Daqo New Energy Corp ADR

Good day and welcome to the JustGo Energy new fourth quarter 2025 results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. 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 Darko New Energy. Thank you for joining our conference call today. Dakar New Energy just issued its financial results for the fourth quarter of 2025, which can be found on our website at www.dqsolar.com. Today, attending the conference call, we have our Deputy CEO, Ms. Anita Xu, our CFO, Mr. 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 the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth, are forward-looking statements that are made under the safe harbor provisions of the U.S. Private Securities 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 these 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 rule. 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 this translation into US 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 happy year of the horse and i'll now deliver the remarks on behalf of our chairman mr zeus in 2025 china's nt evolution initiative supported the solar pv industry's gradual emergence from a cyclical downturn as a result solar product market prices rebounded from the third quarter onward with the solid silicon sector posting the most notable gains Following with this trend, our utilization rate increased from 33% in Q1 to 55% in Q4, bringing our annual production volumes to 123,652 metric tons, in line with our guidance of 121,000 metric tons to 124,000 metric tons, representing a 39.7% year-over-year decrease from 205 and 68 metric tons in 2024. Furthermore, our 2025 sales volume reached 126,707 metric tons, exceeding production volume and reducing year-end inventory to a reasonable level. In the second half of 2025, we strategically ramped up sales efforts to capitalize on favorable pricing dynamics. The strong market response highlighted growing customer confidence in our product quality and their continued preference for our brand in this new pricing environment. However, policy on ASPs decreased 7.2% from 5.66 US dollar per kilogram in 2024 to 5.25 US dollar per kilogram in 2025. This lower pricing combined with reduced sales volume resulted in revenue of 665 million US dollars in 2025 compared to 1 billion USD in 2024. Despite the decline in our top line, we significantly have narrowed our losses during the year as compared to 2024. In particular, EBITDA swung to a positive $1.7 million in 2025 compared to a negative $337.4 million in 2024. While net loss attributed to Dakot New Energy Corp shareholders narrowed to $1.7 million, from $345.2 million in 2024. Moreover, we generated a $56.1 million in positive operating cash flow in 2025, marking a notable turnaround from the $435 million outflow recorded in 2024. We continue to maintain a strong balance sheet and ample cash reserves. At the end of 2025, we had a cash balance of $980 million, short-term investments of $114 million, bank notes receivable of $136 million, and a fixed-term bank deposit balance of $1 billion. In total, these highly liquid assets stood at a $2.27 billion, representing an increase of $57 million compared to the end of the previous quarter. This solid financial foundation provides us with confidence and strategic flexibility to navigate the ongoing market recovery and capitalize on long-term opportunities. Operationally, we continue to implement proactive measures in the fourth quarter to mitigate market oversupply, including operating at a main plate capacity utilization rate of 55%. Total policy outcome production for the fourth quarter was 42,181 metric tons, in line with our guidance range of 39,500 to 42,500 metric tons. And our sales volume for the quarter reached 38,167 metric tons. In addition, we comprehensively reduced our production costs through process improvements, manufacturing efficiency gains, and raw material cost optimization. Extending our ongoing cost reduction initiative, total production costs declined by 9% to 5.83 US dollar per kilogram in Q4 2025 from 6.38 US dollar per kilogram in Q3 2025. Total idle facility related costs, which consists primarily of non-cash depreciation expenses alongside approximately 0.1 US dollar per kilogram in cash costs for maintenance also fell to $0.74 per kilogram in Q4 from $1.18 per kilogram in Q3, driven by higher production levels. Notably, cash costs decreased by 2% from $4.54 per kilogram in Q3 to a new record low of $4.46 per kilogram in Q4. In light of current market conditions, we expect our total policy income production volume in the first quarter of 2026 to be approximately 35,000 metric tons to 40,000 metric tons, and our full year 2026 production volume to be in the range of 140,000 metric tons to 170,000 metric tons. Chinese authorities demonstrate a strong resolve in tackling irrational competition and industry overcapacity, formally designating NTM Volution as a national priority within China's 15 five-year plan, and the solar PV industry was a key focus of these efforts. These initiatives have driven a structural shift from price-based competition to value-driven differentiation. To advance industry governance, authorities deployed targeted measures, including standards guidance, quality supervision, price enforcement, and promotion of technological progress. Specifically, this involved updating legislative frameworks such as the revised anti-on-their competition law and the draft amendment to the price law, which mandate that sales shall not be below cost. Furthermore, a new mandatory national standard was drafted to set strict energy consumption limits for polysilicon production on a per unit basis. Led by the China Photovoltaic Industry Association, major polysilicon manufacturers have proactively responded to these initiatives. enforcing self-discipline and exploring innovative market-oriented approaches to combat excess capacity and pricing violations. These coordinated efforts have yielded measurable results in curbing overcapacity. The overall production volume fell by 28.4% to 1.32 million metric tons in 2025, and market prices surged more than 50% from the mid-2025 lows to RMB 50 to 56 per kilogram by year-end. Looking ahead, we expect anti-involution initiatives will remain a central theme for the solar PV industry, supporting a more balanced supply and demand dynamic and driving higher quality growth through 2026. More broadly, the solar PV industry continues to exhibit compelling long-term growth prospects. In 2025, China's newly installed solar PV capacity grew 14% year-over-year to 317 gigawatts, setting yet another record high and proving that market potential continues to exceed expectations. As the global AI industry scales rapidly, space-based solar power is increasingly viewed as a vital solution to the immense and expanding energy demands of AI data centers creating a significant new growth engine for the sector. Looking ahead, as one of the world's lowest cost producers of the highest quality N-type polysilicon with a strong balance sheet and no debt, we remain optimistic about the sector and believe we're ideally persistent to capitalize on the market recovery and these long-term growth opportunities. We will continue to strengthen our competitive edge through advancements in high-efficiency N-type technologies and cost optimization via digital transformation and AI adoption. As the world accelerates its transition to clean energy, we're confident in our ability to play a leading role in powering the future. Now I'll turn the call to our TFO, Mr. Ming Yang, who will discuss the company's financial performance for the quarter. Ming, please go ahead.