Daqo enjoys record Q2 profits on strong demand

Chinese solar-grade polysilicon producer Daqo New Energy Corp (NYSE:DQ) on Wednesday said it delivered record production volume and profits in the second quarter of 2022, with net income attributable to Daqo shareholders surging 170% year-over-year to USD 628 million (EUR 616m).

Gross profit and gross margin improved sequentially mainly as a result of a decline in the company’s polysilicon production cost on higher manufacturing efficiency and better economy of scale.

There was some decline in sales volume between the first and second quarter but the polysilicon average selling price (ASP) climbed to USD 33.08 per kg from USD 32.76 per kg in the first quarter of 2022.

The company operated at full capacity in the quarter and produced 35,326 tonnes of polysilicon. Reflecting maintenance plans, third-quarter polysilicon production volume is seen at 31,000 to 32,000 tonnes. The forecast for annual production was at the same time increased to 129,000-132,000 tonnes from 120,000-125,000 tonnes previously.

Daqo also said that its Phase 5A polysilicon project of 100,000 tonnes currently under construction in Inner Mongolia is expected to be completed by the second quarter of 2023.

Chief executive Longgen Zhang highlighted the strong solar market demand.

“According to data from the China Photovoltaic Industry Association, China's production of polysilicon and solar modules in the first half of 2022 was approximately 365,000 MT and 123.6 GW, respectively, an increase of 53.4% and 54.1% compared to the same period of 2021,” he said. “Despite rising ASPs, during the first half, solar PV installations in China reached 30.9 GW, and China exported 78.6 GW of solar modules, up 137% and 74%, respectively, over the same period of 2021,” the CEO added.

(USD 1 = EUR 0.981)

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