GURE

Greetings. Welcome to the Gulf Resources Third Quarter 2023 Earnings Conference. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Helen Xu. You may begin.

Thank you, operator. Good morning, ladies and gentlemen, and good evening to all those joining us from China and U.S. And I like to welcome all of you to Gulf Resources third quarter 2023 conference call. I am Helen Xu, IR Director and CEO of the company; Mr. Xiaobin Liu, will also join this call today. I would like to remind you to all our listeners that in this call, certain management statements during the call will contain forward-looking information about Gulf Resources in corporation, and its subsidiary business and products within the meaning of Rule of 175 on the Securities Act of 1933 and the 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 the PRC, the risk associated with COVID-19 pandemic outbreak; future product development and production capabilities, shipments to end customers, and market acceptance of new and existing products, additional competition from existing and new competitors from the bromine and the other oilfields and power production chemicals, changing technology, the ability to make future bromine assets and the risk other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this cautionary statement and the risk factors detailed with the company's reports filed with the SEC. Gulf Resources assumes no obligation to revise or update any forward-looking statements, to reflect events of circumstances after the date of this call. Accordingly, our company believes expectation reflecting in those 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, represent the management's estimates as of today, the 20th of November 2023. For those of you unable to listen to the entire call at this time. A replay will be available on company's website, the call is also accessible through the website and link is accessible through our website. So please locate our press release issued earlier for the details. Before focusing on the major contents of this conference call, I would like to briefly discuss the proposed change in our chairmanship Mr. Yang founded our company and Mr. Liu joined the company in 2007 and become CEO in 2009. Mr. Liu who has investment in many companies in Sichuan Province, has decided not to stand for reelection as Chairman at the annual meeting on November 30, 2023. The board has nominated Mr. Liu to serve as our next Chairman. We would also like to refer to a recent press release discussing our prevention plan. As we issued earlier that in year 2018, Shouguang city experienced that in last impact of typhoon of India [ph] regarded as one of the most destructive typhoons in history, resulted in the region receiving 14.9 inches of rainfall, and the overflow of three major surveys along the Miho River led to extensive flooding in farmland, residential routes and industrial factories. All of the company's bromine factories, crude salt tanks, and mining areas it was seriously impacted, the company incurred substantial expenses amounting for more than $40 million including the write-offs and the road repairs, equipment replacement, salt pan reconstruction and redrilling of flood wheels. A year later, the Typhoon Lekima struck Shouguang city again, surpassing the destructive force of its predecessor. Once again, the company had to spend more than $6 million to rectify the aftermath involving the road repairs, equipment replacement, salt pan reconstruction and the feeling of offsetting will. So, to mitigate the similar damages in the future, the company had commenced of the provision initiative. Our strategy involves the renovation of the channels of four major rivers within our mining area, in combating the Tributary of Miho River. The aim is to prevent flooding that could have the wells, aqueducts, and crude salt pans at our plant. The projected expenditure for this initiative amounts to approximately $50.5 million. As of this quarter, ended by September 30, 2023, the company disbursed amounted approximately $15.15 million for the initial phase of this project. Apart from reducing risk to surrounding regions, we anticipated that there are three notable advantages from this flood provision plan. It is expected to, firstly, enhance the probability of opportunity approvals to reopen factories number two and number 10. Secondly, enable the drilling of additional wealth across our five operating factories. And number three mitigates the risks and associated expenses related to future stops induced flooding. Given the company's current financial position and its substantial cash resources, the company believes that the floor protection plan will yield favorable returns over the long-term to the company. So now let's turn to the results of the third quarter and the nine months. During the third quarter, the sales declined by 74%. Net income after tax was a loss of approximately $1.8 million compared to approximately $9.0 million. Net loss per share was $0.17 compared to a net profit of $0.86. Shareholders' equity was approximately $260.8 million or $24.99 per share. Total results for the three months ended September 30, 2023, in the third quarter of 2023, revenue only declined by 74% to approximately $5.9 million from approximately $22.9 million. Especially the bromine revenues declined by 75% to approximately $4.9 million from approximately $19.8 million. The decrease in this net revenue was primarily due to the reduction in the volume of tons sold 43% and a 57% decrease in the average selling price of bromine. During the quarter, the average selling price was $3,237 compared $7,474. As of November 16, 2023, based on the sensors.com data, the price of bromine has seen an increase of approximately 7.4% to $3,477. The decrease in selling price of bromine reflects both economic weakness in China and an excess inventory of anticipated. Following the aftermath of COVID, the reduction in tons sold reflects the company's strategic decision not to engage enterprise competition, aiming to safeguard the long-term value of its resources. Additionally, crude salt revenues declined by 70% due to an 18% decline in pricing and a 63% decrease in tonnes produced. As crude salt is a byproduct of bromine, the decreased production of bromine, resulting in a reduction in production of crude salt as well. There were no revenue generated from our chemical products business yet, while our natural gas business obtained approximately $68,000 in revenue through its equipment leasing. Gross profit for the quarter was amounted to a loss of $580,000 compared to a profit of approximately $14.5 million in the previous year. Especially, our bromine business suffered a gross profit loss of approximately $1.1 million compared to a profit of $12.5 million while crude salt achieved a gross profit of $511,500 compared to $1.9 million previously approximately. The company incurred direct labor and factory overhead amounting to approximately $1.0 million during the plant shutdown, compared to approximately $1.9 million previously. General and administrative expenses were approximately $762,900 compared to $584,500 previously. Consequently, our loss from operations was amounted to approximately $2.3 million, compared to a profit of approximately $11.9 million in the period prior year. The net income after tax was a loss of approximately $1.8 million, compared to a profit of approximately $9.0 million, and the net loss per share was $0.17 compared to a net profit of $0.86. Results for the nine months ended September 30th, 2023, revenues over nine months declined by 51%, decrease of approximately $23.2 million from approximately $47.5 million. Specially, bromine revenue also fell by 51% from approximately $20.7 million from approximately $41.9 million. Notably, there was a 9% increase in bromine cost, reflecting the addition of section number eight. However, despite this, the gross profit margin decreased to 7%, down from 57%. Throughout the nine months, the average selling price of bromine was $3,493 per tonne compared to the previous of $7,674 per tonne. Revenues from crude salt also declined by 51% to approximately $2.3 million from approximately $5.5 million. While the production volume declined by 31%, no revenue was generated from chemical business yet. Conversely revenue from natural gas increased by 13 percentage from the equipment levy. The gross profit for nine months totaled approximately $2.7 million, compared to $26.4 million. Especially the bromine business accrued a gross profit for approximately $1.5 million, compared to approximately $27.7 million in the previous period. Our crude salt business achieved a gross profit of approximately $1.0 million compared to approximately $2.6 million. Meanwhile, the Chemical business recorded no gross profit and the natural gas business marked a gross profit of approximately $150,000, compared to approximately $132,600 previously. The company incurred direct labor and factory overhead during the planned shutdown amounted to approximately $4.5 million compared to approximately $6.0 million in the previous period. General and administrative expenses were approximately $2.3 million compared to approximately $3.4 million as previously. As a result, our loss from operations were amounted to approximately $4 million compared to a profit of $17.0 million as previously. Net income was a loss of approximately $3.0 million, compared to a profit of $12.7 million previously. And the net loss per share were $0.29, compared to a profit of $1.22. Cash flow during the nine months ended by September 30, 2023, we generated approximately $9.9 million from operating activities and invested approximately $15.2 million, primarily in our floor protection program. Balance sheet, as of September 30, 2023, our cash balance was approximately $103.8 million based on the shares issued and outstanding ended by September 30, 2003 that translated to $9.95 in cash per share. The net, net cash, which is cash minus or liabilities was $8.21 per share. Working capital was approximately $10.07 per share. Shareholders' equity was $260.7 million approximately or $24.99 per share. So now let me turn the call over to Mr. Liu for his additional commentary. Liu?

