Daqo New Energy (NYSE:DQ)

Fourth Quarter 2012 Results

• Revenues were $6.2 million, compared to $21.1 million in the third quarter of 2012 and $27.3 million in the fourth quarter of 2011.
• Earnings per fully diluted ADS** were negative $10.76 compared to negative $2.21 in the third quarter of 2012, and negative $5.61 in the fourth quarter of 2011.

"In September of 2012, we started pilot production for polysilicon in our Phase II facilities in Xinjiang. Thanks to the dedication and hard work of our technical and operation teams, we produced 617 MT of polysilicon in our Xinjiang facilities in the fourth quarter of 2012. We shipped 323 MT to our customers and 139 MT internally to our wafer manufacturing business in the fourth quarter of 2012. We successfully reached our targets in terms of capacity and cost structure by the end of first quarter 2013. Our total production cost of polysilicon in Xinjiang was already below $20/kg in February 2013 and we believe there is still room for further improvement. Now we are working intensely to maximize the output and further reduce the cost in Xinjiang," commented Dr. Gongda Yao, Chief Executive Officer of the Company. "Since the end of 2012, we do see the demand for polysilicon is picking up, the average selling price is increasing and the payment terms are improving. We are confident that we are well positioned in the current challenging market with Xinjiang facilities' low cost and high quality polysilicon products."

Dr. Yao continued, "As for our facilities in Wanzhou, we have successfully conducted annual maintenance in the fourth quarter of 2012. We have already completed the technical improvement project of Hydrogen vent gas recovery. The other two projects of DCS recovery and electrical system modification for CVD reactors are ongoing. In addition, we are also evaluating various technical improvement options for further cost reduction.

"In the fourth quarter of 2012, due to the continued challenging supply and demand conditions in the wafer segment, we recognized an impairment of long-lived assets of our wafer facilities in the amount of $42.8 million. The recording of the impairment charge was to reflect the less than expected profit-generating ability of our wafer assets. In addition, considering the uncertainty in the solar market, the Company determined it was more-likely-than-not that our deferred tax assets would not be utilized before they expire and recorded a valuation allowance for deferred tax assets recognized in the prior periods in the amount of $19.9 million.

"Although it is still early to say the downturn is over, we are encouraged to see the solar market has begun to stabilize across the value chain since the end of 2012. We believe that 2013 will be a year of growth especially in Asia where China, Japan and India will make a great contribution, and other emerging markets like Africa, South America, and the Middle East," Dr. Yao concluded.

CHONGQING, China, December 12, 2012 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that the ratio for its ordinary shares to American Depositary Shares (the "ADS") will change from one (1) ADS representing five (5) ordinary shares to one (1) ADS representing twenty five (25) ordinary shares (the "Ratio Change"). The effective date is expected to be on December 21, 2012.

Pursuant to the Ratio Change, the record holders of the Company's ADS as of the effective date will be entitled to receive one (1) new ADS, each representing twenty five (25) ordinary shares, in exchange for every five (5) ADSs held by them. No new ordinary shares will be issued in connection with the Ratio Change. JPMorgan Chase Bank N.A. will contact ADS holders and arrange for the exchange of their current ADSs for new ADSs. As a result of this Ratio Change, the ADS price is expected to automatically increase proportionally. The Company can give no assurance, however, that the post-change ADS price will be equal to or greater than the pre-change ADS price multiplied by the ratio.

Third Quarter 2012 Preliminary Results

• Revenues were $21.1 million, compared to $27.6 million in the second quarter of 2012 and $61.2 million in the third quarter of 2011.
• Loss per fully diluted ADS was $0.44, compared to $0.20 in the second quarter of 2012, and earnings of $0.34 per fully diluted ADS in the third quarter of 2011.

"We have successfully completed the construction of Xinjiang Phase II polysilicon plant in the third quarter and already started pilot production. As of November 20, we had produced 285 MT polysilicon in our new plant. Our progress of ramp-up is in line with our original schedule. We are confident that we will meet our targets regarding annual capacity, quality and cost structure by the end of the first quarter of 2013 in our Xinjiang Phase II polysilicon plant." commented Dr. Gongda Yao, Chief Executive Officer of the Company.

