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Edited Transcript of SORL earnings conference call or presentation 15-Aug-19 12:00am GMT

Q2 2019 Sorl Auto Parts Inc Earnings Call

Ruian City, ZHJ Aug 24, 2019 (Thomson StreetEvents) -- Edited Transcript of Sorl Auto Parts Inc earnings conference call or presentation Thursday, August 15, 2019 at 12:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Jin Rui Yu

SORL Auto Parts, Inc. - COO

* Min Kan Lin;Accounting Manager

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Conference Call Participants

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* Kevin Theiss;Awaken Advisors;Investor Relations

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Presentation

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Operator [1]

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Greetings, and welcome to the SORL Auto Parts 2019 Second Quarter Financial Results Conference Call. (Operator Instructions) Please note this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Kevin Theiss, Investor Relations. Thank you. You may begin.

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Kevin Theiss;Awaken Advisors;Investor Relations, [2]

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Thank you for joining us today, and welcome to SORL Auto Parts 2019 Second Quarter Conference Call. Joining us today are Ms. Jin Rui Yu, SORL's Chief Operating Officer; and Mr. Min Kan Lin, the Accounting Manager.

Before we begin, I would like to just remind all listeners that throughout this call, we may make statements that may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words believe, expect, anticipate, project, target, optimistic, intend, aim, will or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts are statements that may be deemed forward-looking statements. These forward-looking statements are based on current expectations or beliefs including but not limited to statements concerning SORL Auto Parts operations and its financial performance and condition. SORL Auto Parts cautions that these statements, by their nature, involve risks and uncertainties, and actual results may differ materially depending on a variety of factors including those discussed in SORL Auto Parts reports with the Securities and Exchange Commission from time to time. SORL Auto Parts specifically disclaims any obligation to update the forward-looking information in the future.

The 2019 second quarter results discussed on today's call are unaudited numbers, and all numbers are presented in U.S. dollars under U.S. GAAP.

Ms. Jin Rui Yu, SORL's Chief Operating Officer, will give an overview of the operations for the 2019 second quarter, and then I'll return to give the financial results. Thereafter, there will be a question-and-answer session conducted. Ms. Yu, please begin your prepared remarks.

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [3]

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Thank you, everyone, for joining us today for the second quarter of 2019.

China's GDP grew at 6.2% compared with 6.7% in the second quarter of 2018. This growth is the lowest in the past 27 years. The Chinese economy has been slowing trend over past quarters. And [that's really] over the current trade issues with the U.S. have created additional business uncertainties over future growth.

In addition to the slower economic growth, the auto market was affected by the government's earlier implementation of the new automotive emission standards, the strict national VI, which was implemented on July 1 in some province and Taiwan cities. This action caused a prebuy of existing inventories and reduced production of new vehicles. According to the data reported by the China Association of Automobile Manufacturers, in the second quarter of 2019, unit sales of the commercial vehicles declined by 1.8% in April of 2019, down by 11.8% in May and down by 17.8% in June. Against these headwinds, are pleased to -- we are pleased to report our revenues increased by 8.5% year-over-year to USD 139.4 million in second quarter last year and increased 16.7% to USD 275.6 million for the first half 2019.

Our net income attributable to stockholders for the second quarter of 2019 was USD 5.6 million or $0.29 per basic and diluted share. Net income attributable to stockholders was USD 14.6 million or $0.76 per basic and diluted earnings per share for the first half of 2019.

We continue to invest our R&D program with $7 million in the second quarter of 2019 compared with USD 5.3 million in second quarter of 2018 and USD 11.8 million invested through the first 6 months of 2019 compared with USD 8.9 million in the same period a year ago. Our R&D program is responsible for our market leadership position as we develop a higher-margin electronically controlled products, products for the new energy vehicles and enhanced performance of our legacy basic products.

To help us stimulate economic growth, the Central Government has initiated a physical stimulus plan including tax cuts, ease some tax regulation -- debt regulations to encourage infrastructure projects and adopted to a more helpful monetary policy. We believe these measures will slowly improve economic conditions in China in the future.

