Hello, everyone. I'm Kevin He, 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 third quarter of 2021, 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 Mr. Longgen Zhang, our Chief Executive Officer, and Mr. Ming Yang, our Chief Financial Officer. The call today will feature an update from Mr. Zhang on market and operations, and then Mr. Yang will discuss the company's financial performance for the quarter. 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 provisions 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 statements. 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 conference call is also 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 over to our CEO, Mr. Zhang.

Thank you, Kevin. Hello, everyone. Thank you for joining our conference call today. We are very excited to report an excellent quarter with a record-high production volume and net profit in the company's history. The strong end market environment, supported by favorable global policies to address climate change and the rapidly increasing use of green energy, resulted in stronger than expected downstream demand, which continues to push polysilicon market prices. Our third quarter polysilicon ASP was $27.55 per kg, a significant sequential improvement of more than 30% from $20.81 per kg in the second quarter. The end market demand continues to be strong, even under today's high-price module environment, and this has further raised the polysilicon market prices to the current level of $33 to $35 per kg. Our production costs increased 8.4% quarter-over-quarter, primarily due to the increase in silicon powder costs. Excluding this impact, our production cost actually decreased by approximately 1% quarter-over-quarter. The increasing silicon powder cost will continue to impact our cost structure in the fourth quarter. However, with the strong market demand, so far, we have been able to transfer the majority of such cost increase to our customers. Over the past three weeks, we have seen silicon powder prices stabilizing, and we expect they will gradually normalize in the first half of next year as energy and emission controls could be somewhat relaxed compared to the fourth quarter of this year, and new supply of silicon powder will start to enter the market. During the first three quarters of 2021, we generated $653 million in cash flow from operations. We repaid all our banking loans in the third quarter and have reduced our debt to asset ratio to 18.2%. At the end of the third quarter, we had $661 million in cash and cash equivalents, $440 million in short-term investments, which are lower-risk financial products, and $353.3 million in bank note receivables that will mature in the next three to six months. This total liquidity of $1.4 billion is a strong foundation to support our expansion projects and further plans to reward our investors. The construction of our Phase 4B capacity expansion project is going smoothly according to schedule. We expect to complete the construction by the end of 2021 and ramp up the full capacity by the end of the first quarter of 2022. In the third and fourth quarter of this year, we have observed some volatility in the global energy market. Prices of almost all energy resources are going up quickly and significantly, including the prices of natural gas, oil, and coal. In many regions in China, many companies are required to shut down production from time to time due to the shortage of electricity supply and carbon emissions control. Fortunately, the Chinese government quickly responded to the challenging situation by accelerating production and allowing electricity prices for industrial users to float according to the market, resulting in rising electricity prices. We expect these measures will further stimulate the solar end market for electricity generation in the near term. With solar already at grid parity broadly, higher fossil fuel market prices make solar projects more competitive. In addition, according to the newly released policies, the usage of renewable energy will not be counted towards the energy usage quota, which will further promote renewable energy in the future. This also explains why the demand from industrial users for solar distributed generation is strong even in the current high-price module environment. On the other hand, because of the strong energy quota and carbon emission control, the overall pace of the polysilicon industry expansion will inevitably slow down. For example, as we are now in the process of identifying the location for the next expansion project, the energy quota issues have become more challenging. We are committed to using more renewable energy in our new polysilicon projects according to secured energy quotas, which will allow us to gradually realize the idea of 'green poly' and 'solar for solar'. This October, at the United Nations Biodiversity Conference in Kunming, Chinese President Xi Jinping announced that the first step had been taken towards the construction of a huge 400-gigawatt wind and solar park. Construction on the first phase comprising 100 gigawatts of wind and solar in deserts in China is already underway. The full 400-gigawatt project would be half-finished by 2025. The Chinese government has also released policies to promote energy storage systems, especially for water reservoir storage. With all these trends and policies in place, it's very clear that China has made a strong determination supported by initial and detailed plans to build a new national energy infrastructure in which renewable energy will play a critical role. The newly announced policies and evolving energy market environment illustrate a vast potential market for solar in China, which is much larger than previously anticipated. Therefore, we are very optimistic about solar PV demand in the future, and we expect the polysilicon sector will continue to be one of the most favorable sectors in the foreseeable future, as polysilicon availability will remain the main constraint and determinant for the future size of the solar end market. Let's move to outlook and guidance. The company produced 62,970 metric tons of polysilicon and sold approximately 63,714 metric tons of polysilicon in the first three quarters of 2021, representing full utilization levels of the company's production facilities. For the full year of 2021, the company's guidance for annual polysilicon production volume is approximately 83,000 to 85,000 metric tons, inclusive of the impact of the company's annual facility maintenance.