"In this quarter, we temporarily suspended our production in our Wanzhou polysilicon plant. We started annual maintenance in October and we have initiated equipment upgrades and technology improvements to further lower the cost. We plan to restart production after we complete these projects. Moreover, it is high-flow period from May to September when the hydro electricity rate is lowest in the whole year. We expect the improved cost structure will enable Wanzhou facility to generate positive cash flow when we resume production."

"As we previously announced, in this quarter we spun off our module business to Daqo Group. We believe this spin-off will enable us to concentrate our valuable resources on our core business in order to pull through this challenging period." Dr. Yao concluded.

Outlook for Fourth Quarter 2012

For the fourth quarter of 2012, the Company expects to ship 550-600 MT of polysilicon, approximate 10 MW of wafers. In addition, the Company expects to provide 100-120 metric tons of ingot and block manufacturing outsourcing services to its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.

CHONGQING, China, September 29, 2012 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that it has sold Nanjing Daqo New Energy Co., Ltd., the entity that operates the Company's module business, to Daqo Group for a consideration of RMB 65.6 million. Daqo Group is one of the largest private electrical equipment manufacturers in China and an affiliate of the Company. Daqo Group's shareholders in aggregate beneficially own over a majority of the Company's total outstanding ordinary shares.

The transaction has been approved by the Company's audit committee, which is composed entirely of independent directors. The Company had conducted a public auction of Nanjing Daqo New Energy Co., Ltd. through Nanjing Asset and Equity Exchange before it determined that the terms of the sale of the module business to Daqo Group are fair to the Company.

"We are pleased to complete the spin-off of the module business and to be able to focus our resource and attention on our core polysilicon and wafer business," commented Dr. Gongda Yao, chief executive officer of Daqo New Energy.

CHONGQING, China, August 20, 2012 /PRNewswire-Asia/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that it has been notified by the New York Stock Exchange (the "NYSE") that the Company was not in compliance with the NYSE's price criteria for continued listing standard because, as of July 24, 2012, the average closing price of the Company's American Depositary Shares, or ADSs, was less than $1.00 per ADS over a consecutive 30-trading-day period. Pursuant to Section 802.01C of the NYSE's Listed Company Manual, the NYSE's price criteria standard requires that any listed security trade at a minimum average closing price of $1.00 during any consecutive 30-trading-day period.

Under NYSE rules, the Company has six months following receipt of the notification to regain compliance with the minimum share price requirement. The Company can regain compliance during the cure period if the Company's ADS have a closing share price of at least $1.00 on the last trading day of any calendar month during the period and also have an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month or on the last day of the cure period. As required by the NYSE rules, the Company has notified the NYSE of its intent to cure the price deficiency and return to compliance with this continued listing standard. The Company intends to cure its ADSs' price deficiency within the applicable time periods required by the NYSE and to remain listed on the NYSE, subject to its compliance with other NYSE continued listing standards.

Second Quarter 2012 Financial and Operating Highlights

• Revenues were $30.6 million, compared to $34.0 million in the first quarter of 2012 and $70.7 million in the second quarter of 2011.
• Gross loss was $5.9 million, compared to a gross loss of $11.0 million in the first quarter of 2012 and gross profit of $33.0 million in the second quarter of 2011.
• Gross margin was negative 19.5%, compared to negative 32.2% in the first quarter of 2012 and 46.6% in the second quarter of 2011.
• Operating loss was $6.8 million, compared to operating loss of $12.1 million in the first quarter of 2012 and operating income of $32.6 million in the second quarter of 2011.
• Operating margin was negative 22.4%, compared to negative 35.5% in the first quarter of 2012 and 46.2% in the second quarter of 2011.
• Net loss attributable to Daqo New Energy Corp. shareholders was $7.1 million, compared to $13.7 million in the first quarter of 2012 and net income attributable to Daqo New Energy Corp. shareholders of $25.7 million in the second quarter of 2011.
• Loss per fully diluted ADS was $0.20, compared to $0.39 in the first quarter of 2011, and earnings of $0.73 per fully diluted ADS in the second quarter of 2011.

"In the second quarter of 2012, we were running our Wanzhou polysilicon plant smoothly at full capacity. We have successfully reduced our polysilicon production cost, which is attributed to several technology improvements and the lower seasonal electricity rate. However, the solar PV industry continued its downward motion and the average selling prices for polysilicon, wafer and module remained weak. The international trade conflicts also had a negative impact on market demands." Commented Dr. Gongda Yao, Chief Executive Officer of the Company. "As for the Xinjiang Phase II project, we have already completed 97% of the total construction by the end of July. Several units including liquid chlorine system, utilities system, TCS system, and distillation system, have already been tested and are ready for pilot production. We are confident to achieve our original goal to start pilot production this September and contribute over 500 MT Polysilicon in the last four months of 2012."

