DQ Stock Forecast & Price Target

Daqo New Energy Corp's management anticipates a recovery in polysilicon prices due to expected increased demand from downstream manufacturers, following significant production cuts across the industry as prices fell below production costs. The company reported a decrease in its all-in production costs to $6.19/kg in Q2 2024, indicating improved operational efficiency amid challenging market conditions. Furthermore, management projects a potential price recovery of approximately RMB 2-4/kg in 2024, which would place pricing at or above production costs by mid-2025, reinforcing a positive outlook for the company's financial performance.

Daqo New Energy Corp experienced a significant revenue miss in Q2, with revenues of $220 million falling approximately 40% short of consensus expectations, primarily due to lighter-than-expected shipments and lower average selling prices (ASPs). The company has downgraded its 2024 production guidance by 25%, forecasting production of around 215,000 metric tons compared to prior estimates of 290,000 metric tons, underscoring ongoing challenges in the market. Additionally, a non-cash inventory impairment expense of $108 million further strained the company's financials, contributing to a dramatic reduction in the 2025 revenue estimate by 56% to $1.2 billion, compounded by negative gross margins where ASPs fell below production costs.