Good morning. My name is Ray, and I will be your conference operator today. At this time, I would like to welcome everyone to the China Ceramics' First Half 2018 Earnings Conference Call. All lines have been placed in mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. David Rudnick, you may begin your conference.

Thank you, Ray. Good morning, ladies and gentlemen, and good evening to those of you who are joining us from China. Welcome to China Ceramics’ first six months of fiscal 2018 earnings conference call. With us today are China Ceramics’ Chairman and Chief Executive Officer, Mr. Jiadong Huang and his Chief Financial Officer, Mr. Edmund Hen. Before I turn the call over to Mr. Huang, I would like to address forward-looking statements that may be discussed in the call. Forward-looking statements involve risks and uncertainties and include among others those regarding revenue, operating expenses, other income and expense, taxes and future business outlook. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. The company claims the Safe Harbor protections for such forward-looking statements as contemplated under the Private Securities Litigation Reform Act of 1995. Please refer to the documents filed by the company with the SEC, specifically the most recent reports of Forms 20-F and 6-K, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. We assume no obligation to update any forward-looking statements or information, which speak as of their respective dates. And now, it’s my pleasure to turn the call over to China Ceramics' Chairman and CEO, Mr. Jia Dong Huang, and China Ceramics' CFO, Mr. Edmund Hen. Gabriel -- will be translating for Mr. Huang. Mr. Huang, you may proceed.

[Foreign Language]

Thank you, David. On behalf of the company, I'd like to welcome everyone to our first half fiscal 2018 earnings conference call.

[Foreign Language]

For the first half of 2018, we experienced top line growth of 6% as stronger market position enable us to increase our average selling price of 17% compared to the same period a year ago. However, we also experienced a 9% contraction in our sales volume after period of -- for six months of last year due to strategic decision to be more selective and [indiscernible]. We were able to implement three price increases over the last 18 months due to our reputation for high-quality products as well as the modest equipment and operating conditions. This pricing increase enabled us to achieve our recent utilization of our product capacity given the current market environment.

[Foreign Language]

During the six months ended June 30, 2018, we utilized production facilities capable of producing 21.1 million square meters of ceramic tiles for the first half of 2018 and the company's effective annual production capacity of 61.5 million square meters. In order to generate cash flow, we have entered into a contract to reach out an annual production line in our Hengdali facility that has the capacity to produce 10 million square meters of ceramic tiles. As we have in past quarters, we maintained the reduced utilization of existing plant capacity, based on the current market environment in order to keep operating costs low. And we will bring additional capacity online as the business environment improves.

[Foreign Language]

From the second half of 2018, we intend to continue to strategically target second tier cities, where we forecast development activities, they will be careful about extending credit to customers consistent with the general tightening of customer credits in our sector. Further, various pollution regulations applicable to our sector could cause the exit of smaller, less well capitalized competitors which we believe will ultimately give us the opportunity to increase our market share. Although we anticipate that business was slow in the second half of 2018, we believe that our business is sustainable since real estate development is vital for China's continued urbanization, which is a key element of government policy to achieve domestic economic growth.

[Foreign Language]

With that, I'll turn over the call to company's Chief Financial Officer, Mr. Edmund Hen, who will discuss the company's first half 2018 earnings results in more detail. Thank you.

Thank you, Mr. Huang. I'll now move on to a more detailed discussion of our financial results for the six months ending June 30, 2018. Our revenue for the six month ended June 30, 2018, was RMB 255.6 million or $55.9 million, an increase of 5.7% from RMB 236.5 million for the same period of 2017. The increase in revenue was primarily due to the 17.1% increase in the average selling price, or ASP, of the company's ceramic tiles products to RMB 28.1 or $4.4 in the first half of 2018 that's compared to RMB 24 for the same period of 2017, partially offset by the 9.3% decrease in sales volume to 12.7 million square meters of ceramic tiles in the first half of 2018 from 14 million square meters of ceramic tiles in the first half of 2017. Gross profit for the six months ended June 30, 2018, was RMB 44.8 million or $7 million as compared to gross loss of RMB 7.4 million for the first period of 2017. The gross profit margin was 12.6% for the six months ended June 30, 2018. That's compared to negative 2.2% total margin for the same period of 2017. The increase in gross profit margin was primarily due to the 16.7% increase in ASP of the company's ceramic tiles, and the decrease in depreciation expense resulting from the write-down of fixed assets at December 31, 2017. Other income for the six months ended June 30, 2018, was RMB 7.1 million or $1.1 million, as compared to RMB 7.1 million for the same period of 2017. For the six months ended June 30, 2018, other income consists of RMB 7.1 million or $1.1 million. The company received by leasing out one of the production lines from its Hengdali facility pursuant to an…

