Hello, ladies and gentlemen, and thank you for standing by for JinkoSolar Holding Co. Ltd. First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host for today's call, Ms. Stella Wang, JinkoSolar's Investor Relations. Please proceed.

Thank you, operator. Thank you, everyone, for joining us today for JinkoSolar's First Quarter 2024 earnings conference call. The company's results were released earlier today and available on the company's IR website at www.jinkosolar.com as well as on Newswire services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website. On the call today from JinkoSolar are Mr. Xiande, Chairman and CEO of JinkoSolar Holding Company Limited; Mr. Gener Miao, CMO of JinkoSolar Company Limited; Mr. Pan Li, CFO of JinkoSolar Holding Company Limited; and Mr. Charlie Cao, CFO of JinkoSolar Company Limited. Mr. Li will discuss JinkoSolar's business operations and the company highlights followed by Mr. Miao, who will talk about the sales and marketing. And then Mr. Pan Li, who will go through the financials. We will be available to answer your questions during the Q&A session that follows. Please note that today's discussion will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding this and other risks is included in JinkoSolar's public filings with the Securities and Exchange Commission. JinkoSolar does not assume any obligation to update any forward-looking statements, except as required under the applicable law. It's now my pleasure to introduce Mr. Xiande, Chairman and CEO of JinkoSolar Holding. Mr. Li will speak in mandarin and our translate his comments into English. Please go ahead, Mr. Li.

[Interpreted] We are happy to announce that thanks to our advantages of N-type TOPCon technology, competitive products, global marketing and manufacturing layout of module shipments grew 53.3% year-over-year to nearly 20 gigawatts in the first quarter, ranking first in the industry. The proportion of N-type shipments increased to nearly 80% in the first quarter from approximately 70% in the fourth quarter last year, maintaining our leading position in the industry. Module prices continued to fall in the first quarter, while the industry average utilization rates declined sharply. We've maintained our leading utilization rate at high level. Over 70% of the modules were shipped to overseas markets in the first quarter, while proportion of shipments to Europe and the U.S. significantly increased sequentially. Gross margin was 11.9%, flat sequentially. Net income was USD 84.4 million, up 19.8x sequentially. Adjusted net income was USD 65.1 million, up 1.6% sequentially. Newly added installations in China reached 45.7 gigawatts in the first quarter, an increase of 35.9% year-over-year. Module exports totaled 61.7 gigawatts, an increase of over 20% year-over-year. The PV industry remains one of the few sectors maintaining a higher growth rate, and we expect the global PV demand to grow approximately 25% to 30% in 2024. Coming into the second quarter, polysilicon prices continued to decline as flight expense demand. On the other hand, macroeconomic conditions push the commodity prices higher while increasing market demand drove prices of raw materials such as glass and film higher. All those factors combined to keep the module prices relatively stable at a low level. In the short term, the profitability of integrated solar companies is expected to come under pressure. Yet, this distinction in operating capabilities, performance of different companies will have larger difference. We expect that overall production capacity in other industry will shrink…

Thank you, Mr. Li. Total shipments were 21.9 gigawatts in the first quarter with module shipment accounting for over 90%, ranking first in the industry again. And with the stressful market prices in the first quarter, we flatly for adjusted our geographic mix. Over 70% of modules were shifted to overseas markets, especially to Asia Pacific and the emerging markets. Shipments for the U.S. were relatively stable sequentially, while shipments to Europe increased to nearly 20%, evidence of future inventories reduction. On the demand side, the general trend for global low-carbon transformation was unchanged despite problems related to installation and connection in some regions and the positive issues in others. We continuously expect a relatively rapid growth in global demand in 2024. Our intensive sales network and the deeply rooted local customer service infrastructure will help us to respond to market shifts and adjust flexibly and timely. [indiscernible] demand for more reliable, low-carbon and compliant PV products. Looking towards the full year, we expect the proportion of shipments to Europe and the U.S. to further increase compared to last year. Shipments of competitive high-efficiency N-type Tiger Neo modules accounted for nearly 80% overall -- far exceeding the industry average as the value of Tiger Neo is increasingly recognized by customers. In the European and emerging markets, the Tiger Neo penetration rate exceeds 90%. In terms of segment demand from distribution markets in China, Europe and Asia Pacific was strong during the first quarter. Closely following the market trend, we raised as a ratio of distribution to approximately 50% in the quarter. We focus very strongly on building our brand regulation because an outstanding brand is key to gaining the long-term trust of our clients. Recently, we were recognized as the Tier 1 energy storage provider by Bloomberg New Energy Finance due to our outstanding products and the capabilities in energy storage, reflecting our commitment to providing safe and reliable energy storage solutions and recognition by customers for timely delivery and effective deployment capabilities. Besides, we received the AAA rating once again in the 2024 Q1 release of PV-Tech's ModuleTech bankability report, which demonstrates our leadership in manufacturing activity, reliable quality market share leadership, sound financial performance and technology innovation. With that, I will turn the call over to Pan.

