ReneSola Ltd (NYSE:SOL) Third Quarter 2022 Results Conference Call December 1, 2022 5:00 p. M. , Eastern Time
Participating companies
Yujia Zhai – Investor Relations
Yumin Liu – Executive Director
Ke Chen – Chief Financial Officer
John Ewen – President and CEO, North America
Conference Call Participants
Philippe Shen – ROTH Capital Partners
Amit Dayal – H. C. Wainwright
Donovan Schafer – Northland Capital Markets
Pavel Molchanov – Raymond James
Operator
Good morning, girls and gentlemen. Thank you for ReneSola Power’s third quarter 2022 earnings convention call. Please note that we are recording today’s convention call.
Now I would like to talk to Mr. Yujia Zhai, General Manager of Blueshirt Group. Go on, Mr. Zhai.
Yujia Zhai
Thank you, operator, and good morning everyone. Thank you for joining us today to discuss our third quarter 2022 results. We published our letter to shareholders after market close today and it is available on our online page in ir. renasolapower. com. There is also an additional slideshow posted on our online page that we will refer to in our ready comments.
On the call with me are Mr. Yumin Liu, Director General; M. Ke Chen, Chief Financial Officer; and Mr. John Ewen, Executive Director of North America.
Before continuing, skip to slide two. Let me remind you that the comments made on this call may come with predictions, estimates, or other data that can also be considered forward-looking. These forward-looking statements constitute ReneSola Power’s existing judgment for the future. However, they are subject to dangers and uncertainties that may also cause actual effects to differ materially. These hazards are described in Risk Factors and elsewhere in ReneSola Power’s SEC filings. Do not place undue reliance on such forward-looking statements, which reflect ReneSola Power’s ideals only as of the date of this call. ReneSola Power assumes no legal responsibility to update any revisions to such forward-looking statements. Please also note that, unless otherwise stated, all figures discussed in the convention call are in U. S. dollars. .
With that, let me now turn to Mr. Yumin Liu.
Yumin Liu
Thank you, Yujia, and day to all. Thank you for joining our call today. I will provide a high-level summary of our third quarter effects, then give more details on our recent strategic projects and provide an update to our guidance. Next, Ke, the CFO of our company, will take a detailed look at our monetary effects for the 3rd quarter. After that, we will be joined by our US CEO. U. S. Secretary of State, John, for questions and answers.
Starting with our monetary functionality, the third quarter effects exceeded the peak of our third-class diversity and constitute one of our most productive quarters in the last 3 years. Net source of revenue $3 million, compared to $711,000 a year ago. We achieved those effects despite demanding economic situations and a strong dollar, which negatively impacted our revenue and earnings from Europe and China through approximately $3 million. Excluding this type of change impact, the effects would have been even more potent with revenues of approximately $32 million and a net revenue source of over $5 million. such as the recently acquired 50-megawatt solar park in Branston, UK.
We closed the acquisition of Branston on September 30, the total transaction price was $41 million, adding $20 million in money and $21 million in non-recourse allocation financing. This acquisition marks the beginning of our European IPP strategy, which will load predictable information and sound cash flows to complement our product sales business. PPP costs have seen a strong end across Europe due to power shortages and favorable regulatory conditions. In fact, we have already signed a multi-year PPA for the Branston assignment through March 31, 2017, which we will deliver over $25 million in EBITDA through the end of 2026.
In addition to Branston, we finalized the acquisition of Emeren on October 10, through a $16 million cash transaction with reload clauses. Assignments in progression in various stages, adding more than 2 gigawatts of sun allocations and more than 500 megawatts of garage allocations. As a component of our European IPP strategy, we have to choose 110 megawatts of allocation sales in Poland and Hungary that we had originally planned to sell to NTP Stadium in the fourth quarter of 2022. We will now build those allocations and exploit them in our European IPP portfolio.
In October, we finished the first 10 megawatts at two solar parks in Hungary and expect the remaining 100 megawatts to be operational until the third quarter of 2023. As a result of the move from the sale to PPI, we will forfeit over $20 million in profits and $5 million to $6 million. million dollars in net earnings in the fourth quarter of 2022, but you will earn particularly superior lifetime earnings and solid cash flows. We estimate the recovery era for those PPI projects at 4 years or less, while retaining the option to sell those IPP assets in the future.