"As for our wafer business, we are working with our business partner to improve our wafer manufacturing technology so as to achieve better quality with lower cost. We plan to gradually increase the utilization rate of our wafer plant, progressively to the level of full capacity, so that we will be able to minimize the loss in the interim as we move towards break-even, and eventually obtain positive cash flow in wafer business."

"Recently, our high quality polysilicon has been qualified by a semiconductor customer and we obtained the first order. In the second quarter, 90% of our polysilicon meets the standard of electronic grade III. Although the first order from this semiconductor customer is not significant in terms of volume, we think it's a new opportunity for the company to expand its business to a new market with higher margins." Dr. Yao concluded.

Outlook for Third Quarter 2012

For the third quarter of 2012, the Company expects to ship 1000-1200 MT of polysilicon, approximate 6 MW of wafers, 8 MW of wafers OEM and 3.0 MW of modules. In addition, the Company expects to provide 200 metric tons of ingot and block manufacturing outsourcing services to its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.

CHONGQING, China, July 9, 2012 /PRNewswire-Asia/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced that its board of directors has approved a share repurchase program, effective immediately.

The board of directors has authorized Daqo New Energy to repurchase up to US$5 million worth of its issued and outstanding ordinary shares or American Depositary Shares, or ADSs, representing ordinary shares in open-market purchases, in negotiated transactions off the market, in block trades or through other legally permissible means prior to December 31, 2012 in accordance with applicable securities laws.

First Quarter 2012 Results

• Polysilicon shipments were approximately 964 metric tons, or MT. Photovoltaic (PV) module shipments were 2.3 Mega watts, or MW. Wafer shipments were 23.4 MW. In addition, the Company provided 2.4 MW PV modules manufacturing outsourcing service to its customers.
• Revenues were $34.0 million, compared to $38.2 million in the fourth quarter of 2011 and $87.3 million in the first quarter of 2011.
• Gross loss was $11.0 million, compared to a gross loss of $11.2 million in the fourth quarter of 2011 and gross profit of $44.5 million in the first quarter of 2011. Gross loss excluding an inventory write-down of $1.6 million was $9.4 million.
• Gross margin was negative 32.2%, compared to negative 29.3% in the fourth quarter of 2011 and 51.0% in the first quarter of 2011. Excluding $1.6 million of inventory write-down, gross margin would be negative 27.5%.
• Operating loss was $12.1 million, compared to operating loss of $49.9 million in the fourth quarter of 2011 and operating income of $43.5 million in the first quarter of 2011.
• Operating margin was negative 35.5%, compared to negative 130.4% in the fourth quarter of 2011 and 49.8% in the first quarter of 2011. Operating loss excluding an inventory write-down of $1.6 million was $10.5 million, representing an operating margin of negative 30.8%.
• Net loss attributable to Daqo New Energy Corp. shareholders was $13.7 million, compared to $39.4 million in the fourth quarter of 2011 and net income attributable to Daqo New Energy Corp. shareholders of $35.0 million in the first quarter of 2011.
• Loss per fully diluted ADS was negative $0.39, compared to negative $1.12 in the fourth quarter of 2011, and earnings of $0.99 in the first quarter of 2011.

"In the first quarter of 2012, we continued to operate our polysilicon production in full utilization. We exceeded our targets for shipments. Nevertheless, the solar PV market remains weak due to restrained demand as a result of uncertainties including changing governmental policies, tight credit markets and potential international trade conflicts." commented Dr. Gongda Yao, Chief Executive Officer of the Company "We will focus on the operation of our existing polysilicon site in Wanzhou and the construction of Phase 2 polysilicon plant in Xinjiang. We are confident that after our Phase 2 facilities commence production, we will be well positioned with a much lower cost structure and larger capacity."

Outlook for Second Quarter 2012

For the second quarter of 2012, the Company expects to ship 900-1000 MT of polysilicon, approximate 20.5 MW of wafers and 4.5 MW of modules. In addition, the Company expects to provide 200 metric tons of ingot and block manufacturing outsourcing services to its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.

