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Daqo New Energy (DQ)
NYSE:DQ
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Daqo New Energy
(NYSE:DQ)
Rating:42Neutral
Price Target:―
Positive Factors
Future Performance
The ability to track polysilicon futures in China provides a real-time check on the Daqo/Poly-Si bull thesis, suggesting increased confidence in the company's future performance.
Government Support
The proposed price floor for polysilicon suggests potential upside, as it indicates government support for maintaining profitable price levels for major producers like Daqo.
Market Restructuring
China’s Ministry of Industry and Information Technology’s new proposed policy for the polysilicon segment, which includes monthly production quotas for major producers, may provide a more stable market environment for Daqo New Energy.
Negative Factors
Downstream Impact
More fragmented downstream module makers will see further margin compression, as global solar demand is fading, which could impact related segments in the solar industry.
Market Dynamics
More fragmented downstream module makers will experience margin compression due to fading global solar demand, indicating potential challenges in the broader market context.
Daqo New Energy (DQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.32B
Dividend YieldN/A
Average Volume (3M)1.12M
Price to Earnings (P/E)―
Beta (1Y)0.94
Revenue Growth-63.37%
EPS Growth-403.47%
CountryUS
Employees4,749
SectorTechnology
Sector Strength93
IndustrySemiconductors
Share Statistics
EPS (TTM)-1.07
Shares Outstanding67,056,720
10 Day Avg. Volume1,692,090
30 Day Avg. Volume1,117,025
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)0.31
Price to Sales (P/S)0.00
P/FCF Ratio-2.26
Enterprise Value/Market Cap0.42
Enterprise Value/Revenue0.12
Enterprise Value/Gross Profit-1.51
Enterprise Value/Ebitda-1.03
Forecast
1Y Price Target
$22.04Price Target Upside5.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Daqo New Energy Business Overview & Revenue Model
Company DescriptionDaqo New Energy Corp. (DQ) is a leading manufacturer in the renewable energy sector, specializing in the production of high-purity polysilicon. The company's core product, polysilicon, is a critical raw material used in the solar photovoltaic (PV) industry for the manufacture of solar wafers and cells. Headquartered in China, Daqo New Energy operates state-of-the-art production facilities designed to meet the growing demand for solar energy components worldwide.
How the Company Makes MoneyDaqo New Energy makes money primarily through the production and sale of high-purity polysilicon to solar manufacturers. The company sells its product to major solar wafer manufacturers, who then use it to produce solar cells and modules. Daqo's revenue streams are significantly influenced by polysilicon prices, production volumes, and long-term supply agreements with key clients. The company benefits from economies of scale and technological advancements that enhance production efficiency and cost-effectiveness. Additionally, strategic partnerships with industry players and a strong focus on maintaining high-quality standards contribute to Daqo's earnings and market position.
Daqo New Energy Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 41.12%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a strong financial position with no debt and stable polysilicon prices. However, there were significant challenges, including decreased revenue, increased costs, and operational losses. The long-term outlook for the solar PV industry remains positive, but short-term challenges weigh heavily on the company's performance.Q1-2025 Updates
Positive Updates
Strong Financial Position and Liquidity
Despite quarterly operating and net losses, Daqo New Energy Corp. maintained a strong balance sheet with no financial debt and total quick assets of $2.15 billion, providing ample liquidity.
Exceeding Sales Volume Expectations
The company reported a sales volume of 28,008 metric tons, exceeding its production and reducing inventory to healthier levels.
Stable Polysilicon Prices
Polysilicon prices remained stable throughout the quarter at approximately 37 to 42 RMB per kilogram, with expectations for support at current levels due to policy changes.
Positive Long-term Solar PV Industry Outlook
China's new solar PV installations reached 59.71 gigawatts in Q1, a robust 30.5% year-over-year growth, indicating promising long-term prospects for the solar PV industry.
Negative Updates
Revenue and Margin Decline
Revenues decreased to $123.9 million from $195.4 million in Q4 2024 and $415 million in Q1 2024. The gross margin was negative 66%, primarily due to lower average selling prices and higher production costs.
Operating and Net Losses
The company reported a net loss attributable to shareholders of $71.8 million, compared to a net income of $15.5 million in Q1 2024. Loss per basic ADS was $1.07.
Increased Production Costs
Polysilicon unit production cost increased by 11% sequentially to an average of $11.57 per kilogram, with cash costs rising by 5% to $5.31 per kilogram due to maintenance and facilities-related costs.
Reduced Utilization Rates
The company operated at a reduced utilization rate of approximately 33% of its nameplate capacity due to challenging market conditions and weak selling prices.
