Daqo turns focus to expansions after cashing in on polysilicon sales to record 'best-ever' quarter
- Daqo New Energy recorded a guidance-beating efficiency in the opening quarter of 2022, capitalizing excess supply, lower manufacturing prices and greater than expected average selling prices (ASPs).
The polysilicon provider is now transforming its attention to capitalising over ASPs, which president Longgen Zhang alerted are expected to rise better in May and remain elevated throughout 2022, by advancing with its expansion plan.
Daqo generated 31,383 MT of polysilicon in Q1 2022, marketing 38,839 MT-- a more than three-fold rise on its sales volume in Q4 2021-- as it profited excess stock from the previous quarter.
Production expenses also fell by greater than 28% in the quarter to US$ 10.09/ kg because of a fall in the price of silicon powder, with Daqo additional anticipating these prices to fall as it realises production effectiveness with the increase of its Phase 4B expansion.
While ASPs realised in the quarter fell slightly quarter-on-quarter, down to US$ 32.76/ kg, they stayed greater than anticipated and, courtesy of the raised sales volume, powered Daqo to a best-ever quarterly revenue figure of US$ 1.28 billion.
Gross margin rose to 63.5%, with the company's gross profit reaching US$ 813.6 million.
Daqo kept its full-year manufacturing guidance of 120,000-- 125,000 MT of polysilicon, but Zhang likewise noted that the company was remaining to pursue its expansion approach after effectively ramping its 4B center throughout Q1 2022.
Speaking with analysts after the results disclosure, Zhang validated that field work had begun on the brand-new 100,000 MT polysilicon production facility in Inner Mongolia. It now anticipates all equipment to be on site by August, with initial production to begin in Q1 2023 prior to ramping throughout Q2 2023.
That center is expected to include between 70,000-- 80,000 MT to the company's result in 2023 and also while Zhang would certainly not be drawn onto specific guidance, the chief executive officer stated complete polysilicon output by Daqo in 2023 could land within the 200,000-- 210,000 MT range.
Daqo is also eyeing a brand-new 200,000 MT silicon steel manufacturing facility, an expansion which depends upon various intending approvals as well as the success of capital elevates prepared for this summer. Such a plant can feasibly still commence production in Q1 2023, Zhang claimed.
Zhang likewise validated that while COVID-19 lockdowns in the eastern of China, specifically Shanghai as well as Ningbo, were triggering some logistical issues-- creating a lag between verified deliveries as well as revenue acknowledgment for business-- it has yet to experience any kind of major impact to its manufacturing bases in Xinjiang as well as Inner Mongolia. The business is however preparing for these to take place.