NYSE:DQ

Stock Analysis Report

Executive Summary

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufactures in the People’s Republic of China.

Rewards

PE ratio (31.5x) is below the Semiconductor industry average (34.5x)

Earnings are forecast to grow 71.62% per year

Risk Analysis

High level of non-cash earnings

Has a high level of debt

Highly volatile share price over past 3 months

Profit margins (8.2%) are lower than last year (29.5%)

+ 1 more risk


Snowflake Analysis

High growth potential and fair value.


Similar Companies

Wacker Chemie

XTRA:WCH

Share Price & News

How has Daqo New Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DQ's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-9.1%

DQ

-1.7%

US Semiconductor

-2.7%

US Market


1 Year Return

49.6%

DQ

44.0%

US Semiconductor

21.2%

US Market

Return vs Industry: DQ exceeded the US Semiconductor industry which returned 46.9% over the past year.

Return vs Market: DQ exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

DQIndustryMarket
7 Day-9.1%-1.7%-2.7%
30 Day-2.4%1.1%0.09%
90 Day37.0%12.0%6.9%
1 Year49.6%49.6%46.8%44.0%23.8%21.2%
3 Year106.3%106.3%87.8%77.6%48.1%38.6%
5 Year115.9%115.9%159.8%134.8%72.5%53.4%

Price Volatility Vs. Market

How volatile is Daqo New Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Daqo New Energy undervalued compared to its fair value and its price relative to the market?

26.92x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DQ ($58.93) is trading above our estimate of fair value ($15.78)

Significantly Below Fair Value: DQ is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DQ is good value based on its PE Ratio (31.5x) compared to the Semiconductor industry average (34.5x).

PE vs Market: DQ is poor value based on its PE Ratio (31.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DQ is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: DQ is good value based on its PB Ratio (1.5x) compared to the US Semiconductor industry average (3.3x).


Next Steps

Future Growth

How is Daqo New Energy forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

71.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DQ's forecast earnings growth (71.6% per year) is above the savings rate (1.7%).

Earnings vs Market: DQ's earnings (71.6% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DQ's revenue (37.7% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: DQ's revenue (37.7% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DQ's Return on Equity is forecast to be low in 3 years time (18.6%).


Next Steps

Past Performance

How has Daqo New Energy performed over the past 5 years?

27.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DQ has a high level of non-cash earnings.

Growing Profit Margin: DQ's current net profit margins (8.2%) are lower than last year (29.5%).


Past Earnings Growth Analysis

Earnings Trend: DQ's earnings have grown significantly by 27.6% per year over the past 5 years.

Accelerating Growth: DQ's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DQ had negative earnings growth (-75.3%) over the past year, making it difficult to compare to the Semiconductor industry average (-15.8%).


Return on Equity

High ROE: DQ's Return on Equity (4.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Daqo New Energy's financial position?


Financial Position Analysis

Short Term Liabilities: DQ's short term assets ($129.5M) do not cover its short term liabilities ($304.0M).

Long Term Liabilities: DQ's short term assets ($129.5M) do not cover its long term liabilities ($210.1M).


Debt to Equity History and Analysis

Debt Level: DQ's debt to equity ratio (47.1%) is considered high.

Reducing Debt: DQ's debt to equity ratio has reduced from 151.7% to 47.1% over the past 5 years.

Debt Coverage: DQ's debt is well covered by operating cash flow (53.7%).

Interest Coverage: DQ's interest payments on its debt are well covered by EBIT (5.3x coverage).


Balance Sheet

Inventory Level: DQ has a high level of physical assets or inventory.

Debt Coverage by Assets: DQ's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Daqo New Energy's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate DQ's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate DQ's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if DQ's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DQ's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of DQ's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Daqo New Energy's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

Longgen Zhang (54yo)

2yrs

Tenure

0

Mr. Longgen Zhang has been chief executive officer and executive board member at Daqo New Energy Corp., since January 16, 2018. Mr. Zhang served as Financial Advisor of JinkoSolar Holding Co., Ltd since Se ...


Management Age and Tenure

2.0yrs

Average Tenure

51yo

Average Age

Experienced Management: DQ's management team is considered experienced (2 years average tenure).


Board Age and Tenure

8.8yrs

Average Tenure

59yo

Average Age

Experienced Board: DQ's board of directors are considered experienced (8.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 13.5%.


Management Team

  • Longgen Zhang (54yo)

    CEO & Director

    • Tenure: 2yrs
  • Ming Yang (46yo)

    Chief Financial Officer

    • Tenure: 4.5yrs
  • Guangfu Xu (76yo)

    Founder & Chairman

    • Tenure: 12.2yrs
  • Shihua Su (44yo)

    Chief Marketing Officer

    • Tenure: 4.5yrs
  • Qiangmin Zhou (51yo)

    Chief Operations Officer

    • Tenure: 0.6yrs
  • Kevin He

    Head of Investor Relations

    • Xiyu Wang

      Chief Technology Officer

      • Tenure: 0.6yrs

    Board Members

    • Shuming Zhao (67yo)

      Independent Director

      • Tenure: 8.3yrs
    • Longgen Zhang (54yo)

      CEO & Director

      • Tenure: 2yrs
    • Fumin Zhuo (68yo)

      Independent Director

      • Tenure: 10.2yrs
    • Rongling Chen (77yo)

      Independent Director

      • Tenure: 9.3yrs
    • Guangfu Xu (76yo)

      Founder & Chairman

      • Tenure: 12.2yrs
    • Xiang Xu (48yo)

      Director

      • Tenure: 12.2yrs
    • Dafeng Shi (47yo)

      Director

      • Tenure: 6.9yrs
    • Arthur Wong (59yo)

      Independent Director

      • Tenure: 7.1yrs
    • Minsong Liang (50yo)

      Independent Director

      • Tenure: 8.3yrs

    Company Information

    Daqo New Energy Corp.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Daqo New Energy Corp.
    • Ticker: DQ
    • Exchange: NYSE
    • Founded: 2006
    • Industry: Semiconductor Equipment
    • Sector: Semiconductors
    • Market Cap: US$669.106m
    • Shares outstanding: 13.28m
    • Website: https://www.dqsolar.com

    Number of Employees


    Location

    • Daqo New Energy Corp.
    • 666 Longdu Avenue
    • Wanzhou
    • Chongqing Province
    • 404000
    • China

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    DQNYSE (New York Stock Exchange)YesADR EACH REPR 25 ORD SHS (POST R/S)USUSDOct 2010
    5DQ2MUN (Boerse Muenchen)YesADR EACH REPR 25 ORD SHS (POST R/S)DEEUROct 2010

    Biography

    Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufactures in the People’s Republic of China. The photovoltaic product manufactures further process its polysilicon into ingots, wafers, cells, and modules for solar power solutions. It offers ready-to-use polysilicon, and packaged to meet crucible stacking, pulling, and solidification products. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is headquartered in Wanzhou, the People’s Republic of China. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/28 00:52
    End of Day Share Price2020/01/27 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.