Thank you, Longgen, and good day, everyone. Thank you for joining our earnings conference call today. I am Ming Yang, the CFO of the company. We are very pleased to report excellent financial performance for the third quarter of 2021. We had record high revenues of $585.8 million, an increase of 33% sequentially as compared to $441.4 million in the second quarter of 2021 and an increase of 366% year-over-year as compared to $125.5 million in the third quarter of 2020. The increase in revenue as compared to the second quarter of 2021 and the third quarter of 2020 was primarily due to higher polysilicon average selling prices and higher polysilicon sales volume. During the third quarter, market conditions for solar remained robust, with strong demand for mono-grade polysilicon that far exceeded supply. Our third quarter polysilicon ASP was $27.55 per kilogram, an increase of 32% sequentially as compared to the ASP of $20.81 per kilogram in the second quarter. Gross profit was $435.2 million compared to $303.2 million in the second quarter of 2021 and $45.3 million in the third quarter of 2020. Gross margin was 74.3% compared to 68.7% in the second quarter of 2021 and 36% in the third quarter of 2020. The increase in gross margin was primarily due to higher average selling prices, offset by slightly higher production costs. As Longgen indicated, higher production costs during Q3 were a result of the higher market price for silicon raw material. Selling, general and administrative expenses were $11.4 million compared to $9.3 million in the second quarter of 2021 and $9.2 million in the third quarter of 2020. SG&A expenses during the quarter included $2 million in non-cash share-based compensation costs related to the company's share incentive plan, compared to $2 million in the second quarter of 2021 and $4 million in the third quarter of 2020. The increase from the second quarter of 2021 as well as the third quarter of 2020 was primarily due to expenses related to the IPO of our Xingjiang Daqo subsidiary on China's Asia market. R&D expenses were $1.9 million compared to $2.1 million in the second quarter of 2021 and $1.7 million in the third quarter of 2020. R&D expenses converted from period to period reflect R&D activities that take place during the quarter. As a result of the foregoing, income from operations was $421.7 million compared to $292.4 million in the second quarter of 2021 and $33.3 million in the third quarter of 2020. Operating margin was 72% compared to 66.3% in the second quarter of 2021 and 26.6% in the third quarter of 2020. Interest expense was $6.4 million compared to $7.2 million in the second quarter of 2021 and $5.4 million in the third quarter of 2020. Net income was $255.8 million compared to $242.9 million in the second quarter of 2021 and $21.9 million in the third quarter of 2020. Adjusted for minority interests, net income attributable to Daqo New Energy Corp. shareholders was $292.3 million compared to $232.1 million in the second quarter of 2021 and $20.8 million in the third quarter of 2020. Earnings per basic ADS was $3.95 compared to $3.15 in the second quarter of 2021 and $0.29 in the third quarter of 2020. EBITDA was $441.8 million compared to $311.7 million in the second quarter of 2021 and $51.6 million in the third quarter of 2020. EBITDA margin was 75.4% compared to 70.6% in the second quarter of 2021 and 41.1% in the third quarter of 2020. Now on the company's balance sheet and financial conditions. As disclosed previously, the company successfully completed its IPO listing of its Xingjiang Daqo