Daqo New Energy Corp · NYSE:DQ

Daqo New Energy — Q2 2015 Earnings Presentation

19 slides from Daqo New Energy's earnings presentation, Aug 11, 2015

  1. Slide 1: Q2 2015 Financial Results Presentation

    Daqo New Energy Corp. Q2 2015 Financial Results Presentation August 11, 2015

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will”, “expects”, “antici

  3. Slide 3: Agenda

    Agenda  Business Highlights and Summary  Financial Results and Update  Q&A PRIVATE & CONFIDENTIAL P. 3

  4. Slide 4: Business update and Q2 2015 highlights

    Business update and Q2 2015 highlights  Polysilicon production volume of 1,734 MT in Q2 2015, compared to 1,801 MT in Q1 2015; Polysilicon production volume in Q2 was impacted by the planned shutdown related to our annual facility maintenance in May 2015  Cost Structure total production of $12.98/

  5. Slide 5: Daqo Xinjiang Polysilicon Phase 2B

    Daqo Xinjiang Polysilicon Phase 2B PRIVATE & CONFIDENTIAL P. 5

  6. Slide 6: Market update

    Market update •According to the announcement by China’s National Energy Administration, the newly added PV installation in China in the first half of 2015 was 7.7 GW. We believe the installation in the second half of 2015 in China may potentially reach 10GW and the 17.8GW annual target is achievable

  7. Slide 7: Market price trend (by PVinsights)

    Market price trend ( by PVinsights) Polysilicon spot market price ($/kg) Wafer ASP ($ / piece) $0.94 $21.37 $21.61 $20.83 $20.35 $0.90 $18.71 $17.87 $0.88 $17.45 $16.78$16.94 $16.05 $0.85 $0.85 $0.85 $0.84 $0.84 $0.82 $0.81 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2

  8. Slide 8: Xinjiang polysilicon facilities update

    Xinjiang polysilicon facilities update Q2 2015 key facts Outlook  1,734 MT production  Expected sales volume in Q3 2015: 2,100 ~ 2,200 MT  1,363 MT sold to external customers  Xinjiang Phase 2B project update:  Solar Grade I: 99.5% in Q2 2015 ‒ Started pilot production in the end of June  Q2 2

  9. Slide 9: Polysilicon manufacturing overview

    Polysilicon manufacturing overview Production Volume (MT) Production cost, SG&A, interest ($/kg)* 1,801 1,791 1,748 1,734 1,517 1,504 1,445 1,311 4.76 1,088 962 5.43 4.16 3.77 2.74 2.65 2.33 2.35 2.27 2.38 15.83 12.21 11.82 11.98 11.75 11.48 10.72 10.88 10.53 10.60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q

  10. Slide 10: Consistent first class quality -- 99.5% Solar Grade 1

    Consistent first class quality -- 99.5% Solar Grade 1 Daqo New Energy polysilicon quarterly quality data (1) 99.3% 99.5% 100.0% 100% 99.5% 100% 100% 92.5% 100% 88.3% 94.7% 95.8% 95.0% 93.0% 90.7% 84.3% 85.3% 85.9% 77.4% 67.5% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2

  11. Slide 11: Wanzhou wafer facilities update

    Wanzhou wafer facilities update Q2 2015 key facts Q3 sales volume outlook  Annual capacity of approximately  Q3 2015 wafer sales volume expected to 72 million pieces (310 MW) be 17.5 ~18.0 million pieces  18.3 million pieces sold to customers PRIVATE & CONFIDENTIAL P. 11

  12. Slide 12: Sales volume in Q2 2015 and outlook for Q3 2015

    Sales volume in Q2 2015 and outlook for Q3 2015 Q3 2015E Sales Volume Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 guidance 2,100~ Polysilicon (MT) 1,391 1,528 1,646 1,502 1,363 2,200 Wafer 18.0 17.1 18.3 18.1 18.3 17.5~18.0 (million pieces) Ingot & block (MT) 1.5 5.0 - - - - PRIVATE & CONFIDENTIAL P. 12

  13. Slide 13: Agenda

    Agenda  Business Highlights and Summary  Financial Results and Update  Q&A PRIVATE & CONFIDENTIAL P. 13

  14. Slide 14: Q2 2015 financial highlights

    Q2 2015 financial highlights  Revenues were $34.3 million, compared to $41.9 million in Q1 2015;  Polysilicon production cost of $12.98/kg in Q2 2015, compared to $12.80/kg in Q1 2015; cash cost of $10.60/kg in Q2 2015, compared to $10.53/kg in Q1 2015;  Gross profit was $3.6 million, compared to

  15. Slide 15: P&L summary (Q2 2015 vs. Q1 2015)

    P&L summary (Q2 2015 vs. Q1 2015) US$ in millions Q2 2015 Q1 2015 Change Analysis Polysilicon: Sales↓ , ASP↓ Revenues 34.3 41.9 (7.6) Wafer: OEM↑, ASP↓ Polysilicon unit production cost slightly increased due to annual maintenance; Cost of revenues (30.7) (33.4) (2.7) Wafer unit processing cost sligh

  16. Slide 16: Non-GAAP reconciliation – EBITDA and gross margin

    Non-GAAP reconciliation – EBITDA and gross margin US$ in millions Q2 2015 Q1 2015 Change Net income (loss) (0.9) 1.2 (2.1) Income tax (benefit) expenses (0.2) 0.2 (0.4) Interest expense 2.6 3.2 (0.6) Interest income (0.1) (0.05) (0.05) Depreciation 7.0 6.9 0.1 EBITDA (1) 8.4 11.4 (3.0) EBITDA margin

  17. Slide 17: Balance sheet summary

    Balance sheet summary Change (Q2 2015 vs. US$ in millions 6/30/2015 3/31/2015 Q1 2015) 6/30/2014 Cash and restricted Cash 95.1 32.2 62.9 77.7 Accounts receivable 7.0 8.8 (1.8) 6.8 Notes receivable 38.3 48.4 (10.1) 33.6 Inventories 10.5 9.4 1.1 12.1 Prepaid land use rights 28.7 28.9 (0.2) 29.3 Net PP

  18. Slide 18: Cash flow summary

    Cash flow summary 6 months ended 6 months ended US$ in millions Jun 30, 2015 Jun 30, 2014 Net cash provided by operating activities 32.1 29.1 Net cash (used in) investing activities (56.2) (30.9) Net cash provided by financing activities 75.7 52.8 Effect of exchange rate changes 0.006 0.5 Net increa

  19. Slide 19: Agenda

    Agenda  Business Highlights and Summary  Financial Results and Update  Q&A PRIVATE & CONFIDENTIAL P. 19

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