Hello and welcome to the Gulf Resources 2020 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Helen Xu. Please go ahead, Helen.

Thank you, operator. Good morning ladies and gentlemen and good evening to all of you for joining us from China, and we'd like to welcome all of you to Gulf Resources’ second quarter 2020 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'd like to remind you to all of our listeners that in this call certain management's statements during the call will contain forward-looking statements and information about Gulf Resources, Incorporation and its subsidiaries business and products within the meaning of rule 175 on the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the Safe Harbor created by those rules. Actual results may differ from those discussed today, taking into account a number of risk factors, including, but not limited to, the general economic and business condition in China, the risks associated with COVID-19 pandemic outbreak, future product developments and production capabilities, shipments to end customers, market expectations of new and existing products, additional competition from our existing and new competition from the bromine and the other chemical productions, changing technology, the ability to make future bromine assets and various of other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by these cautionary statements and the risk factors detailed with the company's reports filed with SEC. Gulf Resources assumes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Accordingly, our company believes the expectations 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 17th of August, 2020. For those of you unable to listen to this entire call at this time, a replay will be available at the company's website. The call is also accessible through the webcast, and the link is accessible through our website. So please locate our press release issued earlier for the details.

[Foreign Language]

Hi, thank you very much to attending the call results 2020 second quarter earnings release conference call. So we had to close all of our facilities, so the government [ph] could not move ahead on the plans to improve the environment when just as we were getting some of our important and crucial operations back on line we were hit by one of the most destructive typhoons in Chinese history. Then we were impacted by the COVID-19 pandemic which caused a delay in the opening our facilities and both of our customers.

[Foreign Language]

Okay, this caused [indiscernible] transformation period for our company the commercial production sites #1 and #7 on April 2020 and sections #4 and #9 on May 2020. We received approval to begin construction of our new chemical factory and commenced formal construction in June 2020. PetroChina made one of the largest discoveries of natural gas in Chinese history in an area very near to the company at [indiscernible] well in Tianbao Town of Daying County in Sichuan Province, which is only two kilometers away from the company's existing well.

[Foreign Language]

Okay, while our earnings [ph] were small and we shipped in a lot during the second quarter of 2020, we were extremely optimistic that we will be able to scale our weakness and return to profitability in the near future because below reasons. Firstly it has tested the mill [ph] [indiscernible] our four bromine and crude salt flagship and will be gearing up production. We hope to achieve good production in the fourth quarter 2020. We expect to receive permission to open our still remaining bromine factories by the end of this year or the beginning of next year. We believe our new chemical factory, which will focus on pharmaceutical intermediate products with higher margins. We also believe that we have strong opportunities to produce natural gas and the bromine production in Sichuan province. We appreciate the support of our investors through this long process. We will provide you with financial projection of three to five years plan and increase communications as we return our company to profitability. So now, I will hand the call back to Helen.

Thank you, Mr. Liu. So I would provide update on the company's financial results and operating results and we will cover the questions we have received from our investors. Even though our financial results in the second quarter may at first look week, but we are very [indiscernible] our progress. Firstly, let me confirm and across our segments. So during the second quarter of 2020, net revenues declined 11 percentage to approximately $5.4 million as compared to the results from year 2019 is decreased relative to mainly due to a lower volume of production and the lower selling price in bromine segment. During this quarter, we produced approximately 1280 pounds of bromine in our first factory. The total reached from 215 to 295 pounds. In all we produced around approximately 16 percentage of our total capacity. For the three months period ended June 30, 2020, our gross profit margin for our bromine segment was 5%. There was a 14% decrease as compared to the same period from year 2019. I want to highlight here that there are two major sectors impacted this margin in bromine. Firstly, bromine prices have come down from about $4427 [ph] to $3672 [ph] per ton which caused [indiscernible] in the domestic volume and the lack of exports mainly caused by the COVID-19 pandemic. However, the current price is not far below the price in the year 2017 and 2016 prices and is quite far above the prices in the year 2015 and 2014 which are $3177 and $2863 which [indiscernible] in the same quarter of previous years. Even though our bromine prices were profitable at each of these price levels, so now that the Chinese economy is recovering and many of our downstream customers are beginning to reopen, we expect the selling price of bromine…

Absolutely. [Operator Instructions]

Hello, operator?

