Daqo New Energy Corp. (NYSE:DQ)

WEB NEWS

Thursday, June 18, 2020

Comments & Business Outlook

SHIHEZI, China, June 5, 2020 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced a strategic plan to extend its access to China's capital markets to further strengthen the Company's leading position in the industry and support its continuous growth over the long run.

Daqo New Energy is considering the opportunity to list, within the next two years, shares of its principal operating subsidiary Xinjiang Daqo New Energy Co., Ltd. ("Xinjiang Daqo") on the Shanghai Stock Exchange's Sci-Tech innovation board (the "STAR Market"), an exchange intended to support innovative companies in China.

In order to qualify for a STAR Market listing, Xinjiang Daqo is required by local securities regulations to have multiple shareholders. As a first step, Daqo New Energy entered into an agreement on June 5, 2020 to sell 4.4% of Xinjiang Daqo's shares to the following four individual investors: Mr. Guangfu Xu (the Chairman of the board of directors of Daqo New Energy), Mr. Xiang Xu (a director of Daqo New Energy), Mr. Dafeng Shi (a director of Daqo New Energy) and Mr. Longgen Zhang (the CEO and a director of Daqo New Energy). The four individuals will pay an aggregate of RMB199.05 million (approximately US$28.0 million at current exchange rates) to Daqo New Energy at a pre-money valuation of Xinjiang Daqo's equity value at RMB4.52 billion (approximately US$637.0 million) according to a valuation report issued by an independent third-party firm. Daqo New Energy also has a wholly-owned subsidiary, Chongqing Daqo, with approximately US$84.1 million of net assets as of 30 April, 2020.

The total proceeds of RMB199.05 million (approximately US$28.0 million) from the investment are due by the end of June 2020, and will be used to fund Xinjiang Daqo's committed registered capital shortfall, which is also a requirement for listing on the STAR Market.

Daqo New Energy's Chief Executive Officer Mr. Longgen Zhang commented, "Our plan to list Xinjiang Daqo on the STAR Market should enable us to access a new source of growth capital in China's domestic financial markets, solidify our leading position in the polysilicon industry, and most importantly, amplify our advantages in terms of cost structure and quality and accelerate our growth to better serve the fast growing solar PV market. At the same time, we are committed to maintaining Daqo New Energy's ADR listing on the New York Stock Exchange. We believe listing on both stock exchanges will raise our profile with investors both at home and abroad and provide us with a greater variety of opportunities in the future."


Wednesday, May 20, 2020

Comments & Business Outlook

First Quarter 2020 Financial Results

  • Revenues were $168.8 million, compared to $118.9 million in the fourth quarter of 2019 and $81.2 million in the first quarter of 2019. 
  • Earnings per basic ADS was $2.37 in the first quarter of 2020, compared to $1.45 in the fourth quarter of 2019, and $0.50 in the first quarter of 2019.

Mr. Longgen Zhang, CEO of Daqo New Energy, commented, "We are pleased to report an outstanding quarter with excellent financial and operational results. We operated at full capacity during the quarter and were able to produce and sell record-high volume of 19,777 MT and 19,101 MT of polysilicon, respectively. Thanks to growing economies of scale, savings on energy consumption and improved operational efficiency, our total production cost decreased to $5.86/kg during the quarter, a decrease of 8% from $6.38/kg in Q4 2019. Our cash cost during the quarter also decreased to $5.01/kg, down from $5.47/kg in Q4 2019. In addition, we continued to make improvements in quality and were able to sell approximately 95% of our products to mono wafer customers. All in all, we are very proud of the achievements we made in expanding production volume, optimizing our cost structure and enhancing quality within only two quarters following the start of Phase 4A pilot production. Our exceptional results this quarter reflect the strong capabilities of our Xinjiang facilities at full production following the completion of the Phase 4A expansion project. We believe this also demonstrates our extensive experience and expertise in polysilicon manufacturing, and further solidifies our position as a global leader in the industry."

"Despite the challenging market environment, we successfully expanded our gross margin by further optimizing our cost structure during the quarter. Gross margin during the quarter was 33.5% compared with 29.5% in the fourth quarter of 2019. An expanding gross margin and increasing sales volume resulted in $63.1 million in EBITDA, up 39% sequentially, and $37.7 million in adjusted net income, up 53.5% sequentially. I would like to thank our entire team for their contribution to this quarter's strong results given all the difficulties in securing raw materials, managing on-site operations, and facilitating logistics during lockdown that followed the outbreak of COVID-19 in China."

"Towards the end of the first quarter, the spread of COVID-19 globally and related lockdowns, particularly in the U.S., Europe and certain other emerging markets, resulted in significant disruptions to demand for solar PV products. This has created short-term market uncertainty and volatility across the solar PV industry during the second quarter. Fortunately, the spread of COVID-19 has begun to ease and things are gradually returning to normal across all walks of life, particularly in China. We expect to see some rush orders from solar PV developers in China for legacy projects delayed from last year in order to meet the grid connection deadline set for the end of June. However, a recovery of demand from markets outside of China is critical going forward as overseas markets currently account for approximately 75% of total global solar end market demand. With many economies beginning to reopen, we expect to see a gradual recovery of solar PV demand in the third quarter. We are confident that the long-term solar PV growth prospects remain intact despite the near-term challenging market environment as solar PV energy continues to attract investors seeking to benefit from lower costs and interest rates."

"We are currently conducting scheduled annual maintenance for our Xinjiang facilities. As such, we expect to produce 15,500 to 16,500 MT of polysilicon during the second quarter. Annual production volume for 2020 is expected to be 73,000 to 75,000 MT. We expect to see global solar markets recover as the impact from COVID-19 fades over the next two or three months. We are confident in our ability to navigate this challenging environment leveraging our competitive advantages in product quality and cost structure."

Outlook and guidance

The Company expects to produce approximately 15,500MT to 16,500MT of polysilicon and sell approximately 14,500MT to 15,500MT of polysilicon to external customers during the second quarter of 2020. For the full year of 2020, the Company expects to produce approximately 73,000 to 75,000 MT of polysilicon, inclusive of the impact of the Company's annual facility maintenance.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and may be subject to changes. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.





Wednesday, March 11, 2020

Comments & Business Outlook

Fourth Quarter 2019 Financial Results

  • Revenues were $118.9 million, compared to 83.9 million in the third quarter of 2019 and $75.6 million in the fourth quarter of 2018. The increase in revenues was primarily due to higher polysilicon sales volume and partially offset by lower ASPs.
  • Earnings per basic American Depository Share (ADS) was $1.45 in the fourth quarter of 2019, compared to $0.37 in the third quarter of 2019, and $0.86 in the fourth quarter of 2018.

Mr. Longgen Zhang, CEO of Daqo New Energy, commented, "We are pleased to report an outstanding quarter to close out the year in which we delivered strong operational and financial results. Having completed the new 35,000 MT Phase 4A expansion project at the end of the third quarter, we quickly ramped its production up during the fourth quarter and hit full capacity in December 2019. We completed the ramp up progress months ahead of schedule and were able to generate outstanding operational results across all key metrics including production volume, product quality, and manufacturing cost. I would like to thank our entire team for their hard work and dedication. I also would like to thank the Shihezi city government and our energy suppliers, equipment providers, construction and installation partners and other business partners, for their enormous support that made the Phase 4A expansion project a great success. We truly appreciate their contributions and excellent work."

"We successfully reduced our total production cost to $6.38/kg during the quarter, an 8.5% decrease sequentially and below our previous target of $6.50/kg. With the Phase 4A fully ramped up, our energy consumption, raw material utilization efficiency, and other unit costs are all trending positively. Approximately 81% of our production during the quarter consisted of high-quality mono-grade polysilicon. This result is all the more exceptional given we achieved it while ramping up production and optimizing overall operations for the new Phase 4A. With manufacturing costs continuing to fall, our gross margin for the fourth quarter expanded to 29.5%, a significant improvement sequentially from 21.5%. Our EBITDA improved to $45.4 million during the quarter as adjusted net income jumped to $24.5 million. We are proud of this financial performance and believe it reflects the direction we are headed in with Phase 4A now at full production capacity."

"Based on our current estimates, we expect to run our facilities at full utilization and produce approximately 18,000 MT to 19,000 MT of polysilicon during the first quarter of 2020. We are also making progress in further cost reduction by improving operational efficiency and reducing energy consumption. As such, we expect our production costs to be reduced to approximately $6.10/kg in the first quarter of 2020. At the same time, we will continue to improve product quality and expect mono-grade polysilicon products to account for approximately 90% of our sales volume during the first quarter of 2020."

"2019 was a challenging year for China's domestic solar PV market. Due to the delayed announcement of the subsidy policy last year, newly added solar PV installations in China during the year came in at approximately 30 GW, significantly below the market and government's original expectations of 40~50 GW. However, a draft of the subsidy policy for 2020 was released in late January this year and is expected to be finalized sometime in March or April of 2020. When combined with some delayed projects from 2019, we expect newly added installations in China for 2020 to be approximately 40 GW. Demand from overseas markets is expected to grow healthily in 2020 as overall costs fall further and grid-parity is reached in more and more countries and regions. With China's domestic market expected to recover and overseas demand continuing to grow, we believe global solar PV demand will exceed 140 GW in 2020, a significant increase from 2019."

"Towards the end of 2019 we saw the market share for multi-grade polysilicon shift meaningfully towards mono-grade polysilicon. While mono-grade polysilicon continues to be in high demand with stable pricing, demand for multi-grade polysilicon wanes with prices dropping significantly. While we are ideally positioned to benefit from this shift towards mono-grade polysilicon, this will adversely impact some of our competitors who produce mostly multi-grade polysilicon. At the same time, we are seeing a number of major competitors shutting down their operations, exiting the market and laying off employees due to significant financial losses and their uncompetitive cost structure. We believe this trend will continue going forward unless ASPs can recover to healthy levels for our competitors to continue production."

"In order to limit and contain the spread of COVID-19 (Coronavirus) in China, the government implemented strict controls and policies starting in late January this year that had an adverse impact on logistics and supply chains of many companies in manufacturing industry. We immediately set up a crisis response task force led by our senior management team and began rolling out initiatives to ensure business continuity including a detailed assessment of our supply chain and logistics, the immediate procurement of critical raw materials, and plans to allow employees return to work, which resulted in uninterrupted production and full utilization during this challenging period. We are pleased to report that with our team's dedication and the strong support we received from our raw material suppliers and logistics partners, we were able to remediate most of the impact on production, sales, and shipments resulting from the outbreak and related government controls."

"We believe the balance between polysilicon supply and demand will improve meaningfully in 2020 driven by the aggressive capacity expansion of mono wafer producers and very limited additional polysilicon production capacity coming online. So far during the first quarter, we are seeing improvements in ASPs of polysilicon every month which we believe will continue going forward. I am confident that we will continue to benefit from the shift from multi-crystalline to mono-crystalline technology resulting in robust demand and pricing for mono-grade polysilicon."

Outlook and guidance

The Company expects to produce approximately 18,000MT to 19,000MT of polysilicon and sell approximately 17,500MT to 18,500MT of polysilicon to external customers during the first quarter of 2020. For the full year of 2020, the Company expects to produce approximately 73,000 to 75,000 MT of polysilicon, inclusive of the impact of the Company's annual facility maintenance.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and may be subject to changes. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Tuesday, November 12, 2019

Comments & Business Outlook

Third Quarter 2019 Finacial Results

  • Revenue from continuing operations was $83.9 million in Q3 2019, compared to $66.0 million in Q2 2019
  • Earnings per basic ADS was $0.37 in Q3 2019, compared to loss per basic ADS of $0.16 in Q2 2019, and loss per basic ADS of $1.39 in Q3 2018.

Mr. Longgen Zhang, CEO of Daqo New Energy, commented, "We had an outstanding quarter in which we reached record-high production volume of 9,437 MT while achieving the lowest production cost in the Company's history of $6.97/kg. Our results for the quarter reflect the full production capacity and cost structure that our original 35,000 MT facility is able to generate. In mid-September, we successfully completed the construction and installation of our new Phase 4A expansion project and now are currently working to ramp up production of its additional 35,000 MT of capacity. We expect Phase 4A to reach full production capacity by the end of 2019, approximately three months ahead of schedule. With Phase 4A's additional capacity quickly coming online, we expect production volumes during the fourth quarter of 2019 to be approximately 14,000 to 15,000 MT. Our production costs would be further reduced to approximately $6.5/kg upon Phase 4A running at full capacity."

"We continue to enhance mono-grade product quality and are optimizing our product portfolio towards it in order to maintain higher ASPs. We sold approximately 86% of our products to mono-wafer customers during the quarter. Once Phase 4A is fully ramped up, we expect mono-grade products to account for approximately 90% of our total production volumes. With our downstream mono-wafer customers expected to rapidly expand their capacities for next year, we believe this will lead to continued increase in mono-grade polysilicon demand, which should lead to improvement in the price of mono-grade polysilicon for next year."

"During the first three quarters of 2019, China installed approximately 16 GW of new solar PV projects, significantly below the market's expectations. We believe the primary reason is the long-delayed announcement of a subsidy policy which has rippled downwards, forcing many project developers to postpone project completion dates and extend the time needed for planning, preparation, permit applications, and procurement. It is possible that many of the 22.8 GW of subsidized projects, which were originally expected to be installed in the fourth quarter of 2019, could be delayed to the first half of year 2020. Despite softening demand from China's downstream market, demand from overseas markets remains robust and could possibly reach 85 GW this year, a significant increase from approximately 60GW in 2018. With the Chinese downstream market expected to rebound next year and overseas demand continuing to grow, we believe global solar PV demand could exceed 140GW in 2020, a significant acceleration when compared to 2019."

"Solar energy is now one of the most competitive forms of energy generation, even when compared with traditional fossil fuel in many markets. When combined with efficient methods to store power, solar energy has the potential to become a sustaining baseload power. As the economics improve and governments pass more policies to tackle climate change, we believe we are at the cusp of major changes in the market which will create enormous opportunities for us over the next several years. We are confident in our ability to navigate this temporary downturn in the market and are ready to take advantage of the recovery next year when the market will continue advancing towards grid parity."

"As one of the lowest-cost polysilicon producers with the highest standards for quality, we are among the very few polysilicon manufacturers who are able to generate a profit in the current challenging market environment. For the first three quarters of this year, our net cash provided by operating activities was approximately $100 million. Once Phase 4A is operating at full capacity, we expect to make further improvements in product quality and cost structure so as to enhance our leadership position in the industry."

Outlook and guidance

The Company expects to produce approximately 14,000 to 15,000 MT of polysilicon during the fourth quarter of 2019 and sell approximately 12,500 to 13,500 MT of polysilicon to external customers during the fourth quarter of 2019.For the full year of 2019, the Company expects to produce approximately 39,300 to 40,300 MT of polysilicon, inclusive of the impact of the Company's annual facility maintenance.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and may be subject to changes. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Monday, September 16, 2019

Comments & Business Outlook

SHIHEZI, China, Sept. 16, 2019 /PRNewswire/ -- Daqo New Energy Corp. (DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that it had begun pilot production at its new Phase 4A polysilicon production facility in Shihezi, Xinjiang. The Company expects Phase 4A to gradually ramp up to full production capacity and to increase its total annual production capacity to 70,000 MT by the end of this year.

Mr. Longgen Zhang, CEO of Daqo New Energy, commented, "We are very excited to have successfully completed the construction and installation of Phase 4A months ahead of schedule. I would like to thank our entire Xinjiang team for their hard work and dedication to make this possible. We have already started pilot production at Phase 4A and expect to ramp up production to full capacity by the end of this year, which will increase our total annual polysilicon production capacity to 70,000 MT. In addition, with greater economies of scale, higher manufacturing efficiency, and cutting-edge equipment and process, we expect the total cost of polysilicon production at our Xinjiang facilities to decrease to approximately US$6.80/kg in the first quarter of 2020."

"We have seen that mono-crystalline solar technology is rapidly expanding market share and accounting for an increasingly significant portion of capacity expansion projects of our solar wafer customers. We believe that mono technology will account for over 80% of the global PV market by the end of 2020. The supply of ultra-high-quality mono-grade polysilicon still lags behind the growing demand. As a result, mono-grade polysilicon is being sold at a significant premium over multi-grade polysilicon. We believe that product quality is just as important as cost structure to a polysilicon producer's profitability, if not more."

"As one of the first-tier high-quality polysilicon providers, we sell approximately 85% of our products to mono customers and expect to increase this percentage to 90% after Phase 4A is fully ramped up. At the same time, we are also working closely with some key customers to test our products for potential N-type mono wafer applications, which requires even higher quality polysilicon when compared to standard P-type mono wafer. We are aiming to be market-ready and produce approximately 40% of our total polysilicon products for potential N-type applications in 2020."

"With the solar industry rapidly approaching grid parity, the successful completion of Phase 4A facility will provide us with added high-quality polysilicon capacity which will allow us to benefit from the sustainable growth of the global solar PV market. It also demonstrates our strong execution capabilities, deep understanding of our customers' needs, and our long-term commitment to the solar PV industry. We've made it a priority to address climate change for the next generation and to make solar PV one of the cleanest, most sustainable, and most cost-effective sources of energy."


Wednesday, September 11, 2019

Contract Awards

SHIHEZI, China, Sept. 11, 2019 /PRNewswire/ -- Daqo New Energy Corp. (DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that it has signed a two-year polysilicon supply agreement with JinkoSolar Holding Co., Ltd. ("JinkoSolar") (JKS), one of the largest and most innovative solar module manufacturers in the world.

Under the terms of the supply agreement, Daqo New Energy will supply JinkoSolar with 12,000 to 14,400 MT and 15,600 to 21,600 MT of polysilicon during calendar year 2020 and 2021, respectively. Prices will be determined on a monthly basis according to market pricing.

Mr. Shihua Su, Chief Marketing Officer of Daqo New Energy, commented, "We're very pleased to sign this two-year supply agreement with JinkoSolar which will further strengthen our long-term strategic relationship. JinkoSolar is significantly expanding its mono-wafer capacity as part of their strategy to meet the rapidly changing demand from end customers. Our two companies have a long-standing partnership that spans many years and we are delighted to have been selected for our ability to produce high-purity mono-grade polysilicon. This supply agreement further demonstrates Daqo as the supplier of choice for high-quality mono-grade polysilicon with proven reliability. Once our Xinjiang polysilicon production facility expands to 70,000 MT capacity by the end of this year, we will be able to meet the rapidly growing demand from our mono-solar customers and the global solar PV industry."


Wednesday, August 14, 2019

Comments & Business Outlook

Second Quarter 2019 Financial Results

  • Revenue from continuing operations was $66.0 million in Q2 2019, compared to $81.2 million in Q1 2019
  • Loss per basic ADS was $0.16 in Q2 2019, compared to earnings per basic ADS of $0.50 in Q1 2019, and $1.06 in Q2 2018.

