Daqo New Energy (DQ) Q2 2026 earnings call transcript

I would now like to turn the conference over to Jessie Zhao, Investor Relations Director. Please go ahead. Hello, everyone. I'm Jessie Zhao, the Investor Relations Director of Daco New Energy. Thank you for joining our conference call today. Daco New Energy just issued its financial results for the second quarter of 2026, which can be found on our website at www. dqsolar. com. Today attending the conference call, we have our chairman and CEO, Mr. Xiang Xu, our deputy CEO, Mr. Nita Xu, our CFO, Mr. Ming Yang, and myself. Today's call will begin with an update from Mr. Xu on market conditions and company operations, followed by a translation from Mr. Xu from Mr. Xu, and then Mr. Yang will discuss the company's financial performance for the quarter.

After that, we will open the floor to put an aid from the audience. Before we begin the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth, are forward-looking statements that are made under the safe harbor provisions of the U. S. Private Securities Litigation Reform Act of 1995. Five, this statement involves inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding this and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission. This statement only reflects our current and preliminary review as of today and may be subject to change.

Our ability to achieve these projections is subject to risks and uncertainties. All information provided in today's call is as of today, and we undertake no duty to update such information, except as required under applicable law. Also, during the call, we will occasionally reference monetary amounts in U. S. dollar terms. Please keep in mind that our functional currency is the Chinese RMB. We will offer these translations into U. S. dollars solely for the convenience of the audience. Now, I will turn the call to our chairman and CEO, Mr. Xu. Please go ahead.

请来请总统长 Thank you for joining us today. I am the CEO of Daxxia, the CEO of Daxxia. I am the CEO of Daxxia, and I will now turn the call over to the Daxxia.

As of June 30, 2026, market sentiment across the solar energy industry remained cautious amid the domestic demand and elevated unemployment levels, which showed prices lower across the solar value chain. Despite these headlines, we resumed sales in June, delivering a sequentially increasing revenue and the narrowing of a quarterly operating and net losses. Throughout this period, we continue to maintain a robust and healthy balance sheet of zero debt. As of June 30, 2026, we held a cash balance of $555.3 million, short-term investments of $250 million, bank-dose-fifth of $71.7 million, housing maturity investment of $51 million, and fixed-term banks upon the balance of $994.8 million. Together, these readily convertible assets totaled $1.9 billion, providing us with ample liquidity, confidence, and strategic flexibility to navigate the current market downturn.

On the operational front, we continue to take proactive measures to navigate challenging market conditions, with our namespace capacity utilization rate operating at approximately 57% during the period. Total production volume at our two policy facilities was 43,675 metric tons for the quarter, exceeding our guidance range of 35,000 metric tons to 40,000 metric tons. The policies on market prices remaining below production costs since the first quarter of 2026.

We initially refrained from engaging in the below-cost sales in line with Chinese self-regulation guidelines and adopted a disciplined way-to-see approach pending further implementation of the national anti-involution policies. However, after an extended period without clear policy updates, We adjusted our sales and pricing strategies toward a more market-oriented approach in June. As a result, our sales volume increased from 4,482 metric tons last quarter to 15,190 metric tons, with average selling price falling to 4.04 US dollars per kilogram.

Our policies and transactions and shipment volumes have continued to pick up in the third quarter, reflecting increased confidence in the quality and an ongoing preference for products from customers. On the cost side, total production costs remain flat sequentially at $5.95 USD per kilogram, with cash costs edging down by 0.4% to $4.57 USD per kilogram, and manufacturing costs in RMD terms declining slightly. In light of the current market dynamics, we expect total pulse-to-come production volume third quarter 2026 to be approximately 40,000 metrotons to 45,000 metrotons.

For the full year of 2026, we expect production volume to be in the range of 160,000 metrotons to 180,000 metrotons. Pulse income market prices came under further downward pressure during the second quarter, with n-type pulse income prices falling from 35 to 37 RMV for children at the end of the first quarter to 31 to 34 RMV for children at the end of the second quarter. Amid subdued demand, depressed pricing, and accumulated industry-wide inventories, the customer producer operated at a low utilization rate with aggregate output of 5,308,000 metronome in the first half of 2020, representing a 9.8% year-on-year decrease. As we make our way through the third quarter, we continue to roll out of anti-involution measures and gaining momentum.