Fourth Quarter 2011 Results

• Polysilicon shipments were approximately 834 metric tons, or MT. Photovoltaic (PV) module shipments were 9.6 Mega watts, or MW. Wafer shipments were 7.8 MW. In addition, the Company provided 5.9 MW PV modules manufacturing outsourcing service to its customers.
• Revenues were $38.2 million, compared to $59.6 million in the third quarter of 2011 and $81.9 million in the fourth quarter of 2010.
• Gross loss was $11.2 million, compared to gross profit $19.9 million in the third quarter of 2011 and $45.8 million in the fourth quarter of 2010. Excluding the impact of $10.6 million inventory write-down, gross loss would be $0.6 million.
• Gross margin was negative 29.3%, compared to positive 33.3% in the third quarter of 2011 and 55.9% in the fourth quarter of 2010. Excluding $10.6 million of inventory write-down, gross margin would be negative 1.6%.
• Operating loss was $49.9 million, compared to operating profit $17.1 million in the third quarter of 2011 and $41.3 million in the fourth quarter of 2010.
• Operating margin was negative 130.4%, compared to positive 28.8% in the third quarter of 2011 and 50.4% in the fourth quarter of 2010. Excluding provision of fixed assets impairment of $38.5 million and inventory write-down of $10.6 million, operating loss would be $0.8 million, representing a margin of negative 2.1%.
• Net loss attributable to Daqo New Energy Corp. shareholders was $39.4 million, compared to profit $12.1 million in the third quarter of 2011 and $32.8 million in the fourth quarter of 2010.
• Earnings per fully diluted ADS were negative $1.12, compared to positive $0.34 in the third quarter of 2011, and $0.95 in the fourth quarter of 2010.

“In the fourth quarter of 2011, we continued to operate our polysilicon manufacturing smoothly. We achieved our targets for production and shipment. In addition, we successfully conducted annual maintenance, and in turn laid a concrete foundation for the operation in 2012.” commented Dr. Gongda Yao, Chief Executive Officer of the Company “Nevertheless, the weakening industry environment resulted in even lower selling prices for Polysilicon, Wafer and Module compared to the third quarter, which adversely affected our profitability.”

“For 2011, we achieved a year of growth in both shipment and revenue. We will continue our commitments to further improve operation efficiency and lower manufacturing cost. We are taking initiatives in our existing Wanzhou site and expect to see significant cost reduction when our Xinjiang facilities start operation in the fourth quarter of 2012.”

Dr. Yao continued “In order to best concentrate our financial and operational resources on Xingjiang project, which we believe is the first priority given the current market situation, we implemented projects consolidation plan to postpone the Hydrochlorination project in Wanzhou for one year. We will resume this project after Xinjiang facilities successfully ramp up. Besides that, the module production plan of JNE Daqo Solar Corp., which was a joint venture between Daqo New Energy and JNE in Canada, has also been suspended indefinitely.”

“In spite of the near term uncertainties and challenges in the market, we are confident that solar PV is becoming one of the most feasible, affordable and reliable alternative energies. We believe our Company with its high-quality and low cost polysilicon will weather through the downturn and seize opportunities for the next growth stage.” Dr. Yao concluded.

Outlook for First Quarter 2012 

For the first quarter of 2012, the Company expects to ship 800-900 MT of polysilicon. The Company also expects to ship approximately 16-17 MW of wafer and 5.3 MW of modules. For the module shipment, the Company further expects 2.9 MW will come from its brand name module and expects to provide 2.4 MW PV modules manufacturing outsourcing service to its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See “Safe Harbor Statement” at the end of this press release.

CHONGQING, China--(BUSINESS WIRE)--Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today announced the appointment of Mr. Bing Sun as Chief Financial Officer, effective February 1, 2012.

Mr. Sun joins Daqo New Energy from Shunda Holdings Co, a solar photovoltaic company based in China, where he was the Chief Financial Officer since June 2008. Prior to Shunda Holdings, Mr. Sun was financial controller at BCD Semiconductor, a leading analog integrated device manufacturer in China from April 2007 to June 2008. His earlier experiences include serving as audit manager at Deloitte Touche Tohmatsu and compliance manager at BAX Global. Mr. Sun holds MBA degree with concentration in accounting and he is a U.S. Certificated Public Accountant.

