Daquan Energy: Poly silicon production forecast for 2022 raised to 129,000–132,000 tons

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On August 3, Daquan Energy released its semi-annual report for 2022, showing that the company achieved revenue of 16.34 billion yuan in the first half of the year, a year-on-year increase of 262.16%. The net profit attributable to the shareholders of the listed company was 9.525 billion yuan, representing a year-on-year increase of 340.81%. The net profit attributable to the shareholders of the listed company, after deducting non-recurring gains and losses, was 9.529 billion yuan, representing a year-on-year increase of 342.13%. The basic earnings per share was 4.94 yuan per share. During the reporting period, the company achieved significant performance improvements, primarily due to a shortage in the supply of silicon materials in the market, which led to a sharp rise in the prices of these materials and in the company’s gross profits; this was also attributed to the gradual expansion of production capacity at Project Phase 3B. Total assets increased by 92.05% compared to the beginning of the reporting period, primarily due to: 1) a significant and continuous rise in the sales prices and gross profits of silicon materials, which improved the company’s profitability and enhanced its financial position; 2) the receipt of 10.945 billion yuan in funds from the targeted stock issuance at the end of June; 3) the commencement of the 100,000-ton polysilicon project in Baotou, resulting in a substantial increase in the balances related to advance payments for construction and equipment. Currently, the company’s production capacity is 105,000 tons per year. According to data from the China Photovoltaic Industry Association, domestic polysilicon production in the first half of 2022 was approximately 365,000 tons; the company’s polysilicon production during that period was 66,700 tons, accounting for 18.3% of China’s total polysilicon production. The company is optimistic about the future trends in the prices of photovoltaic products and silicon materials. To ensure safe and stable production, the company will carry out routine annual maintenance in phases during the second half of the year, with production expected to range from 31,000 to 32,000 tons in the third quarter. Thanks to its strong performance in the first half of the year, the company has raised its annual production forecast to 129,000–132,000 tons. The 100,000-ton high-purity polysilicon project in Baotou, Inner Mongolia, has begun construction and is expected to be completed in the second quarter of 2023. Upon completion, it will further increase the production capacity of high-purity polysilicon, thereby strengthening the company’s market position and competitiveness. In July 2022, the company signed an Investment Agreement with ** in Guyang District, Baotou City, for the 300,000 tons/year high-purity industrial silicon project and the 200,000 tons/year silicone project. The first phase of the project, which aims to produce 150,000 tons of high-purity industrial silicon per year, is expected to be completed and put into operation in the third quarter of 2023. Upon completion of the first phase of construction, it will ensure 100% supply of raw materials for Baotou’s 100,000-ton polysilicon project, enhancing the company’s overall profitability while guaranteeing supply security and quality in terms of raw materials.