DAQO New Energy Corp. (NYSE:DQ) Q4 2015 Earnings Conference Call March 24, 2016 8:00 AM ET
Kevin He - Investor Relations
Gongda Yao - Chief Executive Officer
Ming Yang - Chief Financial Officer
Sheng Zhong - Morgan Stanley
Pierre Maccagno - Northland Capital Markets
Philip Shen - ROTH Capital Partners
Hello, and welcome to the Daqo New Energy Group fourth quarter and fiscal year 2015 conference call. I would now like to turn the conference over to Kevin He. Mr. He, please go ahead.
Hello, everyone. I am Kevin He of the Investor Relations of Daqo New Energy. Thank you for joining our conference call today. Daqo New Energy just issued its financial results for the fourth quarter and fiscal year 2015, which can be found on our website at www.dqsolar.com. To facilitate today's conference call we have also prepared a PPT presentation for your reference.
Today, attending the conference call, we have Dr. Gongda Yao, our Chief Executive Officer; and Mr. Ming Yang, our Chief Financial Officer. The call today will feature an update from Dr. Yao remarks on market and operations, and then Mr. Yang will discuss the company's financial performance for the fourth quarter and fiscal year 2015, after that we will open the floor to Q&A from the audience.
Before we begin, the formal remarks, I would like to remind you that certain statements on today's call including expected future operational and financial performance and industry growth are forward-looking statements that are made under the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission.
These statements only reflect our current and preliminary view as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. All information provided in today's call is as of today and we undertake no duty to update such information except as required under applicable law.
Also during the call, we will occasionally reference monetary amounts in U.S. dollar terms. Please keep in mind that our functional currency is the Chinese RMB. We offer these translations into U.S. dollars solely for the convenience of the audience.
Without further ado, I now turn the call to Dr. Yao. Please.
Hello, everyone, and thank you for joining our call today. First, let me provide some updates on recent industry developments in China. Based on [technical difficulty] reports and analysis, global solar PV installations in 2015 totaled approximately 57 to 58 gigawatts, which represents about a 27% increase in PV installations compared to 45 gigawatts in 2014.
China, Japan and United States are the three biggest solar PV markets globally in 2015, with both China and U.S. experience significant growth, while India is also growing significantly and have become a major PV-end market. China installed approximately about 15 gigawatts solar PV systems in 2015, ranking number one globally in terms of volume after three consecutive years.
As China [technical difficulty] solar PV installation reached 43 gigawatts by end of the year. In the draft version of China's 13th Five-Year-Plan, the solar PV installation is expected to reach 150 gigawatts by 2020, which means China would need to install additional 100-plus-gigawatts over the next five years from 2016 to 2020 in order to meet its target. With strong support and backing from China's central government, we expect China's installation activities to continue to be strong over the next several years.
In December 2015, United States announced a five-year extension for Solar Investment Tax Credit, which provides a 30% tax credit for solar systems on residential and commercial properties. The extension will significantly support the development of solar energy in the United States over the next several years, and that we expect U.S. to remain large and a significant end-market for solar.
In addition, many emerging solar end-markets are experiencing high growth, including India, Southeast Asia, Latin America and Africa. In particular, based on various industry reports and analysis, India's solar PV installation in 2015 grew to about 2 gigawatts from approximately 1 gigawatt in 2014, growing 100% year-over-year, and it is now the world's fifth biggest solar PV market in the world. For 2016, based on feedbacks from our customers and various industry reports, India's newly added solar PV installation is expected to double, again, to about 4 to 5 gigawatts.
According to several market forecast reports, the global solar PV installation in 2016 is expected to be in the range of 62 to 65 gigawatts. We believe that overall solar PV demand will remain strong in 2016, resulting in favorable demand environment for polysilicon for the year.
After relatively soft installation activities and end-market demand in the first half of 2015, global PV industry witnessed a very strong global demand in the second half of 2015. As industry demand continued to be strong towards the end of the year, we saw a significant reduction of industry polysilicon inventory towards the end of the year.
Also, as poly price coming down, we saw some industry production stoppage due to the plant maintenance and shutdowns at our peers. The strong end-market demand, our downstream customers, added the capacities across wafer, cell and module, and we've began to see those capacity add addition come online in the first quarter of 2016.