In July, a series of mandatory national standards were issued for energy consumption and product efficiency across the solar feed value chain, including the final official version of the new standard studying energy consumption limits per unit of Pulsica output, which will take effect on January 1, 2027. Also, manufacturers whose unit energy consumption exceeds 6.3 kg per kg must complete a corrective improvement by that date or face the risk of plan shutdown. Notably, the threshold of 6.3% is stricter than the 6.4% proposed in the draft, signaling regulators' commitment to accelerating the phase-out of inefficient capacity. On July 27, the China Photovoltaic Industry Association issued the General Principles for Cost Accounting Models in the Photovoltaic Industry Initiative to regulate market competition and advance standardized industry governance, laid the Foundation for Price Regulation and Enforcement.

On July 31st, the State Administration for Market Regulation issued price compliance guidelines for the solar PBA sector, promoting a structural shift from price competition to value-driven differentiation. The SAMR emphasized that solar CBA companies must conduct price-compliant self-reviews and curb irrational low-price competition, and that the CCIA should shouldn't spend industry self-regulation, promote the general principle, and guide companies away from illegal pricing practices, such as the ULKU. The SAMR also indicated that it will take enforcement action against non-compliant entities. Together with seven other postal campaign factors, we jointly signed an initiative to eliminate rural class deals and fully comply with energy consumption standards on August 6th. As a result of these collective measures, policy prices are beginning to show signs of recovery, with spot prices stabilizing and lower prices rebounding by more than 10% from their recent growth.

We're also diversifying beyond our poor policy conditions to hedge against solar PVs to collapse, targeting the fast-growing AI data center, power infrastructure, and markets. On June 3, 2026, we announced the signing of an investment agreement to establish a manufacturing base focused on the R&D, manufacturing and sale of next generation energy solutions, and related equipment for AIVP. This includes energy storage systems, solid-state transformers, and solid-state directors. These technologies support the industry's transition to high voltage direct current architecture, such as the 800 volts, DC standards, advanced by NVIDIA, and other leading AI infrastructure providers. The platform is anchored by Daco Group, our affiliated entity under common beneficial ownership of Daco New Energy, which brings over 40 years of power equipment manufacturing expertise, established technology, and deep talent in the customer relationships to accelerate our entry into the segment.

We view AIG's power infrastructure as a structural growth opportunity that complements our core business and broadens our earnings base. Consistent with our strong track record, having navigated several possible cycles, we intend to pursue this extension in a disciplined manner that preserves our balance sheet exchange. Despite a challenging environment, the solar PV industry continues to exhibit compelling long-term growth prospects. Growing vulnerability in global energy markets have sparked widespread concerns about national energy security, in which the solar PV and renewable energy sectors can play a crucial role. As one of the world's lowest cost producers of the highest quality in-tech, called FITCON, We will remain optimistic about the sector and are well-positioned to capitalize on the anticipated market recovery and long-term growth opportunities.

We will continue to strengthen our competitive edge through advancement and high-efficiency and high-tech technology and cost optimization via digital transformation and AI adoption. As the world accelerates its transition between energy, we're confident in our ability to play a leading role in shaping that future. And now I'll turn the call to our CFO, Mr. Ming Yang, who will discuss the company's financial performance for the quarter. Ming, please go ahead.

Thank you, Anita, and hello, everyone. This is Ming Yang, CFO of Daco New Energy. We appreciate you joining on our new conference call today. I will now go over the company's second quarter of 2026 financial performance. Revenues were $62.7 million compared to $26.7 million in the first quarter of 2026 and $75 million in the second quarter of 2025. The increase in revenue compared to the first quarter of 2026 was primarily driven by higher sales volume. The company resumed normal sales activities starting in June following a prolonged period with no new policy developments. Gross loss was $82.7 million compared to $139 million in the first quarter of 2026 and $81.4 million in the second quarter of 2025.

Gross margin was negative 132% compared to negative 520% in the first quarter of 2026 and negative 108% in the second quarter of 2025. The sequential improvement in gross margin was primarily due to a decrease in provisions for inventory impairment, which was $55.7 million in the second quarter of 2026, compared to $98.9 million in the first quarter of 2026.

SG&A expenses were $15.8 million, compared to $12.2 million in the first quarter of 2026 and $32 million in the second quarter of 2025. The sequential increase was primarily due to higher sales volume in the second quarter of 2026. The year-over-year decrease was also due to the companies recognizing $18.6 million in non-cashure-based compensation costs related to its share incentive planning in the second quarter of 2025. R&D expenses were $1.6 million compared to $0.8 million in the first quarter of 2026 and $0.8 million in the second quarter of 2025.

