SHANGHAI - Daqo New Energy Corp. (NYSE:DQ), a prominent polysilicon manufacturer for the solar PV industry, announced Monday that its board of directors has approved a share repurchase program. The company is set to buy back up to $100 million of its outstanding ordinary shares or American depositary shares (ADSs) by June 30, 2025.
The repurchase will occur through open-market purchases, off-market negotiated transactions, block trades, or other legal methods in compliance with U.S. securities laws. Daqo New Energy intends to finance the buyback with its available cash and existing cash balance. The program does not require the company to purchase a specific number of shares or ADSs within a set timeframe.
Chairman and CEO Mr. Xiang Xu expressed confidence in the company's business trajectory and commitment to shareholder value, despite the current industry downcycle. He noted that the repurchase plan's specifics would be influenced by operational performance, market conditions, and regulatory constraints.
Daqo New Energy, established in 2007, is one of the world's leading producers of high-purity polysilicon, supplying photovoltaic product manufacturers. With a total nameplate capacity of 205,000 metric tons, Daqo prides itself on being one of the most cost-efficient high-purity polysilicon producers.
The information in this article is based on a press release.
In other recent news, Daqo New Energy Corp., a high-purity polysilicon manufacturer, has reported mixed financial results.
The company's first quarter of 2024 production volume reached 62,278 metric tons, surpassing expectations. However, net income attributable to shareholders dropped to $15.5 million, marking a considerable decrease from previous figures. In response, Daqo adjusted its capital expenditure plan to about $700 million for the year, primarily focusing on its Inner Mongolia polysilicon project.
GLJ Research revised its price target for Daqo shares to $12.51, maintaining a sell rating, and expressed concerns about Daqo's financial health. Despite these challenges, Daqo reported a 2% decrease in production costs and a strong cash balance of $2.7 billion. The company anticipates industry improvements in the second half of the year and is exploring potential expansions in the US, Middle East, and Southeast Asia.
These are recent developments reflecting Daqo's strategic planning amid the current industry landscape.
InvestingPro Insights
In light of Daqo New Energy Corp.'s recent announcement regarding its share repurchase program, investors might find the following InvestingPro data and tips particularly insightful. With a market capitalization of $1.06 billion, the company is trading at a low Price / Book multiple of 0.23, suggesting that the shares might be undervalued relative to the company's book value as of Q1 2024. Additionally, the P/E Ratio stands at 1.93, which is quite low and could indicate that the stock is potentially undervalued based on its earnings.
While the company holds more cash than debt on its balance sheet, which is a positive sign for financial stability, it is important to note that analysts are anticipating a sales decline in the current year, with revenue growth reported at -50.14% over the last twelve months as of Q1 2024. This could be a point of concern for investors looking at the company's future revenue prospects.
Investors should also be aware that Daqo New Energy has experienced significant price volatility, with the stock's price having fallen by -56.81% over the last year. This level of volatility is something risk-averse investors might need to consider carefully.
To gain further insights into Daqo New Energy Corp. and access a comprehensive list of 14 additional InvestingPro Tips, potential investors can visit InvestingPro. For those interested in subscribing, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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