Mr. Longgen Zhang, CEO of Daqo New Energy, commented, "We are pleased to report a solid quarter, in which we made good progress in capacity increase and quality improvement. During the second quarter, we completed our capacity debottlenecking project on time, which allowed us to increase our annual capacity to 35,000 MT. At the same time, we also completed the annual maintenance of our Xinjiang facilities, which was originally scheduled in the third quarter. While our production volume was temporarily impacted by the debottlenecking project and the annual maintenance, we were still able to produce 7,151 MT of polysilicon in the second quarter at the total production cost and cash cost of $8.12/kg and $6.65/kg, respectively. With the production ramp up at our newly debottlenecked facilities, we anticipate our production volume in the third quarter to be approximately 9,200 to 9,500 MT of polysilicon, with the total production cost returning to the normal level of approximately $7.50/kg."

"During the second quarter, we also significantly improved the quality of our products. Out of our entire sales volume during the quarter, approximately 80% was sold to mono customers. With the completion of our debottlenecking project and annual maintenance, we expect the percentage of mono-grade polysilicon of our product to further increase to approximately 85% in the third quarter. In addition, we are now working closely with some leading mono wafer producers to test our ultra-high purity polysilicon for application in potential N-type mono wafer market."

"The expansion of our Phase 4A project is progressing smoothly and remains on schedule. The equipment installation has already begun and will continue through to the end of the third quarter of 2019. Based on our current assessment, we expect to complete the Phase 4A project by the end of 2019 and ramp up to the full capacity of 70,000 MT by the end of the first quarter of 2020. Upon the full ramp up, we expect that 90% of our total production volumes will be sold to mono customers, including 40% for the N-type mono wafer market."

"In early July this year, China's National Energy Administration released a list of 22.8 GW approved solar projects that secured government subsidies for 2019. Combining these approved subsidized projects, grid-parity projects, residential distributed-generation projects, top-runner projects and poverty alleviation PV projects, China is expected to install approximately 40GW to 45GW of new solar PV projects in 2019. During the first half of 2019, China has already installed 11.4GW, which means the installation volumes could triple in the second half of 2019. Realistically, it will take some time to complete the preparation work for these recently approved subsidized solar projects, which includes detailed designs and rounds of procurement bidding and contract negotiations. All of these stages have to be completed before the actual modules can be shipped. All in all, we anticipate China's solar demand to pick up significantly starting from early September."

"The second quarter of 2019 was a challenging time for polysilicon industry as prices dropped to their lowest levels in history, particularly for multi-grade products. While prices for mono-grade products declined sequentially, they were relatively stable. We believe that polysilicon supply and demand will balance out and begin to improve when Chinese project developers begin to place orders by the end of the third quarter. Incremental demand from China is expected to gradually exceed the additional supply that is currently hitting the market. We believe polysilicon ASP will begin to improve in the third quarter of 2019 to a level that the majority of marginal high-cost players are able to break even on a cash-cost basis, which we estimate to be approximately $10.5 to $11/kg. Moreover, the pricing spread between mono-grade and multi-grade polysilicon products will likely remain significant, because output of mono-grade polysilicon still lags behind market demand and new capacities of mono wafer are still growing."

"In early August, we signed a three-year supply agreement with LONGi Green Energy to supply 112,800 MT of polysilicon products. LONGi is our long time strategic partner with strong balance sheet and growth momentum in mono wafer sector. This is the second long term supply agreement between us. It's also a testament to our supply stability and excellent quality of polysilicon product for mono-applications. We are confident that the combination of our premium product quality and competitive cost structure will set a benchmark for the polysilicon industry and solidify our position as the market leader. Our competitive advantage will be further strengthened once the Phase 4A project is completed and ramped up to full capacity in the first quarter of 2020 which will double our capacity and drive our production cost even lower."

Outlook and guidance

The Company expects to produce approximately 9,200 to 9,500 MT of polysilicon with a total production cost of $7.5/kg during the third quarter of 2019 and sell approximately 9,000 to 9,300 MT of polysilicon to external customers during the third quarter of 2019. For the full year of 2019, the Company expects to produce approximately 37,000 to 40,000 MT of polysilicon, inclusive of the impact of the Company's annual facility maintenance.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and may be subject to changes. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.



Wednesday, August 7, 2019

Contract Awards

SHIHEZI, China, Aug. 7, 2019 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that it signed a three-year 112,800 MT ultra-high-purity polysilicon supply agreement with LONGi Green Energy Technology Co., Ltd. ("LONGi"), the world's leading mono-crystalline solar products manufacturer with expected 36GW of mono-crystalline wafer capacity, 10GW of mono-crystalline cell capacity, and 16GW of mono-crystalline module capacity by the end of 2019. 

Under the supply agreement, Daqo New Energy will supply LONGi with 36,000 MT (inclusive of 18,000 MT in 2020 covered under the Company's existing supply agreement with LONGi), 38,400 MT and 38,400 MT of ultra-high-purity polysilicon in 2020, 2021, and 2022, respectively. As part of the supply agreement, LONGi will make an advance payment to Daqo New Energy.

Mr. Baoshen Zhong, Chairman of LONGi, commented, "Daqo New Energy is one of the most important ultra-high-purity polysilicon providers in the industry. We have been working closely with them for years and are pleased to extend this strategic partnership for the next three years. Daqo New Energy's ability to consistently deliver polysilicon products which meet our stringent quality standards is critical in supporting us as we expand capacities of high-efficiency mono-crystalline solar products to meet growing demand from downstream customers."

Mr. Longgen Zhang, Chief Executive Officer of Daqo New Energy, commented, "LONGi has been an excellent partner over the past several years. We are extremely excited to have the opportunity to further strengthen our strategic partnership with them. Developing high-efficiency solar products is critical to driving future growth for solar manufacturers. High-efficiency mono-crystalline solar products, which require ultra-high-purity mono-grade polysilicon as raw material, are increasingly popular amongst downstream customers and gaining market dominance. Our ability to produce ultra-high-purity polysilicon efficiently, leveraging our optimized cost-structure and growing production capacity, will allow us to benefit significantly from this growing trend."


Tuesday, May 21, 2019

Comments & Business Outlook

First Quarter 2019 Financial Results

  • Revenue from continuing operations was $81.2 million in Q1 2019, compared to $75.6 million in Q4 2018
  • Earnings per basic ADS was $0.50 in Q1 2019, compared to $0.86 in Q4 2018, and $2.91 in Q1 2018

 "We are very pleased to report solid operational and financial performance for the first quarter of 2019, during which we achieved record-high production and sales volumes, as well as our most competitive cost structure," commented Mr. Longgen Zhang, CEO of Daqo New Energy. "During the quarter, our polysilicon facilities were running at full capacity and produced 8,764 MT and sold 8,450 MT of polysilicon. We were also able to successfully reduce our total production cost and cash cost to $7.42/kg and $6.20/kg, respectively, our lowest ever."

"We are currently undertaking a capacity debottlenecking project to gradually upgrade several older CVD furnaces with improved technology, allowing us to increase production capacity by additional 5,000 MT. This project is progressing well and we expect to complete the project ahead of schedule in early June 2019. The ramp-up process of this debottlenecking project will temporarily impact production volumes and cost and as a result we expect to produce approximately 7,200 to 7,400 MT of polysilicon at total production cost of $8.0~8.5/kg during the second quarter of 2019. Once our facilities are fully ramped up in June, we anticipate our total annual production capacity will reach 35,000 MT and our production costs will return to the current level of approximately $7.5/kg." 

"Our Phase 4A project is also progressing smoothly and remains on schedule. The foundation work has been completed and the construction of various buildings and structures are progressing as planned. The initial equipment installation has already begun and is planned to continue through the third quarter of 2019. Based on our current assessment, we expect to complete Phase 4A by the end of 2019 and ramp up to full capacity of 70,000 MT by the end of the first quarter of 2020."

"China installed approximately 5.2GW of new solar PV installations during the first quarter of 2019. While installation numbers for the second quarter of 2019 haven't been released yet, we believe they will likely be even lower. Installations should significantly pickup in the second half of this year as China's solar PV policy is gradually rolled out. Grid parity projects will be the first batch to start installations and then followed by subsidized projects which will bid for the total three billion RMB of subsidy. Market consensus indicates that China will install approximately 35-40 GW in 2019, which means solar project installation volumes during the second half could potentially double or even triple those in the first half. As polysilicon is the key raw material of solar PV modules, we believe demand for polysilicon will significantly increase in the second half of 2019."

"We are optimistic about China's booming demand for solar PV in the second half of this year. Since May, the market conditions for polysilicon have shown signs of improvement as prices appear to have bottomed out. While Daqo remained solidly profitable in the first quarter with our low cost and high mix of mono-grade polysilicon products, we believe the current challenging pricing environment for polysilicon has resulted in serious financial losses for many of the existing polysilicon producers. According to news from China Silicon Industry Association, at least three major Chinese polysilicon producers have shut down their facilities for maintenance since April and May, resulting in reduced supply. In addition, the ramp-up process of other Chinese players' new capacities have not been as fast and smooth as they expected, including production delays and unscheduled shutdowns. Furthermore, these new capacities are generally unable to immediately produce high quality mono-grade polysilicon due to quality issues. This has resulted in increased pricing spread between mono-grade and multi-grade polysilicon. Looking into the future, we believe current oversupply will be alleviated by a reduction in supply from high cost players. For the second half of 2019, we anticipate the booming demand from China's domestic PV market will significantly improve the overall supply-demand situation, particularly for the tightly-supplied mono-grade polysilicon."

"We are confident to overcome the temporary market challenges with our low cost structure and first class product quality. Moreover, our Phase 4A project is expected to double our capacity and reduce our cost even further, strengthening our leading position as one of the world's most competitive polysilicon manufacturers."

Outlook and guidance

Due to the significant pricing spread between mono-grade and multi-grade polysilicon, the Company is currently maximizing the amount of mono-grade polysilicon as percentage of our total production volume to approximately 80% in April and May. In addition, the ramp up process of the Company's debottlenecking project is expected to take place ahead of schedule in early June. As such, the Company may see some impact on production volume and cost structure in the second quarter.

The Company expects to produce approximately 7,200 to 7,400 MT of polysilicon with total production cost of $8.0~8.5/kg during the second quarter of 2019 and sell approximately 7,100MT to 7,300MT of polysilicon to external customers during the second quarter of 2019. The Company expects the total production cost will come back to normal at the level of $7.5/kg in the third quarter of 2019. For the full year of 2019, the Company expects to produce approximately 37,000 to 40,000 MT of polysilicon, inclusive of the impact of the Company's annual facility maintenance.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and may be subject to changes. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.



Wednesday, March 13, 2019

Comments & Business Outlook

Fourth Quarter 2018 Financial Results

  • Revenues were $75.6 million, compared to $67.4 million in the third quarter of 2018 and $118.9 million in the fourth quarter of 2017.
  • Earnings per basic American Depository Share (ADS) of $0.86 in Q4 2018, compared to loss per basic ADS of $1.39 in Q3 2018, and earnings per basic ADS of $3.16 in Q4 2017

Management Remarks

"I would like to thank our entire team for their hard work and dedication for delivering another outstanding quarter in which we successfully completed the Phase 3B project and ramped production up to full capacity by the end of November 2018, three months ahead of schedule," commented Mr. Longgen Zhang, CEO of Daqo New Energy.

"During the quarter, we achieved new record both in production volume and sales volume which were 7,301 MT and 7,030 MT, respectively.  With the successful ramp up of our new phase 3B facility and efforts of our operating team, both production volume and cost reduction targets were achieved with excellent results.  During the fourth quarter of 2018, we successfully reduced our total production cost to $7.94/kg and our cash cost was lowered to $6.64/kg, representing our lowest cost structure in history. With our Xinjiang production facilities now running at full capacity, we expect to produce approximately 8,500 to 8,700 MT of polysilicon during the first quarter of 2019. Furthermore, with reduction in unit utility usage, operating leverage and other cost savings, we expect to further reduce our total production cost to approximately $7.50/kg. In addition, we plan to conduct a capacity debottlenecking project to gradually upgrade several older CVD furnaces with improved technology, allowing us to increase production capacity by additional 5,000 MT. We plan to start this project in mid-March and complete it by the end of June. The debottlenecking project will have limited impact on production volume, therefore we expect to produce 7,600 to 7,800 MT of polysilicon during the second quarter of 2019. Subsequent to the completion of the debottlenecking project, we anticipate the Company will reach total annual production capacity of 35,000 MT.

"The Phase 4A capacity expansion project is progressing smoothly and will increase our production capacity to 70,000 MT by the end of the first quarter of 2020 with an even lower cost structure once fully ramped up. In February 2019, we received approval from Bank of China for a RMB400 million 5-year fixed-asset capital project loan and a RMB50 million working capital loan. The Company has obtained a total of RMB830 million of additional bank loans, including the loans from Bank of China and credit facilities from other domestic Chinese banks, to support our capacity expansion and working capital needs. These loans will support capital expenditure for our Phase 4A project and enable us to complete it on schedule."

"2018 was a challenging but also promising year for solar PV industry. The policies issued by the Chinese government on May 31, 2018 immediately impacted the market and resulted in a significant price decline across the entire value chain. However, this fall in price significantly stimulated demands from markets outside of China, especially where grid-parity has already been reached. The global solar PV market recovered rapidly in the following months and has since achieved equilibrium again, even with very limited contribution from China, the world's largest individual solar PV market."

"A draft of China's solar policy for 2019 has already been released with the final version yet to be confirmed. The draft indicates a new incentive program based on a fixed subsidy amount rather that a fixed quota system as was previously done. The fixed subsidy amount is expected to be in the range of approximately RMB 3 billion and could cover approximately 30-35GW of installations. Poverty alleviation projects will be subsidized and funded separately. In addition, the market anticipates some grid-parity projects which will not require central government subsidies. Based on industry research, China's installation target for 2019 is anticipated to be approximately 40-45 GW but there could be some variations in the final version of China's policy in 2019. Grid-parity and cost reduction will continue to play a key role in driving global demand from developed markets such as Europe and the US to developing markets like India, South Asia, Africa and South America. We expect global solar installations in 2019 to be approximately 120 to 140 GW."

"We believe demand for polysilicon, which is the key ultra-pure raw material for crystalline-silicon solar PV module,  will keep growing as solar PV becomes more and more competitive compared to other energy sources. We believe the current market challenges are temporary and should be resolved during the second half of 2019, especially when demand and installation from China recovers. Looking forward, we believe the solar PV industry has become much stronger and increasingly independent of policies and is expected to grow sustainably over the long-term with better stability. The pace of new capacity expansion within the polysilicon industry will smooth out going forward. As a leading polysilicon manufacturer, we believe Daqo New Energy is ideally positioned to benefit from this fast growing market and will continue to outperform its peers with lower cost and better quality."

Outlook and guidance

The Company expects to produce approximately 8,500MT to 8,700MT of polysilicon and sell approximately 8,400MT to 8,600MT of polysilicon to external customers during the first quarter of 2019. The Company will conduct a debottlenecking project by gradually upgrading several older CVD furnaces beginning in mid-March through the end of June in 2019. The debottlenecking project is expected to have a limited impact on production volume. As such, the Company expects to produce 7,600 to 7,800 MT in the second quarter of 2019. For the full year of 2019, the Company expects to produce approximately 37,000 to 40,000 MT of polysilicon, inclusive of the impact of the Company's annual facility maintenance.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and may be subject to change. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Thursday, February 21, 2019

Contract Awards

SHIHEZI, China, Feb. 21, 2019 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that it had signed a one-year 10,350 MT polysilicon supply agreement with JinkoSolar Holding Co., Ltd. ("JinkoSolar") (NYSE: JKS), a world-renowned solar module manufacturer.

Under the terms of the supply agreement, Daqo New Energy will supply JinkoSolar with 10,350 MT of polysilicon during calendar year 2019, with price to be determined on a monthly basis according to market pricing.

Mr. Shihua Su, Chief Marketing Officer of Daqo New Energy, commented, "We're pleased to have signed this agreement with JinkoSolar which will further strengthen our relationship. JinkoSolar has been one of our strategic customers for many years. We will continue to support them by supplying our high quality polysilicon products and work together with them to meet the growing demand of the global solar PV markets."


Tuesday, November 13, 2018

Comments & Business Outlook

Third Quarter 2018 Financial Results

  • Revenue from continuing operations of $67.4 million in Q3 2018, compared to $63.0 million in Q2 2018
  • Net loss attributable to Daqo New Energy shareholders of $18.3 million in Q3 2018, compared to net income attributable to Daqo New Energy shareholders of $13.4 million in Q2 2018 and $24.1 million in Q3 2017.

Management Remarks

Mr. Longgen Zhang, CEO of Daqo New Energy, commented, "We are pleased to report another solid quarter. In spite of weak market demands, we sold 6,199 MT of polysilicon during the third quarter, with polysilicon inventory returning to lean levels, which demonstrates our product's superior quality and our strong relationships with downstream customers. We successfully completed annual maintenance in September and resumed production earlier than originally scheduled to minimize its impact on production volumes and our cost structure. In addition, we also began pilot production for Phase 3B project in October ahead of schedule. We are in the process of optimizing throughput, efficiency and quality and expect to ramp up Phase 3B to full capacity early in the first quarter of 2019. With lower electricity rates, higher manufacturing efficiency, greater economies of scale and enhanced equipment and processes, we expect the overall total cost of polysilicon production from our Xinjiang facilities to decrease to approximately US$7.50 per kilogram when fully ramped up. Moreover, Phase 3B will not only increase our capacity and reduce costs, but also allow us to improve product quality with approximately 80% of our production capacity devoted to mono-crystalline grade polysilicon, of which approximately half will be applicable for use in N-type mono-crystalline solar cells."

"Despite the impact of the new solar PV policy issued on May 31, 2018, China will still be the largest solar PV market this year with 34.5 GW already installed during the first three quarters of 2018. In late September, China's National Development and Reform Commission released the second draft of renewable energy portfolio standard, which is expected to lay a solid foundation for the nation's goals of increasing non-fossil energies as percentage of total primary energy to 15% in 2020 and 20% in 2030, respectively. In addition, China National Energy Administration held an informal gathering on November 2, in which it reiterated the government's continuous support to the solar PV industry and hinted that it might increase China's cumulative solar installation target by 2020 to at least 210 GW or higher. Subsidies will also continue until 2022 when grid parity is expected to be achieved. Several government agencies have also started to evaluate potential opportunities to effectively reduce the soft cost of solar PV projects so that an increasing number of grid-parity projects will become feasible in China as soon as possible. Solar PV is becoming one of the most cost-effective and feasible forms of renewable energy generation in many global markets, including China. With cost reduction efforts continuing throughout the entire solar PV value chain, we believe the new era of grid parity in the global solar PV market is just around the corner."

"As one of the industry's leading suppliers, Daqo New Energy benefits from its strong cost structure advantage and quality, which are continuously being improved upon with the addition of our Phase 3B and 4A projects. Our Phase 4A project is currently under construction and is expected to begin pilot production in the fourth quarter of 2019. We expect to ramp up Phase 4A to full production in the first quarter of 2020 which will expand our total production capacity to 70,000 MT and reduce the overall total cost of polysilicon production for our Xinjiang facilities to approximately US$6.80 per kilogram. We believe the combination of our cost structure advantage, high quality products and increasing capacity will allow us to benefit from future sustainable growth of global solar PV markets."

