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$DQ Poly market panic?!?! A quick mini🧵
Polysilicon (and all of #solar as a mfg industry) is a bullwhip-cycle commodity industry.
Right now, poly is down, making modules even cheaper - which is wild, because solar is already the cheapest utility-scale option.
Polysilicon (and all of #solar as a mfg industry) is a bullwhip-cycle commodity industry.
Right now, poly is down, making modules even cheaper - which is wild, because solar is already the cheapest utility-scale option.
2/n $DQ
This massive #LCOE superiority is going to further propel demand for panels.
At which time poly goes up again.
While poly dips towards Daqo's cost level ($7.55 total cash cost last Q), other mfgs are under water.
This massive #LCOE superiority is going to further propel demand for panels.
At which time poly goes up again.
While poly dips towards Daqo's cost level ($7.55 total cash cost last Q), other mfgs are under water.
3/n
$DQ will always be last man standing - the last factory operating - because they are cost kings.
Meanwhile, they moved early when market bubbled, reinvesting cash in new capacity.
Now that market is back to normal, the competition will not be able scale similarly.
$DQ will always be last man standing - the last factory operating - because they are cost kings.
Meanwhile, they moved early when market bubbled, reinvesting cash in new capacity.
Now that market is back to normal, the competition will not be able scale similarly.
4/n
So we have $DQ, ready to strangle competition if the poly market price dips, and ready to pounce on all available margins as soon as demand recovers.
They are nearly debt-free and will soon (Phase 5B)have just over 300,000,000 kg/year factory output.
What does that mean?
So we have $DQ, ready to strangle competition if the poly market price dips, and ready to pounce on all available margins as soon as demand recovers.
They are nearly debt-free and will soon (Phase 5B)have just over 300,000,000 kg/year factory output.
What does that mean?
5/n
I see poly market stabilizing around $14/kg.
Simple math, folks.
$14 - $7.55 ($DQ total cost) = $6.45/kg
x 300,000,000 = $1.9 bn profit
PER YEAR. CASH.
72.7% of which is attributable to $DQ.
I see poly market stabilizing around $14/kg.
Simple math, folks.
$14 - $7.55 ($DQ total cost) = $6.45/kg
x 300,000,000 = $1.9 bn profit
PER YEAR. CASH.
72.7% of which is attributable to $DQ.
6/n
$DQ has already shown willingness to distribute earnings in form of buybacks.
Dividends are next step.
In the above scenario, EPS is $18.49. Per year. Cash.
Daqo is ready to reap rewards of investment over past years, and distribute earnings to shareholders.
#BullishAF
$DQ has already shown willingness to distribute earnings in form of buybacks.
Dividends are next step.
In the above scenario, EPS is $18.49. Per year. Cash.
Daqo is ready to reap rewards of investment over past years, and distribute earnings to shareholders.
#BullishAF
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