Greetings, and welcome to the China Automotive Systems Third Quarter 2019 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Kevin Theiss. Thank you. Kevin, you may begin.

Thank you, everyone for joining us today. Welcome to China Automotive Systems 2019 third 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 on the conference call with the assistance of translation. Before we begin, I remind all listeners that throughout this call, we will make statements that may contain forward-looking statements. Forward-looking statements represent the company's estimates 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, 2018, as filed with the Securities and Exchange Commission on March 28, 2019, and in other documents filed by the company from time to time with the Securities and Exchange Commission. The company expressly disclaims any duty to provide updates to any forward-looking statements made in this call or 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 2019 third quarter. Management will then conduct a question-and-answer session. The following 2019 third quarter and nine months financial results are unaudited and are reported under US GAAP. For the purposes of our call today, I'll review the financial results in U.S dollars. We will begin with review of the recent dynamics of the automobile industry in China automotive market position. China's GDP growth in the third quarter of 2019 grew at 6%, down from 6.2% in the second quarter and down from 6.4% in the first quarter of…

Thank you. [Operator Instructions] Our first question comes from the line of William Gregozeski with Greenridge Global. Please proceed with your question.

Hi. Did you guys say you still expect the 75,000 units to Great Wall will be shipped in 2019? And if so, how many were shipped through the third quarter?

Okay. Yes, we started -- the Great Wall started the year very ambitious plan for 180,000 units. During the second quarter they made some adjustment, so the new number now for the full-year 2019 is 75,000 as you mentioned. During the third quarter 2019, we shipped about over 20,000 units. So we are on track.

Okay. Just in regards to the EPS sales in general, they’re still struggling, obviously the market as well, but can you talk about what the customer response is there to the JV units and if you can get to at least what your sales were from EPS when you’re doing it on your own several years ago with that higher sales [indiscernible] you can get back to that?

Okay. So the -- our EPS product sales, to tell the truth is behind, is below our expectation as well mainly attributable to two factors. One, as we all know now, the Chinese auto industry are -- the growth have tapering off this year. And also the domestic brand, domestic Chinese auto brands market share and their sales shipment has been down in the first nine months. As we mentioned earlier, the Great Wall is one of the example. They started a very ambitious plan at the beginning and -- beginning the year, then start to adjust throughout the year. So downward adjustment. So all that, it's affecting our business because we’re the largest provider to the domestic brands in China. And the second factor is the -- we have some competitors who are aggressively disturbing the market by low borrowing and price, significant low price. It's not helping them either, because the margin it cannot be too good for anybody with this kind of environment. However, as we see the markets stabilizing, our -- we see some areas are recovering. And so our -- joint venture for the EPS product is [indiscernible] is now regaining momentum and getting some market share back. There are some [indiscernible] quantitative factors or benefits we’re having our joint venture business now. We’ve seen a noticeable improvement. One is the operational efficiency through the Japanese partners very -- well managed operation and now we’re seeing efficiency have been improving significantly. And secondly, the quality. We are now seeing our product quality and consistency of [indiscernible] above our previous product. So we will become very -- we are now even more confident than before when this kind of product will take market share and grow all the business. And thirdly, it is the gross margin. With this new team working with our existing platform, now our gross margin has been improving. So all these things said, we are confident, are cautiously optimistic in Q4 as well as 2020 our EPS business will have regain some -- regain our growth.

Okay. All right. And last question is with all the cash you guys have in the balance sheet, what plans do you have for that in the near future?

For -- and to answer your question on the cash, we have -- we are -- on one hand, we are going to continue to buy back shares from open market as we mentioned in this quarter we bought back a significant chunk of shares in the third quarter. And secondly, we are actively looking for a good auto related investment and opportunities with the components or other technologies. So we are looking to expand and -- our portfolio and also to develop a new growth engine for us.

Okay. So you will be looking not to just invest passively as you have with the fund structures, but buy something outright?

Yes, you’re right. So it's not passive investment through investment vehicle anymore. So we’re going to be actively looking for specific projects in technology.

Okay. All right. Thank you.

Thank you.

Thank you. Our next question comes from the line of Robert Pavlovich, a Private Investor. Please proceed with your question.

Yes. Good morning. I was wondering what the status is of the new electric motor joint venture, the Hyoseong, Korean electric motors. To start up, I think initially we had like a target startup of late October. Thank you.

Okay. Thank you. For the joint venture for electric motor, the facility, the workshop has been constructed completed. The -- we have procured a equipment and they just arrived from South Korea has been installed. We are -- we have done the testing, so now we’re at the batch volume -- small volume production, trial production stage right now. So everything is still on track.

Okay. You expect actual production of [indiscernible] to begin maybe like in the first quarter of [technical difficulty]?

We will have some shipment and production -- shipment during the first quarter. But the mass production will start in April 2020.

Okay. I was wondering how China automotive is doing in Brazil these days and is there any possibility where they might do expand some manufacturing to that location to possibly supply to Mexico and North America?

On Brazil, our production is on track. We are expanding our production capacity in Brazil. And also as you may know, we have recently signed a major contract with FCA Brazil which is a Fiat Chrysler. The -- that order book is about 300,000 units a year. We are pretty excited about it. We have -- the relationship with Fiat Chrysler come a long way -- to way over 10 years and we have build a very strong track record with them and with our top notch quality and engineering capability. And you really see in the news the merger between Fiat Chrysler and Peugeot, we see that’s an great opportunity for us. And we being a major supplier, Tier 1 supplier to FCA, Fiat Chrysler we have really positioned our self in three different continent and markets, started from America, [indiscernible] that is Chrysler, then we just mandate [ph] a contract in this year in Italy with Fiat and then this Brazil. So we are -- the Italy contract is going to start, I think 2020 and the Brazil contract is coming online as well. So we are well-positioned and within the Fiat Chrysler Group, and then -- and with this merger, we believe they gave us more access to the Peugeot product line and we are confident we have the right products and great quality to meet their global demand. So that being said, we are pretty excited about it, the opportunities ahead of us.

Okay. Thank you.

Thank you.

Thank you. [Operator Instructions] There appear to be no further questions at this time. I would like to turn the floor back over to management for closing remarks.

Thank you for participating in today in our conference call and we look forward to speaking to you again. Have a great day.

Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines at this time.