[Foreign Language].

So here is the remark from Mr. Xiaobin Liu, the company's CEO. First of all, and the company's CEO, Mr. Xiaobin Liu. Welcome all of you to attend the Gulf Resources Third Quarter 2023 Earnings Conference Call. In the third quarter, our results were adversely impacted by the diminished price of bromine, we attribute this drop-in price to two major factors. First, the sluggish state of the construction market in China led to reduced purchase of bromine for fire retardant application. Secondly, the warning impact of COVID pandemic resulted in decreased demand for bromine in medical instruments and sterilization. Despite these challenges, our company remains optimistic about the long-term equilibrium of bromine's demand and supply, we still continued. We anticipate a research in demand of bromine-based products and emerging products such as zinc and bromine batteries and new medical products presents opportunities for sustained demand growth. However, the supply of bromine continues to be constrained. Notably, based on 2022 production data, we estimate probably over 75% of global bromine production is concentrated in regions like Israel, Jordan, and Ukraine, which currently states military conflicts or wars. We adopt a prudent strategy in navigating the market. We have held back seeking approvals to open section number two and number 10 as we await improved pricing. Additionally, we have postponed the procurement of the final equipment of our chemical factory, clear insights into opportunities for innovative bromine products. We have scaled back our sales, anticipating higher returns from future bromine sales. Since the end of the quarter, we have observed a gradual, but consistent uptick in the market price of bromine. We are monitoring the events in the Middle East, recognizing that any disruption in the better sea region could certainly unload the market dynamics. Looking ahead, the ambition returning to profitability in the fourth, coming quarter. Moreover, we aim to progress with the opening of our chemical factory, obtaining approvals for our remaining two bromine factories, and ideally resuming our natural gas and broad exploration in Sichuan Province. So now we are open for the question-and-answer section.

Thank you. [Operator Instructions]. The first question comes from Alan Perkaca [ph], she is a private investor. Alan, please proceed.

Good morning, Helen. Good morning, management. I given what happened in Q3, I have couple of quick two or three questions. My first question is, could you explain why there was a delay in the 10-Q filing in Q3?

[Foreign Language]. Okay. Hi, Alan. This quarter's delay in filing was because that auditors, they need more documents or materials when they are doing their review.

But yes, that's, okay. It is not a fully audited quarter. It's not like a 10-K. So, I am curious to know, what we are concerned about in the quarterly filing. But, okay. So, the auditors are the reason why you have some delay. My second question, if you don't mind. My second question is regarding this flood prevention investments. And as just as I have already mentioned in the past that definitely we wanted the company to consider some action to mitigate the risk of flooding and I think that's great. We are happy about that. The only thing that surprised us is that, we learned that last minute, so I don't know when the decision was taken, but to learn last minute that we have a $50 million investment and that's already $15 million against paying Q3. That was kind of a surprise to shareholders. So, when was the decision taken to make this $15 million underlying investment?

[Foreign Language]. It was during the September in Q3.

And you were able to spend $15 million in September?

