Good day, ladies and gentlemen. And welcome to the Fuwei Films' third quarter 2020 earnings conference call. All phone lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, Mr. Shiwei Yin.

Sir, the floor is yours..

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 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, 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. [Indiscernible] call is Mr. Yong Jiang, Corporate Secretary. Before I walk you through our financials, Mr. Jiang will deliver his opening remarks. Sir, please go ahead..

[FOREIGN LANGUAGE] Thank you Shiwei. [FOREIGN LANGUAGE] [Indiscernible] To environment and the outbreak of the COVID-19 pandemic, which has caused significant and adverse effects on the global economy, our orders remained solid and sales are relatively stable.

Sales in specialty films increased continuously which accounted for 64.6% of our total revenues during the quarter and in addition we maintained profitability for six consecutive quarters.

We believe these results benefit 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.

Our financial results for the third quarter and first nine months of 2020. [Indiscernible] were RMB84.3 million, $12.4 million, compared to RMB79.6 million during the same period in 2019, representing a year-over-year increase of RMB4.7 million or 5.9%.

The decrease of average sales price caused a decrease of RMB3.2 million and the sales volume increase caused an increase of RMB7.9 million.

Specialty films were RMB54.4 million, $8.0 million or 64.6% of total revenues as compared to RMB40.6 million or 51.0% in the same period of 2019, representing a year-over-year increase of RMB13.8 million or 34.0% as compared to the same period in 2019.

The [indiscernible] average sales price caused a decrease of RMB2.0 million and the increase in the sales volume caused an increase of RMB15.8 million. [Indiscernible] RMB7.8 million or $1.1 million or 9.2% of total revenues, compared to RMB11.6 million or 14.6% of total revenues in the third quarter of 2019.

[Indiscernible] price caused a decrease of RMB0.6 million and the decrease in sales volume resulted in a decrease of RMB3.2 million. [Indiscernible] RMB36.0 million, $5.3 million for the third quarter [indiscernible] margin rate of 42.7%, as compared to gross profit of RMB21.6 million and a gross margin rate of 27.1% for the same period in 2019.

Correspondingly, [indiscernible] margin rate increased by 15.6 percentage point compared to the same period in 2019. [Indiscernible] third quarter were RMB20.9 million, $3.1 million, which was RMB4.6 million or 28.2% higher than the same period in 2019.

[Indiscernible] due to the change of accounting estimate which caused the increase of accrual depreciation of the third production line.

[Indiscernible] the company during the third quarter was RMB13.5 million, $2.0 million compared to net profit attributable to the company of RMB3.4 million during the same period in 2019, representing an increase in profit of RMB10.1 million. Nine months results highlight.

Net sales during the first nine months were RMB250.4 million, $36.9 million, compared to RMB248.8 million, during the same period in 2019, representing an increase of RMB1.6 million or 0.6%, mainly due to the increase in sales volume.

[Indiscernible] sales of specialty films were RMB142.4 million, $21.0 million or 56.9% of total revenues as compared to RMB114.7 million or 46.1% in the same period of 2019, [indiscernible] RMB27.7 million, or 24.1% as compared to the same period last year.

[Indiscernible] price caused a decrease of RMB6.0 million and the increase in the sales volume caused an increase of RMB33.7 million. [Indiscernible] nine months were RMB21.1 million, $3.1 million or 8.4% of total revenues, compared with RMB42.2 million or 16.9% of total revenues in the same period in 2019.

[Indiscernible] lower than the same period in 2019. The decrease in sales volume resulted in a decrease of RMB21.6 million and the increase of average sales price caused an increase of [Indiscernible].

[Indiscernible] RMB100.2 million, $14.8 million for the first nine months ended September 30, 2020, representing a gross margin of 40.0%, as compared to a gross margin of 21.2% for the same period in 2019. Correspondingly, gross margin increased by 18.8 percentage points.

Sales prices decreased by 0.9% compared to the same period last year while the average cost of goods sold decreased by 24.7% year-over-year. [Indiscernible] first nine months were RMB54.7 million, $8.1 million, compared to RMB44.9 million in the same period in 2019, which was RMB9.8 million or 21.8% higher than the same period in 2019.

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

[Indiscernible] company during the first nine months was RMB40.5 million, $6.0 million, compared to net profit attributable to the company of RMB1.0 million during the same period in 2019, representing an increase of RMB39.5 million from the same period in 2019 due to the factors described above.

[Indiscernible] and restricted cash totaled RMB88.8 million, $13.1 million as of September 30, 2020. Total shareholders' equity was RMB248.7 million, $36.6 million. [Indiscernible] 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. We are happy to answer your questions. We require [indiscernible] as we like translate each question and answer.

Jasmine, please begin the Q&A?.

Operator:.

[Indiscernible] today's conference call. We look forward to being in touch with you and keep you updated about our progress in the future. Thank you and have a nice day..

Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time and have a great day..