Daqo New Energy Corp ADR

Photovoltaic polysilicon leader Daqo New Energy disclosed in its latest investor communication notes that the company's AIDC project is overall in the preliminary permit-processing stage. During the 2026 half-year report period, it initiated research and development projects around new energy storage equipment and solid-state transformers. Among them, the new energy storage equipment has completed some staged work such as prototype units, single-machine assembly, and hardware board debugging, while the solid-state transformer has completed the main topology design and hardware design. However, the company stressed that the project is still in an early stage. In the first half of this year, Daqo New Energy's net profit attributable to the parent company was negative 1.595 billion yuan, including inventory impairment losses of 1.026 billion yuan, with the loss widening 40.29 percent year on year, the largest increase among the four major polysilicon producers. Since the second quarter of 2024, it has lost more than 5 billion yuan in just two years. Nevertheless, as of the end of the first half of this year, the company's cash reserves, including monetary funds, trading financial assets, and time deposits and large-denomination certificates of deposit in other current assets, totaled 10.419 billion yuan, with an asset-liability ratio of only 7.9 percent. On the evening of June 3, Daqo New Energy announced that its subsidiary Daqo New Energy Technology Shanghai Company Limited signed an investment agreement with the Kunshan Economic and Technological Development Zone Management Committee, planning to establish a new independent legal entity in the Kunshan development zone to build the Daqo Smart Energy System Manufacturing Base project, with a total investment budget of about 6 billion yuan, to be constructed in two phases. The first phase has a total investment of about 2.1 billion yuan, and the second phase will be advanced at an appropriate time after the project meets relevant industrial policy conditions and investment conditions. The next morning, the company's share price hit the 20 percent daily limit. Daqo New Energy said that extending into the AIDC power distribution sector can effectively diversify operating risks and cultivate new profit growth points. Its Daqo brand has more than fifty years of technical accumulation in the electrical, new energy, and power electronics fields, holds nearly 3,000 valid patents, and has led or participated in the formulation of more than ninety industry standards. Looking ahead to the fourth quarter, Daqo New Energy said the polysilicon industry is still in a supply-demand rebalancing stage, and actual output changes are the core variable affecting industry fundamentals. The company will reasonably arrange its production and operating pace. When asked when the industry turning point will arrive, the company did not respond directly. According to statistics from the Silicon Industry Branch of the China Nonferrous Metals Industry Association, in the week ending September 30, the average transaction price of n-type re-feeding material was 43,000 yuan per ton, and the average transaction price of n-type granular silicon was 40,300 yuan per ton. The Silicon Industry Branch believes that in October, polysilicon producers will successively implement production reduction plans, and October output may decline by about 13 percent month on month.

Daqo New Energy's fair value estimate has been trimmed from about US$23.95 to about US$19.65, an adjustment of roughly 18%, as analysts remain sharply divided on the stock. JPMorgan maintains an Overweight rating with a revised US$22 price target, still above the updated fair value estimate, while Goldman Sachs shifted to a Sell rating with a reduced US$10 target, citing a Q2 non GAAP net loss driven by lower recognized average selling prices and higher SG&A expenses. The company issued new production guidance for the third quarter of 2026 targeting polysilicon output of about 40,000 MT to 45,000 MT, and for the full year 2026 guided to polysilicon production of about 160,000 MT to 180,000 MT, including the impact of annual facility maintenance. Daqo New Energy was also removed from the FTSE All World Index in US$ terms, and Reuters reported that the U.S. government is preparing a price floor and tariffs on polysilicon to support domestic factories, with Daqo New Energy cited among the companies expected to be affected. In the updated model, revenue growth was trimmed from about 32.87% to about 30.82%, net profit margin moved from about 1.77% to about 6.50%, the future P/E was cut from about 97.65x to about 23.46x, and the discount rate edged higher from about 12.27% to about 12.37%.

U.S. stock futures fell sharply on Thursday despite strong labor market and manufacturing data, with the Dow down 440 points, the S&P 500 off 44 points, and the Nasdaq down 250 points. The 30-year Treasury yield climbed back to 5.25%, the 10-year to 4.71%, and the 2-year to 4.19%, reversing a brief rally after the Treasury announced liquidity support for long-term bonds. Oil prices remained elevated, with Brent crude at $94 per barrel and WTI at $87 per barrel, as the White House's six-month conflict with Iran continued to pressure global supply. Weekly jobless claims came in at 206,000, below estimates and the lowest since late July, while continuing claims ticked up to 1.799 million. The Philadelphia Fed manufacturing index surged to 47.4 in August, its highest since April 2021, following July's 41.4. In earnings, Walmart beat expectations with $0.81 per share versus $0.73 but fell 7.5% on weak comps and valuation concerns; Deere rose 1.4% after a 6.5% earnings beat; Advance Auto Parts plunged 18% despite a 27.2% earnings beat due to soft guidance; and Chinese stocks Alibaba, NetEase, and Daqo Energy sold off on disappointing results.

DAQO New Energy reported second quarter 2026 financial results, with non-GAAP EPADS of negative $1.20 missing analyst expectations by $0.63. Revenue came in at $62.66 million, a 16.7% decline year-over-year, but beat estimates by $6.6 million. The company issued the results via press release.