Outlook and guidance

The Company expects to produce approximately 7,000 MT to 7,100 MT of polysilicon and sell approximately 6,800 MT to 6,900 MT of polysilicon to external customers during the fourth quarter of 2018. For the full year 2018, the Company expects to produce approximately 23,000 MT of polysilicon.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and may be subject to change. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Friday, July 13, 2018

Comments & Business Outlook

CHONGQING, China, July 13, 2018 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced updates to its previous polysilicon and wafer sales guidance for the second quarter of 2018 and reiterates its full year 2018 polysilicon production guidance.

The Company estimates that its polysilicon sales to external customers during the second quarter of 2018 will be approximately 3,800 MT to 3,900 MT, as compared to the previous guidance of approximately 5,300 MT to 5,500 MT. The Company sold approximately 2,600 MT of polysilicon during the first two weeks of July and reduced inventory to low levels.

The Company produced 5,659 MT of polysilicon during the second quarter of 2018, within the range of its previously announced guidance of 5,600 MT to 5,800 MT. The Company reiterates its full year 2018 polysilicon production guidance of 22,000 to 23,000 MT, which takes into account the impact of annual facility maintenance.   

The Company also estimates that its wafer sales volume during the second quarter of 2018 amounted to approximately 9.5 million to 10.0 million pieces, as compared to the previous guidance of approximately 15.0 million to 20.0 million pieces.    

The above updates are mainly attributable to the new solar PV policies issued by the Chinese government on May 31, 2018, which are expected to reduce solar installation quotas and feed-in tariffs in China during the second half of 2018. The policies created significant uncertainty in the domestic solar market and negatively impacted downstream demand. As a result, the Company's customers adjusted production plans and utilization levels, and due to the volatility of polysilicon average selling prices, a significant number of customer orders were not confirmed until the beginning of July.

Mr. Longgen Zhang, Chief Executive Officer of Daqo New Energy, commented, "We remain confident in the long-term sustainable growth of polysilicon industry despite the new policies' impact on shipments in the short-term. The new policies created significant uncertainty in the market and disrupted our downstream customer's production plans. At the same time, polysilicon average selling prices saw increased volatility in June but have since stabilized over the past two weeks."

"Leveraging our strong cash position, we maintained our production schedule believing that polysilicon ASPs would eventually stabilize and delayed shipments until demand returned in early July. During the first two weeks of July, polysilicon prices stabilized and our shipments returned to normal levels. We are currently running at full production capacity with low levels of inventory, which allows us to reiterate our full year production guidance. The sudden change in policy hasn't impacted our long-term strategic plan to strengthen our leadership position in the industry by further increasing our capacity, improving our cost structure and polysilicon purity." 


Thursday, May 24, 2018

Comments & Business Outlook

CHONGQING, China, May 24, 2018 /PRNewswire/ --Daqo New Energy Corp. (DQ) ("Daqo New Energy" or the "Company"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that it has received government approval of its Phase 4 capacity expansion plan in its entirety and signed an investment agreement with the local government.

The Phase 4 expansion plan will expand the Company's manufacturing capacity in Shihezi, Xinjiang Uygur Autonomous Region, by a total of 70,000 MT in two Phases, Phase 4A and 4B, which will each consist of 35,000 MT expanded manufacturing capacity. We began the design, construction and installation of the new facilities for Phase 4A in early May 2018, with pilot production expected to commence in the fourth quarter of 2019 before ramping up to full 35,000 MT annual production capacity in the first quarter of 2020. Phase 4A compliments Phase 3B of the Company's capacity expansion which will increase the total annual production capacity from 18,000 MT to 30,000 MT by the first quarter of 2019.

Mr. Longgen Zhang, Chief Executive Officer of Daqo New Energy, commented, "Government approval of Phase 4 in its entirety is another milestone in our long-term expansion plan and demonstrates our commitment to meeting the surging demand for ultra-high purity polysilicon from our customers. As part of our investment agreement with the local government, our electricity rate will decrease to RMB0.20/kwh (VAT included) when we fully ramp up our Phase 4A project in Q1 2020. Our current electricity rate is RMB0.29/kwh (VAT included), which is expected to decrease to RMB0.24/kwh (VAT included) when we fully ramp up our Phase 3B project in Q1 2019. The reduced electricity rates and the additional capacity will improve our manufacturing efficiency and strengthen our leadership position in terms of cost structure. With grid parity rapidly approaching, I am confident that demand for our ultra-high purity mono-crystalline-grade polysilicon will remain strong going forward. We will continue to strategically plan for our future as we further improve our cost structure and polysilicon purity, and expand our capacity to  strengthen our leadership position in the industry."


Thursday, April 12, 2018

Notable Share Transactions
CHONGQING, China, April 12, 2018 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) (the "Company"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that the Company has priced its registered follow-on offering of American Depositary Shares ("ADSs") at US$55.0 per ADS (the "Offering"). The Company will issue and sell 2,000,000 ADSs in the Offering and has granted to the underwriter a 30-day option to purchase up to 300,000 additional ADSs. Each ADS represents 25 ordinary shares, par value $0.0001 per share, of the Company. The Offering, which is subject to customary closing conditions, is expected to close on April 16, 2018.

Tuesday, April 3, 2018

Comments & Business Outlook

CHONGQING, China, April 2, 2017 /PRNewswire/ -- Daqo New Energy Corp. (DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that it has signed a 32-month 39,600 MT ultra-high-quality polysilicon supply agreement with LONGi Green Energy Technology Co., Ltd. ("LONGi"), the world's leading mono-crystalline solar products manufacturer with 15GW of mono-crystalline wafer capacity and 6.5GW of mono-crystalline module capacity in 2017.

Under the terms of the supply agreement, Daqo New Energy will supply LONGi with 39,600 MT of ultra-high-quality polysilicon starting from April 2018 through the end of 2020, for use in the production of high-end mono-crystalline solar products. As part of the supply agreement, LONGi will make an advance payment on the ultra-high-quality polysilicon to Daqo New Energy.

Mr. Baoshen Zhong, Chairman of LONGi, commented, "Daqo New Energy's polysilicon meets the stringent purity requirements we have for the production of high-efficiency mono-crystalline solar products. This supply agreement with Daqo New Energy will allow us to expand production capacity of our high-efficiency mono-crystalline solar products to meet the growing demand from our downstream customers. Daqo New Energy's ultra-high-quality polysilicon and reliability make them the ideal strategic supplier, and we look forward to building a deeper partnership with them."

Mr. Longgen Zhang, Chief Executive Officer of Daqo New Energy, commented, "I'm pleased that we have signed this long-term supply agreement with LONGi, the world's leading mono-crystalline solar products manufacturer and one of global top-tier solar manufacturers. Chinese solar manufacturers rely heavily on foreign imports of polysilicon. Daqo is one of the very few Chinese polysilicon producers who can produce ultra-high-quality polysilicon domestically. I believe bringing LONGi on board as a strategic long-term customer demonstrates our reputation as a reliable and preferred supplier of high-quality polysilicon. I look forward to working closely with LONGi to further improve our ability to serve the growing demand for high-end mono-crystalline grade polysilicon."


Thursday, March 1, 2018

Comments & Business Outlook

Fourth Quarter 2017 Financial Results

  • Revenue of $103.7 million in Q4 2017, increasing from $46.1 million in Q4 2016
  • Earnings per basic American Depository Share (ADS) of $3.16 in Q4 2017, increasing from $2.28 in Q3 2017, and $0.39 in Q4 2016.

Management Remarks

"The fourth quarter of 2017 was an excellent quarter for Daqo New Energy in terms of both operational and financial performance, which concluded our fiscal year of 2017 as the best year in the Company's history. I would like to thank our entire team for their hard work and dedication for delivering such an outstanding financial and operational performance," commented Mr. Longgen Zhang, CEO of Daqo New Energy.

"Despite the annual maintenance of our facilities and its impact on our operations during the quarter, we were able to produce 5,339 MT of polysilicon during the quarter, a new record for the Company. This was a direct result of our continuing focus on improving operational efficiency and maximizing overall output. Demand for our high-quality polysilicon products remained strong, allowing us to sell a record high of 4,730 MT of polysilicon during the quarter to external customers while generating total revenue of $103.7 million, an increase of 16.0% sequentially and 125% year-over-year. During the fourth quarter, the Company generated $33.7 million in net income attributable to Daqo New Energy shareholders and $53.6 million in EBITDA with an EBITDA margin of 51.7%. The fourth quarter earnings per basic ADS were $3.16, an increase of 38.6% from $2.28 in the prior quarter, and up 710.3% from fourth quarter of 2016."

"2017 was the strongest year in the Company's history. We produced 20,200 MT of polysilicon throughout the year, 12.2% more than our nameplate capacity of 18,000 MT. Our financial performance in 2017 was significantly better than in 2016, with revenues of $352.9 million, EBITDA of $167.5 million, net income attributable to Daqo New Energy shareholders of $92.8 million and net cash provided by operating activities of $142.7 million. While we are in a capital-intensive industry, our debt ratio improved to a healthy level of 47.3% by the end of 2017, compared to 58.6% at the end of 2016 which further strengthened our competitive positioning in the market."

"Our focus throughout the quarter and going into 2018 remains on reducing costs. Having successfully completed the annual maintenance of our facilities in October 2017, we resumed production with improved manufacturing efficiency. While average polysilicon production cost increased sequentially during the quarter, primarily due to higher raw material prices and the impact of an appreciation of RMB, our two biggest polysilicon manufacturing cost components, unit electricity consumption and unit silicon metal consumption, hit their lowest levels ever in December 2017. We are already working on several additional technological improvements that we expect will further reduce our costs in 2018."

"We are also devoting increasing resources to R&D and quality improvement. We continue to improve our front-end manufacturing process and post-production handling techniques to reduce impurities. This resulted in record levels of production for both electronic-grade polysilicon and mono-crystalline-grade polysilicon in January 2018. We are pleased with this achievement and believe it demonstrates the strength and effectiveness of our overall strategy and is another step towards becoming the leading supplier of electronic-grade and mono-crystalline-grade polysilicon in China."

"In 2017, approximately 100 GW of solar PV panels were installed globally. China continued to rank as the leading solar PV market in the world with total installations of approximately 53 GW.  The United States, India and Japan rank as other top solar markets globally in 2017. According to the latest solar PV market reports, we expect to see low double-digit installation growth globally in 2018, with growth expected to pick up further in 2019. In addition, we are seeing rapid growth in demand for high-efficiency mono crystalline wafers as well as continued growth in demand for ultra-high purity mono-crystalline-grade polysilicon which only very few Chinese producers are able to produce. Demand for high-purity polysilicon products continues to be strong. We will continue to improve the quality of our polysilicon products and expect to increase production levels of polysilicon for mono wafers application."

"We completed the foundation and initial preparation work for our Phase 3B capacity expansion project during the quarter. Facility design and equipment procurement are progressing well and on schedule. With strong customer demand for our high-quality polysilicon products, we are planning to accelerate the construction pace so that we can begin production sooner. We expect to complete the entire Phase 3B project and begin pilot production in the first half of 2019, and reach full capacity of 30,000 MT by mid-2019. With the newly added capacity and our competitive advantages in polysilicon quality and production costs, we are strengthening our polysilicon manufacturing leadership position and are confident in our ability to meet growing demand and create additional value for our shareholders."

Outlook and guidance

The Company expects to produce approximately 5,300 MT to 5,500 MT of polysilicon and sell approximately 4,900 MT to 5,100 MT of polysilicon to external customers during the first quarter of 2018.  The above external sales guidance excludes shipments of polysilicon to be used internally by the Company's Chongqing solar wafer facility, which utilizes polysilicon for its wafer manufacturing operation.  Wafer sales volume is expected to be approximately 15.0 million to 20.0 million pieces for the first quarter of 2018.  For the full year of 2018, the Company expects to produce approximately 22,000 to 23,000 MT of polysilicon, inclusive of the impact of our annual facility maintenance.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and may be subject to change. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end


Monday, February 5, 2018

Comments & Business Outlook

CHONGQING, China, Feb. 5, 2018 /PRNewswire/ -- Daqo New Energy Corp. (DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that its polysilicon order book for 2018 is already 90.2% filled with the signing of multiple long-term contracts with Chinese solar manufacturing companies.

The Company has entered into multiple long-term contracts with pre-fixed purchase volumes and floating purchase prices that can be negotiated on a monthly basis. As the supply of ultra-high-quality polysilicon for mono wafer is expected to tighten throughout 2018, the Company expects to collect pre-payments from a number of customers that are eager to secure their orders.

Mr. Longgen Zhang, Chief Executive Officer of Daqo New Energy, commented "I'm pleased to see that our polysilicon order book for 2018 is 90.2% filled just one month into the year. I believe that it demonstrates the effectiveness of our strategy to turn ourselves into a reliable and preferred supplier for many top-tier Chinese solar manufacturers. We will continue to invest in technology to further enhance our operation efficiency and improve the quality of our polysilicon, while at the same time increase our capacity through overall expansion, innovation and equipment upgrades."        


Tuesday, November 14, 2017

Comments & Business Outlook

Third Quarter 2017 Financial Results

  • Revenues were $89.4 million, increasing from $76.0 million in the second quarter of 2017 and $54.3 million in the third quarter of 2016.
  • Earnings per basic ADS were $2.28 in the third quarter of 2017, increasing from $1.15 in the second quarter of 2017 and $1.07 in the third quarter of 2016.

"We are pleased to report strong financial and operating results for the third quarter of 2017.  I would like to thank our entire team for their great work and contribution to the solid profitability and earnings for the third quarter.  Our excellent third quarter results demonstrate the robust customer demand for our high quality polysilicon products.  During the third quarter, we produced 4,940 MT of polysilicon and sold 4,500 MT to external customers.  Revenues for the third quarter were $89.4 million, an increase of 17.6% from the prior quarter.  Third quarter earnings per basic ADS were $2.28, an increase of 98% compared to $1.15 in the prior quarter.  During the third quarter of 2017, the company generated $24.1 million in net income attributable to Daqo New Energy shareholders and $42.3 million in EBITDA with an EBITDA margin of 47.4%.  In particular, our operating cash flow remains strong.  In the first three quarters of 2017, we generated $98.4 million in net cash provided by operating activities," said Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy.

"In late September and early October, we conducted annual maintenance for our Xinjiang polysilicon facilities.  We are glad to report that the annual maintenance had been completed successfully for this year, with less impact to production volume than anticipated by our original plan.  For this year, rather than shutting down the entire facility for maintenance as we had done in previous years, we conducted maintenance in two phases with partial shutdown of the facility.  While this was the first time we made partial shutdown for annual maintenance, through the hard work and dedication of our team, maintenance was completed ahead of schedule and allowed for increased production during the same period.  Furthermore, through the maintenance and related technology upgrades, we have successfully expanded our hydrochlorination capacity and manufacturing efficiency, which lays a solid ground for potential production increase and cost reduction in the following quarters."

"Demand in China remained strong in the third the quarter, driven by Top Runner and PV Poverty Alleviation projects, as well as distributed generation projects, which have provided strong support for demand during the second half of the year.  According to industry sources, China has added approximately 42GW of solar PV installation in the first three quarters of 2017, which is much stronger than most forecasts. It is expected that the total annual solar PV installation in China will likely reach 50GW in 2017, which represents an approximate 40% increase compared to 2016. In addition, the United States is expected to install approximately 12GW in 2017 and India is expected to take over Japan to become the third largest solar PV installation market with approximately 10GW installation in 2017.  Based on the strong end market demand, we anticipate global annual solar PV installation would grow in the double-digit rate in 2017 as compared to 2016."

"As a result of strong downstream PV market, the market remained short-supplied and polysilicon pricing increased throughout the third quarter.  Our third quarter polysilicon ASP were $16.19/kg, representing a significant increase from the second quarter's ASP of $13.58/kg.  As of today, we continue to see robust customer demand for our high quality polysilicon, with pricing in the approximate range of $18.50/kg."

"Polysilicon average total production cost was $8.95/kg in the third quarter, compared to $8.53/kg in the prior quarter.  The increase in production cost was primarily due to costs related to our annual maintenance, as well as exchange rate related impact and higher raw material cost."

"In October, our board of directors officially approved the Company's Phase 3B Project, which is expected to increase our polysilicon annual capacity from 18,000 MT to 25,000 MT. By adopting additional technology improvement and debottlenecking projects, we may be able to further increase our capacity to 30,000 MT per annum by the end of 2019. Once Phase 3B Project is ramped up to full production capacity, we anticipate the overall total production cost for our Xinjiang facilities could potentially be decreased to $7.50/kg, benefiting from better operating leverage, adopting new production processes and equipment with higher efficiencies, and achieving greater economies of scale."

"For the Phase 3B Project, we will adopt new designs, processes, technologies and equipment that would further improve the purity of our polysilicon products.  Polysilicon produced under the Phase 3B Project are expected to reach electronics grade and will be targeting the mono-crystalline wafer and semiconductor markets. We may potentially enjoy higher profit margin if we could successfully access these markets with our differentiated electronic-grade polysilicon products. "

Outlook and Q4 2017 guidance

The Company continued to conduct its annual maintenance for the Xinjiang polysilicon facility in October, 2017, with some impact to production.  As a result, the Company expects to produce 4,800 MT to 5,000 MT of polysilicon and sell approximately 4,300 MT to 4,500 MT to external customers during the fourth quarter of 2017. The above external sales guidance excludes shipments of polysilicon to be used internally by our Chongqing solar wafer facility, which utilizes polysilicon for its wafer manufacturing operation.  Wafer sales volume is expected to be approximately 25.0 million to 25.5 million pieces in the fourth quarter of 2017.


Thursday, October 19, 2017

Comments & Business Outlook

CHONGQING, China, Oct. 19, 2017 /PRNewswire/ -- Daqo New Energy Corp. (DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced that the board of directors has officially approved the Company's Phase 3B expansion plan ("Phase 3B Project") for its polysilicon facilities in Xinjiang.

Phase 3B Project is expected to increase the Company's polysilicon annual nameplate capacity from the current 18,000 MT to 25,000 MT. By adopting additional technology improvement and debottlenecking projects, the Company may be able to further increase its capacity to 30,000 MT per annum by the end of 2019.

The Company expects to complete project design and initial preparation works for Phase 3B Project by the end of 2017, complete constructions and installations by the end of 2018, start pilot production in the first half of 2019 and reach full capacity by the end of the second quarter of 2019.

For the Phase 3B Project, the Company plans to adopt new designs, processes, technologies and equipment that would further improve the quality and purity of its polysilicon products. The polysilicon products of the Phase 3B Project are anticipated to reach electronics grade and will be targeting the mono-crystalline wafer and semiconductor markets, which have more stringent requirements on polysilicon quality and purity, and therefore have higher entry barriers. The Company may potentially enjoy higher profit margin if it could successfully access these markets with its differentiated ultra-high purity electronic-grade polysilicon products.

