Daqo New Energy Corp (NYSE: DQ) stock plummeted 5.21% in the pre-market session on Friday, following the release of its Q4 2024 earnings report that revealed the significant impact of oversupply in the solar PV industry and resulting impairment charges.
The polysilicon manufacturer reported a sharp decline in average selling prices (ASPs), falling from $11.48 per kilogram in 2023 to $5.66 per kilogram in 2024. This price erosion, coupled with excess capacity in the industry, led to a negative gross margin of 33% in Q4 2024, compared to 18.3% in Q4 2023.
Consequently, Daqo New Energy reported a net loss of $180 million in Q4 2024, a significant turnaround from the net income of $53.3 million in Q4 2023. The company also recorded a non-cash provision for inventory impairment due to ASPs falling below production costs, as well as a $175.6 million non-cash impairment charge related to older polysilicon production lines.
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