Greetings, and welcome to China Automotive Systems' Second Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Kevin Theiss, Investor Relations. Thank you, sir. You may begin.

Thank you, everyone, for joining us today. Welcome to China Automotive Systems' 2021 Second 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 will remind all listeners that throughout this call, we may make statements that may contain forward-looking statements. Forward-looking statements represent the company's estimates and assumptions only as of the call date of this call. As a result, the company's actual results could differ materially from those contained in the 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, 2020, as filed with the Securities and Exchange Commission and in other documents filed by the company from time to time with the Securities and Exchange Commission. If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition may be materially and adversely affected as a result of the deteriorating market outlook for automobile sales, the slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations. And for long disruption, or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could…

[Operator Instructions] Our first question comes from the line of William Gregozeski with Greenridge Global.

With the EPS sales jump in, can we expect to see EPS sales growth outperform traditional steering products going forward?

[Foreign Language]

[Interpreted] In terms of growth rate, as the EPS growth is now -- our sales growth is now pacing at 49.7%. It's clearly faster than hydraulic steering systems. But in terms of revenue, EPS still only accounts for 19.2% total revenue. Longer run, we do see EPS will account more revenue -- accounts for more revenue than the traditional hydraulic product. But it will take some time. We see probably in the next -- within the next 3 years.

Okay. All right. What was the reason for the commercial sales being down in the quarter?

[Foreign Language]

[Interpreted] Okay. It comes down to the year-over-year sales of the commercial vehicle. The second quarter 2020 coming off the tail of the recovery of COVID, the Chinese government issued a number of stimulus packages which propel a very robust sales second quarter last year. That makes a -- that built a very high base for the second quarter of this year to compare with. So for that reason, in terms of sales units, year-over-year comparison, it seems that down, but still running at a very high rate in terms of overall commercial vehicle sales. As you know, most of our commercial vehicle steering systems are ling in the domestic market. So that's been -- that's the main reason it's being affected.

Okay. All right. Are you guys seeing any or having any issues or seeing concerns with the chip shortage?

[Foreign Language]

[Interpreted] Okay. Yes, we do see -- we do experience some impact from chip shortage during the second quarter, we are -- we saw about 20% to 30% shortage on the supply side, which is affecting our sales. Otherwise, our sales would have been even faster than the current growth rate on a year-over-year basis. Many OEM auto makers are waiting for our EPS product. But because of this gap on the supply side, due to the chip supplier -- chip shortage, we had to let them wait. So that's affecting somewhat, affecting our EPS sales in the second quarter this year. But starting July, we see some of the large chip producers are -- have increased their production. So we expect in the Q3 and Q4 -- coming up Q3, Q4, the pressure will be lessened. And we are still seeing overall -- probably would be 10% chip shortage than what we would have sold to the EPS product market. So -- but overall, we'll see EPS sales is going to be very, very strong this year.

Okay. Can you provide a quick update on how things are going in Brazil?

[Foreign Language]

[Interpreted] We're seeing a very strong growth in Brazil in the second quarter of this year. Our sales from Brazil market was $6.2 million compared with USD 0.5 million in the same quarter last year, mainly due to the COVID impact in that market. And in this first half of this year, our total revenue from Brazil is exceeded -- has already exceeded $10 million compared with USD 2.5 million last year. And for that reason and our overall order book, we expect full year 2020, our Brazil sales will be around $23 million to $25 million, that compared with $6 million or $7 million in 2020, so that's a major increase. And we already expected a high growth. But now we're seeing the growth outpacing our initial estimate.

Last question is on Sentient. Can you talk a little bit more about that and what your plans are for it?

[Foreign Language]

[Interpreted] Okay. So as we disclosed in the past, Sentient is -- the company we acquired is the software and hardware leader specializing steering functions and vehicle motion controls. And it's an integral part of autonomous driving. So we're very, very excited about it. And in terms of the areas, we'll be working with, there are 2 areas. One is in European market. We're going to work together from hardware perspective, CAAS will, from a hardware perspective, support the best-in-class hardware and custom made for their software. And so our engineering team will be working closely with Sentient team to integrate their software into our hardware and help them to win more -- our goal is to help them to win more contracts in the European market. In China, we are -- since the Sentient has the L3, L4 product software designs and some of the hardware solutions. So we are marketing this product to the Chinese OEMs. We're aggressively marketing this. So we're looking to expand it in the Chinese market now with this technology. And we see -- we already see some interest from OEMs. So this is going to be the future of our company.

[Operator Instructions] Ladies and gentlemen, we have reached the end of today's question-and-answer session. I would like to turn this call back over to Mr. Kevin Theiss for closing remarks.

We thank you for joining us in today's conference call. Please be safe, and we look forward to speaking with you again. Thank you.

Thank you for joining us today. This concludes today's conference. You may disconnect your lines at this time. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]