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Daqo New Energy Corp. (DQ)

NYSE - NYSE Delayed Price. Currency in USD
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42.37+1.15 (+2.79%)
At close: 04:00PM EST
42.60 +0.23 (+0.54%)
After hours: 07:58PM EST
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  • s
    shahram
    I love math because numbers never lie to me, so I decided to take a fundamental look at the price of polysilicon according to DQ's third quarter report, current price and possible future price in 2022.

    Polysilicon average total production cost for DQ was $6.84/kg in Q3 2021.
    Polysilicon average selling price (ASP) for DQ was $27.55/kg in Q3 2021.
    Current polysilicon spot price: US$31.37 per kg.
    Price prediction quotes from Sakura Yamasaki, director of the Singapore Solar Exchange during a webinar hosted by Roth Capital Partners,
    She said that a price pegged at $41/kg excluding value added taxes (VATs) is possible through the end of the year of 2022 but could go higher.

    When I look at the above numbers, the only question that cross my mind is how DQ is traded at this cheap price and who is the seller...!
  • M
    MAGAscrewedMAGI
    Are we beginning to see light at the end of the tunnel?
    For a long time we've been seeing this frustrating movie everyday i.e. DQ goes up in the morning and then painfully drifts down for the rest of the day for a net loss or a meagre gain. But today, although the morning 'routine' was familiar, the recovery throughout the day is a break from the trend.
    Possible catalysts -
    1) Poly prices stabilizing - more importantly not falling precipitously as many FUD proponents are predicting.
    2) A very likely blockbuster Q4 results
    3) Possibly a dividend (~$3 per ADR) announcement in April
    4) Improving sentiment of Chinese ADRs (starting with Charlie Munger doubling down in BABA)
    ... so maybe, just maybe we are finally beginning to see some light here.
    Fingers crossed X.
  • v
    viki
    I would like to elaborate the mega importance of the Xinjiang issue for DQ's huge discount.
    There are two important negative aspects to this discount.
    Chinese DQ by virtue of its base in Xinjiang is on the US entity list. So if push comes to shove with any US initiated delisting of Chinese adrs ,the first ones to be delisted will be those on any entity list. The market has priced approximately a 50 to 60% discount on this fact alone.
    The US has recently passed a ban ,to be implemented sometime this year, for all products whose supply chain includes xinjiang. Market fears that this xinjiang contagion may spread to other important consumers of Solar products such as Europe and Australia thereby really muting the demand for those companies that are solely based in Xinjiang. The market is giving DQ another 20 to 30% discount on this. This ladder discount hopefully will be mitigated towards the end of this year if the company is executing on its plan to have its new capacity in the new province.
    In order to eliminate the first discount either the US and China have to become friends again thus eliminating the US -Chinese entity list or DQ itself has to be preemptive and move its us listing elsewhere such as HK
    So in total the market has priced in about an 80% discount to DQ's real value of currently $120 (ie forward PE of 10 like almost all other commodity stocks out there that do not have any geopolitical risk)
  • f
    fayiz
    According to PV insights today's price of polysilicon is $30.56 up 2.31% from the last week.
  • M
    MAGAscrewedMAGI
    DQ fair value (anecdotal) analysis:
    We all know the huge discrepancy between Xinjiang DQ (priced at $208 per ADR equivalent) to US DQ priced at $40 for a 81% discount. So if DQ gets listed in HK with US interchangeable shares (due to US delisting fears), what would be their fair value?
    My thoughts: Recently a Chinese biotech company Biogene was the FIRST one to sucessfully list its shares in all 3 exchanges (US, HK and Shanghai STAR) and here are the results wrt their share prices:
    a) Shanghai STAR listing 688235.SS is trading at RMB 132.6 per share
    b) HK listing 6160.HK is trading at HKD 132.5 per share (i.e. 19% discount to China STAR price)
    c) US NYSE listing is trading at $ 225.58 per ADR (which is 13 shares per ADR) i.e. 17% discount to China STAR price)
    If this is any indication or precursor of things to come then we can expect DQ fair value (incl HK listing price if that path is chosen) to be approx 20% discount to China STAR pricing or $166 per ADR. There is a huge reward to reap for investors who are patient enough to let this work it ways through.
    Meanwhile the company continues to add $300M to its coffers every quarter. So I'm holding all the shares I bought since 2018.
  • J
    John
    Load up the shares guys, this could break out anytime soon👀
  • M
    MAGAscrewedMAGI
    Some news on new Baotou entity formation (Note this will seperate from Xinjiang Daqo and will not be subject to US export ban):
    On January 4, Daquan Energy (stock code “688303”) issued an announcement stating that the company held the nineteenth meeting of the second board of directors and the twelfth meeting of the second board of supervisors on December 31, 2021. Approved the "Proposal on Increase of Capital in Wholly Owned Subsidiaries" and agreed to increase the capital of the wholly-owned subsidiary Inner Mongolia Daquan Energy Co., Ltd. ("Inner Mongolia Daquan") with its own or self-raised funds of 9.99 billion yuan for The investment, construction and operation of the first phase of Baotou City's project "100000 tons/year of high-purity polysilicon + 1,000 tons/year of semiconductor polysilicon".

