Zhenyong Liu - Chairman and CEO Jing Hao - CFO

Hello, ladies and gentlemen, and welcome to participating Orient Paper’s Third Quarter of 2016 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in listen-only mode. Joining us today are Mr. Zhenyong Liu, Orient Paper’s Chairman and Chief Executive Officer; and Ms. Jing Hao, the Company’s Chief Financial Officer. Remarks from both, Mr. Liu and Ms. Hao will be delivered in English by interpreters. Orient Paper announced its third quarter 2016 financial results via press release yesterday, which can be found on the Company’s Web site at www.orientpaperinc.com. First, Mr. Liu will brief you on Company’s key operational highlights over the third quarter of 2016, and then Ms. Hao will review the Company’s financial results. Before we start, I would like to draw your attention to our Safe Harbor statement. Management’s prepared remarks contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts and its announcements, are forward-looking statements, including, but not limited to anticipated revenues from the corrugating medium paper, tissue paper, offset printing paper, and digital photo paper business segments, the actions and initiatives of current and potential competitors, the Company’s ability to introduce new products, the Company’s ability to implement capacity expansion, market acceptance of new products, general economic and business conditions, the ability to attract or retain qualified senior management personnel and research and development staff, and other risks detailed in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. The Company undertakes no obligation to update forward-looking statements to reflect subsequent or current events or circumstances or to changes in its expectation, except as maybe required by law. Although, the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that this expectation will turn out to be correct and investors are cautioned that actual results may differ materially from the anticipated results. There is a presentation document featuring management’s prepared remarks, and it’s now available for download from the Company’s Web site at www.orientpaperinc.com. Please note that there will be discussions on non-GAAP financial measures or EBITDA or Earnings before interest, taxes, depreciation, and amortization. Please refer to our press release for a complete reconciliation of EBITDA to net income. As a kind reminder, all numbers in our presentation are quoted in U.S. dollars and all comparisons refer to the year-over-year comparisons, unless otherwise stated. I’ll like to turn the call over to Mr. Liu. His comments will be delivered in English by Tony Tian from Weitian Investor Relations. Ms. Tian, please go ahead.

Thank you, operator and good morning everyone. Thank you for joining Orient Paper’s third quarter 2016 earnings conference call. We are pleased to report solid financial results for the third quarter of 2016 with increasing sales volume across all major product categories that more than offset decrease in overall average selling prices. As highlight of the quarter, our revenue increased by 15.6% year-over-year to $37.5 million. While net income increased by 80% to $3 million. Our newly launched tissue paper product packaging business also generated $1.6 million in revenue, and almost five fold increase versus the same on last year. As for order trends, we started this year seeing stabilizing trend for our major products over the past few months, and expect this trend to carry over into the beginning of 2017. Now I will turn the call over to CFO, Ms. Jing Hao, who will review and comment on our third quarter financial results. Her comments will be delivered in English by my colleague Tina Xiao. Tina please go ahead.

Thank you, Tony. And I thank everyone for being on the call. Next, on behalf of the management team, I will summarize some key financial results for the third quarter of 2016. Also, I’ll occasionally refer to specific production lines associated with various projects. I will make clear to which products I am referring to. For reference though, the numbers presented for the production line is provided in our earnings press release, and on slide number 17, the earnings call presentation. Now, let's look at our financial performance for the third quarter of 2016. Please turn to slide number seven. For the third quarter of 2016, total revenue increased to 15.6% to $37.5 million, due to the increase in sales for CMP and tissue paper products. Turning to slide number eight, for the third quarter 2016, the CMP segment, including both regular CMP and light-weight CMP generated revenue of $26.4 million, representing 70.6% of total revenues; $22.2 million of revenue was from our regular CMP products and $4.2 million was from light-weight CMP. Volume for CMP segment increased by 28.9% to 81,035 tonnes; of which, 68,422 tonnes was regular CMP and 12,613 tonnes was light-weight CMP. Average selling price of ASPs for regular CMP decreased by 9.5% to $325 per tonne; while ASP for light-weight CMP decreased 9.3% to $322 per tonne. Turning to slide number nine, for the third quarter of 2016, our Offset Printing Paper segment generated revenue of $9.3 million, representing 24.9% of total revenue. We shipped 14,571 tonnes Offset Printing Paper in the third quarter, increased 6.4% from the same period last year; ASP for Offset Printing Paper also decreased by 5.7% to $641 per tonne. For the third quarter of 20156, tissue paper segment generated sales of $1.6 million, volume of tissue paper was 1,327…

Thank you for attending Orient Paper’s third quarter 2016 earnings conference call. This concludes our call today. And we thank you all for listening-in. Good-bye. End of Q&A: