U.S. Markets close in 2 hrs 46 mins

Edited Transcript of SOL earnings conference call or presentation 28-Mar-17 12:30pm GMT

Thomson Reuters StreetEvents

Q4 2016 ReneSola Ltd Earnings Call

Jiashan, Zhejiang Mar 28, 2017 (Thomson StreetEvents) -- Edited Transcript of ReneSola Ltd earnings conference call or presentation Tuesday, March 28, 2017 at 12:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Gary Dvorchak

The Blueshirt Group, LLC - MD of Asia

* Rebecca Shen

* Xianshou Li

ReneSola Ltd - Chairman and CEO

* Yuanyuan Ma

ReneSola Ltd - CFO

================================================================================

Conference Call Participants

================================================================================

* Justin Clare

Roth Capital Partners, LLC, Research Division - Research Associate

* Maheep Mandloi

Crédit Suisse AG, Research Division - Research Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Hello, ladies and gentlemen. Thank you for standing by for ReneSola's Fourth Quarter and Full Year 2016 Earnings Conference Call. (Operator Instructions) Please note that we're recording today's conference call.

I will now turn over the call to Mr. Gary Dvorchak, Managing Director of The Blueshirt Group Asia. Please go ahead, Mr. Dvorchak.

--------------------------------------------------------------------------------

Gary Dvorchak, The Blueshirt Group, LLC - MD of Asia [2]

--------------------------------------------------------------------------------

Thanks. Hello, everyone. Thank you for joining us on ReneSola's conference call to discuss fourth quarter and full year 2016 results. We released the results a little bit earlier today, and they're available on the company's website as well as from newswire services. You can also follow along with today's call by downloading the short presentation available on the company's website at www.renesola.com.

On the call today with me are Mr. Xianshou Li, Chief Executive Officer; Ms. Maggie Ma, Chief Financial Officer; and Ms. Rebecca Shen, Director of Investor Relations. Rebecca will read Mr. Li's prepared remarks regarding ReneSola's operational highlights and strategy, and Maggie will then review our fourth quarter and full year 2016 financial results in detail.

Before we continue on Slide 2, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, and as such, the company's results may materially -- may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's annual report on Form 20-F and other documents filed with the U.S. Securities and Exchange Commission. ReneSola does not assume any obligation to update any forward-looking statement except as required under applicable law.

Please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars.

Let me now turn the call over to Rebecca, who will translate Mr. Li's prepared remarks. Rebecca?

--------------------------------------------------------------------------------

Rebecca Shen, [3]

--------------------------------------------------------------------------------

Thank you, Gary. The following are Mr. Li's prepared remarks. Thank you, everyone, who joined our call this morning. We appreciate your interest in ReneSola. I'll begin our call with the important strategic comments about business and our performance, then Maggie Ma, our CFO, will present operating and financial details for the fourth quarter, the full year 2016 and provide 2017 guidance. We will then open the call to Q&A.

Now let me quickly recap our Q4 and full year 2016 results. Please turn to Slide 3. We recorded revenue of $232.1 million for the fourth quarter of 2016, in line with our expectations. We shipped approximately 655 megawatts of solar products, up 30% sequentially and essentially flat compared to the fourth quarter of 2015.

The LED distribution business was solid, recording a 31. -- 31% sequential revenue increase. The company's overall gross margin was 2.1% below our guidance. On the bottom line, we reported a net loss of $25.5 million.

For the full year 2016, we reported revenue of $929.8 million and shipped 2.6 gigawatts of solar products. This compares to revenue of $1.28 billion and total shipments of 2.75 gigawatts of solar products in 2015.

LED sales were $30.4 million. Gross margin was 11.8% versus 14.7% in 2015. We reported a net loss of $34.7 million, which compares to a net loss of $5.1 million a year ago. EBITDA declined 30% year-over-year.

Although market conditions were challenging in 2016, we continue to execute on the strategy that we detailed in the second half of 2015, shifting our focus toward a downstream project development business and away from manufacturing. Additionally, we are committed to establishing the LED distribution business, improving our balance sheet and reducing our cost structure with a goal of delivering consistent profitability.