With wafer capacity additions and increasing wafer production, we saw increased customer demand for high-purity polysilicon product. In February of 2016 we began some price recovery in polysilicon ASPs. With polysilicon industry inventory already reduced to the normalized level by strong end-market demand, by March the spot market price for polysilicon bounded to approximately 15% as compared to December of 2015.
As the industry and our customers continue to add additional wafer capacity through 2016, we anticipate that demand for the polysilicon will remain strong, and we expect to see stable improving polysilicon ASPs in the coming quarters, supported by strong end-market demand.
Operation updates. Now, let me provide you with updates of the company's operational performance for the fourth quarter of 2015. We delivered strong operation and financial result that were beyond our internal expectations. Our polysilicon facilities were running successfully at full capacity for the entire quarter. We are excited to report that both our external sales volume and cost structure exceeded our prior guidance.
We achieved record-high quarterly polysilicon production volume of 3,547 metric tons, an increase of 31.9% from 2,689 metric tons in the third quarter of 2015 and about 12% above our name plate capacity. Thanks to our technology and operations team, we made solid progress on our cost reduction efforts, and reduced our polysilicon average total production cost and cash cost even further to $9.74 per kilo and $7.69 per kilo, respectively, which is our lowest ever cost and ahead of our cost reduction roadmap.
In the fourth quarter of 2015, we generated revenue of $59.3 million, an increase of 27.3% as compared to third quarter of 2015. We achieved EBITDA margin of 39.5%, which increased from 32.1% in the third quarter of 2015. Our income from operations was $14.3 million, an increase of 113% as compared to $6.7 million in the third quarter of 2015, with operation income margin of 24%.
Despite a 7.5% reduction in polysilicon ASPs in the fourth quarter as compared with the third quarter of 2015, we were able to deliver high gross margin, operation margin and net margin in the fourth quarter as compared to the third quarter, primarily as a result of successful cost reduction efforts in polysilicon manufacturing.
Additionally, our Chongqing wafer subsidiary was operating well and contributed meaningfully to the company's financial performance. Wafer gross margin, on a standalone basis, grew to 25.8%, a substantial increase from third quarter gross margin of 17%. The improvement in the gross margin was driven primarily by a 9% improvement of production pricing as well as further reductions in manufacturing costs, due to our technology upgrade, which saw a meaningful reduction from unit to energy consumption and a cost.
As we continue to execute our technology enhancement project at our wafer manufacturing facility to increase production volume and further reduce cost and reach annualized production capacity of 100 million pieces a year by mid of 2016, we anticipate our wafer subsidiary will continue to contribute positively to the company's financial results.
Outlook for the first quarter of 2016. For the first quarter of 2016, company expect to sell about 2,800 metric tons to 3,000 metric tons of polysilicon to external customers. The above guidance reflects increasing consumption of polysilicon internally by our own wafer subsidiary, due to the increased wafer production and the wafer capacity expansion.
Wafer sales volume is expected to be about 21.5 million to 22 million pieces during the quarter. This outlook reflected our current and the preliminary view of the data of this press release and may be subject to change.
Now, I will turn the call to our CFO, Ming Yang, for the financial update.
Thank you, Dr. Yao, and good day, everyone. Thank you for joining Daqo New Energy's earnings conference call. Now, I will provide the financial updates for the fourth quarter of 2015.
Revenues were $59.3 million compared to $46.6 million in the third quarter of 2015 and $49.5 million in the fourth quarter of 2014. Revenue from polysilicon sales to external customers were $42.9 million compared to $34.1 million in the third quarter of 2015 and $33.8 million in the fourth quarter of 2014. The increase in polysilicon revenue was driven primarily by increase in external polysilicon sales volume, offset by lower ASPs. External sales volume was 3,092 metric ton during the fourth quarter compared to 2,277 metric ton in the third quarter of 2015 and 1,646 metric ton in the fourth quarter of 2014.
With the successful ramp up of the company's phase 2B polysilicon expansion in Xinjiang, the company reached full production capacity during the quarter and produced 3,547 metric ton of polysilicon in the fourth quarter of 2015, an increase of 32% from 2,689 metric ton in the third quarter of 2015. Average selling price of polysilicon was $13.86 per kilogram in the fourth quarter of 2015, a decrease of 7.5% from $14.98 per kilogram in the third quarter of 2015.
