Gulf Resources, Inc. (GURE) Q2 2017 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the Gulf Resources 2017 Second 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. Helen, you may begin your conference.

Thank you, operator. Good morning, ladies and gentlemen, and good evening to those of you joining us from China, and we’d like to welcome all of you to Gulf Resources’ second 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. I will be offering translation for management comments for the Company’s operating results. I would like to remind you that -- 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, 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 any other 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 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 the Company’s future performance represents the management’s estimates as of today, the 14th of August, 2017. Company assumes no obligation to update these projections in the future 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. This 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, I will start with the financial discussion first and later Mr. Liu will provide his conclusion for this quarter of 2017 and then we’ll go for the Q&A session. On July 10, 2017 the Company issued a press release that stated at the present time Gulf expects to report strong results in bromine and improved results in chemicals for the second quarter of 2017. However, excluding potential extraordinary items and currency exchange problems, the company expects to report revenues in the second quarter of 2017 increase over those in the previous year; it also expects to report that earnings and earnings per share increase by double-digit. In order to understand how it is related to our guidance and to appreciate the strength and weakness relating to our business. We have to understand impact of changes in the currency. In the second quarter of 2016, the exchange rate was RMB 6.53 per U.S. dollar; in the second quarter 2017, it was RMB 6.85 per U.S. dollar. We buy and sell our products in RMB; we do virtually no business with U.S. dollar. The exchange rate impact on our company when our accounts translate the RMB results into U.S. dollars. During the second quarter our net revenue was essentially flat at approximately $47.5 million against approximately $47.6 million. However, when we look at converting them to RMB, our revenue increased 4.8% to RMBs 326 million from RMB 311 million. Gross margin improved by 11.9%. As a percentage of revenue, the increase was 43.3% from 38.7%. We were very pleased to show these strong results. Reported income from operations increased 7% to $18.5 million. However, we incurred a currency translation loss for the quarter of approximately $466,700 as compared to a gain the same quarter of the previous year in 2016 of approximately $679,200, which has been called as unrealized gain or loss on translation of intercompany balance in Company’s 10-Q. Including the impact of the currency translation transactions, income from operations would have been approximately $18.9 million against approximately $16.7 million, an increase of 13.8%. Reported net income was approximately $13.8 million against $13.2 million, an increase of 4%. Net income excluding currency changes would have been approximately $14.2 million against $12.5 million, an increase of 13.6%. Reported diluted earnings per share were $0.29 against $0.28, an increase of 3.6%. However, after excluding the impact of currency changes, reported diluted earnings per share would have been $0.30 against $0.27, an increase of 13.6%. Comprehensive net income increased 512% to approximately $21 million from $3.4 million. So, now we look at segment data. Reported net revenue in bromine and crude salt were approximately $20.9 million against $20.8 million, an increase of 0.8%. In RMB, net revenue in bromine and crude salt were RMB around 143.5 million against RMB 135.8 million, an increase of 5.7%. Bromine prices were very consistent and crude salt price improved as well. With good pricing and strong cost control, reported income from operations in bromine and crude salt increased around 31.8% to $10.8 million from $8.2 million. Income from operations in RMB in bromine and crude salt segment increased 38.3% to RMB approximately RMB 33.9 million from RMB 53.5 million. We were very pleased to have shown such strong results in these segments. Reported net revenue in chemicals was $26.6 million against $26.8 million, a decline of 1%. However, if we look at RMB, the net revenue in chemicals was around RMB 182.2 million against RMB 175.1 million, an increase of 4%. Reported income from operations in