No. I mean the decision you mean the final decision when was…

The decision to plan I mean to spend $15 million, when was the decision made towards? I just find it that shareholders find it interesting that we just learned about it and suddenly we are told $15 million has already been spent. So, we would have liked to have a little more of a warning, when you have made the decision to do this investment? The big question is how much do you expect to spend in Q4 of the $15 million?

[Foreign Language]. Maybe in Q4, rest of the projects will be spent next $35 million approximately.

$35 million in Q4.

Approximately.

The last point is regarding the bromine pricing and market. You have restricted production in Q3 because the price went pretty low. It was at a very low price at the beginning of Q3. Are you still restricting production in Q4? Or do you expect to go to full production in Q4? Whatever is full production, because it's winter, so I know it's not as high as in the summer.

[Foreign Language]. Okay. So, hi, and here's the response from you. Firstly, because we think the bromine price is in its recovery stage, and we think it's under its current stage and we should not launch passion of our production alone. So, we estimate the production volume maybe will be similar as last year Q4, quarter-four focus. Secondly, we think because the Dead Sea region, the situation could alert market dynamics and the pricing of bromine as well. So, we are monitoring the events in the Middle East.

Yes. And regarding that, I mean, I've seen that the price of bromine outside that's coming from the legalities are coming from the U.S. is higher than the price of bromine in China. Is the export team looking at the possibility of exporting some bromine to Asia, like to India or to Singapore? Has the export task force looked at that?

[Foreign Language]. Hi, Allen. Firstly, because you know, the downstream of bromine industry are majorly in China area, but not in Asia. So, the main demand are here. And secondly, because bromine is very dangerous to transport, and the transportation cost is very high. So, based on these two factors we think if we wanted to translate, like you said, Asia and other countries and also Singapore, maybe we have to evaluate and monitor the market condition and to evaluate the cost and the benefit.

I think if the export platforms could look at that, that would be a great thing. Okay. Sorry for all these questions have been so long. Okay. But thank you very much for your answers.

The next question comes from John Smith with Gulf Resources. Please proceed.

Hello? Can you hear me?

Yes. Hi, John.

Hi. My question -- first thing I just want to say, thank you to the Chairman who has been with the company for a long time. He has done a good job building the business and I think the current CEO is in a good spot to take a spot and continue the good management. So, the first off is just thank you. After that my question goes off of Elaine's question on the bromine. Look, thinking that we just spent $50 million in the flood prevention, that's good. But if we could export some of that bromine, I understand the cost would be bad, and I think looking at it from an economic standpoint it might not make sense. But if you could just export $2 million, $3 million, $4 million, $5 million a year, you could use that money to buy back shares. And with shares right now at an all-time low, that would instantly double, triple, quadruple times five the market value. So, I think you guys do a good job running the business. But if you want to bring back shareholder value, I think you need not just look at it from economic standpoint, but from the shareholder standpoint as well. And it is good for you. You guys could pay you guys' self in stock at $8 a share. I mean, this stock would skyrocket, if you guys bought back 2 million shares, which at this price you could do easily. So, thank you.

[Foreign Language]. Okay. John, thank you very much. We will consider about your suggestion. And by the way, we just want to say, that's because bromine raw material is a very dangerous material during transportation, so there might be some partial requirements from the government policy when we want to export. But anyway, we will do more research on these projects, and see if we can do this.

Awesome. Yes, I understand it might be more expensive. But again, maybe even if you lose some money, it could really boost the stock price. Thank you.

Yes.

I have one more question. Would you, on this hypothetical would the company right now we are valued so low compared to our worth? Would the company think about take like say $15, $20 a share, obviously hypothetical?

What do you mean $20 or $15 per share?

Would you consider a buyout at $15 or $20 a share?

You mean that's for private or sell the company for what out?

Yes. If someone bought it for $15 to $20 a share, yes.

[Foreign Language]. No. We don't think about this currently.

And then I have one more question. The flooding, the big flood that happened so was that I think 2018, that caused the $40 million damage? If that were to happen again under the new flood plan. What would your estimates, would you think, how much cost would that cost the company if a very similar typhoon hit, after your provisions?

[Foreign Language]. So, if, like, the similar typhoon as year 2018 again, after all this provision project. We think the cost for us to get everything down again it will be very few. Maybe around $3 million to $5 million we can finish all of the retirement.

That's really good if that's true. So that makes the plan seem a lot better.

The next question comes from Randy Liggett, Private Investor.

I'm afraid, I'm not going to be as nice as the first you guys, I mean this conference call sounds like the same one we've heard for last 10 to 15 conference calls. And I mean you just, it doesn't sound like management has taken to heart one idea that investors have brought to them. Okay, the flood prevention plan, that's fine. But we haven't looked at advisors to help the company. Management's fine with the bromide facilities and remediation of the facilities and all that stuff. They cannot and have shown they cannot enhance shareholder value. If anything, look at the price of the stock. I don't understand the stubbornness why we will not higher advisors to help management get through this. And it's just an anomaly to me. I would think you guys would want to get pay. We would like to get paid and for heaven's sake, if somebody offers, as John mentioned, $15 to $20 a share sign on the dotted line. This has been going on for how many years. And this is all fine dandy, but we keep pro. And I mean, we just talk about the same old stuff every conference call. And it's like management does not listen to one thing investors are just throwing out there for ideas. I mean, look at it, look at where the stock closed down. I mean, $1.50 and I haven't even done the math on the reverse split. I'm sure somebody on here probably knows that. But when is management going to wake up and listen to a few things that we are suggesting, go hire an advisor, please. I mean, I don't know what else to say. Also, where do we stand in negotiations with the local government on this gas, natural gas we've been talking about for how many years now? I mean, I can't count the years. I'm going to be dead before all I'm joking when I say that, but I hope not because I mean the value is there and it's like we don't do anything. That's what I'd like to hear about.