The increase is primarily due to R&D of next-generation energy solutions for AIDC power infrastructure. R&D expenses can vary from period to period and reflect R&D activities that take place during the quarter.

Last form operations was $98 million compared to $150.8 million in the first quarter of 2026 and $150 million in the second quarter of 2025. Operating work margin was negative 156% compared to negative 560% in the first quarter of 2026 and negative 152% in the second quarter of 2025. Net loss attributable to Daqo New Energy shareholders was $81 million, compared to $88 million in the first quarter of 2026 and $76.5 million in the second quarter of 2025.

Loss per basic ADS was $1.20, compared to $1.31 in the first quarter of 2026 and $1.14 in the second quarter of 2025. Adjusted net loss attributable to Dapu New Energy shareholders, excluding non-cashure-based compensation costs, was $81 million compared to $88.4 million in the first quarter of 2026 and $57.9 million in the second quarter of 2025. Adjusted loss for basic ADS was $1.20 compared to $1.31 in the first quarter of 2026 and $0.86 in the second quarter of 2025. The Dibidot was negative $29 million compared to negative $83 million in the first quarter of 2026 and negative $48 million in the second quarter of 2025.

Ipto margin was negative 46.8% compared to negative 311% in the first quarter of 2026 and negative 64% in the second quarter of 2025. Now on the company's financial condition. As of June 30, 2026, the company had $555 million in cash and cash equivalents, compared to $559.4 million as of March 31, 2026, and $598.6 million as of June 30, 2025. And as of June 30, 2026, short-term investment was $250 million, compared to $288 million as of March 31, 2026, and $118 million as of June 30, 2026.

As of June 30, 2026, no receivable balance was $71.7 million compared to $20.8 million as of March 31, 2026, and $49 million as of June 30, 2025. No receivable balance, which represents bank notes with maturity within six months. As of June 30, 2026, health maturity investment was $51 million compared to $50.3 million as of March 31, 2026 and zero as of June 30, 2025. And as of June 30 2026 the balance of fixed deposits within one year was million compared to billion as of March 31 2026 and million as of June 30 2025 Now on the company cash flows For the six months ended June 30 2026 net cash using operating activities was million compared to million in the same period of 2025 And for six months at the end of June 30, 2026, net cash using investing activities was $169.6 million, compared to $242.7 million in the same period of 2025.

Net cash using investing activities in 2026 was primarily related to the purchase of short-term investments and fixed-term deposits. For the six months ended June 30, 2026, net cash-using finance activities was $7.8 million, compared to $32,000 in the same period of 2025. Net cash-using finance activities in 2026 was primarily related to $7.8 million in stock purchases made by the company's subsidiary, Xinjiang. co, from its minority shareholders. And that concludes our prepared remarks. We will now open the call to Q&A from the audience. Operator, please begin.

Okay, we're going to translate your question. Thank you. I will now turn the call over to the U. S. The market is not a big deal. The market is about 50-60 million. The market is about the price of the U. S. The market is about the price of the U. S. The price of the U. S. is now about 3,000,000. The price of the U. S. is now about 4,000.

I will translate for our CEO Mr. Shi. On August 6th, led by the China's Photovoltaic Industry Association, there is a strong initiative for self-discipline. Based on the CTIA cost model, the industry average production cost is estimated to be around 50,000 RMB per ton, so about 50 RMB per kilogram. But due to the current market environment where demand activity is relatively low, and there's still approximately 500,000 to 600,000 tons of approximate inventory in the industry. So we think the price recovery might take a little bit longer than anticipated, but there is strong consensus within the industry for self-discipline and also with the urging of the government and the related departments that the industry consensus is that it's no longer viable to sell below cost.

And what we're seeing in the market is that the quotations for polysilicine pricing from different manufacturers have already exceeded about 40 RMB per kilogram. So we're optimistic about the current policy development, and we're waiting to see how the policy may be enforced going forward. I think the market is in a new way. The market is in a fair規模, but it is still in a fair規模. I think that the market is a fair price, and it is an fair price. I will now turn the call over to management for the government. I will now turn the call over to management for the government. I think this should be a good result. I think that all of the countries in the country are in a large number of government.