chemicals declined 2.5% to $8.3 million from $8.5 million. Income from operations in RMB in chemicals increased 2.3% to RMB 53 million (sic) [RMB 57 million] from RMB 55.7 million. Now, let’s look at the balance sheet. Our balance sheet continues to strengthen. At the end of the quarter, we had cash on hand of $176.3 million or $3.77 per diluted share, this is more than twice of our current share price. Net net cash, which is cash minus all liabilities, was $151.6 million or $3.24 per diluted share. Shareholders’ equity increased 8.9% to $8.13 per diluted share from $7.47 per share at the end of the fiscal year of 2016. Working capital was $246.4 million or $5.26 per fully diluted share. We generated $8.6 million in free cash. Our accounts receivable increased 67.6% to $86.9 million. With the economic slowdown and tightened credit in China, we elected to use our strong balance sheet to provide support for our customers. We have had long experience with most of these customers, and believe we will collect virtually all of our outstanding receivables. Now, let’s look at the Company’s six months results. For the six months ended June 30, 2017, net revenue declined 2% to $80.3 million from $82.1 million. While we have the same issue with the changes in the currency, we are only going to discuss six months result in U.S. dollars as with the second quarter, the six months results look significantly better in RMB. Cost of revenues declined by 11% because of strong cost control. Income from operations increased by 13%. The impact of unrealized loss or gain on translation of intercompany balance, or we can call it currency adjustment represented a cost of $603,900. In the prior period, it represented benefit of $548,700. Excluding the impact of this unrealized loss or gain on translation of intercompany balance or currency adjustment, the income from operation before taxes were $29.9 million against $25.4 million, an increase of 17.5%. Income from before tax increased 13% to approximately $29.5 million; including the impact of currency translation income before tax increased 17.5% to approximately $30.1 million. Net income increased 11% to $21.8 million. Excluding this similar impact from currency adjustment, net income increased 17.3% to $22.4 million, even with the higher tax rates, primarily caused by exchange related issues. Earnings per share increased 11.9% to $0.47 from $0.42. Excluding the currency adjustment earnings per share increased 17.3% to $0.48 from $0.41. Comprehensive net income increased 164% to approximately $31.1 million from $11.8 million. Now we look at natural gas project update. We would like to give you an update on natural gas project. We overly surprised that our first natural gas will have issues related to water and other potential impurities. From the beginning, we have said that or in the past we stated that we were going to produce small quantities as a test until we were confident that we could produce natural gas of sufficiently higher quality. Our greater concern was that we will contract major amount of natural gas only to discover types of problems we have now found, we also stated that we were not going to drill any more wells until our first well were producing economically successful levels. We’re now consulting with Southwest Petroleum University in Sichuan Province to assess the issues related to our natural gas. At the present time, we do not yet have the final results. However, we believe that these issues can be resolved. We’re confident that there are larger quantities of natural gas in Daying. We believe that the types of problems we have encountered are relatively common and not difficult to resolve, as solution is largely to ensure the purchase of some additional equipment that will enable us to improve the quality of the natural gas. By eliminating water and other potential impurities, until the report is completed by University, we will postpone the drilling of additional wells. We will keep you updated as we receive report from the Southwest Petroleum University. Our second half and future projections. As we enter the second half of 2017, we feel very positive about our business. Bromine prices have remained strong. Demand is starting to increase. Our chemicals business has stabilized and is also showing good signs of improvement. Based on the current tone of our business, we believe we can show good increase in sales and earnings in RMB during the second half of the year 2017. There, however, is one major issue that we could have significant impact on our sales and earnings in the second half of the year 2017 and beyond. We will now turn the call over to Mr. Liu to discuss this issue.

