Changjiang Business News Once the scenery of the infinite silicon leader Daquan Energy (688303.SH), is trapped in the photovoltaic cycle.

The stock price has fallen again and again. Recently, Daqo Energy has taken measures. Its announcement stated that Xu Guangfu, the actual controller and chairman of the board, voluntarily promised not to reduce his direct holdings of the company's shares within 6 months from July 23, 2024.

Daquan Energy is headed by a Zhenjiang father and son-Xu Guangfu and Xu Xiang. Father Xu Guangfu is over 80 years old. He led the company step by step to become a leader in the electrical industry, while his son Xu Xiang promoted the company's transformation to new energy and stepped to a new level.

However, under the downward cycle of the photovoltaic market, Daqo Energy suffered a "double kill" in performance and stock price ". In the first quarter of 2023 and 2024, the company's revenue and net profit both fell sharply year-on-year.

As of the close of trading on June 28, Daquan Energy's share price was reported at 20.39 yuan per share, which has fallen below the issue price, and the company's market value has shrunk by more than 140 billion yuan from a higher point.

Daqo Energy is still expanding against the trend and wants to enhance its advanced capacity advantages and improve efficiency and quality.

in the last round of photovoltaic trough, under the persistence of Xu guangfu and his son, daquan energy survived and created another brilliant future. Now, in another cold winter, can Xu Guangfu and his son keep the clouds open and see the moon bright?

From electrical to photovoltaic to a new level

In 1942, Xu Guangfu was born in Xinba Town, Yangzhong County, Zhenjiang City, Jiangsu Province. After graduating from junior high school, he became an agricultural technician. Later, he entered the Xinba Comprehensive Factory, the predecessor of Daquan Group, where he worked. Ten years. In 1984, the factory was renamed Yangzhong Electromechanical Equipment Factory, and 42-year-old Xu Guangfu became the head of the factory.

Xu Guangfu is ambitious. Three years later, under his leadership, the factory was renamed Zhenjiang Electrical Equipment Factory, from producing grinding wheels and bakelite to developing electrical products such as refrigeration compressors and cable trays. In 1990, Xu Guangfu took advantage of the opportunity of the Asian Games to push his products into the construction of the Asian Games venues, which made the company famous in one fell swoop.

In 1993, Xu Guangfu went international and established a joint venture with Germany's Moeller Company to establish Zhenjiang Moeller Electric. Since then, it has promoted the establishment of 5 joint ventures with Siemens, AZZ, and Saixuelong to produce electrical equipment such as DC switches and buses. In 2000, it changed its name to Jiangsu Changjiang Electric Group and later to Daquan Group, becoming a leader in the electrical industry.

But a joint venture with a foreign company does not mean having his own technology. As he grows older, Xu Guangfu becomes more and more anxious, worried that the company will be eliminated by the market sooner or later.

At the time of anxiety, his son Xu Xiang noticed a rising industry overseas-photovoltaic. In 2000, Xu Xiang, who returned from his MBA, joined the family business. When they learned that a European company had transferred polysilicon technology, the father and son won the project.

Under the leadership of Xu Xiang, Daquan Group began the first step in the transformation to new energy. In 2006, Xu Xiang served as vice chairman and president of Daquan Group and prepared to build a polysilicon factory. In 2007, Daqo Group invested 4 billion yuan to establish a polysilicon production base in Wanzhou, Chongqing, and started production the following year. Under the strong development momentum, Daquan New Energy Co., Ltd. was successfully listed on the New York Stock Exchange in 2010.

Driving on the photovoltaic outlet, Xu Guangfu and his son enjoyed a period of time. However, in 2011, as European countries lowered their photovoltaic subsidies, the industry ushered in a cold winter overnight. Upstream silicon prices fell sharply, and in the same year, Daquan New Energy's net profit fell by nearly half.

