Charlie Cao: Yes. I think U.S. market generates a very big market, sustainable long growth. And there are a lot of disruptions from the recent 2 years because of, let’s say, the WLO-UFLPA, so it makes the supply tight. And so some of the — let’s say, the local producers takes out a lot of this, sign a lot of long-term contracts. But from the long-term perspective, we see the silicon-based technology at the absolute, 100% [indiscernible] versus other technologies. And so now the focus is overseas polysilicon supply relative shortage. And we are able to — let’s say, next year, we are — it’s going to be a very big year for Jinko and we have secured the sufficient, I think, probably out of China. And so we are able to sign very I think very decent contracts.
And with, let’s say, the poly has stabilized and we are able to get more contracts not only next year, maybe next 2 or 3 years. So that’s historically, we take the majority, a very big market share in U.S., 25% because of the disruptions but we have overcome the disruptions. And so for the long term, we think we are in a good position with our peers.
Rajiv Chaudhri: Final question. Will you be able to take advantage of the IRA in terms of the production that you are starting with the 1 gigawatt N type product in the U.S.?
Charlie Cao: An IRA, you mean Jinko is, let’s say, applicable or not? We think that IRA is kind of very transparent in policies and it’s for the local productions in the U.S. And when we do that, we don’t, let’s say, depend on why is IRA. We think a relatively sized local productions and global content makes Jinko more competitive in the market. But we strongly believe that we are qualified, let’s say, the IRA.
Rajiv Chaudhri: Okay. So you expect that you will be able to benefit from it but you’re not counting on it.
Charlie Cao: Yes, we don’t count on it. We do very conservative accounting. I know some peers in the, U.S. producers that do accrue basis even the quality or the cost of goods sales. That’s a different accounting perspective. But we didn’t do that. We want to do it on a cash basis based on the casing and the fund of the higher in the future.
Operator: [Operator Instructions] The next question comes from Alan Lau with Jefferies.
Alan Lau: Congratulations for the great results. So a couple of questions to follow up. So first of all, I would like to clarify, so the amount — because in Asia reporting the overall impairment in 2Q was around RMB1.3 billion. So in U.S. reporting, around RMB500 million is recorded in cost of revenue and the remaining is under the impairment of long-life assets. So is this understanding correct?
Charlie Cao: Yes, you are right. It’s a kind of different presentations in different accounting standards. And the U.S., inventory provisions is typically an item of cost of goods sold. But in China, the PRC standards, they have separate line called kind of the assets impairments, including everything, the fixed assets and as well as inventory. So that’s kind of the presentation different accounting standards.
Alan Lau: So if we add back RMB500 million [ph] of inventory impairment, so the gross margin in Q2 was actually improving compared to Q1, right?
Charlie Cao: Yes. Yes, you are right. Yes.
Alan Lau: Yes. And then another thing is the impairment of long-lived assets, to my understanding, they are those equipment which we can also expect as the one-off thing, right? Because the impairment of equipment will happen at the quarter?
Charlie Cao: It’s a one-off and we provided for the small size and small size modules to our competitors. And we — to make our assets to be more competitive on the balance sheet.
