Daqo New Energy reports Q4 EPS ($2.56) vs. 1.06 last year

Reports Q4 revenue $195.4M vs. $476.3M last year. Xiang Xu, chairman and CEO of the company, commented, “In 2024, we faced a challenging market environment with excess capacity in the solar PV industry leading to sharp price declines across the entire value chain. We proactively managed these difficulties by curtailing polysilicon production to reduce cash burn, particularly in the third and fourth quarters. Nevertheless, we reached an annual polysilicon production volume of 205,068 MT in 2024, meeting our guidance of 200,000 MT to 210,000 MT, which represented an increase of 3.7% year-over-year compared to 197,831 MT in 2023. Our N-type product mix increased significantly from approximately 40% of total production in 2023 to 70% in 2024. We sold 181,362 MT in 2024, ending the year at a reasonable inventory level. Despite solid growth in demand for solar PV products globally, the mismatch between demand and supply drove prices lower in 2024 even below cash cost. Overall, our polysilicon ASPs decreased significantly from $11.48/kg in 2023 to $5.66/kg in 2024. Revenue came in at $1.0 billion compared to $2.3 billion in 2023 as a result of lower ASPs as well as lower sales volume. As polysilicon ASPs fell below production cost starting in the second quarter of 2024, we recorded a non-cash provision for inventory impairment expense, with a negative gross margin of 20.7% for 2024. Due to the continuous negative gross margin, we recorded a non-cash long-lived assets impairment charge of $175.6 million for the quarter related to our older polysilicon production lines. Despite the losses, Daqo New Energy (DQ) continued to maintain a strong balance sheet and ample cash reserves. At the end of 2024, the Company had a cash balance of $1.0 billion, short-term investments of $10 million, bank notes receivables of $55 million, and a fixed term bank deposit balance of $1.1 billion. Overall, the company maintains strong liquidity with a balance of quick assets of $2.2 billion, which can be readily converted to cash if needed. This solid financial position ensures we are well-equipped to navigate the market downturn and remain strategically resilient.”