Feng Peng – Chief Financial Officer Wei Hua – Chief Executive Officer Tina Xiao – Weitian Investor Relations

John Sheehy – Private Investor

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Ossen Innovation Company Limited’s Fourth Quarter and Full Year 2015 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. This conference is being recorded today April 22, 2016. I would now like to hand the conference over to Tina Xiao of Weitian Investor Relations. Please go ahead.

Thank you operator and welcome everyone to today's conference call for Ossen Innovation Company Limited. This call will cover Ossen's financial and operating results for the three months and 12 months ended December 31, 2015. Joining us today as a Company’s Chief Executive Officer Mr. Wei Hua, and the Company’s Chief Financial Officer Mr. Feng Peng, Before we get started, I'm going to quickly read a disclaimer about forward-looking statements. This conference call may contain in addition to historical information forward-looking statements within the meaning of the federal securities law regarding Ossen Innovation Company Limited. Forward-looking statements include statements about plans, objectives, goals, strategies, future events and performance and underlying assumptions, and other statements that are different than historical facts. These forward-looking statements are based on current management expectations and are subject to risks and uncertainties that may result in expectations not being realized and may cause actual outcomes to differ materially from expectations reflected in these forward-looking statements. Potential risks and uncertainties include change in demand for the company's products, the impact of competition and government regulation, and other risks contained in the statements filed from time to time with the SEC. All such forward-looking statements, whether written or oral, made on behalf of the company are expressly qualified by this cautionary statements. As such forward-looking statements are subject to risks and uncertainties and we caution you not to place undue reliance on these. At this time, I'd like to turn the call to Mr. Wei Hua, CEO of the company, who will be providing brief opening remarks; Mr. Feng Peng, CFO of the company will provide translation from Mr. Hua for opening remarks.

Thank you Tina, and thank you everyone for joining us today for our fourth quarter and the full year 2015 financial results conference call. 2015 was another challenging year for steel related companies in China as slow in GDP growth and the infrastructure buildout, industry-wide overcapacity, and high price volatility continued to plague the steel value chain, despite this macro and industrial challenges. We executed well and managed to increase our overall sales volume by 16.6% year-over-year, that’s largely offset the net impact of an 18.2% decrease in blended ASP. Our margins and the profitability also increased year-over-year and they reached the highest level in four years. Looking ahead, we expect the Chinese central government to continue to stimulate economic growth by further injecting capital into the economy by funding new infrastructure projects. While we do not believe that the Chinese government will initiate another large scale, comprehensive capital injection, we believe that infrastructure spending will be selectively targeted at developing regions in Central or Western China. Furthermore, through the "One Belt, One Road" initiatives, investments are expected to be made during the next decade to construct new bridges, highways, and the railroads. In addition, the Asian Infrastructure Investment Bank launched in December 2015 could pave the way for new infrastructure projects outside of China and create new bidding opportunities for us. In 2016, we expect the market for our products to recover gradually as steel industry fundamentals improve over time, thanks to the central government's continuing efforts to curb excess capacity. So specifically, we expect to do well in the Japanese market as we are one of the two suppliers to supply plain surface prestressed steel products to a major Japanese company who won the bid for the construction of Tokyo New National Stadium for the 2020 Tokyo Olympics. Next, I will turn the call over to Mr. Peng, our Chief Financial Officer, who will be providing a summary of our financial results for the three months and the 12 months ended December 31, 2015. Peng, please go ahead.