Thank you, Gener. We are pleased to report that our solar module shipment increased by about 53 percentage in the first quarter where solar modules price declined, we enhanced control over costs and expenses. Gross profit margin was flat and adjusted net income slightly improved sequentially. At the same time, thanks to our efforts in debt management, our net debt improved sequentially, leveraging our advantages in N-type technology and global sales and manufacturing network. We're very confident in our growth prospects and we'll continue to improve the efficiency of our working capital, achieving sustainable growth in operating cash flow and enhance our resilience to risks. Let me go into more details now. Total revenues were $3.2 billion, down sequentially and slightly down year-over-year. The sequential decrease was mainly attributed to the decrease in the shipments of solar modules and year-over-year decreases was mainly attributed to the decrease in average selling price of solar modules. Gross margin was 11.9 percentage compared with 12.5 percentage in the fourth quarter last year. The decreases were mainly due to the decrease in average selling price of modules. Total operating expenses for $426 million, down 18 percentage sequentially. The sequential decrease was mainly due to the decrease in the shipments of solar modules and lower expense in relation to the segment of a dispute with one of our customers. Total operating expenses accounted for 13 percentage of total revenues compared with 11 in the fourth quarter and 12 in the first quarter of '23. Net income attributed to JinkoSolar Holding ordinary shareholders was about $84.4 million, up nearly 20x sequentially. Excluding the impact from a change in fair value of the note, a change in fair value of long-term investments and share-based compensation expenses, adjusted net income was about $ 65 million, slightly up sequentially. Moving to the balance sheet. At the end of the first quarter, our cash and cash equivalents were $ 2.44 billion compared with $2.69 billion in the fourth quarter of '23 and slightly improved from $1.48 billion in the first quarter of '23. AR turnover days were 100 days compared with 76 days in the fourth quarter and 95 days in the first quarter of last year. Inventory turnover days were 89 days compared with 57 days in the fourth quarter and 100 days in the first quarter of last year. At the end of the first quarter, total debt was $3.66 billion compared to $4.38 billion in the fourth quarter of '23. Net debt was $1.22 billion compared to $1.63 billion in the fourth quarter of '23, a continuous improvement in our debt structure. This concludes our prepared remarks. We're now happy to take your questions. Operator, please proceed.

[Operator Instructions] The first question comes from Brian Lee.

I know you guys are not the practice of providing specific margin and ASP guidance anymore. But just given kind of the fluctuations in the pricing environment, can you give us a sense, pricing was down? It seems like kind of down to like the low to mid-teens here, ASP per watt if we back out the wafer and the cell revenue in the quarter, should we expect more ASP degradation in modules embedded in the 2Q guide? And then what's sort of the margin cadence you expect off the results here in Q1? Should we expect 2Q to be up, down, flat? And then maybe back half views as well if there's more of a recovery there?

Brian, this is Charlie. Yes, back to your questions. And the module price is down in the recent 3 quarters, and that's a fact. And we have different ratings, different arrangements, long term versus short term. If you are talking about Q2, the ASP on average, it's down a little bit. But the most important thing is we are improving the cost and trying our best. At the same time, we are adopting the relatively new technology materials. And on top of that, we are ramping up -- this year, our focus is the Shanxi Super factory, we're expecting to be fully operational in the second half year. And for the gross margin and profitability, we strongly believe in the first half of the year, this year, it's reached to the bottom. And for quarter-by-quarter, we expect the gross margin relatively stable for the second quarter versus Q1. And for the second half year, we expect more shipments particularly in the United States as well as in the European markets. And on top of that, we are in a very good position for the Middle East market. And it helps the gross margin. And so that's the answer -- in addition, we -- the industry is suffering the rate competitions, particularly for price, and we are expecting the capacities for the Tier 2, Tier 3 and even the capacity which are not able to be technology-competitive will be phased out throughout this year. This may well help the overall supply versus demand situation, particularly in the second half year.

