Daqo New Energy (DQ) Soars 8.35% on $100M Buyback, Industry Capacity Cuts Drive Renewed Confidence

Shares of Daqo New Energy (DQ) surged 8.35% on Thursday, marking a five-day winning streak with a cumulative gain of 27.89%. The stock reached an intraday high of $30.27, its highest level since September 2025, driven by renewed investor confidence and strategic corporate actions. This rally follows a $100 million stock buyback program announced in late August, signaling management’s conviction in the company’s undervalued shares and long-term growth potential.

The solar energy sector has faced persistent challenges from overcapacity and price wars, but Daqo has taken a leading role in addressing these issues. Collaborating with industry peers, the company helped establish a 50 billion yuan ($9 billion) fund to retire over 1 million tonnes of excess polysilicon capacity by year-end. This initiative, backed by government support, aims to stabilize prices and restore profitability. With polysilicon prices currently around 50 yuan/kg, analysts project a gradual recovery as supply-demand imbalances ease.

Recent analyst upgrades and institutional investments have further bolstered sentiment. HSBC raised DQ to “Buy” with a $31 price target, while GLJ Research reaffirmed its “Buy” rating. Institutional stakeholders, including American Century Companies and Taikang Asset Management, have increased holdings, reflecting growing confidence in Daqo’s market leadership. The company’s near-monopoly in global polysilicon production—supplying materials for over 90% of solar panels—positions it to benefit from the renewable energy transition, despite short-term industry headwinds.

While Daqo reported a Q2 net loss amid declining revenues, management and analysts anticipate a turnaround in Q3 as overcapacity measures take effect. The company’s liquidity remains strong, with over $2 billion in cash, and its projected production capacity of 110,000–130,000 metric tons in 2025 underscores its scalability. However, investors must remain cautious of cyclical industry risks and geopolitical uncertainties. The stock’s current valuation, trading at a significant discount to book value, highlights its potential as a long-term value play in the evolving clean energy landscape.