Zhenyong Liu - Chief Executive Officer Jing Hao - Chief Financial Officer

Hello, ladies and gentlemen, and welcome to participating Orient Paper’s Fourth Quarter and Fiscal Year 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 a 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 fourth quarter and fiscal year 2016 financial results via press release yesterday, which can be found on the company’s website at www.orientpaperinc.com. First, Mr. Liu will brief you on the company’s key operational highlights over the fourth quarter and fiscal year 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 the 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 website 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 refers to the year-over-year comparisons, unless otherwise stated. I would now like to turn over the call to Mr. Liu. His comments will be delivered in English by Tony Tian from Weitian Investor Relations. Mr. Tian, please go ahead.

Thank you, operator, and good morning, everyone. Thanks for joining our fourth quarter and fiscal year 2016 earnings conference call. During 2016, slowing GDP growth trend and government’s heightened effort to combat pollution continue to take a toll on the paper industry. So we saw both revenues and a profit decreased slightly in 2016. As a result, our 4.3% year-over-year decrease in blended ASP that more than offset a 4% increase in overall sales volume. However, starting from the latter half of 2016, we see more stabilized order trends and upticks in prices for our paper products. This give us reasons to be cautiously optimistic for a gradual recovery in overall market condition in 2017. Now, I will turn the call over to our CFO, Ms. Jing Hao, who will review and comment on the fourth quarter and full-year financial results. Her comments will be delivered in English by my colleague Janice Wang [ph]. Janice, please go ahead.

Thanks, Tony, and thanks everyone for being on the call. Next, on behalf of the management team, I will summarize some key financial results for the fourth quarter of 2016. Also, I’ll occasionally refer to specific production lines associated with various products. I will make clear to which products I’m referring to. For reference though, the number system for our production line is provided in our earnings press release, and on Slide #17, the earnings call presentation. Now, let’s look at our financial performance for the fourth quarter of 2016. Please turn to Slide #24. For the fourth quarter of 2016, total revenue decreased 10.6% to $31.4 million, due to the decrease in sales of offset printing paper and continued suspension of the production of digital photo paper. Turning to Slide 18. For the fourth quarter of 2016, the CMP segment, including both regular CMP and light-weight CMP generated revenue of $23.6 million, representing 75.1% of total revenues; $18.3 million of revenue was from our regular CMP products and $5.3 million was from light-weight CMP. Volume for CMP segment decreased by 14.1% to 60,701 tonnes; of which, 47,338 tonnes was regular CMP and 13,363 tonnes was light-weight CMP. Average selling price of ASPs for regular CMP decreased by 15.6% to $386 per tonne; while ASP for light-weight CMP increased 15.3% to 395 per tonne. Turning to Slide 20. For the fourth quarter of 2016, our Offset Printing Paper segment generated revenue of $6.5 million, representing 20.6% of total revenue. We shipped 10,815 tonnes Offset Printing Paper in the fourth quarter, decreased 25.9% from the same period of last year; ASP for Offset Printing Paper also decreased by 10.5% to $598 per tonne. Turning to Slide 22. For the fourth quarter of 2016, Tissue Paper segment generated sales of $1.4 million,…

Thank you for attending Orient Paper’s fourth quarter and fiscal year 2016 earnings conference call. This concludes our call today, and we thank you all for listening in. Good-bye.