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- DAQO had a very strong third quarter that exceeded Company's guidance by a distance.
- DAQO continues to achieve cost levels well below its rivals in the industry and is the best positioned polysilicon manufacturer in the industry today.
- We expect DAQO to outperform its peers by a wide margin for 2015.
- Daqo delivered a solid Q2 with accelerating sales and earnings.
- Company's cost reduction and manufacturing expansion roadmap is intact.
- We see the potential for the stock to double as the Company ramps up its manufacturing capacity by end of Q2 2015.
DAQO New Energy: A New Leader In The Polysilicon Industry
- DAQO New Energy is now a cost leader in the solar polysilicon industry.
- As of Q1 2014, the company is generating EBITDA at an enviable $10 per KG and is likely to continue to earn at that rate for the next several quarters.
- Given the cost advantage, the company has a realistic chance of becoming an industry volume leader by 2017.
Daqo New Energy Slashes Guidance, Shares Hold Steady
Tue, Nov. 18, 11:36 AM
- Under pressure for much of last week, solar stocks are rallying (TAN +4.3%) after SunEdison (SUNE +23.5%) and its TerraForm Power (TERP +29.1%) YieldCo announced they're buying leading wind project developer First Wind for up to $2.4B, and JA Solar (JASO +4%) beat Q3 estimates and upped its full-year cell/module shipment guidance to 3.1GW-3.2GW from 2.9GW-3.1GW.
- Gainers: SCTY +3.9%. SOL +4.5%. TSL +3.7%. YGE +2.7%. JKS +3.4%. HSOL +2.8%. ASTI +6%. DQ +3.2%. RGSE +2.6%.
- SunEdison CEO Ahmad Chatila declares the First Wind deal will double his company's addressable market. Cowen thinks SunEdison "can leverage First Wind’s platform to push into international markets for wind given the potential expiration of the production tax credit for U.S. wind projects."
- Along with its results/guidance, JA announced a $90M buyback; it's good for repurchasing 23% of shares at current levels, if fully used. JA's Q3 gross margin was 15%, -20 bps Q/Q but +370 bps Y/Y. Cell/module shipments rose 15.2% Q/Q and 57% Y/Y to 500.2MW.
Thu, Nov. 13, 1:58 PM
- Solar stocks can't catch a break this week. Down on Tuesday following Vivnt Solar's weak results and guidance, and down yesterday in the wake of Canadian Solar's numbers, they're off today after SunPower provided light 2015 guidance.
- Notable decliners: FSLR -4.3%. SUNE -5%. CSIQ -6.9%. JKS -5%. SOL -4.7%. JASO -3.2%. VSLR -3.7%. SOL -4.7%. CSUN -7.9%.
- Chinese polysilicon maker Daqo (DQ -10.1%), which posted mixed Q3 results this morning, is selling off after opening higher.
- Is a lot of bad news priced in? The Guggenheim Solar ETF (TAN -1.6%) is now down 33% from a March high of $51.07, and not far from a 52-week low of $32.23.
Tue, Nov. 11, 12:15 PM
- Newly-public Vivint Solar (VSLR -21.6%) has nosedived after missing Q3 EPS estimates and guiding for Q4 revenue of $5.5M-$6.5M, below a $7.3M consensus. Installations are expected to fall to 45MW-47MW from Q3's 49MW.
- Rivals SolarCity (SCTY -3%) and SunPower (SPWR -3.2%) are following Vivint lower, as are several other solar names. RGSE -6.2%. ENPH -5.7%. CSIQ -2.5%. JKS -2.2%. DQ -4.1%. CSUN -2.7%.
- Solar ETFs: KWT, TAN
Mon, Oct. 13, 4:09 PM
- Solar and fuel cell companies are among the biggest decliners on a day that saw NYMEX crude oil prices fall below $85/barrel (they're now slightly above), and Reuters report the Saudi government "will accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two." The Nasdaq as a whole finished down 1.4%.
