Greetings and welcome to China Automotive Systems, Inc. 2017 First Quarter Earnings Conference. At this time all participants are in listen only mode. [Operator Instructions] I would now like to turn the conference over to your host Kevin Theiss. Thank you. You may begin.

Thank you everyone for joining us today. Welcome to China Automotive Systems' 2017 first quarter conference call. Joining us today are Mr. Qizhou Wu, Chief Executive Officer, and Mr. Jie Li, Chief Financial Officer of China Automotive Systems. They will be available to answer questions later in the conference call with the assistance of translation. Before we begin, I would remind all listeners that throughout this call, we may make statements that may contain forward-looking statements. Forward-looking statements represent the Company's estimate and assumptions only as of the date of this call. As a result, the company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors including those described under the heading Risk Factors in the Company's Form 10-K Annual Report for the year ended December 31, 2016 as filed with the Securities and Exchange Commission on March 30, 2017, and in other documents filed by the company from time-to-time with the Securities Exchange Commission. The Company expressly disclaim any duty to provide updates to any forward-looking statements made in this call whether as a result of new information, future events or otherwise. On this call, I will provide a brief overview and summary of financial results for the 2017 first quarter then I will turn the call over to the management to conduct a question-and-answer session. Then the following 2017 first quarter numbers are unaudited and the fiscal year end and these results are reported under the US GAAP. For the purpose of our call today, I will review financial results in US dollars. We'll begin with the review of the recent dynamics of the automotive industry and China Automotive market position. According to the Chinese Association of Automobile Manufacturers, CAAM, overall unit sales in China grew by 7% year-on-year…

Thank you. [Operator Instructions] Our first question is from William Gregozeski from Greenridge Global. You may begin.

Hi, I got a couple of questions. You guys talked about the EPS demand exceeding your capacity for a while and the sales were down this quarter - year-over-year, can you just talk a little more why that was the case?

[Interpreted] Yes, it was due to the recall one of our OEM customer we have been made an announcement earlier that was a recall by our OEM customer time. But after a number of discussions, which we're now back on track, I think the order was start flowing - starting from second quarter. And so that was the reason first quarter was big weak and due to this large customer.

Okay. Can you give us update on how things are going in Brazil?

[Interpreted] Okay. So for Brazil our first production line is up and running and we're expecting to produce 120,000 units in 2017. The main product from that facility though be manual steering gears, we're expecting 60 million RMB in USD - in sales, in revenue and 60 million RMB.

Okay, all right. And last question was looks like you guys took $29 million loan and one that two a related party, it was classified as advanced payment through related on the balance sheet for a long and the cash flow statement, so I just wanted to get some more information on what that was and what - I want to know what that $29 million was for?

So for that particular related party transaction we see - given us a line of credit which we can draw down at relatively lower rates. So our costs for those - interest costs for the mark will be four point something percent new rate when we loan to related party for that transaction will be charging six point something percent interest, so its relating transaction, but it's also we're going to make money on that transaction.

Okay, so it's strictly just a vehicle to make interest spread?

Okay.

Okay. And what's the length of that loan?

[Interpreted] Okay. So it's a one year loan, but there is a special term the creditor can call back any time.

All right. That's all I have. Thanks guys.

Okay, thank you.

[Operator Instructions] Okay. Our next question is [indiscernible] Private Investor. You may begin.

Thank you good morning. I had a question or two on revenue guidance for I guess this quarter, Q2, Q3, and Q4 I know you're targeting $485 million for the year, but if you look at the comparisons from last year Q2 and Q3 do you feel that this year your comparisons for Q2 and Q3 will be up maybe closer to 10% and maybe Q4, which was very strong last year might be lower. What's your view at this point?

[Interpreted] Okay. So let me take it through the overall market dynamics. In 2017 it's been widely perceived the overall - all the market will grow about 5% in China. Within that segment you will see commercial vehicle will grow faster, so as a whole we'll see the growth will be around 10%. The commercial was mainly due to the government policy and the entire overloading situation in China and enforced by central government. And that's why we're seeing the growth has been quite strong since the fourth quarter of 2015 and we will see growth will continue in 2017. And in terms of passenger vehicle, we're seeing overall growth it's relatively smaller than the - what we have achieved in 2016 and also compared with the commercial vehicle growth in 2017. Reason being one the base is higher - the base is higher in 2016 and makes the comparable difficult to continue to achieve higher growth. And secondly the subsidy in 2016 is now being reduced in 2017 and subsidy is related to consumption tax for smaller vehicles and in 2015 it was given - it's a very generous discount for consumption tax for new car purchase for the smaller engine vehicles. However, that policy continued, but it's in the smaller scale in 2017, so we'll see that the overall sales for passenger vehicle growth. Together we see 2017. First and second quarter is generally good, third quarter it's essentially somehow it's relatively flat and fourth quarter is last year 2016 was the strong quarter, so we think the year-over-year because of higher comp comparable is going to affect the year-over-year growth and so we'll see a growth would be relatively small.

Okay. And as far as u guess it's right to say, but year-over-year it was $0.75 for the full year in 2016 do you see the potential for 10% up maybe above 75%.

[Interpreted] Okay, go ahead.

No I'm done, go ahead.

[Interpreted] Normally not giving the bottom line guidance, the net income guidance have already provided a top line guidance, but at the same time we also implement stringent cost control, expense control, so we'll make our best effort to reflect the revenue growth in the bottom line.

Okay. I have last question. 2018 what's your forecast for I guess improvement in EPS and percentage of that business growing you're probably looking at transition of more vehicles into the EPS requirement what do you see for next year?

[Interpreted] Well, due the recall in the first quarter which has reflected in 2017 first quarter, our EPS full year will come down a bit, because of first quarter based on the EPS sales to that particular life customers. So but overall we're still projecting EPS steering sales at 1.2 million units in 2017. For 2018 we're seeing around 20% year-over-year growth for the EPS product and we believe is our continue investment into R&D and product development and we'll achieve that goal.

Okay. Actually maybe I could ask one last question. Anything on buybacks I know you've completed what almost half the buyback, but your position on that as far as the share repurchase?

[Interpreted] No plan right now. We'll make an announcement in a week to that point.

Okay. Thanks for answering my questions.

Thank you.

[Operator Instructions] Okay, ladies and gentlemen, we have reached the end of our question-and-answer session. I'd like to turn the conference back over to Kevin Theiss for closing remarks.

Thank you for attending China Automotive Systems first quarter 2017 earnings conference call. We look forward to speaking with you. Thank you.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.