increase of RMB8.9 million and the decrease in the average sales price caused a decrease of RMB2.8 million. Overseas sales were RMB7.5 million or $0.1 million, or 9.1% of total revenues, compared with RMB14.3 million or 16.3% of total revenues in the second quarter of 2019.

The increase of average sales price caused an increase of RMB0.5 million and the decrease in sales volume caused resulted in a decrease of RMB7.3 million. Gross profit was RMB34.4 million, $4.9 million, for the first quarter, representing a gross profit rate of 41.6%, as compared to a gross profit of rate 21.1% for the same period in 2019.

Correspondingly, gross profit rate increased by 20.5 percentage point compared to the same period in 2019. Our average product sales price decreased by 4.2% compared to the same period of last year, while the average cost of goods sold decreased by 29%, due to the decrease in raw material costs. It resulted in increase in our gross profit.

Operating expenses for the second quarter were RMB18.7 million, $2.7 million, as compared to RMB15.0 million for the same period in 2019. The decrease was mainly due to change of accounting estimate which caused the increase of accrual depreciation of third production line.

Net profit attributable to the Company during the second quarter was RMB14.1 million, $2.0 million, while net profit attributable to the Company was RMB1.0 million during the same period in 2019. Six months results.

Net results during the six months period ended June 30, 2020 were RMB166.1 million, $23.5 million, compared to RMB169.2 million in the same period in 2019. The increase in average sales price caused an increase of RMB0.7 million and decrease in some volume caused a decrease of RNB3.8 million.

Sales of specialty films were RMB88.0 million, $12.5 million, or 53% of our total revenues as compared to RMB74.2 million or 43.8% in the same period of 2019, which was an increase in and RMB13.8 million or 18.6% year-over-year.

Sales volume caused an increase of RMB17.7 million, and the decrease in the average sales price caused a decrease in RMB3.9 million. Overseas sales during the first six months were RMB13.3 million, $1.9 million, or 8.0% of total revenues, compared with RMB30.6 million or 18.1% of total revenues in same period of 2019.

The decrease in sales volume resulted in a decrease of RMB18.2 million and was mainly due to the antidumping measures while higher average sales price caused an increase of RMB0.9 million.

Our gross profit was RMB64.2 million, $9.1 million, for the first six months, representing a gross margin rate of 38.7%, as compared to a gross margin rate of 18.3% for the same period in 2019. Correspondingly, gross margin rate increased by 20.4 percentage points.

Our average product sales price increased by 0.4%, compared to the same period last year, while the average cost of goods sold decreased by 24.6%. Correspondingly, it resulted in increase in our gross margin. Operating expenses for the six months were RMB33.8 million, $4.8 million, compared to RMB28.5 million in the same period in 2019.

This increase was mainly due to the change of accounting estimate, which caused the increase of accrual depreciation of third production line.

Net income attributable to the Company during the first half of 2020 was RMB27.0 million, $3.8 million, compared to net loss attributable to company of RMB2.4 million during the same period in 2019, representing an increase of RMB29.4 million from the same period, due to the factors described above.

Cash, cash equivalent and restricted cash totaled RMB81.3 million, $11.5 million, as of June 30, 2020. Total shareholders' equity was RMB235.2 million, $33.3 million. Management will be happy to answer your questions. We require your patients as we like translate question and answers.

Jim?.

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 remain committed to providing value to our shareholders and customers. We will keep you informed of our future progress. Thank you. Have a good day..