Good morning. My name is Shunick and I will be your conference operator today. At this time, I would like to welcome everyone to the Gulf Resources 2017 First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I would now like to turn the conference over to Helen Xu. Please go ahead.

Thank you, operator. Good morning, ladies and gentlemen, and good evening to those of you who are joining us from China and we’d like to welcome all of you to Gulf Resources’ first quarter 2017 earnings conference call. My name is Helen, the IR Director. Our CEO of the company Mr. Xiaobin Liu will also join this call today. The company had released its results for the first quarter ending March 31, 2017 on last Friday, that covers the results of the quarter. Mr. Xiaobin Liu, our CEO will also make comments, then we will open the call for questions. I would like to remind you to all of our listeners that in this call, management’s remarks will contain forward-looking statements which are subject to risks and uncertainties. The management may make additional forward-looking statements. Therefore, the company claims the protection of Safe Harbor for the forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today depending upon a number of risk factors, including, but not limited to, the general economic business condition in China, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from the existing and new competitors for the bromine and other oilfields, agriculture and flame production chemicals and changing technology, the ability to make future bromine asset purchase and various other factors beyond the company’s control. All forward-looking statements are expressly qualified in their entirety by this precautionary statement and the risk factors detailed with the company’s reports filed with the SEC. Accordingly, our company believe that a expectation reflected in these forward-looking statements are reasonable and there can be no assurance of such will prove to be correct. In addition, any reference to company’s future performance represents the company management estimates as of today, the 15th of May, 2017. Gulf Resources assumes no obligation to update these projections in the future and as market conditions may change. For those of you who are unable to listen to the entire call at this time, a replay will be available for 14 days at the company’s website. The call is also accessible through the webcast and the link is accessible through our website. Please look at our press release issued early for details. So now, let me turn the call over to Mr. Liu for some introduction remarks. Xiaobin?

[Interpreted] First off all thank you for you all to attending Gulf Resources first quarter 2017 earnings conference call. And I had never been more excited about the opportunities for Gulf Resources. We have especially signed the first natural gas customer in Sichuan. At the present time, we don’t fully know the potential of this project. However, based on the test we have done and the discoveries in neighboring areas, we believe we could have the opportunity to drill 90 wells and earn tens of millions of dollars per year from natural gas projects alone. Bromine prices continued to strengthen further with depletion and increased government regulation. Bromine supplier continue to be cost change with our existing production resources in Shandong Province and a potential in Sichuan Province. We believe our bromine business should do extremely well in future. Our chemical business is starting to sign of improvement. We believe the worst time is behind us. And that by year end, we will be showing increases in sales and earnings. No matter how hard we tried and we have been trying. [indiscernible] continue to lastly undervalue our shares based on the closing price of May 10, 2017, last trading at $0.26 on a dollar of book value $0.63 on a dollar of cash, $0.60 on a dollar of net-net cash, and 2.4 [indiscernible] earnings. I do not think there’s another company in the world who is selling at such low valuation. We know you are frustrated by our low share price. We’re even more frustrated for our unhealthy business companies our life. We only can win if you, our shareholders win as well. We’re working on strategy to help recognize shareholder value. At the same time, we’re working to build our business, so that we will be large enough to attract the interest of Chinese companies or investors. As we have said before, our goal is to build our natural gas and other business. So that our company has an end value of 20 – between $20 to $30, based on the opportunities we see ahead of us. And the valuation of companies in China we believe this is a reasonable goal. So now, I will turn the call back to Helen to cover the result of the first quarter.

Thank you, Mr. Liu. So now, I will cover the first quarter results, 2017. First of all for highlighting first quarter 2017. The company’s operating income increased 25%, as compared with second quarter 2016. Net income increased 25%, earnings per share increased 21%, free cash flow equaled to $0.17 per share, cash balance increased to approximately $172.8 million, or around $3.69 per share, net-net cash per share equaled to $3.29 and working capital per share equaled to $4.76. Book value per share equaled to $7.68. For the first quarter results, revenues declined 5% to approximately $32.8 million from approximately $34.5 million. Cost of goods sold declined by 15%. As a result gross, margin dollars improved 18%. As a percentage of sales, gross margins increased to 38% from 31%. Sales expenses declined by 7%. Research and Development costs increased by 3%. General admin expense declined by 10%. Total expenses declined by 15%. Income from operation increased 25% to approximately $10.8 million from approximately $8.7 million. Earnings before taxes also increased by 25% to approximately $10.9 million. Net income increased by 25% to approximately $8.1 million. Earnings per share increased by 21% to $0.17 from $0.14. Mr. Xiaobin Liu, the President and CEO of company stated that, we’re extremely proud of our much improved margins, cost controls, and profitability during the seasonably slow first quarter. We believe we will continue to produce strong results during the remainder for 2017. So now, let’s look at segment results. Firstly, we will look at the Bromine segment. Revenue in this segment increased by 6% to approximately $14 million. Volume in bromine declined by 0.2%. The average selling price per ton increased 6% to $4,071 continuing the strong increases the company has been experiencing. Cost per tonne of bromine declined 10% to $2,522. Overall costs in…

[Foreign Language] [Interpreted] So the company have continued to deliver on our promises. We have many exciting things ahead of us. We are going to see real revenues from our natural gas project. We believe we have significant leverage in Bromine. We think our chemical business has bottomed and is starting to show improvement. We see very exciting acquisition opportunities that could significantly add to earnings, and we are committed to finding ways to help recognize shareholder value. We appreciate the support of our shareholders. We are implementing our plan that we believe will lead to significantly higher sales and earnings in the years ahead and will give us the opportunity to help our shareholders recognize the value they see in our company. So now, we would like to open the call for questions.