[Foreign Language]

As many of you may have read, government of China is taking now a much more active role in enforcing environment solution as a big issue in China. The government wants to improve air and water quality. It also wants to ensure that factories are now dumping hazard materials in areas near pollution center. I am sorry, there is a translation mistake. So, the government does not want to ensure that factories are now dumping dangerous materials in areas near the population center. As a result, throughout the country, the government is to inspect mines, factories and other related facilities. Their practice [ph] is to force those that violate the rules, to increase their level of quality or close their facilities. In addition, they are tracking down many unlicensed operators [indiscernible] Chinese government set goal of closing 4,300 -- around 4,300 coal mines from year 2016 to year 2019. Intermediate to long run, we consider this to be a substantial opportunity in the bromine industry, for example, we have many small unlicensed competitors, also have many smaller licensed competitors that have significantly underinvested in their facilities. We believe the government may force the unlicensed competitors close; we also believe most of smaller competitors may not have the capital to bring their mines as factories in the companies meet government regulation. Factories in China are currently very restricted except for major state-owned companies. The smaller companies in our industry will probably not be able to bring the money to being compliant. We had wanted to strong [ph] capital because we saw that natural gas was a great opportunity and also because we did foresee the types of possibilities of results [indiscernible] with our strong balance sheet and cash balances, we believe we’ve got prospective position, and made by the factories at lower prices, we currently have enough cash flow to drill our wells, acquisitions within industry and still find ways of recognizing our shareholders value. We do believe the new government regulation will increase the cost of doing business. On the other hand we also have belief that substantial amount of capabilities, factories will be removed from the market; with fewer competitors, we believe prices will increase faster than costs. Our current bromine mines and factories are currently operating at utilization rates of about 40%. If demand remains less by numbers of competitors and industry capacity significantly reduced, we will have substantial leverage in our business model. The same facts of conditions that apply to the bromine industry also apply to the chemical industry. There are two issues that we cannot control, the first one is timing. We do not know how long it will take the government to close many of unlicensed mines and factories or to first many of these modern mines and factories to upgrade their facilities. We also do not know how our mines and facilities will be impacted by government inspection. We know that we have continually invested in upgrading our facilities. We believe our facilities are more state-of-the-art than those of most of our competitors. We also have a diversified production base. Last year, we were forced to close one of our bromine mines and factory. This year, our earnings in bromine and crude salt are up substantially. Our diversified base lessens our risk. However, it’s possible that government may force us to significantly increase our capital investments, especially for processes that improve environmental quality. Since the inspections are just about to start, we cannot project timing at this time. As Helen mentioned, if these inspections were not occurring, we believe we will have a strong second half of year 2017. We also believe that the likelihood is that this inspection will result in favorable outcomes of our Company. This leads to say, we cannot control the timing of the government inspection or the impacts on any factory specifically, we can only say that we have invested more on upgrading our facilities than have our competitors and we are financially strong Chinese company in the bromine industry. Our best guess is that one year from now we will have many fewer competitors and significantly higher profit. The only uncertainties are timing and the potential costs. We expect to have a full understanding of the implications within the next two months. As soon as we have more certainty concerning the impact of the new government regulation on our company and our industry, we will upgrade investors and provide detailed earnings guidance. So, now, I will turn the call back to Helen for the question-and-answer segment of the call.

Hi, operator, can we start the question-and-answer session?

[Operator Instructions] And our first question comes from the line of Rex Manuel [ph].

Thank you for taking my question. I may have missed this in your conference call. Did you have any immediate plans on trying to do something about the share price? I appreciate all the efforts that you’ve done to make this a great company, but shareholders have not been rewarded this time. Thank you.

So, this is Helen here and I’ll answer your question on behalf of Mr. Liu and the company management. So, regarding your question, as we already mentioned that central government already sent an inspection team for the -- to the province to assess on the company’s factories and the industry. And to know the cost to operate, the impact of this inspection team we’ll have on our company and the cost we have to spend on the upgrading company’s facilities are not confirmed yet. But once all the implications being confirmed within the next two months by this inspection team, the companies will decide what to do next to revert our shareholder value, maybe by the third quarter of this year 2017 to decide pay the -- if going to pay the dividend or share buyback.

Thank you. And also could you tell me, do you have any -- you look at any acquisitions of other companies that would be accretive to Gulf’s earnings?

Okay. It’s always in the Company’s strategy to vertically or horizontally to acquire assets of factories in the industry and it’s always actively looking, but until now we’re not confirmed yet if there is any decided but we’re always in the industry to find our acquisition target.

And our next question comes from the line of Adam Valdo. [Ph]

Good day. And I really want to follow up on the line of questioning of the previous caller, Mr. Manuel. You all continue to do an excellent job, as evidenced by the latest quarter’s solid results in operating your company and building your Company. The share price obviously has not reflected the strong growth of the Company with stock trading at less than 50% of the Company’s cash balance per share and less than a quarter of its book value per share. We’ve explored over several years options for the Company to repurchase shares, to initiate a dividend couple of quarters ago. Even I think in the most recent quarter back in May after the March quarter results, you talked about making acquisitions of companies with significant export earnings as a way to be able to have cash balances in U.S. dollars to be able to buy back shares. Can you update us on the progress if any that you’ve made in looking at acquisitions of businesses with export earnings already in place in U.S. dollars? Can you update us on your own efforts to grow your own internal export business which you’ve been for several quarters that might result in dollar earnings that could be put into share buybacks? Give us the sense for how aggressively you’re going to be moving here in future quarters to have your share price more accurately reflect the strong results of the underlying Company? Thank you.