    On October 25, 2021, Inner Mongolia Daquan was formally established with a registered capital of 1 million yuan. On January 4, 2022, Daquan Energy issued an announcement stating that the company decided to adjust the year in order to make full use of the resources and talents of Baotou’s industrial base in order to make full use of the advantages of the resources and talents of Baotou’s industrial base in accordance with the future strategic development plan and the actual construction of fundraising projects. The implementation location and implementation body of the 1,000-ton high-purity semiconductor material project will be invested and constructed by Inner Mongolia Daquan in the Jiuyuan Industrial Park, Baotou, Jiuyuan District, Baotou City. On the same day, Daquan Energy also disclosed an announcement on the capital increase of Daquan Inner Mongolia.

    After the capital increase is completed, the registered capital of Inner Mongolia Daquan will increase from RMB 1 million to RMB 10 billion. Daquan Energy said that through this capital increase, on the one hand, it will expand the production capacity of high-purity polysilicon, further consolidate and expand the company's high-purity polysilicon business market share, and on the other hand, it will further optimize the company's main business structure and realize the company's product structure. The diversification of the company enhances the company’s comprehensive competitive advantage and profitability.
  • s
    shahram
    When Sunray said if anyone can find a stock with better fundamentals than DQ , I was thinking to myself, let’s take a look at some of the important statistics related to this share together...

    DQ's Return On Assets of 23% with Return On Equity of 34% and Profit Margin of 44% is amongst the best returns of the industry for each single one of them.

    With a current Price/Earnings Ratio of 3.2 the valuation of DQ can be described as a unique.

    DQ shows a impressive strong growth in Earnings Per Share by over 600% In the last year. also it shows a strong growth in Earnings Per Share by almost 50% over the last 5 years.

    The Earnings Per Share is expected to very strong grow by almost 25% on average over the next 5 years based on the chartmill analysis.

    DQ shows a strong growth in Revenue by 180% In the last year. when in the past 5 years shows a strong growth in Revenue by growing around 30% on average per year.

    Also DQ is expected to show quite a strong growth by almost 20% in Revenue. In the coming 5 years based on the chartmill analysis.

    Now, according to the above basic information, tell me how much DQ will be worth, especially if the problem of the delisting from US market going to be solved?
  • S
    Sunray
    fun to see that forecast are always revised upwards...
    short sellers be like: dq is going to earn less......boom 1300% earnings growth. what a joke
  • S
    Sunray
    in the last period when the market was down 0,5% we were down 3%...when the market was up 1%, we were up 0,5%
    now something changed. when market is down we are less down, when market goes up we are up bigger.
  • M
    Michael
    DQ ok's for power consumption in new region. This is big news, considering all new solar needs to have electricity consumption 'ok'd by some new 'solar for solar' guideline (certain percentage of all new manufacturing must be a certain percentage from green source).
  • S
    Sunray
    please note that last forecast weren't considering new facilities....adding production capacity like crazy
  • S
    Sunray
    if DQ hits the industry average PE, the stock will be 200$
  • S
    Sunray
    IF anyone can find a stock with better fundamentals pleas tell me. I Can't.
    what a gift
  • v
    viki
    Huge mother downgrade from Daiwa
    They lowered their Target price from 76 to 43 based on collapsing poly prices this year and next year because of increasing capacity.
    They also claimed that DQ is behind its peers in capacity additions.
    That's why DQ collapsed after 2:00 p.m. where it was flat and then went down 4%
  • s
    shahram
    With all the stories we've heard recently about issues for Chinese stocks like $DQ but this price is like a joke considering the company's growth and revenue with such a high profit margin, IMO any price below 100 bucks could be a gift.
  • k
    kmq540
    One of the top clean energy stock, DQ makes money year over year. This should be in the $70s-$80s.
  • M
    MAGAscrewedMAGI
    There is positive news regarding VIE from China per below (but of course US media will spin it negatively):
    Investors are likely to cheer a new rule proposed by China's market watchdog on stock offerings by local companies in offshore markets, potentially removing a major regulatory overhang hobbling the nation's biggest tech stocks, South China Morning Post's Zhang Shidong, Daniel Ren and Coco Feng report. The China Securities Regulatory Commission said it will allow companies to sell shares overseas as long as they register their plans with regulators, according to a draft released on December 24. It also allows mainland-incorporated firms to directly list overseas without the need for a so-called variable-interest entity structure if they meet compliance requirements, the authors note.
  • G
    GuyRitch
    This stock is so fundamentally strong, making profit every quarter and provides outlook even stronger. It's going to make me retire early. No matter, how you look at it, it's a great stock, great company, great potential. Buy the Dip to make shorts RIP.
  • S
    Sunray
    market down we up for now... good sign.