With that, now let me turn the call to Kevin. Thank you. Kevin?

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Kevin Theiss;Awaken Advisors;Investor Relations, [4]

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Thank you, Ms. Yu.

For the second -- yes. For the second quarter 2019, net sales increased by 8.5% to $139.4 million from $128.5 million for the second quarter of 2018. Revenues from the company's domestic OEM customers increased by 10.6% to $69.2 million from $62.6 million in the second quarter of 2018. Commercial vehicle sales in China decreased in the second quarter of 2019, but SORL continued to expand its leading market share due to higher product quality and better service. Sales from China's domestic aftermarket increased 8.8% to $46.6 million in the second quarter of 2019 from $42.8 million in the same quarter of 2018. Higher aftermarket product sales were generated due to the growing number of OEM warranties that expired from prior new vehicle sales in China and the company's marketing campaign to enhance market share through its distribution campaign. Revenue from international markets increased 2% to $23.6 million from $23.1 million in the second quarter of 2018 primarily due to a larger customer base.

The gross profit for the second quarter of 2019 increased 5.3% to $36.3 million from $34.4 million of the second quarter of 2018. Gross margin for the second quarter of 2019 was 26% compared with a gross margin of 26.8% in the same quarter of 2018. The decrease in gross margin was primarily due to increased sales promotions during the second quarter of 2019. Also, gross profit and gross margin decreased in the passenger vehicle auto parts operations. The focus for the remainder of 2019 is to increase production efficiency, improve product technology and enhance SORL's product portfolio to help maintain or increase gross profit margins.

Operating expenses increased 21.1% to $32.7 million from $27 million in the second quarter of 2018. Operating expenses rose due to higher research and development, selling and distribution and general administrative expenses in the second quarter of 2019. As a percentage of revenue, operating expenses were 23.4% in the second quarter of 2019 compared with 21% in the second quarter of 2018.

Selling and distribution expenses increased 17.9% to $16.5 million or 11.8% of quarterly revenues compared with $14 million or 10.9% in the same quarter of 2018. The increase in expenses was mainly due to higher packaging and repair expenses, increased warranty fees and higher labor costs.

General and administrative expenses in the second quarter of 2019 were $9.2 million or 6.6% of revenue compared with $7.7 million or 6% in the second quarter of 2018 primarily due to higher labor expenses.

Research and development expenses were $7 million in the second quarter of 2019 compared with $5.3 million in the same quarter of 2018. As a percentage of revenue, R&D was 5% in the second quarter of 2019 compared with 4.1% of revenue in the second quarter of 2018. The R&D program mainly focused on the development of new higher-margin electronically controlled products, products for new energy vehicles and upgrading legacy products -- brake products to enhance the company's market leadership.

Income from operations was $6.1 million in the second quarter of 2019 compared with $9.8 million in the same quarter of 2018. Interest income was 5.1 -- I'm sorry, was $1.5 million in the second quarter of 2019 compared with $0.8 million in the same quarter of 2018.

Financial expenses were $3.2 million in the second quarter of 2019 compared with $3.5 million in the second quarter of 2018. The decrease was mainly due to lower long-term loans outstanding.

Exchange differences were $0.5 million in the second quarter of 2019 compared with $1.1 million in the same quarter of 2018.

Income before income taxes was $6.6 million for the second quarter of 2019 compared to $8.7 million for the second quarter of 2018. The pretax income margin was 4.7% in the second quarter of 2019 compared with 6.8% in the second quarter of last year. The provision for income taxes was $0.3 million in the second quarter of 2019 compared with $1.2 million in the second quarter of 2018.

Net income attributable to stockholders for the second quarter of 2019 was $5.6 million or $0.29 per basic and diluted share compared with $6.7 million or 35% -- I'm sorry, $0.35 per basic and diluted share in the second quarter of 2018.

Now we'll go over the first 6 months 2019 financial performance highlights. Net sales for the first 6 months of 2019 increased 16.7% to $275.6 million from $236.2 million for the first 6 months of 2018. Net sales from the company's China OEM market increased 26% to $144.1 million from $114.4 million in the same period in 2018.

