Gordon Johnson

Gordon Johnson, CEO and Founder of GLJ Research, asked for Daqo New Energy's outlook on polysilicon prices for Q1 and Q2, considering recent spot and futures market trends and the impact of anti-involution policies. He also questioned if there's a potential for prices to fall below the RMB 53-54 range in the first half, given current futures prices. Additionally, Mr. Johnson inquired about the company's expectations for free cash flow trends in 2026, following significant improvements in 2025.

Answer

Deputy CEO Anita Xu reiterated that polysilicon prices for Q1 and Q2 2026 are expected to be at least RMB 53-54 per kilogram, as mandated by the Pricing Law to stay above industry-level cost. She also mentioned that Daqo views participation in the futures market as a potential risk management tool but is prioritizing policy clarity before engaging. Ms. Xu expressed certainty that prices should be sustained at the industry-level cost. CFO Ming Yang stated that free cash flow is expected to improve further from the Q4 2025 level in 2026, driven by stable to lower costs and steady volume and ASP expectations.

Gordon Johnson asked for Daqo New Energy's outlook on polysilicon prices in Q1 and Q2 2026, considering the futures market and anti-involution policies. He also inquired if prices could potentially fall below the RMB 53-54 range in the first half of 2026 and sought expectations for the company's free cash flow trend in 2026.

Answer

Deputy CEO Anita Xu reiterated that polysilicon prices should be sustained at least at RMB 53-54 per kilogram in Q1 and Q2 2026, as mandated by the Pricing Law which prevents sales below industry-level cost. She noted that while the futures market offers risk management potential, the company is prioritizing policy clarity on anti-involution before active participation. Ms. Xu confirmed that RMB 53-54 is the industry-level cost, making it a sustained floor. CFO Ming Yang stated that free cash flow is expected to improve further from Q4 2025 levels in 2026, driven by steady volume, ASP, and stable-to-lower costs.

Gordon Johnson asked about Daqo New Energy's Q4 gross margin expectations, considering the reported production cost of $6.38 and current polysilicon prices from PV Insights and Guangzhou Futures Exchange. He also inquired if the company's strategy of selling from inventory was complete or would continue. Lastly, he sought the company's expectations for total solar installations in China for 2026 compared to 2025, in light of the new five-year plan.

Answer

Ming Yang, CFO, clarified that polysilicon futures prices require a 13% VAT subtraction and projected a low to mid-single-digit gross margin for Q4. He stated that Q4 sales volume is expected to be similar to production volume, but the company will continue to seek opportunities to sell additional inventory. Anita Zhu, Deputy CEO, forecasted China's solar installations for 2026 to be relatively stable or show low single-digit growth compared to 2025 (estimated 220-250 GW), potentially reaching 270-280 GW.

Gordon Johnson inquired about Daqo New Energy's expected Q4 gross margin given current polysilicon prices and production costs, the company's inventory sales strategy, and the forecast for China's solar installations in 2026.

Answer

IR Director Jessie Zhao estimated Q4 gross margins in the low to mid-single digits after VAT adjustments. CFO Ming Yang indicated Q4 sales volume should be similar to production, with continued efforts to sell additional inventory. Deputy CEO Anita Zhu projected China's 2026 solar installations to be stable or show low single-digit growth, reaching 270-280 GW.

Gordon Johnson of GLJ Research asked if intentionally holding back sales in Q2 implies significantly higher sales in Q3 and Q4. He also questioned if the company is currently transacting at the high-40s to low-50s RMB price level and whether this would lead to a positive gross margin in Q3.

Answer

Deputy CEO Anita Zhu confirmed sales were held back due to below-cost pricing and will resume as prices recover. CFO Ming Yang clarified that while the company aims to sell above production cost and reduce inventory, a positive gross margin in Q3 is unlikely due to significant non-cash depreciation costs from idle facilities. However, he expects sales to be cash-flow positive. He also corrected the price calculation, noting the quoted RMB price includes a 13% VAT.

Gordon Johnson asked how projected demand for uranium is influencing Cameco's current investment in new exploration, noting a recent global slowdown in exploration activity.

Answer

CEO Tim Gitzel confirmed that exploration remains a 'very, very important' part of Cameco's strategy. He mentioned the appointment of a new VP of Exploration and stated that the company has continued to hold its best properties in the Athabasca Basin and has been actively growing its exploration budget over the last few years to prepare for future demand.

Gordon Johnson asked about uranium price seasonality, the strength in enrichment prices, and whether contracting has strengthened since the World Nuclear Association symposium.

Answer

Executive VP and CFO Grant Isaac attributed seasonality to the nuclear industry's September-to-August calendar and noted short-term 'month-end games' can soften spot prices. He confirmed strong off-market contracting activity post-symposium, evidenced by 40 million pounds of newly reported contracts, but noted the negotiation of price floors/ceilings has stalled slightly due to the recent spot price dip.

Gordon Johnson cited data suggesting a competitor, Tesla, was gaining significant market share in both storage and inverters in California and asked if Enphase was experiencing these trends or managing to regain share.

Answer

President and CEO Badrinarayanan Kothandaraman did not comment on competitors but vigorously defended Enphase's value proposition. He stated the fourth-generation battery will make them 'best-in-class' for backup, addressing a prior limitation. He emphasized key differentiators like modularity, a 15-year warranty, superior serviceability, higher energy production from microinverters, and new software features that solve key installer and homeowner pain points.