Company Guidance
During the first quarter of 2025, Daqo New Energy Corp. faced significant challenges in the solar PV industry, with overcapacity and polysilicon prices remaining below cash cost levels. Despite sustaining quarterly operating and net losses, the company managed to narrow these losses sequentially and maintained a strong balance sheet with no financial debt. As of March 31, 2025, Daqo reported a cash balance of $792 million, short-term investments totaling $168 million, and a fixed-term bank deposit balance of $1.1 billion, resulting in quick assets of $2.15 billion. The company operated at a reduced utilization rate of 33%, producing 24,810 metric tons of polysilicon, slightly below its guidance of 25,000 to 28,000 metric tons. However, sales volume exceeded production at 28,008 metric tons, allowing Daqo to reduce inventory. The polysilicon unit production cost increased by 11% to $11.57 per kilogram, with a cash cost increase of 5% to $5.31 per kilogram. For the second quarter, Daqo expects production volume of 25,000 to 28,000 metric tons and anticipates full-year production between 110,000 and 140,000 metric tons. Despite current market downturns, the company remains optimistic about long-term growth prospects, supported by China's new solar installations reaching 59.71 gigawatts in the first quarter, a 30.5% year-over-year increase.Daqo New Energy Financial Statement Overview
Summary
Daqo New Energy is currently facing a challenging financial landscape. The income statement shows declining revenues and profitability, impacting overall financial stability. The balance sheet remains fairly strong with no debt, but declining equity is a concern. Cash flow performance has deteriorated, raising questions about the company's ability to sustain operations without positive cash flow.Income Statement
Daqo New Energy's income statement reveals a challenging financial period. The company experienced a significant drop in total revenue from $4.6 billion in 2022 to $1.03 billion in 2024, reflecting a sharp revenue decline. The gross profit margin turned negative in 2024, indicating the cost of goods sold exceeded revenue. Additionally, both EBIT and net income margins are negative, demonstrating declining operational and overall profitability. While the past showed strong growth, recent performance highlights instability and potential market challenges.45
Neutral
Balance Sheet
Daqo's balance sheet indicates a mixed financial position. Positive aspects include zero total debt in 2024, suggesting no leverage risk and a healthy cash position with $2.1 billion in cash and equivalents. However, stockholders' equity has decreased from 2023 to 2024, and the equity ratio remains stable but not improving. The company’s ability to maintain a debt-free status is commendable, yet declining equity may pose future challenges.55
Neutral
Cash Flow
Daqo's cash flow statement reveals pressure on cash generation. Operating cash flow turned negative in 2024, indicating potential difficulties in generating cash from core operations. Free cash flow has also significantly decreased, suggesting reduced financial flexibility. While the company previously enjoyed strong free cash flow growth, recent trends indicate a challenging cash flow environment that could impact future operations and investments.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 737.68M | 1.03B | 2.31B | 4.61B | 1.68B | 675.60M |
| Gross Profit | -366.55M | -212.93M | 920.65M | 3.41B | 1.10B | 233.99M |
| EBITDA | -375.18M | -179.88M | 932.32M | 3.15B | 1.13B | 188.76M |
| Net Income | -432.52M | -345.21M | 429.55M | 1.82B | 748.92M | 129.19M |
Balance Sheet | ||||||
| Total Assets | 6.31B | 6.42B | 7.43B | 7.59B | 3.34B | 1.24B |
| Cash, Cash Equivalents and Short-Term Investments | 2.09B | 2.14B | 3.04B | 3.53B | 1.00B | 76.60M |
| Total Debt | 0.00 | 0.00 | 0.00 | 20.69M | 0.00 | 243.09M |
| Total Liabilities | 497.34M | 560.38M | 978.58M | 948.24M | 672.53M | 440.23M |
| Stockholders Equity | 4.33B | 4.36B | 4.76B | 4.85B | 2.17B | 767.12M |
Cash Flow | ||||||
| Free Cash Flow | -594.68M | -794.50M | 429.20M | 1.22B | 130.16M | 91.41M |
| Operating Cash Flow | -360.67M | -437.72M | 1.62B | 2.47B | 639.10M | 209.70M |
| Investing Cash Flow | -1.50B | -1.48B | -1.20B | -1.00B | -782.00M | -118.49M |
| Financing Cash Flow | -41.35M | -47.36M | -795.40M | 1.47B | 736.23M | -95.47M |
Daqo New Energy Technical Analysis
Positive
20.90
Price Trends
15.26
Positive
16.12
Positive
18.16
Positive
Market Momentum
1.61
Negative
74.05
Negative
73.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DQ, the sentiment is Positive. The current price of 20.9 is above the 20-day moving average (MA) of 17.20, above the 50-day MA of 15.26, and above the 200-day MA of 18.16, indicating a bullish trend. The MACD of 1.61 indicates Negative momentum. The RSI at 74.05 is Negative, neither overbought nor oversold. The STOCH value of 73.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DQ.
Daqo New Energy Risk Analysis
Daqo New Energy disclosed 70 risk factors in its most recent earnings report. Daqo New Energy reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Daqo New Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $18.57B | 13.57 | 11.65% | 4.92% | 2.22% | -22.39% | |
76 Outperform | $28.02B | 27.42 | 6.32% | 0.96% | -25.47% | -70.07% | |
74 Outperform | $22.33B | 21.61 | 11.47% | 2.53% | 1.32% | 4.86% | |
72 Outperform | $24.87B | 41.21 | 7.85% | ― | -18.28% | -70.98% | |
64 Neutral | $39.46B | 84.25 | >-0.01% | 2.44% | -42.35% | -100.12% | |
63 Neutral | $34.26B | 5.42 | -11.67% | 1.85% | 5.30% | -18.55% | |
42 Neutral | $1.32B | ― | -9.56% | ― | -63.37% | -403.47% |
* Technology Sector Average
Performance Comparison
DQ
Daqo New Energy
20.90
4.82
29.98%
ASX
ASE Technology Holding Co
10.58
-0.16
-1.49%
MCHP
Microchip
74.30
-12.06
-13.96%
ON
ON Semiconductor
59.41
-13.12
-18.09%
STM
STMicroelectronics
32.11
-7.36
-18.65%
UMC
United Micro
7.53
0.06
0.80%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.