[Foreign Language]. Okay. Hi, Andy. Thanks very much for your comments. And we want to say that, we have been always thinking about our shareholders, and how to reward our shareholders. At the beginning or maybe like last quarter, previous quarters, we were thinking that because we have many production lines, we wanted to have all our production lines to be like a more online or finished, then we can talk to IR firm to see how they can give us idea based on our ideal business model. And in order to help our investors increase our shares, as of now, based on -- comments and based on the current situation, we may sync this in other one. And we will go to talk -- consider going to talk with the algorithm to see based on what we can do now. Hopefully, you can help us to do more promotion and to increase the awareness of the company and the increase our rewards to our shareholders.

I mean, that's fine and dandy, but we are not doing anything to do it. I mean, I want to see -- we talk about and talk about and talk about. No, I know. I am going on and on. I am going to get off in a minute. But it is the same thing. I mean, you can call, you have Chinese investment bankers, you have international investment bankers that work all over China. I mean, I just don't get it. We are spending all this money all of a sudden on flood protection. And, we don't want to go out and retain somebody to help us to realize the value in the company. I don't get it. I mean, I really don't. And, I have been around a long time, Helen. And it is...

Yes. I know you.

Okay. What about the local government? Go ahead.

Yes.

Yes. I mean, and there would be no reason to turn down $15 or $20 tomorrow afternoon. If somebody were to make that, I mean, my word, I think shareholders would jump up and down for joy and so with management. I mean, but where are we with the negotiations with the local government on natural gas, I don't think you answered that unless I missed it.

[Foreign Language]. Hi. In the Sichuan project, Sichuan province project, the local government, they have some new ideas come out in their mind, and there are some new competitors in the industry also come out. So, we are still doing the active discussion with the local government on this project.

I mean, have you all even thought about going to China Petro? What's the big company that has the natural gas fund next to where yell in the land? What's the big company? I mean, I don't know why we don't go to them and try to do a joint partnership. I just don't get it. And then I'm going to keep quiet, Helen, and thank you for your help as usual.

[Foreign Language]. So, because China venture, they do not, they instead of corporations, they just wanted to merge the company. So, we think this is not what we want. So that's why we were looking for the cooperation with local governments. And during the discussion with local governments and there are some new competitors come out and the governments have some new ideas in their minds. So that's why this discussion is still undergoing.

One other quick question since you brought it up. I mean, what did they want to buy? Did they just want to buy that natural gas field or what were they talking about?

You mean China Metro?

Yes, ma'am.

[Foreign Language]. The discussion on this kind of agreement, no matter with local governments or special channel or other companies. It's very complicated. There are lots of items or criteria under discussed. And until it's finalized and until we can have a final decision or whatever, we cannot talk too much about it.

I mean, one last comment. Please go hire an advisor this week. There are plenty of them out there that would take L1, spend a little bit of money with them and let them see what they can come up with, please. Thank you, Helen, as usual. Appreciate it.

The next question comes from Tom [indiscernible] Private Investor. Tom, please proceed.

Thank you, for taking my question. I have a few questions. I hope you can hear me.

Yes. I got you, Tom.

So, the typhoons they hit in 2018 and 2019, and we are in 2023. I want to understand the reasoning for proceeding with this flood prevention program at this stage. So, I want to understand the management thought process on why the decision was made to proceed with this flood prevention program currently. And the second question, I have a series of questions, but just on the flood prevention. I want to understand why the management notified investors only after it had spent already spent a third of the projected expense for it. So, is there a reason for this delay in notifying the shareholders? And I also want to understand why a decision was made to proceed with the flood prevention at this stage?

[Foreign Language]. So firstly, Tom, because, after the typhoons in 2018 and 2019, we want to, we have to evaluate the surrounding area and our main area to think so how to do this. Then we see, other companies, how they do it, until they finish, then we can learn some knowledge from them and experience from them. And at this stage, we think it's a very appropriate period time stage to do this since we had more knowledge and we learned a lot from others. Second question, because we think this cost was like normal operating expense, we did not think it's very normal. So, rates happened in Q3. And when we just disclosed it in our 10-Q to our investors.

Thank you. That sounds like a reasonable explanation. I want to get a sense of what the $15 million expense was? And I think from one of the other gentleman's question, I understood that the remaining nearly $35 million was going to be spent in Q4. Is that assumption correct?

Yes. Probably. Yes.

Okay. My next set of questions are with regard to previous gentleman asked, if the management would consider a buyout at $15 or $20 a share. And I think, the CEO answered that they would not consider it. And I wanted to get a sense of why they would not even consider it. And the reason is, around 2017, there was around $209 million in the company's books. And as of this release, there is only half of that around $104 million or so. And so, we have gone through a period where there has not been much return for shareholders. It has been -- not much value has been created. Actually, a lot of value has been decimated in the last seven years or so. And so, I just want to get a sense from a shareholder's perspective, why the management would not even consider a buyout at, $15 or $20 per share.

Hi, Tom. I think because this question we did discussed in previous quarters. Firstly, company will have our bromine business segment, even though now it is now very good, but because bromine price is very low now. But once bromine price increase or come to back to its normal price, our business is very profitable in this bromine segment. Then our natural gas in Sichuan province also have a big potential, because the concentration of the bromine resources there is very low. Third, our Chemical business. Even though now Chemical business are not online yet, but we have very confidence in this segment as well. So already -- and bromine resources are limited resources, like, very few productions in the world. So overall, we think our -- we have quite confidence in our company. So that's why we do not consider to sell it at a $15 or $20 currently.

