In Q3/2019, Daqo New Energy had a total average production cost of only $6.97 per kg which it expects to bring further down to approximately $6.5 per kg once its Phase 4A at Xinjiang facility fully ramps up, by the end of 2019. (Source: Daqo New Energy)
- Daqo’s Q3/2019 results were particularly optimistic as it reported $83.9 million revenues improving from last year’s $67.4 million
- The company returned to profitability with its net income of $5 million, compared to net loss reported sequentially and on YoY basis
- It expects to sell 12,500 MT to 13,500 MT in Q4/2019 externally out of total Q4/2019 production volume
- For full year 2019, the company has increased its guided range for annual production volume as it sees its Phase 4A facility ramping up three months ahead of schedule by the end of 2019
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(21. August 2020)
Chines poly silicon producer Daqo New Energy had a healthy third quarter in 2019 reporting a record-high production volume of 9,437 metric ton (MT) at the lowest production cost in the company’s history at $6.97 per kg.
With an ASP of $8.99 per kg, the company earned revenues of $83.9 million in the reporting quarter, compared to 6,199 MT it sold a year back in Q3/2018 when the ASP was $10.79 per kg and revenues added up to $67.4 million. Gross margin was 21.5% in the reporting quarter while last year it was 19.1%.
Daqo also returned to profitability with $5 million in net income after it suffered a net loss of $2.2 million in Q2/2019 and a net loss of $18.3 million last year (see Daqo Sales Up But Losses In Q2/19).
In September 2019, the company commenced pilot production at its Xinjiang facility under Phase 4A ahead of schedule and expected to reach the 70,000 MT goal within 2019 (see Daqo Begins Production Under Phase 4A At Xinjiang).
With full capacity of Phase 4A anticipated to ramp up three months ahead of schedule, the management has revised its annual production guidance for 2019 to 39,300 MT to 40,300 MT, up from its previous guidance of 37,000 MT to 40,000 MT inclusive of its annual facility maintenance. For Q4/2019, the production volume is expected to be between 14,000 MT to 15,000 MT. Regarding the fourth quarter production volume, it hopes to sell 12,500 MT to 13,500 MT externally.
Daqo’s management said it sees its production costs coming further down to around $6.5 per kg once Phase 4A is operating 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, added the management. “Once Phase 4A is fully ramped up, we expect mono-grade products to account for approximately 90% of our total production volumes.”