Due to the strategic shift in Poland and Hungary and approximately $6 million of a negative currency impact, we now expect our earnings for the full year 2022 to be between $85 million and $90 million. 2022 gross margin between 25% and 30%. For the net profit source, we expect the net profit source for the full year to be approximately $7 million to $8 million.
Looking ahead to 2023 and beyond, we have a lot to be excited about. We have a strong presence in the world’s fastest developing solar markets, driven through developing demand for blank energy, emerging PPA costs and supportive government policies. In Europe, we are extremely happy with our newly acquired assets and the expansion of our IPP portfolios. For Branston, Emeren and 110 megawatts of IPP projects in Poland and Hungary, we have visibility through 2023 and expect those assets to generate around $35-40 million in profits and $10-15 million in EBITDA.
We also align our strategy in China with the rest of the world as a component of a progression, ownership or sale strategy. Compared to the original strategy in China, such as development, construction, ownership and IPP. In the short term, we are in the process of monetizing some allocations in China and expect to close the sale before the end of the year. For our allocation progression business, we plan to monetize approximately 400 megawatts of our portfolio of mid- to late-stage projects by 2023. And our goal is to succeed on a four-gigawatt general pipeline by the end of 2023.
In conclusion, the long term seems brilliant for solar energy and, indeed, wonderful for our company. We believe we are well placed to capitalize on the accelerated adoption of solar energy around the world. From industry partnerships, a well-capitalized balance sheet, and an unprecedented track record of profitable end financial transactions and monetization allocations, we are moving toward our purpose of adapting to a world-leading sun developer and operator.
With that, I will now pass the message on to our CFO, Ke Chen. Ke?
Ke Chen
Thank you, Yumin. And thank you to all of us for joining us on today’s call. As a reminder, our letter to shareholders includes a non-GAAP and GAAP mix. We use non-GAAP measures because they provide useful data. about our operational functionality that deserves to be considered as through investors throughout GAAP measures.
Revenue of $28. 9 million, an increase of 252% sequentially and 86% year-over-year, largely thanks to our allocations progression activities in the U. S. Strong EPC revenues in Poland and IPP solar assets. GAAP gross profit of $8. 5 million, compared to $3. 7 million in the current quarter of 2022 and $6. 1 million in the third quarter of 2021. Gross margin 29. 6%.
Let’s go back to our expenses consistent with the elaboration. Expenses consistent with current revenues were $3. 5 million, compared to $3. 9 million in the second quarter of 2022 and $3. 4 million in the third quarter of 2021. ReneSola Power’s non-unusual shareholder net revenue source $3 million, diluted source of revenue consistent with ADS net loss consistent with ADS of 0 in the second quarter of 2022 and diluted net income source consistent with ADS of $0. 01 in the third quarter of 2021.
Cash used for operating activities $5. 2 million, money used for investment activities $31. 2 million and money used for financing activities $45. 7 million. Cash used in operating activities generated primarily through allocation expenses for Poland, Hungary and TCN allocations in the United States. Cash flows from conducting investment activities are basically due to the Hungarian PPI and the acquisition of Branston. Cash used in monetary activity: Investment primarily similar to the $42 million percentage repurchase transaction on September 2, 2022 with ReneSola Singapore.
Let us now review the balance sheet. Our monetary balance as of September 30, 2022 is $123 million, compared to $208 million at the end of the current quarter of 2022. The reduction is primarily due to percentage buybacks, the acquisition of Branston and capital expenditures similar to the structure of our PPI assets in Poland and Hungary. Our debt-to-equity ratio at the end of the third quarter increased to 12. 8% from 8. 3% in the current quarter of 2022, due to non-recourse debt acquired in connection with the Branston acquisition.
Finally for orientation. We now expect 2022 revenue to be $85 million to $90 million, a gross margin of 25-30%, and a net revenue source of $7-8 million. For the fourth quarter, we expect revenue of $44 million to $49 million and gross margin of 20 to 25%.
Now we would like to open the for any questions. Operator, please continue.
Q&A session
Operator
Surely. [Operator Instructions] And the first comes from the lineage of Philip Shen of ROTH. Please.
Philip Shen
Hi, guys. Thank you for accepting my question. The first considerations 2023. I know he hasn’t given any official indication, but I wonder if he can communicate how much he can sell to nuclear power plants next year. It seems that it is making plans to build two hundred megawatts and keep them on Europe’s balance sheet until the end of 2023. So what are the expectations for other geographies?It looks like China will be sold during this year. So what are the expectations of nuclear power plants: the expectations of promoting nuclear power plants for next year?And then the overall structure beyond two hundred megawatts if you plan to get assets in the United States that would also be useful to know?Thank you for answering the question.
