Daqo New Energy Corp · NYSE:DQ
Daqo New Energy — Q2 2016 Earnings Presentation
20 slides from Daqo New Energy's earnings presentation, Aug 9, 2016
Slide 1: Unaudited Q2 2016 Financial Results Presentation
Daqo New Energy Corp. Unaudited Q2 2016 Financial Results Presentation August 9, 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “antici
Slide 3: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 3
Slide 4: Business update and Q2 2016 highlights
Business update and Q2 2016 highlights Polysilicon Cost Structure (1) -- total production cost (including depreciation) of $9.43/kg in Q2 2016, compared to $9.65/kg in Q1 2016 -- cash cost (excluding depreciation) of $7.42/kg in Q2 2016, compared to $7.62/kg in Q1 2016 Polysilicon production vol
Slide 5: Phase 2B Existing and Phase 3A Polysilicon Facilities
Phase 2B Existing Polysilicon Facilities Phase 3A Polysilicon Facilities Under Construction PRIVATE & CONFIDENTIAL P. 5
Slide 6: Market update
Market update In the second quarter of 2016, the demand for polysilicon was very strong. We saw substantial increase in polysilicon orders and shipments across a wide range of customers. With a tight supply environment, market ASPs improved meaningfully, from $13.72/kg in the first quarter to $17.
Slide 7: Daqo's quarterly polysilicon Average Selling Prices
Daqo’s quarterly polysilicon Average Selling Prices Quarterly Polysilicon ASPs($/kg) $21.63 $22.04 $21.50 $20.47 $18.67 $17.98 $18.09 $17.24 $16.71 $15.95 $14.98 $13.86 $13.72 Q2 2013 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 PRIVATE & CONFIDENTIAL P. 7
Slide 8: Xinjiang polysilicon facilities update
Xinjiang polysilicon facilities update Q2 2016 key facts Outlook Production volume of 3,570 MT Plan to conduct annual maintenance at Q3 end, External sales volume of 2,931 MT which is expected to result in 15~20 days of Average total production cost : $9.43/kg suspension to polysilicon produ
Slide 9: Polysilicon manufacturing overview
Polysilicon manufacturing overview Production Volume (MT) 3,547 3,570 3,405 2,689 1,748 1,791 1,801 1,734 1,445 1,517 1,504 1,311 962 Q2 2013 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Cash cost and Depreciation ($/kg)* Cash cost Depreciation 17.64 15.98 15.75 14.49 14.13 5.43 13.05 13.23 12
Slide 10: Chongqing wafer facilities update
Chongqing wafer facilities update Q2 2016 key facts Q3 2016 sales volume outlook Annual capacity of approximately Q3 2016 wafer sales volume: 100 million pieces (430 MW) 24.0 ~25.0 million pieces 25.0 million pieces sold to customers PRIVATE & CONFIDENTIAL P. 10
Slide 11: Sales volume in Q2 2016 and outlook for Q3 2016
Sales volume in Q2 2016 and outlook for Q3 2016 Q3 2016E Sales Volume Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 guidance Polysilicon 2,550~ 1,363 2,277 3,092 2,905 2,931 (MT) 2,600 Wafer 18.3 19.1 21.0 22.1 25.0 24.0~25.0 (million pieces) PRIVATE & CONFIDENTIAL P. 11
Slide 12: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 12
Slide 13: Q2 2016 financial highlights
Q2 2016 financial highlights Revenue of $71.0 million in Q2 2016, representing a 23.1% increase from $57.7 million in Q1 2016; Gross profit of $29.4 million in Q2 2016, representing a 76.0% increase from $16.7 million in Q1 2016; Non-GAAP gross margin (1) of 43.9% in Q2 2016, up from 32.6% in
Slide 14: P&L Summary (Q2 2016 vs. Q1 2016)
P&L Summary (Q2 2016 vs. Q1 2016) US$ in millions Q2 2016 Q1 2016 Change Analysis Polysilicon: Ext. sales volume ↑ , ASPs↑ Revenues 71.0 57.7 13.3 Wafer: Sales volume ↑ Polysilicon: Ext. sales volume ↑ , Cost ↓ Cost of revenues (41.6) (40.9) (0.7) Wafer: Sales volume ↑ Gross profit 29.4 16.7 12.7 Gr
Slide 15: Balance sheet summary
Balance sheet summary Change (Q2 2016 vs. US$ in millions 6/30/2016 3/31/2016 Q1 2016) 6/30/2015 Cash and restricted Cash 42.9 35.7 7.2 95.1 Accounts receivable 10.1 15.4 (5.3) 7.0 Note receivables 14.8 25.3 (10.5) 38.3 Inventories 9.5 10.9 (1.4) 10.5 Prepaid land use rights 26.2 27.2 (1.0) 28.7 Net
Slide 16: Cash flow summary
Cash flow summary 6 months ended 6 months ended US$ in millions Jun 30, 2016 Jun 30, 2015 Net cash provided by operating activities 66.6 32.1 Net cash (used in) investing activities (37.6) (56.2) Net cash used in (provided by) financing activities (13.5) 75.7 Effect of exchange rate changes (0.3) 0.
Slide 17: Non-GAAP reconciliation – EBITDA and gross margin
Non-GAAP reconciliation – EBITDA and gross margin US$ in millions Q2 2016 Q1 2016 Change Net income 20.2 8.4 11.8 Depreciation 8.6 8.6 - EBITDA (1) 34.7 21.9 12.8 EBITDA margin (1) 48.9% 38.0% 10.9% Costs related to Chongqing poly 1.8 2.0 (0.2) facilities Non-GAAP gross profit (2) 31.2 18.8 12.4 Non
Slide 18: Non-GAAP reconciliation – Adjusted Net Income and EPS
Non-GAAP reconciliation – Adjusted Net Income and EPS US$ in millions (except per ADS data) Q2 2016 Q1 2016 Change Net income attributable to Daqo New Energy Corp. 19.8 8.3 11.5 shareholders Costs related to Chongqing poly 1.8 2.0 (0.2) facilities Share-based compensation 0.4 1.3 (0.9) Adjusted Net
Slide 19: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures To supplement Daqo’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), the Company uses certain non-GAAP financial measures that are adjusted for certain items from the most directly comp
Slide 20: Agenda
Agenda Business Highlights and Summary Financial Results and Update Q&A PRIVATE & CONFIDENTIAL P. 20