Alan Hon

Alan Hon asked for an expected timeline for the polysilicon industry's consolidation agreement and the mechanisms to ensure compliance with agreed-upon quotas or volumes. He also sought clarity on Daqo New Energy's ASP expectations post-consolidation and the projected trends for production and cash costs in Q4 and the broader sector. Finally, he inquired about the progress of the company's share buyback program, considering potential CapEx or acquisition spending for consolidation.

Answer

Anita Zhu, Deputy CEO, stated that consolidation discussions are ongoing, making it difficult to provide an exact timeline, but emphasized efforts towards consensus. She projected Q4 ASPs to remain stable at RMB 49-55/kg, with potential increases to RMB 60/kg initially and then RMB 60-80/kg after phased consolidation. Ming Yang, CFO, detailed Q3 cost reductions due to energy efficiency, silicon powder usage, lower silicon metal prices, and increased production, expecting a low single-digit decline in Q4 costs. Anita Zhu explained the share buyback program was paused due to rising share prices and the need for clarity on consolidation investment amounts, with plans to resume once the picture is clearer.

Alan Hon asked about the expected timeline and enforcement mechanisms for the polysilicon industry's consolidation agreement, Daqo New Energy's ASP and cost trends, and the status of the company's share buyback program.

Answer

Deputy CEO Anita Zhu stated that consolidation discussions are ongoing, with an expectation for prices to rise to RMB 60-80/kg post-agreement. CFO Ming Yang detailed a 12% Q-o-Q cost reduction in Q3 2025, driven by energy efficiency and lower silicon metal prices, projecting a further low single-digit decline in Q4. Ms. Zhu explained the share buyback is paused pending clarity on consolidation investment.

Alan Hon of JPMorgan Chase & Co. asked for an update on policy developments, specifically regarding the consolidation fund, and inquired about the polysilicon price outlook for the next three months given current supply, demand, and inventory levels.

Answer

Deputy CEO Anita Zhu responded, detailing a recent symposium where regulators reinforced the need to curb below-cost selling and are working towards a buyout SPV for outdated capacity. She stated that the price outlook depends on the rollout of this SPV but noted that recent module bid prices from China Huadian Corporation have increased significantly, which should positively impact the upstream polysilicon sector.