#Shanghai #USA #Daqo New Energy #polysilicon #Solar PV

Daqo New Energy Reports First Quarter 2026 Financial Results

Daqo New Energy Corp. (NYSE: DQ), a prominent manufacturer of high-purity polysilicon for the global solar photovoltaic (PV) industry, disclosed its unaudited financial results for the first quarter ended March 31, 2026. The report outlines several significant highlights and challenges that the company faced during this period.

Financial Highlights

As of the end of the first quarter 2026, Daqo reported cash and short-term investments totaling $2.00 billion, down from $2.27 billion by the end of 2025. The production volume during this quarter stood at 43,402 metric tons (MT) of polysilicon. However, sales saw a drastic drop, with only 4,482 MT sold compared to 38,167 MT in the previous quarter. The average total production cost per kilogram of polysilicon was $5.95, a slight increase from $5.83 in the last quarter of 2025. The average selling price also rose marginally to $5.96 per kilogram, reflecting the continued pressure on pricing from industry overcapacity.

In terms of revenue, Daqo reported a staggering decline to $26.7 million for Q1 2026, down from $221.7 million in the prior quarter. This decrease raised the company's gross loss to $139.4 million, compared to a gross profit of $15.4 million in Q4 2025. Furthermore, the net loss attributable to shareholders reached $88.4 million, leading to a significant loss per American Depositary Share (ADS) of $1.31.

Management Insights

CEO Mr. Xiang Xu provided commentary on the results, stating that the overall sentiment in the solar PV sector remains subdued, impacted by relatively high inventory levels and heightened geopolitical tensions—particularly in the Middle East. He noted that these factors contributed to a slowdown in demand. Daqo’s management decided to refrain from below-cost sales to maintain pricing stability amid these challenges.

Despite these operational hurdles, Mr. Xu emphasized that the company retains a solid balance sheet with zero debt, including $559.4 million in cash as of March 31, 2026. This healthy liquidity is expected to lend Daqo the flexibility needed to navigate through the current downturn in the market.

Operational Strategy

Operationally, the company has maintained a nameplate capacity utilization rate of approximately 57%. The total polysilicon production for the quarter met expectations, exceeding its guidance of 35,000 MT to 40,000 MT. However, ongoing geopolitical risks and a seasonal slowdown in demand due to the Chinese New Year exacerbated the overall market environment.

Looking ahead, Daqo anticipates that its polysilicon production for Q2 2026 will remain within a similar range of 35,000 MT to 40,000 MT, and for the entire year, production is projected to be between 140,000 MT and 170,000 MT.

Market Outlook

The current market conditions reflect a broader trend of seasonal declines, coupled with a significant drop in polysilicon prices post the holidays, which shows signs of stabilizing as market sentiments shift. The management is optimistic about the long-term prospects of the solar sector, leaning on the growing importance of renewable energy for national security and sustainable development.

To enhance their competitive advantage, Daqo is focusing on technological advancements in N-type polysilicon technology and embracing digital transformations to optimize cost structures. The efforts of government and relevant parties aiming to regulate overcapacity and improve market conditions are expected to support a more favorable environment in the near future.

Going forward, Daqo New Energy is positioned strategically to capture upcoming growth opportunities and emerge stronger within the evolving landscape of renewable energy.

Conclusion

Overall, Daqo New Energy's first quarter 2026 results showcase the difficulties confronted by the company amidst significant market changes. However, with a strong financial foundation and strategic maneuvers, the company is well-equipped to face these challenges and capitalize on future opportunities in the fast-evolving solar PV market.