“I have been in the solar industry for over a decade and the prospects for the solar industry have never been brighter.”
That was the verdict of Longgen Zhang, CEO of Chinese polysilicon producer Daqo New Energy as he presented his company's unaudited fourth-quarter and full-year figures this week.
Zhang spoke of the prospect of “tremendous growth over the next few years without the need for government subsidies,” and the reasons for such unabashed bullishness were laid out in a set of almost flawless numbers presented by a company which manufactures the basic ingredient of solar panels.
Records
Daqo manufactured a record 21,008 metric tons (MT) of polysilicon in the final three months of 2020 and bumper sales, particularly in November and December, meant the business posted a new landmark in that respect too, shifting 23,186 MT to customers in the October-to-December window.
Those record volumes come on the back of an aggressive production capacity expansion program and, with Zhang predicting demand for monosilicon-grade poly will mean “the supply of polysilicon will continue to be very tight throughout the year, given very limited additional polysilicon supply this year,” that strategy shows no sign of stopping.
With Daqo's main Xinjiang subsidiary preparing for an IPO on the science and tech Star market of the Shanghai Stock Exchange, the CEO said the funds raised would finance ‘Phase 4B' of the production capacity plans to bring another 35,000 MT of annual manufacturing capacity into full service by April next year. Construction of the new lines is set to start next week, Zhang indicated, with the building to be finished this year.
With the trade numbers all pointing in the right direction–even though silicon raw material costs rose between the third and fourth quarters and year-round average selling prices dipped slightly from 2019–Daqo has already started paying down the bill run up by its new production facilities.
Total borrowings sat at $194 million at the end of the year, down from $271 million at the end of September and $280 million at the close of 2019, and the company had $118 million in the bank at the end of the year, up from $110 million at the end of September and $115 million on December 31, 2019.
Revenue
Daqo was able to keep the bank manager happy on the back of those record sales volumes and rising average selling prices during last year which added up to revenue of $248 million during the fourth quarter and $676 million for the full year. Those figures compare with $119 million and $350 million, respectively, for the same periods of 2019.
The resulting net income for shareholders was $73 million for October-to-December and $129 million for the 12 months, up from $20 million and $29.5 million, respectively.
With Daqo having manufactured 77,288 MT of poly last year and sold 74,812 MT–up from 41,556 MT and 38,110 MT a year earlier–the business said it expects to produce 19,500-20,500 MT in the current three-month window and to sell 20-21,000 MT of it, as part of an anticipated 2021 production run of 80-81,000 MT.
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