• Revenue: $195.4 million in Q4 2024, down from $198.5 million in Q3 2024 and $476.3 million in Q4 2023.
• Gross Margin: Negative 33% in Q4 2024, compared to negative 30.5% in Q3 2024 and 18.3% in Q4 2023.
• Net Loss: $180 million in Q4 2024, compared to $60 million in Q3 2024 and net income of $53.3 million in Q4 2023.
• Loss per ADS: $2.71 in Q4 2024, compared to $0.92 in Q3 2024 and income per ADS of $0.76 in Q4 2023.
• Adjusted Net Loss: $170.6 million in Q4 2024, compared to $39.4 million in Q3 2024 and adjusted net income of $74 million in Q4 2023.
• EBITDA: Negative $236.5 million in Q4 2024, compared to negative $34 million in Q3 2024 and $128.2 million in Q4 2023.
• Cash and Cash Equivalents: $1.038 billion as of December 31, 2024.
• Polysilicon Production Volume: 34,236 metric tons in Q4 2024.
• Sales Volume: 42,191 metric tons in Q4 2024.
• Average Selling Price (ASP): Decreased to $5.66 per kilogram in 2024 from $11.48 per kilogram in 2023.
• Cash Costs: Declined to $5.04 per kilogram in Q4 2024, a 6% decrease from Q3 2024.
• Inventory Impairment: Non-cash provision due to ASPs falling below production costs.
• Fixed Asset Impairment: $175.6 million charge related to older polysilicon production lines in Q4 2024.

• Warning! GuruFocus has detected 3 Warning Signs with DQ.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Daqo New Energy Corp (NYSE:DQ) achieved an annual polysilicon production volume of 200,568 metric tons in 2024, meeting their guidance.
• The company increased its N-type product mix significantly from 40% in 2023 to 70% in 2024.
• Daqo New Energy Corp (NYSE:DQ) maintains a strong balance sheet with a cash balance of $1 billion and a total of $2.2 billion in quick assets.
• The company has been proactive in managing production to reduce cash burn amid challenging market conditions.
• Daqo New Energy Corp (NYSE:DQ) is positioned as one of the world's lowest-cost producers with high-quality products, no financial debt, and plans to leverage digital transformation and AI for cost optimization.

Negative Points

• The company faced a challenging market environment with excess capacity in the solar PV industry, leading to sharp price declines.
• Average selling prices (ASPs) for polysilicon decreased significantly from $11.48 per kilogram in 2023 to $5.66 per kilogram in 2024.
• Daqo New Energy Corp (NYSE:DQ) reported a non-cash provision for inventory impairment and a negative gross margin of 20.7% for 2024.
• The company recorded a non-cash long-lived assets impairment charge of $175.6 million related to older polysilicon production lines.
• Revenues decreased to $1.03 billion in 2024 from $2.3 billion in 2023, primarily due to lower ASPs and sales volumes.

Q & A Highlights

Q: Can you provide a breakdown of cash spending in the fourth quarter of last year? A: Ming Yang, CFO: Approximately $80 million was related to operations, $40 million to CapEx, and the remaining was due to changes in balance sheet items between operating assets and liabilities.

Q: What is the pricing outlook for the next two quarters? A: Anita Zhu, Deputy CEO: We expect polysilicon prices to increase in the short term, likely until the end of the second quarter of 2025, due to industry self-regulation discussions and reduced production. However, demand in the second half of 2025 may be more challenging without new application scenarios or business models.

Q: What are your thoughts on potential policy interventions to suppress industry capacity? A: Ming Yang, CFO: The National Energy Administration and other bodies are considering policies to address industry losses. These may include production quotas or retiring inefficient capacity, but specifics are still being discussed.

Q: What is the current utilization rate, and will you consider shutting down any facilities? A: Anita Zhu, Deputy CEO: We are operating both Xinjiang and Inner Mongolia facilities to fulfill social responsibilities and maintain employment. We may lower utilization rates further if demand worsens, but this will depend on balancing costs and other factors.

Q: What is your view on the demand side, especially with changes in the feed-in tariff outlook? A: Anita Zhu, Deputy CEO: Global demand is expected to be stable, with Chinas solar installations ranging from 250 to 300 gigawatts. However, market-oriented reforms pose uncertainties, and international demand will likely come from emerging markets like Latin America and the Middle East.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.