Yumin Liu
Hello, thank you, Phil. We plan to close the year with four gigawatts of pipeline until 2023. We also intend to sell four hundred megawatts of this pipeline to NPP. In addition, we plan to build two hundred megawatts, build a total of two hundred megawatts to the end [indistinguishable] Q3, Qfour next year. This includes the existing 50 Branston and 10 megawatts in Hungary. This means that we have 140 megawatts left, of which one hundred megawatts are planned and built in Poland and Hungary. And the ones are the big numbers. Four hundred megawatts of sales, two hundred megawatts of IPP, four gigawatts of pipeline. And sales of four hundred megawatts, adding the 3 regions: United States, Europe and China.
Philip Shen
Excellent. And then the 165 megawatts, do we expect all of them to be sold by the end of this year? Or do you think you recognize, how much do you expect to recognize in the fourth quarter in terms of China IPP sales or China megawatts? And so how many do you think are in 23?
Yumin Liu
Most will be in 23. We implement, as I mentioned, we implement the same strategy, build, develop, build and sell or own, okay?In the past, in China, as we announced 18 months ago, we said: you will do everything in China on the basis of PPI. But now we are converting it about two or three months ago, we will use the same style that we use in the United States and Europe. So we are in the process of defining our first product. portfolios in China, we will continue to do so in 2023.
Philip Shen
It is ok! So, for the 200 megawatts he intends to build in Europe, he discussed 50 for the Branston turn and 10 for Hungary. What is the additional amount of money or equity you expect to invest in the 140 or 200?
Yumin Liu
For the first hundred megawatts of the remaining hundred megawatts in Poland and Hungary, we are at a fair percentage of around $30 million and some another 40 to 50 megawatts that will require another $10 million to $20 million. Therefore, the total will be $40 million to $50 million for the injection of overall equity for the additional 140 megawatts of projects.
Philip Shen
It’s bien. me they gave it AND then, historically, because their strategy before selling on NTP, they weren’t buyers or buyers of modules and trackers. Is it fair to say now that it will be in the EPC rate and that it will make the module and stick to its sourcing decisions in Europe?
Yumin Liu
Yes and no. In general, the answer is yes. In fact, even in 2020, 2021 and even this year, we’ve gained module trackers and done those EPC efforts, adding primary purchases in Europe, not the US. But in Europe and China, we have those source obligations. But in 2023, we plan to continue EPC activities, at the same time build our hundred megawatts in Poland and Hungary and continue to build them yourself or expand and build 40 megawatts or more. or get some smaller mergers and acquisitions: through mergers and acquisitions, they have obtained some smaller growth projects in Europe. This is the goal of achieving 200 megawatts in Europe by the end of 2023.
Philip Shen
It is ok. Thank you, Yumin. I know I answered a lot of questions, but can I ask any others on the 23rd?You gave us the megawatts, I was wondering if you could help us perceive what next year’s profit might be. Selling 400 megawatts, I guess can generate close to $500 million in profit. I know Chinese assets will be lower, but European and U. S. assets will be close to a [dollar] (ph). So, I’m just curious if, maybe it’s close to $400 million?Are we on track in terms of profits for 2023? Thank you.
Yumin Liu
We are now in a position to give the detailed forecast for 2023 to date, but we will do so when we have finalised the 2022 figure. But in the meantime, we know we’re going to grow. Not only are we developing from those 3 acquisitions that we are talking about, the two acquisitions that I speak of are actually Branston, IPP and more than 150 megawatts more in Europe and more the acquisition of Emeren. These 3, as I mentioned, give a contribution to about $40 million in profits and about $10 million, $15 million in EBITDA by 2023. At the end of the day, we are not yet in a position to publish that figure.
Philip Shen
It is ok. I can appreciate that. Thank you for answering all my questions and I will answer them. Thank you, Yumin.
Yumin Liu
Thank you Phil
Operator
Just a moment for our nextArray And our next one comes from Amit Dayal’s H. C. Wainwright line. Please.
Amit Dayal
Thank you. Good afternoon everyone. Congratulations on all the progress. As for the fourth-quarter forecast for 2022, do you take into account the monetization of Chinese assets?Or will it be the opposite of advice?