It’s Helen here. So, try and understand your question, let me make it clear. So, your first question, you want to know how about the export acquisition going on, right?

Yes, Helen. I mean, you have talked in several recent quarterly conference calls about making acquisitions of companies with dollar denominated export earnings which would allow you to have dollar sources of earnings in the future for -- that could be used for share buybacks and dividends and wouldn’t be relying on the foreign exchange controls in the People’s Republic of China. You have talked about growing your own export business without acquisition through your internal operations. Can you give us an update on your initiatives, both to acquire companies with existing dollar denominated export earnings and your own internal initiatives to build your own internal dollar denominated export business?

Okay. The Company is always looking for acquisition targets in order to help it to transfer dollars into overseas [indiscernible] dollars in overseas, to find these acquisition targets. And as you know that we did not really find a specific target yet. And as we mentioned to the first investor’s question that until the third quarter, company can decide based on the impact of the central government inspection team they will have on industry and on the Company’s facilities, the company can decide it’s going to paying dividends or buying share -- doing buyback.

No, that’s helpful, Helen. Are you all now signaling though a greater willingness to pay dividend and undertake share buybacks than you have in the past. I mean you’ve cited appropriate concerns in the past about how much you would be investing in the natural gas business and how quickly as a reason for holding cash. Now, obviously you have the uncertainties around environmental regulations and what you might have to invest in your existing facilities for that. But, at the same time, you seem to saying, once we have greater uncertainty -- a greater certainty around the impact of the environmental regulations on this, we actually are more interested to be more aggressive in buying back shares and dividends -- buying back shares and having dividends. So, can you just expand on that a little bit for me? Is management and the Board now much more aggressive in its mindset to use its very strong balance sheet to force its share price to more accurately reflect the underlying value of the Company by buying back shares and having a dividend in the very near term?

Until now, because management and the Board of Directors think that Company’s major problem is still its operations. And since they are not very familiar with the capital markets, so they would like to kick the Company’s operating business on its track first, everything when operating like operations side everything -- every uncertainties confirmed, then it can decide like on the capital market how to do to increase its share value by buying shares back or by paying dividend.

Helen, I do think you all are very strong operators; as managers in your industry, you’ve done a very good job there and you all are shareholders and those of us who are not management who our shareholders have not been rewarded for that strong operating performance. And obviously, there is a big disconnect there. And I just hope that what you’re now signaling is a greater aggressiveness on the part of the Board and management to buy back shares and dividends. I hope that’s what you’re signaling here. Is that what you’re signaling here?

I can understand you and other investors’ view. But, management wants to emphasize that they think there are two major opportunities in front of the Company. First one is a natural gas project; it’s really a great opportunity for the company to expand its industry. And the second opportunity is now the government is doing inspection on industry, if industry consolidated, it’s also a really great opportunity for company to make business strong positioned in this industry and it would be the Company’s middle and long-term objective as well.

Okay. May I touch on one other topic? You all put out a press release in June in which you talked about some small inside -- forced inside management sales of stock. And it was not a subsequent filing with the SEC about those sales. When I go and look for the press release now, it doesn’t look to be out there anymore. Is that something that in the end did not occur or can you just clarify for us what happened with that press release in June about small inside management sales of stock that were forced by the context of -- I believe they were forced by the context of the accounts in which they were held. May be can you just clarify that once and for all for us?

Okay. First of all, there are only parts of the shares sold by management and it’s not all. And since…

Yes, I know.

There are not -- because there are some shares being [ph] account with one broker, one agent and that agent is going to close its service for this -- I don’t know how to call it, but they are going to close that service and then asked management to transfer the shares to other agents in a very short notice time. There is no time for them to transfer the shares. So, they had to sell it at that time, because in China if we are filling all the papers, it would take more than a month. And by that time, they only had few time to this action, that’s why we decided sale part of shares first.