In addition to polysilicon quality upgrading, the Company expects to implement new production processes to improve operational efficiencies, which would further reduce our total production cost.  Once Phase 3B Project is ramped up to full production capacity, we anticipate the overall total production cost for our Xinjiang facilities could potentially be decreased to US$7.50 per kilogram, benefiting from better operating leverage, adopting new production processes and equipment with higher efficiencies, and achieving greater economies of scale.


Tuesday, August 8, 2017

Comments & Business Outlook

Second Quarter 2017 Financial Results

  • Revenues were $76.0 million, compared to $83.8 million in the first quarter of 2017 and $71.0 million in the second quarter of 2016.
  • Earnings per basic ADS of $1.15 in Q2 2017, compared to $2.18 in Q1 2017 and $1.90 in Q2 2016

"We are pleased to report that the second quarter of 2017 was a solid quarter with new records on both polysilicon production volume and external sales volume. During the quarter, we produced 4,993 MT of polysilicon and sold 4,497 MT to external customers. We also conducted various experiments to improve polysilicon quality, particularly for the mono-crystalline grade polysilicon, which had a slight impact to overall production cost and volume. However, we are seeing meaningful quality improvements. Production volume as well as shipment of mono-crystalline quality polysilicon hit a record high in June," said Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy.

"Due to downstream customer inventory management at the end of the first quarter, ASP fell in April, but ASP started to recover in May. Demand and pricing improved throughout the second quarter, with the ASP in June approximately 15% higher than that in April. So far in the third quarter, customer demand has remained robust with pricing continuing to improve."

"In terms of the PV end market, China installed 24.4 GW of solar PV in the first half of 2017, representing a new record high and a 9% increase from the first half of 2016. For the full year of 2017, China's annual PV installation forecast is currently expected to exceed 35GW. Based on discussions with our customers, we believe that China's PV market demand continues to be strong, driven by top-runner projects as well as distributed generation. Globally, the U.S. and Indian markets are also seeing strong PV product demand. Starting in late July, we have seen a fairly significant shortage of polysilicon in the China market and continued improvements in polysilicon pricing. With a much stronger than expected solar PV installations in China, the annual total global solar installation in 2017 is likely to exceed 80 GW for the first time ever. "

"During the second quarter of 2017, the company generated $12.1 million in net income attributable to Daqo New Energy shareholders and $29.8 million in EBITDA with an EBITDA margin of 39.2%. In particular, our operating cash flow remains strong. In the first half of 2017, we generated $73.6 million in net cash provided by operating activities."

"Going forward, we will continue our efforts to improve quality throughout the year. With our high product quality and stable supply capabilities, we continue to be a supplier of choice with strong demand for our high quality polysilicon from our diverse customer base."

Outlook and Q3 2017 guidance

The Company's annual maintenance for the Xinjiang polysilicon facility is scheduled for late September and October. The annual maintenance is anticipated to impact production volume by approximately two weeks. As a result, the Company expects to produce 4,200 MT to 4,500 MT of polysilicon and sell approximately 3,700 MT to 4,000 MT to external customers during the third quarter of 2017. The above external sales guidance excludes shipments of polysilicon to be used internally by our Chongqing solar wafer facility, which utilizes polysilicon for its wafer manufacturing operation. Wafer sales volume is expected to be approximately 25.0 million to 25.5 million pieces in the third quarter of 2017.


Tuesday, March 7, 2017

Comments & Business Outlook

 Fourth Quarter 2016 Financial Results

  • Revenues were $46.1 million, compared to $54.3 million in the third quarter of 2016 and $59.3 million in the fourth quarter of 2015.
  • Earnings per basic ADS were $0.39, compared to $1.07 in the third quarter of 2016 and $0.92 in the fourth quarter of 2015.

"The fourth quarter of 2016 was an important milestone for Daqo New Energy. During the quarter, we successfully completed our annual maintenance work and interconnections between our new facilities and existing facilities in Xinjiang at the same time. We also successfully completed all the construction and installation work related to Phase 3A polysilicon expansion. As maintenance, construction, installation of new equipment, and interconnection of facilities were conducted concurrently, our annual maintenance for 2016 took longer than usual to complete. However, the combination of these efforts allowed us to start initial production of our expanded production capacity in the first quarter of 2017, months ahead of our original schedule. We have already reached full production throughput of 18,000 MT per annum by the end of February 2017," said Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy.

"During the fourth quarter of 2016, we saw robust demand for polysilicon products, and the strong momentum continued into the first quarter of 2017. Based on industry forecasts, the size of the solar market was approximately 70GW in 2016, with demand from China and India exceeding expectations. The PV market is expected to continue its growth in 2017, with the market size expected to be 73 to 79GW for the year. In particular, the India PV market is expected to grow from approximately 5 or 6GW in 2016 to more than 10GW in 2017. With a growing PV market and major downstream PV manufacturers continuing to add manufacturing capacities, this bodes well for continued strong demand for high-purity polysilicon products. In particular, we are seeing a shift in industry trend, with rising demand and increasing manufacturing capacities for high-efficiency mono crystalline solar wafers and solar cells. This has translated to increased demand for high-purity semiconductor-grade polysilicon, which only very few Chinese domestic manufacturers are able to supply. Daqo New Energy, with our upgraded process and high-purity products, is uniquely positioned to address this growing high-efficiency mono crystalline solar market."

"Based on feedback from our customers, we believe that orders and shipments of downstream PV module products are currently healthy and strong. We are witnessing strong orders and robust pricing for our high quality polysilicon products from our customers, and despite our expanded capacities and production volume, customer demand is still exceeding our production volume. In fact, certain customers are now willing to make prepayments so that they can take priority in product delivery. This is a testament to both the strong market demand and the high quality of our products. As a result, we expect polysilicon ASP in the first quarter of 2017 will be higher as compared to the fourth quarter of 2016."

"We are also proud of the financial performance we achieved for the year 2016. In 2016, we had revenues of $229 million, net income attributable to Daqo New Energy Corp. shareholders of $43.5 million, and earnings per basic ADS of $4.15, all higher as compared to 2015. We generated non-GAAP EBITDA of $99.3 million and net cash provided by operating activities of $98.7 million in 2016. The strong cash flow has allowed us to fund and complete the current phase of capacity expansion without significantly increasing bank borrowings."

Outlook and Q1 2017 guidance

With the successful initial production of the Phase 3A capacity, the Company expects polysilicon production volume will reach 4,300 MT to 4,500 MT in the first quarter of 2017. The company expects to sell approximately 3,800 MT to 4,000 MT of polysilicon to external customers during the first quarter of 2017, a record high for the Company. The above external sales guidance excludes shipments of polysilicon to be used internally by our Chongqing solar wafer facility, which utilizes polysilicon for its wafer manufacturing operation. Wafer sales volume is expected to be approximately 23.5 million to 24 million pieces for the first quarter of 2017.

This outlook reflects our current and preliminary view as of the date of this press release and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Tuesday, November 15, 2016

Comments & Business Outlook

Third Quarter 2016 Financial Results

  • Revenues were $54.3 million, compared to $71.0 million in the second quarter of 2016 and $46.6 million in the third quarter of 2015.
  • Earnings per basic ADS were $1.07, compared to $1.90 in the second quarter of 2016 and $0.29 in the third quarter of 2015.

"During the third quarter of 2016, we successfully set new records again in terms of polysilicon production volume and costs. I would like to thank our entire team for their hard work and dedication.  Our polysilicon production for the third quarter reached a record high of 3,636 MT, which surpassed our name plate capacity of 12,150 MT per annum.  Through technical and process improvements, we also made significant progress in reducing our production cost even further, achieving our lowest ever cost structure with $8.66/kg in total cost and $6.88/kg in cash cost," said Dr. Gongda Yao, Chief Executive Officer of the Company.

"In the third quarter of 2016, downstream solar end market and polysilicon market experienced significant volatility.  Due to a slow-down in China end market demand and installation activities after China's FIT adjustment at the end of June 2016, the market saw lower levels of demand towards the end of the third quarter of 2016.  Our third quarter ASP was $15.64/kg, compared to second quarter ASP of $17.24.  As a result, several polysilicon manufacturers, both within China and abroad, partially shut down their capacities due to weak polysilicon pricing.  The resulting reduction in polysilicon supply has helped to stabilize the market and paved the way for price recovery.  Nevertheless, as a result of our continuous effort on technology improvements and cost reduction, our quarterly average production cost has been further reduced by 8% from $9.43/kg in the second quarter to $8.66/kg in the third quarter of 2016. "

"Due to a delay in the delivery of critical specialty components, the start date of annual maintenance for our Xinjiang polysilicon facility was postponed to October 3 from the second half of September as originally planned.  We conducted more than 500 maintenance items, including special projects that are expected to improve our manufacturing efficiency even further.  The maintenance was completed successfully, and we initiated a gradual restart of production on October 24.  In early November, production resumed successfully and we reached full capacity utilization.  Overall, we estimate that the annual maintenance has an impact of approximately 800 MT to 900 MT on our fourth quarter polysilicon production volume."

"In the third quarter of 2016, due to market volatility and declining conditions for the solar wafer segment, we reduced our wafer production utilization rate. As a result, the Company sold 14.4 million pieces of wafer in the third quarter, compared to 25.0 million pieces in the second quarter of 2016. With improving market conditions, the Company ramped up wafer production utilization starting from mid-October and reached full production in November."

"The solar market began to recover in early October, with strong customer demand and order momentum.  Due to limited channel inventory, polysilicon pricing has recovered particularly well, with increases in orders from our broad based customers.  Wafer pricing also recovered significantly.  During early November, we also saw downstream product pricing recovering meaningfully, including pricing for solar cells and solar modules."

Outlook and Q4 2016 guidance

As a result of our annual maintenance, the Company expects to sell approximately 2,200 MT to 2,300 MT of polysilicon to external customers during the fourth quarter of 2016.  The external sales guidance excludes shipments of polysilicon to be used internally by our Chongqing solar wafer facility, which utilizes polysilicon for its wafer manufacturing operation.  Wafer sales volume is expected to be approximately 20 million to 21 million pieces for the fourth quarter of 2016.


Tuesday, August 9, 2016

Comments & Business Outlook

Second Quarter 2016 Financial Results

  • Revenue of $71.0 million in Q2 2016, representing a 23.1% increase from $57.7 million in Q1 2016.
  • Adjusted earnings per basic ADS (non-GAAP)(3) of $2.10 in Q2 2016, representing an increase of 87.5% from $1.12 in Q1 2016 and 707.7% from $0.26 in Q2 2015.

"I would like to thank our entire team for the excellent operational performance and financial results for the second quarter of 2016," said Dr. Gongda Yao, Chief Executive Officer of the Company.  "During the quarter, we produced a record-high of 3,570 MT of polysilicon, which surpassed our annual name plate capacity of 12,150 MT.  With our continuous effort on cost reduction, we reached our lowest ever cost structure with $9.43/kg in total cost and $7.42/kg in cash cost.  Our current cost structure is 27% below Q2 2015 level, which at the time was already one of the lowest in the world. We believe we continue to be one of the lowest cost producers of polysilicon in the world in Q2 2016, and with further technology upgrades and process improvements, we believe we have a roadmap to reduce our cost even lower. "

"In the second quarter of 2016, the demand for polysilicon was very strong. We saw substantial increase in polysilicon orders and shipments across a wide range of customers.  With a tight supply environment, market ASPs improved meaningfully, from $13.72/kg in the first quarter to $17.24/kg in the second quarter of 2016."

"Entering into the third quarter, we continue to see strong demand and robust orders from customers.  The market for polysilicon within China remain tight supplied, with low levels of inventory across domestic suppliers and customers.  Based on current market demand trends, we are seeing a stable pricing environment, and we anticipate Q3 ASP to be similar to Q2 levels.  Considering several of the major Chinese polysilicon producers including Daqo plans to conduct annual facilities maintenance during the third quarter, we anticipate that the tight-supply situation for polysilicon sector within China should continue in 2016."

"For the second quarter of 2016, we not only delivered the best-ever quarter for the Company in terms of operational performance, but also excellent financial results. We achieved revenues of $71.0 million, with non-GAAP gross margin of 43.9%, and EBITDA margin of 48.9%, and GAAP earnings per basic ADS of $1.90.  In particular, we generated strong cash flow from operating activities of $66.6 million in the first half of this year.  With our Phase 3A polysilicon facilities expected to come online in early 2017, which will bring our annual capacity to 18,000 MT, we expect to continue to deliver compelling financial performance and results to our shareholders."

Outlook and Q3 2016 guidance

Since the ramp up of our Phase 2B capacity at the end of June 2015, we have produced a total of over 13,200 MT of polysilicon over the past four quarters, above our nameplate capacity of 12,150 MT.   As our Xinjiang polysilicon manufacturing facilities have been operating continuously for more than 12 months, it is necessary that we conduct our annual scheduled maintenance during the third quarter to ensure safe and smooth operations.  We also plan to take this opportunity to do preparation work for the interconnection between existing facilities and Phase 3A facilities which are expected to start pilot production early next year.  The entire annual maintenance schedule is expected to result in 15 to 20 days of suspension to polysilicon production for 2016.  Due to the long lead-time for procuring the specialty materials and equipment required for the annual maintenance, we anticipate that we would start the annual maintenance work in the second half of September 2016.  However, the start date of the annual maintenance work depends on the scheduled delivery of such specialty materials and equipment. Therefore, it is possible that the annual maintenance start date may be delayed.     

As a result of the above mentioned factors, the Company expects to sell approximately 2,550 MT to 2,600 MT of polysilicon to external customers during Q3 2016.  The external sales guidance excludes shipments of polysilicon to be used internally by our Chongqing solar wafer facility, which is expected to utilize approximately 550 tons of polysilicon during the quarter for its wafer manufacturing operation.  Wafer sales volume is expected to be approximately 24.0 million to 25.0 million pieces for Q3 2016.

This outlook reflects our current and preliminary view as of the date of this press release and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Tuesday, May 10, 2016

Comments & Business Outlook

First Quarter 2016 Financial Results

  • Revenue of $57.7 million in Q1 2016, compared to $59.3 million in Q4 2015
  • Earnings per basic ADS of $0.80 in Q1 2016, compared to $0.92 in Q4 2015 and $0.12 in Q1 2015


"I would like to thank our entire team for delivering strong operating and financial results for the first quarter of 2016," said Dr. Gongda Yao, Chief Executive Officer of the Company. "During the quarter, we produced 3,405 MT of polysilicon, representing full utilization of our manufacturing facilities, which surpassed our name plate capacity of 12,150 MT per year. The slight decrease in polysilicon production volume compared to Q4 of 2015 was primarily due to a smaller number of calendar days in Q1 of 2016, and the impact of the Chinese New Year holidays. During the quarter, we sold 2,905 MT to our external customers, compared to 3,092 MT in Q4 of 2015. The difference is primarily due to a greater shipment of polysilicon for use at our Chongqing wafer facilities, which was 520MT in Q1 of 2016, compared to 415MT in Q4 of 2015, as well as lower polysilicon production volume.  As we ramp up our Chonqing solar wafer capacity and aim to increase our wafer production volume from 21 million pieces per quarter in Q4 of 2015 to 25 million pieces per quarter by mid-2016, it is necessary that we ship an increasing volume of polysilicon to our Chongqing wafer manufacturing subsidiary in order to meet its raw material needs. Our polysilicon average total production cost and cash cost were $9.65/kg and $7.62/kg, respectively, during Q1 of 2016. As a result, despite lower ASPs in Q1 this year versus Q4 last year, we were able to achieve better gross margin. We continue to make progress toward our goal to further reduce our production cost and improve quality, and further enhance our profitability and competitive positioning."   


Thursday, March 24, 2016

Comments & Business Outlook
Fourth Quarter 2015 financial Results
  • Revenue of $59.3 million in Q4 2015, an increase of 27.3% from revenue of $46.6 million in Q3 2015
  • Earnings per basic ADS of $0.92 in Q4 2015, compared to $0.29 in Q3 2015, and $0.40 in Q4 2014

    "In the fourth quarter of 2015, we delivered strong operating and financial results that were beyond our internal expectations. Our polysilicon facilities were running successfully at full capacity for the entire quarter, and we are excited to report that both our external sales volume and cost structure exceeded our prior guidance. We achieved record-high quarterly polysilicon production volume of 3,547 MT, an increase of 31.9% from 2,689 MT in the third quarter of 2015 and 12% above our name plate capacity. Thanks to our technology and operations team, we made solid progress on our cost reduction efforts, and reduced our polysilicon average total production cost and cash cost even further to $9.74/kg and $7.69/kg, respectively, which is our lowest-ever cost and ahead of our cost reduction roadmap," said Dr. Gongda Yao, CEO of Daqo New Energy. 

    In the fourth quarter of 2015, we generated revenue of $59.3 million, an increase of 27.3% as compared to the third quarter of 2015. We achieved EBITDA margin of 39.5%, which increased from 32.1% in the third quarter of 2015. Our income from operations was $14.3 million, an increase of 113.4% from $6.7 million in the third quarter of 2015.  Despite a 7.5% reduction in polysilicon ASPs as compared to the third quarter of 2015, we were able to deliver higher gross margin, operating margin and net margin in the fourth quarter as compared to the third quarter, primarily as a result of our successful cost reduction efforts in polysilicon manufacturing.

    In February 2016, we began to see recovery in polysilicon ASPs, driven by strong customer demand for our high-purity polysilicon products.  Furthermore, we saw overall polysilicon channel inventory reduced to a normal level by strong end market demand.  As the industry and our customers continue to add on additional wafer capacities through 2016, we anticipate continued strong demand for polysilicon.  As of March 2016, the spot market price for polysilicon has rebounded by approximately 15% as compared to December of 2015, and we expect to see stable to improving polysilicon ASPs in the coming quarters supported by strong end market demand and increases in downstream solar manufacturing capacities.

    Additionally, our Chongqing wafer subsidiary was operating well and contributed meaningfully to the company's financial performance.  Wafer gross margin, on a standalone basis, improved to 25.8%, a substantial increase from third quarter gross margin of 17.4%.  The improvement in gross margin was driven primarily by a 9% improvement in product pricing, as well as further reductions in manufacturing costs.  Currently our wafer annual capacity is approximately 87 million pieces. As we continue to execute on our technology enhancement project at our wafer manufacturing facilities to increase production volume and further reduce cost, with the goal to achieve an annual production capacity of 100 million pieces by mid-2016, we anticipate our wafer subsidiary would continue to contribute positively to the company's financial results.

