Greetings. Welcome to the China Automotive Fourth Quarter and 2015 Full-Year Results. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the conference over to Dixon Chen. Thank you. Dixon, you may begin.

Thank you. Thank you everyone for joining us today. Welcome to China Automotive Systems fourth quarter and fiscal year 2015 earnings conference call. Joining us today are Mr. Qizhou Wu, Chief Executive Officer; and Mr. Jie Li, Chief Financial Officer; and Ms. [indiscernible], Financial Manager for China Automotive Systems. They will be available to answer questions later in the conference call with the assistance of translation. Before we begin, I’d like to remind all listeners that throughout this call, we may make statements that may contain forward-looking statements. Forward-looking statements represent the Company’s estimates and assumptions only as of the date of this call. As a result, the Company’s actual results could differ materially from those contained in these forward-looking statements due to a number of factors including those described under the heading Risk Factors in the Company’s Form 10-K Annual Report for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on March 30, 2016, and in the documents filed with the Company from time-to-time with the Securities and Exchange Commission. The Company expressly disclaims any duty to provide updates to any forward looking statements made on this call whether as a result of new information, future events or otherwise. On this call, I’d like -- I’d provide a brief overview and a summary of financial results for the fourth quarter and fiscal year 2015. And then I’ll turn the call over to management to conduct a question-and-answer session. The following 2015 fourth quarter results are unaudited; and the year-end results are audited numbers. Results are reported under the US GAAP. For the purposes of our call today, I’ll review the financial results in US dollars. We will begin with a review of the recent dynamics of China Automotive’s industry and our market position.…

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Thank you. We’ve a question coming from the line of Peter Halesworth with Heng Ren. Please go ahead with your question.

Hi. I just wanted to ask a few questions about the utilization rates. I understand that additional capacity has been added over the past year, and I’m wondering what we’re looking at in terms of the lead production capacity for 2016 and the utilization? Then I will have a follow-up question.

Thanks. For 2014 -- I’m sorry, in 2015, the utilization rate for EPS is very high. We are running at 100% utilization rate for EPS line. Hydraulic product line is slightly lower at 80%, down in 2015. Looking into 2016, the utilization rate for EPS line will remain 100%. The hydraulic line we will see -- it’s going to range between 90% to 95%.

Okay. I’ve a follow-up question.

Yes, go ahead.

Thank you. So, regarding the contract pipeline and new customer pipeline, what did we see coming through in the fourth quarter of 2015 or earlier that will be relevant to 2015, in particular, how does it relates to the guidance we’ve been given on revenue? Thank you. And I’ll have a quick follow-up.

We -- in terms of the order book, we quickly touch upon on the guidance. This year it’s relatively -- its flat from last year. But we’ve some -- we see some new dynamics. For instance, Shanghai GM [indiscernible] their order in September was delayed, but it’s finally started in December. That’s 250,000 units for 2016. Guangzhou Auto joint venture with Fiat, we’re starting a new order with them. It’s a small order, but we secure a good price and we believe it’s a good step and we try to grow that business. Ford, internationally we’re following up with Ford. So probably by later this year we’re going to start shipment and that’s about the annual total volume about 110,000 units.

Thank you. I’ll go back in the queue. Let other investors ask questions and see if I can get back in the queue. Thank you.

Thank you.

Thank you. The next question comes from the line of William Gregozeski with Greenridge. Please go ahead with your question.

Hi guys. On the [technical difficulty] million in revenue guidance, can you give a split on what you’re expecting between China, U.S., and South America?

Between China, U.S., and South America, okay. The breakdown will be roughly 15% from the U.S market, slightly less than 5% from South American market, and the remaining around 80% will be generated from domestic China.

Okay. Can you guys talk maybe as well through on this year what you’re expecting for how hydraulic growth compared to EPS, since you lost more at hydraulic sales in 2015, than you gained in EPS sales?

You talk about 2016, right?

Yes.