No, I understand that, that’s a helpful estimation. That’s more or less what the press release said. There hasn’t been a subsequent filing with the SEC about those share sales. Is that because management then repurchased the shares or where do we stand in terms of the net small change in insider ownership as a result of that event? Has there been a small management -- small reduction in management’s ownership in the end or did they repurchase those shares and other account that they were required to sell in that one broker’s account?

No, it’s just a few shares being sold. No, repurchase.

Okay, so small amount of shares sold…

Repurchase…

I am sorry. Did you say they then repurchased those -- that small number of shares in other accounts?

No, no, no. I mean, if they want to repurchase, they have to have another account, but there is no time for them do that at that time.

Okay. So, the summary is, there was this small insider share sale, as reported in the press release in June; there has not been an SEC filing; is there going to be an SEC filling on that small insider share sale than?

There is SEC filing we made on Form-4.

On Form-4? I have not seen that visible on SEC, EDGAR. Perhaps, I’ll follow up with you on that separately. It’s not on the SECs website.

No, no, I am sure it’s been filed. If…

Okay, so you all filed with Form-4 with the SEC; it just hasn’t been posted yet by the SEC on its sec.gov…

I am not sure like if you are looking right, but the Form has been filed on time after they sold the shares.

Okay. So, you did file Form-4

Yes. If you cannot see it, you can email me, I may find the link and forward to you.

Okay, I did already email you. I’ll follow up you with you again on that email I already sent you on this issue. So, thank you very much for taking my questions and comments.

Okay. You’re welcome.

[Operator Instructions] And we have a question from the line of [indiscernible].

Hey. Thanks for taking my call. I was just wondering as quarter-after-quarter we talk about increasing shareholder value, and follow-up on last couple of guys that have spoken, you have all done a great job with managing the Company. Has there ever been any thought about just taking company public or being sold at reasonable price? And in that way, management can take advantage of the natural gas opportunities that will lay down the road?

Hello. I don’t understand, like what your specific question?

I mean, we go through this and you have to listen to us. But, we go through this quarter-after-quarter, when we talk about how we’re going to increase shareholder value. There always seems to be something. And I was just wondering has the Board of Directors ever thought about putting the Company up for sale or possibly taking it private like some other small Chinese companies have done? Thank you.

I got you. And the response from management that because the uncertainties from government we cannot control and also the natural gas as we said is a testing well, we also do not know what’s going to happen. So, all these uncertainties is not under company’s management control. And we will talk about the priority or buy back company and management go back to discuss with Board of Directors, maybe we can talk with Chairman and Board of Directors and maybe come to you back, if you can send me an email.

I will. Thank you.

Okay. Thank you. You’re welcome.

And our next question comes from the line of [indiscernible]

Hi. I have a few questions, actually. May be first of all, do you have any comments on the letter that we sent you a month ago from unrecovered cash? [Ph] I had a question -- I am sorry. Did you get my question?

No, I didn’t get it. The line is not clear.

I was asking, did you have any comments on the letter that we sent to you a month ago from unrecovered cash?

What it’s about?

We sent you a letter, to the Board, a month ago; it was regarding the share repurchases and shareholder return et cetera and the cash, excess cash.

Like we explained in the first and the second question to our investors that Company cannot speak [ph] what to do now until and the third quarter finished, until the central government inspections team finished their assessment on the company’s factories, and then we can see what impact it will have on our company’s facilities and on the industry, then it can decide if it’s going to pay dividend or do share buyback.

Okay. Can you maybe clarify why you need -- why you exactly need to hold so much cash when you have no debt and you already have very strong cash flows and why it doesn’t return any interest if you would expect it to -- at least some of it to be kept in short term investments?

Sorry. I really cannot hear you very clear.

Yes. Maybe can you clarify why you need to hold so much cash and why it doesn’t return any interest?

Because firstly, it’s not fixed savings, so the interest rate is very low in China, especially at company’s level, certainly because company’s not sure how much it’s going to invest on the natural gas projects and how much on this upgrading of its factories currently. So, it cannot make all the cash on fixed side.

Okay. So, why it doesn’t [multiple speakers] So, why don’t you raise issues on debt, [ph] instead of just using shareholders’ equity?

We can go back discuss with management team and the Board of Directors and will respond you back later on. You can email me.

Yes, okay.

And we have a follow-up question from the line of Adam Valdo. [Ph]

[Technical Difficulty]

Hello?

