(Yicai) Oct. 29 -- Chinese polysilicon supplier Daqo New Energy has achieved profitability in the third quarter of the year, after the policies introduced in the photovoltaic industry to tackle involution-style competition took effect, prompting a rebound in prices.

Net profit reached CNY73.5 million (USD10.4 million) in the three months ended Sept. 30, compared with a net loss of CNY429 million (USD60.4 million) a year earlier, the Xinjiang Uygur Autonomous Region-based firm announced on Oct. 27. Revenue jumped 25 percent to CNY1.8 billion (USD250 million).

Daqo [SHA: 688303] surged 7.1 percent to CNY30.45 (USD4.29) in Shanghai today, after gaining 3 percent both yesterday and on Oct. 27. The company's New York-listed stock [NYSE: DQ] fell 1 percent to USD29.43 yesterday, after climbing 14.1 percent on Oct. 27.

Under the guidance of anti-involution policies, the polysilicon industry experienced a price recovery in the third quarter, Daqo noted, adding that it promptly adjusted its production and sales strategies in response to market dynamics, successfully capitalizing on the price rebound, achieving revenue growth, and turning losses into profits.

In the first half, polysilicon prices plunged due to excess capacity, putting great pressure on manufacturers. Daqo reported a net loss of CNY1.1 billion in the first half, with revenue plunging 68 percent to CNY1.5 billion, according to the firm's semiannual earnings report.

In August, six government departments, including the National Development and Reform Commission and the State Administration for Market Regulation, held a joint symposium for entrepreneurs to regulate the competitive order of the PV industry. They called for strengthening capacity control and curbing disorderly competition, and prohibited the sale of products at prices below cost.

With the support of regulatory authorities, polysilicon prices entered a recovery trend. According to Daqo, the average selling price of polysilicon increased nearly 37 percent to CNY41.49 per kilogram in the third quarter from CNY30.33 per kg in the second quarter.

Daqo has actively controlled its production capacity according to the regulatory requirements. In the first three quarters of the year, the company lowered its polysilicon production 52 percent to 81,471 tons from a year earlier.

In the fourth quarter, production is expected to remain between 39,500 and 42,500 tons, Daqo predicted.

Daqo's main competitor Tongwei Group, China's largest polysilicon producer, did not achieve profitability in the third quarter. However, its net loss narrowed 63 percent to CNY315 million (USD44.4 million) in the period from a year earlier, while revenue slid 1.6 percent to CNY24.1 billion (USD3.4 billion).

Editors: Dou Shicong, Futura Costaglione