Yumin Liu
That reflected some of that when we closed the first portfolio in China. And lately we are working on the portfolio of the moment. So, this represents that the first wallet should be closed very, very soon. Then we know the number. But the moment is still in negotiation mode.
Amit Dayal
So it’s not in the guidelines, I guess, is it?
Yumin Liu
It’s true.
Amit Dayal
It’s bien. Merci. Et then, just looking for operating prices after those recent acquisitions, and then moving more towards IPP ownership in Europe, etc. , how do we think about adjustments in operating prices going forward?
Yumin Liu
Amit, first of all, I think Branston is an operational project, so we don’t expect a big increase in operating costs. And for Emeren, we have 22 other [indistinguishable] people. Again, we expect only a slight increase in operating costs. Again, I would say between $3. 5 million and $3. 7 million, which is what we expect.
Amit Dayal
And then, when it comes to those recent board adjustments, is there any strategic implication that we think about?
Yumin Liu
Are you talking about a property?
Amit Dayal
Yes. With new appointments to the board of directors, etc. I know he highlighted the cooperation [several speakers], etc. Is Delaware’s cooperation still at stake?And what do we read about those kinds of implications of those changes?
Yumin Liu
It is ok. Let me also tell you the first component of the story, and then Ke will tell you the next steps, which are in the procedure we are in, in the access procedure. It is ok? The first is that we have a lot of replacements. One is property replacement, as we explained earlier also in last month’s press release or a few months ago. We made a percentage buyback of ReneSola Limited, Singapore, controlled through Mr. . Li, the founder of the company, 6 million percents, sorry, sorry, 7 million percents. And M. Li ownership goes from 22% to about 8% more now at the moment.
So, on the other hand, the Board also appointed Shah Capital’s Managing Director and CIO, Himanshu Shah, to our Board. In addition, we have also restructured our board committees. Find out how to pay, how to be responsible with our investors. On the other hand, to meet the ICC requirement, I will let Ke comment on this.
Ke Chen
First of all, Amit, let me highlight the corporate first. If you take a look at our revenue from 2020 and 2021 and now, you’ll see that U. S. operations are going to be in the U. S. The U. S. and Europe will make up the majority of our business, this quarter close to 80%. So this is our strategic resolution about 3 years ago, we continue to lead the company in this direction. This is in line with our in-property replacement design to concentrate on the US markets. The U. S. and Europe, which lately are the most productive market for renewables. Targeted and obviously strategically focused on the stock price here. And also, we must, once again, demand that the requirement be exceeded and perhaps also, once again, an American fiber counterpart in the future.
Amit Dayal
That’s all I have for now, guys. I will ask my questions offline. Thank you.
Yumin Liu
Thank you Amit.
Operator
Thank you. [Operator Instructions] The following comes from the lineage of Donovan Schafer of Northland Capital. Please.
Donovan Schäfer
Hi, guys. Thank you for answering my questions. Sorry for the background noise. I’m at the airport right now. So the first query I have is just, just to be transparent about the weaker earnings outlook type for the fourth quarter. It turns out you’re saying it: it’s not a matter of delays in the rollback project, it’s still just a company-level resolution to retain them. Therefore, there is a decrease in the popularity of income. It has made it more exciting to stick with those assets. Was it some kind of additional tranche of assets that you decided, hey, let’s hold on?Here’s another asset organization you need to hold on to in Poland and Hungary?
Yumin Liu
You are probably right, for two reasons, not only are we seeing demand in Europe and the value of PPAs increasing, but also, since we are so active in Europe, we need to be a consistent local player for solar farms in the long term. . . Without a doubt, more importantly, owning solar farms, as an IPP player in Europe, gives us huge economic benefits from those deals. So literally about six months ago, the control made the decision not to sell the 110 megawatts in the fourth quarter of this year and keep all of it. So we have this plan to build in the next, I would say, nine to 10 months. And the deals: the projects are in structure, some of them are in structure right now and some of them are being financed. But in any case, it will bring solid money and a significant smart return to the business. And as I also mentioned earlier, the return on investment from the sale, from the sale of the nuclear plant to the IPP, is less than 4 years. And by the way, less than 4 years ago, we already used a fairly conservative PPP value to estimate the commercial curve in Europe, not counting the $300, $400, $500 consistent with the megawatt hour.
Ke Chen
Donovan, the decline in revenue is largely explained by the financial effect of the weakness of the euro. So, I just need to point it out.