We have reached the end of the question-and-answer session. And I will now turn the call back to Helen for any closing remarks.

Hi, operator. I think, if there is no more question, we can close for the call today because it's time limit, time out. And welcome. If any shareholders have questions, can feel free to e-mail me. And I will be happy to respond to the e-mail as well.

Thank you. This concludes today's conference. Disconnect your line at this time. Thank you for your participation.

Greetings. Welcome to the Gulf Resources Second Quarter 2023 Earnings Conference. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Helen Xu. You may begin.

Thank you, operator. Good morning, ladies and gentlemen and good evening to all those joining us from China and U.S. And I like to welcome all of you to Resources second quarter 2023 Conference Call. I'm Helen Xu, IR Director and CEO of the company; Mr. Xiaobin Liu, will also join this call today. I'd like to remind you to all our listeners that in this call, certain management statements during the call will contain forward-looking information about Gulf Resources in corporation and its subsidiary business and products within the rule of 175 on the Securities Act of 1933 and the Rule 3b-6 under the Securities Exchange 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 the PRC. The risk associated with COVID-19 pandemic outbreak; future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competition from the bromine and the other oilfields and power production chemicals, changing technology, the ability to make future bromine assets and the risk other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this cautionary statements and the risk factors detailed with the company's reports filed with the SEC. Gulf Resources assumes no obligation to revise or update any forward-looking statements. to reflect events of Circumstances after the date of this call. Accordingly, our company believes expectation reflecting in those 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, represent the management's estimates as of today, the 14th of August 2023. For those of you unable to listen to the entire call at this time. A replay will be available on company's website, the call will also accessible through the website and link is accessible through our website too. So please locate our press release issued earlier for the details. So, we will review the results of this quarter first. I'd like to return the call back to Mr. Liu for his comments. So firstly, let's look at the Chinese economy for this quarter. The Chinese economy continues to severely slow down our products were especially impacted. The demand for bromine was weak with the control of COVID-19. The demand for SunSirs drive up, especially since many companies had built up stock anticipating higher not the slowdown in construction of impacted sales of very target. Ever green route as result, bromine prices from based on sensors.com which has been 69,500 per tonne on October 16, 2021, During the heat of COVID dropped to RMB18,0000 only on June 30, 2023, the bromine a decline of 4 percentage -- the company expects bromine prices may improve in the future. In fact, by August 10, 2023, bromine prices had increased to RMB2000 -- 24200. However, at this time, it is difficult to estimate the timing of the improvement in addition to the decline in the price of bromine, the RMBdecline against the U.S. dollar. Over the extenditor which could be a significant benefit for our company. with a lower R&D import of chemicals using bromine are more expensive, mean that domestic producers should gain share export pharmaceuticals and other chemicals that may be cheaper. Meaning the opportunities for butene and export will increase. Given the pricing of bromine in the second quarter, the company's believe that most companies in the bromine industry and most companies produce chemicals made from bromine have not been profitable. We have yet to see mainly bankruptcy but we assume many may come, given the current marketing conditions, we believe that the company currently has strong cash position and balance sheet. Accordingly, the company made 2 decisions to protect capital and plan for future operations. It has looked seeking current approval for its rep to close bromine factory. The opening of these factories may require the company to build codex and drill new wells. This is the current market for bone we have salient capacity and are not winning to expend additional capital until we see a stronger result in the market. We still expect to receive permission to open these factories. However, there is no point to spend in the capital until they can operate profitably. As previously announced, the company have also postponed the delivery of the remaining equipment for chemical factors, while it will evaluates the market opportunities. The company is committed to its is Chemical business and believe it will be profitable over the long term. However, different products will request slightly different final equipment. For example, some products which pollute more heavily may require more complex solution restricting equipment. During this period, where most chemical companies are to demand, the company is undertaking a thorough review of the potential market. So it can ensure that it is altering the most applicable equipment. Once the review is finalized and the market has stabilized, we will have the remainder of our equipment delivered and assembled. Then we will begin trial and test production. So now let's look at the financial results. Because of the weakness of the Chinese economy and a huge decline in the bromine price, the company reported and after tax laws of approximately $61,800 for the second quarter and approximately $1.2 million for the 6 months end June 30, 2023. However, during the 6-month period, the company generated cash from operations of approximately $11 million. These numbers reflected the potential strength of our business model. At the end of the second quarter, our balance sheet was strong. We have approximately cash of $150 million and approximately representing $11.05 per share. The net net-cash which is cash minus all liabilities, approximately $97 million, representing $9.32 per share, working capital which is approximately $112.6 million which presented $10.79 per share. Shareholder equity approximately $260 million and representing $24.95 per share. We're very pleased to have rather shut down turn while generating strong free cash flow and strengthening our balance sheet. So for the coming future goals and objectives, the company expects that the economy in general and the bromine market in particular to improve. As of August 8, from [indiscernible] -- from a market prices had increased 34% since the end of the second quarter and 11% from the average selling price during the second quarter due in second quarter. Growing revenues were approximately $7.4 million. If the study of prices has been 11% higher bromine revenues would have been approximately $8.2 million. This would have provided us in the additional gross profit of approximately $809,000 in the quarter. Our loss before taxes was approximately $874,500, meaning that the price increase slightly more than 11% may have taken us to breakeven. At August 14, we can see that market price for bromine was [indiscernible] which is requirement an increase of 37% since the end of the second quarter and [indiscernible] 8% from the average selling price during the second quarter. This would bring more extra profit based on our previous projection. So when bromine prices improve further, we will push ahead and to get approval for the company's rest within informing factors. The company is still pacing to its Yuxin Chemical Business. At the present time, many chemical sectors are still struggling. As the cost economic in general and bromine products in particular improved will be in a position to identify the best products for our new factory has a remaining equipment tailored to our needs and delivered complete and assembled. And the rig can begin trial and the test production. The company is continuing to explore opportunities for exports so that it can gain financial flexibility. At the present time, the export market is quite depressed. The company is looking for products that it can produce profitably export so company can obtain capital which we may continue to use to repurchase shares as all payer dividends. The company is still continuing in the discussion with the government of Daying County. I'm creating a joint venture for the exploration and production of natural gas and bromine product is true. While there is no guarantee that the joint venture will be created but if the company is successful in partnering with the local government, substantial opportunities could be open to us. The financial results which included -- you will see in our income statement, balance sheet and cash flow statement for the 3 and 6 months ended June 30, 2023. Our 10-Q have been filed with the SEC will present a full description of the segment of our business and the factors contributing to our lower sales and profits. [Foreign Language]