[Operator Instructions] And your first question is from the line of John Wells [ph].

Yes, you said you may be able to buy companies at attractive prices, including some with export markets. Any such discussions in progress?

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Yes, they are some under discussions, but there isn’t any specific progress yet. As long as we have, we will issue the press release to let our shareholders and investors know at first time.

Okay. I want another question.

Yes.

You said that two or three new wells will be added soon – natural gas wells. When will these new wells begin production? And when will bromine production begin at the Sichuan site?

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Yes, this is a response from Mr. Liu. Firstly, regarding the bromine production, the company now has started natural gas production on its first well. So depending on the natural gas output from this first well and the condition then we would decide the bromine production as a next step, but now it’s not clear yet in this situation. Secondly, regarding the two to three wells production as to certainly, because company had planned the next half year of 2017, we will invest on trailing of this two to three wells. But when it’s started to product natural gas, the time is not sure yet.

Okay. Thank you.

Okay. Thank you.

[Operator Instructions] The next question is from the line of Glenn Krevlin.

Yes, good morning. I have a series of questions. The first is, the company has been discussing acquisition opportunities for several years. You’re now talking about a recovery in your markets. And it doesn’t make sense to me that someone would sell when things are recovering, it would make sense for them to sell when things are depressed. So why are you more optimistic now than several quarters ago, it seems inconsistent to me?

Hi, Glenn, do you mean only Bromine segment acquisition, or you mean all segments?

Well, I think you’ve said that your focus is on bromine, and you’ve talked about in the past competitors who don’t have capital. But now that the prices are up a lot, it seems like you’ve missed the window of potentially buying things at the right price, and I’d like you to address that?

Okay, help you. Thank you. [Foreign Language]

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Okay. Hey, Glenn, this is a response from Mr. Liu. He stated that even the bromine price was lower before than now, and the company was always looking for opportunities in the past several years and this cost with potential sellers that is not confirmed even though we were always on the discussion in the past few years. And in long-term, if company’s long-term like objective of vision to increase its bromine we love and the company still optimistic about its industries and the bromine price, including its invested potential in the future. So if you continually looking for acquisition, as they have it in this industry.

I have several other questions. Second question is, what is your projection for capital spending for this year?

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We have like expanded this one in our 10-Q release.

Yes. What do you estimate your spend for the full-year for capital spending? What’s your estimate for the full-year?

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Okay. [Foreign Language]

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So as we discussed early that the company expected to have $10 million project at its eastern projects this year, which is almost concurrent. But the excess anchorageacquisition in this year, which is not confirmed yet, since the potential discussion is going on. This is second year percentage – the first-half of second year about the [acreage initiatives] [ph]. And the last one is about the company’s Chemicals and Bromine segment upgrade depends on government environmental regulations, so this amount is uncertain amount.

Okay. Third question, given your focus on bromine salt and natural gas, would you consider selling the chemicals business?

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Okay. So because the chemical segment is a downstream industry in bromine of bromine industry. So this segment, which makes the company’s cost section change go longer, go deeper, and it’s also increased the company’s anti-risk abilities against bromine price alone. Even though now this industry is little weak in our other segments, but until now considering the company’s long-term objectives, we don’t think we’re selling, yes, considering this option yet.

That would be true for paper and oil and gas, but there’s a downstream connection with bromine in paper and oil and gas?

Sorry, in paper and gas, we would downstream, it’s not.

You’re making the argument that it’s integrated to your bromine business chemicals. And my question is, is that true or relevant for paper and oil and gas end markets, which are big end markets for you? Is that a relevant mix?

Okay. I got you, I got you. [Foreign Language]

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Okay. So these two products like paper making intermediaries and oil and gas, it’s intermediaries. This was a company’s tradition of chemical products as the company had established like several years ago. So this part may consider, which is not that much relevant to Bromine segment. And the companies may consider to decrease the production of selling these two, as until now, it’s not in their considering options yet.

Okay. Several years ago, you made an acquisition in the pharmaceutical industry that uses bromine. You indicated at that time there was a business that was secularly growing. Can you tell me what – how that business has done this quarter?

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Okay. So waiting for this bromine expect the traction come here quite several years ago. It almost meets the company’s expecting – expectation, sorry, because the – based on the Chinese economic condition now considering the chemical industry recently even though around [indiscernible] a little bit. But considering the last from company’s growth strategy, we think it best meets the company’s expectations.

Okay. I have a last comment or question. You start every call talking about how undervalued your equity is, and you continue to build cash. Yet, you complain about your stock price, but frankly, you do not think about it. And so I don’t think, I think, you should stop complaining, and I think you should figure out a plan to enhance shareholder value. I would suggest that you maintain your cash levels – current levels to support your bidding in exploration and gas. And I think you should work to return capital in excess of that going forward. But I really don’t appreciate the comments about the undervalued stock when frankly you’ve done nothing about it for several years, it’s frankly frustrating.

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Right.

Yes.

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Okay, perfect. So as we all explained in our earnings call and in our press release that the company really think we should do some action suite with our shareholders value. But the first thing company think we should do is confirm or ensure the company can make its short-term and middle-term objectives, while during – it may considering to take out some cash to do well our cash, our shareholders. So by the – we think by the end of this year, 2017, and when all the conditions become clearly for the company for its middle and short-term objectives, then the company will consider to take out some cash to reward its shareholders.

Okay. I implore you to take action and stop complaining.

Thank you. [Foreign Language] Okay, thank you.

There are no further questions at this time.

[Foreign Language] Otherwise we may close.

Please stay for other questions.

Okay. So, I think, we can close for the call today. [Foreign Language]

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Thank you for the questions.

This dose conclude today’s conference call. You may now disconnect.