Daqo New Energy: Citigroup initiates coverage with Buy rating, $27 price target.

Daqo New Energy: Citigroup initiates coverage with Buy rating, $27 price target.

Citigroup has initiated coverage on Daqo New Energy (NYSE: DQ) with a Buy rating and a $27.00 price target, according to a recent report. The company, currently trading at $20.90 with a market capitalization of $1.4 billion, shows mixed signals according to InvestingPro data, trading at an attractive 0.32 Price/Book ratio while posting strong returns of over 25% in the past year [1].

The investment bank cited ongoing supply-side reforms in China as a key catalyst for polysilicon stocks, noting these reforms are "lifting all major polysilicon stocks" in the sector. Three potential benefits from China’s reforms include market-based tariffs slowing solar capacity additions and potentially forcing smaller suppliers out, government-assisted capacity acquisitions benefiting larger players, and price controls establishing a floor for polysilicon prices [1].

Polysilicon prices have already increased 28% in just the first half of July, which could lead to profit turnarounds and sector rerating. In its coverage initiation, Citigroup ranked Daqo New Energy third in its cost-curve based "pecking order" behind GCL Technology and Tongwei, while assigning a High Risk designation alongside the Buy rating [1].

Daqo New Energy has seen its stock rating upgraded by GLJ Research from Sell to Buy, with a new price target set at $30.50. This upgrade is attributed to a proposed policy from China’s Ministry of Industry and Information Technology, which aims to restructure the polysilicon segment. The policy includes the implementation of monthly production quotas for the four major polysilicon producers, who collectively account for 80% of global capacity. Additionally, the policy proposes the closure of smaller or less efficient producers and the establishment of a price floor for polysilicon products [1].

These developments are significant for investors keeping an eye on the polysilicon industry and its major players. Daqo New Energy is expected to benefit from these reforms, with potential upside in both revenue and profitability.

References:
[1] https://www.investing.com/news/analyst-ratings/citi-initiates-daqo-new-energy-stock-with-buy-rating-on-china-reforms-93CH-4141357
[2] https://www.ainvest.com/news/pnc-financial-citigroup-maintains-buy-rating-raises-pt-217-2507/
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3TE0L7:0-xinjiang-daqo-new-energy-says-lock-up-period-for-1-6-billion-shares-to-end/
[4] https://www.marketbeat.com/instant-alerts/filing-citigroup-inc-nysec-shares-sold-by-bailard-inc-2025-07-18/