Moving forward in the darkness, Xu Guangfu and his son finally ushered in the dawn. At the end of 2014, the state announced the implementation of photovoltaic poverty alleviation project. Since then, the policy has been launched one after another, and the domestic photovoltaic industry has warmed up. In July 2021, Daquan Group spun off its silicon business "Daquan Energy" to be listed on the board.

in 2022, Xu guangfu will be ranked 1119 in hurun global rich list with a fortune of 20 billion yuan.

Silicon price decline still counter-cyclical expansion

At present, Daqo Energy's main product is high-purity polysilicon, which is mainly used in the photovoltaic industry and is in the upstream link of the photovoltaic industry chain.

Under the rapid development of the domestic photovoltaic industry, Daquan Energy has once again made a wave of crazy profits. From 2021 to 2022, Daquan Energy achieved operating income of 10.83 billion yuan and 30.94 billion yuan, respectively, up 132.23 percent and 185.64 percent year-on-year; net profit of 5.724 billion yuan and 19.12 billion yuan, respectively, up 448.56 percent and 234.06 percent year-on-year.

During this period, domestic polysilicon production capacity is in short supply, and Daqo Energy has pulled out huge sums of money to expand vigorously.

at the end of 2021, the company signed an agreement with the people's Government of Baotou City, Inner Mongolia, planning to invest 33.25 billion yuan in the local production capacity construction of polysilicon and other products. The project will be carried out in two phases. The first phase of the project has a polysilicon production capacity of 100000 tons, which has reached production.

In 2023, the company achieved polysilicon production of 197800 tons, an increase of 47.84 percent over the same period last year, accounting for 13.83 percent of domestic polysilicon production that year, ranking first in the industry.

However, this photovoltaic carnival also went quickly. Under the crazy expansion of major manufacturers, the industry is seriously involved, the "excess cycle" of the photovoltaic industry is coming ahead of schedule, and the prices of the main materials in the industrial chain are falling continuously.

in 2023, the company's polysilicon sales volume was 200000 tons, up 50.48 percent from the same period last year; the average sales price (excluding tax) was 81.12 yuan/kg, down 64.95 percent from the same period last year; the unit cost was 48.7 yuan/kg, down 16.84 percent from the same period last year; and the gross profit margin of high-purity polysilicon business was 39.97 percent, down 34.72 percentage points from the same period last year.

Affected by this, in 2023, the company achieved operating income of 16.329 billion yuan, a year-on-year decrease of 47.22; realized net profit of 5.763 billion yuan, a year-on-year decrease of 69.86.

Despite the increase in advanced production capacity, in the first quarter of 2024, the company sold 53987 tons of polysilicon, an increase of 113.5 percent over the same period last year; the unit cost was 45.99 yuan/kg, down 13.96 percent from the same period last year; but the unit sales price (excluding tax) was 54.92 yuan/kg, down 71.16 percent from the same period last year. During the reporting period, the company achieved operating income of 2.982 billion yuan, down 38.6 percent from the same period last year, and net profit of 0.331 billion yuan, down 88.64 percent from the same period last year.

Xu Guangfu and his son continue to plan expansion. At the end of 2023, Daquan Energy announced that the company intends to build a project in Shihezi, with a total investment of 15 billion yuan. The project is expected to add 100000 tons of silicon production capacity after reaching production.

In the secondary market, Daqo Energy's share price has been on a roller coaster ride. In August 2021, one month after listing, Daquan Energy's share price reached a peak of 91.38 yuan per share. At the close of trading on June 28 this year, the company's share price fell to 20.39 yuan per share, a record low, and fell below 21.49 yuan per share. Issue price.

over the past three years, daquan energy share price has fallen by about 77% from its peak, corresponding to a market value reduction of more than 140 billion yuan.

In the face of falling stock prices, recently, Daquan Energy announced that Xu Guangfu, the actual controller and chairman of the board, voluntarily promised not to reduce his direct holdings of the company in any way within 6 months from July 23, 2024. shares.

● Changjiang Business Daily reporter Wang Jing

responsibility: ZB