Emmett Lau

Emmett Lau of Jefferies questioned the incentive for acquiring other polysilicon capacities if prices are not allowed to significantly exceed RMB 60, seeking clarification on the coordination of industry consolidation versus price. He also asked for Daqo New Energy's pricing expectations for Q1 and Q2, noting recent declines in spot prices. Furthermore, Mr. Lau inquired about the Q4 ASP appearing lower than spot prices, asking if this was due to delayed recognition or quality issues and if normalization is expected in Q1. Finally, he asked if Daqo New Energy is considering direct acquisitions or liaising with specific players.

Answer

Deputy CEO Anita Xu explained that consolidation would occur in phases over several years, starting with enforcing sales above cost, then gradually phasing out excess capacity. She reiterated that prices should be at least RMB 53-54 per kilogram in the coming quarters, depending on the pace of consolidation. CFO Ming Yang clarified that the lower Q4 ASP was due to a mix of initial production batches from ramping up volume, which had lower quality and market discounts, but normalization is expected in Q1. Ms. Xu confirmed Daqo's open-mindedness towards acquisition opportunities, with the SPV for consolidation being the primary focus for now, but direct acquisition remains a consideration in the future.

Emmett Lau questioned the incentive for acquiring capacities if polysilicon prices cannot be pushed above RMB 60, and how industry coordination would work. He also asked for the pricing outlook for Q1 and Q2 2026, noting recent price declines, and sought an explanation for why 4Q 2025 ASP was lower than spot prices. Finally, he asked if Daqo New Energy was considering direct acquisitions or liaising with specific players.

Answer

Deputy CEO Anita Xu explained that consolidation would occur in phases, starting with sales not below cost, then gradually phasing out outdated capacities over a couple of years, focusing on a market-oriented approach rather than specific price targets. She reiterated the Q1/Q2 2026 pricing outlook of at least RMB 53-54 per kilogram. CFO Ming Yang attributed the lower 4Q 2025 ASP to a product mix issue, specifically lower quality initial batches from ramped-up production, which incurred market discounts but normalized by December. Ms. Xu confirmed the company is open-minded to acquisition or consolidation via the SPV, with the SPV being the primary focus for now.