Polysilicon producer Daqo New Energy is expecting a five-fold increase in net profit from its Xinjiang subsidiary as it continues to progress expansion plans.
In a statement issued today, Daqo revealed that its Xinjiang Daqo New Energy subsidiary was forecasting for net profit to be in the range of RMB5.6 – 5.8 billion (US$885 – 917 million) for 2021, an increase of between 437 – 456%.
Xinjiang Daqo reported profit of RMB1.04 billion (US$164 million) in 2020.
By means of comparison, total group gross profits at Daqo in Q3 2021 reached a new record of US$435.2 million.
Polysilicon producer profits jumped last year on the back of demand far outstripping supply, resulting in pricing soaring from RMB97/kg – including China’s sales tax – in late February 2021 to highs of RMB269/kg experienced throughout November 2021.
Today will also see the trade of shares in Xinjiang Daqo as part of a private offering which is intended to raise around RMB11 billion (US$1.74 billion) in proceeds to fund a 100,000MT expansion project in Baotou, Inner Mongolia.
Earlier this month Daqo announced a capital injection of US$1.6 billion for its Xinjiang Daqo subsidiary to advance the project, stating at the time the capital would originate from existing group funds and lines of financing.
The private offering was then announced to the Shanghai Stock Exchange on 14 January before the offering taking place today.
Construction of the 100,000MT facility is due to start in March this year and complete in Q3 2023.
Daqo is in the midst of a major capacity expansion plan with new and expanded facilities at various stages of construction. It began pilot production at its Phase 4B project last month in anticipation of achieving full-scale production of 105,000MT later this quarter, and expects full production capacity to exceed 270,000MT by the end of 2024.