Daqo New Energy announces $100 million share repurchase program

SHANGHAI - Daqo New Energy Corp. (NYSE:DQ), a manufacturer of high-purity polysilicon for the solar photovoltaic industry, announced Tuesday that its board of directors has approved a $100 million share repurchase program. The company, currently valued at $1.54 billion, maintains a strong balance sheet with more cash than debt and a healthy current ratio of 5.62, according to InvestingPro data.

The program, effective immediately, will run through December 31, 2026, allowing the company to repurchase its own issued and outstanding ordinary shares or American depositary shares through various means including open-market purchases, negotiated transactions, block trades, or other legally permissible methods. The stock, trading at just 0.37 times book value, has shown strong momentum with a 22.94% gain year-to-date.

Daqo plans to fund the repurchases primarily from its existing cash balance. The program does not obligate the company to acquire any specific number of shares at any particular time, and the board will review the program periodically with potential adjustments to its terms and size.

"The share repurchase program reflects our confidence in the Company’s business prospects as we navigate the current industry downcycle," said Xiang Xu, Chairman and Chief Executive Officer of Daqo New Energy, according to the press release statement. InvestingPro analysis suggests the stock is currently undervalued, though analysts anticipate sales decline in the current year. Discover 10+ additional exclusive insights and detailed valuation metrics with an InvestingPro subscription.

The company stated that the timing, quantity, and price of any repurchases will depend on operational performance, market conditions, and compliance with corporate governance and regulatory requirements, including applicable blackout periods.

Daqo New Energy, founded in 2007, currently maintains a polysilicon nameplate capacity of 305,000 metric tons. The company manufactures and sells high-purity polysilicon to photovoltaic product manufacturers who process it into components for solar power solutions.

In other recent news, Daqo New Energy Corp. reported its second-quarter revenue, which significantly missed analyst expectations. The solar industry is currently facing challenges such as overcapacity and pricing pressures, which have impacted the company’s financial performance. Despite these hurdles, Daqo New Energy remains a key player in the polysilicon manufacturing sector. The revenue shortfall comes as the industry grapples with broader market dynamics. Analysts had anticipated stronger financial results, but the company’s earnings did not align with those projections. This development highlights the ongoing volatility within the solar industry. Investors are closely monitoring these trends as they consider the company’s future prospects.

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