Daqo Energy(688303. SH) personnel exodus continues.

On the evening of March 17, Daqo Energy disclosed that a core technical staff of the company resigned. Shell financial reporters paid attention to the fact that in the past six months, Daqo Energy has disclosed three resignations of core technical personnel.

On March 18, the staff of Daqo Energy Securities Department told the Shell Finance reporter that the company did have core technical personnel resigned in the past six months, and the reason for the resignation mainly lies in the personal choice of employees. The company has supplemented the core technical personnel, and the company's cost control and product quality have been improved recently.

The beginning of this wave of personnel turmoil may be in August 2023, when Zhang Longgen, director of Daqo Energy, and Zhou Qiangmin, director and general manager of Daqo Energy, will resign together. Shell financial reporters paid attention to the fact that only two of the recently departed Daqo Energy executives hold a small amount of company equity. Compared with other listed photovoltaic companies, Daqo Energy's shareholding structure is more concentrated.

At the same time as the executive change, Daqo Energy is experiencing its first loss since its listing, and the company expects a loss of more than 2.7 billion yuan in 2024.

The top management continued to fluctuate, and only one of the five core technical personnel was still working in the company at the time of listing

On the evening of March 17, Daqo Energy disclosed that the labor contract signed by Ma Xiaoliang, the company's core technical personnel, and the company will expire on March 2, 2025. After the expiration of the contract, Ma Xiaoliang did not renew the labor contract with the company for personal reasons, and recently completed the resignation procedures.

According to the resume disclosed in the announcement, Ma Xiaoliang entered Daqo in 2011 and was recognized as a core technical personnel by Daqo Energy in November 2023, and his position before leaving was the deputy general manager of the General Manager Office of Daqo in Inner Mongolia.

Daqo Energy specifically stated in the announcement; The impact of this resignation is limited, and Ma Xiaoliang's resignation will not have a material adverse impact on the company's ability to continue operations, R&D strength, and core competitiveness.

This is the third resignation of core technical personnel recently disclosed by Daqo Energy. In January 2025, Daqo Energy disclosed that Wang Xiyu, the company's core technical personnel, applied for resignation from the company's position for personal reasons; In October 2024, Hu Ping, deputy general manager and core technical personnel of Daqo Energy, resigned.

Wang and Hu have both worked in Daqo for more than ten years, and they belong to two of the five-person core technical personnel team disclosed by Daqo Energy when it went public in 2021. Tan Zhongfang and Zhao Yunsong in this team have left in 2023, and only Luo Jialin, who was the manager of the production department at the time, remains in Daqo.

After the above-mentioned core technical personnel have left one after another, Daqo Energy has successively identified new core technical members. For example, on March 17, while announcing the news of Ma Xiaoliang's resignation, Daqo Energy newly identified Zhai Zhanli as the company's core technical personnel. The latter joined Daqo in 2008 and currently serves as the deputy general manager of the general manager office of Inner Mongolia Daqo New Energy Co., Ltd.

In addition to the core technical personnel, Cao Wei, deputy general manager of Daqo Energy, also resigned in November last year.

The

beginning of this round of personnel turmoil at Daqo Energy may be traced back to August 2023, when Zhang Longgen, director of Daqo Energy, and Zhou Qiangmin, director and general manager of Daqo Energy, resigned.

Born in 1964, Zhang Longgen has a financial background and is a certified public accountant in the United States, and served as the chief financial officer of JinkoSolar in his early years, and after joining Daqo Energy in 2018, he once became the company's "window" to the outside world, accepting media interviews, attending industry events, or receiving visiting government officials with Xu Guangfu, the founder of Daqo Energy.

Zhou Qiangmin has been with Daqo Energy for a longer time, having served as CTO and COO of Cayman Daqo (the controlling shareholder of Daqo Energy) since joining in 2006. Daqo Energy's prospectus in 2021 shows that Zhang Longgen and Zhou Qiangmin are both actually responsible for the company's production and operation decision-making and daily operation and management, and Zhou Qiangmin is also responsible for the company's technological innovation and transformation projects.

Zhang Longgen's whereabouts after leaving Daquan were soon revealed. According to public reports, he founded United Solar and went to the Middle East to build a silicon material factory, and plans to build a high-purity silicon-based material project with an annual output of 100,000 tons in Oman.

Shell financial reporters paid attention to the fact that among the executives of Daqo Energy who have left since August 2023, only Zhang Longgen and Ma Xiaoliang hold a small number of shares in listed companies, of which Ma Xiaoliang directly holds 5,000 shares, and Zhang Long disclosed 16.25 million shares according to the 2021 listing prospectus, with a shareholding ratio of 1%. As of the end of the third quarter of last year, the single largest shareholder, Daqo New Energy Corp., held 71.41% of the shares, and Xu Guangfu and Xu Xiang, as the actual controllers of the listed company, held more than 20% of the shares of Caqo New Energy Corp.

Source of Daqo Energy's shareholding structure before IPO/company prospectus

The first loss since its listing last year, this year's production target fell sharply year-on-year

At the same time as the change of senior management, Daqo Energy is also experiencing performance fluctuations in the industry cycle.

At the end of February, Daqo Energy disclosed a performance report, which is expected to achieve revenue of 7.411 billion yuan in 2024, a year-on-year decrease of 54.62%; The net profit attributable to the parent company was -2.718 billion yuan, turning from profit to loss.

At the same time as the disclosure of the performance report, Daqo Energy issued a special performance statement, announcing the financial and operational overview for the fourth quarter and full year of 2024. The note mentions that the company has chosen to continue operating at a lower capacity utilization rate of 40% to 50% in the fourth quarter of 2024. However, the company's gross margin for the full year was -20.7% due to the fact that the average selling price of polysilicon fell below the cost of production from the second quarter of 2024.

"We plan to keep the operating rate relatively low throughout 2025 until the industry reaches an inflection point." Daqo Energy's statement shows that the company's annual output in 2025 is expected to be 110,000 to 140,000 tons, compared with 205,100 tons of polysilicon in 2024. This year-on-year decline in production indicators means that Daqo Energy's revenue scale will continue to decrease this year, further testing the company's ability to survive the cycle with its own capital reserves.

Daqo Energy also mentioned in the statement that the company had a cash balance of $1 billion at the end of 2024 and that "overall, the company maintains strong liquidity, with liquid assets of $2.2 billion, which can be converted into cash at any time if needed."

According to the weekly review released by the Silicon Industry Branch on March 12, up to now, all polysilicon enterprises in production in China are basically in a state of load shedding. According to the current price level of polysilicon, the signing price of N-type re-feeding materials between leading enterprises and direct downstream is 41,000 yuan/ton or more, and the signing price between enterprises and traders is about 43,000 yuan/ton, which is still unable to cover the production cost for most enterprises in production.

However, there are also positive signals in the production and operation disclosed by Daqo Energy. For example, in the fourth quarter of 2024, the company's polysilicon unit cash manufacturing cost was US$5.04/kg, a slight decrease from the previous quarter; The proportion of the company's N-type product production will increase significantly from 40% in 2023 to 70% in 2024.

"We remain optimistic that the supply-demand imbalance will improve this year as supply adjusts to more reasonable levels." Daqo Energy said.