Now let me update you on downstream project development, which is at the core of our transformation. As we communicated to you in prior earnings calls, downstream projects remain a sizable opportunity globally, and equipment manufacturers like us have a natural advantage in designing and developing projects. I am proud that we continue to gain traction in developing a robust pipeline of future projects across different geographies. We now have over 1 gigawatt of projects on various stages of development. Our shovel-ready pipeline features 700. -- 707 megawatts in the U.S., the U.K., Turkey, China, Japan, Canada, France and Poland. In addition, we have approximately 335 megawatts of projects under construction and over 550 megawatts we expect to be built in 2017. This gives you a sense of the size of the upcoming monetization opportunity of project assets.

The U.K. remains an excellent market for us, and recent activity continues to highlight our competitive advantage there. We recognize revenue from 6 utility-scale projects in the United Kingdom sold in the fourth quarter. These projects had approximately 26 megawatts of generating capacity. In addition, we intend to sell approximately 14 megawatts of project this year, of which 10 megawatts are under the ROC 1.2 program and should connect to the grid by the end of March.

The U.S. is also a large and robust market for us. We plan to construct around 108 megawatt of project in 2017, of which 70 megawatt are community solar projects, which have higher PPA price than utility projects. Our U.S. projects are located in California, North Carolina and Minnesota.

In January 2017, we won 13 utility projects in Southern Poland, each with an installed capacity of 1 megawatt. The projects are eligible for a guaranteed tariff and a 15-year power purchase agreement and are expected to be connected to the grid by December 2017.

In Canada, we intend to construct approximately 9 megawatts of small-scale utility projects under the FIT3 program in the current calendar year.

In Turkey, we expect to construct 13 megawatt of projects this year. All of the projects are unlicensed, thus, qualifying for FIT of $134 per megawatt hour.

In our domestic market of China, we continue to see an opportunity for smaller projects with more attractive economics. Smaller installations on commercial, industrial and residential buildings can be cost-competitive for the building owners, provide good IRRs and get the support of the Chinese government. According to China's 13th Five-Year Plan for the development of the power industry, the country is targeting an installed capacity of distributed generation of solar power of 60 gigawatts by 2020. China had 10 gigawatts installed capacity of distributed generation solar power at the end of 2016 according to the National Energy Administration. As of March 20, the company had approximately 392 megawatts of solar rooftop projects in shovel-ready stage in China. All of the projects are on file with the National Development and Reform Commission, and the company has obtained legal rights to develop these projects. The projects are located in the Eastern and Central part of China. We intend to commence construction of all of these projects within the current calendar year. We continue to outreach our global footprint and brand equity to develop an LED distribution business. This remains an exciting new opportunity for us, which we expect will create an outflow of growth on project development.

As I mentioned earlier, the LED business delivered encouraging financial performance in the fourth quarter. We saw over 30% sequential revenue growth with a gross margin of approximately 26% and had approximately 4,200 customers at year-end. The energy efficiency market remains a very large and growing market, and LED lighting is a critical element. We continue to expect this market to expand substantially as energy efficiency retrofits grow as a trend around the world. We continue to position ourselves to capture this opportunity in the years ahead.

Now let's turn to another key strategic objective. We remain committed to generating cash and paying our debt. I'm proud that we strengthened our balance sheet in 2016 by paying down debt and repurchasing all of the remaining convertible notes. We retired notes in the first quarter to improve our financial flexibility.

In the fourth quarter, we further reduced total debt by approximately $75 million to $624 million. We continue to streamline our operations with tight cost control during down cycles. While we take a cautious approach to spending in a number of areas, we do plan to invest $15 million this year to replace our current manufacturing equipment with diamond wire cutting technology. We believe this will increase wafer capacity by 200 megawatts and reduce silicon usage, thus, lowering our overall production cost.

Finally, let me reiterate our commitment to the shareholders who are the owners of the company and our partners. Operating efficiently and profitably is our primary goal, which we believe can drive a higher valuation for the company over time. In addition, a prudent return of capital also reflects our commitment to shareholders. We did this again in the fourth quarter. While we repurchased 725,850 ADS before the reverse split at a cost of approximately $0.5 million dollars.

