Good morning, my name is [Dishanta] and I will be your conference operator today. At this time, I would like to welcome everyone to the China Ceramics Third Quarter 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions] Thank you. I will now turn the conference over to Mr. David Rudnick, Investor Relations. Please go ahead sir.

Thank you, Kyla. Good morning, ladies and gentlemen and good evening to those of you who are joining us from China. Welcome to China Ceramics’ second quarter 2015 earnings conference call. With us today are China Ceramics' Chairman and Chief Executive Officer, Mr. Jia Dong Huang; and its Chief Financial Officer, Mr. Edmund Hen. Before I turn the call over to Mr. Huang, may I remind our listeners that during this call, management's prepared remarks contain Forward-Looking Statements, which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore, the Company claims protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today. We refer to more detailed discussion of the risks and uncertainties in the Company's filings with the Securities and Exchange Commission. In addition, any projections as the Company's future performance represent management's estimates as of today November 19, 2015. China Ceramics assumes no obligation to update these projections in the future as market conditions change. To supplement the financial result presented in accordance with U.S. GAAP management will make reference to earnings before interest, taxes, depreciation and amortization which we will call by its abbreviated name EBITDA. EBITDA is non-GAAP financial measure reconciled from net income, which the Company believes provides meaningful additional information to better understand its operating performance. A table of reconciling net income to EBITDA can be found in the earnings press release issued earlier today. And now, it's my pleasure to turn the call over to China Ceramic's Chairman and CEO, Mr. Jia Don Huang, and China Ceramic's CFO, Mr. Edmund Hen. [Sophie Wong] (Ph) will be translating for Mr. Huang. Mr. Huang, you may proceed.

Thank you David, on behalf of the company I would like to welcome everyone to our third quarter 2015 earnings conference call. We reported solid financial results in the third quarter due to our continued strong marketing efforts, sustained pricing power and a modest improvement in China's real estate and construction markets. The quarter's modestly improved top line results were driven by improved customer demand and a higher average selling price for our products. Further, a gradual migration of our sales towards higher margin products helped to solidify our margins in the quarter. We are also excited about our new glazed brick ceramic tile product, which diversifies our product portfolio even further. We are utilizing production facilities capable of producing 47 million square meters of ceramic tiles per year out of a total annual production capacity of 72 million square meters. This was a modest 4% decrease over what we utilized during this period last year, but that is close to the planned capacity we utilized last quarter. We hope to bring additional capacity online going forward as business conditions improve. For the fourth quarter, we anticipate a modest improvement in the macroeconomic factors, which contribute to the demand for our products. However, we also anticipate a seasonal slowdown consistent with the construction building cycle which would lead to lower sequential fourth quarter results. In the periods ahead, we plan to especially focus upon developing stronger relationships with larger property developers and we plan to tailor our marketing efforts towards those cities in China, which offer better potential for new property development. Despite periods of occasional volatility, we believe that China's urbanization and economic growth continue to support the viability of our business. We also believe that we have the management expertise and operating infrastructure to adapt to difficult market conditions as well as to capitalize upon the opportunities presented by an improving market environment. With that, I would like to turn over the call to the company’s Chief Financial Officer, Mr. Edmund Hen, who will discuss the company’s third quarter earnings results in more detail. Thank you.

Thank you Mr. Huang. I will now move on to a more detailed discussion of our financial results for the third quarter 2015. Our revenue for the third quarter ended September 30, 2015 was RMB339 million or US$53.3 million, an increase of 5.9% from RMB320.1 million or US$52.2 million in the third quarter of 2014. The year-over-year increase in revenue was primarily due to a 2.8% increase in sales volume to 11 million square meters of ceramic tiles from the year ago quarter and a 3.3% increase in average selling price to RMB30.9 per square meters from the year-ago quarter. Gross profit for the third quarter ended September 30, 2015 was RMB46.3 million or US$7.3 million, an increase of 10.8% from RMB41.8 million or US$6.8 million for the year-ago quarter. The gross profit margin was 13.7% for the third quarter compared to gross profit margin of 13.1% in the year ago quarter. The improvement in gross margin was primarily driven by the increase in average selling price. Profit from operations before taxes, for the quarter of 2015 was RMB36.6 million or US$5.8 million as compared to RMB44.1 million or US$7.2 million in the year-ago quarter. adjusting for this non cash gain on derivative financial instruments of RMB12.2 million in the quarter of 2014. Profit from operations before taxes increased 13.7% for the current quarter, for the third quarter of 2014. Net profit for the third quarter of 2015 was RMB26.9 million or US$4.2 million as compared to net profit RMB35.7 million or US$5.8 million in the year ago quarter. Adjusting for the non-cash gain of financial derivatives in the third quarter of 2014, net profits increased to 15% for the current quarter from the third quarter 2014. Earnings per fully diluted share for the third quarter of 2015 were RMB1.32…

[Operator Instructions] Your first question comes from Howard Flinker with Flinker & Company.

I have a few questions. One, I have been told that perhaps 20% or 25% of the competitors in Jiangsu have closed and the banks are probably going to close another 25% for a total of maybe 50%. Do you think you are getting some business from those closed competitors or not yet?

We hope so. We have not yet seen the situation. As you mentioned, we realized about 20% of the small competitors has closed their business already and other 20% to 30% of the manufacturer has stopped their production line right now and we hope we can survive in this stringent situation and get more market share in the near future.

I also noticed that both your prices were up and your backlog is up, meaning business is getting better and prices are sticking. Is that true in both plants in Jiangsu and is it Jiangxi or Zhejiang, if forgot the second one?

Jiangxi and Zhejiang.

