Alan Lau: And so what you mean is because you have locked in the module price through the contract and then as the input price is now declining, so you expect US market will actually be improving a lot from Jinko’s perspective, right?
Charlie Cao: Yeah, it’s — if you look at the market, the market — module is high, right? Because it was only can be supplied from the capacity out of China. There is a UFLPA issues for the industry in the last 12 months. And for Jinko specifically, because our inventory was produced long time ago and we get the process very smooth and starting from July and the relatively old inventory, the cost is very higher. So earning gross margin contribution is small for third quarter but going forward we expect the earning contribution will be improved very quickly quarter by quarter. And next year, Q1 will be in a very good position.
Alan Lau: Understood. And I think that is a very positive point that a lot of investors have not fully appreciated this. Thanks a lot for the clarity on this. And then my next question is, so everyone has been talking about the inventory in Europe. So how do we see it and around how many days or months of inventory we have in Europe?
Charlie Cao: Yeah, so approximately in Europe market — that’s our main DG-based market. So in that kind of segment, in my opinion, that’s normally around two months of the local inventory plus the logistic time, maybe one month to 1.5 months should be reasonable. So total together, if you’re taking from the manufacturer point of view, on average it should take us 3 to 3.5 months of the volumes. That’s the, let’s say, normal or let’s say the standard inventories across everyone. If you look into the seller’s point or distributor’s point, that’s normally around approximately two months of the inventory.
Alan Lau: Understood. So you think the current level is actually at two months and it is actually normal, right?
Charlie Cao: No, no, no. I’m saying for a DG-based distributor generated driven market, that’s the market standard let’s say, right? At the current status, especially you mentioned in Europe, I think you know that because of the price is falling, so the end customer is having the hesitation to wait until the market price coming to the lower level. So that slows down the, let’s say, the sales volume at the end customer side. That’s the reason why from the channel’s or the inventory’s point of view, the inventory is higher than the normal situation. However, in my opinion, the end customer, the end market, and demand is still there, but it just creates some hesitation. But I believe it takes maybe one, two more months’ time to observe, digest all the inventories across the whole channel, but the demand is still robust in Europe.
Alan Lau: Understood. So could you share your view on the utility side of things in Europe? Because I think people have been focusing a lot on DG market in Europe. And actually inventory is mostly related to DG but how about utility market in Europe?
Charlie Cao: In utility segment, not only in Europe, but across the whole globe there’s barely any inventories, a real inventory right So most of the inventory under the utility segment is more built [indiscernible] deliver outside, but it’s not a free inventory you can redirect to sell to others, right? So that’s why even accounting basis, it is defined as inventory, but from a sales point of view, it is not available to sell, right? It’s just the way to do the right timing or it’s on the way to the destinations, right? That’s why not only Europe, but across the whole world, that’s more or less the situation in utility. Even if there’s some inventory on the accounting basis, it should not be risky too much.
Alan Lau: Yeah, I see your point. I think the — we’d like to know how is the demand in utility side of things like in US or in Europe as well because will the decline in module prices stimulate more installation in the utility side? And how does that compensate with the interest?
