DQ - Daqo New Energy Remains Too Cheap To Ignore - Bullish Support Is Here
2024-04-20 10:00:00 ET
Summary
- We are upgrading DQ to a Buy, despite the declining spot prices, the growing pessimism surrounding Chinese-based ADS, and the (potential) intensified solar tariffs on foreign made solar panels.
- The stock is still trading way below its book value per share, thanks to the robust balance sheet and the management's consistent share repurchases thus far.
- DQ remains well capitalized to weather the intermediate-term uncertainties, as the polysilicon prices near cash costs and the global capacity expands over the next few years.
- Combined with the bullish support observed at the $17s and the long-term electrification story, DQ continues to offer a compelling investment thesis for value-oriented investors.
- Interested readers may also keep a look out for a potential dividend announcement in the upcoming earnings call.
We previously covered Daqo New Energy (NYSE: DQ ) in December 2023, discussing why we maintained our Hold rating on the stock, with China's accelerating solar panel installation likely to be negated by the stalling demand in the US and EU over the next few quarters.
While the stock might be rerated closer to its book value, we believed that there might be more pain in the near-to-intermediate term, due to the increasingly imbalanced global supply/ demand picture through 2024....
Daqo New Energy Remains Too Cheap To Ignore - Bullish Support Is Here