Xinjiang Daqo of Daqo New Energy has forecast a net loss of up to RMB 3.1 billion in FY 2024
This includes losses related to provisions for inventory impairment and fixed asset impairment
The company’s expected results follow similar announcements by various Chinese solar manufacturers for the year
Leading Chinese polysilicon producer Daqo New Energy says its primary subsidiary Xinjiang Daqo New Energy expects to incur a net loss for FY 2024 amounting to RMB 2.6 billion to RMB 3.1 billion ($355 million to $424 million).
This compares to the net profit of RMB 5.8 billion Xinjiang Daqo reported for FY 2023, including losses related to provisions for inventory impairment and fixed asset impairment.
Daqo holds a 72.4% equity interest in Xinjiang Daqo, and the latter contributes most of the revenue and net income to its majority shareholder.
The subsidiary does not cite any specific reasons for the expected net loss; nevertheless, this reflects the general trend among solar PV companies in 2024. Overcapacity due to the mismatch in demand and supply led to a significant drop in component prices while also impacting the capacity utilization of their factories.
Recently, Daqo’s peers JinkoSolar and TBEA forecast a net profit decline for FY 2024 by up to 99% and 63.55% year-on-year (YoY) respectively (see China Solar PV News Snippets). One of China’s leading PV manufacturers LONGi Green Energy Technology is looking at its 1st annual loss in 12 years citing intense competition due to overcapacity and lower output of its back contact (BC) modules (see LONGi’s 2024 Profit Warning, Forecasts Up To RMB 8.8 Billion Loss).
Daqo itself reported a net loss of $60.7 million in Q3 2024 and over a 9% drop in revenues quarter-on-quarter (QoQ). Polysilicon ASPs were below production costs across the value chain, according to the management.
While the company expects a healthier market in the medium to long term as it sees poor profitability eliminating competition, Daqo has lowered the annual production guidance for FY 2024 to 200,000 MT to 210,000 MT (see Daqo Sustains Net Loss In Q3 2024 Amid Challenging Market Conditions).