China XD Plastics Company Ltd. (NASDAQ:CXDC) Q3 2018 Earnings Conference Call Transcript
Nov 09, 2018 • 09:00 am ET
Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2018 China XD Plastics Earnings Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. (Operator Instructions)
I will now turn the conference over to your first speaker today, Mr. (inaudible). Thank you. Please go ahead.
Thank you all for joining us for the China XD Plastic third quarter 2018 financial results conference call. Joining me on the call today are Mr. Jie Han, Chairman and CEO; Mr. Qingwei Ma, COO; Mr. Taylor Zhang, CFO; Mr. Junjie Ma, CTO; Dr. Kenan Gong, General Manager of the Dubai Subsidiary.
Earlier today, China XD Plastic issue a press release announcing the third quarter 2018 results.
(Forward-Looking Cautionary Statements)
In addition, any projection as to the company's future performance represents management's estimate as of today, November 9, 2018. China XD Plastic assumes no obligation to update this projection in the future as market (inaudible). To supplement the financial results present in accordance with the US GAAP, management will make reference to earnings before interest expense, income tax, depreciation and amortization, which we refer to as EBITDA. EBITDA is a non-GAAP financial measure reconciled from net income, which the company believes to -- additional information to better understand its operating performance. A table reconciling net income to EBITDA can be found on the earnings press release issue earlier today.
I would now like to turn the call over to our Chairman and Chief Executive Officer, Mr. Han. Mr. Han will be (technical difficulty) and I will translate his opening remarks into English. Mr. Han, please go ahead. (foreign language)
Our third quarter 2018 results were consistent with the unanticipated severe downturn in the auto industry of China, the first year-over-year drop in 28 years. In addition, the reduction of duty on import vehicles by an average of 46% is expected to have profound impact on the entire auto industry in China.
Although, we applaud the implementation of such supply-side reform by the policymakers for the well-being of the long-term benefit of China auto industry, it will have short-term impact on the auto market as companies throughout the supply chain adjust themselves and adapt to such change.
On overseas business development front, we are pleased with our successful trial production at our production base in Dubai and remain optimistic about the prospect of our business expansion overseas, especially after positive results and feedbacks after production trials from customers in various countries and regions overseas.
On October 31, 2018, the company signed a deleveraging investment framework agreement. We are very pleased to welcome CCB Financial as an important strategic and long-term partner of Xinda. Once materialized, the corporation, under this agreement will not only help our company deleverage its balance sheet and improve its capital structure, but assist the company to solidify its long-term position in this industry. As the second-largest bank in the world by asset,