Thank you, Mr. Hua. Next, I’ll discuss our financial results for the three months and 12 months ended December 31, 2015 respectively. Revenues increased by 11.1% to $35.3 million for the fourth quarter of 2015 from $31.8 million for the same period of last year. This increase was mainly due to increased sales in plain surface PC strands and the zinc coated products and the pressure to offset by decrease in sales from rare earth coated products. The sales of coated of PC steel materials, including both the rare earth and the zinc coated products increased by $0.7 million to $27.4 million and accounted for 77% of total sales for the first quarter of 2015. Sales of rare earth and the zinc coated products were $23.1 million and a $4.3 million for the first quarter of 2015 compared to $25.7 million and $1 million respectively for the same period of last year. Sales of plain surface PC strands and others increased by 56.9% to $7.9 million and accounted for 23% of total sales for the first quarter of 2015. Cost of goods sold increased by 15.5% to $31.4 million for the first quarter of 2015 from $27.2 million for the same period of last year. Gross profit increased by 13.3% to $3.9 million for the first quarter of 2015 from $4.5 million for the same period of last year. Gross margin decreased to 10.9% for the first quarter of 2015 from 14.3% for the same period of last year. Gross margins for rare earth and zinc coated products were 9.5% and 14.1% respectively, for first quarter of 2015, compared to 15.3% and negative 11.1% respectively, for the same period of last year. Gross margin for plain surface PC strands and others was 13.4% for the first quarter of 2015, compared to 14% for the same period of last year. Selling expenses were approximately $0.3 million for the first quarter of 2015, increasing $0.1 million from the same period of last year. General and administrative expenses were approximately $1.9 million for the first quarter of 2015, decreasing $0.4 million from the same period of last year. Operating income was $1.7 million for the first quarter of 2015, compared to $2 million for the same period of last year. Operating margin was 4.8% for the first quarter of 2015 compared to 6.3$ for the same period of last year. After allocating net income attributable to non-controlling interest, net income attributable to Ossen Innovation Company Limited was $0.5 million for the first quarter of 2015 compared to $1.4 million for the same period of last year. Earnings per share, both basic and diluted, were $0.02 for the first quarter of 2015, compared to $0.07 for the same period of last year. Now shifting gear to 12 months ending December 31, 2015 financial results. Revenue decreased by 4.6% to $117.9 million for the 12 months ending December 31, 2015, from $123.6 million for the same period of last year. This decrease was mainly due to decrease in ASP for all products and partially offset in sales volume for both coated PC steel materials and plain surface PC strands and others. Sales of coated PC steel materials, including both rare earth and zinc coated products, decreased by 11.3% to $95.5 million and accounted for 81% of total sales for the twelve months ended December 31, 2015. Sales of rare earth and zinc coated products were $85 million and a $10.5 million respectively for the 12 months ended December 31, 2015, compared to $97.6 million and a $10 million respectively for the same period of last year. Sales of plain surface PC strands and others increased to 40.5% to $22.4 million and accounted for 19% of total sales for the twelve months ended December 31, 2015. Cost of goods sold increased by 7.3% to $102.2 million for the 12 months ended December 31, 2015, from $110.3 million for the same period of last year. Gross profit increased by 17.9% to $15.7 million for the twelve months ended December 31, 2015 from $13.3 million for the same period of last year. Gross margin increased by 2.5% to 13.3% for the 12 months ended December 31, 2015, from 10.8% for the same period of last year. The increased in gross margin was mainly due to lower material costs and the change in product mix was increased contributing from the higher margin plain surface PC strands and others, as well as zinc coated products. Gross margins for rare earth and zinc coated products were 11.8% and 19.7% respectively, for the twelve months ended December 31, 2015, compared to 9.8% and 18.7% respectively, for the same period of last year. Gross margin for plain surfaced PC strands and others was 16.2% for the twelve months ended December 31, 2015, compared to 11.7% for the same period of last year. Selling expenses were approximately $1 million for the twelve months ended December 31, 2015, increasing $0.2 million from the same period of last year. General and administrative expenses were approximately $4.5 million for the twelve months ended December 31, 2015 decreasing $1.9 million from the same period of last year. As a result, total operating expense were approximately $5.5 million for the twelve months ended December 31, 2015 decreasing $1.6 million from $7.1 million for the same period of last year. Operating income was $10.2 million for the twelve months ended December 31, 2015, compared to $6.2 million for the same period of last year. Operating margin was 8.7% compared to 5.0% for the same period of last year. After allocating net income attributable to non-controlling interest, net income attributable to Ossen Innovation Company Limited was $5.9 million for the 12 months ended December 31, 2015, compared to $3.9 million for the same period of last year. Earnings per share, both basic and diluted were $0.30 for the twelve months ended December 31, 2015, compared to $0.19 for the same period of last year. Due to a depreciation of the RMB as compared to the U.S. dollar in 2015, our comprehensive income was approximately $67,000, reflecting a foreign currency translation loss of approximately $5.8 million, unrelated to our operations. Now, turning to balance sheet and cash flows. As of December 31, 2015, Ossen had approximately $9.6 million of cash and restricted cash compared to $18.3 million at December 31, 2014. Total accounts receivable were $43.2 million as of December 31, 2015 compared to $53.8 million at December 31, 2014. The days of sales outstanding were 150 days for the twelve months ended December 31, 2015 compared to 151 days for the year of 2014. The balance of prepayment to suppliers for raw materials was $55.7 million as of December 31, 2015, compared to $56.3 million at December 31, 2014. The Company had inventories of $27.3 million as of December 31, 2015, compared to $20.1 million at December 31, 2014. Total working capital was $94.7 million as of December 31, 2015, compared to $108 million at December 31, 2014. Net cash provided by operating activities was $12.4 million for the twelve months ended December 31, 2015, compared to $1.8 million for the same period of last year. Net cash used in investing activities was approximately $30,000 for the twelve months ended December 31, 2015, compared to $80,000 for the same period of last year. Net cash used in financing activities was $4.4 million for the twelve months ended December 31, 2015, compared to $3.5 million for the same period of last year. Now, I will turn the call next to operator for any questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of John Sheehy, Private Investor. Please ask the question.