    Market outlook and Q1 2016 guidance

    Global solar PV installations in 2015 totaled approximately 57 GW, representing a 26.7% increase from 45 GW in 2014. China, Japan and the United States are the three largest solar PV markets globally in 2015. China installed 14.95 GW solar PV system in 2015, ranking No.1 globally in terms of volume for three consecutive years, with China's cumulative solar PV installation reaching 43 GW by the end of the year. In the draft version of China's "13th Five-Year-Plan", the cumulative solar PV installation is expected to reach 150 GW, which means China would install an additional 107 GW over the next five years from 2016 to 2020 in order to meet the target. In December 2015, the United States announced a 5-year extension for Solar Investment Tax Credit (ITC), which provides a 30 percent tax credit for solar systems on residential and commercial properties. The extension will significantly support the deployment of solar energy in the United States in the next five years. In addition, several emerging solar end markets are experiencing rapid growth, including India, Southeast Asia, Latin America and Africa. In particular, India's solar PV installation is reported to be approximately 2 GW in 2015, which makes it the fifth largest solar PV market in the world. India's newly added solar PV installation is expected to be approximately 4.8 GW in 2016.  According to several market forecast reports, the global solar PV installations in 2016 are expected to be in the range of 62 to 65 GW. We believe the overall solar PV demand will remain strong in 2016, resulting in favorable demand for polysilicon in the year.

    For the first quarter of 2016, the Company expects to sell approximately 2,800 MT to 3,000 MT of polysilicon to external customers.  The above guidance reflects increased consumption of polysilicon internally by our own wafer subsidiary due to increased wafer production and wafer capacity expansion.  Wafer sales volume is expected to be approximately 21.5 million to 22.0 million pieces for the quarter. This outlook reflects our current and preliminary view as of the date of this press release and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Monday, January 4, 2016

Comments & Business Outlook

CHONGQING, China, January 4, 2016 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading manufacturer of high-purity polysilicon for the solar PV industry, today announced that its subsidiary, Xinjiang Daqo New Energy Stock Co., Ltd., a PRC joint stock company ("Xinjiang Daqo"), formerly Xinjiang Daqo New Energy Co., Ltd., has filed an application with the National Equities Exchange and Quotations, an emerging over-the-counter market in China (the "New Third Board"). Xinjiang Daqo operates the polysilicon production facilities of the Company located in Shihezi, Xinjiang Uyghur Autonomous Region.

Daqo New Energy currently owns 99% of the equity interest of Xinjiang Daqo following a corporate restructuring completed in December 2015 to enable Xinjiang Daqo to meet certain PRC legal requirement for listing on the New Third Board. Prior to the restructuring, Xinjiang Daqo was a wholly owned subsidiary of Daqo New Energy.

In the event that Xinjiang Daqo successfully lists on the New Third Board, the current intent of the Company is that, immediately following the listing, Daqo New Energy will own a substantial majority of the outstanding equity interest of Xinjiang Daqo and continue to consolidate its financial results.

There is no assurance that Xinjiang Daqo will successfully list on the New Third Board. Xinjiang Daqo's listing is subject to, among other things, market and business conditions and Xinjiang Daqo satisfying relevant rules of the China Securities Regulatory Commission and the applicable securities exchange and other applicable registration, listing and offering requirements and obtaining requisite regulatory approvals of its listing application.


Wednesday, August 26, 2015

Notable Share Transactions

CHONGQING, China, August 26, 2015 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading manufacturer of high-purity polysilicon for the solar PV industry, today announced that its board of directors has approved a share repurchase program, effective for one year from August 26, 2015.

The board of directors has authorized Daqo New Energy to repurchase up to US$10 million worth of its own issued and outstanding ordinary shares or American depositary shares representing ordinary shares in open-market purchases, in negotiated transactions off the market, in block trades or through other legally permissible means in accordance with applicable United States securities laws. The repurchase program does not obligate Daqo New Energy to make repurchases at any specific time. The board of directors will review the share repurchase program periodically and may authorize adjustment of its terms and size accordingly.


Wednesday, August 12, 2015

Notable Share Transactions

CHONGQING, China, August 12, 2015 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading manufacturer of high-purity polysilicon for the solar PV industry, today announced that it proposes to restructure Xinjiang Daqo New Energy Co., Ltd. ("Xinjiang Daqo"), a subsidiary of the Company, and is exploring the idea of listing Xinjiang Daqo separately on the National Equities Exchange and Quotations, an emerging over-the-counter market in China (the "New Third Board"). Xinjiang Daqo operates the polysilicon production facilities of the Company located in Shihezi, Xinjiang Uyghur Autonomous Region.

Pursuant to the restructuring plan, which has been approved by the board of directors of the Company and its audit committee, Xinjiang Daqo Investment Co., Ltd., a wholly-owned subsidiary of Daqo Group Co., Ltd., an affiliate of the Company, will subscribe for newly issued equity interest of Xinjiang Daqo representing 1% of the total outstanding equity interest of Xinjiang Daqo. After the restructuring, the Company will hold 99% of the outstanding equity interest of Xinjiang Daqo. The restructuring is aimed at meeting the PRC legal requirement that a company to be listed on the New Third Board shall be in the form of a limited company by shares with at least two shareholders.

In the event that Daqo New Energy is able to effect the proposed New Third Board listing of Xinjiang Daqo, the current intention of the Company is that, immediately after such listing, it will own a substantial majority of the outstanding equity interest of Xinjiang Daqo and continue to consolidate its financial results. The Company expects that, after the proposed New Third Board listing of Xinjiang Daqo, the Company's American depositary shares ("ADSs", each representing 25 ordinary shares) will continue to be traded on the New York Stock Exchange, and its ordinary shares will continue to be registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company does not have any current plan or intention to pursue any "going-private" transaction or any other transactions having the purpose or effect of causing its ADSs to no longer be traded on the New York Stock Exchange or its ordinary shares to no longer be registered under the Exchange Act.

"Daqo New Energy has established a leadership position in our industry as a low-cost and high-purity polysilicon manufacturer," said Dr. Gongda Yao, Chief Executive Officer of the Company. "The potential listing of Xinjiang Daqo on the New Third Board will offer us new opportunities to accelerate our growth and enhance our core business."

The New Third Board is a national over-the-counter stock exchange that supplements trading activities on the Shanghai and Shenzhen stock exchanges, including the related Growth Equity Market (GEM) exchanges. The New Third Board offers a new channel for enterprises in China to access the capital markets and to gain greater exposure to the investment community.


Tuesday, August 11, 2015

Comments & Business Outlook

Second Quarter 2015 Financial Results

  • Revenues were $34.3 million, compared to $41.9 million in the first quarter of 2015 and $43.7 million in the second quarter of 2014.
  • Loss per basic ADS was $0.09, compared to earnings per basic ADS of $0.12 in the first quarter of 2015, and $0.57 in the second quarter of 2014.

In May 2015, we successfully completed the annual maintenance of our Xinjiang polysilicon facilities, which impacted polysilicon production for five days. In the second quarter of 2015, we produced 1,734 MT of polysilicon and sold 1,363 MT and 310 MT to our external customers and our internal wafer sector, respectively. Our total production cost for polysilicon was $12.98/kg and cash cost was $10.60/kg. The slight decreases in production and sales volume, and the increase in production cost as compared to Q1 2015, were the results of the planned shutdown related to our annual facility maintenance.

In the second quarter of 2015, we achieved EBITDA of $8.4 million, operating income of $1.2 million and recorded a net loss attributable to Daqo New Energy shareholders of $0.9 million. Although we are one of the lowest-cost polysilicon producers in the world, our profitability was negatively impacted by the decline in the second quarter's ASP, which was $15.95/kg compared to $18.09/kg in the first quarter of 2015.

The pilot production for Phase 2B capacity expansion is running smoothly and on schedule. We expect to achieve full production capacity by the end of August, and reduce the total production cost to a level below $12.00/kg when fully ramped up.

In July 2015, we are very excited to have our new CFO Mr. Ming Yang on board. We believe his previous experiences including working on Wall Street in both buy-side and sell-side capacities, and also as the head of investor relations, will add great value to the Company in corporate finance, capital markets, business development and corporate strategy.

Also in July 2015, the board of directors approved our Phase 3A expansion project, which is expected to increase the polysilicon production capacity at our Xinjiang manufacturing site from the current level of 12,150 MT to 18,000 MT. We currently expect capital expenditures for the expansion project to be approximately RMB620 million and we anticipate to benefit from our ability to reutilize all possible idle polysilicon manufacturing equipment and related assets in Chongqing, as well as the existing shared facilities in Xinjiang. We have already started initial work related to the project including applications for relevant permits and approvals. Construction and equipment installation is expected to be completed by the end of 2016. We also expect to commence initial production of the Phase 3A project in the first quarter of 2017 and achieve full production capacity by the end of the second quarter of 2017. Our Phase 3A expansion project is a very important step towards our goal of becoming one of the world's top producers of high-purity polysilicon in terms of cost competitiveness, and will allow us to better serve the demand of the global solar PV industry.

Market outlook and Q3 2015 guidance

According to the announcement by China's National Energy Administration, the newly added PV installation in China in the first half of 2015 was 7.7 GW. Towards the annual target of 17.8GW, 11.5GW has already been allocated to specific developers and an additional 2.2GW is in the process of obtaining approvals. We believe the installation in the second half of 2015 in China may potentially reach 10GW and the 17.8GW annual target is achievable. As for the global market, typically the installation in the second half of a calendar year may be 30~40% higher than in the first half. We expect to see strong demand in global solar markets in the second half of 2015, which may possibly improve polysilicon ASP in the second half of 2015. In addition, according to the announced policy regarding the suspension of "processing trade", the polysilicon imported from the United States, Korea and Europe will be subject to different AD and CVD tariffs, on top of the import tariff of 4%, starting from September 1, 2015.

For the third quarter of 2015, the Company expects to sell 2,100 to 2,200 MT of polysilicon to external customers. The Company also expects to sell approximately 17.5 million to 18.0 million pieces of solar wafers. This outlook reflects our current and preliminary view as of the date of this press release and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Tuesday, August 4, 2015

Comments & Business Outlook

CHONGQING, China, August 4, 2015 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading manufacturer of high-purity polysilicon for the solar PV industry, today announced that the Company's board of directors has approved its Phase 3A expansion project, which is expected to increase the polysilicon production capacity at the Company's Xinjiang manufacturing site from the current level of 12,150 metric tons (MT) to 18,000 MT. The Company currently expects capital expenditures for the expansion project to be approximately RMB620 million, having benefitted from the Company's ability to reutilize all possible idle polysilicon manufacturing equipment and related assets in Chongqing, as well as the existing shared facilities in Xinjiang.

The Company has officially launched the Phase 3A expansion project after the board approval. Initial work related to the project has already begun, including applications for relevant permits and approvals. Construction and equipment installation is expected to be completed by the end of 2016. The Company expects to commence initial production of the Phase 3A project in the first quarter of 2017 and achieve full production capacity by the end of the second quarter of 2017.

"The success of our Phase 2B project, which is expected to bring total production capacity to 12,150 MT at our Xinjiang site, gives us confidence that the company can continue to expand our production capacity and further enhance its advantage in cost structure in polysilicon production," commented Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy. "With our new Hydrochlorination system now fully on-line and operating at better than anticipated levels in terms of production output, quality and efficiency, we believe we can further strengthen our industry-leading cost structure by reducing energy consumption and improving manufacturing efficiencies. By reutilizing our idle production equipment in Chongqing and taking advantage of the exiting shared facilities in Xinjiang, we believe that we will be able to achieve substantial savings in capital expenditures, and reduce it to very competitive levels on a per unit basis, resulting in enhanced return on investment. Moreover, our recently announced loan agreements with domestic Chinese banks afford us the flexibility to fund our expansion plan. Our Phase 3A expansion project is a very important step towards our goal of becoming one of the world's top producers of high-purity polysilicon in terms of cost competitiveness, and will allow us to better serve the demand of the global solar PV industry."


Tuesday, June 30, 2015

CFO Trail

CHONGQING, China, June 30, 2015 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced the appointment of Mr. Ming Yang as Chief Financial Officer, effective July 6, 2015. In addition, Ms. Tracy Tianqun Zhou, currently Chief Marketing Officer, is leaving the Company to pursue personal endeavors, effective June 30, 2015. Succeeding Tracy Zhou as Chief Marketing Officer is Mr. Shihua Su, who is currently the acting Chief Financial Officer of the Company and will continue serving in such role until Mr. Ming Yang's appointment.

Mr. Yang has significant breadth of experience in corporate finance, capital markets, business development and corporate strategy. Most recently, Mr. Yang was a management consultant at McKinsey & Company, where he specialized in the cleantech and solar sectors. His work focused on such areas as corporate strategy, market strategy, performance management, risk management and growth initiatives. Prior to that, he was vice president of business development and corporate communications at JA Solar Holdings Co., Ltd., a leading manufacturer of solar products based in China, where he was responsible for corporate strategy, business development, strategic partnerships and investor relations. Prior to JA Solar, Mr. Yang was an analyst covering the renewable energy sector at Coatue Management, a multi-billion dollar hedge fund based in New York. Before that, he was vice president and senior China analyst at Piper Jaffray based in New York and Shanghai, where he was a core member of the global cleantech team and covered the solar energy and semiconductor materials sectors.

Mr. Yang holds an MBA degree from Cornell University with concentration in finance and strategy. He also holds a bachelor's degree in electrical engineering and computer science from the University of California, Berkeley.

"We are very excited to have Mr. Ming Yang join Daqo New Energy as our new Chief Financial Officer," said Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy. "Mr. Yang's deep knowledge of the solar sector and extensive experience in corporate finance and strategy will bring great value to the Company's rapid growth in the future. His previous experience includes working on Wall Street in both buy-side and sell-side capacities, and also as the head of investor relations at a U.S.-listed solar company, which will further enhance our communications with the investor communities."

"Ms. Tracy Zhou has worked with the Company for more than six years. On behalf of the board of directors, I would like to thank her for her contributions and wish her the best in her future endeavors. I also want to congratulate Mr. Shihua Su on his appointment as the Chief Marketing Officer. Mr. Su was formerly the general manager of the Company's Xinjiang polysilicon manufacturing facilities, and prior to that the Company's financial controller. He has great knowledge of the company's operations, and has done excellent work in his previous positions. We are confident that he will continue to contribute to the Company in his new role."


Friday, May 8, 2015

Comments & Business Outlook

First Quarter 2015 Financial Results

  • Revenues were $41.9 million, compared to $49.5 million in the fourth quarter of 2014 and $42.1 million in the first quarter of 2014.
  • Earnings per basic ADS were $0.12, compared to $0.40 in the fourth quarter of 2014, and $0.38 in the first quarter of 2014.

Commentary

In the first quarter of 2015, we further increased our production volume to 1,801 MT from 1,791 MT in the fourth quarter of 2014. More importantly, we reduced our total production cost to $12.80/kg and cash cost to $10.53/kg, which represent the best ever cost structures in our Xinjiang facilities. The cost reduction was primarily due to lower electricity consumption on a per unit basis contributed by the improvement in production efficiency.

In the first quarter of 2015, we shipped 1,532 MT of polysilicon and 18.8 million pieces of wafer. The sales volumes for polysilicon and wafer were 1,502 MT and 18.1 million pieces, respectively. The average selling prices, or ASPs, for polysilicon were $18.09/kg, compared to $20.47/kg in the further quarter of 2014. We achieved EBITDA of $11.4 million, operating income of $4.1 million and net income attributable to Daqo shareholders of $1.2 million in the first quarter of 2015.

In May, we successfully completed the annual maintenance in our Xinjiang polysilicon facilities, which has affected our production for five days. We will complete all the preparation work for the expansion of our polysilicon capacities by 6,000 MT by the end of May and start pilot production in June. We expect to fully ramp up the capacity during the third quarter. Given that our current cost structure is already below $13/kg, we are confident that we will achieve the production cost target of $12/kg when we fully ramp up the expanded capacities and run the whole 12,150 MT with Hydrochlorination technology.

Market outlook and Q2 2015 guidance

The consensus of the market believes that a year-on-year growth of 15%~20% could be expected for the global solar installation. That means the demand for polysilicon in 2015 could potentially increase by 40~50 thousand MT compared with 2014. In the first quarter of 2015, China's newly added installation is reported to be 5.04GW, which accounts for 28% of the announced 2015 target for solar PV installations of 17.8GW. We believe polysilicon ASPs would recover in the second half, driven by increasing demand not only in China but worldwide as well, although there could be some additional polysilicon supply coming into the market late this year.

For the second quarter of 2015, the Company expects to ship 1,320 MT of polysilicon. The annual maintenance has affected our polysilicon production for five days. In addition, in the second quarter we expect our internal polysilicon shipment to our wafer sector will be more than before. However, we expect our polysilicon inventory will remain at a very low level by the end of the second quarter. The Company also expects to ship approximately 17.5 million to 18.0 million pieces of wafer. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Friday, May 1, 2015

CFO Trail

CHONGQING, China, May 1, 2015 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced its chief financial officer, Bing Sun, is leaving the Company to pursue other professional interests, effective April 30, 2015. The Company's Board of Directors is initiating a search for a successor. The current general manager of the Company's Xinjiang polysilicon facilities, Mr. Shihua Su, who previously served as its financial controller, will act as acting chief financial officer until a successor is on board.

Mr. Sun has made great contributions to Daqo New Energy since he joined the Company in January 2012. His significant efforts were critical to improving the expertise of the Company's finance department, and he played a critical role in the Company's follow-on offerings in May 2014 and February 2015.

"We very much appreciate Bing's contributions over the past three years. We wish him the best in his future endeavors," said Dr. Gongda Yao, Daqo New Energy's chief executive officer. "We have been in the process of identifying and recruiting a qualified CFO candidate and will bring the individual on board as soon as we can."


Friday, April 10, 2015

Comments & Business Outlook

Fourth Quarter 2014 Financial Results

  • Revenues were $49.5 million, compared to $47.3 million in the third quarter of 2014 and $37.0 million in the fourth quarter of 2013.
  • Net income per ADS was $0.40 in the fourth quarter of 2014, compared to $0.66 in the third quarter of 2014, and loss per ADS of $1.16 in the fourth quarter of 2013.

 In the fourth quarter of 2014, we continued to deliver strong performance in our Xinjiang polysilicon facilities. We further increased our quarterly production volume to 1,791 MT, a new record, compared to 1,748 MT in the third quarter of 2014. To maximize our polysilicon output, we purchased some raw material of TCS externally, which caused our cash cost to slightly increase to $10.88/kg, compared to $10.72/kg in the third quarter of 2014. With our Hydrochlorination system coming online, which will provide sufficient TCS for 12,150 MT polysilicon capacity by the end of June 2015, we don't expect to continue to purchase TCS externally afterwards.

In the fourth quarter of 2014, we shipped 1,537 MT of polysilicon and 17.8 million pieces of wafer. We achieved EBITDA margin of 29.6% and operating income of $7.6 million. Our net income attributable to Daqo shareholders was $3.6 million.

