Andre Coparade's questions to Daqo New Energy Corp (DQ) leadership • Q3 2024
Question
Andre Coparade, a private investor, pressed management on plans to capitalize on the valuation arbitrage between its Shanghai-listed A-shares and U.S. ADRs. He specifically asked about selling A-shares to fund ADR buybacks after the lockup expires on January 15, questioned the slow pace of recent buybacks, and asked if regulatory changes would favor the most efficient producers.
Answer
Deputy CEO Anita Zhu confirmed they have considered selling A-shares to repurchase ADRs but noted regulatory hurdles, such as rules preventing sales if the price is below the IPO price. CFO Ming Yang clarified that as long as the A-share price is above RMB 21.49, they are permitted to sell, but the rule allows for only 1-2% per quarter. Regarding the slow buyback pace, Ms. Zhu explained management was waiting for a clearer market turning point before buying more aggressively.