[Operator Instructions] Your first question comes from the line of Howard Flinker. Your line is open. Please ask your question.

Hello, everybody. Edmund, your sales dimensions something that I calculated and I want to correct -- on a check to see if this is correct. The way I see it, if you exclude the receivable write-off, which is not a cash write-off, your cash inflow was RMB 40 million or $6.4 million for the six months. Is that correct? Depreciation was the reversal of receivable minus loss. Is that correct?

Yes. You are correct. If you do not count -- that is our cash inflow from operations.

That's $1.50 a share or ¥9.7 million, correct, in six months?

Yes. Approximately like that.

Yes. Okay. And you and I have talked about the company's closing because of the environmental restrictions. Do you think that in the last two years more than 50% of the competitors have gone out of business?

I think so in Fujian province. There're a lot of provinces …

And then Jiangxi

Jiangxi

Jiangxi. Right. I suppose some competitors have gone out of business too. Is that correct?

Yes. We do notice it.

Is it as many our bigger percentage in the Jiangxi as in Fujian or not yet?

I think Fujian has more significant -- in Fujian Province.

Could it be as high as 65% in Fujian?

I think it's about 50%.

About 50%. Okay.

It's not for sure. So it's just …

No, no. I know -- I know it's a guess. And finally, the Government of China changed the taxes recently and also the necessary contribution to retirement and pensions. Is that going to put more pressure on some of these weaker competitors?

Yes. They will come for the pressure in the coming years.

So the reduction in industry-wide capacity in Fujian, and maybe even Jiangxi, could be more than 50% correct?

This is only an estimate.

Yes. But there is -- the pension expense is going to add more pressure to competition. Correct? More kind of pressure.

Correct.

All right. So now -- it could be bigger than 50%. We'll see without fee.

Yes.

Okay. All right. I suggest next time -- you mentioned, because most people don't bother to calculate what the cash inflow was, because that's a very large number for a company like yours. And you might point that out more clearly next time.

Yes. We may do that.

Okay. [Foreign Language]

Thank you.

Welcome.

[Operator Instructions] Your next question comes from the line of James [indiscernible]. Your line is open. Please ask your question.

Thank you for this conference call. My question is, can you tell us something about what has happened between June 30th and now, which is almost three months? Has there been any backlog?

We -- because at the end -- from June, we have changed our strategy a bit. So we did not have [indiscernible] we only chose to quality customer to do direct business with them. So from the June 30 to now, I can only say that we do have some good revenue, but that is a little bit lower or slower than the same period of last year.

You mean it's slower to collect your receivables?

One, the revenue growth. So revenue growth is much lower than we thought.

Okay. What about the cash situation? I see that relative to a year ago there's more cash on hand now which is good. That was as of June 30th. Can you tell us anything about the cash on hand now?

The cash on hand is approximately the same. There is no too much difference. I mean, well, we maintain it about the same level.

Okay. Well, I'm certainly glad that you're able to raise prices by as much as you have. And that you have returned to profitability. But, I guess, as you say the situation is still challenging in China, if it ever becomes non-challenging, which typically, I guess, it will eventually, that should be very good for you. But for now, I'm glad that you're profitable.

Thank you. Thank you [indiscernible]. Thank you very much.

[Operator Instructions] There are no further questions at this time. You may continue sir.

Thank you. Thank you very much everyone. On behalf of the entire China Ceramics' management team, we want to thank all of you for your interest and participation on this call. This concludes China Ceramics' first half 2018 earnings call. Thank you all very much.

This concludes today's conference call. You may now disconnect. Thank you for participating.