Daqo New Energy Corp. (DQ), a leading manufacturer of high-purity polysilicon for the solar photovoltaic industry, plunged over 5% in pre-market trading on Thursday after reporting a substantial loss in the fourth quarter of 2024 due to deteriorating market conditions and oversupply in the solar industry.

The company reported a net loss attributable to shareholders of $180.2 million, or $2.71 per American Depositary Share (ADS), compared to a profit of $53.3 million, or $0.76 per ADS, in the same period last year. The massive loss was primarily driven by lower polysilicon average selling prices (ASPs), non-cash impairment charges related to long-lived assets, and lower utilization rates amid excess industry capacity.

Daqo's revenue for the quarter declined to $195.4 million, down from $476.3 million in Q4 2023, due to a significant drop in polysilicon ASPs and lower sales volumes. The company's gross margin was a negative 33.4% in the fourth quarter, reflecting the challenging pricing environment and inventory impairment charges.

Throughout 2024, Daqo implemented measures to curtail polysilicon production and reduce cash burn in response to the industry downturn. However, the company continued to face pricing pressures and oversupply, leading to an annual loss of $345.2 million, compared to a profit of $429.5 million in 2023. Despite the losses, Daqo maintained a solid financial position with $2.2 billion in cash, short-term investments, and fixed-term deposits at the end of 2024.

Looking ahead, Daqo plans to maintain a relatively low utilization rate in 2025, with expected full-year production of 110,000 to 140,000 metric tons of polysilicon, until a turning point emerges in the sector. However, the management remains optimistic about the long-term prospects of the solar industry, driven by the global energy transition and sustainable development goals.