Daqo New Energy's (NYSE:DQ) principal operating subsidiary, Xinjiang Daqo, expects a substantially smaller loss for 2025, signaling that the worst of the solar industry's recent price collapse may have passed.
The subsidiary issued a preliminary estimate Friday projecting a net loss of between RMB 1 billion and RMB 1.3 billion for the fiscal year ended Dec. 31, 2025, under Chinese accounting standards (PRC GAAP).
The forecast represents a marked improvement over the RMB 2.7 billion net loss reported in 2024.
Daqo New Energy, which holds a 72.8% stake in the subsidiary, relies on Xinjiang Daqo for the vast majority of its revenue and net income.
While the parent company reports consolidated results in U.S. dollars under U.S. GAAP, the narrowing loss at the subsidiary level reflects a broader recovery in the polysilicon sector.
After a disastrous first half of 2025, during which polysilicon prices plummeted to record lows, the industry reached an "inflection point" in the third quarter.
Recovery has been bolstered by Chinese government initiatives to curb "low-price competition" and new energy consumption standards designed to phase out inefficient capacity.
Daqo has capitalized on this shift by maintaining its position as one of the world's lowest-cost producers, recently reporting record-low cash costs of $4.54 per kilogram.
Despite the improving trend, management urged caution, noting that the figures are preliminary and subject to internal closing processes.
The company warned that actual results could vary materially from these estimates, particularly given the historical discrepancies that can occur between PRC GAAP and the consolidated U.S. GAAP figures used in the parent company's final reporting.