Question-and-Answer Session
Operator
Thank you. Ladies and gentleman, if you have a question at this time, please press the number one on your telephone. If your question has been answered or if you wish to remove yourself from the queue, please press the pound key. One moment for our first question.
Again, if you do have a question at this time, please press the number one key on your touch-tone telephone.
Our first question comes from Jeff Osborne of CIBC.
Mr. Osborne, your line is open.
Jeff Osborne – CIBC World Markets
Thank you, good evening. I just had a few questions on the pricing environment in Q1. It looks like based on the revenue guidance, that you’re going to see a significant decline in pricing in 2007, and now that we’re well along our way in the March quarter, if you could just update us in terms of megawatt shift and the ASP assumptions for Q1? That would be appreciated.
Yonghua Lu
Jeff, this is Yonghua Lu. We expected the pricing from the market?the ASP is declining. It is happening this year, actually since the 1st quarter of last year, because of the new term, we think there’s going to be above 5% of the average ASP dropped in a quarterly basis from the fourth quarter to the first quarter due to the seasonality and also to the uncertainty of the market.
Overall, we expected for the whole year that the price drop would be in the range of 5-10%.
Jeff Osborne – CIBC World Markets
OK, I was calculating something a little more. If you were doing 80 megawatts at the low end at $2.65, it seems like your prices would go from roughly $4.00 down to $3.50 or so. Is that not correct?
Kevin Wei
Jeff, this is Kevin. As you may be aware, we have a different product mix than in the past and we will probably continue to have a different product mix in 2007. We record our PV cell profits on a net revenue basis and a certain part of the overall annual guidance of 80-90 megawatts. It is likely that some of those will be produced under PV cell processing, as such those revenue numbers will be much smaller.
Jeff Osborne – CIBC World Markets
OK, do you have a sense of how many megawatts of cell processing you would expect in ’07?
Kevin Wei
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