Okay. That's helpful. So if I summarize, I guess, it sounds like ASPs down a little bit more into 2Q and then margins stable in 2Q of the 1Q level. Are you actually seeing quoting activity? Or what's the outlook for pricing? I know you said shipment volumes and mix improved in the back half, but how about like-for-like ASPs? Are you actually seeing you said 70% of your '24 is already covered in backlog, it sounds like, what's the pricing dynamic you're seeing in the second half versus Q1 and Q2 where pricing is still going down?

Yes. For the pricing, Brian, for the pricing, we believe it will continue to follow the market, which we believe is already reaching the rock bottom, right, compared to the market prices versus the, let's say, industry, even the leading cost structures is -- most of the peers or the industry players are under the water right now. So that's why we believe the price is reaching out. However, when we look into the improvement of the cost structure wise, definitely, it does not goes as fast as the price force in the last 5, 6, even 8 months' time. That's why the market-wise, it will struggle at the beginning of the year, but we believe once the cost structure start to improve to reach the level of the ASPs and match the level of ASPs, we believe the company or even the whole industry, at least the leading competitive ones will keep their margin as healthy as possible. Hope that answers your question.

Yes, absolutely. Very helpful. And then maybe last one for me, and I'll jump back in the queue. You also mentioned back half of the year, it sounds like you're positive on U.S. volume trends growing for you? I know this is pretty fresh, the inception of this AD/CVD potential investigation that was petitioned last week by some of the U.S. fliers. I know in the fall last year, you guys were deemed to not have been one of the companies dumping or countervailing. And so you weren't subject to any duties. It sounds like this petition is opening that entire case back potentially. So what are your thoughts on the latest trade policy update here given what happened last week? And then do you anticipate any -- or are you seeing any customer feedback right now that suggests there's more uncertainty for you as you move through the next few quarters? Just kind of how are you navigating it?

Well, it's still early to see what could be the result of this upcoming AD/CVD petitions. But definitely, from Jinko's perspective, we still prefer as a fair trade work, which could benefit not only the Jinko itself, but also the whole industry where we can drive that's what the whole industry has been doing in the last even 2 decades, right, to driving the LCOE of the PV energy more and more competitive, which can help the whole world become greener and more environmental-friendly and less carbon footprint. With trade tariff or the current geopolitical issue, definitely, it is a big challenge. It increased a lot of cost. But as a company side, we have no choice but to try our best to adapt towards the market or what the government wants. So that's why we are working very hard with our lawyers, with our customers, trying to find out the best solutions in the U.S. market. But right now, honestly speaking, it's still too early to see what could be the pros and cons for that right now. So we will -- we might need another, let's say, 3, even 6 months to see what could be the, let's say, upside and downside on that.

Okay. Fair enough. Last one housekeeping for Charlie. I promise I'll pass it on after this. Charlie, what was D&A in the quarter? What was CapEx in the quarter? And then also, could you tell us what the percent of sales in the U.S. this quarter was and what U.S. ASP range was, dollar cents per watt in the quarter?

The U.S. shipment roughly 80%, 80% in total in terms of Q1 shipments. And revenue percentage will be higher because the prices were dramatically higher, right, if you look at the average market price. And for the total CapEx, we always share about it -- last year, we spent roughly [ $20 billion ] of the capacity expansion. And this year will be 50% lower -- [ $10 billion ]. And last year, we delivered $25 billion operating cash flow. And this year, we -- our target operating cash flow will be over -- larger than the $10 billion. So that's -- for Q1, the CapEx is roughly $3 billion, the operating cash was $1.5 billion.

The next question comes from Philip Shen with Roth MKM.

First one is a follow-up on Brian's question regarding Southeast Asia AD/CVD tariffs that could be coming later this year. So I was wondering if you could talk about how you plan on managing the retroactive tariff risk. So I think you guys talked about increasing your shipments to the U.S. market, more certainly having a high mix to the U.S. through 2024. Can you share how much of your shipment volume in '24 could go to the U.S.? And then how do you plan on managing that retroactive risk that could be as early as May or July?