subsidiary on China's Asia market in July 2021. Net proceeds of the IPO, minus listing-related expenses, are approximately RMB 6.1 million or approximately $935 million, which will fund Xingjiang Daqo's polysilicon expansion project and provide additional capital for the company's future growth plans. Following Xingjiang Daqo's IPO, Daqo New Energy in aggregate holds approximately 80.7% of the A-share listed subsidiary. As of September 30, 2021, the company had $660.9 million in cash and cash equivalents and restricted cash compared to $269.7 million as of June 30, 2021 and $109.8 million as of September 30, 2020. To better utilize the company's cash balance with improved capital efficiency, the company purchased short-term investments during the quarter, which are primarily principal-protected short-term interest-bearing bank deposits with 3-month and 6-month maturity durations. These term deposits have higher interest rates than regular bank deposit accounts. Thus, at the end of the quarter, the company had $414.2 million in short-term investments compared to $10.4 million as of June 30, 2021. And as of September 30, 2021, the bank notes receivable balance was $353.3 million compared to $97 million as of June 30, 2021 and $1.9 million as of September 30, 2020. Inclusive of cash and cash equivalents, short-term investments, and bank note receivable balance, the company has total capital liquidity of approximately $1.43 billion as of September 30, 2021. With our strong cash balance, we also seized the opportunity to repay all of our bank borrowings at the end of the quarter. As of September 30, 2021, we had no bank borrowings compared to total borrowings of $156.6 million as of June 30, 2021 and total borrowings of $271 million as of September 30, 2020. For the nine months ended September 30, 2021, with our strong earnings, operating cash flow, and cash balance, we repaid approximately $195 million of bank borrowings. And with our total capital liquidity of $1.43 billion and no interest-bearing bank loans, we now have what we believe to be one of the best balance sheets in the industry. Combined with the ability to access the attractive Asia capital markets in China, we are very well positioned competitively for our company's future growth and expansion plans. For the nine months ended September 30, 2021, net cash provided from operating activities was $653 million compared to $71 million in the same period of 2020. The increase was primarily due to higher ASPs and higher polysilicon sales volume, as well as prepayments of long-term contracts from customers. For the nine months ended September 30, 2021, net cash used in investing activities was $855 million compared to $80.3 million in the same period of 2020. The cash used in investing activities in 2021 and 2020 was primarily related to the capital expenditures on the company's polysilicon expansion projects. The purchase of property, plant, equipment, and land totaled approximately $444 million in the first nine months of the year, primarily related to our Phase 4B polysilicon expansion project. The remaining balance was primarily related to the company's purchase of short-term investments. For the nine months ended September 30, 2021, net cash provided by financing activities was $741.6 million compared to $1.1 million in the same period of 2020. The net cash provided by financing activities in 2021 was primarily related to the net proceeds of $935 million contributed by Xingjiang Daqo's IPO in China, offset by net repayments of bank borrowings. That concludes our prepared remarks.