I think that this is not a good result. I will now turn the call over to management for a year. I will now turn the call over to management for a year after the year. Actually, in the last 12th, we had a first time in the first time. We had a few people, but we were not seeing it. I think this is the same kind of action. The action will be affected by our government. Okay.

So let me translate for Mr. Xi. So right now the industry in terms of the value chain between the buyers and sellers of policy silicon, so some of the buyers are still observing the market and the policy development, And they're taking a wait-and-see approach. But in terms of the Ponceman manufacturers are expecting a reasonable price where they would not be selling at a lot or below their cost. So there's still some, you can call it a wait and see between the positive manufacturers and the downstream. But we do believe that the past industry practice of selling below cost, especially in the first six months of this year, is likely to end. And where the government is very adamant about preventing dumping of the products and selling below cost.

So, you know, within the law framework for price law and for the anti-evolution, And our expectation is that this is likely to move forward optimistically over the next several months. And then we know that over the past few years, the policy can manufacturers or the whole industry in general have seen significant losses, and we do not think that this is long-term sustainable. In fact, it's very unsustainable, and this is likely to lead to the industry in trouble. So if we look at DQ, especially in December of last year, when the anti-evolution policy was more successful, right? So, and the Daqo had no cash loss in Q4 2025. So, we were able to achieve a positive operating cash flow during that period.

So, we think that that's a more sustainable timing or framework going forward.

Thank you, Mr. Shi. Okay, so we believe that the current round of anti-involution policy and with the price law enforcement is likely to sustain. What we saw in the previous round was that there was this proposal for the industry consolidation platform to accelerate the excess capacity. But the state administration for market regulation stepped in because they were very worried about anti-monopoly practices between the manufacturers, the leading manufacturers. So they were worried that this would bring non-market activities or behaviors by the main manufacturers.

But this time, the current effort is led by the state administration for market regulations, And this is bringing self-discipline forward. And also, this is not, for example, there's no coordination between the manufacturers on pricing or allocation of sales volume, for example. So this time, it's really based on each individual manufacturer's own production costs in terms of their manufacturing efficiencies. And for them to sell products based on their ability to produce products at a lower cost.

Okay, so we think that this time it's actually much more sustainable and is being supported by the government. So we think that through these two efforts, right, so one is by being one of the lowest cost producers within the industry. As well as with the regulations on energy usage, we think that this time it will promote a more market-oriented approach to both capacity exits and to the selling of products at a reasonable price. And this is all under the current legal framework brought forward by the government.

Hello?

Let me translate for Mr. Shia. Yes, thanks. Give us a minute. Okay. Okay. Thank you. I will now turn the call over to management for the Daqo New This is a process of processing We understand the information is about 4 and more than the other I think this is the time. I think we are talking about the first tax tax. It is not a tax tax tax. It is a law of law. So I think this will be a little bit more. I think it will be a little bit more. But now it is already a little bit more. From the beginning of the day, we have two things to do. Now it is already a little bit more.

I think this is what I think is going to be a little bit more. This is what is the case of the Daqo New Energy. We are going to be in the Daqo New Energy. and pay for the price of the price of the price. I think this will be easier to get.

Even though the overall demand is relatively weak, but there are some wafer producers in the industry that have very low to no inventory where they are procuring to production. And so right now, we are seeing some transactions, although not very high. What we're seeing is some manufacturers are testing the market. So although the full cost model would stipulate around 50 RMB per kilogram, some producers are right now testing the market and selling at approximately 40 RMB per kilogram right now. And so it's been about two weeks since the announcement of the manufacturers and the guidance from the government. So we do think that going forward, we are likely to see more and more transactions happen at this new price range.

当然,中国当中有能力生涯,它已经有些职业,这种很多中国还有很多动力的企业,现在已经提到了60,它也开不出来了,因为它已经没有能力了。 因为开动这个动力规则的时候,还有人的问题,没什么问题,时间的问题。 对吧,这几个因素,要素之后,它有个实现性的理由也开不出来了。 虽然它号称它能开出,其实也开不出来了。 可是这几个产生已经到不了这个300万年,200万年,200万年都很难做。 Okay, let me translate for Mr. Xi, okay. He thinks that the recent energy quota policy from the government where there's different energy usage requirements for the industry, I think this is what will lead to a force exit of a significant amount of capacity that have significant or higher energy usage. So we're likely to see that happen pretty soon. And then also the industry self-discipline, and there's a commitment from the various manufacturers that there should be a voluntary reduction of capacity or production. And then also there's a commitment that manufacturers should not be selling at below production cost. So we think that both of these are likely to happen starting the second half of this year.