Revenue from wafer sales were $16.4 million compared to $12.5 million in the third quarter of 2015 and $15.7 million in the fourth quarter of 2014. Wafer sales volume was 21 million pieces compared to 19.1 million pieces in the third quarter of 2015 and 18.6 million pieces in the fourth quarter of 2014. The increase in revenue from the third quarter was primarily due to higher sales volume and higher wafer selling prices.
Gross profit was approximately $16.9 million compared to $8.6 million in the third quarter of 2015 and $12.6 million in the fourth quarter of 2014. Non-GAAP gross profit, which excludes costs related to the non-operational polysilicon facilities in Chongqing, was approximately $18.9 million compared to $10.9 million in the third quarter of 2015 and $15.9 million in the fourth quarter of 2014.
Gross margin was 28.5% compared to 18.4% in the third quarter of 2015 and 25.4% in the fourth quarter of 2014. The improvement in gross margin compared to the third quarter was primarily due to our continuous cost reduction efforts in polysilicon manufacturing, partially offset by the polysilicon ASP decline as well as higher wafer selling prices combined with our improved wafer processing cost.
In the fourth quarter of 2015, total cost related to the non-operational Chongqing polysilicon plant, including depreciation, was $2 million compared to $2.3 million in the third quarter of 2015 and $3.3 million in the fourth quarter of 2014. Excluding such costs, non-GAAP gross margin was approximately 31.9% compared to 23.4% in the third quarter of 2015 and 32.1% in the fourth quarter of 2014.
Selling, general and administrative expenses were $2.3 million compared to $2.9 million in the third quarter of 2015 and $4.7 million in the fourth quarter of 2014. R&D expenses were approximately $0.5 million compared to $0.1 million in the third quarter of 2015 and $0.2 million in the fourth quarter of 2014.
The company recognized $1.6 million of fixed asset impairment loss in the quarter compared to zero in the third quarter of 2015 and zero in the fourth quarter of 2014. The company is currently in the process of relocating and repurposing the company's temporarily idle polysilicon machinery and equipment in Chongqing to the company's Xinjiang polysilicon manufacturing facility. The impairment loss incurred was related to identified relocation assets in Chongqing that were not transferable and could not be utilized by the Xinjiang polysilicon expansion project.
Income from operations was $14.3 million, compared to $6.7 million in the third quarter of 2015 and $7.6 million in the fourth quarter of 2014. Operating margin was 24.1% compared to 14.3% in the third quarter of 2015 and 15.4% in the fourth quarter of 2014.
Net interest expenses were $4 million compared to $3 million in the third quarter of 2015 and $4 million in the fourth quarter of 2014. EBITDA was $23.4 million compared to $15 million in the third quarter of 2015 and $14.7 million in the fourth quarter of 2014. EBITDA margin was 39.5% compared to 32.1% in the third quarter of 2015 and 29.6% in the fourth quarter of 2014.
Net income attributable to Daqo New Energy shareholders was $9.6 million compared to $3.1 million in the third quarter of 2015 and $3.6 million in the fourth quarter of 2014. Earnings per basic ADS were $0.92 compared to $0.29 in the third quarter of 2015 and $0.40 in the fourth quarter of 2014. Non-GAAP adjusted net income were $11.9 million in the fourth quarter of 2015 compared to $6.3 million in Q3 2015. Adjusted earnings per basic ADS were $1.14 compared to $0.60 in Q3.
As of December 31, 2015, the company had $33.6 million in cash and cash equivalents and restricted cash compared to $68.7 million as of September 30, 2015, and $29.2 million as of December 31, 2014. The decrease in cash and cash equivalents and restricted cash compared to the third quarter was primarily due to loan repayments amounting to $31.6 million.
As of December 31, 2015, the accounts receivable balance was $19.9 million compared to $15.4 million as of September 30, 2015, and $8.7 million as of December 31, 2014. The increase in accounts receivable balance was primarily due to higher sales volume to customers.
As of December 31, 2015, notes receivable balance was $11.1 million compared to $16.5 million as of September 30, 2015, and $50.2 million as of December 31, 2014. As of December 31, 2015, total borrowings were $242.5 million, of which $118.5 million were long-term borrowings. This compares to at the end of third quarter 2015 total borrowing of $259.1 million, including $144 million long-term borrowings and compared to at the end of 2014 total borrowings of $137.1 million, including $77.3 million of long-term borrowings. As of December 31, 2015, notes payable balance was $20.2 million compared to $52.2 million as of September 30, 2015, and $48.9 million as of December 31, 2014.