“We are very excited to have Mr. Bing Sun join Daqo New Energy. His more than 15 years’ financial and operational experience in various industries, including photovoltaic industry, will bring great value to the company.” said Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy.

• Polysilicon shipments were approximately 1,001 metric tons, or MT. Photovoltaic (PV) module shipments were 3.9 Mega watts, or MW. In addition, the Company manufactured 8.1 MW PV modules for outsourcing customers. Wafer shipments were 1.3 MW.
• Revenues were $70.7 million, a decrease of 19.0% from the first quarter of 2011 and an increase of 34.8% from the second quarter of 2010.
• Gross profit was $33.0 million, a decrease of 25.9% from the first quarter of 2011 and an increase of 69.8% from the second quarter of 2010.
• Gross margin was 46.6% in the second quarter of 2011, compared to 51.0% in the first quarter of 2011 and 37.0% in the second quarter of 2010.
• Operating income was $32.6 million, a decrease of 24.9% from the first quarter of 2011 and an increase of 98.0% from the second quarter of 2010.
• Operating margin was 46.2%, compared to 49.8% in the first quarter of 2011 and 31.4% in the second quarter of 2010.
• Net income attributable to Daqo New Energy Corp. shareholders was $25.7million, a decrease of 26.6% from the first quarter of 2011 and an increase of 118.6% from the second quarter of 2010.
• Earnings per fully diluted ADS were $0.73, compared to $0.99 in the first quarter of 2011, and $0.41 in the second quarter of 2010.

"The substantial price decline and weak market demand in the second quarter of 2011 has impacted our revenue. However, our core business, the production of polysilicon, was still at 100% utilization and we kept no inventory at the quarter end. We have seen the pricing environment for polysilicon stabilized since the beginning of the third quarter and the demand picked up. The wafer and module markets continue to see pricing pressure. However, the modules order picked up in the third quarter and the majority of our wafer output will be used in our module production through tolling arrangement with our cell partner.” Commented, Dr. Gongda Yao, the Chief Executive Officer of the Company, “ On the financing side, we are happy to announce that we have obtained bank loan approval from Bank of China for our Xinjiang phase II polysilicon expansion plan, which fulfills the financing requirement for the project”.

Outlook for Third Quarter 2011

For the third quarter of 2011, the Company expects to ship 975-990 MT of polysilicon. The company also expects to ship 10 MW of wafer as well as 20 MW of modules. For the module shipment, the company further expects 10 MW will come from its brand name module and 10 MW outsourcing for its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this projection is subject to risks and uncertainties. See “Safe Harbor Statement” at the end of this press release.

CHONGQING, China--(BUSINESS WIRE)--Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy" or the "Company"), a leading polysilicon manufacturer based in China, today revised its second quarter 2011 revenue guidance.

Due to the impact of price decline throughout the entire photovoltaic (PV) supply chains in the second quarter of 2011, the Company updates its revenue guidance for the second quarter of 2011 to the following:

For the second quarter of 2011, the Company expects its total revenue to be in the range of $70 million to $71 million, compared to a prior guidance of range of $92 million to $95 million. The Company expects to ship between 970 MT to 990 MT of polysilicon in the second quarter of 2011. The Company also expects to ship approximately 0.7 MW of wafer, 4 MW PV modules under its own brand and sales of approximately 8 MW PV modules outsourcing for its customers.

"We had experienced a substantial price decline in the second quarter of 2011, and as a result, we are revising our revenue guidance for the second quarter of 2011," says Jimmy Lai, CFO of the company. "The reduction in revenue guidance is mainly due to the less shipment in the down-stream product, wafer and module."

We expect that we will require approximately $210 million for capital expenditures in 2011. Such projected capital expenditures will be used primarily for technological improvements and equipment enhancements for our Phase 1 polysilicon facilities, construction of our Phase 2 polysilicon facilities and wafer facilities, and the gradual increase of our module production capacity.

We believe that our current cash and cash equivalents, anticipated cash flow from our operations, and proceeds from additional bank borrowings will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures, for at least the next 12 months.