Hello, can you hear me?

Yes.

Okay, you can hear me. I apologize. Thank you for taking my follow-up question, which really builds on the questions of the previous questioner. You all have done a wonderful job operating the company. And the share price doesn’t come close to reflecting your reported financial results in terms of your balance sheet strength. Quarter after quarter after quarter, we have this debate about how do we -- what steps can management take and the Board take to buybacks, dividends, export earnings, other initiatives to have the share price in the public market more accurately reflect the company’s reported financial results and its reported balance sheet strength. And many other industries and Chinese and private equity funds have teamed up with managers who have the significant opportunities you have in the natural gas area and the consolidation of your own industry because of new environmental regulations like government promulgating private equity funds, have routinely teamed up with strong operating managers such as the management of this Company, to take the company private and to pay the public shareholders a decent value for their shares [indiscernible] trading but they capture a lot of the upside value beyond that. So, I want to really ask again what the previous question was asking which is how seriously has the board and the management here considered taking the Company private in partnership with the increasingly numerous number of private equity funds in China? Thank you.

Hi, Adam. This question, I cannot answer right now, as I said before. We may go back to this Company’s management team and the Board of Directors and decide and email back or we make an announcement. But until now, this question, we cannot -- it’s not in our control to answer this question.

Well, I respectfully suggest that given the strength of -- management’s strength, very impressive strength in operating the Company but their relatively lower strength in dealing with the capital markets, teaming up with the private equity fund and going private here is probably the best outcome for the existing public shareholders, the existing management terms of realizing value for their shares and also for delivering a good return for a private equity fund to invest. Thank you for taking my questions and hearing my comments.

Okay, thank you very much. I will forward this to Board of Directors.

And there are no further questions at this time.

Hey, operator, if there is no more question, can we close the call for today?

We actually just had a popping question from the line of John Tim [ph]

Hi. Yes, thanks for taking my call, Helen. So, I just would like to make a recommendation. So, I know that in the past your Company had a professional Investor Relations who would deal with conference calland quarterly -- earnings calls. So, are there any folks from management to have a more professional interlocutor or translator who can do this call more in a professional manner?

Sorry. How should I call you?

John.

Hi, John. Okay. Before our company used CCG as our IR company, but then later on CCG was closed. So, until now, they did not find that folks [ph] that suits Company to do our professional IR yet. But we will find -- we will be looking for it. Company is always looking for it.

Okay. Yes. It has been more than year. If the Company is really serious about looking for a professional Investor Relations, then I would really hope that the management really will consider something serious. I think quarter after quarter, I would see this as an improvement in terms of generating investor -- generating investor trust and getting management credibility. Just a recommendation…

Okay. [Multiple speakers] maybe we can do this more actively.

Okay. Yes. I appreciate it. Nothing to discard your effort. I think you have been doing a good job, Helen. Thanks for keeping all the investors informed.

Okay, thank you. You’re welcome.

And we have a question from the line of Rex Manuel. [Ph]

Thanks for taking my follow-up question. I wonder why you haven’t put more effort in getting the story out about Gulf Resources. It’s hard to find a company with no debt and this much cash and share price just lingered year after year. Why aren’t you doing more road shows or hiring, as kind of follow-up to last question, hiring some more professionals to maybe present your story and get it out to the investment community? Thank you, again doing wonderful job that’s being done, other than the share price. Thank you.

Thank you. I got comments and we will forward this to Board of Directors and management, and the Company may arrange more road shows or presentations.

Pardon me? Are you planning any road shows or any investment conferences to try to pitch Gulf Resources to other shareholders, other investors? Any efforts being put in that category or in that direction to increase shareholder…

Yes, the company is always looking for opportunities to go to meet our investors and to attending the conferences.

I think more effort needed to put in that direction because you have such a great story to tell and it’s just not getting out to a lot of small investors. I think small and large investors should be very interested in Gulf Resources, if they knew about it. Thank you very much for taking my call.

Okay. We’ve got all these comments and we will pay more activation and attention on this message. And I will forward this to management team and Board of Directors, maybe we should put more efforts on this matter.

And there are no further questions at this time.

Okay. Can we close the call for today?

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.