Yes. For -- firstly, for the volume-wise, we still stick to our previous plan that we are not intentionally increase or decrease our shipments in the U.S. because of the recent AD/CVD petitions. So that's already within our within the plan of this year. So it is definitely because you know what's happening in the last 2 years in U.S. to Jinko, so that's why this year's total shipment numbers or the ratio of the U.S. market definitely will be higher than last year. That's why we're just saying that. And for this -- risk retroactive or number-wise, we don't have mature solutions right now. That's why we are still -- as I just answered Brian's question, we are still talking to the lawyers and the customer to see what could be the best solutions. Right now, at least I am not aware of any good solutions on that.

Got it. And how are your contracts structured? Meaning, oftentimes, there's a change of law provision that may put the risk on to the customer. But does it cover tariffs? And so do you have the provisions in all your U.S. contracts so that the risk is on the customer? Or in this case, do you believe that the risk of retroactive tariffs may fall into your camp?

I don't think we can disclose the details of the contract, but definitely, customers feel the risk as well. So even there are some languish, which give the cash risk to the customer end. But definitely, the customer side has this the basic economics of the project financing, right? If it does go beyond a certain threshold, then definitely, the project will not happen as planned. That's why we have to go through all those details with our customers, with their lawyers and even their financing providers to find out the best mutual solution for all parties. It's not that easy to take 1 case -- 1 solution for all.

Okay. One last question on the U.S. market. What do you think is the amount of channel inventory in the U.S. We've seen a lot of shipments to the tune of about 5 gigawatts a month coming to the U.S. over the past year. Do you think there's as much as 1.5 years of module inventory in the U.S.? Or do you think it's much lower? Can you help us understand what you see.

We have reasons now saying that there's, let's say, oversupply in the U.S. market. Even some players, either downstream or upstream try to get more modules before, just not AD/CVD, but that's undeserved, right, so before any circa. We heard it reasonable. But from our end, we have not been able to verify that directly from the customers or from some of our peers right now. But definitely, if we look into the numbers available in the market or some market analyst reports, we have seen a massive number of modules or solar product has been shipped to U.S. But -- but the grid connection numbers might not support that big number. Definitely, we have the same question as you have right now.

Okay. Last question here for me on the fire that you guys disclosed over the weekend. Can you talk about the impact Shanxi supposedly a key part of your margin, right? So -- you did say that there would be an impact in '24. Can you quantify in any way? When do you think that facility could come back online? How destructive was the fire?

Philip, the impact is still being evaluated. But Shanxi Super factory. Remember, this year, we do 2 phases. Phase I is 14 gigawatts, Phase II is another 14 gigawatts. And the second phase, Phase II will stick to the original plan and expected to start operation in Q3 for the Phase II and fully operational in early Q4 this year. But we are talking about the Phase I. Phase I, the fire has the impact on the cell capacity, the 14 gigawatts, and we expect the cell capacity will be fully operational by the end of this year. And this is our original plan is by the end of the middle year. So it's going to have some kind of impact, 2 quarters roughly and estimated 3 to 5 gigawatts. So the impact is not significant. It's very -- not significant impact for the cell. And so for the operational side, we have adjusted our productions throughout the global facilities to minimize the impact to our customers. And for the cost side and the impact of the operation, we think it's not significant. However, for the losses of the fire is still evaluating, but the equipment is fully -- the insurance from the big insurance companies in China, and we're working on it.

Next question comes from [ Wade Wu ] with Jefferies.

This is Alan from Jefferies. So first of all, I would like to ask a follow-up the question from Philip on the -- basically, how many -- or what is the percentage of the contracts you have signed -- at least have the languish that is passing through the potential liability of the delays in AD/CVD? The background of this question is because some of the peers suffered a lot last year when they have procured high-priced polysilicon. And then later on, when they failed to deliver the shipment, they even have to pay penalties as per those contracts. So I wonder if those languish is already there. And it's only a matter of working with your clients to solve the problem? And is there any potential liability in delivering the obligations?

Yes. So again, I don't think we can disclose that level of detail. But definitely, we are case-by-case working with customers on this AD/CVD risk as we always do, right? So we've got a lot of support from the customers regarding what has happened in the U.S. market in the last 2 years' time. So definitely, we appreciate the support, and we are carrying that love for the future long-term partnership with most of our customers. That's why we never want to end up with a loss-loss solution. So even if there's a risk, we definitely go ahead with the customer to look into the solutions together. That's why we can maintain our leadership in many markets, right?

Okay. Understood. So the next question is regarding to some of the -- appears to be one-off income in this quarter. So like the other income is actually surged quarter-by-quarter. So I wonder if that's related to a disposal gain in our Xinjiang capacity? And how much of that is related to that?