[Foreign Language]

[Foreign Language] I'll do the translation for Mr. Liu's comments. Hi, everyone. I'm Xiaobin Liu, the CEO of the company. First of all, welcome all of you to Gulf Resources 2023 Second Quarter Earnings Conference Call. So we can see there has been a difficult time for the company of our industries and the Chinese economy. We have focused on preserving capital on our long-term strategy and preparing for opportunities we see ahead of us. We believe the economy will improve and bromine and crude salt profits will increase as well. We are carefully refining our plans for Yuxin chemical plant, so we can produce products that generate the higher level of profit. We also continue to focus on identifying products that can be exported, so the company can gain financial flexibility to consider to support initiatives supporting shareholder value. While the company still do not know if it's proposed joint venture in Sichuan will be approved. A potential could be significant, greater than is owing to the plan. If the company can partner with the local government. The company should be able to drill more wells for both bromine and bromine and natural gas. Currently, the company has approximately $115 million in cash. It could have moved ahead is our efforts to support the rest two remaining bromine and crude salt factories. It could also have taken delivery of equipment for our chemical factory but we are committed to retaining our capital from the opportunities we see ahead of us. The company's investors have asked about actions, it will take to increase shareholder value. Companies believe that we had very substantial opportunities in front of us. The Chinese economy will get better, bromine prices will rise. The chemical facial will open and it will find products to export if company can get off the joint venture established the opportunities in strong will be higher than we had originally anticipated. And the company management just wants to remind our investors that management has traded more than 11.5 years of compensation for shares in Gulf Resources. No one wants to see the price of the shares appreciate more than we do. We are committed to generating cash from exports. When our business improves, the company will take other steps such as hiring investment bankers or IR firm and consider mergers or acquisitions so that it can produce strong financial returns for you and for us. So, now we are open for the Q&A section.

[Operator Instructions] The first question comes from Jay Bhullar [ph], private investor. Jay, please proceed.

I had a question for Mr. Liu. I wanted to ask, are you guys going to repurchase shares?

Sorry, I didn't get it.

Are you going to repurchase shares?

Repurchase shares?

Yes. Because that would be the best use of cash rather than speculating on a factory or exporting goods, you could just repurchase shares and increase the value for shareholders.

Okay.

[Foreign Language]

Okay, so, Hi Jay. So this question has been asked previously by investors as well and as companies explained before, because due to the China government restrictions on the money going overseas and because the company does not have U.S. dollar in overseas bank account. So the company is trying to find a way to maintain dollar in overseas. Then it's trying -- that's why we explained that the company is trying to find a product with higher profit margin and which can be exported. Then we can retain dollar in overseas accounts and then to consider -- do any like improve our shareholders' value, including share repurchase and all share paid dividends that the way which can initiate our shareholder value.

Okay. The next question comes from Alan Parka [ph], private investor.

I don't call our funds [indiscernible] on call. The question I have is, of course, I mean, regarding share price. You will hear certainly what the investors calling are really concerned, since you announced the delay in the clinical factory, the share price went down the drain and now we are at the lowest ever and ridiculous price compared to the book value of the company. So, if we wait an additional time for the chemical factory to be the solution to shareholder value. I don't know where the share price will be because investors are living patients. So my question is the company looking in particular, I would say the CEO and the CFO must get a lot of pressure from the Chairman. Are they looking at other ways of creating shareholder value or pushing the share price up. I've heard you talk to investment bankers. You mentioned that which I was happy to hear. But is there a task force like you have in for the chemical factory. Is there a taskforce looking at the possibility of taking action to add the share price?

Maybe my understanding is not -- can you just like...

Sorry for my French accent to -- so I'm just asking, is there any kind of action taken by the CEO and the CFO that would be the main people to look at ways of improving the share price until we have a chemical factory that will create some export business to provide dollars. So is there -- and you said, you mentioned you talked to investment banks. So I mean, is there an action or is there a firm action some people being in charge of looking at that?

Okay. Okay. I got it. [Foreign Language]

[Foreign Language]

Okay, so, first of all, thank you for your question Alan. So as you know, this year, in recent years, the company has been in discussion, few discussions. But we did not sign any like formal agreements with any bankers, investment bank or a from yet. Because like we all know that due to 2 major reasons, the COVID-19 for this year which suggests like happened for the past few years. And the company's current projects which did not performed and completed well yet. So when all these projects, we have a more clear view where we can talk to the investment bank or IR firm to see how we can go and we will have more borrowing power in this discussion?

