Benefiting from the rebound in polysilicon prices, the upstream photovoltaic industry has seen a turnaround in performance in Q3 2025 after over a year of declining prices and financial pressure. Daqo New Energy (DQ.US) is among the companies leading this recovery. On October 27, Daqo New Energy released its unaudited Q3 2025 financial results, reporting total revenue of approximately $245 million, a remarkable 225.27% increase quarter-over-quarter and a 23% year-over-year rise. The strong earnings report drove the company’s stock price up 14.06% on October 27, with an intraday high of $30.28, nearing its yearly peak. Investors are now watching whether the stock can break through this resistance level.
Despite a slight 0.88% dip on October 28, Daqo New Energy’s stock has surged 51.39% year-to-date. If this trend continues, the company could end a four-year downtrend since 2021. The rally began in early July, following a yearly low of $12.40 in late April, triggered by declining sales volumes and prices in the industry.
In H1 2025, major polysilicon producers, including Daqo New Energy, reported significant sales declines. Combined sales from four leading companies, such as Tongwei Co., Ltd. (600438.SH) and Daqo New Energy, fell 37.4% YoY to 368,800 tons. Daqo’s sales dropped the most, down 52.49% YoY. Additionally, polysilicon prices plummeted due to oversupply and high inventory levels, with Daqo’s average selling price at 31.20 yuan/kg, down 33.63% YoY, below its cash cost of 37.66 yuan/kg. This led to a 65.8% YoY revenue drop in Q2 and a net loss of $76.5 million.
The turning point came after a July 3 industry symposium, where policymakers emphasized "anti-involution" measures to curb excessive competition. Subsequent policies helped stabilize polysilicon prices, pushing futures above 40,000 yuan/ton. Daqo’s stock surged 15.75% on July 2, kicking off a month-long rally. Trading volume initially spiked but later declined, indicating stronger holder consensus. By July 22, another 16.81% jump saw volume rebound to 4.9 million shares, signaling renewed market divergence.
Technically, Daqo’s stock fluctuated within the upper Bollinger Bands until October 10, when a 14.52% drop to the lower band attracted new buyers. Despite a 14% surge post-earnings on October 27, trading volume remained subdued at around 2 million shares, suggesting cautious optimism among investors awaiting further industry signals.
The polysilicon sector’s oversupply stems from rapid capacity expansion in 2021–2022, with China’s 2023 output hitting 1.43 million tons, up 76.33% YoY. Despite falling prices, Daqo continued expanding, announcing a 15-billion-yuan silicon-based materials industrial park in December 2023. However, intensifying competition and price declines hurt profitability, contributing to Daqo’s prolonged stock slump.
With China’s polysilicon capacity reaching 3.5 million tons against global demand of ~1.5 million tons by 2026, overcapacity remains a critical issue. Market rumors in May suggested a potential 1-million-ton capacity cut via a joint reserve mechanism, boosting solar stocks temporarily. While unconfirmed, Daqo has proactively reduced output, slashing production by 60% YoY in H1 2025, with utilization rates at 33.31%.
Recent reports indicate possible shutdowns in Sichuan and Yunnan due to higher dry-season electricity costs (30–50% increase), potentially idling 320,000 tons of capacity. If realized, this could further tighten supply. Investors now await confirmation of these developments to gauge the stock’s near-term trajectory.