Donovan Schäfer
It is true, it is true, the weak euro. It is ok. And then I also wanted to ask him if he sees any trends in any way, a follow-up to Phil’s consultation about the projects he brings to COD and sells or NTP because, of course, they’re still potentially part of the strategy. . I think NTP is similar to COD, but sometimes it can happen. So when you make those sales, I tend to think that NTP is in the diversity of $0. 10 to $0. 20 and COD sales in the U. S. are in the U. S. The U. S. and European are regularly around $1 But a lot has changed, I just wanted to check that. As you noticed and we’ve talked a lot about PPA pricing, have you noticed significant changes or trends for ASPs when you make an NTP or COD sale?sale? Pretty much what it is: I just need to get some kind of update.
Yumin Liu
I create array.
Donovan Schäfer
And you can simply, if you’re okay with sharing it, you can check out the ASP you have on Pennsylvania megawatts, if that’s helpful. I know those were more about the length of the scale of the app. It’s a [indistinguishable] decrease traditionally, but I think it can be useful to speed up.
Yumin Liu
In fact, I cannot reveal the main points of the project. In general, small transactions in certain regions or countries in Europe or the United States tend to have a higher value in watts, okay?But a giant application scale seems like a generally smaller value: the value in watts will be lower, okay?That’s number one, the big concept. Another is that the PPA price is, in general, very high in Europe, which in turn makes the selling price very high. You’re right, the COD payout is usually $1-1. 1 million consistent with megawatts in Europe or the US. A little different, when you think about that fair structure. But in Europe, it’s very simple to say that other people are providing between $1 million and $1. 2 million per megawatt. This is the typical value. And also in NTP, you can switch to, say, use $0. 20 to $0. 50. OK? It has a wide variety of hiring and distrust from one country to another. And also the other purposes of the solar park.
For example, in Italy, on the commercial side, the selling price of NTP can reach $300 to $400 per megawatt. Very well. No, sorry, $300,000 to $400,000 consistent with megawatts. But for farmland, it’s about 200,000. And also in the countries of Poland and Hungary, all those numbers can be different from one side to another, from other countries. But in general, all average sales values are overlooked on average.
Donovan Schäfer
It is ok. Because it’s just kind of a heist – it probably follows PPPs on an unconventional basis [Various speakers]
yumin liu
Listen, Donovan, another smart thing is that we have detected that the chain of origin is collapsing. And we have, as we buy, modules and we have seen that the value of the modules has decreased in recent months and we are expecting that from the current quarter of next year it will be transmitted even more. This will help our IPP initiative and also help make our EPC business more profitable.
Ke Chen
Donovan would add that for solar projects in American communities, the value is much, much greater than what you just discussed here. So, we also have networking issues here in the United States, so the values are pretty good right now.
Donovan Schäfer
OKAY! Excellent. And if I could ask one last question. For the Emerens, for the team, if I’m not forgetting correctly, I think, Yumin, you worked with a couple of the guys on Recurrent where it was before, I guess, Recurrent was required through Canadian. And you joined them in July, not July, but I guess it would be a year and a half from now. So it sounds like you’re quite. . . you have some pretty smart wisdom about them and they were kind of. . . I guess there are possibly two questions on this where, one could you remind me what context is there? Does it give you some familiarity? And then two, what kind of, like there’s some kind of clever game going on here because, as I perceive it, they made this land to grab the move to Italy, where you can deposit little types of deposits with ownership rights to the land and so on. to the safe. the place. But then there are those who, in order to go from the initial level to the intermediate or expired level, want to deposit more coins for deposits, interconnection, etc. So what kind of coin wishes will this have? It has a healthy balance of coins, but that happens to be part of what it brings to the. . . part of what it brings to the component, so to speak. So what would the currencies want to help move forward [indistinguishable] today over the next 12, 24 months, how do you plan to frame that?
Yumin Liu
Okay, let me answer your inquiry: two, 3 separate queries. The first is, he’s right, the company founder and a few other key people in the company who lead the expansion, finance and legal issues came to me when I was in charge of EMEA for Canadian Solar. And they started marriage with us 18 months ago, since last summer. And we know them well, we completely accept them as true with their ability to expand projects. The moment is that Italy is one of the most sensitive 3 soles markets in Europe. We have the idea of going to Italy and driving or hiring a local team and building the local design to expand this market, a very vital market. And that’s why the moment we marry Emeren, we think it’s more productive for them to sign up with us. Therefore, this occurs upon completion of the acquisition.