Okay. So -- but is somebody is in charge of looking at helping the share price. I mean the CEO or the CFO, is there somebody who has been appointed to do that? To really focus on this. I mean we need to miss somebody to be looking at it and having that as a priority, okay, for sure; the CFO.

Yes, yes.

And you will do something before the chemical factory and you will do something before the chemical factory is ready because it could take a year or two before we get that? So are you going to do something or you're going to let the stock price keep falling like it has fallen for the last several months now?

Okay. [Foreign Language]

[Foreign Language]

Hi Alan. For the share price, the company management always been looking at it including the sales and CEO, OP attention. We see the price of the share dropped. The major reason is due to if we're looking at bromine price which dropped from RMB60 -- more than RMB60 at the highest and to recently more than RMB18,000. There is more than 70% drop in this bromine price. And looks like the bromine price has been reflected to our share price. The company management also quite worried about our share price. So we think we have -- that's why we have 2 major ways to do. Firstly, if we look at our chemical business and our chemical products because this area, the product is now with very low, very low profit margin. So the company that's why -- might disrupt its rest equipment to be delivered because the companies want to find new ways with other products which can have higher margin in order to bring the company with more net profit. By doing this way, may increase our share price and the company's profit. Secondly, company is in deep discussion with Sichuan Daying [indiscernible with its best -- company best to improve this process and to get it down as soon as it can. By doing this, it will provide a continuous much higher opportunities in this area. In exploring and producing bromine, halogen and natural gas and try to bring the company with more opportunities and more possible net profit.

Okay. I'll let other people ask questions. I'll write to you a little bit more because the price of a mine has been coming back up and the share price kept going down. So it's more than that. But I'll do it in writing to you later on and I'll let other people ask questions.

The next question comes from Frank Manning [ph], private investor.

Your balance sheet shows cash of $115 million at the end of Q2. Your income statement shows interest income of $72,500 approximately for Q2. That's under 0.3% annual interest for average cash. Why is that interest so low? And is there a conservative way to increase the interest?

Okay. [Foreign Language]

[Foreign Language]

So because the company is more like of conservative on its cash, so like that's why I did not do any less finance production [indiscernible] but we just put the money there for its safety and even we did not put money in trust or any other finance products. For example, last trust which had a big problem and because it's put the money to new assets industry and now they have very lesser [indiscernible] risks and cannot be back. So based on the company's way of doing this is always conservative to make sure it's cash in a safe position and but not only looking for higher interest of return. That's why we have low, like you said, interest rate.

The next question comes from Kumin Ken [ph] from Dorel Capital Corporation.

I have a few questions. Question number 1, from the last quarter report Mr. Liu, the CEO, talked about exploring the export of your chemical products. Can you share some light on what concrete plan or have you hired people with knowledge to explore the export opportunities for your chemical products?

[Foreign Language]

[Foreign Language]

My next question is that -- the Bromine price has fluctuated and then declined dramatically from $69,500 per tonne in October 2021 and then went down to approximately $18,000 per tonne in October 23. My question is that what are the driving forces for that -- for this dramatic price fluctuation?

Okay. [Foreign Language]

[Foreign Language]

Okay. So maybe for fees to other shareholders, I think I will transfer -- translate Mr Liu's comment. The reason for the is drop in this price of bromine because of the real estate industry, the very patent products is the first reason. Second reason is because of COVID-19. Before the demand was high for bromine but after -- like past, then the demand for -- which drives up the bromine price. The third reason because the export of pharmaceuticals from China to overseas.

[Foreign Language]

Okay. So another reason for the very high price, like almost RMB70,000 a tonne because of the market reason. Normally, the market speculation to not only bromine price wouldn't be that much high if [indiscernible] market speculation.

Do you anticipate from your perspective or experience that the bromine price is going to be kind of stabilized in short term or maybe the long term? That really the driving force of the revenue and the -- and also related to the shareholder price?

Okay. [Foreign Language]

[Foreign Language]

Are you very optimistic in terms of the price stake stabilization?

[Foreign Language]

[Foreign Language]

Okay. So losing that because Bromine resources is funding a major fundamental chemical raw material and this resource is limited. So as this -- the -- if it's more than RMB60, they have a reason for the market speculation but if there is too low price like below like RMB10,000 or about approximately RMB10,000 this is realistic to the market reflection as well. So misleading the price for Bromine be stabilized and go up slowly. And this is what the company be happy to see as well. Because we are in this industry and we do not want -- do not want to see there is big fluctuation in the pricing of the bromine.

My last question is the -- for your petroleum and natural gas product, you're working out a partnership with the government. Also, do you anticipate approval and the approval and then start the production of the petroleum and natural gas product. And then what is the expected revenue and a profit margin if the production starts? You've done any consulting to do an estimate on this future revenue and profit or margin, etcetera?

[Foreign Language]

[Foreign Language]

Do you anticipate a timeline for this?

[Foreign Language]

[Foreign Language]

No, because this is a discussion with the government. So we do not have the timeline yet.

The next question comes from Randy Liggett [ph], private investor.

Hey and how are you and -- sorry for all my e-mails, by the way. But obviously, everybody shareholders are frustrated we've gone through this for several years, no matter what the price of bromine was. Why are we being so serving about hiring investment bankers and the PR firm. I just don't understand we've been talking about it for quarter after quarter. And the price of bromine was $70,000. And the stock really did not reflect the value of the company. And I would think management, including yourself and the Board of Directors would want the stock to go up. My second question is and I'll make this very short and sweet. Have you all received any unsolicited offers to purchase the company or take a private or anything like that?

