Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: When do you think the government policy on reducing production based on energy intensity might become effective? A: Ming Yang, CFO: The government is studying this and talking with industry players. Policies like this might take 1 to 2 months to formulate, so we might see something by the end of November or December, but the exact timing is uncertain.
Q: What are the plans for selling Shanghai shares to address the price gap between Shanghai and New York shares after the lockup period ends in January? A: Anita Shu, Deputy CEO: We have considered selling down shares to purchase ADRs to close the gap, but regulatory difficulties have delayed this. The decision will depend on the stock price in January.
Q: Can you provide more details on the inventory impairment and its impact on costs? A: Ming Yang, CFO: In Q3, we recorded an $80 million inventory write-down, with about 66% related to finished goods and 34% to raw materials. This impacted the cost of goods sold.
Q: Why did the average production cost rebound, and what is the outlook for Q4? A: Ming Yang, CFO: The rebound in production cost is due to lower utilization rates, leading to higher unit depreciation costs. We expect cash costs to decrease in Q4, but total production costs may rise due to continued low utilization.
Q: What is the company's view on potential regulatory changes in China and their impact on pricing? A: Anita Shu, Deputy CEO: Discussions are ongoing about structural reforms based on energy consumption or utilization rates. There is a chance of a price rebound before the end of the year, but the outlook for next year is uncertain due to supply and demand dynamics.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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