I will close my comments by noting while our Q4 and full year financial results were mixed, we are optimistic about our opportunities in 2017 and beyond. We are working diligently to create what we believe is the path to sustained profitability. Project development remains our focus, while we also continue to deliver high-quality power products. In the meantime, we will focus on tight cost control, cash generation and further strengthening our balance sheet.

I would like to thank the entire ReneSola team for their ongoing hard work, passion and dedication as we work together towards executing on our strategy to transform ReneSola from a PV product manufacturer and into a multifaceted provider across the solar value chain.

Now let me turn the call over to Maggie for details on our financial performance. Maggie?

--------------------------------------------------------------------------------

Yuanyuan Ma, ReneSola Ltd - CFO [4]

--------------------------------------------------------------------------------

Thank you, Mr. Li and Rebecca, and thank you, everyone, for joining us on the call today. I will review our operations and the financial performance for the fourth quarter and full year 2016, and then discuss our outlook.

Let's begin with Slide 4. Revenue of $232 million for the fourth quarter was up 24% sequentially and down 22% year-over-year. Q4 revenue was in line with our guidance of $220 million to $240 million. The year-over-year decline was largely due to low solar product pricing and fewer product shipments to external customers.

Revenue for the full year was approximately $930 million, down $27.5 million -- 27.5% when compared to last year. Gross profit of $5 million declined 74% sequentially and 90% year-over-year, falling short of our expectations.

Q4 gross margin was 2.1%, down from 10.1% in Q3 2016 and 16% in Q4 2015. The sharp decline in gross margin resulted from an inventory provision coupled with lower wafer and module ASPs. The gross margin in 2016 was $109.5 million, down 42% year-over-year. Gross margin for 2016 were 11.8%, which compares to 14.7% last year.

Operating loss for the fourth quarter was $21.8 million compared to operating loss of $11.9 million last quarter and the operating income of $16.9 million in the prior quarter. Operating expense for the fourth quarter of 2016 was $26.8 million, down 3.7% sequentially and down 3.1% year-over-year. The decrease in operating expense in the quarter was largely attributable to tight cost control initiatives coupled with the reversal of the warranty expense.

Sequentially, SG&A expense decreased 29%, and R&D expense decreased 44% when compared to the same period last year. Operating loss for full year 2016 was $15.1 million compared to an operating income of $29.3 million last year. We continue to take a more cautious approach to spending in a number of areas. In particular, we remain prudent in managing our discretionary expense across the company. As discussed, we plan to remain a healthy company during a down cycle and be ready for the higher growth and a better profit as the industry recovers.

Below the operating line, nonoperating expense of $0.2 million includes net interest expense of $7.1 million, offset by foreign exchange gain of $4.9 million and gains on derivatives of $2 million.

Net loss for the fourth quarter was $25.5 million, which compares to a net loss of $20.5 million in Q3 of 2016 and a net income of $6.7 million in the same quarter last year.

Loss per ADS was $1.26 in the quarter and compares to a loss per ADS of 1. -- $0.01 in Q3 of 2016 and earnings per ADS of $0.33 in the prior quarter.

We recorded a wider loss for the year of $34.7 million. This compares to a net loss of $5.1 million last year.

Slide 5 provides a summary of key [ up ] line items of our income statement over the last several quarters.

Please turn to Slide 6, which highlights portions of our balance sheet. Cash and equivalents, including the restricted cash, ended the year at $133.2 million. During the quarter, the company further reduced the total debt by approximately $75 million as we paid down short-term debt. Our long-term objectives remains to reduce debt substantially, and we strongly believe that each $1 of debt reduction will yield a similar increase in the value of the company's equity.

Slide 7 highlights the recent trend of working capital efficiency. Days sales outstanding Q4 declined to 59 days from 86 days in Q3. Days of inventory decreased to 51 days in Q4 from 94 days in Q3.

Before I move on to our project sales in the quarter, I want to reiterate that the entire finance team remains focused on improving our balance sheet and that we are happy with the continued progress the team made in the past year.