And the first question comes from Phil Shen with ROTH Capital Partners. Please go ahead.

Hi, everybody. Thank you for taking my questions. I'd like to ask about your outlook for polysilicon prices. With the silicon metal pricing going up so high, we've seen, as Longgen, you mentioned in your prepared remarks, pricing as high as $35 per kilogram. So how do you expect the poly pricing to trend in Q1 and in Q2 for the balance of 2022?

I think the voice may not be clear. It seems a little broken. Currently, market prices are continuing to rise. This is because high-efficiency module prices are being accepted by the market as well. In the fourth quarter, even though silicon powder costs increased significantly, the selling price also increased. The current selling price is about $35 to $36 per kg. Looking ahead, based on our historical research, we expect the price to be approximately CNY180 to CNY220 per thousand metric tons of additional polysilicon supply, which can support the production of around 250 gigawatts of solar modules. We anticipate strong support for poly pricing, considering solar has already achieved grid parity and high-priced modules have been accepted by the market. Therefore, we expect higher-than-expected module prices in 2022. Since polysilicon will remain in short supply, we anticipate very healthy profit margins. If silicon metal prices stay at the current average selling price, we believe polysilicon prices will remain around $30 to $36 per kg for the first half of next year and around $30 for the second half.

Let's move on to the capacity expansion plan. So with the strong pricing, I can imagine you're more encouraged to pursue your capacity expansion. I think on the last call, you talked about 180,000 metric tons by year-end '23 and 270,000 metric tons by year in '24. Would you have any plans to accelerate that? What's the latest update on your capacity expansion plans?

Basically, Philip, the 4B project is currently under construction. The nameplate capacity is 35,000 tons. We will start trial production by the end of the year. By the end of the first quarter of next year, we anticipate reaching our capacity. If we reach this output, it may be around 50,000 tons. So next year, we are aiming for around 120,000 to 130,000 tons; we will provide guidance next year. For further capacity increases, for example, 4B, the exact CapEx is funded from the proceeds of our Chinese IPO. We think, in the future, we will continue to leverage the capital markets in China to raise more money and support future expansions. Yes, we are looking for the next phase in other locations, potentially around 100,000 tons projects. However, if finalized, we will announce that. So basically, yes, we are looking for future CapEx; the funding will come from the capital market.

Okay. And then as it relates to your cost structure, I know pricing has gone up significantly, but your cost structure is also going up a little bit with the silicon powder increase. We saw a bit of an increase in your cash costs in Q3 versus Q2. As we go through next year, how do you expect that to trend as well?

At least as of now, the cost structure for Q4 is a bit difficult to determine. So we are currently looking at silicon powder pricing of roughly in the range of $8 to $10 per kilogram. This is up from approximately $2.50 to $3 per kilogram in the previous quarter. It really depends on how the pricing trends. But so far, what we are seeing is the pricing trend has stabilized for silicon powder, and in fact, for certain grades, the price has declined, and some of it has declined more significantly. So we do believe that over the next two months, silicon powder pricing should be stable to down. Additionally, next year, I would say, the power shortage in China should improve, allowing for more silicon production to ramp up. What has really happened in the second half, especially since September, is the shortage of power and the lack of power has led to forced production shutdowns for some silicon powder producers, especially in Hunan Province. There’s no shortage of silicon metal production capacity; rather, the ability for producers to operate has diminished. We believe this situation should improve in the first half of next year. Therefore, we expect silicon powder pricing could potentially decrease as a result.

So Philip, I'll just add a comment. For the fourth quarter, we think silicon powder prices will go up, but we believe we will be able to transfer almost 100% of the increase to the selling price.

Yes.

So we can maintain our gross profit in the fourth quarter, remaining the same as the third quarter. That's our planning. For next year, as Ming just mentioned, because capacity is expected to increase by more than 50%, even though we expect lower sales prices, due to the drop in silicon powder costs, supply will still be very tight. Thus, it is difficult to forecast precisely how much cash flow we can generate. However, our goal is to maintain at least a 20% to 25% increase based on this year.

Hello, management. Thank you for taking my questions and congrats again on the very strong results. So three quick questions from me. Firstly, do you see any kind of risk for your company's production or your peers' production into, say, November or December due to China's energy control policy and power shortage issues? Secondly, based on my calculations, I think the current polysilicon ASP hike actually more than covers the silicon metal cost hikes. So basically, that's even a little margin expansion. Do you see room for polysilicon prices to ease a bit to help downstream demand? Lastly, I think you mentioned earlier we were talking about possible dividends in the next earnings results. So now we have seen very strong results in earnings and cash flows. Do you have any guidance for the dividend payout ratio or absolute dividend amount?