First Quarter 2011 Financial and Operating Highlights

• Polysilicon shipments were approximately 1,089 metric tons, or MT. Photovoltaic (PV) module shipments were 4.8 Mega watts or MW and 8 MW of outsourcing for our customers. The Company also shipped approximately 8 MT polysilicon to produce PV wafer through a tolling arrangement
• Revenues were $87.3 million, an increase of 6.6% from the fourth quarter of 2010 and 93.6% from the first quarter of 2010.
• Gross profit was $44.5 million, a decrease of 2.8% from the fourth quarter of 2010 and 214.9% increase from the first quarter of 2010.
• Gross margin was 51.0% in the first quarter of 2011, compared to 55.9% in the fourth quarter of 2010 and 31.3% in the first quarter of 2010.
• Operating income was $43.5 million, an increase of 5.4% from the fourth quarter of 2010 and 310.1% from the first quarter of 2010.
• Operating margin was 49.8%, compared to 50.4% in the fourth quarter of 2010 and 23.5% in the first quarter of 2010.
• Net income attributable to Daqo New Energy Corp. shareholders was $35.0 million, an increase of 6.6% from the fourth quarter of 2010 and 456.9% from the first quarter of 2010
• Earnings per fully diluted ADS were $0.99, compared to $0.95 in the fourth quarter of 2010, and $0.20 in the first quarter of 2010. Earnings per fully diluted ordinary share were $0.20, compared to $0.19 in the fourth quarter of 2010 and $0.04 in the first quarter of 2010

"We are happy to announce another record quarter in terms of revenue and profitability. Our ability to control our production cost, combined with ongoing favorable polysilicon pricing environment helped us to achieve this record result. During the quarter, we also successfully progressed the construction of our Shihezi, Xinjiang polysilicon phase 2 facility as planned. Our wafer production facility in Wanzhou also commenced production in April. Initial output product quality met our expectations" said Dr. Gongda Yao, CEO of the Company, "With a good start in the first 1 quarter of the year, we are confident that we can execute on our business plan for the year. We are also reaching out to our current and potential polysilicon material customers to secure our polysilicon output for the year of 2012 through 2014 with the signing of supply agreements with advance deposits. We will continue to work hard and deliver value and return for our investors".

For the second quarter of 2011, the Company expects its total revenue to be in the range of $92 million to $95 millions. The Company expects to ship between 950 MT to 1000 MT of polysilicon and generate revenues from the sales of polysilicon in an amount between US$64.5 million to US$67.5 million in the second quarter of 2011. The Company also expects to ship approximately 7 MW of wafer and generate about $4.5 million of revenue. The Company expects PV module sales to be approximately $23 million with the sales of approximately 14 MW PV modules under the Company's own brand and sales of approximately 2.5 MW PV modules outsourcing for its customers. This outlook reflects our current and preliminary view and may be subject to change. Our ability to achieve this outlook is subject to significant risks. See Forward-Looking Statements at the end of this press release.

Fourth Quarter 2010 Financial and Operating Highlights 

• Polysilicon shipments were approximately 966 metric tons, or MT. Photovoltaic (PV) module shipments were 3.5 Mega watts, or MW. The company also shipped approximately 20.5 MT polysilicon to toll into PV wafer.
• Revenues were $81.9 million, an increase of 29.6% from the third quarter of 2010 and 158.2% from the fourth quarter of 2009.
• Gross profit were $45.8 million, an increase of 70.2% from the third quarter of 2010 and 466.4% from the fourth quarter of 2009.
• Gross margin was 55.9% in the fourth quarter of 2010, compared to 42.5% in the third quarter of 2010 and 25.5% in the fourth quarter of 2009.
• Operating income were $41.3 million, an increase of 71.8% from the third quarter of 2010 and 379.5% from the fourth quarter of 2009.
• Operating margin was 50.4%, compared to 38.0% in the third quarter of 2010 and 27.1% in the fourth quarter of 2009.
• Net income attributable to Daqo New Energy Corp. shareholders was $32.8 million, an increase of 85.3% from the third quarter of 2010 and 229.3% from the fourth quarter of 2009
• Earnings per fully diluted ADS were $0.95, compared to $0.64 in the third quarter of 2010, and $0.40 in the fourth quarter of 2009. Earnings per fully diluted ordinary share were $0.19, compared to $0.13 in the third quarter of 2010 and $0.08 in the fourth quarter of 2009.