Now let's move on to the details of our project pipeline. Slide 8 shows our recent history of sales, including the 6 utility projects in the U.K. in the fourth quarter. Slide 8 shows our geographic footprint, and Slide 9 breaks down our project pipeline by country. As Mr. Li mentioned, we now have a pipeline of over 1 gigawatt of projects in various stages of development.

Our shovel-ready pipeline features 707 megawatts across different geographic regions, as shown here on Slide 10. In addition, we have approximately 335 megawatts of projects under construction.

Slide 11 summarizes the results for the LED business. After 1 quarter of top line decline, in Q3, we again experienced solid growth in LED revenue in the fourth quarter. Revenue came in at $9.3 million in Q4, up nearly 31% from $7.1 million in the third quarter. This increase in revenue reflects higher demands from the U.S., Europe and India.

Gross margin was approximately 26% in Q4, down from 27% in the prior quarter. We remain optimistic about the growth prospect from the LED business.

At the end of December, we have about 4,200 active customers. We believe we can leverage our brand name and the global distribution footprint to build an attractive high-margin business. While the LED business accounted for approximately 3% of total revenue in 2016, we expect it to grow into a meaningful financial contributor in the year ahead.

Next, let me summarize our module and wafer product shipment in the quarter shown on Slide 12. Our module and the wafer business remains an attractive business segment given the cost reduction initiatives we put in place. As anticipated, our in-house manufacturing cost per watt in Q4 was in the $0.35 due to declines in processing and silicon cost. We expect the in-house cost per watt in 2016 to further decrease.

Total solar module shipment in the fourth quarter was 331 megawatts compared to 191 megawatts in Q3 of 2016 and 373 megawatts in Q4 of 2015. The year-over-year decrease reflects our gradual exit from the OEM business as we successfully transition our business model to focus on project development. The sequential increase was due to higher demand from the domestic market. Wafer shipments was 306 megawatts in Q4 of 2016 compared to 291 megawatts in the previous quarter and 270 megawatts in the same quarter last year.

The pie chart highlights the geographic breakdown of module shipments in the fourth quarter. Demand in China rebounded in Q4, which represents 69% of our total shipments in the quarter. Japan remains an important market for us, representing 7% of total shipment in Q4. India continues to be a growth market for us, representing 6% in Q4. The U.S. accounted for less than 1%, and the rest of the world was about 18%.

Our module ASP declined to $0.40 per watt in Q4 2016 from $0.45 per watt in the third quarter of 2016 compared to prior to the quarter as we did not ship much to the U.S. in Q4, which typically commands higher pricing.

Finally, we conclude with guidance, which is on Slide 13. In the first quarter 2016 -- 2017, we expect revenue to be in the range of $130 million to $150 million, external wafer shipments in the range of 240 million to 260 million and external module shipment in the range of 250 million to 260 million -- sorry, 250 -- 260 megawatts.

The Q1 revenue guidance reflects our expectations that we will be redirecting more external module shipments to the downstream projects. For the full year 2017, we expect revenue in the range of $900 million to $1 billion.

Before we go to the question-and-answer segment of our call, I would like to take a minute to cover 2 other updates: First is our compliance with the New York Stock Exchange listed -- listing requirements. On March 1, 2017, the NYSE informed us that the company has retained compliance with their continued listing requirement of a minimum average of a closing price at $1 per share over the previous consecutive 30 trading days period.

The second update is regarding antidumping duties being imposed on us in the European Union. Our press release details demand notes from the U.K. and the Dutch Customs authorities relating to shipments into those countries several years back -- or 3 -- several years back. These shipments came from our India OEM partners. We believe the authorities are mistaken in their conclusion and that we intend to appeal the decision. The appeal will [ uphold ] over the course of this year, and we'll update you as we make progress.

We would now like to open up the call for any questions that you may have for us. Operator, please go ahead.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) And our first question comes from the line of Justin Clare from Roth Capital.

--------------------------------------------------------------------------------

Justin Clare, Roth Capital Partners, LLC, Research Division - Research Associate [2]

--------------------------------------------------------------------------------

So first, could you share what your margins were in Q4 for module sales, wafer sales and for the projects that you sold in the U.K. and China?