For the 12 months ended December 31, 2015, net cash provided by operating activities was $66.4 million compared to net cash provided by operating activities of $45.6 million in the same period of 2014. For the full year 2015, net cash used in investing activities was $74.1 million compared to $90.6 million in the same period of 2014. The net cash used in investing activities in both 2014 and 2015 was primarily related to the capital expenditure of the company's Xinjiang Phase 2B polysilicon project.
For the full year 2015, net cash provided by financing activities was $15.2 million compared to $44.3 million in the same period of 2014. The net cash provided by financing activities in 2015 was primarily contributed by the net proceeds from the follow-on offering in February 2015 and net bank loan borrowing.
Now, I will discuss the results for the fiscal year 2015. Revenues were $182 million in 2015 compared to $182.6 million in 2014. Revenues from polysilicon sales to external customers were $125.9 million in 2015 compared to $127.7 million in 2014. Polysilicon sold in 2014 and 2015 was mostly contributed by our Xinjiang facility.
During the third quarter of 2015, we successfully ramped up our Phase 2B expansion project, which increased our annual capacity from 6,150 metric tons to 12,150 metric tons. As a result, our polysilicon production volume increased to 9,771 metric tons in 2015, up 49% from 6,560 metric tons in 2014.
External polysilicon sales volume increased 38% from 5,972 metric ton in 2014 to 8,234 metric ton in 2015. The improvement in external sales volume was offset by the decrease of our annual polysilicon average selling prices, which decreased from $21.37 per kilogram in 2014 to $15.29 per kilogram in 2015.
Revenue from wafer sales were $56.1 million in 2015 compared to $54.9 million in 2014. Wafer sales volume was 76.4 million pieces in 2015 compared to 70.5 million pieces in 2014. The increase in wafer revenues as compared to 2014 was primarily due to higher sales volume.
Gross profit for 2015 was $37.6 million, a decrease of 13.2% from $43.3 million in 2014. Gross margin was 20.6% in 2015 compared to 23.7% in 2014. The decrease in gross profit and gross margin was primarily due to decreased profitability of our polysilicon sector offset by the improved gross profit and gross margin by our wafer sector.
In 2015, total cost related to the non-operational Chongqing polysilicon plants, including depreciation, were $10.7 million compared to $13.9 million in 2014. Excluding such costs, the non-GAAP gross margin was approximately 26.5% in 2015 compared to 31.3% in 2014.
SG&A expenses were $12.7 million in 2015 compared to $10.3 million in 2014. The increase in SG&A expenses was primarily due to increased shipping costs, as a result of higher polysilicon shipping volume.
R&D expenses were $0.9 million in 2015 compared to $1.5 million in 2014. The R&D expenses in 2015 and 2014 primarily resulted from continuous technology improvement projects for polysilicon and wafer production.
In the fourth quarter of 2015 the company recognized $1.6 million of impairment loss for the long-lived assets of its Chongqing polysilicon facilities. In 2014 no long-lived assets impairment loss was recognized.
Other operating income was $3.8 million in 2015 compared to $0.6 million in 2014, which mainly consisted of unrestricted cash incentives that we received from local government authorities, which fluctuate from period-to-period at the discretion of the government.
Income from operations was $26.2 million in 2015 compared to $32 million in 2014. Operating margin was 14.4% in 2015 compared to 17.5% in 2014.
Net interest expenses were $12.7 million in 2015 compared to $15.3 million in 2014. The decrease in net interest expenses was primarily due to the decrease in bank borrowing balance combined with a decreased average borrowing interest rate.
Income tax expenses were $1.1 million in 2015 compared to nil in 2014. In 2015 one of our Xinjiang subsidiaries started to pay corporate income tax along with the recovery of accumulated loss.
Net income attributable to Daqo shareholders was $13 million in 2015 compared to $16.7 million in 2014. Earnings per basic ADS were $1.26 in 2015 compared to $2.02 in 2014.
Non-GAAP adjusted net income attributable to Daqo shareholders was $27.4 million in 2015 compared to $32.3 million in 2014. Non-GAAP adjusted earnings per basic ADS were $2.65 in 2015 compared to $3.91 in 2014.