Revenues from Chinese domestic aftermarket increased 11.1% to $89.9 million from $80.9 million in the first 6 months of 2018. Revenues from international markets increased 1.6% to $41.6 million from $40.9 million in the first 6 months of 2018.

Gross profit for the 6 months of 2019 increased 12.6% to $72.8 million from $64.6 million in the same period in 2018. Gross margin for the first 6 months ended June 30, 2019, was 26.4% compared to 27.4% for the first 6 months of 2018.

Operating income for the first 6 months of 2019 decreased 16.6% to $19.9 million from $23.8 million in the same period in 2018. Operating margin was 7.2% versus 10.1% in the first 6 months of 2018. Net income attributable to stockholders for the first 6 months of 2019 was $14.6 million or $0.76 per basic and diluted share compared with $15 million or $0.78 per basic and diluted share in the same period in 2018.

Now we will highlight a few balance sheet and financial items. As of June 30, 2019, the company had cash and cash equivalents of $10.3 million, up from $8 million at March 31, 2019, and compared with $73.6 million at December 31, 2018. Cash and cash equivalents plus restricted cash was $24.9 million on June 30, 2019, compared with $92.9 million at December 31, 2018.

Inventories decreased to $183.5 million at June 30, 2019, from $204.3 million at December 31, 2018. Bank acceptance notes from customers increased to $73.7 million on June 30, 2019, from $62.1 million on December 31, 2018. Short-term bank loans increased to $224.4 million on June 30, 2019, from $217.9 million at December 31, 2018.

Total equity was $221.2 million at June 30, 2019. And on June 30, 2019, the working capital was $35.7 million.

Moving on to the business outlook. For the fiscal year 2019, we reiterate the expectation for annual net sales to be approximately $515 million and net income to be approximately $22 million. These targets are based on the company's current views on the operating and market conditions, which are subject to change.

With that, we'll now open the floor for questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of [Jim Burn], private investor.

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Unidentified Participant, [2]

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I just had a couple of questions. One is that I noticed this is the second call I've been on where your CFO and your CEO are not present. I'm just -- this is -- I've never heard of this kind of thing, but both of these 2 people missing on a conference call. I'm just -- I'm puzzled as to why they don't have an hour in a quarter to spend with their shareholders, number one. And the other one is why is some of your cash restricted.

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Kevin Theiss;Awaken Advisors;Investor Relations, [3]

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(foreign language) Yes, to the restricted cash.

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [4]

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(foreign language)

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Min Kan Lin;Accounting Manager, [5]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [6]

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(foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [7]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [8]

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[Interpreted] Okay. So this is the payment structure in China. For a manufacturer to pay -- typically for a manufacturer to pay the suppliers, and they will go to the bank, ask bank to issue a bank note, these are -- those bank notes are usually due in 6 months. Some are even longer. So what this would do is they will issue a bank note to -- on your behalf to the supplier. But it's -- these notes are -- they're close to cash, but it has a 6 months duration. You can only cash out to receive the full amount at the end of the 6 months. And however, if you want to cash out earlier, you can still go to the bank to -- the bank will have to take a discount based on the interest rate. So for us, as a customer to those suppliers, we need -- we go to the bank, we need to put in a deposit, and that deposit will sort of provide bank a safety net. And so when they write out that note, it's got a note to the supplier, our supplier, and they know there's a cash behind it. So that's why those cash are in a bank as a restricted cash. I hope that explains.

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Unidentified Participant, [9]

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Yes. And then the other question I had is, this is the second call I've been on where both the CEO and the CFO are not on the call. That concerns me because I've never heard of a CEO and a CFO not being on an earnings call, and this has happened twice now.

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Kevin Theiss;Awaken Advisors;Investor Relations, [10]

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Okay. (foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [11]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [12]

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[Interpreted] Okay. Yes. This -- again, it's not an excuse, but we will definitely have them on the next call. The reason is this quarter, they are -- as you know, the ongoing trade discussion with U.S., so they've been buried in a meeting with customers and -- international customers. So at this moment, it's -- but again, no excuse. We'll get the message across, and we'll have them attend the call next time.