Yes, our first question today is coming from David Xu [ph] from Group [ph]. Your line is now live.

Thank you. Hi good morning.

Thank you.

I want to check, right now you have such a huge pile of cash or working capital in your balance sheet, but your share price is so low is the company afraid being buyed out by other company or by other investors?

Hi, sure sorry and to your last point, so you're asked buy the company?

Yes, so will your company have any surety or policy to avoid being bought up by other investors, because your cash is so attractive, but your share price is so low?

Okay. [Foreign Language]

[Foreign Language]

No we are, I am not talking about investing, but I am talking about being buyout by other investors if they offer to purchase your company, the buyer?

Oh, sorry sorry, I have listened like a attractive [ph] a check, okay I am sorry. [Foreign Language]

[Foreign Language]

Okay.

[Foreign Language]

When I answer the question concerning the, how much share, how much shares or how many shares does the insider owns in your company?

Okay. [Foreign Language]

[Foreign Language]

Okay, so, Mr. Yang, the Chairman of the company and his [indiscernible] including his son, wife and others.

So it is less than 50%?

30, more than 30% around more than 30%, but the exact number I think you can find on the company document we filed in [indiscernible] with the SEC.

Okay, and how about other institutional investors?

Which I don't have a clear cut…

You have no idea how many shares other institutional ownerships?

No we don't have a [indiscernible]

So, if other investors take a hostile bid to buy your company, does the company have any strategy to fend them off?

Sorry? The line is not clear. I could not hear your last question.

Yes, I mean, if other investor, with a hostile bid keeps eye on your company, does the company…

As an investor…

Yes that why I asked, the investors or institutions or buyers became a hostile bid and planning to buy your company in whole…

As in question. Okay, the answer, currently we didn't have here any deals or information who want to buyout the company, but if later on, anyone wishes we will talk about it.

Okay, great. For example, just for example, if I also can buy your company at $6 each a share, will your company accept that or will your company be able to fend off such an offer?

Do you mind say again, because the line is really when you speak it is not clear?

Okay, can you hear me now?

Yes, talk slowly, otherwise the sound is not clear, you talk slowly, so…

Okay. Just for example, okay? If I make an offer to buy your company at the current share price of $6 per share, how can your company fend off such a hostile bid?

So, you mean if you want to buy the company at the current price $6 per share?

Yes, as an example only. Okay?

For example, yes. Now what's your question?

Okay, how can your company handle this?

Okay, okay, I got you. Okay little clear. [Foreign Language]

[Foreign Language]

Okay, so that is - first of all when you think of that Mr. Yang and his family they will certainly not sell their shares. If you could - more than, approximately more than 30%. Secondly, other shareholders or investors, we don’t know clearly that they thought about it. In fact based on our understanding we think now the only if shareholders shift, based on this no value [ph] now.

Okay, I fully understand that.

And then Mr. [indiscernible] will lead the company, we really live on the trust and believe on the company's future.

There is always a danger that others will buy your company or offer a higher price to buy out all your company shares.

Yes, but I've mostly explained that Mr. Yang and his family definitely will not sell.

Okay then. Thank you so much for your answer.

Okay, thank you. You're welcome.

Thank you. We have reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments. Hello, do you have any further comments? Hello, do you read me? Thank you. That does conclude today's teleconference. You may disconnect our line at this time and have a wonderful day. We thank you for your participation today.

I apologize. So we are [indiscernible] through the call today if there are no more questions.

Yes, that's it we are set. Thank you so much for your time.

Thank you.

You may now disconnect.