Hello everybody, congratulations on this good 2015 results and thank you for taking my call. First, I would like to ask, steel prices have been crazy so far in 2016. Is this going to have any impact on your business?

Yes. Hi, John. Okay. Yes. In last week, actually the steel price went up like 20%, so it’s better – actually the price was up and down in last few weeks. We think that our raw material was – we have prepayment for the raw materials, also we tried to lock the price for the raw materials at lower price. On the other hand for our sales price, usually our sales price will go up if the market price goes up. So, in this kind of situation now in some circumstance we can – our gross margin will increase slightly based on these kinds of situation.

Okay. Thank you. And yearend balance sheet shows bond payable. Could you tell us about this financing?

Yes. We are had a bond offering in 2014 and it will mature in September 2016, and we tend to consummate another bond offering maybe in last this year to repay these bonds.

Okay. Do you have any capital expenditure plans for 2016?

We don’t have much. Our capital expenditure will be focusing on maintenance and the repairing of our current production lines.

And when you have maintenance spending, is that recorded as capital expense or is that just far as this like a ordinary income statement expense?

You know, for some maintenance expense will record as our capital expenditure.

Can you comment on the execution of your sale repurchase plan?

Yes. We repurchased about 73,000 shares last year from time-to-time from the market and we cannot discuss this time, because it’s going to be expire in next couple of weeks. So when we will hold a board meeting and discuss if we’re going to renew this, continue this or extend this or we cannot terminate this plan. So we will announce in the next couple of weeks.

Okay. And can you tell us a little bit more detail about the Tokyo Olympics Stadium contract?

Okay. It’s a contract that it’s from Japanese customer and there were two suppliers, plain surface, steel product, the other one is Shanghai listed public company, and we are the one of the two suppliers. And these kinds of contract is has higher margin, especially from Japanese market, usually it’s even higher and the other international market. On average, you know, it’s about like 20% in gross margin.

And does this mean that you have a good relationship with that Japanese contracting companies so that you hope for additional future business in Japan?

Yes, of course we’ll hope for additional business opportunities from that customer. So far, we’ll have better relationship with this customer.

That’s good. And to the government's targets in the 13th five-year plan give you a confidence and often outlook not just for 2016, but for the next five years up to 2020?

I am sorry. Can you say it again?

The government has made some targets in the 13th five-year plan for daily construction and so on. So, does it give you confidence that the company has good potential sales and profits, not just for 2016 versus for the next five years?

Yeah. We see the market is gradually recovering, but the steel industry is still in difficult condition. And there is a whole steel market or the steel industry will – it will take years for the whole industry to recover, that’s our position about the industry right now. And for the government initiatives, we see some opportunities coming up and we’ll try to focus on those high margin opportunities or bit opportunities with less cash deposits.

Thank you. Our next question comes from the line [indiscernible]. Please ask the question.

Hi. This is [indiscernible]. My question is the share price has grown $1 level for several years and the level of the public issued shares is so small that the company will attract enough attention to trade at fair price related to share earnings and book value. So have you consulted any significant actions to either change the structure of the company to make it more appealing to investors or deliver more value to shareholders?

Thank you. We understood your frustration with the current level of stock price as an investor and we are frustrated as well. We firmly believe the stock is significantly undervalued at the current level. As Mr. Hua's opening remarks mentioned, we have executed well in 2015 despite the macro and the industrial challenges. As we build up track records and continued to deliver solid result quarter-by-quarter, we will attract more investors and our stock performance will be more in line with the true value of the business.

Okay. Thank you. Thank you so much for answering me. Thank you.

Thank you.

Thank you. There are no further questions at this time. I would like to hand the conference back to today’s presenters. Please continue.

On behalf of our entire management team, I would like to thank everyone again for joining us today for Ossen Innovation fourth quarter and full year 2015 earnings conference call. We appreciate your interest and the support in Ossen, and we look forward to speaking with you again next time. Good bye.