DQ - Daqo New Energy: Oversold Status Triggers Compelling Value And Growth Story

2024-07-12 09:00:00 ET

Summary

• Market sentiments surrounding solar stocks remain pessimistic, thanks to the ongoing polysilicon supply glut, stalling electrification story, and solar trade bans.
• The ongoing US election campaign does not help as well, since President Trump has "said he’ll dismantle the Inflation Reduction Act, which includes an estimated $370 billion for clean energy."
• Even so, it is undeniable that solar PVS will comprise the lion's share of the global renewable energy capacity additions through 2028 (either in base or accelerated case).
• With DQ still trading way below its book value per share while being extremely oversold/ discounted, we believe that its investment thesis looks very compelling for value/ growth oriented investors.
• We will also highlight a few metrics to look out for in the upcoming FQ2'24 earnings call in early August 2024 (estimated), with it underscoring DQ's near-term prospects.

We previously covered Daqo New Energy ( DQ ) in April 2024, discussing why we had upgraded it to a Buy, despite the declining spot prices, the growing pessimism surrounding Chinese-based ADS, and the (potentially) intensified solar tariffs on foreign made solar panels....

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