And that concludes the official part of our presentation. And with that, I'd like to turn the call over for questions.
[Operator Instructions] And the first question comes from Sheng Zhong with Morgan Stanley.
I have two questions. One is you have a very impressive cost reduction on the polysilicon income. So can you give us some more color on the cost breakdown and your further outlook of the production cost in 2016? And secondly is also about polysilicon production. We see that the total national, I mean, the China domestic polysilicon production was around 165,000 metric tons in 2015 and that is about 30,000 metric tons higher than 2014.
So that means even the polysilicon price is going to low level, the domestic production volume still grows very fast. And I think that volume is not only from the big manufacturers, there's also some increase from the small manufacturers. So can you please share some -- what's your view about the domestic production in 2016, given the polysilicon prices is currently at low level?
So first question. Yes, this fourth quarter 2015, is our first quarter fully ramped to the capacity. And as we forecast, after Q3 of 2015, we expecting to gradually go into the full ramp up, and our new technology used in the second quarter, hydrochlorination process is very, very successfully running. So we reached our goal. Actually, originally, we targeted for 2016, is our cost will be at $10 under. So fortunately, because as I mentioned in earlier, our operation team did a great job, so we actually reached the target of under $10 ahead of schedule.
As for 2016, we will continue take some measures to further reduce our costs. At this moment, for the same guidance, the cost is under $10, I would say, at least, at the same level as we achieved the first quarter. And as you know, our Phase 3A is still underway doing, we're expecting will join the production in the first half of 2017. By that time, we were expecting further cost reduction by that time.
For the China production of polysilicon, for your second question, in 2015 is about 150,000 metric tons, roughly about 150,000 to 160,000 metric ton. We do not expecting any increase in capacity in 2016, because we do not see any upgrade in the capacity or new manufacture construction for polysilicon. Actually, as a matter of fact, as of right now, only very solid core project to expansions for polysilicon is from our company. We have 6,000 metric ton added will be within this year, and the next year we're starting production.
So we do expecting the polysilicon -- because the restriction of the U.S. polysilicon to China and we also see REC and also SunEdison's polysilicon manufacturer shutdown, we do expecting polysilicon supply and demand will be more balanced in 2016. And we do expecting in coming quarters the ASP of polysilicon will slightly increasing. And so I think our polysilicon demand is very strong. As we see, actually, first end of the first quarter, I think our Q2 demand probably will be more stronger than first quarter as we see. So that's the answer of your two questions.
And the next question comes from Pierre Maccagno with Northland Capital Markets.
So I have a first questions here, usually ahead of FIT decrease, like that's one that is scheduled in China for about June time. There's a very strong plan at that time and probably that definitely increases the ASPs. But what happens after the June FIT time? What are your expectations in terms of how the demand or ASPs will stay?
So the whole scenario, right now, we see, and also the report is the whole year, as you know, installation for China is very strong and also our customers expansion for the wafer and cell manufacturing are very prickly right now, as we see from first quarter starting as the capacity will be online. So that's driving the polysilicon demand and going higher.
We do not expecting bigger impact from current point of view, because the policy change already are marked in for our customers' mind and for their production schedule. We meet with several key customers and every one forecasting for 2016 their production volume will begin increasing from high volume basis in 2015. So again, we do expecting strong demand in China, and we don't believe that will impact any volume production of downstream for module standard cell production.
Peter, it is Ming. I'm the CFO of the company. So let me just start with what actually Yao just said, so if you look at the China's National Energy Administration, their head just had a forum this week talk about how their planning for the 13th five year plan for renewable energy, particularly, for solar. They're planning to install at least 15 gigawatts to 20 gigawatts of PV every year over the next five years, so that's the government target. And we think the overall demand will certainly be driven by that.
Follow-up question. What are your plans for further expansion at this point?
So we first stated we are very focused on the 6,000 metric ton added. We expecting online full production first half of 2017. And the long-term target is we will build our company's capacity to total about 25,000 metric tons, but that's second stage. We have not decided yet when we're starting construction. Obviously, we will see the market situation, as well as company's capital situation, bonding, in those areas.
And so my final question to you is, how do you see the costs of your competitors in China? I know, there is FBR, [ph] in build and GCL. And so do you expect competitors to increase their costs going forward?