--------------------------------------------------------------------------------

Rebecca Shen, [3]

--------------------------------------------------------------------------------

So overall, the module sales in Q4, we generated like a mid-single-digit margin for module selling.

--------------------------------------------------------------------------------

Justin Clare, Roth Capital Partners, LLC, Research Division - Research Associate [4]

--------------------------------------------------------------------------------

Okay. And then what did you see for the wafer sales?

--------------------------------------------------------------------------------

Rebecca Shen, [5]

--------------------------------------------------------------------------------

You mean Q4?

--------------------------------------------------------------------------------

Justin Clare, Roth Capital Partners, LLC, Research Division - Research Associate [6]

--------------------------------------------------------------------------------

Yes, in Q4 for the wafer business.

--------------------------------------------------------------------------------

Rebecca Shen, [7]

--------------------------------------------------------------------------------

Okay. In Q4, since there was a sharply decline in wafer price and also with the price of poly was still in a high position in Q4, actually, the margin of the wafer is quite small. Or we could say that is generating 0 margin in Q4. But entering into the year 2017, along with the decline of module price -- polysilicon price, we can see that the margin of -- and also with our further cost reduction in the future, we can see that the margin for wafer will gradually increase in Q1 and Q2.

--------------------------------------------------------------------------------

Justin Clare, Roth Capital Partners, LLC, Research Division - Research Associate [8]

--------------------------------------------------------------------------------

Okay. Could you share approximately what your expectations are in Q1 for module margins and for wafer margins?

--------------------------------------------------------------------------------

Yuanyuan Ma, ReneSola Ltd - CFO [9]

--------------------------------------------------------------------------------

We think that in Q1, the module margin will keep flat because the -- you can see that the price declined a little. But however, we, at the same time, entered into some cost-reduction initiatives. So as well as the wafer margins. But in Q1, we can see that since we will have a maintenance in -- equipment maintenance in our polysilicon plant, so there will be a slight impact to our gross margin.

--------------------------------------------------------------------------------

Justin Clare, Roth Capital Partners, LLC, Research Division - Research Associate [10]

--------------------------------------------------------------------------------

Okay, great. And then moving to your project business, you have plans to construct over 550 megawatts in 2017. Can you give us a sense for how many megawatts you could sell in each region as we move through the year?

--------------------------------------------------------------------------------

Rebecca Shen, [11]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [12]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [13]

--------------------------------------------------------------------------------

For overseas regions, we plan to sell over 140 megawatts this year.

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [14]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [15]

--------------------------------------------------------------------------------

In China, we plan to sell around 300 megawatts.

--------------------------------------------------------------------------------

Justin Clare, Roth Capital Partners, LLC, Research Division - Research Associate [16]

--------------------------------------------------------------------------------

Okay. And can you give us a sense for when those sales could happen? Do you expect any project sales in Q1? Or should we be thinking more about Q2, Q3 and Q4?

--------------------------------------------------------------------------------

Rebecca Shen, [17]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [18]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [19]

--------------------------------------------------------------------------------

Well, we don't expect much sales from the project sales in Q1. But in Q2, we could expect around 120 megawatts.

--------------------------------------------------------------------------------

Operator [20]

--------------------------------------------------------------------------------

Our next question comes from the line of Maheep Mandloi from Crédit Suisse.

--------------------------------------------------------------------------------

Maheep Mandloi, Crédit Suisse AG, Research Division - Research Analyst [21]

--------------------------------------------------------------------------------

Just wondered during the 2017 guidance, does the $900 million to $1,000,000,000 include those 440 megawatts of downstream sales you just spoke about? Or does it include any other sales as well?

--------------------------------------------------------------------------------

Yuanyuan Ma, ReneSola Ltd - CFO [22]

--------------------------------------------------------------------------------

Right. It includes the project sales and the LED sales.