As for the Phase 2b polysilicon project, which will increase our polysilicon capacity from current 6,150 MT to 12,150 MT, we are on track with our target to fully ramp it up by the end of June 2015 and lower the total production cost to the level of $12/kg. Looking forward, we are also considering further capacity expansion at our Xinjiang facilities in the medium term, or the Phase 3 project. Our Board of Directors has approved the launch of an early stage research for the Phase 3 project. After a comprehensive analysis of the capacity and comparability of the Chongqing machinery and equipment, we concluded that it would be more efficient to use part of the machinery and equipment in the Phase 3 project than to use all of them in our Phase 2b project. As a result, we have changed our original relocation plan and determined to utilize a portion of these equipment and machinery in our Phase 3 project in Xinjiang. Subject to market and industry conditions, we expect the completion of our Phase 3 project, which may be conducted in two stages, to further increase our total polysilicon production capacity to 25,000 MT. In February 2015, we raised approximately $30 million through a public follow-on offering. We intend to use the net proceeds for the feasibility study, design and some capital expenditure related to the Phase 3 project, along with other general corporate purposes.

In the fourth quarter of 2014, the average selling price, or ASP, for polysilicon was $20.47/kg, compared to $21.50/kg in the third quarter of 2014. In the fourth quarter, foreign polysilicon manufacturers increased their supply of polysilicon into China to take advantage of the grace period before the Chinese government fully suspend solar grade polysilicon import through processing trade. As a result, we saw pressure on the ASP of polysilicon in the fourth quarter. However, we do not expect the increase of supply from foreign polysilicon manufacturers to continue after the contract terms of the existing processing trade agreements expire under the Chinese government's suspension policy, which is expected to remain in effect in the foreseeable future.

2015 is expected to be another year of rapid growth for solar PV market. Polysilicon is the raw material for crystalline silicon PV module which accounts for around 90% market share globally. As one of the leading polysilicon producers, we believe we have been very well positioned with the lowest cost structure which could be further improved, our fast growing capacity which will be doubled in the second half of 2015 and could potentially be doubled again in midterm and the first-class quality which is essential to produce high-efficiency solar PV products.

Market outlook and Q1 2015 guidance

Global solar PV installations in 2014 totaled approximately 45.0 GW, which represents a 23.2% increase compared to 36.5 GW in 2013. Currently most analyst reports forecast that global solar PV installations in 2015 will be in the range of 52~55 GW, which represents a growth of 16%~22% compared to 2014. In 2014, annual solar PV installations in China were reported to amount to 10.6 GW. In March 2015, Chinese National Energy Administration released the 2015 target for solar PV installations of 17.8GW, which is 19% higher than the initial target of 15GW, and represents an increase of almost 70% from 10.6 GW in 2014. Although some additional polysilicon supply may enter the market mainly in the second half of 2015, we believe the supply and demand of polysilicon will remain in balance, on the premise that the global markets, including the China market, will grow as expected.

For the first quarter of 2015, the Company expects to ship 1,500 MT of polysilicon. The Company also expects to ship approximately 17.5 million to 18.0 million pieces of wafer. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Friday, February 6, 2015

Deal Flow
 

PRICE $19.50 PER ADS



 

 

   
    Per ADS   Total
Offering price   $ 19.50     $ 30,030,000  
Underwriting discount   $ 0.8775     $ 1,351,350  
Proceeds, before expenses, to us   $ 18.6225     $ 28,678,650  

Thursday, February 5, 2015

Notable Share Transactions

CHONGQING, China, Feb. 5, 2015 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) (the "Company"), a leading polysilicon manufacturer based in China, today announced that the Company has priced a registered follow-on offering of American depositary shares ("ADSs") at US$19.50 per ADS. The Company will issue and sell 1,540,000 ADSs. Each ADS represents 25 ordinary shares of the Company.

The Company intends to use the net proceeds from this offering for general corporate purposes, including studying the feasibility of further expansion of its business, and working capital.

Credit Suisse Securities (USA) LLC is acting as the sole book-running manager and underwriter of the offering.

Duke Elite Limited, an affiliate of one of our directors, Mr. Xiang Xu, who is also President of Daqo Group Co., Ltd, has subscribed for, and has been allocated by the underwriter, 1,025,641 ADSs in this offering, at the same offering price and on the same terms as the other ADSs being offered in this offering.

This offering is being made only by means of a prospectus supplement dated February 5, 2015 and an accompanying prospectus included in a registration statement on Form F-3 filed with the Securities and Exchange Commission on December 23, 2014, which became effective under the U.S. Securities Act of 1933 on January 7, 2015. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities referred to herein have not been and will not be registered under the applicable securities laws of any jurisdiction outside of the United States of America.


Deal Flow

DAQO NEW ENERGY CORP.
Representing 38,500,000 ordinary shares


We are offering 1,540,000 American Depositary Shares, or ADSs, each representing 25 ordinary shares, par value $0.0001 per share, of Daqo New Energy Corp.

Our ADSs are traded on the New York Stock Exchange, or NYSE, under the symbol “DQ.” On February 4, 2015, the reported last sale price for the ADSs was US$21.86 per ADS.


Thursday, November 13, 2014

Comments & Business Outlook

Third Quarter 2014 Financial Results

  • Revenues was $47.3 Million vs $29.6 Million for same period last year
  • Earnings / (loss) per ADS ($ per ADS) was $0.66 vs. ($1.49) for the same period last year.

"We are excited to report another successful quarter which delivered the best quarterly results of our Xinjiang polysilicon facilities so far in terms of cost structure, production volume and shipment and recorded the third consecutive profitable quarter," announced Dr. Gongda Yao, the Company's chief executive officer.

"In the third quarter of 2014, our operation team in our Xinjiang facilities did an excellent job to further optimize the manufacturing progress and improve production efficiency, and as a result achieved a record high quarterly production volume of 1,748 MT without adding any additional equipment in such quarter. As a result, our total production cost (including depreciation) was reduced to $13.05/kg with a cash cost of $10.72/kg (excluding depreciation). We expect to continue to produce polysilicon in our Xinjiang facilities at this output level which exceeds our nameplate capacity by 9%. We believe we will continue to maintain this level of production cost until our existing capacities are upgraded to the new hydrochlorination system, which we expect will further lower our production cost to $12.00/kg by the end of the second quarter of 2015."

"In the third quarter of 2014, we shipped 1,598 MT of polysilicon, increasing from 1,436 MT in the previous quarter. We also shipped 18.5 million pieces of wafer, increasing from 17.6 million pieces in the previous quarter. We achieved EBITDA margin of 34.7% and positive operating income of $9.5 million. Our net income attributable to Daqo shareholders was $5.9 million, up from $4.5 million in the second quarter of 2014."

"As for the polysilicon expansion project in Xinjiang, we are on track with the construction and installation work. We expect to fully ramp up the capacity to 12,150MT by the end of the second quarter of 2015 and thereafter reduce our cash cost (excluding depreciation) and production cost (including depreciation) to approximately $8.70/kg and $12.00/kg, respectively."

"In the third quarter of 2014, the average selling price, or ASP, for polysilicon was $21.50/kg, compared to $22.04/kg in the second quarter of 2014. In spite of the ASP decrease, we were still able to expand our gross margin due to our continuous cost reduction effort. We believe the end-market demand in the fourth quarter is likely to be strong. We also believe the positive trend in terms of end-market demand will likely continue into early next year, as we expect the demand in the first quarter of 2015 to be strong in the UK and Japanese markets. In mid August, the Chinese government announced that starting from September 1, 2014, the application for solar grade polysilicon processing trade import would be suspended and all existing agreements approved beforehand could remain valid until the end of 2014. As a result, we have seen foreign polysilicon makers increasing their supply of polysilicon into China. However, we do not expect that such behavior by foreign polysilicon makers can continue indefinitely as the Chinese government adopts new regulations for polysilicon import in the future."

"We believe that Daqo currently has the lowest cost structure within our industry and first class quality polysilicon manufacturing facilities. We believe it is difficult for our competitors to replicate our growth and achieve the consistent cost reductions we have achieved. Looking forward, with our current and future expansion and progressive cost reduction road map, we believe we are paving the way to become a truly global leader in the industry," concluded Dr. Yao.

Outlook for Q4 2014

For the fourth quarter of 2014, the Company expects to ship 1,500 MT to 1,550 MT of polysilicon. The Company also expects to ship approximately 16.8 million to 17.0 million pieces of wafer.

This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties.


Friday, August 15, 2014

Comments & Business Outlook
Second Quarter 2014 Financials Results

Revenues were $43.7 million, increasing from $42.1 million in the first quarter of 2014 and $27.8 million in the second quarter of 2013.

Income per ADS was $0.57, compared to income per ADS of $0.38 in the first quarter of 2014 and loss per ADS of $4.91 in the second quarters of 2013, respectively

"We are proud that the Company continues to deliver excellent performances in the second quarter of 2014 and records the second consecutive quarter of profitability," announced Dr. Gongda Yao, the Company's chiefexecutive officer.

Market outlook and Q3 2014 guidance

According to IHS's latest report on solar PV market in June, IHS adjusted its 2014 global installation guidance upward to 47GW. On August 7, China National Energy Bureau increased the 2014's target of newly added installation to 13GW from the previously announced 10GW and reaffirmed its resolution to actively drive distributed generation market. It is expected that the new policies to encourage distributed generation will be soon announced. Consider in the first half of 2014 the total newly added installation is around 3.3GW, we strongly believe the market will soon pick up in the fourth quarter due to rising installation especially in China. In addition, we do see more and more policies are getting in place for the distributed generation market in terms of financing, insurance, grid connection, incentive payment schedule et cetera. We believe the opportunities in distributed generation are emerging as the bottlenecks are being removed gradually.

For the third quarter of 2014, the Company expects to ship 1,450 MT to 1,500 MT of polysilicon. The Company also expects to ship approximately 16.8 million to 17.0 million pieces of wafer. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties.  


GeoBriefs

Second Quarter 2014 Financial Results

  • Revenues were $43.7 million, increasing from $42.1 million in the first quarter of 2014 and $27.8 million in the second quarter of 2013.
  • Income per ADS was $0.57, compared to income per ADS of $0.38 in the first quarter of 2014 and loss per ADS of $4.91 in the second quarters of 2013, respectively

"We are proud that the Company continues to deliver excellent performances in the second quarter of 2014 and records the second consecutive quarter of profitability," announced Dr. Gongda Yao, the Company's chief executive officer.

Market outlook and Q3 2014 guidance

According to IHS's latest report on solar PV market in June, IHS adjusted its 2014 global installation guidance upward to 47GW. On August 7, China National Energy Bureau increased the 2014's target of newly added installation to 13GW from the previously announced 10GW and reaffirmed its resolution to actively drive distributed generation market. It is expected that the new policies to encourage distributed generation will be soon announced. Consider in the first half of 2014 the total newly added installation is around 3.3GW, we strongly believe the market will soon pick up in the fourth quarter due to rising installation especially in China. In addition, we do see more and more policies are getting in place for the distributed generation market in terms of financing, insurance, grid connection, incentive payment schedule et cetera. We believe the opportunities in distributed generation are emerging as the bottlenecks are being removed gradually.

For the third quarter of 2014, the Company expects to ship 1,450 MT to 1,500 MT of polysilicon. The Company also expects to ship approximately 16.8 million to 17.0 million pieces of wafer. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties.


Wednesday, August 6, 2014

Comments & Business Outlook
CHONGQING, China, August 6, 2014 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that Xinjiang Daqo New Energy Co., Ltd. ("Xinjiang Daqo"), a wholly-owned subsidiary of the Company in China, has successfully qualified for and received the certification of High and New Technology Enterprise in the Xinjiang Uygur Autonomous Region of China for a three-year period from 2014 to 2016. As a High and New Technology Enterprise, Xinjiang Daqo is entitled to enjoy a preferential enterprise income tax rate of 15%, compared to a standard enterprise income tax rate of 25%. The certification of High and New Technology Enterprise can be renewed for additional three-year terms upon Xinjiang Daqo's additional application and the government's approval.

Thursday, May 15, 2014

Notable Share Transactions

CHONGQING, China, May 15, 2014 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) (the "Company"), a leading polysilicon manufacturer based in China, today announced that the previously announced registered follow-on public offering of American depositary shares ("ADSs") by the Company was priced at US$29.00 per ADS on May 14, 2014. The Company will issue and sell 2,000,000 ADSs. Each ADS represents 25 ordinary shares of the Company. In connection with this offering, the Company has granted the underwriter a 30-day option to purchase up to 300,000 additional ADSs.

The Company intends to use the net proceeds from this offering for the expansion of its Xinjiang polysilicon facility, upgrade of process technology at the Xinjiang polysilicon facility, and general corporate purposes.


Tuesday, May 13, 2014

Notable Share Transactions

CHONGQING, China, May 12, 2014 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) (the "Company"), a leading polysilicon manufacturer based in China, today announced the commencement of a proposed registered underwritten public offering by the Company of American Depositary Shares ("ADSs"), each representing 25 ordinary shares of the Company. The Company proposes to offer 2,000,000 ADSs. The Company intends to grant to the underwriter a 30-day option to purchase up to 300,000 additional ADSs. The Company intends to use the net proceeds from this offering for the expansion of its Xinjiang polysilicon facility, upgrade of process technology at the Xinjiang polysilicon facility and general corporate purposes.


Comments & Business Outlook

DAQO NEW ENERGY CORP.
Representing 50,000,000 ordinary shares


We are offering 2,000,000 American depositary shares, or ADSs, representing 50,000,000 ordinary shares of Daqo New Energy Corp., or Daqo, with this prospectus supplement and the accompanying prospectus. Each ADS represents 25 ordinary shares.

Our ADSs are traded on the New York Stock Exchange, or NYSE, under the symbol “DQ.” On May 14, 2014, the reported last sale price for the ADSs was US$29.09 per ADS.

  Per ADS   Total
Price to public   $ 29.00     $ 58,000,000.00  
Underwriting discount(1)   $ 1.305     $ 2,610,000.00  
Proceeds, before expenses, to us   $ 27.695     $ 55,390,000.00  


Friday, April 4, 2014

Comments & Business Outlook

Fourth Quarter 2013 Financial Results

  • Revenues were $37.0 million, compared to $29.6 million in the third quarter of 2013 and $6.2 million in the fourth quarter of 2012.
  • Loss per ADS was $1.16 in the fourth quarter of 2013, compared to $1.49 in the third quarter of 2013, and $10.76 in the fourth quarter of 2012.

As previously reported, the Company has been transitioning from its original production facilities in Wanzhou, Chongqing to a new facility in Shihezi, Xinjiang. The Company continued ramp up of its new Xinjiang facility which had commenced commercial production in Q1 2013, and is pleased to report that the plant has now reached close to nameplate capacity of 6,150 MT per annum, with production of 1,445 MT in the fourth quarter of 2013, up from 1,311 MT and 962 MT in the third and second quarters of 2013, respectively.

The Company will commence ground preparing construction on a new expansion at the Xinjiang facility in April of 2014, which will add 6,000 MT and take nameplate polysilicon capacity to 12,150 MT once completed. The Company will utilize some of the existing equipments which are being relocated from the Chongqing line where production is no longer taking place, and as a result the capital expenditure required will be less than that of an equivalent completely new build. Daqo New Energy ceased a technology improvement project at the Chongqing polysilicon line in the second quarter of 2013 ahead of the relocation of the machinery and equipment to Xinjiang. The Company has already completed an optimized feasibility study and received all permits and approvals required for the ground preparing construction. The upcoming scheduled annual maintenance work in April 2014 will include readying the existing plant for the expansion project and upgrading off-gas treatment process from traditional hydrogenation technology to hydrochlorination technology. Construction work on the expansion is expected to be completed by the end of 2014 with full ramp up of capacity by the second quarter of 2015.

The Company believes the transition to Xinjiang has transformed it into a low-cost leader and positions the Company to compete with the leading polysilicon manufacturers in China and globally. As of the fourth quarter 2013, the Company achieved a total production cost, including depreciation, of $15.8 per kilogram, and cash cost (excluding depreciation) of $12.0 per kilogram. The Company expects to further lower total production cost to $12 per kilogram when capacity at the Xinjiang expansion is fully ramped up by the second quarter of 2015.

Market outlook and Q1 2014 guidance

In 2013, according to industry analysis reports, global solar PV installations were around 37 GW, of which the China market alone contributed approximately 11 GW. In terms of production, China accounted for approximately 66% global cell / wafer production and imported almost 50% of polysilicon requirements. Most industry research institutions estimate global installations in 2014 to be around 45 GW, which represents a year-on-year growth of 22%. This growth is expected to accelerate in the years to come, as solar PV is rapidly approaching grid-parity in an increasing number of regions. The Company believes that as the key raw material for the most widely used c-Si solar PV cells, polysilicon demand will continue its rapid growth going forward. With one of the lowest cost structures, an excellent reputation for first-class quality in the industry and a strategic location in China, the Company is confident that it will be able to enjoy and benefit from robust growth.

For the first quarter of 2014, the Company expects to ship 1,350 MT to 1,400 MT of polysilicon. The Company also expects to ship approximately 16.6 million to 17.0 million pieces of wafer. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Monday, December 16, 2013

Contract Awards

CHONGQING, China, Dec. 16, 2013 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that its wholly owned subsidiary, Xinjiang Daqo New Energy Ltd. ("Xinjiang Daqo"), has signed a two-year spot-price polysilicon supply framework contract with a leading solar PV company.

According to the terms of the agreement, Xinjiang Daqo will supply polysilicon on monthly basis beginning January 2014 throughDecember 2015. The contract will account for approximately 20% of Xinjiang Daqo's polysilicon capacity in 2014, and 15% in 2015. The selling prices will be discussed and decided based on spot market prices at the time.

"We are excited to establish such a long-term business relationship with this leading solar PV company. As the market keeps improving, we see stronger demands for polysilicon recently. It is the first contract that we signed for our 2015's capacity," commented Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy. "We are committed to creating value for our customers by providing high quality and low cost polysilicon products. We will continue to work closely with them to further improve the efficiency and performance of solar PV products in the future."


Friday, November 22, 2013

Comments & Business Outlook

Third Quarter 2013 Financial Results

  • Revenues were $29.6 million, compared to $27.8 million in the second quarter of 2013 and $21.1 million in the third quarter of 2012.
  • Earnings per fully diluted ADS were negative $1.49, compared to negative $4.91 in the second quarter of 2013, and negative$2.46 in the third quarter of 2012.

"In the third quarter of 2013, due to strong demands from our downstream customers, the actual shipment of polysilicon exceeded our original guidance by 29%. The shipment in the third quarter included 191 MT decrease in inventory balance. We have already booked out all of our remaining capacity through the end of the year. In September, we signed long-term agreements with three Chinese leading wafer manufacturers with the contracted volume accounted for over 70% of our current capacity from Xinjiang facilities. We believe with solar PV market continues to grow in the long run, the demand for high quality and low cost polysilicon will keep increasing."

"In the third quarter of 2013, it was the first time for both of our Xinjiang polysilicon facilities and Wanzhou wafer facilities to achieve positive gross margin on stand-alone basis. It was also the first time since the first quarter of 2012 that we generated positive operating cash inflow on quarterly basis at the company level. Our operating cash flow improved from negative $24.3 million in the first quarter to positive $8.8 million in the third quarter of 2013. In the fourth quarter of 2013, we expect that our Xinjiang polysilicon facilities will break even, and our Wanzhou wafer facilities will improve its gross margin to high single digit," commented Dr. Gongda Yao, Chief Executive Officer of the Company.