Another point is that, Italy design for Emeren, they have five DSA associations. DSA is actually a progression service agreement. Literally speaking, this answers your question about the flow of coins. This company, Emeren, has a very unique progression design. All the projects they developed before our arrival are [indistinguishable] located among the five DSA partners. And DSA partners will pay Emeren based on milestone achievement, milestone zero, one, two, three. And as such, the need for coins is pretty minimal. But at the same time they want in the short term, for example, land and interconnection. They want short-term coins before handing them over to SA partners. And then after the acquisition, we made the decision to not only work with the other 4 DSA partners, but also to expand our pipeline internally, which is about 500 megawatts of internal piping at the solar site and also another 500 megawatt pipeline. megawatts of storage. which outlets retail 12,000 megawatts, not 500 megawatt hours, okay? That’s how significant we say this acquisition really is.
Donovan Schäfer
It is ok! Great. Thank you Yumin. And I’ll ask my questions offline. Thanks guys.
Yumin Liu
Thank you, Donovan.
Ke Chen
Ok thanks.
Operator
Just a moment for our nextArray And our next one comes from Pavel Molchanov’s Raymond James line. Please.
Pavel Molchanov
Thank you for answering the questions. As you own and operate more power stations in Europe, I guess you’ll want to start thinking about the value differences in the EU and separately in the UK that governments impose. to those standards?
Yumin Liu
Excellent question, Paul. I would say that the scenario is still uncertain. We have news one day, news the other day, especially in the UK. Existing news is reflected back to us, we cannot say – yes, oh, it would have no effect on us. But we have taken into account all those possible differences in value. As I mentioned, Pavel, earlier, we say that we have made the decision not to sell our IPPs, but to remain in a part of Hungary. The constant payback period is less than 4 years and is not based on the competitive value of the electric power market curve. As the market place curve value for ’23, ’24 is still 250, 350 consistent with megawatt hours. But we use our style fairly conservatively taking into account potential discrepancies in value. In the UK, we signed the long-term, not long-term, multi-year PPA for Branston to make sure that the [indistinguishable] market place has very smart cash flow. And those PPAs, as we know from afar, will have no effect. And also, those are fun moderate PPAs and shouldn’t have an impact on the UK to run value gaps.
Pavel Molchanov
It is ok. It’s useful. Head to American opportunities. You, like all application-scale developers, are on the lookout for [ADCVD](ph), [indistinguishable] and import restrictions from China. So, just to ask, in a general sense, are you having trouble loading modules for your goods?
Yumin Liu
I’m going to pass this one on to John, our North American CEO. But as you know, we don’t make any purchases in the United States. Although surely we care about the ABCVD case or any problem of forced hard labor. Jean, please?
John Ewen
Oui. Je I mean, I would just echo that. I think Yumin’s answer is the answer. While it’s the same as when COVID, it’s the same kind of responses when COVID started and raised chain of origin prices. We are a little far away. And the price of the progression section, I have maintained it at all times, I do not say that it is a constant detail and always, but it is a valuable component of the chain because you can not build solar projects. No progression. So we’re a little bit far apart. I think we’re away from it because we’re not directly the buyer, but we’re also away from it because in a competitive process, NTP assets are priced and paid out and some of that inflation is probably directed toward PPP pricing. Therefore, the progression cut is relatively protected on both sides.
Pavel Molchanov
It is ok. And just one accounting question, given the number of mergers and acquisitions you’ve made recently, can you give your money balance, say, November 1 or December 1?
Ke Chen
Well, Pavel, we have a very strong cash flow. We’re raising operating money from the allocation we’re promoting this quarter. Therefore, our money position is still quite strong at the moment.
Pavel Molchanov
It is ok. Enjoy it, guys.
Yumin Liu
Thank you, Pavel.
Ke Chen
Ok thanks.
Operator
Thank you. This concludes today’s question and answer program. I would like to leave the program to control any comments.
Yumin Liu
Thank you, operator. Our strategy is strong and our track record of execution is strong. We continue to increase our profitability. We are excited about the opportunities ahead and look to the future to update you on our progress in a few months. Thank you for joining us today and for your continued support. If you have any questions, please contact our investor relations team. I wish you all a glorious Christmas season. This concludes our call today. Everyone can log out.
Operator
Thank you, gentlemen, thank you for your participation in today’s conference. This concludes the program. You can now log out. Have a nice day.