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Operator [13]

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Our next question comes from the line of [Derek Winter], private investor.

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Unidentified Participant, [14]

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Yes. Can you give us an update on the take private offer that you received and the strategic review of those proposals?

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Kevin Theiss;Awaken Advisors;Investor Relations, [15]

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Okay. (foreign language)

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Min Kan Lin;Accounting Manager, [16]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [17]

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[Interpreted] Okay. So to answer your question, the company's Board of Director, actually, they add a few more directors, has formed a special committee. The special committee has also retained a legal counsel and financial adviser. And they are reviewing the large shareholders' going private proposal. And when they make progress, they will make -- do an announcement, so please stay tuned. We'll -- we're waiting for the...

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Unidentified Participant, [18]

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How long might that take?

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Kevin Theiss;Awaken Advisors;Investor Relations, [19]

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(foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [20]

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(foreign language)

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Min Kan Lin;Accounting Manager, [21]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [22]

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[Interpreted] Okay. So the time line is actually decided by the special committee. Management doesn't have -- because it's a separate line, so we only have the information when they provided us, then we'll make announcement. So I think it involve a number of things including the due diligence, including the evaluation of the offer. So it's ongoing. It's in progress. So that's all we can tell you, unfortunately, at this point.

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Operator [23]

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(Operator Instructions) Our next question comes from the line of [Peter Sers], private investor.

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Unidentified Participant, [24]

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First, I have a comment. There is a small error in the 10-Q on Page 23 where it shows the percent of sales for 2018 in the commercial vehicles brake system and passenger vehicle auto parts, the percentages are wrong. You might just want to take a look. It's not a serious matter, but since I actually read the 10-Q and saw it, I'm just bringing it to your attention, okay? That's number one.

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Kevin Theiss;Awaken Advisors;Investor Relations, [25]

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(foreign language) Thank you, Peter. We'll look into that.

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [26]

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Thank you. (foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [27]

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[Interpreted] We'll look.

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Unidentified Participant, [28]

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She's going to look at it. Okay. (foreign language) The second thing I just wanted to say is given the market for auto sales in China is in a great quarter, are you taking share from people? What's your strategy that's enabled you to stay above water when the market is declining so much?

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Kevin Theiss;Awaken Advisors;Investor Relations, [29]

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(foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [30]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [31]

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[Interpreted] Okay. First, thank you for ongoing support for all these years. Second, we -- as has been part of our growth strategy in the last couple of years and how to continuously establish our market leadership and expand our market share, so we took a few steps.

First, we want to beat our competitors, large or small, with our best value. So for the same price, we'll provide the best functions. For the same functions, we'll provide the best price. So our price-to-value is the best in the market, so we are very, very competitive. And not to mention our quality is top-notch, and both OEM and aftermarket customers have been recurring, so that's -- we're very fortunate for that.

And secondly, we've been working harder in the last few years to increase and improve our service quality. And we believe if we go close to the market, close to -- stay close to our customer, understand what their needs, we will better retool our product to meet their demand. So with better and improved service, we're receiving increased order from those customers.

And lastly, we're looking for area for growth internally and see from different department to discuss what we can improve. For instance, some of the customers are with us for a long time and can we expand our product offering to better service them and to -- and also to increase our exposure with this particular customer. So we are increasing our bundled sales of different products. And for them, it's also a value as they are doing more volume purchase that, that value shows. So with -- in building to our strategic plan, the market, as you know, it's somewhat saturated at this moment. And prior to 2019, you see a number of years that has been growing. So those grow -- high-growth years are -- the difference between the competitors, you can see everyone's having growth, so it's just who is growing more than the other. But now we're in a different economic cycle. And so we are aiming to take over some market shares, and we have been taking over market share with our better pricing, value and service and so -- and product offering. So with all that, we are squeezing a lot of smaller players out of this market, so we take pride on that.