Yes Jiangxi. Are sales up at both plants or just one?

I think yes, a small amount of our product has increased a little bit of the price, this is because of - the actual situation is that we shipped our product mix to some higher margin product at this point. And we realized that the low margin product is not very sellable or welcomed to the market at this economic environment and we found high quality. And we found the high quality...

Are you seeing improvement in both plants or mainly one?

Both plants.

Both plants, okay.

Majority from Hengda which is Zhejiang area, Zhejiang plants.

Okay. Jiangxi and Zhejiang. In relation to your new roofing tile, is that more expensive than your current product line or the same or cheaper?

That will be a little bit higher than our current product pricing and we found market for this product is very high and we have a few pre-order right now and we believe the market for this new type of product will be very good.

So if the prices are higher, I’m guessing that your profits margins are going to be higher?

Yes.

Okay.

We expect that profit margin will be a little bit high.

Alright. Now I'll ask about the cash flow and your capital expenditures and a possible stock buyback. It's looks like your cash flow is going to be only a little bit less than your stock price not much per share and you should be able to pay your CapEx pretty easily from almost depreciation alone. Are you still in black rate now in the seasonal fourth quarter?

Sorry at the end of fourth quarter we - sorry can you repeat your question again?

Yes, before I asked my question, the second question I’m going to ask first. Are you still in the black currently and the seasonally weak fourth quarter?

Yes, the fourth quarter is seasonally slow season.

Yes but you are still in the black, are you not?

You may say that.

But I’m asking you.

I’m sorry, can you rephrase your question on this?

Yes, at the current level of business, are you still making a small profit?

Yes.

Okay.

Correct.

Okay, so if you take, I guess a 12 months profit and add about I don’t know RMB72 million of depreciation that will pay for your whole capital expenditure, your expansion into the new product line. Why aren’t you using some of your cash to buy back stock which would increase the value of anybody else who does not submit the stock, why aren’t you doing that?

You have a very good suggestion and we our discussing on all these possibilities and therefore we will consider on your suggestion very seriously. Well as you also noticed that the credit period by our customers become longer right now at this situation.

Yes, you are using that competitively, you do that on purpose, I know you did that on purpose you told me. And maybe that’s helping to some of those competitors out of business because they cannot affords to give the customers like longer terms, but even so there seems to be enough money left over for a stock buyback.

Yes and your suggestion will be considered and discussed by the boards among what you mentioned.

Okay. One final question, on your balance sheet and which you really don’t mention is restricted cash, you also have cash that’s restricted, I think it's a $4 million or something like that? Maybe RMB20 million, RMB25 million. What is the purpose of that?

All right, that’s used to secure on short-term loans.

I see. So it is RMB29 million and US$4.5 million in cash. So that really is to offset some of your RMB84 million loans and you have to keep it on deposit temporally. Correct me, is that correct?

Correct. Yes.

Okay. In tough times, I think you did a job. Just keep it up.

Thank you very much.

All right thanks.

Your next question comes from [Morico Gordon with China Ceramics] (Ph).

Good morning.

Good morning.

How much does the recent devaluation of the Yuan or the RMB affect profitability if it does at all?

It does not have too much implication to the company, because most of our revenue are selling, our product selling within China, let's say about 93%, 96% of our products are selling within China.

Okay. Has there been an increase in marketing in overseas this year?

This year will remain the same, but we are exploring some overseas markets and we also hope to have more overseas market to explore more overseas market in future.

How much of your marketing is devoted to overseas sales versus your domestic sales?

For example the Japanese products have a much better margin than the local sellers probably 20% or 30% higher sometimes.

Okay. What neighboring countries shows the most interest in being in a long-term business relationship with you guys and why?

Sorry, the long-term business relationship with us?

Yes what country, is it still Japan.

Still Japan and also Southeast Asia.

Okay. All right. Thank you. That's it.

Thank you.

Next question comes from the line of James Kong with Oppenheimer.

I want to add my congratulations for a good quarter and also I'm proud of the fact that your company came through a very difficult time and you are still profitable and you came out of the difficult period even stronger than before. So my first question is at this point do you see any market for your tiles in the U.S., what are your thoughts about selling to the United States.

Yes, we also want to explore the market in U.S. and actually we are exploring some business partner in U.S. too and we will let you know once we have any further movement under U.S. market, but at this point, we are still very preliminary.

Okay, thank you and I'm also impressed by the growth of your cash, which you are unlike many companies is growing for the right reasons, profitability. So in general could you talk about what the purpose of the cash is, is it more for future growth or to build a bigger and bigger cushion in case there are bad times or what?

Of course, some part of cash as you may notice we are building the new capital expenditure for the future growth and also we want to reserve some money for this difficult environment and also we will reserve part of the money to think about the capital market and also to explore on the overseas product market as well.

All right, very good, I approve of all of those and it's true that there is no guarantee that the difficult times are over. They may become more difficult in the future, but as a last comment I just want to - second what Mr. Flinker said about the stock buyback and add one point, which is that it does not have to be all or nothing, you could have a very small stock buyback. Even a tiny one would make the market realize that when you have so much cash in assets, the cash in assets per share actually go up after the stock buyback and that I think would be an impressive signal to the market.

Yes, and we hear you and we will make a serious consideration and discussion among the management.

Thank you.

Okay.

[Operator Instructions] We have no further questions at this time. I will turn the conference back over to Mr. David Rudnick. Please go ahead sir.

Thank you. On behalf of the entire China Ceramics’ management team I want to thank all of you for your interest and participation on this call. This concludes China Ceramics’ third quarter 2015 earnings conference call. Thank you all very much.

Thank you ladies and gentlemen, you may disconnect at this time.