On October 13, Daqo Energy released a record of investor relations activities in September.
The content shows that in the first half of 2025, the company implemented the strategy of reducing production, and actively regulated the shipment volume according to the market situation. Fixed costs such as labor and depreciation related to the shutdown production line need to be apportioned to the current sales volume, resulting in an increase in the unit cost in the current period. In this regard, Daquan Energy said that this fluctuation is a normal phenomenon under the company's short-term business strategy adjustment, and will not affect the company's long-term cost control ability and core competitiveness.
At the same time, the company revealed that its polysilicon production in the third quarter is expected to be 27 thousand to 30 thousand tons.
The original text is as follows:
First, how does the company view the recent market rumors about the photovoltaic industry in response to "involution" and promoting capacity integration?
Answer: The company firmly supports the polysilicon industry to get out of the "involution" vicious competition as soon as possible, and actively responds to the relevant initiatives of China Photovoltaic Industry Association to promote the healthy and orderly development of the industry. If the relevant matters meet the information disclosure standards, the company will strictly comply with the requirements of the listing rules and fulfill its disclosure obligations through official channels in a timely and accurate manner.
2. What is the significance of the new comprehensive energy consumption standard for polysilicon to the photovoltaic industry?
Answer: On September 16, the Standardization Administration of the People's Republic of China issued the Energy Consumption Quota for Polycrystalline Silicon and Germanium Unit Products (draft for comments). The quota standard of comprehensive energy consumption per unit product of polycrystalline silicon (trichlorosilane method) is redefined and graded: Grade 1 is the target level (corresponding to the advanced process standard of the industry), Grade 2 is the access level of new construction or expansion projects, and Grade 3 is the limited level; The proposed energy consumption limits for levels 1, 2 and 3 are ≤ 5, ≤ 5.5 and ≤ 6.4 kgce/kg respectively, which are significantly higher than requirements of ≤ 7.5, ≤ 8.5 and ≤ 10.5 kgce/kg in the current Limits on Energy Consumption per Unit Product of Polycrystalline Silicon and Germanium (GB 29447 – 2022). The revision of this standard is in line with the actual development of industry technology and the guidance of national industrial policy, and provides a more scientific and advanced technical standard basis for industrial optimization and transformation; At the same time, it is of great significance to promote the "anti-involution" work of photovoltaic industry with marketization and legalization, reconstruct the benign competition pattern of the market, and ensure the sustainable and high-quality development of the industry.
Three, now the price of polysilicon has risen significantly, will the company's previous inventory impairment be reversed?
Answer: According to the Accounting Standards for Business Enterprises, on the balance sheet date, the enterprise shall determine the net realizable value of the inventory. If the factors affecting the previous write-down of inventories have disappeared, the amount of write-down shall be restored and reversed from the amount of provision for the loss on decline in value of inventories that has been made, and the reversed amount shall be included in the current profits and losses. The company will continue to pay close attention to market conditions and industry changes, dynamically optimize the inventory structure, scientifically implement inventory management, and provide strong support for the company's sustainable and healthy development.
4. Faced with the current market environment, what measures does the company plan to take to ensure its future business performance?
Answer: The company will continue to focus on the development of its main business and consolidate its core competitive advantages in the course of operation. It will maintain a prudent financial policy, maintain abundant cash and low asset-liability ratio, actively respond to market changes, scientifically adjust its production mode and inventory management, and improve its operational efficiency by 3/3. Strive to achieve the synergy of intrinsic value and market value, and bring sustained and stable value returns to investors.
5. What is the reason for the increase in the unit cost of the company in the second quarter of 2025?
Answer: According to the company's financial report, the accounting caliber of unit cost is sales cost. In the first half of 2025, the company implemented the strategy of reducing production, and actively regulated the shipment volume according to the market situation. Fixed costs such as labor and depreciation related to the shutdown production line need to be allocated to the current sales volume, resulting in an increase in the unit cost in the current period. This fluctuation is a normal phenomenon under the company's short-term business strategy adjustment, and will not affect the company's long-term cost control ability and core competitiveness.
6. At present, does the industry and the company strictly follow the relevant provisions of "selling at no less than cost"?
Answer: The company's sales work is carried out in strict accordance with the Anti-Unfair Competition Law, the Price Law and relevant laws and regulations.
7. Does the company have any plan to adjust the operating rate in the future?
Answer: The company's polysilicon production in the third quarter is expected to be 27,000 to 30,000 tons. The company will make operating rate decisions based on its business strategy, abide by industry self-discipline and pay attention to changes in the industrial environment, and scientifically and rationally apply diversified business strategies to ensure stable operation.
8. Recently, there are rumors in the market that polysilicon enterprises will implement self-discipline measures such as production restriction and sales restriction. Is the company aware of the relevant situation?
Answer: The Company supports the Proposal of China Photovoltaic Industry Association on Further Strengthening Industry Self-discipline and Jointly Maintaining the Photovoltaic Market Order of Fair Competition and Survival of the Fittest. The Company will continue to adhere to the principle of legal and compliant operation and participate in industry competition in accordance with the law, regulations and self-discipline. Promote the high-quality development of photovoltaic industry.
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