Numbers
The Numbers
Daqo's financials tell a single story: this is a commodity business at the mercy of polysilicon pricing, currently in the deepest trough since the company's founding. Revenue has collapsed 86% from peak ($4.6B in 2022 to $665M in 2025), margins have gone deeply negative, and the only reason the company survives is a fortress balance sheet built during the boom years.
Snapshot
Stock Price
Market Cap ($M)
Liquid Assets ($M)
Total Debt ($M)
Price / Book
Price / Liquid Assets
EPS (FY2025)
Book Value / Share
Stock trades at 0.26x book value and 0.69x liquid assets. The market is pricing permanent destruction of at least 74% of shareholder equity — a bet that either the cash will burn away or the VIE structure makes it inaccessible.
Revenue & Earnings Power
Revenue and earnings are entirely a function of polysilicon pricing. The 15x revenue peak-to-trough swing (2022 to 2025) dwarfs what you see in oil & gas or metals mining.
Gross margins ranged from 74% (2022 peak) to -21% (2024-2025 trough). The ~95 percentage point swing is the entire story — Daqo has minimal pricing power, and when ASPs drop below production cost, every unit sold destroys value.
The quarterly data shows a potential inflection: gross margins turned positive in Q3 2025 (3.9%) and improved to 7.0% in Q4 2025. But Q1 2026 revenue collapsed to $27M — a 88% sequential drop — as Daqo refused to sell below cost.
Cash Generation
Cash conversion historically strong — during the boom years (2021-2023), cumulative operating CF of $4.7B exceeded cumulative net income of $4.0B, indicating real cash earnings. The FCF gap reflects massive capex ($1.8B in 2022-2023 alone) for the Baotou expansion.
FY2025 operating cash flow turned slightly positive ($50M) despite a $216M net loss, as D&A ($240M) and working capital improvements offset cash losses. FCF was -$123M due to ongoing Baotou capex.
Balance Sheet — The Survival Asset
The balance sheet is the bull case in one chart. Daqo carries:
- $1.94B in cash (plus $330M in short-term investments and deposits = $2.27B total liquidity)
- Zero debt since 2021
- $5.9B in equity ($87/share book value vs $23 stock price)
- $3.4B in PP&E — the key impairment question
Valuation Context
At 0.26x book, Daqo trades at the lowest P/B in its history. For context:
- During the last trough (2019): P/B was ~0.40x
- At the peak (2021): P/B reached ~2.50x
- Current: P/B 0.26x implies the market expects ~74% of equity to be destroyed
Cash Runway Analysis
Even in the worst case, Daqo has 2+ years of cash runway. In the base case, 3-4 years. If Chinese government pricing enforcement materializes (mid-2026), the runway becomes effectively infinite. The survival risk is not financial — it is political (VIE structure, delisting risk).
Capital Allocation
Capital allocation has been aggressive in both directions: $1.7B in capex during 2022-2023 (Baotou expansion at the worst possible time) and $486M in buybacks in 2023. The buyback timing was poor — shares were repurchased at much higher prices than today. Capex is now winding down ($173M in 2025), which helps FCF recovery.