And then there's also the issue that not that many producers actually have the capability to produce, especially now that the industry is running at a fairly low fertilization level. So a lot of manufacturers have let go of a significant number of people. So there's actually a lack of employees and also lack of training and time. So a lot of capacity that has been shut down is unlikely to restart going forward. So even now, he thinks that, for example, the effective capacity within the industry, even though close to 3 million tons, have been built. The effective capacity is already less than 2 million tons right now. It's likely to go lower as well.

Let me translate. Welcome to the Daqo New Energy. Welcome to the Daqo New Energy. We are looking at the Daqo New Energy. We are looking at the Daqo New Energy. I will turn the call over to the Daqo New. And in the AI of the development of the AI, we know that we have to understand that we have a clear understanding of the market. In the case of the AI, the Daqo News, we have to understand that the Daqo News and the Daqo News are in a relationship with the AI. We will be able to do our best practices and our best practices. This is our business, our business, our research, our research. We have a great deal.

We have a great deal. We have no to share with the投資 team. I will now turn the call over to management for the Daqo New Energy. We are doing this product. The Daqo New Energy is based on the Daqo New Energy. I think the Daqo New Energy is a business. We are very interested in the Daqo New Energy. This is our Daqo New Energy. We are very interested in the Daqo New Energy. In Dbc. SFC, FFCB, and GOO are now to the world. Although, in Dbc, no other market market market market, the Dbc. com and the Dbc. com. This is our first-time business. We have a huge deal with the Daqo New, and we have a huge deal with the Daqo New, and we have a huge deal with the Daqo New.

Then we turn the call over to the Daqo New. This is the Daqo New. This is the Daqo New. This is our Daqo New. This is the Daqo New. We are very good at the Daqo New. Now we are doing this, we have a Daqo New. We have a Daqo New. We have a Daqo New. So I think that in 2026 or 2027, we should be able to do it. Because in the industry, we have a lot of customers. We need to do the E-New in our project. We want to do E-New in our project. So IIDC, the D-New system, the S-New system, and the S-New system, can be able to be the business and the business.

This is our goal. We have a lot of money, but we are able to do the cost of the money. We need to be a part of the company. We can build a company that is a part of the company. The company will build a company, and we will build a company. Let me translate for Mr. Shi. So we do see that the AIDC related power infrastructure and improvement market is actually a very viable sector where it's going to be a significant growth driver for the company, and it's still a very viable sector. The second sector that the company is entering into. So I think most investors are probably aware that we do think that the growth for the policy market going forward is likely to be relatively low in terms of volume demand as well as for solar.

So the company is actively looking for other areas of growth. And because Daco Group has more than 40 years of experience in the power equipment sector and being one of the leading manufacturers and suppliers of high and low voltage power equipment such as a transformer and circuit breakers. So Daco Group is seeing a very strong demand, especially in AI data center related power equipment demand. So we do think this is a very significant and real opportunity for the company. And Daqo Group brings many years of experience and advantage in manufacturing and R&D and technology capability.

So in terms of products as well. So with the growing power demand, and especially for the next generation power infrastructure for IDC, where led by NVIDIA, there's this future development of a new next generation of equipment under the 800 volt DC infrastructure.

So we're targeting initially in the solid state transformer and solid state circuit breaker market. So the industry is starting in 2027 next year, and then we expect to see very significant growth from 2028 to 2030 with power demand from these new AI data centers based on the new 800 volt DC technology. So with Daqo Group, right, so it brings significant experience and vintage, and at the same time matching with Daqo New Energy's strong balance sheet and capital position, right, to capture this growth driver. So now we have built an R&D team in Shanghai, and we expect to have an initial product ready by year end, and then with prototypes, and then achieving sales starting in 2027, and then capturing the growth opportunity in 2028 to 2030.

and our goal is to become an industry leader within this IEDC power equipment sector by being a chair one, both in terms of product and the team. So that's our current goal right now.

Thank you, Moen. So let me tackle your question for Mr. Xi, and then he will respond. Okay, just a minute. Thank you.

How do you think about the fact that the stock market is a good thing? I think that the next year, the stock market is a good thing. The stock market is a good thing. The stock market is a good thing. I will now turn the call over to management for the Daqo New. I will now turn the call over to management for the Daqo New. The Daqo New is a great deal of the Daqo New. This is a great deal of the Daqo New. I think that the Daqo New is a good and good and good and good and good and good. I will now turn the call over to management for the Daqo New.

