Ladies and gentlemen, thank you for standing by and welcome to Canaan Incorporated Second Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the management’s prepared remarks, we will have a Q&A session. Please note that this event is being recorded. Now, I’d like to hand the conference over to your speaker for today Mr. Shaoke Li, Board Secretary of the Company. Please go ahead, sir.

Thank you very much and hello everyone. Welcome to Cannan Inc. second quarter 2020 earnings conference call. The Company's financial and operating results were released by our newswire services earlier today and are currently available online. Joining us today are our Chairman and CEO, Mr. Nangeng Zhang; and our CFO, Mr. Quanfu Hong. In addition, Mr. Jingjie Wu, our VP and Mr. Wenjun Zhang [ph] our Executive Assistant, will also be available during the question-and-answer session. Mr. Zhang will start with the call by providing an overview of the Company and the performance highlights for the second quarter of 2020. Mr. Hong will then provide the details on the Company's operating and the financial results for the period before we open the call up for your questions. Before we continue, I would like to refer you to our Safe Harbor Statements in our earnings press release, which also applies to this call as well, as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are mostly roughly explained and reconciled to the most comparable measures reported on the general accepted accounting principles in our earnings release and the filings with the SEC. With that, I will now turn the call over to our Chairman and the CEO, Mr. Nangeng Zhang. Mr. Zhang will deliver his remarks in Chinese and I will provide with corresponding English translation. Please go ahead, sir.

[Foreign Language] Hello, everyone. This is Nangeng Zhang, Chairman and the CEO of Canaan Inc. I will now provide a brief overview of our progress in second quarter of 2020. [Foreign Language] During the quarter Bitcoins price volatility declined in comparison to the first quarter as a result of the Bitcoin halving event in May 2020. As Bitcoins price began to recover in the post-halving period during the second quarter we recorded a meaningful improvements on a sequential basis in our financial and operating performances. [Foreign Language] Most notably, our total net revenues increased by 160.8% quarter-over-quarter to RMB178.1 million, driven by a 198.5% sequential increase in our total computing power sold and a 153.5% sequential increase in the number of Bitcoin mining machines sold during the quarter. In addition, we also improved our profitability as we grow our gross profit to RMB43.3 million in the second quarter from RMB2.4 million in the prior quarter, while significantly narrowing our net loss to RMB16.8 million in the second quarter from RMB39.9 million in the prior quarter. [Foreign Language] This strong performance was a testimony to our ability to rejuvenate our business and financial growth, as Bitcoin prices stabilized in the post-halving period. Additionally, China's raining season brought an excess of hydropower in the second quarter, making electricity cheaper and mining more profitable. As a result, the welcoming environment for Bitcoin and the Blockchain has accelerated with a rebound of market demand for mining machines. In fact, during the second quarter, we came close to clearing out our entire inventory, and our Bitcoin mining machines that are now currently under production in the third quarter have all been pre-ordered. To date, we have already started accepting pre-orders for mining machine deliveries in the fourth quarter of 2020 and early 2021. These pre-orders…

Thank you so much. [Operator Instructions] And our first question comes from the line of [indiscernible] from Charles Investments. Your line is now open.

Yes. Thank you very much. I apologize I don't speak Chinese. So I have that - the question in English. Can you make any comments on deposits made by customers for orders for your mining equipment?

[Foreign Language] Okay. Our existing customer orders are mainly from the A10 series product, and this is part of because the A10 product was more mature. And in the second quarter our sales are mostly - are selling based on - selling on our inventory. And starting from the third quarter, our inventory was completely sold. So the new orders - are now - future orders are booking - our future new series of products. This is fairly a common practice in our industry, and especially for big orders they normally - you'd have to wait for a certain period. Now that our expected delivery time is between the third quarter this year and first quarter next year, the delivery time it's bit longer, it's because of the processing and manufacturing of the foundry takes a longer time. Recently our number of orders are increasing because our new product series has better performance and better price - cost efficiency.

Okay, thank you.

Thank you so much. [Operator Instructions] And your next question comes from the line of Michael Parker from TDF Limited [ph] Michael, your line is now open.

Thank you. Yes. My question is to the CFO, what international accounting standards does the company worked with on tools [ph] lease?

[Foreign Language] Hi. Our accounting principle is full [ph] on the US GAAP standard.

Okay. Thank you.

Thank you.

Thank you so much. There were no further questions at this time. I'll hand back over to the management for closing remarks.

All right. Thank you for joining us today and we look forward to talking with you next quarter. Thanks.

And that concludes the conference for today. Thank you for participating. You may all now disconnect.