That battle is not finished yet. As we are going to second half of the year, I think we'll have to work harder to continue to expand. But so far, the numbers speaks itself, when the market's sort of on the reverse, but we continue to advance. So we have -- and also realize the business is having growth, which is in this market not many auto part company from China can achieve that.

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Unidentified Participant, [32]

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Yes. No, it's great. I was also surprised that your international markets held up so well. But where -- especially with the trade war with the U.S., what markets are you gaining in?

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Kevin Theiss;Awaken Advisors;Investor Relations, [33]

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(foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [34]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [35]

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(foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [36]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [37]

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[Interpreted] So [Peter], the trade war impact -- the U.S.-China trade war impact actually are smaller than we expected to our business, to be honest. Mainly, our customers are in a very strong position in the marketplace, so our customer in the U.S. is in a very strong market position. So far, we see the impact is minimal. And so that being said, clearly, there are other products in the market, but we are -- whether from quality, pricing or the service, clearly, we still are in the -- they still need our product. That just shows how competitive it is.

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Unidentified Participant, [38]

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Very interesting. And finally, I just have a comment to make, which is...

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Kevin Theiss;Awaken Advisors;Investor Relations, [39]

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[Peter], let me finish the answer.

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Unidentified Participant, [40]

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Oh, sorry. Okay. Sorry. (foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [41]

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For the other markets, we have the other emerging market. We benefit from the Belt and Road Initiative by Chinese government. These markets are now, because the Chinese are building infrastructures in those emerging markets, and they are using -- obviously, those Chinese contracts are using Chinese equipment, so those large OEM equipment producers are -- many are already our customers in China. So with their increased deployment of their vehicles, construction equipment and going to these markets, they need more million parts, reliable parts they know. So it comes naturally for us to go with them to expand into those markets.

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Unidentified Participant, [42]

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Yes. I have always said One Belt, One Road would be a big benefit to you. I just have one comment to make which is I am disappointed to see the continuing amount of interrelated party transactions and loans. I think if the Chairman and his family want to take the company public, the shareholders should have a chance to see what the company looks like without all these deals with Ruili Group and others. I think they're making a mistake, but that's my two cents.

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Kevin Theiss;Awaken Advisors;Investor Relations, [43]

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Okay. (foreign language)

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Min Kan Lin;Accounting Manager, [44]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [45]

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[Interpreted] Okay. [Peter], so in terms of related party loans, as of -- the Ruili Group was making increased efforts to reduce that. So as of March 31, the outstanding loan is about USD 98 million. As of this reporting, June 30, that amount reduced to $76 million. Then as of a couple of days ago, August 12 and 13, that amount has already been reduced to $60 million. So Ruili Group has been making effort to reduce that. So we are fully aware of your concern. We're working with them diligently to reduce and control that related party transactions.

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Unidentified Participant, [46]

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But there are also -- as by my math, and my math isn't perfect, but I see that the company has provided credit line guarantees for Ruili Group of -- it looks to me like over USD 100 million.

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Kevin Theiss;Awaken Advisors;Investor Relations, [47]

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(foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [48]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [49]

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(foreign language)

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Min Kan Lin;Accounting Manager, [50]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [51]

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[Interpreted] Okay. So the short answer is, yes, we'll provide that guarantee at the bank for parent company -- for Ruili Group. However, the most recent year's growth also attributable to this ongoing support for Ruili Group. They are providing a similar guarantee for our expansion that -- when you need to open the bank line. So their guarantee for us is about -- it's over USD 200 million.

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Unidentified Participant, [52]

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I know that. What I'm saying is it makes things complicated for investors and investment and the independent committee to understand what the value of each is because there's so many things crossed. That's all.

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Kevin Theiss;Awaken Advisors;Investor Relations, [53]

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Yes. Understood. (foreign language)

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Min Kan Lin;Accounting Manager, [54]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [55]

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[Interpreted] Thank you for your suggestion. We're looking into that.

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Unidentified Participant, [56]

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(foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [57]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [58]

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[Interpreted] Thank you.

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Operator [59]

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Our next question comes from the line of [Paul Renart], private investor.

