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Daqo New Energy Q1 2025 Earnings Report
Daqo New Energy reported a decrease in revenue and continued net and operating losses in Q1 2025, while maintaining strong liquidity.
Key Takeaways
Daqo New Energy experienced a challenging first quarter in 2025, with revenues decreasing to $123.9 million and a net loss of $71.8 million, primarily due to lower polysilicon sales volume and higher production costs. Despite the losses, the company maintained a strong cash balance and liquidity.
Total cash, short-term investments, bank notes receivable, and fixed term bank deposit balance was $2.15 billion, indicating strong liquidity.
Polysilicon production volume decreased to 24,810 MT, and sales volume was 28,008 MT, exceeding production to reduce inventory.
The company reported a gross loss of $81.5 million and a net loss attributable to shareholders of $71.8 million.
Polysilicon average total production cost increased to $7.57/kg, and average cash cost increased to $5.31/kg.
Daqo New Energy
Daqo New Energy
Forward Guidance
Daqo New Energy expects polysilicon production volume to be between 25,000 MT and 28,000 MT in Q2 2025, and between 110,000 MT and 140,000 MT for the full year 2025, despite ongoing market challenges.
Positive Outlook
- The company expects to maintain its position as one of the world's lowest-cost producers with high-quality N-type polysilicon.
- The solar PV industry continues to show promising prospects with robust year-over-year growth in China's new solar PV installations.
- Solar power is expected to remain a key driver of global energy transition and sustainable development.
- The company aims to strengthen its competitive edge by enhancing N-type technology and optimizing cost structure through digital transformation and AI adoption.
- Management believes current low prices and market downturn will eventually lead to a healthier and more sustainable industry by eliminating overcapacity.
Challenges Ahead
- The solar PV industry continues to face significant challenges, including overcapacity and polysilicon prices below cash cost levels.
- The company expects to operate at a reduced utilization rate due to challenging market conditions and weak selling prices.
- Uncertainties around future electricity prices and revenue generation have emerged due to the transition to a market-based pricing mechanism for renewable energy.
- Polysilicon prices remained stable but low throughout the quarter, and price increases have not fully materialized in the polysilicon segment.
- Ongoing losses, poor profitability, and cash burn are forcing less competitive players to exit the market.