on the evening of January 30, daquan energy (688303), one of the polysilicon leaders, released its 2023 performance forecast. under the background of the general sharp price reduction of photovoltaic industry chain products represented by polysilicon, the trend of leading manufacturers has attracted much attention.

Daquan Energy expects 2023 net profit of 5.7 billion yuan to 5.8 billion yuan, down 69.67 to 70.19 percent year-on-year, and non-net profit of 5.72 billion yuan to 5.82 billion yuan, down 69.61 to 70.13 percent year-on-year. Data show that in 2022, Daquan Energy's net profit will be 19.12 billion yuan and non-net profit will be 19.15 billion yuan.

when it comes to the reasons for the performance changes, daqo energy said that in 2022, with the support of the national "double carbon" strategy, the photovoltaic industry will expand production at a faster pace. although polysilicon production is also accelerating, the expansion speed is relatively lagging due to factors such as high technical threshold, large capital investment, long construction period and difficult operation and management. Upstream and downstream capacity mismatch, supply and demand changes, so that the price of polysilicon in 2022 is basically at a high level, attracting a large number of investors to join the construction of polysilicon projects.

In 2023, the cyclical inventory consumption in the industry superimposed on the impact of the release of new production capacity, the domestic supply of polysilicon increased significantly, resulting in a rapid decline in polysilicon prices.

Daquan Energy said that during the reporting period, although the company continued to increase sales efforts, actively digested product inventory, and all production bases achieved full sales, the company's performance still dropped significantly compared with the same period last year due to the decline in polysilicon prices.

Data shows that in the first three quarters of 2023, Daquan Energy's net profit was 5.115 billion yuan. Compared with the data in the performance forecast, the company's net profit range in the fourth quarter of 2023 was 0.585 billion yuan -0.685 billion yuan.

regarding the price of polysilicon, data from the silicon branch of China nonferrous metals industry association last week showed that the transaction price range of n-type silicon was 70000 yuan/ton -73000 yuan/ton, with an average price of 70900 yuan/ton, up 1.87 from the previous month. The transaction price range of single crystal compact materials is 55000 yuan/ton -64000 yuan/ton, with an average price of 58600 yuan/ton, up 0.17 from the previous month.

silicon industry branch pointed out that from the cost side, although the recent industrial silicon prices continue to decline, to a certain extent to ease the cost pressure of silicon enterprises, but the current second-line manufacturers price has been close to the full cost, profit margins are extremely limited. The agency speculated that the price of silicon materials can maintain a steady upward trend before the Spring Festival, and the price situation after the festival needs to pay attention to the replenishment and construction of downstream enterprises.

It is worth mentioning that in the context of the rapid rise in polysilicon production capacity, Daqo Energy is still ready to expand production against the trend. In mid-December 2023, Daquan Energy announced that the Company had signed the "Daquan Energy Silicon-based New Materials Industrial Park Project Investment Agreement" with the Shihezi Municipal Government, the Shihezi Economic Development Zone Management Committee and Tianfu Energy, agreeing that the Company would invest in the construction of the "Daquan Energy Silicon-based New Materials Industrial Park Project" in Shihezi City, Xinjiang ".

it is reported that the project is constructed in accordance with the method of "overall planning and phased implementation". the first phase of the project plans to invest 7.5 billion yuan to build a project with an annual output of 50000 tons of polysilicon and supporting 150000 tons of industrial silicon and 1.2 million round silicon cores. The second phase plans to invest 7.5 billion yuan to build a project with an annual output of 50000 tons of polysilicon and supporting 150000 tons of industrial silicon and 1 million round silicon cores.

At that time, Daquan Energy stated that the company's investment in the construction of this project in Shihezi City aims to make full use of Shihezi's comprehensive advantages in industrial base talents and resources, business environment, and industrial policy support. On the one hand, the investment and construction of this project will help to further optimize the company's main business structure, realize the diversification of the company's product structure, and enhance the company's comprehensive competitive advantage and profitability. On the other hand, it will expand the production capacity of high-purity polysilicon and drive the increase of product output. Further consolidate and expand the market share of the company's high-purity polysilicon business.

at the previous performance presentation meeting, sun yicheng, director of daqo energy and dong mi, said that the company mainly had the following countermeasures to deal with the downward cycle of the industry, the oversupply of overall production capacity and the decline of prices. one is to improve the cost performance of existing products in the short term, mainly including reducing product costs and improving product quality through specialization, digitization, upstream integration, scale and healthy asset and liability management; the second is to integrate the production experience and skills of the team in the medium and long term, and constantly develop low-cost, high-quality new products that meet the needs of the market, such as N-type products and semiconductor-grade silicon materials.

Sun Yicheng said that Daquan Energy has the confidence, ability and plan to better and flexibly cope with the silicon price adjustment, smoothly pass through this cycle, and further enhance the competitiveness of the company's industry.

It is worth mentioning that in the cycle of overcapacity and price decline, many polysilicon projects have been delayed and put into production, and Daquan Energy has not been spared. Previously, the company planned to build a 200000-ton/year high-purity polysilicon project and a 21000-ton/year semiconductor polysilicon project in Baotou, Inner Mongolia. The second phase of the project with an annual output of 100000 tons of high-purity polysilicon was originally planned to be completed and put into operation by the end of 2023.

At the end of October 2023, Daquan Energy announced that due to objective factors such as the market environment, the relationship between supply and demand, and the company's actual construction progress, the overall implementation cycle of the above-mentioned phase II high-purity polysilicon project with an annual output of 100000 tons has slowed down, resulting in implementation The progress is lagging behind the original plan. After careful evaluation and comprehensive consideration, the company decided to postpone the date when the second phase of the 100000-ton high-purity polysilicon project reached the expected serviceable state to the second quarter of 2024 without changing the investment content and the implementation subject.

overcapacity and intensified competition have also triggered a pullback in the share prices of listed companies in the photovoltaic industry. in August 2023, daqo energy disclosed the repurchase plan and planned to use its own funds to repurchase the company's shares through centralized bidding. the total amount of the repurchase funds is not less than 0.2 billion yuan (inclusive) and not more than 0.4 billion yuan (inclusive). the repurchased shares will be used for employee stock ownership plans or equity incentives at an appropriate time in the future, the repurchase price does not exceed 50 yuan/share (inclusive).

According to the latest announcement, as of December 31, 2023, Daquan Energy has repurchased 7.5556 million shares of the company through centralized bidding through the trading system of the Shanghai Stock Exchange, accounting for 0.35 of the company's total share capital. The highest repurchase transaction price is 40.58 yuan/share, the lowest price is 28.19 yuan/share, and the total amount of funds paid is 0.26 billion yuan (excluding transaction costs).