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Unidentified Participant, [60]

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I have a 3-part question. The first question is what were the standards utilized to determine the independence of the 2 directors serving on the special committee? The second part to my question is how were they selected to serve on the Board? And then third, I would like to know who is responsible or what parties are responsible for negotiating the sale price with regard to going private.

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Kevin Theiss;Awaken Advisors;Investor Relations, [61]

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Okay. (foreign language)

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Min Kan Lin;Accounting Manager, [62]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [63]

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[Interpreted] Okay. So to answer your question, we -- as you heard, we -- before we started this whole process, the company Board outreached to some of the advisers who is familiar with the procedure. And those that are professional companies have suggested according to the U.S. laws and regulation, you need to appoint such caliber to meet such criteria, such caliber of directors. So we appointed 2 more in addition to our outstanding directors. And so secondly, after the -- in the appointment after the completion of the new Board, then we're going through a selection process to make sure, again, to meet the rules and laws of being a U.S.-listed public company. So -- and based on their background, credential, track record and then select those people to be special committee. And lastly, to answer your question, the special committee is in charge of reviewing the proposal, evaluating the proposal as well as negotiating a discussion -- having a discussion with the offer -- with the large shareholders' offer. So -- and so all these are handled by this special committee. They are independent. And so that's all we can provide information at this moment.

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Unidentified Participant, [64]

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That's helpful. But how was the pool of potential directors arrived at? So many U.S. firms would use a large search firm to determine a pool from which to select independent directors. So how did you go about the selection process to arrive at these 2 independent directors?

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Kevin Theiss;Awaken Advisors;Investor Relations, [65]

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(foreign language)

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Min Kan Lin;Accounting Manager, [66]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [67]

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[Interpreted] The going private -- the company's going private process is -- we've seen that there are a number of companies doing that. And however, and the advisories or firms are very much a few firms out there, and so everyone sort of know everyone. So similar to what you just mentioned, we used a third-party firm to advise us the procedure and the candidate to -- they will provide some candidate for us to interview and also for the Board to interview. Also, the current Board member, they will also -- independent Board member also will recommend a few other candidate who they know. And lastly is our legal counsel, using their network to help us to identify a few other candidates. So through these 3 channels, so we're able to get a few candidates and then narrow down to these 2 later on to be -- eventually to be elected.

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Unidentified Participant, [68]

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Okay. And then lastly, could you please give a sense -- I understand you don't have a time line, but could you please give a sense how urgent of a matter the Board views this offer and the negotiation? Is it high on the urgency, medium or low, just to give a sense for the level of urgency from the Board?

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Kevin Theiss;Awaken Advisors;Investor Relations, [69]

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Okay. Thank you. (foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [70]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [71]

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(foreign language)

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Jin Rui Yu, SORL Auto Parts, Inc. - COO [72]

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(foreign language)

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Kevin Theiss;Awaken Advisors;Investor Relations, [73]

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[Interpreted] Yes. So we -- obviously, the special committee is formed to handle this particular task. In terms of priority, it's very high. In terms of urgency, it's also very urgent for their mission. So it's ongoing, and so we want you to be rest assured they are working diligently on that. And also, again, they -- as we mentioned earlier, they are professionals. They have seen this type of transaction before, so they're experienced. And so that will also bake into the time line in terms of how they manage it. And lastly, we can -- you can either -- you can -- if you want to reach out to them, if you want to have a conversation to them -- with them, you can send the information to us, the management team, and we'll pass it on to special committee. And we can have the -- I think also in doing the offer, which is publicly announced, there are some information -- well, contact information that you can contact them directly. But again, the easiest way is reach out -- send it to us. We'll make sure they receive your inquiry, and then they will hopefully get back to you sooner than later.

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Operator [74]

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(Operator Instructions) Since there are no further questions left in the queue, I would like to turn the call back over to Kevin Theiss for any closing remarks.

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Kevin Theiss;Awaken Advisors;Investor Relations, [75]

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I want to thank everyone for joining us on this call, and we look forward to speaking with you in the future. Have a good time with the rest of your day.

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Operator [76]

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This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation, and have a wonderful day.