Gordon Johnson's questions to DAQO NEW ENERGY (DQ) leadership • Q2 2025
Question
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.