#China #Shanghai #Daqo New Energy #Xinjiang Daqo #polysilicon

Daqo New Energy's Substantial Projected Loss for FY2024

Daqo New Energy Corp., a major player in the high-purity polysilicon manufacturing sector serving the solar photovoltaic industry, announced concerning preliminary estimates from its subsidiary, Xinjiang Daqo New Energy. For the fiscal year ending December 31, 2024, Xinjiang Daqo expects a net loss ranging from RMB 2.6 billion to RMB 3.1 billion. This projection marks a sharp decline from the net profit of RMB 5.8 billion attributed to its shareholders in FY2023.

The stark drop in expected earnings can be attributed to substantial losses associated with inventory impairments and fixed asset write-downs. With approximately 72.4% of Xinjiang Daqo's equity interest held by Daqo New Energy, this news is particularly impactful as Xinjiang Daqo represents a significant portion of the parent company's revenue and net income.

These financial estimates comply with the Generally Accepted Accounting Principles of the People's Republic of China (PRC GAAP). However, it is essential to note that the figures are subject to adjustment pending Xinjiang Daqo's internal financial processes and closing procedures. As Daqo New Energy reports results in U.S. dollars following U.S. GAAP, investors should remain cautious in interpreting these preliminary estimates. They are not indicative of future performance and should not be taken to reflect the full financial condition of Xinjiang Daqo.

Daqo New Energy stresses that the actual results could materially differ from the initial loss estimate, urging investors to remain alert to the inherent risks and uncertainties in projections. Factors such as market demand for photovoltaic products, the global supply and demand dynamics for polysilicon, and regulatory changes significantly influence these financial outcomes.

Founded in 2007, Daqo New Energy has cemented its status as a key player in the polysilicon manufacturing landscape. The company boasts a total nameplate capacity of 305,000 metric tons, positioning itself as one of the lowest-cost producers in the high-purity polysilicon market.

As the industry faces challenges relating to production capacities and alternative technological advancements, Daqo New Energy’s management continues to monitor developments closely. The outlook for Xinjiang Daqo amid these financial projections remains cautious, underscoring the need for strategic adjustments in operations moving forward.

This announcement highlights the critical nature of understanding financial metrics and implications for stakeholders involved in the solar energy sector. Investors are encouraged to keep an eye on further clarifications from Daqo New Energy as they finalize their fiscal reports, which will offer a more comprehensive view of the company’s financial health.

In summary, Daqo New Energy's subsidiary's projections amplify concerns within the industry regarding profitability and highlight the challenges ahead as it navigates through this turbulent financial landscape.