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Daqo (DQ)

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Guest outsmart

"We have seen average selling prices stabilizing across the solar PV value chain. The current improved financial performances of the downstream entities indicate the start of stabilization in the market. We believe today's challenging situation is only temporary. We are confident that the political leaders of China and European Union have competence to manage the international trading conflict in the solar PV industry, so as to enable the industry to achieve a healthy and sustainable growth in the future," Dr. Yao concluded. ;-) In any case, we need some mergers in the next years, even between the big players.

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DQ is hibernating. They're not like the rest that are about to recover from bleeding to thrive again. They are simple running at low temparture for now and forseeable future. Won't die, won't live and thrive. Half their poly assets are quite good and half are mediocre. They need a poly shortage to thrive.

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Guest Klothilde

Their BS is quite good and stark in contrast to their P&L. So its back up to Chi 8 it seems. Does anybody know their poly cost position?

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20 on new plant. Old slightly above 25 I think. I will have to check later. Old plant book value looks very inflated, so BS is BS.

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Not me :)  but I seem to be the only one holding this here despite all the negative views. Best performer for last month.

Another proof that not just those "investable" stocks could make you money.

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Guest JulyWebb

Not me :)  but I seem to be the only one holding this here despite all the negative views. Best performer for last month.

Another proof that not just those "investable" stocks could make you money.

 

Congradgulations

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Thanks July. Of course, just a relatively small position for speculation only. Not bad a ride from 5+ though. Will continue to hold.

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http://www.pv-tech.org/news/daqo_to_expand_polysilicon_production_as_costs_targeted_at_us14_kg

 

"Gongda Yao, Chief Executive Officer of Daqo said, "In the second quarter of 2013, our Xinjiang polysilicon facilities continued to contribute positive cash flow. In April, we successfully conducted several technical improvement projects which reduced our production cost below US$16/kg, which is significantly lower than our original target of us$20/kg. We expect our Xinjiang facilities to generate positive operating income in the third quarter of 2013. We are also making great effort to maximize our capacity in Xinjiang. We plan to expand our capacity in Xinjiang to 6,150 MT by the end of 2013. By achieving that, we expect that we can reduce our cost to the level of US$14/kg at that time.”

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Guest eysteinh

I am impressed at reduction for simens based polysilicon. But keep in mind this is production cost only. Not added opex etc. Just as the module makers need a high gross margin to cover opex the same goes for the polysilicon producers.

 

Also I am wondering how they have done this, I speculate slightly higher conversion ratio from tcs gass to finsihed polysilicon (but allready pushing theoretical limits of how far the simens based tcs process can go) also perhaps the energy used to heat up the reactors is less, silver wall lining etc.

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I thought you guys all saw it in yesterdays ER release but wasn't impressed :) I believe DQ is looking to further expand the capacity beyond 6150 MT.

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Guest joshchang

The way how they will achieve lower cost:

1. Xinjiang has much lower electricity rate (0.3-0.4 RMB). GCL is applying to use electricity from its own power plant and will be able to get similar rate if approved.

 

2. They will write down more than $150 million for Wanshan facility and move the equipments to Xinjiang. Thus much lower depreciation in the future for Xinjiang plant. This shouldn't be considered an operating excellence since they sacrificed equity big time first.

 

IMHO, if DQ can do it, then GCL can do it or maybe better because of economy of scale. And GCL can start producing FBR poly at $9 in 2014. GCL might not be a perfect stock to invest because of the debt burden, but it will survive and keeps providing low cost poly to its partners. 

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IMHO, if DQ can do it, then GCL can do it or maybe better because of economy of scale. And GCL can start producing FBR poly at $9 in 2014. GCL might not be a perfect stock to invest because of the debt burden, but it will survive and keeps providing low cost poly to its partners. 

 

Fully agree. I've been saying this all along.

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Guest joshchang

http://www.aastocks.com/sc/stocks/analysis/china-hot-topic-content.aspx?id=200000254557&type=16&catg=3

 

Just found out that GCL just got approved to use electricity from self powered plant. This will reduce its electricity cost to 0.32 RMB KWH.

 

One problem with DQ's Xinjiang plant is that it was designed for integration purpose in the beginning and now they have to abandon the rest of the value chain since their cost is not competitive. So they need to ship poly to southeast china (where most solar companies bases are) and this increased shipping cost will partially offset the electricity cost advantage there.

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