Full Year 2010 Results Financial and Operating Highlights 

• Polysilicon shipments were 3,650 MT, an increase of 143.6% from 2009.
• Revenues were $242.7 million, an increase of 118.3% from 2009.
• Gross profit was $106.2 million, an increase of 153.2% from 2009
• Gross margin was 43.8% for 2010, compared to 37.7% for 2009
• Operating income was $92.5 million, compared to $36.4 million for 2009.
• Net income was $69.1 million, compared to $29.9 million for 2009.
• Net income attributable to Daqo New Energy Corp. shareholders for 2010 was $68.6 million, an increase of 122.4% from 2009
• Earnings per fully-diluted ADS for 2010 were $2.32, compared to $1.45 in 2009.

"We are very pleased with our operating performance in the fourth quarter of 2010. We executed our business plan well, which resulted in a record quarter, based on the key metrics of revenue, gross profit, gross margin, operating margin and net income. We also successfully completed the Phase 1 polysilicon debottlenecking project, which will enable us to increase our name plate capacity from 3,300 MT to 4,300 MT,” said Dr. Gongda Yao, the chief executive officer of the company. “With the successful listing on the NYSE during the quarter, we now have a platform to grow the company into a leading global solar supply company. In 2011, we will focus on building our Phase 2 polysilicon production facility in Xinjiang, China. We will also commence our 250 MW solar wafer production, along with expanding our PV module capacity. In the beginning of 2011, we have continued to see strong demand from our customers for quality polysilicon, which should lay a strong foundation for a successful year for Daqo New Energy.”

Q1 2011 Outlook 

• For the first quarter of 2011, the company expects
• total revenue to be in the range of $81.5 million to $83.5 millions.
• to ship between 1075 MT to 1100 MT of polysilicon and generate revenues from the sales of polysilicon in an amount between US$74 million to US$76 million in the first quarter of 2011.
• revenue for the PV module sales to be approximately $7.5 million with the sales of approximately 4 MW PV modules under the company's own brand and sales of approximately 8 MW PV modules outsourcing for its customers.

CHONGQING, China--(BUSINESS WIRE)--Daqo New Energy Corp. today announced revised guidance for its fourth quarter ended December 31, 2010. Based on the customer orders and product deliveries,

• the Company now estimates its fourth quarter shipments of polysilicon to be between 930 to 950 metric tons, or MT, above the high-end of its previous guidance of 825 MT to 850 MT given on November 16, 2010.
• The Company also shipped approximately 3 to 4 megawatts, or MW, of photovoltaic modules, versus its previous guidance of 4 to 5 MW.
• Primarily as a result of the increased shipments, total revenues for the fourth quarter 2010 are currently estimated to range between US$75 to US$76 million, also above the high end of its previous range of US$65 to US$69 million.

“The successful completion of the Phase 1 capacity enhancement project has increased our total production capacity to 4,300 MT in 2011, which will help us to better serve our customers in the future.”

Daqo New Energy also announced that it plans to build its Phase 2 polysilicon production facility in Shihezi Economic Development Area in Xinjiang autonomous region, China. This new production facility is expected to commence production in the third quarter of 2012 and to be fully ramped up by the end of 2012.

"We are happy to raise the fourth quarter guidance due to better than expected customer demand and pricing environment. Furthermore, we are pleased to report that we have made encouraging progress in pursuing our polysilicon production capacity expansion strategy. Our periodical maintenance and capacity enhancement of our Phase 1 polysilicon manufacturing facility undertaken in December 2010 had been completed on schedule, and we have selected the location for our Phase 2 polysilicon manufacturing facility," said Dr. Gongda Yao, Chief Executive Officer of Daqo New Energy. "The successful completion of the Phase 1 capacity enhancement project has increased our total production capacity to 4,300 MT in 2011, which will help us to better serve our customers in the future.”

On October 12, 2010, we issued an alert that we were initiating a short-term trade on DQ @ $10.99. (Current price is $14.00).

Why we took the plunge

• Improved short-term sentiment in the ChinaHybrid space
• Solar sector has been in vogue as evidenced by sharp move in Jinkosolar Holding Adr (NYSE:JKS).
• Stock did not over perform in its IPO debut

Note that we have begun winding dwon this trade and this is not a value play.

Investors should be aware of the following points: (Per GeoContributor Dan France).

• DQ is an upstream commodity company supplying polysilicon to solar companies that is trying to build a vertically integrated solar product chain from recovered silicon materials to solar modules.

• DQ attempting to become a vertically integrated company while competing with much larger, well established companies (JKS, LDK) with far greater resources that are already vertically integrated.

