Daqo New Energy Corp ADR

Hello and welcome to the DACO New Energy third quarter 2025 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jessie Zhao, Investor Relations Director. Please go ahead.

Hello, everyone. I'm Jessie Zhao, the Investor Relations Director of Stockholm New Energy. Thank you for joining our conference call today. Stockholm New Energy just issued its financial results for the third quarter of 2025, which can be found on our website at www.com. Today, attending the conference call, we have our Deputy CEO, Ms. Anita Xu, our CFO, Ms. Ming Yang, and myself. Our Chairman and CEO, Mr. Xiang Xu, is on a business trip now, so Ms. Anita Xu will deliver our management remarks on behalf of Mr. Xu. Today's call will begin with an update from Ms. Xu on market conditions and company operations and then Mr. Yang will discuss the company's financial performance for the quarter. After that, we will open the floor to Q&A from the audience. Before we begin with the formal remarks, I want to remind you that certain statements on today's call, including expected future operational and financial performance and the industrial growth are forward-looking statements that are made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding this and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission. These statements only reflect our current and preliminary view as of today, and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. All information provided in today's call is as of today, and we undertake no duty to update such information, except as required under applicable rules. Also, during the call, we will occasionally reference monetary amounts in U.S. dollar terms. Please keep in mind that our functional currency is the Chinese RMB. We offer these translations into U.S. dollars solely for the convenience of the audience. Now, I will turn the call to our Deputy CEO, Ms. Anita Xu. Ms. Xu, please go ahead.

Hello, everyone. This is Anita. I'll now deliver our management remarks on behalf of our CEO, Mr. Xu. So with the recovery of market prices across the solar PV value chain, the third quarter of 2025, we believe the industry is gradually recovering from its cyclical downturn. In particular, the polysolar contractor reached an inflection point during the quarter, with prices rebounding significantly. As a result, we're pleased to report that for the third quarter, back on new energy recorded positive EBITDA of 45.8 million U.S. dollar, as well as adjusted net income of $3.7 million. Moreover, our strong balance sheet was further reinforced. As of September 30, 2025, the company had cash balance of $552 million, short-term investments of $431 million, bank notes receivables balance of $157 million, and total fixed-term bank deposit balance of $1.1 billion. In total, our bank deposit and financial investment assets readily convertible into cash if needed at $2.21 billion, representing an increase of $148 million compared to the end of the second quarter. Our solid financial foundation provides us with confidence and strategic flexibility to navigate the ongoing market recovery and capture long-term opportunities. Operationally, the company implemented proactive measures to counteract the continued market oversupply. maintaining a nameplate capacity utilization rate of 40%. Total polysilicon production for the quarter was 30,650 metric tons, slightly above our guidance range of 27 to 30,000 metric tons. We also capitalized on favorable pricing conditions to sell not only our current quarter's output, but also a significant portion of our existing inventory, leading to a sharp rise in our sales volume to 42,406 metric tons from 18,126 metric tons in the previous quarter. The strong increase in sales volume reflects both our customers' confidence in DACO's product quality and their continued preference for our product in the new pricing environment. As a result, our sales volume far exceeded production, bringing our inventory down to a healthy level. On another positive note, production costs declined significantly during the third quarter, extending our ongoing cost reduction trend. Total production costs declined by 12% to $6.38 per kilogram in Q3 2025, from $7.26 per kilogram in the second quarter of 2025. Total idle facility-related costs, primarily non-cash depreciation expenses, also fell to $1.18 in Q3 from $1.38 in Q2, driven by higher production levels. In particular, our cash cost decreased by 11% from 5.12 USD per kilogram in Q2 to 4.54 USD per kilogram in Q3, the lowest in the company's history. Cash cost includes approximately 0.16 USD per kilogram of idle facility maintenance-related costs. In light of the current market conditions, we expect our total polysilicon production volume in the first quarter of 2025 to be approximately 39,500 metric tons to 42,500 metric tons. As a result, we anticipate our full year 2025 production volume to be in the range of 121 to 124,000 metric tons. At the industry level, according to industry statistics, monthly supply of polysilicon in Q3 remain in the range of approximately 100,000 to 130,000 metric tons. On September 24th, President Xi announced China's new 2035 environmental targets at the UN Climate Summit. These targets include increasing the share of non-fossil fuels in total energy consumption to over 30% and expanding the installed capacity of wind and solar power to over six times the 2020 level, aiming to reach an accumulative capacity to 3,600 gigawatts by 2035. The official announcement re-informed China's ambitious strategy to transition toward a new low-carbon energy structure, with solar PV playing a pivotal role in the process. Entering the third quarter, China's anti-involution initiative to restrict low-price competition in the polysilicon sector continued to impact the industry. Market expectations of consolidation, tighter supply, have improved overall industry fundamentals. In particular, on August 19, the Ministry of Industry and Information Technology, the Central Ministry of Social Work, the NDRC, the State Council State Owned Assets Administration Commission, the General Administration of Market Supervision, and the National Energy Administration jointly held a symposium on the photovoltaic industry. The meeting emphasized the need to strengthen industrial regulation, curb disorderly low-price competition, standardize product quality, and promote industry self-discipline. On September 16, the Standardization Administration of China released a draft of a new mandatory national standard setting energy consumption limits per unit of polycycone production. Once implemented, poly manufacturers with unit energy consumption higher than 6.4 kilograms must implement corrective improvements within a specified period. Those failing to comply or meet the entry threshold after rectification will be ordered to cease operations. According to China's Silicon Industry Association, China's effective capacity in power silicon production is expected to climb to 2.4 million metric tons per year, a decrease of 16.4% from the end of 2024, and of 31.4% from total installed production capacity. We expect the implementation of this new energy consumption standard will subsidentially ease the issue of energy overcapacity. As a result of these more fossil measures, PULSA comprised roadsharp P2 45 to 49 RMB per kilogram in July, from 32 to 35 RMB per kilogram in June. A further climb to 49 to 55, RMB per kilogram at the end of the quarter. The solar PV industry continues to demonstrate strong long-term growth prospects. In the medium term, we believe that the combination of industry self-discipline and government anti-involution regulations will help foster a healthier and more sustainable industry. In the long run, as one of the most cost-effective and sustainable energy sources globally, solar power is expected to remain a key driver of the global energy transition and sustainable development. Looking ahead, DOTCO New Energy is well positioned to capture the long-term growth in the global solar PV market and further strengthen its competitive edge by enhancing its higher efficiency N-type technology and optimizing its cost structure through its digital transformation and AI adoption. As one of the world's lowest cost producers of the highest quality and tight product, and with a strong balance sheet and no bank loan, we're confident in our ability to capitalize on the market recovery and emerge as an industry leader, well-positioned to seize future growth opportunities. So now I'll turn the call to our CFO, Mr. Ming Ye, who will discuss the company's financial performance for the quarter. Ming, please go ahead.