Greetings. And welcome to the China Automotive Systems Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Theiss, Investor Relations for China Automotive Systems. You may begin.

Thank you, everyone, for joining us today. Welcome to China Automotive Systems 2019 fourth quarter conference call. Joining us today are Mr. Qizhou Wu, Chief Executive Officer, and Mr. Jie Li, Chief Financial Officer of China Automotive Systems. They will be available to answer questions later in the conference call with the assistance of translation. Before we begin, I 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, 2018, as filed with the Securities and Exchange Commission on March 28, 2019, and in other documents filed by 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 in this call whether as a result of new information, future events or otherwise. On this call, I will provide a brief overview and summary of financial results for the 2019 first quarter and 2019 fiscal year. Management will then conduct a question-and-answer session. The following 2019 fourth quarter financial results are unaudited and fiscal 2019 year financial results are audited and both periods are reported under US GAAP. For the purposes of today's call, I will review the financial results in US dollars. We will begin with a review of the recent dynamics of the automobile industry and China Automotive's market position. For the fourth quarter of 2019, China's GDP was 6%, unchanged from the growth rate in the…

[Operator Instructions]. Our first question comes from the line of William Gregozeski with Greenridge Global. Please proceed with your question.

Hi. Can you talk about the revenue guidance, how you arrived at that number and what you're expecting from international sales and EPS sales for the year?

[Foreign Language] Okay. So, our revenue guidance for 2020 is based on the current visibility for our business in 2020. As we all know, we were negatively affected by the COVID-19 pandemic during the first quarter, in particular. We saw the overall revenue was down about 50% in the first quarter. In the first quarter of 2019 [Technical Difficulty] revenue is about $110 million, but that is negatively affected during the first three months of 2020 due to the outbreak. Also, international sales, the US and Europe also were affected during the first quarter by the COVID-19. So, we saw the sales in these two regions are down about 20%. Domestically, on a commercial vehicle segment, we are very pleased to see a year-over-year increase for our business. The passenger vehicle sales, we see it remain very soft. So, those are the general picture we're seeing in 2020. Because the passenger vehicle is soft in domestic Chinese market, our EPS electric power steering product sales probably will be soft as well. The commercial vehicle business are going to hold up a lot better in 2020 and international business will have some impact and will continue to digest and adjust. And also, the domestic China business will come back in the following few quarters. But first quarter, the damage is quite significant.

Okay. All right. And the other question I had was, can you talk about the supply chain? Is everything back to normal? Or are you having any issues with getting parts or anything like that?

[Foreign Language] Okay. During the first quarter, especially in the months of February and March, the disruption to the supply chains is quite evident. Starting from month of April, everything back to normal. So, we are having – auto components are coming into our production.

Okay. All right. Thank you, guys.

Thank you.

Thank you. [Operator instructions]. Thank you. Our next question comes from line Robert Pavlovich, Private Investor. Please proceed with your question.

Yes, good morning.

Good morning.

I was wondering about the Hyoseong brushless motors. What percentage – or I guess, the question should be how do you see margins improving from this joint venture. And how do you see the applications throughout the lineup of steering systems that you produce? Will these motors be used for just about all applications, including not just EPS, but driver assist steering systems? I just want to get a little insight on this.

[Foreign Language] Okay. Hi. To your question on the EPS Hyoseong joint venture, this particular joint venture, we initially planned to commence production in the month of April. However, due to the disruption of COVID-19 and our Korean technician advisors are [Technical Difficulty] month of June. And so, we're doing -- they're helping us during the remote tune up of our system and production line, but we'll have to wait for a couple more months to begin the production. So, the month of June, we'll start production. To the application, this particular joint venture will produce the brushless motors for C-EPS product and we're looking to ship 30,000 units in the year 2020 and that will be about RMB 6 million for this particular brushless motor. It carries a higher gross margin and also we're looking to expand and use all of this motor through all of our EPS product. So, this particular joint venture is a key component [Technical Difficulty] EPS systems.

Okay. Thank you. Another question. Fiat, Chrysler and Peugeot look like they're going to still merge. How do you feel that that merger will affect [Technical Difficulty] China Automotive?

[Foreign Language] Looking forward to such merger will help us expand our penetration into Peugeot's global sourcing network. Over the years, we have won our place in Fiat Chrysler through our impeccable track record. And also, throughout the years, we are consistently winning supplier award from Fiat Chrysler. And so, we are very optimistic and very confident if that merger takes place between Fiat Chrysler and Peugeot, we will be able to expand into Peugeot's production. So, we're looking forward to that.

Okay. I guess this is a unique question during difficult times. Is there any possibility that they would – China Automotive do another moderate share buyback this year?

[Foreign Language] So, the current share buyback plan is still valid until the end of 2020. In 2019, we completed the purchase of around 450,000 shares from open market. We will continue to buy back shares in 2020 as long as we're meeting compliance requirement, such as –you have to be in a window to repurchase the share. There are certain blackout period, we're not able to do that. And also, in terms of the amount we can buy, had to meet the requirement of less than 20% of average volume. And also, there are price restrictions as well according to the regulation. So, we are strictly following the guidance – the regulatory guidance in terms of how to continue to buy back shares. And it's ongoing. It's active.

Okay. Thank you.

Thank you.

Thank you. [Operator Instructions]. Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Theiss for any final comments.

We thank you for your participation in today's our conference call. Please be safe. And we look forward to speaking with you again in the future.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.