- Of note: Oil only accounts for 1% of U.S. electricity production, and also a small percentage of electricity output in many other large economies.
- Solar decliners: SUNE -10.7%. FSLR -5.9%. SCTY -9.7%. DQ -9.4%. CSIQ -8.1%.JASO -7.7%. SOL -8.6%. TERP -7.5%. JKS -6.7%. CSUN -5.9%. VSLR -6.3%. TSL -8.7%. YGE -5%.
- Fuel cell decliners: FCEL -6%. PLUG -4.7%. BLDP -7.4%.
- Solar ETFs: KWT, TAN
Mon, Sep. 22, 1:45 PM
- High-beta tech stocks are selling off hard as the Nasdaq registers a 1.3% decline. The selling is broad-based, with Internet, solar, and enterprise tech stocks all well-represented among the ranks of major decliners.
- Major Internet decliners: BIDU -4.7%. ANGI -7%. YELP -5.9%. AWAY -5.1%. CHGG -5.9%. GRUB -5.8%. P -5.2%. Z -4.6%. TRLA -4.8%. ATHM -7.9%. BITA -7%. DANG -5.9%. WB -5.3%.
- Solar: FSLR -4.5%. SCTY -7.5%. SPWR -4.5%. DQ -7.6%. JKS -5.5%. ASTI -6.3%. ENPH -5.5%. CSIQ -4.8%.
- Enterprise: WDAY -5.4%. GIMO -6.7%. VMEM -7.7%. IMPV -4.8%. MKTO -4.9%. SPRT -5.1%. CSOD -5.5%.
- Others: HIMX -4.6%. SIGM -5.6%. WATT -9.7%. CYNI -5.3%. ADNC -5.7%. PXLW -5%. SWIR -5.8%. MITK -6%. OCLR -6%.
Thu, Sep. 4, 1:51 PM
- Making good on an August Bloomberg report, China's National Energy Administration (NEA) has called on local governments to identify and support distributed solar projects in their realms.
- As previously reported, extra subsidies will be encouraged for rural and government projects, public infrastructure installations will be promoted, and financial firms have been told to offer discounted loans.
- The NEA is trying to hit an 8GW 2014 distributed solar installation target in spite of a slow start to the year. Its target for utility-scale projects stands at 6GW.
- Several Chinese solar stocks are rallying, as are a few non-Chinese names. YGE +5.1%. CSIQ +3.6%. JASO +3.8%. TSL +2.3%. SOL +2.1%. HSOL +5.2%. DQ +4.7%. ENPH +6.6%. ASTI +6.1%. RGSE +2.8%. SolarCity (SCTY +5.1%) is up after announcing plans to open 20 new operations centers.
- Solar ETFs: KWT, TAN
Fri, Aug. 15, 9:41 AM
- Daqo (NYSE:DQ) shipped 1,436MT of polysilicon in Q2, up from 1,391MT in Q1 and 975MT a year ago. The company expects Q3 shipments of 1,450MT-1,500MT, and forecasts full-year production will be close to a nameplate capacity of 6,150MT.
- Average cash cost fell to $11.48/kg from $11.75 in Q1 and $12.21 a year ago, and average production cost fell to $14.13/kg from $14.49 and $17.64. For the full year, Daqo is respectively aiming for average cash and production costs of $11.30/kg and $14/kg.
- Gross margin rose to 30.9% from 30.2% in Q1 and -3.9% a year ago. ASP rose to $22.04 from Q1's $21.63. SG&A spend totaled $1.5M, and R&D $200K.
- Daqo is now aiming to grow capacity to 12,150MT by Q2 2015; the company was previously targeting the end of 2014. Construction work for the expansion of its Xinjiang polysilicon plant is expected to finish by the end of November.
- Daqo had $77.7M in cash at the end of Q2, and $253.4M in borrowings.
