Good day, ladies and gentlemen. And welcome to the Fuwei Films' Fourth Quarter 2020 Earnings Conference Call. All lines have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Shiwei Yin.

Sir, the floor is yours..

Thank you, Dagmar. Thank you and let me remind you that today's call is being recorded. A replay of today's call will be made available shortly after the conclusion of the 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. Forward-looking statements are subject to risk 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 highlights, Mr.

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

Hello, everyone and thank you for joining us today. In 2020, our revenues and gross margins continue to grow. Sales of specialty films increased by 26.0% year-over-year and accounted for 60.8% of our total revenues for the year. And gross margin increased by 15.7 percentage points to 40.6% for the year of 2020, up from 24.9% in 2019.

We're encouraged by positive trends in revenues and gross margins which expect us to enable us to better navigate the industrial and economic landscape ahead. We believe that our focus on innovation would enable the company to expand end user product applications and attract new clients and expand relationships with existing customers..

Now I want to highlight our current financial results for the fourth quarter and full year of 2020. Revenues for the fourth quarter of 2020 were revenue RMB86.4 million or US$13.2 million compared with RMB86.8 million in fourth quarter of 2019, a decrease of RMB0.4 million or 0.5%.

Sales volume accounted for a decrease of RMB2.4 million while the increase of average sales price caused an increase of RMB2.0 million. Sales of the specialty films for the fourth quarter were RMB62.3 million or US$9.5 million, or 72.1% of total revenues, compared with RMB47.7 million or 54.9% of total revenue in the fourth quarter of 2019.

Sales volume accounted for an increase of RMB15.5 million, the decrease of average sales price caused a decrease of RMB0.9 million. Sales in China for the fourth quarter were RMB80.5 million, or US$12.3 million, or 93.2% of total revenues, compared with RMB81.4 million or 93.8% of total revenues in the fourth quarter of 2019.

Sales volume accounted for a decrease of RMB3.3 million while the increase of average sales price caused an increase of RMB2.4 million. Overseas sales for the fourth quarter were RMB5.9 million or US$0.9 million, or 6.8% of total revenues, compared with RMB5.4 million or 6.2% of total revenues in the fourth quarter of 2019.

Sales volume accounted for an increase of RMB1.0 million while the decrease of average sales price caused a decrease of RMB0.5 million.

Gross profit for the fourth quarter was RMB36.5 million or US$5.6 million, representing a gross margin of 42.2%, compared with a gross profit of RMB31.0 million, representing a gross margin of 35.7% in the fourth quarter of 2019.

Operating expenses for the fourth quarter were RMB60.6 million or US$9.3 million compared with RMB15.7 million in the fourth quarter of 2019. The increase was mainly due to the increased loss on impairment of assets held for sale.

Net loss attributable to the Company for the fourth quarter was RMB20.9 million or US$3.2 million, compared with net profit attributable to the Company of RMB10.3 million in the fourth quarter of 2019. Basic and diluted loss per share was RMB6.39 or US$0.98, compared with basic and diluted profit per share of RMB3.17 in the fourth quarter of 2019.

Moving on to full year results. During the fiscal year ended December 31, 2020, net revenues were RMB336.8 million or US$51.6 million, compared to RMB335.6 million in 2019, representing an increase of RMB1.2 million or 0.4%.

The decrease in average sales price caused a decrease of RMB0.5 million, which was more than offset by an increase of RMB1.7 million that resulted from the increase in sales volume. Gross profit for the year was RMB136.7 million or US$21.0 million, up from RMB83.6 million in 2019.

Our average unit sales price decreased by 0.2% compared to last year, with the unit sales cost decreased by 21.0% due to the price decrease of main raw materials. Operating expenses during the year were RMB115.3 million or US$17.7 million, an increase of RMB54.8 million, or 90.6% compared to 2019.

The increase was mainly due to the increased loss on impairment of assets held for sale. Net profit attributable to the Company for full year was RMB19.6 million or US$3.0 million, up from a net profit of RMB11.4 million in 2019. Basic and diluted earnings per share for the year was RMB6.00 or US$0.92, up from profit per share of RMB3.48 a year ago.

Net cash provided by operating activities was RMB117.5 million or US$18 million for the year ended December 31, 2020 as compared to net cash provided by operating activities of RMB54.4 million for the year ended December 31, 2019.

Cash and cash equivalents on December 31, 2020 was RMB113.4 million or US$17.4 million, compared with RMB60.9 million as of December 31, 2019. With that, Mr. Jiang will be happy to answer your questions. We require your patience as we translate each question-and-answer. Dagmar? Dagmar, we are ready for the Q&A..

Q - A -.

Okay. Well 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. Thank you and have a nice day..

Thank you. This concludes today's conference call. We thank you for your participation. You may disconnect the lines at this time and have a great day..