"In October, our total production cost for polysilicon was reduced to $15.16/kg. We are currently in the final stage of the 6,150MT expansion project. We will start trial production by end of November and our total production cost will be lowered to $14/kg level when we complete the trail run."

"To best leverage our technical expertise and take advantage of the low utility cost in Xinjiang, the Board has officially approved our plan to further expand our capacity in Xinjiang from 6,150MT to 12,000 MT. We have already formed a dedicated team and started initial preparation works. We expect to complete the project and start pilot production by the end of 2014. Our cost will be further reduced to the level of $12/kg when we fully ramp up the capacity," Dr. Yao concluded.

Outlook for Fourth Quarter 2013

For the fourth quarter of 2013, the Company expects to ship 1,200 MT of polysilicon. The Company also expects to ship approximately 13.5 million pieces of wafer. In the fourth quarter, we don't expect to ship multi-crystal silicon ingots and blocks, which instead will be used internally for wafer slicing. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Monday, November 4, 2013

Comments & Business Outlook

HONGQING, China, Nov. 4, 2013 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today revised its shipment guidance for the third quarter of 2013.

For the third quarter of 2013, the Company expects its polysilicon shipment to be in the range of 1,200 MT to 1,275 MT, compared to a prior guidance of 1,000 MT. The Company expects its wafer shipment to be in the range of 7.4 to 7.5 million pieces, compared to a prior guidance of 8.9 million pieces. The Company also expects its shipment of multi-crystal silicon ingots and blocks to be in the range of 6.5 to 6.6 MT, compared to a prior guidance of 6.8 MT.

"We see a stronger demand for polysilicon in the third quarter of 2013 than our expectation. We believe our polysilicon product is differentiated by its high quality which is key to improve cell efficiency," says Dr. Gongda Yao, Chief Executive Officer of the Company. "We lowered our guidance for wafer shipment due to some delay in shipping by the end of the third quarter of 2013. Nevertheless, we still reaffirm our target to ramp-up our wafer capacity to 6 million pieces per month by the end of this year."


Thursday, September 19, 2013

Contract Awards

CHONGQING, China, September 19, 2013 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that its wholly owned subsidiary, Xinjiang Daqo New Energy Ltd., has signed long-term contracts with three Chinese leading wafer manufacturers to provide them with monthly supplies of polysilicon starting from September 2013 to December 2014.

According to the contracts, from September 2013 to December 2014, Xinjiang Daqo New Energy will provide over 70% of its output to the three customers. The selling prices will be discussed and decided based on spot market prices at the time.

"We are delighted to secure long-term sale agreements with our downstream partners and continue to provide them high quality polysilicon in a more consistent and stable manner," commented Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy. "As the solar PV industry starts to recover, we believe this type of long-term agreements will not only deliver great value to our customers but also pave solid ground for further growth of our polysilicon facilities in Xinjiang."


Wednesday, September 11, 2013

Comments & Business Outlook

Second Quarter 2013 Results

  • Revenues were $27.8 million, compared to $27.6 million in the second quarter of 2012.
  • Earnings per fully diluted ADS were negative $4.91, compared to negative $1.01 in the second quarter of 2012.

"In the second quarter of 2013, our Xinjiang polysilicon facilities continued to contribute positive cash flow. In April, we successfully conducted several technical improvement projects which reduced our production cost below $16/kg, which is significantly lower than our original target of $20/kg. We expect our Xinjiang facilities to generate positive operating income in the third quarter of 2013. We are also making great effort to maximize our capacity in Xinjiang. We plan to expand our capacity in Xinjiang to 6,150 MT by the end of 2013. By achieving that, we expect that we can reduce our cost to the level of $14/kg at that time," commented Dr. Gongda Yao, Chief Executive Officer of the Company.

"In the first half of 2013, we saw average selling prices of polysilicon stabilizing and improvement through the whole value chain. Recently the trade conflict in the solar PV industry between China and the European Union has been settled with a solution that is acceptable for both parties. The Ministry of Commerce of China also announced the preliminary ruling for the investigations on the polysilicon imported from the United States and Korea. With the resolution of various uncertainties becoming clearer, we expect that the industry will start to recover in the second half of 2013, especially when Chinese domestic market starts to take off.

"After evaluating the polysilicon market situation and the business environments both in Wanzhou and Xinjiang, in order to optimize the utilization of our resources and maximize the return on the polysilicon assets, the Company made a strategic decision to move the polysilicon equipments, which no longer create value in Wanzhou under the current situation, to our Xinjiang facilities. As a result, we have incurred certain impairment charges related to the Wanzhou polysilicon assets which will not be relocated in the amount of $158.4 million. At the same time, we plan to increase our Wanzhou wafer capacity to 6 million pieces per month in order to achieve economies of scale. We expect that our wafer facilities will achieve positive operating income by the end of 2013 when we fully ramp up the capacity," Dr. Yao concluded.

Business Outlook

For the third quarter of 2013, the Company expects to ship 1,000 MT of polysilicon. The Company also expects to ship approximately 8.9 million pieces of wafer and 6.8 MT of multi-crystal silicon ingots and blocks. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties.


Tuesday, July 23, 2013

Notable Share Transactions

CHONGQING, China, July 23, 2013 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that its board of directors has approved a share repurchase program, effective immediately.

The board of directors has authorized Daqo New Energy to repurchase up to US$3 million worth of its issued and outstanding ordinary shares or American Depositary Shares, or ADSs, representing ordinary sharesin open-market purchases, in negotiated transactions off the market, in block trades or through other legally permissible means prior to July 23, 2014 in accordance with applicable securities laws.


Friday, June 7, 2013

Comments & Business Outlook

First Quarter 2013 Financial Results

  • Revenues were $14.5 million, compared to $6.2 million in the fourth quarter of 2012 and $32.0 million in the first quarter of 2012.
  • Gross loss was $12.9 million, compared to $11.1 million in the fourth quarter of 2012 and $9.9 million in the first quarter of 2012.
  • Gross margin was negative 89.0%, compared to negative 178.5% in the fourth quarter of 2012 and negative 30.9% in the first quarter of 2012.
  • Operating loss was $16.6 million, compared to $55.9 million in the fourth quarter of 2012 and $10.8 million in the first quarter of 2012.
  • Net loss attributable to Daqo New Energy Corp. shareholders was $18.7 million, compared to$75.6 million in the fourth quarter of 2012 and $13.7 million in the first quarter of 2012.
  • Earnings per fully diluted ADS were negative $2.70, compared to negative $10.90 in the fourth quarter of 2012, and negative$1.95 in the first quarter of 2012.
"In the first quarter of 2013, we have been running our Xinjiang polysilicon facilities successfully and have achieved our initial targets for cost structure, capacity, and quality. As a result, our Xinjiang facilities have started to contribute positive cash flow since the first quarter of 2013 in this challenging market," Commented Dr. Gongda Yao, Chief Executive Officer of the Company. "In April, we conducted several process optimization projects in our Xinjiang facilities. This enabled us to further reduce our total production cost to approximate $18/kg by the end of May."

"We have seen average selling prices stabilizing across the solar PV value chain. The current improved financial performances of the downstream entities indicate the start of stabilization in the market. We believe today's challenging situation is only temporary. We are confident that the political leaders of China and European Union have competence to manage the international trading conflict in the solar PV industry, so as to enable the industry to achieve a healthy and sustainable growth in the future," Dr. Yao concluded.

Outlook for Second Quarter 2013

For the second quarter of 2013, the Company expects to ship 920 MT of polysilicon. The Company also expects to ship approximately 6.5 million pieces of wafer and 25 MT of multi-crystal silicon ingots and blocks. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Monday, October 1, 2012

Comments & Business Outlook

CHONGQING, China, September 29, 2012 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that it has sold Nanjing Daqo New Energy Co., Ltd., the entity that operates the Company's module business, to Daqo Group for a consideration of RMB 65.6 million. Daqo Group is one of the largest private electrical equipment manufacturers in China and an affiliate of the Company. Daqo Group's shareholders in aggregate beneficially own over a majority of the Company's total outstanding ordinary shares.

The transaction has been approved by the Company's audit committee, which is composed entirely of independent directors. The Company had conducted a public auction of Nanjing Daqo New Energy Co., Ltd. through Nanjing Asset and Equity Exchange before it determined that the terms of the sale of the module business to Daqo Group are fair to the Company.

"We are pleased to complete the spin-off of the module business and to be able to focus our resource and attention on our core polysilicon and wafer business," commented Dr. Gongda Yao, chief executive officer of Daqo New Energy.


Monday, August 20, 2012

Investor Alert

CHONGQING, China, August 20, 2012 /PRNewswire-Asia/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that it has been notified by the New York Stock Exchange (the "NYSE") that the Company was not in compliance with the NYSE's price criteria for continued listing standard because, as of July 24, 2012, the average closing price of the Company's American Depositary Shares, or ADSs, was less than $1.00 per ADS over a consecutive 30-trading-day period. Pursuant to Section 802.01C of the NYSE's Listed Company Manual, the NYSE's price criteria standard requires that any listed security trade at a minimum average closing price of $1.00 during any consecutive 30-trading-day period.

Under NYSE rules, the Company has six months following receipt of the notification to regain compliance with the minimum share price requirement. The Company can regain compliance during the cure period if the Company's ADS have a closing share price of at least $1.00 on the last trading day of any calendar month during the period and also have an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month or on the last day of the cure period. As required by the NYSE rules, the Company has notified the NYSE of its intent to cure the price deficiency and return to compliance with this continued listing standard. The Company intends to cure its ADSs' price deficiency within the applicable time periods required by the NYSE and to remain listed on the NYSE, subject to its compliance with other NYSE continued listing standards.


Friday, August 17, 2012

Comments & Business Outlook

Second Quarter 2012 Financial and Operating Highlights

  • Revenues were $30.6 million, compared to $34.0 million in the first quarter of 2012 and $70.7 million in the second quarter of 2011.
  • Gross loss was $5.9 million, compared to a gross loss of $11.0 million in the first quarter of 2012 and gross profit of $33.0 million in the second quarter of 2011.
  • Gross margin was negative 19.5%, compared to negative 32.2% in the first quarter of 2012 and 46.6% in the second quarter of 2011.
  • Operating loss was $6.8 million, compared to operating loss of $12.1 million in the first quarter of 2012 and operating income of $32.6 million in the second quarter of 2011.
  • Operating margin was negative 22.4%, compared to negative 35.5% in the first quarter of 2012 and 46.2% in the second quarter of 2011.
  • Net loss attributable to Daqo New Energy Corp. shareholders was $7.1 million, compared to $13.7 million in the first quarter of 2012 and net income attributable to Daqo New Energy Corp. shareholders of $25.7 million in the second quarter of 2011.
  • Loss per fully diluted ADS was $0.20, compared to $0.39 in the first quarter of 2011, and earnings of $0.73 per fully diluted ADS in the second quarter of 2011.

"In the second quarter of 2012, we were running our Wanzhou polysilicon plant smoothly at full capacity. We have successfully reduced our polysilicon production cost, which is attributed to several technology improvements and the lower seasonal electricity rate. However, the solar PV industry continued its downward motion and the average selling prices for polysilicon, wafer and module remained weak. The international trade conflicts also had a negative impact on market demands." Commented Dr. Gongda Yao, Chief Executive Officer of the Company. "As for the Xinjiang Phase II project, we have already completed 97% of the total construction by the end of July. Several units including liquid chlorine system, utilities system, TCS system, and distillation system, have already been tested and are ready for pilot production. We are confident to achieve our original goal to start pilot production this September and contribute over 500 MT Polysilicon in the last four months of 2012."

"As for our wafer business, we are working with our business partner to improve our wafer manufacturing technology so as to achieve better quality with lower cost. We plan to gradually increase the utilization rate of our wafer plant, progressively to the level of full capacity, so that we will be able to minimize the loss in the interim as we move towards break-even, and eventually obtain positive cash flow in wafer business."

"Recently, our high quality polysilicon has been qualified by a semiconductor customer and we obtained the first order. In the second quarter, 90% of our polysilicon meets the standard of electronic grade III. Although the first order from this semiconductor customer is not significant in terms of volume, we think it's a new opportunity for the company to expand its business to a new market with higher margins." Dr. Yao concluded.

Outlook for Third Quarter 2012

For the third quarter of 2012, the Company expects to ship 1000-1200 MT of polysilicon, approximate 6 MW of wafers, 8 MW of wafers OEM and 3.0 MW of modules. In addition, the Company expects to provide 200 metric tons of ingot and block manufacturing outsourcing services to its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Monday, July 9, 2012

Notable Share Transactions

CHONGQING, China, July 9, 2012 /PRNewswire-Asia/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that its board of directors has approved a share repurchase program, effective immediately.

The board of directors has authorized Daqo New Energy to repurchase up to US$5 million worth of its issued and outstanding ordinary shares or American Depositary Shares, or ADSs, representing ordinary shares in open-market purchases, in negotiated transactions off the market, in block trades or through other legally permissible means prior to December 31, 2012 in accordance with applicable securities laws.


Monday, May 21, 2012

Comments & Business Outlook

First Quarter 2012 Results

  • Polysilicon shipments were approximately 964 metric tons, or MT. Photovoltaic (PV) module shipments were 2.3 Mega watts, or MW. Wafer shipments were 23.4 MW. In addition, the Company provided 2.4 MW PV modules manufacturing outsourcing service to its customers.
  • Revenues were $34.0 million, compared to $38.2 million in the fourth quarter of 2011 and $87.3 million in the first quarter of 2011.
  • Gross loss was $11.0 million, compared to a gross loss of $11.2 million in the fourth quarter of 2011 and gross profit of $44.5 million in the first quarter of 2011. Gross loss excluding an inventory write-down of $1.6 million was $9.4 million.
  • Gross margin was negative 32.2%, compared to negative 29.3% in the fourth quarter of 2011 and 51.0% in the first quarter of 2011. Excluding $1.6 million of inventory write-down, gross margin would be negative 27.5%.
  • Operating loss was $12.1 million, compared to operating loss of $49.9 million in the fourth quarter of 2011 and operating income of $43.5 million in the first quarter of 2011.
  • Operating margin was negative 35.5%, compared to negative 130.4% in the fourth quarter of 2011 and 49.8% in the first quarter of 2011. Operating loss excluding an inventory write-down of $1.6 million was $10.5 million, representing an operating margin of negative 30.8%.
  • Net loss attributable to Daqo New Energy Corp. shareholders was $13.7 million, compared to $39.4 million in the fourth quarter of 2011 and net income attributable to Daqo New Energy Corp. shareholders of $35.0 million in the first quarter of 2011.
  • Loss per fully diluted ADS was negative $0.39, compared to negative $1.12 in the fourth quarter of 2011, and earnings of $0.99 in the first quarter of 2011.

"In the first quarter of 2012, we continued to operate our polysilicon production in full utilization. We exceeded our targets for shipments. Nevertheless, the solar PV market remains weak due to restrained demand as a result of uncertainties including changing governmental policies, tight credit markets and potential international trade conflicts." commented Dr. Gongda Yao, Chief Executive Officer of the Company "We will focus on the operation of our existing polysilicon site in Wanzhou and the construction of Phase 2 polysilicon plant in Xinjiang. We are confident that after our Phase 2 facilities commence production, we will be well positioned with a much lower cost structure and larger capacity."

Outlook for Second Quarter 2012

For the second quarter of 2012, the Company expects to ship 900-1000 MT of polysilicon, approximate 20.5 MW of wafers and 4.5 MW of modules. In addition, the Company expects to provide 200 metric tons of ingot and block manufacturing outsourcing services to its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.


Wednesday, March 21, 2012

Comments & Business Outlook

Fourth Quarter 2011 Results

  • Polysilicon shipments were approximately 834 metric tons, or MT. Photovoltaic (PV) module shipments were 9.6 Mega watts, or MW. Wafer shipments were 7.8 MW. In addition, the Company provided 5.9 MW PV modules manufacturing outsourcing service to its customers.
  • Revenues were $38.2 million, compared to $59.6 million in the third quarter of 2011 and $81.9 million in the fourth quarter of 2010.
  • Gross loss was $11.2 million, compared to gross profit $19.9 million in the third quarter of 2011 and $45.8 million in the fourth quarter of 2010. Excluding the impact of $10.6 million inventory write-down, gross loss would be $0.6 million.
  • Gross margin was negative 29.3%, compared to positive 33.3% in the third quarter of 2011 and 55.9% in the fourth quarter of 2010. Excluding $10.6 million of inventory write-down, gross margin would be negative 1.6%.
  • Operating loss was $49.9 million, compared to operating profit $17.1 million in the third quarter of 2011 and $41.3 million in the fourth quarter of 2010.
  • Operating margin was negative 130.4%, compared to positive 28.8% in the third quarter of 2011 and 50.4% in the fourth quarter of 2010. Excluding provision of fixed assets impairment of $38.5 million and inventory write-down of $10.6 million, operating loss would be $0.8 million, representing a margin of negative 2.1%.
  • Net loss attributable to Daqo New Energy Corp. shareholders was $39.4 million, compared to profit $12.1 million in the third quarter of 2011 and $32.8 million in the fourth quarter of 2010.
  • Earnings per fully diluted ADS were negative $1.12, compared to positive $0.34 in the third quarter of 2011, and $0.95 in the fourth quarter of 2010.

“In the fourth quarter of 2011, we continued to operate our polysilicon manufacturing smoothly. We achieved our targets for production and shipment. In addition, we successfully conducted annual maintenance, and in turn laid a concrete foundation for the operation in 2012.” commented Dr. Gongda Yao, Chief Executive Officer of the Company “Nevertheless, the weakening industry environment resulted in even lower selling prices for Polysilicon, Wafer and Module compared to the third quarter, which adversely affected our profitability.”

“For 2011, we achieved a year of growth in both shipment and revenue. We will continue our commitments to further improve operation efficiency and lower manufacturing cost. We are taking initiatives in our existing Wanzhou site and expect to see significant cost reduction when our Xinjiang facilities start operation in the fourth quarter of 2012.”

Dr. Yao continued “In order to best concentrate our financial and operational resources on Xingjiang project, which we believe is the first priority given the current market situation, we implemented projects consolidation plan to postpone the Hydrochlorination project in Wanzhou for one year. We will resume this project after Xinjiang facilities successfully ramp up. Besides that, the module production plan of JNE Daqo Solar Corp., which was a joint venture between Daqo New Energy and JNE in Canada, has also been suspended indefinitely.”

“In spite of the near term uncertainties and challenges in the market, we are confident that solar PV is becoming one of the most feasible, affordable and reliable alternative energies. We believe our Company with its high-quality and low cost polysilicon will weather through the downturn and seize opportunities for the next growth stage.” Dr. Yao concluded.