- Q2 results, PR
Tue, Aug. 5, 11:57 AM
- Bloomberg reports China's National Energy Administration (NEA) might soon announce policies calling on local planners to support more distributed solar projects - specifically, projects in industrial zones, and for companies with buildings sporting large rooftops.
- Among others things, local governments will be encouraged to offer more distributed solar subsidies, and to promote installations on public infrastructure. Financial firms will be urged to offer discounted loans, and to create solar investment funds.
- China is aiming for 8GW of 2014 distributed solar installations (to go with 6GW of utility-scale installations), but there have been doubts the target will be hit following a slow start to the year. Deutsche argued in May 2GW could be a more realistic distributed target.
- Chinese solar names are up strongly. U.S. giant First Solar reports after the bell. TSL +8.4%. CSUN +7.6%. JKS +8.3%. SOL +6.7%. CSIQ +6.3%. JASO +5.7%. HSOL +4.8%. YGE +4.8%. DQ +4.1%. YGE +4.8%.
- Solar ETFs: TAN, KWT
Tue, Jul. 8, 10:08 AM
- OTR Global reports the Chinese government is thinking of cutting its 2014 solar installation targets due to credit availability issues.
- The government previously set a 2014 installation target of 14GW (8GW distributed systems, 6GW utility). Deutsche has already expressed doubts about its feasibility following a soft Q1.
- U.S. and Japanese shipments have been faring better, but new DoC tariffs could take a toll on near-term Chinese sales to the former market.
- Solar stocks are lower amid a market selloff: YGE -5.3%. CSIQ -4.7%. SCTY -3.5%. FSLR -3.5%. SPWR -3.2%. JKS -4.6%. HSOL -4.4%. SOL -3.5%. DQ -3.4%. CSUN -5%. TSL -2.7%. ENPH -3%.
- Solar ETFs: KWT, TAN
- Update: OTR's note comes amid a report the Chinese government plans to hike its subsidies for power sales stemming from rooftop solar projects by up to 55%, putting their revenue (on a per-kWh basis) on par with ground-mounted projects.
Mon, Jun. 30, 10:48 AM
- Qiangmin Zhou, Daqo's (DQ +3.1%) COO before resigning in April 2013 for personal reasons, has rejoined the company and is back at his old job.
- Zhou's return comes as Daqo gets set to aggressively ramp its polysilicon output. The company wants to eventually grow its production capacity to 25,000MT/year, up from just 6,150MT/year at the end of Q1.
Tue, Jun. 17, 12:55 PM
- SolarCity has announced plans to build a 1GW+ module plant in NY, and to follow it up with one or more much larger facilities. Notably, the company declares (in spite of a current capacity glut) it needs to build the plants to meet long-term solar demand.
- Yingli missed Q1 estimates, but reported a healthy gross margin (thanks in part to strong Japanese sales) and reiterated full-year guidance.
- Also: Goldman is out with a bullish note, predicting rooftop solar installations will post a 40% CAGR through 2016.
- Gainers: FSLR +2.8%. SPWR +4.2%. SUNE +4.4%. JASO +8.2%. SOL +7.5%. JKS +6.5%. CSIQ +7.4%. DQ +4.2%. ASTI +3.9%. HSOL +6.9%. TSL +5.6%. ENPH +3.5%. CSUN +3.7%. RGSE +11.3% (announced a new Hawaiian deal).
- SolarCity's plans are a positive for equipment vendors GT Advanced (GTAT +1.5%) and Veeco (VECO +1.6%), each of which has seen its solar orders plummet thanks to the capacity glut.
- Solar ETFs: KWT, TAN
- Yesterday: Solar stocks rally; Deutsche upbeat on YieldCo potential
Thu, May. 29, 2:45 PM
- SunEdison has filed an S-1 for its anticipated solar project spinoff. The spinoff, named TerraForm Power, will own a slew of SunEdison-built solar projects, while generating revenue (and distributing related cash flows) from electricity sale agreements.