Okay. We will continue to see robust growth from our EPS business. EPS we expect a 50% year-over-year increase to reach the total sales of around $120 million to $130 million in 2016. That’s from EPS. Okay, so the remaining you can do the subtract – subtraction, the remaining will be hydraulic business.

Okay. And then, the last question was on the buyback you announced that there was a time when the stock the market was trading less than in the cash per share. I’m just curious why you guys haven’t [technical difficulty] buyback yet?

It’s mainly due to the procedure. I think it’s because window of -- will now open. We want to buy for some reason our [indiscernible] not to do it, because it’s just not the right time for the window. Window does not open. So by the rule, now we’re reporting number -- first quarter numbers are out, even we’ve not announced it, but we know it. So, we’ve to wait until mid May.

Okay, to execute?

Buyback.

All right. And then, lastly, do you -- given those are the currency and [technical difficulty] margins have trended, do you have a investment as to what you have [technical difficulty] 2016, while the growth for [technical difficulty] on a consolidated basis?

Your line is not very clear. Can you repeat your question?

Yes. Just curious if you have an estimate [technical difficulty] 2016 gross margin just given all the currency issues in [technical difficulty] South America where you thought that might be?

Okay. So gross margin on the EPS side, we will see a notable increase improvement in 2016 mainly with the volume increase economy of scale now we can procure components at a better price. And we’re looking at and price advantage, I mean, cost advantage in the motor, electric motor, that will contribute about 3% to the gross margin for the EPS and other electronic components such as ECU, and [indiscernible] that will also improve and that will contribute to gross margin improvement by another 3%. Overall, the blended gross margin in 2016 with USE 1% to 2% increase.

Okay. Thank you.

Thank you.

Our next question is from the line of Peter Halesworth with Heng Ren. Please go ahead with your question sir.

Yes, just a quick follow-up question on forex translation loss, whether we expecting for 2016 and what renminbi rate are we using for that? That’s my first question.

Okay. So we’re projecting exchange rate at about 6.5%, I mean 6.5 -- the exchange rate between U.S dollars and China RMB is about 6.5%. Again, we don’t have the crystal ball where the rates -- exchange rate will go. But general feeling is its going to -- it’s a mix back. If the exchange -- if RMB depreciates, it will help us with the export, but also its going to affect us, that the domestic sales numbers consolidation because 80% of business still in China. And so that will affect our number as we reported in U.S dollars according to U.S GAAP.

And what …

[Technical difficulty] looking at 6.5%.

Right. And is there a hedging strategy and policy that can be explained?

Yes, we’re in discussion with HSBC on some of the solutions on hedging against the whole currency risk.

Okay. And a quick follow-up, regarding the investments, the venture capital investments, could you explain the rationale behind that and the thinking of choosing to do that rather than increasing the share buyback or issuing regular dividends? Thank you.

Yes, the rationale to get involve was from the [indiscernible] sector is we’re seeing -- there are some innovation in the new technology for the automotive sector in China. And we like to be part of that in early stage and to make sure we get the best benefit of it to -- so some of the technology for instance is related to driverless vehicle, some of the censor technology and we believe is going to be and helpful to our business.

Okay. And my last question is, if shareholders can track and monitor the progress of China Automotive Systems in 2016, what would be the best measure for us to use? How should we evaluate you and on what basis? Thank you.

You want to look at a few things what we call milestone steps in 2016. One of them is the EPS sales, will reach 1 million units in 2016. That’s a major milestone we are very proud of. And the other one is lot of international -- high quality international customer are coming in, including some of them already are booking in our pipeline. And so, even the order contribution to 2016 would be relatively small, but that lay the foundation for a very strong 2017, 2018. And so, we’re very pleased of our quality, which is now bringing us more business -- new business from international market.

Great. Good luck in making those achievements and thank you for taking my question.

Thank you.

Thank you. Our next question is from the line of Robert Polivich, a Private Investor. Please go ahead with your question sir.