Gary, first of all, thank you very much for your first question about the power control and emission control that has affected China, particularly in six provinces due to very strict policies. Our current production site is in Xinjiang Shihezi, which uses local electricity grids. Initially, in September, we got some government calls reminding us that there might be a need to reduce electricity supply. However, later, we were assured by the government, as we are one of the significant producers in the local region and are involved in green energy for the upstream solar industry, that there will be no electricity cuts affecting our production. Therefore, we provided guidance for the fourth quarter, and we do not believe that there will be an impact on our current production. Regarding your second question about ASP and silicon powder prices, we find that we have long-term contracts with our silicon powder suppliers. Most of the time, supply complies with the contract, and our silicon powder prices in the third quarter were actually lower than the market. For the fourth quarter, the costs of silicon are more aligned with the market. For October, we anticipate averaging around CNY80 to CNY85 per kg, with stability in November, and we aim to keep it under CNY80. I estimate that by December, our costs will be under CNY75. Overall, we expect cash costs for the fourth quarter to go up to around CNY90 to CNY105 per kg. However, selling module prices in October averaged around CNY265 per kg, and in November, we anticipate an increase of CNY3 to CNY5 per kg. Therefore, we believe we can transfer the polysilicon prices increase part to the selling price, maintaining our gross profit despite a slight decrease compared to the third quarter. That addresses your second question. As for dividends, because our Xinjiang operations are now publicly listed, we need to adhere to relevant laws and regulations. Currently, the Asian company mandates that we declare a minimum of 30% in dividends post-annual report, but the exact percentage will depend on the board’s approval. We will announce that shortly.

Okay. Congratulations on a very strong result. Most questions have already been well answered. However, I would like to know more about long-term capacity growth. We have plans to achieve 250,000 tons by 2024. Do we have a more concrete plan, timeline, or expected announcement regarding site selections and timelines, especially since competitors are aggressively adding capacity in 2022 and 2023?

Just to clarify, you're asking about our long-term capacity expansion plans, right?

Yes, after 4B.

Right now, these plans are quite preliminary, and we will make further announcements when they become more concrete. It’s still in very preliminary stages. Beyond Phase 4B, we plan to continue to expand our capacity. We have a strong balance sheet to support that and the ability to access the Asia market with attractive valuations. We expect to reach our plan of 270,000 metric tons by the end of 2024, representing approximately a 50% average annual growth rate. We are currently negotiating with various localities for our next expansion project, including Mongolia, for example. However, sourcing energy quotas is a significant challenge. We are exploring potentials to utilize green energy in the future to secure energy quotas, as the coal quotas have been largely over-allocated. This energy quota acquisition challenge is likely to slow down the overall expansion pace in the polysilicon sector. Moving forward, we expect many of our competitors working on new projects will find it hard to secure energy quotas. We will disclose more details upon finalizing our plans for our next project.

Thanks a lot. Congratulations to the management for the performance of the results. I'd like to know, first of all, what your view is on granular silicon, meaning FBR, as one of your competitors are having aggressive plans ahead.

I think Ming might address your question.

Regarding FBR or granular polysilicon, based on our understanding of the current market situation, including some of the production and quality data that existing granular producers have provided, we do see material differences in quality and purity levels of granular polysilicon compared to Daqo's mono-grade polysilicon. Furthermore, various downstream manufacturers have differing perspectives. However, overall feedback indicates material quality differences exist, with granular polysilicon generally being used as a mix rather than a standalone product.

My last question is about the power tariffs. To my understanding, one of the key advantages of the company is low-power costs in Xinjiang. I'd like to confirm that Phase 4B will receive the same low tariff as 4A for the next 10 years. Is that correct?

We have agreements with the local governments and the city distribution developing zone authority. The contract includes both 4A and 4B, meaning the nameplate capacity of 70,000 metric tons. The price is fixed for 15 years, so it will remain the same.

Thank you, everyone. Thank you for participating in today's conference call. If you have any further questions, please don't hesitate to write us emails or make a phone call. Thank you, everyone. Bye-bye.

This concludes our question-and-answer session. I'll now turn the conference back over to management for closing remarks. Conference is now concluded. Thank you for attending today's presentation. You may now disconnect.