[Foreign Language]

[Foreign Language]

Okay. So first question, as we previously explained that we want to have like a discussion with investment bank or PR firm. But still not progress yet, because if we go to discuss with investment bank and they will want to see real company's development value and how we want to discuss with you to improve your value, right? But based on the current currency position, our projects which did not -- on the standards of position to perform our development value yet. So until our projects which become more clear, then we can see how we're going to do this discussion with investment bank.

Yes. How about my second question. Have you received any offers unsolicited?

[Foreign Language]

[Foreign Language]

Okay. So for your second question, because the company never think about to sell it because even though now we have low share price. But we really have big potential and we are confident in it.

So you all have not had any interest from outside parties.

No.

Okay. One last thing, thank you again, Helen. I appreciate all your help. Please update the website and please continue the communications update. Sometimes I feel like we're going back to the old days. And I think it's good for shareholders to hear from you all and just kind of let us know what's going on, not asking much there.

Okay. Just for information; the website will be updated right after the quarter recruiting the CEO letter and CFO letter. And because sometimes for the fairness of public information to all shareholders, so we want to make sure, it's fair and transparent to all our investors. Thank you, Randy.

Okay. We have a question coming from Bill Bender [ph], private investor.

Good morning, Helen. This question is in general but I've been an investor for over 10 years and shared many of the thoughts that previous callers had. But if you look back over the last 5 years, we discovered natural gas. Then you had a Tsunami and we replenished and really made state-of-the-art bromide factories, even though there's a few not open yet. And then, we were really banking on this new chemical factory for 2023 that was to open in January, it's now August. And the [indiscernible] were delays in equipment that was for COVID. There's no more delays. You can get anything in the world today. And the frustration is building and building because we keep going quarter-to-quarter with the same story. And I'm sorry but the bromide price is not the problem, Helen. The problem is we are losing investor confidence. And I think the management and Mr. Liu and the Board have put their own money on the line, I know they did. They want the share price to go higher. You hear all the callers here who are just investors. I've been an investor for 40 years. It really doesn't take much in 3 months to make a promise of something and we have a brand-new state-of-the-art chemical factory that should be making something and making money and delivering product that's 8 months of sitting there. I saw the pictures. So the confidence from an investor when every quarter tells us it's something else. We have not done anything with natural gas. And I don't even hear a reason why. We discovered we have natural gas and we can't sell it. It's one of the most largest demand items in the world. So my question is this simple. If I remain an investor, I've been in this 10 years, if I want to remain an investor for the next 3 months, I would like Mr. Liu, to tell me why I should remain an investor and not finally sell my shares at $2 a share. Thank you.

Maybe I explain first because for our chemical factory, forming prices have dropped from almost RMB70,000 to RMB18,0000, more than 70 percentage decrease and this similar to chemical industries as well. Chemical products also dropped a lot. So the company, even though it's chemical factory is almost completed for the [indiscernible] completion. But the equipment which can be customerized for example, the far retardants which have much lower profit margin now have different equipment requirements than paper-making chemicals, because paper making chemicals is more polluted and which require more strict equipment. So that our company stopped based on current market condition, stopped the delivery of the rest equipment because company now cannot see clearly where it will go in this industry which specific products it want to produce and which can produce and bring more value to our company and our shareholders. That's why for this chemical factory. Secondly, if we look at our Natural gas project in Sichuan Province. Firstly, because the Sichuan whole province was doing the land and the resourcing planning. Until the government finish the planning, the company continue its further application with government. That's why this process has been delayed. And now company because there is a huge opportunity in this industry, et cetera. And the company wants to bring governments to join us, maybe we establish a joint venture company then can bring the company with more opportunities in this industry in Sichuan area. The overall companies still are conservative view of company and which is not very aggressive, we can see.

Helen, the conservative view, quite honestly, I was an investor when bromide was $2,000 and you were very profitable. But the bromine prices are going to go up and are going to go down for the next 10 years. We're building a company here that is going to be in the bromine business and we can adapt accordingly. We can't put off and wait for -- bromine's never going to go to 70,000 again. So the delays of the chemical factory are very concerning to me, an investor at the time it takes to make any decision to partner to do anything, the patients -- just look at the volume of your shares without earnings, the shares have been going down because people are selling. That's it. It's that simple. And they're losing hope and there's not one quarter that we get on this call and hear really good news. Last year, we were profitable and the stock went to 3. We need to know that there are actions being taken to keep your investors who've been with you for many, many years, keep us engaged and I've been on the call for 1 hour and it seems to me, I'm hearing the same story of delay and why and the 6-year plan is becoming a 10-year plan. And in the meantime, the markets are recovering. Interest rates are high. I agree with the gentlemen that having $115 million in cash earning $70,000. In America, you would earn $570,000. So I just would like some action from the Board to take this call tonight from all your investors seriously because it seems like we all have the same concerns, Helen. And I know you've been here for the 10 years with us. I know that. So we're all frustrated but we have to take this serious to make some progress in the next 3 to 6 months.

Okay. Thank you for coming.

Okay. I would like to turn the floor back to Helen. For any closing remarks, looks like we've reached the end of the top of the hour. Do we have any questions?

I think that's all for today and it's been our time closing.

Thank you. Ladies and gentlemen, this does complete the question-and-answer session. This concludes today's conference and you may disconnect your lines at this time.

Thank you and have a good night.