--------------------------------------------------------------------------------

Maheep Mandloi, Crédit Suisse AG, Research Division - Research Analyst [23]

--------------------------------------------------------------------------------

Got that. And how should investors think about cash over here? Like, how much cash do you plan to generate in the year? Or how much of that would be used for CapEx in the year? Could you provide some color on that?

--------------------------------------------------------------------------------

Rebecca Shen, [24]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [25]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [26]

--------------------------------------------------------------------------------

So we have invested a lot of money in the project business in the prior year, so we expect that we could balance -- we could recycle the money that we have invested in the prior years.

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [27]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [28]

--------------------------------------------------------------------------------

And for other projects such as in the U.S. and China, we would -- we will use project financing to develop those projects.

--------------------------------------------------------------------------------

Maheep Mandloi, Crédit Suisse AG, Research Division - Research Analyst [29]

--------------------------------------------------------------------------------

Got that. And in terms of your debt strategy, could you just help us explain how do you plan to reduce that in 2017?

--------------------------------------------------------------------------------

Rebecca Shen, [30]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [31]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [32]

--------------------------------------------------------------------------------

We plan to repay -- we plan to pay down the debt by 5% to 10% every year. Right now, we have less than $600 million of debt, excluding the (inaudible).

--------------------------------------------------------------------------------

Maheep Mandloi, Crédit Suisse AG, Research Division - Research Analyst [33]

--------------------------------------------------------------------------------

And of that $500 million -- $600 million, how much of the current debt is project debt or project financing-related debt?

--------------------------------------------------------------------------------

Rebecca Shen, [34]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [35]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [36]

--------------------------------------------------------------------------------

Around $30 million are project-related loans.

--------------------------------------------------------------------------------

Maheep Mandloi, Crédit Suisse AG, Research Division - Research Analyst [37]

--------------------------------------------------------------------------------

Okay. And just switching gears to the LED business, could you talk about your growth expectations in 2017?

--------------------------------------------------------------------------------

Rebecca Shen, [38]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [39]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [40]

--------------------------------------------------------------------------------

We generated roughly around $30 million for 2016, and we expect to generate revenue from the LED business of $60 million to $70 million for the year of 2017.

--------------------------------------------------------------------------------

Maheep Mandloi, Crédit Suisse AG, Research Division - Research Analyst [41]

--------------------------------------------------------------------------------

And just the last question from me. In terms of module ASPs, you said it's $0.40 in Q4 of 2016. How do you see that trending in Q1 of 2017 and later half of this year?

--------------------------------------------------------------------------------

Rebecca Shen, [42]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [43]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [44]

--------------------------------------------------------------------------------

Mr. Li thinks that the ASP is going to trend down in 2017.

--------------------------------------------------------------------------------

Maheep Mandloi, Crédit Suisse AG, Research Division - Research Analyst [45]

--------------------------------------------------------------------------------

Any color on how much that could be in -- by end of this year?

--------------------------------------------------------------------------------

Xianshou Li, ReneSola Ltd - Chairman and CEO [46]

--------------------------------------------------------------------------------

[Foreign Language]

--------------------------------------------------------------------------------

Rebecca Shen, [47]

--------------------------------------------------------------------------------

Well, he -- we now see a Q1 ASP of $0.37 right now, and we expect that, that ASP is going to decline by around $0.01 to $0.02 every quarter.

--------------------------------------------------------------------------------

Operator [48]

--------------------------------------------------------------------------------

(Operator Instructions) Thank you. Seeing that there are no more questions in the queue, let me turn the call back to Rebecca Shen for closing remarks.

--------------------------------------------------------------------------------

Rebecca Shen, [49]

--------------------------------------------------------------------------------

Thank you, operator. Let me make some closing remarks on behalf of Mr. Li. We continue to believe that our strategy is the right one as our strategic shift to project development continues to gain traction. We intend to further grow our project development this year and focus our assets on the vast opportunities for attractive and rapid return on investment in 2017 and beyond.

I also want to reiterate that we are committed to creating long-term shareholder value with a balanced growth and strategy and sharp focus on profitability through operational excellence.

That concludes our call today. You may all disconnect.

--------------------------------------------------------------------------------

Operator [50]

--------------------------------------------------------------------------------

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.