So in Q1, we have completed a transaction to sell 100% equity of our Xinjiang facilities. And we retained, I think, roughly $800 million to $900 million net income impact.

Understood. So also I recall in the transaction is further performance -- is kind of like a performance guarantee in the next couple of years. So has that been factored into this $800 million to $900 million? Or that is completely separated?

We didn't record that, the performance -- kind of performance obligation or variable considerations from the sale of equity. So we did not account on the book. We just recorded a fixed portion for the transaction.

Understood. So -- and I think another thing that is quite -- I would say, quite impressive compared to a lot of your peers is that you actually do not have any impairment on assets. So wonder if you think you will have any impairment risk going forward, in this year or because you have a super majority of your capacities TOPCon already, so you do not foresee any risk going forward from here?

Yes, you're right. And we have very small capacity, and we accelerated depreciation over 5 years throughout the last 2 years and the net book value is not significant.

That's impressive. And also, you have mentioned the cash flow in the first quarter was actually positive. So I wonder if the company has taken initiative to improve the cash flow quarter-over-quarter because that's also one of the concerns of investors as to the operating cash flow.

Efficiency is our still our focus, operational Efficiencies, and minimize the production lead time, logistics delivery time, cash conversion cycles and the Shanxi Super factory, we are building is one of the key considerations, improves the whole cycle conversion and improves the cash flow, minimize the working capitals and warehouse costs and logistics timing.

Finally, on the buyback. I wonder if the company has any guidance on the pace of the buyback? Because I've noticed that there's a lot of announcement around that. But I wonder if you would provide any guidance on that? And would there be any blackout in buy back after the end of quarter and before the announcement of the results?

Our plan is preliminary price, the shareholder return is roughly USD 200 million this year. And you can see, we released news, we have spent roughly USD 105 million to repurchase back, the ADS. And on top of that, which is subject to the broader pool, we plan to declare dividend roughly USD 70 million to USD 80 million. So together with our plan, preliminary plan, this year's shareholder return is roughly USD 200 million.

[Operator Instructions] The next question comes from [ Rajiv Chaudhri ] with Intrinsic Edge.

Congratulations on a strong performance in a very tough first quarter for the industry. My first question is about the gross margin. It seems like your cost per watt for modules were down roughly 10% from the fourth quarter to the first quarter. And my question is, number one, can you give us an idea of how you were able to achieve such a dramatic decline in cost per watt given that the polysilicon costs were down as well but not as significant. And then I have a follow-up on the gross margin as well.

Yes. It's a combination of our supply chain, our R&D teams, new technologies and improve the -- lower the consumption of the materials. And we upgraded the TOPCon capacity adopting [indiscernible] technology and significantly improve our sales efficiencies while cut a lot of consumption of the [indiscernible]. And so a lot of efforts we are doing that. And we have -- internally, we have a very solid target for the cost reductions. And step by step, we think with -- quarter-by-quarter, the cost will be relative -- improvement will be relatively quicker. But again, now the industry situation is module prices kind of dropped a lot, but we expect it to be stabilized and cost take time. And we will try our best to improve the cost structure.

So Charlie, is it fair to think that in the coming quarters, Q2, Q3 and Q4 with all the improvements that you are making, that we can expect cost to improve by 1% to 2% every quarter.

It depends. Some of the things -- most of the things we can control, but some of the things are out of control. If you look at the severe -- the commodity price, is up a lot in recent months, but we're trying to minimize the impact. But if you look at quarter-by-quarter, throughout the year, it's definitely -- at the end of this year, the cost will be lower than the cost as of today.

Right. But assuming that the material costs don't change, is the 2% per quarter on a sequential basis, a reasonable assumption to make in terms of how you are reducing the cost?

We have internally even bigger targets than the 2 percentage quarter if assuming the material cost is the same. But overall cost, depending on a lot of things. And I think for all it's going to be improved. But again, we think in the next 2 quarters, the cost improvement will not be so significant. And because we have done a lot of things and -- but the commodity price now looks at to be keep at a very high level and considering that, we don't believe the overall cost will be dramatically lower, but it's lower -- slightly lower in the next 2 quarters.

