Daqo New Energy Corp · NYSE:DQ

Daqo New Energy — Q1 2017 Earnings Presentation

19 slides from Daqo New Energy's earnings presentation, May 9, 2017

  1. Slide 1: Unaudited Q1 2017 Financial Results Presentation

    Daqo New Energy Corp. Unaudited Q1 2017 Financial Results Presentation May 9, 2017

  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 Q1 2017 highlights

    Business update and Q1 2017 highlights  Polysilicon Cost Structure (1) -- total production cost (including depreciation) of $8.41/kg in Q1 2017, decreased from $9.98/kg in Q4 2016 -- cash cost (excluding depreciation) of $6.68/kg in Q1 2017, decreased from $7.34/kg in Q4 2016  Polysilicon producti

  5. Slide 5: Phase 3A Polysilicon Facilities

    Phase 3A Polysilicon Facilities Record-high quarterly production volume – 4,927 MT in Q1 2017 PRIVATE & CONFIDENTIAL P. 5

  6. Slide 6: Management commentary

    Management commentary We are pleased with the strong financial and operating results we achieved for the first quarter of 2017. I would like to thank our entire Xinjiang polysilicon team for their great efforts to make the first quarter of 2017 our best quarter ever in terms of cost structure, produ

  7. Slide 7: Daqo's quarterly polysilicon Average Selling Prices

    Daqo’s quarterly polysilicon Average Selling Prices Quarterly Polysilicon ASPs($/kg) $21.63 $22.04 $21.50 $20.47 $18.67 $17.98 $18.09 $17.24 $16.71 $16.66 $15.95 $15.64 $14.98 $14.96 $13.86 $13.72 Q2 2013 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 PRIVATE & CONFIDENTIAL P. 7

  8. Slide 8: Xinjiang polysilicon facilities update

    Xinjiang polysilicon facilities update Q1 2017 key facts Outlook  Successful ramp-up of Phase 3A facilities  Expected external sales volume in Q2 2017:  Record-high quarterly production volume of 4,927 MT 4,200 ~ 4,500 MT (excluding polysilicon used internally  External sales volume of 4,223 MT(

  9. Slide 9: Polysilicon manufacturing overview

    Polysilicon manufacturing overview Production Volume (MT) 4,927 3,547 3,570 3,636 3,405 2,689 2,456 1,748 1,791 1,801 1,734 1,445 1,517 1,504 1,311 962 Q2 2013 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2014 2016 Cash cost and Depreciation ($/kg)* Cash cost Depreciation 17.64 15.98 15.75

  10. Slide 10: Chongqing wafer facilities update

    Chongqing wafer facilities update Q1 2017 key facts Q2 2017 sales volume outlook  22.4 million pieces sold to customers  Q2 2017 wafer sales volume: 23.5 ~24.0 million pieces PRIVATE & CONFIDENTIAL P. 10

  11. Slide 11: Sales volume in Q1 2017 and outlook for Q2 2017

    Sales volume in Q1 2017 and outlook for Q2 2017 Q2 2017E Sales Volume Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 guidance Polysilicon 4,200~ 2,905 2,931 2,838 2,209 4,223 (MT) 4,500 Wafer 22.1 25.0 14.0 21.3 22.4 23.5~24.0 (million pieces) PRIVATE & CONFIDENTIAL P. 11

  12. Slide 12: Agenda

    Agenda  Business Highlights and Summary  Financial Results and Update  Q&A PRIVATE & CONFIDENTIAL P. 12

  13. Slide 13: Q1 2017 financial highlights

    Q1 2017 financial highlights  Revenue of $83.8 million in Q1 2017, an increase of 81.8% from $46.1 million in Q4 2016  Gross profit of $35.9 million in Q1 2017, an increase of 152.8% from $14.2 million in Q4 2016  Gross margin of 42.8% in Q1 2017, increased from 30.7% in Q4 2016  Non-GAAP gross

  14. Slide 14: P&L Summary (Q1 2017 vs. Q4 2016)

    P&L Summary (Q1 2017 vs. Q4 2016) US$ in millions (except on otherwise indicated) Q1 2017 Q4 2016 Change Analysis Polysilicon: Ext. sales volume ↑ , ASP↑ Revenues 83.8 46.1 37.7 Wafer: Sales volume↑ Polysilicon: Ext. sales volume ↑ Unit cost↓ Cost of revenues (47.9) (31.9) (16.0) Wafer: Sales volume

  15. Slide 15: Balance sheet summary

    Balance sheet summary Change (Q1 2017 vs. US$ in millions 3/31/2017 12/31/2016 Q4 2016) 3/31/2016 Cash, cash equivalent and 61.2 31.9 30.7 35.7 restricted Cash Accounts receivable 13.1 4.8 8.3 15.4 Note receivables 11.7 13.0 (1.3) 25.3 Inventories 15.7 12.3 3.4 10.9 Prepaid land use rights 24.9 24.8

  16. Slide 16: Cash flow summary

    Cash flow summary 3 months ended 3 months ended US$ in millions Mar. 31, 2017 Mar. 31, 2016 Net cash provided by operating activities 28.6 22.5 Net cash (used in) investing activities (16.6) (17.5) Net cash (used in) provided by financing activities 16.5 (3.3) Effect of exchange rate changes 0.1 0.1

  17. Slide 17: Non-GAAP reconciliation

    Non-GAAP reconciliation US$ in millions Q1 2017 Q4 2016 Q1 2016 Net income 23.2 4.2 8.4 Income tax expenses 4.7 1.3 1.1 Interest expense 4.3 4.1 3.9 Interest income (0.1) (0.01) (0.1) Depreciation 9.6 8.1 8.6 EBITDA (1) 41.7 17.6 21.9 EBITDA margin (1) 49.8% 38.3% 38.0% Gross profit 35.9 14.2 16.7 C

  18. Slide 18: Use of Non-GAAP Financial Measures

    Use of Non-GAAP Financial Measures To supplement Daqo’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), the Company uses certain non-GAAP financial measures that are adjusted for certain items from the most directly comp

  19. Slide 19: Agenda

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

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