Yes, good morning. I have a couple of questions. The first had to do with there has been a 9% decrease in sales to commercial for 2015. And we’ve seen the trend declining commercial sales, I guess over the last several years. Do you feel at this point that this business is bottoming out here and what percentage of this commercial business relates to the total of China Automotive annual sales? [Indiscernible] I don’t know what that breakout is it, maybe listed somewhere, but -- and then I’ve another question afterwards.

Okay. Overall, commercial vehicles product sales accounted for 20% of our total sales. Yes, go ahead.

Okay. Let me see, I just see the other thing too is, I mean, we’ve seen a consolidation in total company sales over the past year and I know there has been that tax incentive of 50% reduction in the sales tax for the purchase of new vehicles with smaller engines, do you feel that there is a chance that that program would be expanded beyond the end of this year? And as it relates to total sales for China Automotive Systems, do you feel that we’ve maybe bottomed out here and as we look out to one or two years. I know the prior question, there was some good news, leading into 2017 and beyond. Do you feel that we’ve bottomed out at this point?

You’re assessment of -- your comment of bottomed is probably correct. Take our business for example; we’re feeling generally that commercial vehicle business is recovering. If you look at first two months of the business in 2016, its already -- the decline has already stopped and we see a slight rebound from the same time of 2015. And also with our new order coming in, we believe 2017 and ’18 would be back on track for growth. But yes, 2016 we just have to wait and we believe it’s a fair assessment and to call it bottom.

Okay. I guess one last question. You know I can keep asking questions forever, but I will do one last one and that is there is foreign transplants for steering manufacturers that are opening in China, I don’t know that there are many, but just wondering like the impact of foreign competition with transplants within your whole market and I assume that most of those are dedicated agreements with the foreign automotive manufacturers. Have you seen any impact where they’re trying to take your business away or how fixed [ph] do you feel about your position in the marketplace with these plants expanding into your home territory?

Okay. Let me answer you this way. I will see if I will just put it this way. When we started entering steering business passenger vehicle sector, we’ve almost no market share, and our competitors are global names, established customer relations and well developed product line. Over the years, we’re able to gain market share both customer acceptance, win awards, and eventually become a large player having the largest market share in China and now we’re confident we can repeat our success in the EPS sector with our new product line, high quality functionality, as well as established customer relations and we believe we can repeat our success in the EPS sector. So in short, we’re not afraid of competition. We believe we will continue to gain market share and grow that business.

Okay. I guess, for the record, I just wanted to say I do get earnings calls every time you release the quarterly earnings or the yearly earnings and I’ve been a long time shareholder and I own a 100,000 shares as a private investor.

Thank you.

So I’ve had a lot of [technical difficulty] China Automotive and I still do. So, thanks again.

Thank you. One last question.

Yes. That’s from the line of Sam Shalaby [ph]. Please go ahead with your question.

Yes. I’m a small investor and I’ve been holding China Automotive stock for quite sometime. The question is what can China Automotive Systems do to improve its communications with the investors’ community and the shareholders? We hardly hear from you guys outside of the four quarterly earnings reports and I believe that the Company and its executives needs to promote its products, and attract more shareholders. What can you tell us about your programs to go outside, promote your products, attract more investors, and improve the value of the shares? Thank you.

So thank you for the question. There is three things we’re immediately going to do. The first thing is we already have the buyback plan, we already [indiscernible] the money on the site we’re going to buyback seriously. And that’s the first. The second is we’re going to make more regular announcements of the business and [indiscernible] new dynamics development of our business and partnerships and so we will make more announcement, get more visibility. And lastly, we’re definitely going to focusing of rolling out more high quality products and win customer trusts and grow our revenue and let the numbers speak itself.

Thank you. Wishing you every success.

Thank you.

Thank you. I’ll now turn the floor to management for closing remarks.

Thank you for attending China Automotive Systems fourth quarter and fiscal year 2015 earnings conference call. And we look forward to speaking with you and we look forward to your continued ongoing support. Thank you.

This concludes today’s conference. Thank you for your participation. You may now disconnect your lines at this time.