I think that's what I think. From the future, I'm not sure to say that I'm not sure to say that I'm not sure to say that I'm not sure to say that. Because even now, the price is still up. It's not just the case that we're going to talk about the price of the government. It's also the price of the government. Because the price of the government is not to say that it's completely not合理. I will now turn the call over to the Daqo New Energy. I think this will be a little bit better.

Let me translate for Mr. Shi. So, in the second half, what we believe is that because Dakon Uniti, we have a superior quality of product in the market. So, you know, selling and shipping our product is really not an issue. I think the question is really price. So in the first half, because we adhere to self-discipline, so we did not sell as much products as our normal market share.

So because, you know, our competitors were engaged in below-cost sales practices. But if we look at our market share in the past, we believe that we can achieve approximately 15% market share within the industry, and we continue to expect that going forward. So our target is to sell at an appropriate price or a reasonable price, you know, so be fully compliant with the government guidance and the price law. So what we expect is that, say, in the next 6 to 18 months, we're likely to see a forced exit or a market-based exit of manufacturers with high production costs or manufacturers with poor cash positions or poor cash flow. So companies with not a good balance sheet are likely to struggle, continue to struggle going forward.

While Daqo New Energy, with our cash position and our strong balance sheet, also our high product quality and low cost, we expect that we're likely to do better and to do well in the market. So especially in 2027, where we expect to see a much improved and better market environment.

And then we expect to continue to lower our inventory going forward to relatively low inventory levels. That's our target.

Okay, that's super clear. And my second question about AIBC, I think we have put out announcements like we have six billion billion total investment, two billion in the first place. And you just mentioned we will have self-volume recorded in next year. So just wondering, can you share a bit more about the plan for the business, specifically our CapEx timeline and the source of capital for this $6 billion or $2 billion investments? And what's our expected payback duration for the first phase of the production base? And what's the normalized probability from this business do we expect we'll achieve? And also for other like operating metrics, will we have more other sources allocated for this new business development?

Or we can use some of the synergies from our Daqo group, the Aligno company. So a lot of details, but can you share a bit more regarding to this? Matt Patrick, thank you so much. Okay, okay. Let me translate your question first quickly. Okay, hold on.

Thank you. I will now turn the call over to management for the Daqo New. The Daqo New is a host of the Daqo New. The Daqo New is a host of the Daqo New. The Daqo New is a host of the Daqo New. This is a company that we can see on the market. I think it is a company that is a company that has a big deal with the market. It is a company that has a huge impact on the market. Thank you. I hope that we will be ready to bring the new wave to the next stage. I believe that we will be able to talk about the new wave of the Daqo New.

This is the industry. Because in the previous year's marketing, everyone's partners, our customers, our company's cooperation, and our partners, and our partners. We are full of confidence and confidence.

We're only committing the first phase right now, which is about 2 billion RMB, which will cover all of solid-state transformer, solid-state ticket breaker, and also our e-house total solution for AI infrastructure, and also some related to energy storage. And so the remaining $4 billion is not committed as of today, and will be planned sometime in the future.

And then in terms of our strategy, so we're focusing on AIDC-related power infrastructure equipment, and then we expect to have three primary products. So one is a total solution or a package solution, which is going to be a plug-and-play kind of solution for AI power infrastructure, which has all the related power equipment. And then also solid-state transformers and solid-state circuit breakers, and so it includes the related software and control. And there's very significant synergy with Daka Group, where because of Daka Group's experience and know-how and also their position within the market, we think that it's actually we can receive significant orders from customers. And so we're now in the phase of doing R&D and also the building of related manufacturing facilities.

And the R&D team is now in place, and we continue to expect to have our prototype ready by year-end and getting these products. So in terms of 2026 and 2027 is really a preparation period and production of the product into the market. And we think that the market will see a high growth phase from 2028 to 2030, where we do expect a significant ramp-up of revenue during this period for these related products and business.

Okay. Thank you, Momen. For the two billion committed investment we will expand in 2026. Over the next two years, this year is only about, I think two, it's only maybe 30 to 40 million US dollars this year. And then the remaining will be over the next two years.

Jessie Zhao Zhao Thank you, everyone, again for participating in today's conference call. Should you have any further questions, please don't hesitate to contact us. Thank you and have an awesome day. Goodbye.