So combined with the fact that ASPs, that you'll be selling more product in the United States by the fourth quarter. And so it's possible that ASPs are actually up somewhat sequentially from Q3 to Q4 and your costs are coming down by, let's say, even 2% quarter-over-quarter. It looks like you should be able to get the gross margin to be in the 16%, 17% kind of range by the fourth quarter. Is that reasonable?

It's difficult to estimate. As we think one of the key things with the capacity, some more capacity phase out in the second half year, we think the clients will be -- come to a relatively rational level. On top of that, we have Shanxi Super factory. We have more shipments in the U.S. and some of the premium market. It helps our margins, even some level of recovery, but it depends on a lot of things. We think, one, we are now doing is we do internal things, and we do what we can control.

I see. Okay. My next question is on market share. Your market share in 2023 was in excess of 15%, closer to 16% for the year as a whole. And in the first quarter, it's already in the 17% kind of range. Do you think that as the capacity comes off-line for the rest of the year, that your market share will continue to increase, especially if you hit the 110-gigawatt kind of number for the year?

Well, we never take market share as our -- let's say, our target, right? So that's why we -- it's harder to say. And also because of the different definitions, there are different ways to calculate it, right? It's difficult to really define, let's say, a fair, well-accepted market share definition. But anyway, we appreciate your calculations on these numbers. Based on my perception, I think it's roughly around 17%, 18% market share is where -- how we are looking at ourselves today. Whether that number could go up or go down? It depends on the competition. It depends on the whole industry. So it depends on our peer strategy as well. So that's why it's difficult to say that right now, but definitely, we are doing our best to make sure we delivered the good results from the financial statement wise. Meanwhile, we are doing our best to serve our customers in the long term to keep the long-term partnership momentum.

Is the market share that you have combined with the brand name that you are developing as well. Is that giving you a price premium or an increasing price premium relative to other brands?

Definitely, we believe our brand give us a lot of strength and the market acceptance or awareness for sure. But how -- whether it creates a market premium, it depends on what numbers you are comparing with, right? If you compare with nobodies in the market, definitely the brand itself works quite a lot. But if you compare it with the top 2 or top 3, the definition of the acceptance of the customers across the different top brand might not be that much as people imagine. So and also the brand premium in the different market sector in different countries will vary a lot as well.

I see. A question on the N-type products. What do you think the industry's shipments of N-type products will be in 2024?

Roughly, we believe the market will finish the transition from P-type to N-type by end of this year. So technically, it might start from, I'd say, roughly 35% to 40% range and to year-end, 90% even 95% range. That's what we believe.

So you think the other -- the competitors will also get up to the 90% range by the end of the year?

I mean the whole industry, right? Someone might take action faster. Someone may be slower. But as an industry, we believe that the whole industry will look like that.

Now you have been ahead in terms of putting your cost of N-type down and now your N-type costs are comparable to P-type. What kind of margin premium does that give you over Tier 2 and Tier 3 companies who are behind the cost curve relative to you guys?

So let's take this as the last question. Thank you for your questions. We believe if you look into some third-party market intel, for example, there's, let's say, PV InfoLink, right? So if you compare the P-type, N-type price, the gap is roughly USD 1 per watt. So if you -- you can roughly calculate how much it will reflect in the margin-wise, right? So it's roughly like 9%, 10% of the margin difference, right? That's the way we are looking to it. I see.

The last question comes from Leo Ho with Daiwa Capital Markets.

Just a question on the AD/CVD situation. I just wonder for our U.S. capacity, are we using like our own solar cell from Southeast Asia? And we've been hearing some industry feedback suggesting that probably there may be the cancellation of the Wafer-Plus-Three rules, which means that we cannot use solar cell from Southeast Asia and more. So do you have any view on that?

I'm not quite sure what policies you are referring to. But based on Jinko situation, we are fully vertically integrated in outside China, means in polysilicon in the wafer cell module are not all from non-China sources, right? So that's what we have built in the last 2 years' time under the U.S. [indiscernible]. So that gives us a lot of advantage and trust in the U.S. market.

Okay. Just one more question, if I may. I would like to ask about the EU situation. Aside from, I think, publicly announced situation regarding Longxi and also Shanghai Electric. Are we hearing any like troubles regarding Chinese players exporting to Europe? Especially we've been hearing some weird news suggesting that probably that's one of the major module maker with EU headquarter being raided. I'm not sure if you guys are hearing the same situation.

Not -- just not something I'm aware of right now. So if you have anything, I definitely would like to know.

This concludes the conference call. Please disconnect your lines.