Daqo New Energy Corp · NYSE:DQ
Daqo New Energy — Q4 2017 Earnings Presentation
22 slides from Daqo New Energy's earnings presentation, Feb 28, 2018
Slide 1: Daqo New Energy Corp. Q4 and Fiscal Year 2017 Financial Results
Daqo New Energy Corp. Unaudited Q4 and Fiscal Year 2017 Financial Results Presentation February 28, 2018
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
Slide 3: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 3
Slide 4: Management commentary
Management commentary "The fourth quarter of 2017 was an excellent quarter for Daqo New Energy in terms of both operational and financial performance, which concluded our fiscal year of 2017 as the best year in the Company’s history. I would like to thank our entire team for their hard work and dedi
Slide 5: Management commentary
Management commentary “Our focus throughout the quarter and going into 2018 remains on reducing costs. Having successfully completed the annual maintenance of our facilities in October 2017, we resumed production with improved manufacturing efficiency. While average polysilicon production cost incre
Slide 6: Business update and Q4 2017 highlights
Business update and Q4 2017 highlights Polysilicon Cost Structure (1) -- total production cost (including depreciation) of $9.40/kg in Q4 2017, compared to $8.95/kg in Q3 2017 -- cash cost (excluding depreciation) of $7.64/kg in Q4 2017, compared to $7.16/kg in Q3 2017 Polysilicon production vol
Slide 7: Xinjiang polysilicon facilities update
Xinjiang polysilicon facilities update Q4 2017 key facts Outlook Record-high quarterly production volume of 5,339 MT Expected production volume in Q1 2018: Record-high external sales volume of 4,730 MT(1) 5,300 ~ 5,500 MT Average total production cost : $9.40/kg (2) Expected external sales
Slide 8: Daqo's quarterly polysilicon Average Selling Prices
Daqo’s quarterly polysilicon Average Selling Prices Quarterly Polysilicon ASPs($/kg) $21.63 $22.04 $21.50 $20.47 $18.67 $19.09 $17.98 $18.09 $17.24 $16.71 $16.66 $15.95 $16.19 $15.64 $14.98 $14.96 $13.86 $13.72 $13.58 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017
Slide 9: Polysilicon manufacturing overview
Polysilicon manufacturing overview 5,339 Production Volume (MT) 4,927 4,993 4,940 3,547 3,570 3,636 3,405 2,689 2,456 1,748 1,791 1,801 1,734 1,311 1,445 1,517 1,504 962 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017 Cash cost and Depreciation ($/kg)* Cash cost Dep
Slide 10: Phase 3B Project
Phase 3B Project – adding annual capacity to 30K MT by mid 2019 Polysilicon capacity expansion in Daqo Xinjiang (cumulative capacity) Phase 3B Phase 3A 30,000 MT Phase 2A Phase 2B Phase 2A enhancement 18,000 MT 12,150 MT 5,000 MT 6,150 MT 2013 2014 2H 2015 1Q 2017 2019E Expect to start pilot produ
Slide 11: Chongqing wafer facilities update
Chongqing wafer facilities update Q4 2017 key facts Q1 2018 sales volume outlook 22.3 million pieces sold to customers Q1 2018 wafer sales volume: 15.0 ~20.0 million pieces PRIVATE & CONFIDENTIAL P. 11
Slide 12: Sales volume in Q4 2017 and outlook for Q1 2018
Sales volume in Q4 2017 and outlook for Q1 2018 Q1 2018E Sales Volume Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 guidance Polysilicon 4,900~ 2,209 4,223 4,497 4,500 4,730 (MT) 5,100 Wafer 21.3 22.4 27.0 26.4 22.3 15.0~20.0 (million pieces) PRIVATE & CONFIDENTIAL P. 12
Slide 13: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 13
Slide 14: Q4 2017 financial highlights
Q4 2017 financial highlights Revenue of $103.7 million in Q4 2017, increasing from $89.4 million in Q3 2017 Gross profit of $46.9 million in Q4 2017, increasing from $36.4 million in Q3 2017 Gross margin of 45.2% in Q4 2017, increasing from 40.8% in Q3 2017 Non-GAAP gross margin(1) of 45.6%
Slide 15: P&L Summary (Q4 2017 vs. Q3 2017)
P&L Summary (Q4 2017 vs. Q3 2017) US$ in millions (except on otherwise indicated) Q4 2017 Q3 2017 Change Analysis Polysilicon: Ext. sales volume ↑ , ASP↑ Revenues 103.7 89.4 14.3 Wafer: Sales volume↓, ASP↓ Polysilicon: Ext. sales volume ↑ ,Cost↑ Cost of revenues (56.8) (53.0) (3.8) Wafer: Sales volu
Slide 16: Balance sheet summary
Balance sheet summary Change (Q4 2017 vs. US$ in millions 12/31/2017 9/30/2017 Q3 2017) 12/31/2016 Cash, cash equivalent and 72.7 61.6 11.1 31.9 restricted Cash Accounts receivable 3.0 4.6 (1.6) 4.8 Note receivables 27.3 25.3 2.0 13.0 Inventories 19.6 17.3 2.3 12.3 Prepaid land use rights 25.9 25.5
Slide 17: Cash flow summary
Cash flow summary 12 months ended 12 months ended US$ in millions Dec. 31, 2017 Dec. 31, 2016 Net cash provided by operating activities 142.7 98.7 Net cash (used in) investing activities (63.1) (66.1) Net cash (used in) provided by financing activities (37.4) (30.3) Effect of exchange rate changes 2
Slide 18: Full Year 2017 financial and operating highlights
Full Year 2017 financial and operating highlights • Polysilicon production volume of 20,200 MT in 2017, an increase of 54.6% from 13,068 MT in 2016. • Polysilicon external sales volume of 17,950 MT in 2017, an increase of 64.9% from 10,883 MT in 2016. • Solar Wafer sales volume of 98.0 million piece
Slide 19: P&L Summary (FY2017 vs. FY2016)
P&L Summary (FY2017 vs. FY2016) US$ in millions 2017 2016 Change Analysis Poly : Sales volume↑, ASP↑ Revenues 352.9 229.1 123.8 Wafer: Sales volume↑, ASP↓ Poly : Sales volume↑, Unit cost↓ Cost of Revenues (209.4) (148.7) (60.7) Wafer: Sales volume↑, Unit cost↓ Gross profit 143.5 80.4 63.1 Gross marg
Slide 20: Non-GAAP reconciliation
Non-GAAP reconciliation US$ in millions Q4 2017 Q3 2017 Q4 2016 FY 2017 FY 2016 Net income 34.1 24.4 4.2 93.9 43.9 Income tax expenses 5.6 4.2 1.3 17.3 7.4 Interest expense 4.1 4.3 4.1 18.0 14.6 Interest income (0.2) (0.1) (0.02) (0.5) (0.4) Depreciation 10.0 9.6 8.1 38.8 33.8 EBITDA (1) 53.6 42.3 1
Slide 21: 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
Slide 22: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 22