On October 30, Daquan announced that Inner Mongolia Daxin New Energy Co., Ltd., a wholly-owned subsidiary of the company, had postponed the construction of 200000 tons of high-purity polysilicon Phase II 100000 tons project in Baotou City, Inner Mongolia, to the second quarter of 2024. According to the original plan, the project would have been completed and put into operation by the end of this year.
It is reported that in December 2021, Daquan Energy signed a strategic cooperation framework agreement with the people's government of Jiuyuan District, Baotou City. Daqo Energy plans to construct locally: 300,000 tons/year high-purity industrial silicon project + 200,000 tons/year organic silicon project + 200,000 tons/year high-purity polysilicon project + 21,000 tons/year semiconductor polysilicon project. Among
them, 200000 tons/year high-purity polysilicon project and 21000 tons/year semiconductor polysilicon project are invested and constructed by Inner Mongolia Daxin New Energy Co., Ltd. in Jiuyuan Industrial Park, Baotou, with a total investment of 24.25 billion yuan, which will be constructed in two phases. The first phase of 100000 tons was successfully completed in June this year.
For the delay of the second phase of the project, Daqo Energy said that due to the objective factors such as market environment, supply-demand relationship and the actual construction progress of the company, the overall implementation cycle of the second phase of the project with an annual output of 100000 tons of high-purity polysilicon has slowed down, resulting in the implementation progress lagging behind the original plan.
Affected by the decline of polysilicon price in the third quarter, the main business income of Daqo Energy in the third quarter was 3.553 billion yuan, down 57.38% year-on-year, the lowest in a single quarter since 2022; the net profit attributable to parent company in the third quarter was 689 million yuan, down 87.61% year-on-year; The gross profit margin dropped from 80.8% in the third quarter of last year to 14.94%, and the gross profit margin dropped by more than 60%.
Daquan Energy pointed out in the announcement that the supply of polysilicon increased significantly due to the cyclical inventory consumption and the release of new production capacity in the industry, resulting in a rapid decline in the price of polysilicon. In this context, the company's polysilicon sales growth did not increase, the third quarter sales of polysilicon was about 63,300 tons, 2.5 times the first quarter, but the third quarter polysilicon price was only 29.21% of the first quarter, less than 30%. After
the third quarter of revenue and net profit fell, it is not surprising that Daqo Energy chose to postpone the project at this time.
In fact, Daqo Energy is not the first enterprise to postpone the polysilicon project. Previously, the Ganquanbao project of Hesheng Silicon Industry was originally planned to be commissioned in June. In principle, the products will be produced in July and August at the latest. However, the project has not been put into production until the time of publication. In June, when the production was put into operation, the domestic polysilicon price officially fell below the 100000/ton mark, and continued to fall, and the overall inventory level of silicon enterprises was relatively high and rising annually. At that time, there was an obvious surplus trend in silicon materials. After
entering the fourth quarter, the price of components plummeted, bringing down the price of the whole main industry chain, and the price of polysilicon declined rapidly after a brief rebound. As of October 26, According to InfoLink's statistics, the price of polysilicon dense materials dropped to 82,000 yuan/ton again, while the Silicon Branch suspended the price of polysilicon again one year later due to the confusion of the transaction price in that week. Even so, the Silicon Branch still said that the price of polysilicon had shown a downward trend.
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