Outlook for First Quarter 2012 

For the first quarter of 2012, the Company expects to ship 800-900 MT of polysilicon. The Company also expects to ship approximately 16-17 MW of wafer and 5.3 MW of modules. For the module shipment, the Company further expects 2.9 MW will come from its brand name module and expects to provide 2.4 MW PV modules manufacturing outsourcing service to its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See “Safe Harbor Statement” at the end of this press release.


Friday, January 27, 2012

CFO Trail

CHONGQING, China--()--Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced the appointment of Mr. Bing Sun as Chief Financial Officer, effective February 1, 2012.

Mr. Sun joins Daqo New Energy from Shunda Holdings Co, a solar photovoltaic company based in China, where he was the Chief Financial Officer since June 2008. Prior to Shunda Holdings, Mr. Sun was financial controller at BCD Semiconductor, a leading analog integrated device manufacturer in China from April 2007 to June 2008. His earlier experiences include serving as audit manager at Deloitte Touche Tohmatsu and compliance manager at BAX Global. Mr. Sun holds MBA degree with concentration in accounting and he is a U.S. Certificated Public Accountant.

“We are very excited to have Mr. Bing Sun join Daqo New Energy. His more than 15 years’ financial and operational experience in various industries, including photovoltaic industry, will bring great value to the company.” said Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy.


Monday, August 15, 2011

Comments & Business Outlook
Second Quarter 2011 Financial and Operating Highlights
  • Polysilicon shipments were approximately 1,001 metric tons, or MT. Photovoltaic (PV) module shipments were 3.9 Mega watts, or MW. In addition, the Company manufactured 8.1 MW PV modules for outsourcing customers. Wafer shipments were 1.3 MW.
  • Revenues were $70.7 million, a decrease of 19.0% from the first quarter of 2011 and an increase of 34.8% from the second quarter of 2010.
  • Gross profit was $33.0 million, a decrease of 25.9% from the first quarter of 2011 and an increase of 69.8% from the second quarter of 2010.
  • Gross margin was 46.6% in the second quarter of 2011, compared to 51.0% in the first quarter of 2011 and 37.0% in the second quarter of 2010.
  • Operating income was $32.6 million, a decrease of 24.9% from the first quarter of 2011 and an increase of 98.0% from the second quarter of 2010.
  • Operating margin was 46.2%, compared to 49.8% in the first quarter of 2011 and 31.4% in the second quarter of 2010.
  • Net income attributable to Daqo New Energy Corp. shareholders was $25.7million, a decrease of 26.6% from the first quarter of 2011 and an increase of 118.6% from the second quarter of 2010.
  • Earnings per fully diluted ADS were $0.73, compared to $0.99 in the first quarter of 2011, and $0.41 in the second quarter of 2010.

"The substantial price decline and weak market demand in the second quarter of 2011 has impacted our revenue. However, our core business, the production of polysilicon, was still at 100% utilization and we kept no inventory at the quarter end. We have seen the pricing environment for polysilicon stabilized since the beginning of the third quarter and the demand picked up. The wafer and module markets continue to see pricing pressure. However, the modules order picked up in the third quarter and the majority of our wafer output will be used in our module production through tolling arrangement with our cell partner.” Commented, Dr. Gongda Yao, the Chief Executive Officer of the Company, “ On the financing side, we are happy to announce that we have obtained bank loan approval from Bank of China for our Xinjiang phase II polysilicon expansion plan, which fulfills the financing requirement for the project”.

Outlook for Third Quarter 2011

For the third quarter of 2011, the Company expects to ship 975-990 MT of polysilicon. The company also expects to ship 10 MW of wafer as well as 20 MW of modules. For the module shipment, the company further expects 10 MW will come from its brand name module and 10 MW outsourcing for its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See “Safe Harbor Statement” at the end of this press release.


Tuesday, July 5, 2011

Comments & Business Outlook

CHONGQING, China--(BUSINESS WIRE)--Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today revised its second quarter 2011 revenue guidance.

Due to the impact of price decline throughout the entire photovoltaic (PV) supply chains in the second quarter of 2011, the Company updates its revenue guidance for the second quarter of 2011 to the following:

For the second quarter of 2011, the Company expects its total revenue to be in the range of $70 million to $71 million, compared to a prior guidance of range of $92 million to $95 million. The Company expects to ship between 970 MT to 990 MT of polysilicon in the second quarter of 2011. The Company also expects to ship approximately 0.7 MW of wafer, 4 MW PV modules under its own brand and sales of approximately 8 MW PV modules outsourcing for its customers.

"We had experienced a substantial price decline in the second quarter of 2011, and as a result, we are revising our revenue guidance for the second quarter of 2011," says Jimmy Lai, CFO of the company. "The reduction in revenue guidance is mainly due to the less shipment in the down-stream product, wafer and module."


Sunday, June 5, 2011

Liquidity Requirements

We expect that we will require approximately $210 million for capital expenditures in 2011. Such projected capital expenditures will be used primarily for technological improvements and equipment enhancements for our Phase 1 polysilicon facilities, construction of our Phase 2 polysilicon facilities and wafer facilities, and the gradual increase of our module production capacity.

We believe that our current cash and cash equivalents, anticipated cash flow from our operations, and proceeds from additional bank borrowings will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures, for at least the next 12 months.


Monday, May 9, 2011

Comments & Business Outlook

First Quarter 2011 Financial and Operating Highlights

  • Polysilicon shipments were approximately 1,089 metric tons, or MT. Photovoltaic (PV) module shipments were 4.8 Mega watts or MW and 8 MW of outsourcing for our customers. The Company also shipped approximately 8 MT polysilicon to produce PV wafer through a tolling arrangement
  • Revenues were $87.3 million, an increase of 6.6% from the fourth quarter of 2010 and 93.6% from the first quarter of 2010.
  • Gross profit was $44.5 million, a decrease of 2.8% from the fourth quarter of 2010 and 214.9% increase from the first quarter of 2010.
  • Gross margin was 51.0% in the first quarter of 2011, compared to 55.9% in the fourth quarter of 2010 and 31.3% in the first quarter of 2010.
  • Operating income was $43.5 million, an increase of 5.4% from the fourth quarter of 2010 and 310.1% from the first quarter of 2010.
  • Operating margin was 49.8%, compared to 50.4% in the fourth quarter of 2010 and 23.5% in the first quarter of 2010.
  • Net income attributable to Daqo New Energy Corp. shareholders was $35.0 million, an increase of 6.6% from the fourth quarter of 2010 and 456.9% from the first quarter of 2010
  • Earnings per fully diluted ADS were $0.99, compared to $0.95 in the fourth quarter of 2010, and $0.20 in the first quarter of 2010. Earnings per fully diluted ordinary share were $0.20, compared to $0.19 in the fourth quarter of 2010 and $0.04 in the first quarter of 2010

"We are happy to announce another record quarter in terms of revenue and profitability. Our ability to control our production cost, combined with ongoing favorable polysilicon pricing environment helped us to achieve this record result. During the quarter, we also successfully progressed the construction of our Shihezi, Xinjiang polysilicon phase 2 facility as planned. Our wafer production facility in Wanzhou also commenced production in April. Initial output product quality met our expectations" said Dr. Gongda Yao, CEO of the Company, "With a good start in the first 1 quarter of the year, we are confident that we can execute on our business plan for the year. We are also reaching out to our current and potential polysilicon material customers to secure our polysilicon output for the year of 2012 through 2014 with the signing of supply agreements with advance deposits. We will continue to work hard and deliver value and return for our investors".

For the second quarter of 2011, the Company expects its total revenue to be in the range of $92 million to $95 millions. The Company expects to ship between 950 MT to 1000 MT of polysilicon and generate revenues from the sales of polysilicon in an amount between US$64.5 million to US$67.5 million in the second quarter of 2011. The Company also expects to ship approximately 7 MW of wafer and generate about $4.5 million of revenue. The Company expects PV module sales to be approximately $23 million with the sales of approximately 14 MW PV modules under the Company's own brand and sales of approximately 2.5 MW PV modules outsourcing for its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this outlook is subject to significant risks. See Forward-Looking Statements at the end of this press release.


Monday, March 7, 2011

Comments & Business Outlook

Fourth Quarter 2010 Financial and Operating Highlights 

  • Polysilicon shipments were approximately 966 metric tons, or MT. Photovoltaic (PV) module shipments were 3.5 Mega watts, or MW. The company also shipped approximately 20.5 MT polysilicon to toll into PV wafer.
  • Revenues were $81.9 million, an increase of 29.6% from the third quarter of 2010 and 158.2% from the fourth quarter of 2009.
  • Gross profit were $45.8 million, an increase of 70.2% from the third quarter of 2010 and 466.4% from the fourth quarter of 2009.
  • Gross margin was 55.9% in the fourth quarter of 2010, compared to 42.5% in the third quarter of 2010 and 25.5% in the fourth quarter of 2009.
  • Operating income were $41.3 million, an increase of 71.8% from the third quarter of 2010 and 379.5% from the fourth quarter of 2009.
  • Operating margin was 50.4%, compared to 38.0% in the third quarter of 2010 and 27.1% in the fourth quarter of 2009.
  • Net income attributable to Daqo New Energy Corp. shareholders was $32.8 million, an increase of 85.3% from the third quarter of 2010 and 229.3% from the fourth quarter of 2009
  • Earnings per fully diluted ADS were $0.95, compared to $0.64 in the third quarter of 2010, and $0.40 in the fourth quarter of 2009. Earnings per fully diluted ordinary share were $0.19, compared to $0.13 in the third quarter of 2010 and $0.08 in the fourth quarter of 2009.

Full Year 2010 Results Financial and Operating Highlights 

  • Polysilicon shipments were 3,650 MT, an increase of 143.6% from 2009.
  • Revenues were $242.7 million, an increase of 118.3% from 2009.
  • Gross profit was $106.2 million, an increase of 153.2% from 2009
  • Gross margin was 43.8% for 2010, compared to 37.7% for 2009
  • Operating income was $92.5 million, compared to $36.4 million for 2009.
  • Net income was $69.1 million, compared to $29.9 million for 2009.
  • Net income attributable to Daqo New Energy Corp. shareholders for 2010 was $68.6 million, an increase of 122.4% from 2009
  • Earnings per fully-diluted ADS for 2010 were $2.32, compared to $1.45 in 2009.

"We are very pleased with our operating performance in the fourth quarter of 2010. We executed our business plan well, which resulted in a record quarter, based on the key metrics of revenue, gross profit, gross margin, operating margin and net income. We also successfully completed the Phase 1 polysilicon debottlenecking project, which will enable us to increase our name plate capacity from 3,300 MT to 4,300 MT,” said Dr. Gongda Yao, the chief executive officer of the company. “With the successful listing on the NYSE during the quarter, we now have a platform to grow the company into a leading global solar supply company. In 2011, we will focus on building our Phase 2 polysilicon production facility in Xinjiang, China. We will also commence our 250 MW solar wafer production, along with expanding our PV module capacity. In the beginning of 2011, we have continued to see strong demand from our customers for quality polysilicon, which should lay a strong foundation for a successful year for Daqo New Energy.”

Q1 2011 Outlook 

  • For the first quarter of 2011, the company expects
  • total revenue to be in the range of $81.5 million to $83.5 millions.
  • to ship between 1075 MT to 1100 MT of polysilicon and generate revenues from the sales of polysilicon in an amount between US$74 million to US$76 million in the first quarter of 2011.
  • revenue for the PV module sales to be approximately $7.5 million with the sales of approximately 4 MW PV modules under the company's own brand and sales of approximately 8 MW PV modules outsourcing for its customers.

Thursday, January 6, 2011

Comments & Business Outlook

CHONGQING, China--(BUSINESS WIRE)--Daqo New Energy Corp. today announced revised guidance for its fourth quarter ended December 31, 2010. Based on the customer orders and product deliveries,

  • the Company now estimates its fourth quarter shipments of polysilicon to be between 930 to 950 metric tons, or MT, above the high-end of its previous guidance of 825 MT to 850 MT given on November 16, 2010.
  • The Company also shipped approximately 3 to 4 megawatts, or MW, of photovoltaic modules, versus its previous guidance of 4 to 5 MW.
  • Primarily as a result of the increased shipments, total revenues for the fourth quarter 2010 are currently estimated to range between US$75 to US$76 million, also above the high end of its previous range of US$65 to US$69 million.

“The successful completion of the Phase 1 capacity enhancement project has increased our total production capacity to 4,300 MT in 2011, which will help us to better serve our customers in the future.”

Daqo New Energy also announced that it plans to build its Phase 2 polysilicon production facility in Shihezi Economic Development Area in Xinjiang autonomous region, China. This new production facility is expected to commence production in the third quarter of 2012 and to be fully ramped up by the end of 2012.

"We are happy to raise the fourth quarter guidance due to better than expected customer demand and pricing environment. Furthermore, we are pleased to report that we have made encouraging progress in pursuing our polysilicon production capacity expansion strategy. Our periodical maintenance and capacity enhancement of our Phase 1 polysilicon manufacturing facility undertaken in December 2010 had been completed on schedule, and we have selected the location for our Phase 2 polysilicon manufacturing facility," said Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy. "The successful completion of the Phase 1 capacity enhancement project has increased our total production capacity to 4,300 MT in 2011, which will help us to better serve our customers in the future.”


Thursday, October 14, 2010

Research

On October 12, 2010, we issued an alert that we were initiating a short-term trade on DQ @ $10.99. (Current price is $14.00).

Why we took the plunge

  • Improved short-term sentiment in the ChinaHybrid space
  • Solar sector has been in vogue as evidenced by sharp move in Jinkosolar Holding Adr (NYSE:JKS).
  • Stock did not over perform in its IPO debut

Note that we have begun winding dwon this trade and this is not a value play.

Investors should be aware of the following points: (Per GeoContributor Dan France).

  • DQ is an upstream commodity company supplying polysilicon to solar companies that is trying to build a vertically integrated solar product chain from recovered silicon materials to solar modules.
  • DQ attempting to become a vertically integrated company while competing with much larger, well established companies (JKS, LDK) with far greater resources that are already vertically integrated.
  • Wide swings in the price of polysilicon and the impact on margins and profitability.
  • Volatility of polysilicon prices make forecasting the business challenging.
  • Market factors causing a temporary spike in poly prices including plant closures for two major suppliers.  Once plants up and running and supply and demand back in balance the upward pressure on polysilicon prices will abate.  Also, polysilicon imports from the US are filling the supply gap.
  • Substantial cap ex needs including $110 million for 2010 and $211 million in 2011
  • 2010 funded but 2011 is not. 
  • Cash flow from operations and additional bank debt won’t fund 2011 so a substantial equity raise will likely be  required.

Monday, September 27, 2010

Financials
                       
     Year Ended
December 31,
    Six Months
Ended June 30,
     2008    2009     2009     2010
     (in thousands)

Net income attributable to Daqo New Energy Corp.’s shareholders

   $ 21,525    $ 30,835      $ 15,107      $ 18,032

Add: net loss (income) attributable to noncontrolling interest

     327      (899     (937     117
                               

Net income

     21,852      29,936        14,170        18,149

Plus: interest expenses

     3,873      6,462        3,248        5,359

Less: interest income

     115      214        167        160

Plus: income tax expenses

     1,602      240        2,475        3,859

Plus: depreciation expenses

     7,817      16,088        7,441        15,411
                               

EBITDA

   $ 35,029    $ 52,512      $ 27,167      $ 42,618

IPO Activity

Daqo New Energy plans for Initial Public Offering.

Company Snapshot:

Leading polysilicon manufacturer based in China.

Industry Snapshot:

  • Photovoltaics are one of the proven and most rapidly growing renewable energy sources in the world. Solarbuzz, a solar energy research and consulting firm, reports that the global photovoltaic market reached 7.3 gigawatts, or GW, in 2009, an increase from 1.7 GW in 2006, representing a three-year compound annual growth rate of 62.5%. Solarbuzz forecasts the market to grow from 7.3 GW in 2009 to 37.1 GW in 2014, representing a compound annual growth rate of 38.4%.
  • Despite the decrease in demand for solar power products during the second half of 2008 and the first half of 2009 resulting from the global recession and credit market crisis, we believe that demand for solar power products has recovered significantly in response to a number of factors, including the gradual recovery of the global economy and increasing availability of financing for solar power projects. Although selling prices for solar power products have generally stabilized at levels substantially below pre-crisis levels, selling prices may fluctuate again in the future.
  • We believe that demand for solar power products will continue to grow rapidly in the long term as solar power becomes an increasingly important source of renewable energy. We believe several factors will drive demand in the global photovoltaic industry, including advantages of solar power, government incentives and decreasing costs of solar energy.
  • We believe the key challenges presently facing the photovoltaic industry include the need to improve cost competitiveness against other energy sources, possible additional reduction or elimination of government subsidies and economic incentives and the ability to obtain financing.
  • The photovoltaic market in China is at an initial stage of development. According to Solarbuzz, the photovoltaic market in China was 208 MW in 2009, compared to just 35 MW in 2008. However, Solarbuzz expects that China’s photovoltaic market will undergo a significant transformation from a market dominated by off-grid rural and industrial projects to one marked by a significant increase in large on-grid, ground mounted systems as the result of changing project economics and increasing governmental support.
      

Use Of proceeds:

Our net proceeds from this offering are expected to be approximately $83.9 million (assuming an initial public offering price of $11.50 per ADS, the midpoint of the estimated range of the initial public offering price shown on the front cover of this prospectus, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us). We plan to use approximately $65.0 million of the net proceeds to expand our polysilicon manufacturing facilities and the remainder to finance capital expenditures for our wafer manufacturing business. See “Business—Manufacturing Capacity” for additional information about our production capacity expansion plan.

Underwriter:

  • Morgan Stanley & Co. International plc
  • Piper Jaffray & Co.

Proposed offering price: $10.50 and $12.50 per ADS

Post IPO Share Calculation: (assuming 5 to 1 Ordinary to ADS conversion ratio).

  • 25,942,820: Pre IPO fully diluted share count used in EPS calculation.
  •   8,000,000: Newly issued ADS shares
  •   1,200,000: Over-allotments ADS shares 

GeoTeam® best effort calculation of total post IPO ADS count to be used in EPS calculations, assuming full conversions and an Ordinary to ADS conversion ratio of 5 to 1:   35,142,820 (Investors can also multiply 5 by reported EPS per ordinary figures to convert to EPS per ADS).

Financial Snapshot:

We have achieved substantial growth since we commenced commercial production of polysilicon in July 2008. In 2009, we produced 1,523 MT of polysilicon and sold 1,498 MT, compared to 291 MT of polysilicon produced and 237 MT sold in 2008. In the six months ended June 30, 2010, we produced 1,826 MT of polysilicon and sold 1,710 MT.

We generated:

  • Revenues of $18.0 million for the six months ended June 30 2010 compared to $15.1 million in the comparable 2009 period.
  • Net income of $15.4 million for the six months ended June 30 2010 compared to $7.4 million in the comparable 2009 period. (Earnings per ads is tracking at about $0.90 using anticipated post IPO share count)