• Wide swings in the price of polysilicon and the impact on margins and profitability.

• Volatility of polysilicon prices make forecasting the business challenging.

• Market factors causing a temporary spike in poly prices including plant closures for two major suppliers.  Once plants up and running and supply and demand back in balance the upward pressure on polysilicon prices will abate.  Also, polysilicon imports from the US are filling the supply gap.

• Substantial cap ex needs including $110 million for 2010 and $211 million in 2011. 

• 2010 funded but 2011 is not. 

• Cash flow from operations and additional bank debt won’t fund 2011 so a substantial equity raise will likely be  required.

Daqo New Energy plans for Initial Public Offering.

Company Snapshot:

Leading polysilicon manufacturer based in China.

Industry Snapshot:

• Photovoltaics are one of the proven and most rapidly growing renewable energy sources in the world. Solarbuzz, a solar energy research and consulting firm, reports that the global photovoltaic market reached 7.3 gigawatts, or GW, in 2009, an increase from 1.7 GW in 2006, representing a three-year compound annual growth rate of 62.5%. Solarbuzz forecasts the market to grow from 7.3 GW in 2009 to 37.1 GW in 2014, representing a compound annual growth rate of 38.4%.

• Despite the decrease in demand for solar power products during the second half of 2008 and the first half of 2009 resulting from the global recession and credit market crisis, we believe that demand for solar power products has recovered significantly in response to a number of factors, including the gradual recovery of the global economy and increasing availability of financing for solar power projects. Although selling prices for solar power products have generally stabilized at levels substantially below pre-crisis levels, selling prices may fluctuate again in the future.

• We believe that demand for solar power products will continue to grow rapidly in the long term as solar power becomes an increasingly important source of renewable energy. We believe several factors will drive demand in the global photovoltaic industry, including advantages of solar power, government incentives and decreasing costs of solar energy.

• We believe the key challenges presently facing the photovoltaic industry include the need to improve cost competitiveness against other energy sources, possible additional reduction or elimination of government subsidies and economic incentives and the ability to obtain financing.

• The photovoltaic market in China is at an initial stage of development. According to Solarbuzz, the photovoltaic market in China was 208 MW in 2009, compared to just 35 MW in 2008. However, Solarbuzz expects that China’s photovoltaic market will undergo a significant transformation from a market dominated by off-grid rural and industrial projects to one marked by a significant increase in large on-grid, ground mounted systems as the result of changing project economics and increasing governmental support.
    

Use Of proceeds:

Our net proceeds from this offering are expected to be approximately $83.9 million (assuming an initial public offering price of $11.50 per ADS, the midpoint of the estimated range of the initial public offering price shown on the front cover of this prospectus, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us). We plan to use approximately $65.0 million of the net proceeds to expand our polysilicon manufacturing facilities and the remainder to finance capital expenditures for our wafer manufacturing business. See “Business—Manufacturing Capacity” for additional information about our production capacity expansion plan.

Underwriter:

• Morgan Stanley & Co. International plc
• Piper Jaffray & Co.

Proposed offering price: $10.50 and $12.50 per ADS

Post IPO Share Calculation: (assuming 5 to 1 Ordinary to ADS conversion ratio).

• 25,942,820: Pre IPO fully diluted share count used in EPS calculation.
•   8,000,000: Newly issued ADS shares
•   1,200,000: Over-allotments ADS shares 

GeoTeam® best effort calculation of total post IPO ADS count to be used in EPS calculations, assuming full conversions and an Ordinary to ADS conversion ratio of 5 to 1:   35,142,820 (Investors can also multiply 5 by reported EPS per ordinary figures to convert to EPS per ADS).

Financial Snapshot:

We have achieved substantial growth since we commenced commercial production of polysilicon in July 2008. In 2009, we produced 1,523 MT of polysilicon and sold 1,498 MT, compared to 291 MT of polysilicon produced and 237 MT sold in 2008. In the six months ended June 30, 2010, we produced 1,826 MT of polysilicon and sold 1,710 MT.

We generated:

• Revenues of $18.0 million for the six months ended June 30 2010 compared to $15.1 million in the comparable 2009 period.
  
• Net income of $15.4 million for the six months ended June 30 2010 compared to $7.4 million in the comparable 2009 period. (Earnings per ads is tracking at about $0.90 using anticipated post IPO share count)