- The IPO might pave the way for other companies with sizable downstream project portfolios, such as First Solar (FSLR +2.8%), JinkoSolar (JKS +9.7%), and Trina (TSL +8.2%), to do spinoffs of their own. SunEdison's move comes after SolarCity (SCTY +5.6%) twice raised funds by selling solar asset-backed notes.
- Solar stocks are following SunEdison higher (TAN +2.6%). In addition to the aforementioned companies, gainers include SunPower (SPWR +2.5%), Yingli (YGE +3.5%), Canadian Solar (CSIQ +4.6%), and Daqo (DQ +1.5%).
Wed, May. 21, 11:36 AM
- Though Trina's Q1 module shipments were only in-line with the company's revised guidance, it's expecting Q2 shipments will rise 70%-81% Q/Q.
- Volatile solar stocks are responding well (TAN +3.8%) to Trina's outlook, which follows a more subdued Q2 growth forecast from Canadian Solar (CSIQ +3.6%) last Friday, and comes amid general concerns about Chinese growth.
- Notable gainers (besides Trina): CSUN +14.1%. SOL +8.7%. JKS +6.6%. YGE +5.9%. DQ +5.7%. JASO +4.9%. ASTI +6.8%. ENPH +3.9%. SUNE +2.7%.
- NPD Solarbuzz recently noted the world's top-20 module suppliers are collectively forecasting 30%+ 2014 shipment growth. The firm added the outlooks imply 2014 end-market demand will be near 50GW.
Thu, May. 15, 5:41 PM
Thu, May. 15, 2:43 PM
- Chinese solar demand fell to just 1GW in Q1 from 6GW in seasonally strong Q4, writes Deutsche, which was upbeat about local solar activity at the start of the year.
- Deutsche believes Q2 installations will be in a 3GW-4GW range, and (following talks with Chinese solar firms) and thinks 2GW is a more realistic target for 2014 Chinese distributed solar installations than the government's 8GW target. A 14GW target has been set for total installations (8GW distributed, 6GW utility)
- The Deutsche report comes a couple days after Bloomberg reported the Indian government has deemed foreign solar firms (inc. U.S. and Chinese companies) guilty of dumping products, a move that raises the possibility of tariffs. Though still much smaller than China's solar market, the Indian market has been growing quickly.
- Solar stocks (TAN -3.6%) are underperforming amid a market selloff. Notable decliners: JKS -7.5%. SCTY -6.1%. TSL -5.4%. CSIQ -5.3%. YGE -4.9%. CSUN -4.7%.
- Daqo (DQ -9.8%) is especially hard-hit after pricing its 2M-share secondary offering (previous) at $29.
Tue, May. 13, 11:40 AM
- Along with its Q1 numbers, Daqo (DQ -7.4%) has announced it's selling 2M shares to help pay for expansion/tech upgrades. At current levels, the offering would raise $70M, and increase Daqo's share count by 28%. Underwriters have a 300K-share overallotment option.
- Polysilicon shipments rose to 1,391MT in Q1 from 1,271MT in Q4 and 706MT a year ago. Shipments are expected to grow to 1,375MT-1,400MT in Q2.
- Annual production capacity is currently at 6,150MT. Daqo is aiming to eventually grow capacity to 25,000MT. The company asserts its polysilicon cash cost (now $11.8/kg) and production cost ($14.5/kg) are among the lowest in the industry.
- Gross margin was 30.2%, a marked improvement from Q4's 18.5% and the year-ago period's -22.3%. Excluding a $1.8M reversal of doubtful accounts, SG&A spend fell to $3.3M from $4M in Q4 and $4.1M a year ago. R&D spend was at $0.9M vs. $1.1M and $0.4M.
- Q1 results, PR
DQ vs. ETF Alternatives
Daqo New Energy Corp is polysilicon manufacturer based in China. It manufactures and sells polysilicon to photovoltaic product manufacturers, who further process its polysilicon into ingots, wafers, cells and modules for solar power solutions.
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