The photovoltaic industry is plagued by concerns such as involution and overcapacity, however, there are still companies ready to expand production against the trend.
On the evening of December 13, Daqo Energy (688303) announced that recently, the company signed the "Daqo Energy Silicon-based New Material Industrial Park Project Investment Agreement" (hereinafter referred to as the "Project Investment Agreement") with Shihezi City, Shihezi Economic Development Zone Management Committee and Tianfu Energy (600509), agreeing that the company will invest in the construction of "Daqo Energy Silicon-based New Material Industrial Park Project" in Shihezi City, Xinjiang.
The project is constructed in accordance with the method of "overall planning and phased implementation", of which the first phase of the project plans to invest 7.5 billion yuan to build an annual output of 50,000 tons of polysilicon and supporting 150,000 tons of industrial silicon and 1.2 million round silicon core projectsThe second phase plans to invest 7.5 billion yuan to build a project with an annual output of 50,000 tons of polysilicon and supporting 150,000 tons of industrial silicon and 1 million round silicon cores.
To this end, Shihezi City plans to provide about 1,200 acres of land in Shihezi Economic Development Zone (subject to the final survey area) for a new project with an annual output of 100,000 tons of polysilicon and 2.2 million round silicon coresAbout 1,000 acres of land in Shihezi Shihutan New Material Industrial Park (subject to the final boundary survey area) will be used for a new industrial silicon project with an annual output of 300,000 tons.
It is worth mentioning that Daqo Energy's announcement did not disclose the start of construction and commissioning of the first and second phases of the project.
The reporter noted that the "Project Investment Agreement" stipulates the rights and obligations of all parties, among which, Shihezi City provides high-quality services and a good development environment for Daqo Energy, and assists Party B to actively promote the process of new projectsShihezi City** and Shihezi Economic Development Zone Management Committee are responsible for coordinating the implementation of the energy consumption indicators required by Daqo Energy to ensure sufficient energy**.
Daqo Energy shall invest and construct the project in accordance with the construction scale and other arrangements agreed in the agreement, complete and put into operation on schedule, operate legally, and pay taxes in accordance with the lawAt the same time, Daqo Energy has the rights of property, management autonomy and labor autonomy granted by law, actively participates in the economic construction of Shihezi City and Shihezi Economic Development Zone Management Committee, and submits statistical information and materials to the latter in a timely manner.
The Management Committee of Shihezi Economic Development Zone needs to assist Daqo Energy in handling the procedures required for the filing of new projects, environmental impact assessment, land and construction, and coordinate the handling of industrial and commercial registration, bank account opening, tax registration, etc. Tianfu Energy promises to guarantee the electricity, water, steam and natural gas of Daqo Energy's new projects.
Talking about the impact of this investment, Daqo Energy said that the company's investment in the construction of this project in Shihezi City aims to make full use of Shihezi City's comprehensive advantages in terms of talents and resources in the industrial base, business environment, and industrial policy support. On the one hand, the investment and construction of this project will help to further optimize the company's main business structure, realize the diversification of the company's product structure, enhance the company's comprehensive competitive advantage and profitability, and on the other hand, it will expand the production capacity of high-purity polysilicon, drive the increase of product output, and further consolidate and expand the market share of the company's high-purity polysilicon business.
Daqo Energy also said that the company's foreign investment funds are the company's own funds or self-raised funds, which will not adversely affect the company's financial situation, normal production and operation, and there is no harm to the interests of the company and shareholders. The project is still in the planned implementation stage and will not have a significant impact on the company's financial condition and operating results in the short term.
Looking back at the latest round of polysilicon**, in 2022, due to the mismatch of upstream and downstream production capacity and the intensification of the tension between supply and demand, polysilicon** is basically running at a high level, attracting a large number of investors to join the construction of polysilicon projects. However, in the first three quarters of 2023, due to the impact of cyclical inventory consumption in the industry and the successive release of new production capacity, the domestic polysilicon supply increased significantly, which in turn led to a rapid decline in polysilicon**.
In the first three quarters of this year, although Daqo Energy had stable production and continued to increase sales efforts and actively digest product inventory, the company's performance declined sharply compared with the same period last year due to the impact of polysilicon factors. In the first three quarters, the operating income was 1287.8 billion yuan, a decrease of 47 over the same period last year81%；The net profit was 511.5 billion yuan, a year-on-year decrease of 6609%；Deduct non-net profit of 484.2 billion yuan, a year-on-year decrease of 6795%。
According to the data, from January to September 2023, Daqo Energy's Xinjiang base continued to produce at full capacity, and the first phase of the 100,000-ton polysilicon project in Inner Mongolia also reached production, during which the company achieved a total polysilicon output of 13680,000 tons, sales volume 14010,000 tons. Among them, the output in the third quarter was 5770,000 tons, an increase of 2728%；Benefiting from the continuous release of high-efficiency production capacity, good market recognition of products, and sufficient support for long-term orders in hand, polysilicon sales also achieved rapid growth in the third quarter, with a quarter-on-quarter increase of 2272%, the company's inventory levels are normal and still low.
At the previous third quarter performance briefing, Sun Yicheng, director and secretary of the board of directors of Daqo Energy, said that in response to the downward trend of the industry cycle, the oversupply of overall production capacity, and the decline of the company, the company mainly has the following countermeasures: First, improve the cost performance of existing products in the short term, mainly including reducing product costs and improving product quality through specialization, digitalization, upstream integration, scale, and healthy asset and liability managementThe second is to integrate the production experience and skills of the team in the medium and long term, and continuously develop low-cost and high-quality new products that meet the needs of the market, such as n-type products and semiconductor-grade silicon materials.
Sun Yicheng said that Daqo Energy has the confidence, ability and plan to respond flexibly to the polysilicon adjustment, smoothly pass through this cycle, and further improve the company's competitiveness in the industry.
According to Sun Yicheng, Daqo Energy's 150,000-ton-a-year high-purity industrial silicon project, in which the silicon powder processing link has been put into production, and the relevant procedures for the industrial silicon link are still being handled. "The extension to industrial silicon can effectively control costs and avoid large fluctuations in costsSecond, it can effectively control the quality of silicon powder and avoid fluctuations in the quality of silicon powder, which will affect the quality and cost of downstream polysilicon productionThird, it can ensure stability and ensure the safety of the chain. In addition, Daqo Energy has planned 2The 10,000-ton semiconductor-grade polysilicon project, of which 1,000 tons of semiconductor-grade polysilicon is currently under construction, and has been connected to water, electricity and gas in the third quarter of this year.
It is worth noting that in the overcapacity and downward cycle, many polysilicon projects have been postponed, and Daqo Energy has not been spared. Previously, the company planned to build a 200,000-tonne-per-year high-purity polysilicon project and 2The 10,000-ton-per-year semiconductor polysilicon project, the second phase of the project with an annual output of 100,000 tons of high-purity polysilicon was originally planned to be completed and put into operation by the end of 2023.
At the end of October this year, Daqo Energy announced that due to the impact of objective factors such as the market environment, supply and demand, and the actual construction progress of the company, the overall implementation cycle of the second phase of the high-purity polysilicon project with an annual output of 100,000 tons has slowed down, resulting in the implementation progress lagging behind the original plan. After careful evaluation and comprehensive consideration, the company decided to postpone the date of the second phase of the 100,000-ton high-purity polysilicon project to the second quarter of 2024 on the premise of not changing the investment content and implementation entity.