We believe, at this moment, our cost is ahead of most peers in China. And also most of peers of China for polysilicon, they have sighted different business model, because they utilize almost 100% polysilicon for their internal using for wafer production, for instance. So their cost maybe is mainly less sensitivity for ASP, because they were converting the wafer and the wafer ASP in last after six months is very strong.
So we believe, we will continue leading in the cost side, and we are very focused on that side ourselves. And also, we have transitioned our peers and cost aside and we're trying to do more technical improvement in this year in poly side. I mean, we would do our best to continue to reduce our cost. So we know we still have some room to improvement for next two years, so that we believe is our strengths of the company. We will continue trying to lead in that area.
And the next question comes from Philip Shen with ROTH Capital Partners.
Hey guys, good work on the progress you're making on lowering your cost structure. So let's talk about the inventory situation, you alluded to that in your remarks and I think in your release. Can you just give us some more color on the channel inventory now? And then, can you also talk about your inventory levels currently as well?
We knew that our customer, almost no inventory, because after notice the poly price in last December and this year January and most of the February, there's no motivation to keep any inventories, because the prices are keeping dropping. Now we, by the Chinese New Year, I think the inventory is very, very low and so we see the price bounce back in March. Obviously, we do not see the inventory as today.
And actually our second quarter ordering for our customer is very, very strong and almost every customer increasing their demanding for shipment, request the shipment. So we try harder to meet our key customers demand at this moment, so obviously they do not have much inventory as this. So for ourselves, our inventory is very low, and I think at this moment, we're almost just shipping everything to our customer. So our inventory should not be more than two to three working days output by every end of month if we measure that.
So inventory is as good as Q3 or Q4, is very minimal, and the best that we can do. And our customer inventory checking also indicated that they do not have inventory at this moment. So we are expecting Q2 will be very strong quarter. And we expecting price will be strong compared with Q1. And probably, we'll start it up from today, the price for second quarter.
Let's shift over to maybe Q3 and Q4. Can you talk about your long-term contracts? Historically, what percentage of your production is set aside for long-term contracts? And then what is it now? And how much of your production, in Q3 and Q4, have you already sold?
I think when we entered 2016 we signed roughly about 70% of our output for 2016 to our key customers. And just as I've said, actually even when we're into from exiting Q1 to Q2, almost those customers they have raised demand for April shipment, so which means, seems like even we signed a 70%, maybe remaining will be higher percentage we'll be shipping to those key customers, and also, lot of small customers on the line waiting for polysilicon.
On the other side, our wafer manufacturer also demanded more polysilicon for internal our using, so our total outputs of polysilicon shipments will be very, very tight to meet even only maybe possibly the key customer plus our internal usage. So that's why at this moment, we will forecast 2016 is very tight supply.
So Phil just to add a little bit more color, so if you look at our order book, for example, the April month, that's what we're negotiating right now, so some customers actually have increased their month procurement by more than 50%, so that really indicates to us that they're very tight, but they have very low level inventory and the margins is very tight.
And then at the same time, the increased procurement level is actually based on a higher pricing versus the current pricing right now. So that really bodes well for a very strong market currently for polysilicon. And if you look at the orders versus what we could supply, you could probably only supply maybe 70% of what our current orders have, which is probably one of the best situations that we have. So a lot more demand than what we could supply right now.
One last question here, and it's somewhat related. Can you update us on your customer base, discuss how the customer base maybe diversifying, evolving and talk about the concentration?
So we feel, at this moment, majority customer base is similar to 2015. There are some changes. We're shipping our polysilicon to, one is, our traditional wafer customer. I think in 2016, we're starting to ship poly. And the second hand is from the last quarter of last -- 2015, we're starting shipping meaningful volume to mono wafer customers for high efficiency wafers, and we do expecting, we will develop more mono wafer customers in 2016.
And I think we will have a high percentage maybe into 2017 from that. We're starting shipping to like mono-wafer high-efficiency sale manufacture customers in 2017. So we will continue to serve our multi-wafer customers' needs in 2016. We're starting putting some efforts to increasing to the mono-wafer customers from this year, and we think it will be meaningful percentage for 2017. That's our goal.
And as there are no more questions at the present time, we would to return the call to management for any closing comments.
End of Q&A
Thank you, everyone, again, for joining our call today. Should you have any queries, please feel free to contact the Investor Relations of the company. Thank you, bye, bye.
Thank you. The conference has now concluded. Thank you for attending today's presentation.
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