Daqo New Energy Corp ADR

Good day, and welcome to the DeKo New Energy 3rd Quarter 2026 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 1 on a touch-tone phone. To withdraw your question, Please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Jessie Zhao, IR 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. Darko New Energy just issued its financial results for the third quarter of 2026, which can be found on our website at www.darko.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. Xiang Xu. Today's call will begin with an update from Mr. Xu on market conditions and company operations, and then Mr. Yang will 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-working 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 follow-looking statements. Further information regarding these and other risks is included in the reports or documents we are 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 access such information except as required under applicable law. 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.

Thank you. Hello, everyone. This is Anita, and I'll now deliver our management report marks on behalf of our CEO, Mr. Xu. Supported by continued energy evolution policies, including price enforcement, The polysilicon sector bottomed out and rebounded in Q3, with polysorptional prices gradually recovering toward cost levels. However, downstream players continued to hold polysilicon inventories and largely limited their purchases to immediate operational needs, keeping overall sector trading volumes low. Against this backdrop, we delivered a substantial increase in Q3 shipment volumes, driving strong sequential revenue growth and narrowing losses. Our financial position remains sound, with a robust balance sheet and zero debt throughout the period. As of September 30th, 2026, we held cash, cash equivalents and restricted cash of $546.5 million. Short-term investments of $267.3 million. Banked notes receivable of $161.5 million. held to maturity investment of $61.6 million and a fixed-term bank deposit balance of $1 billion. Together, these readily convertible assets total $2.06 billion USD up to $1.92 billion at the end of Q2, providing a strong financial foundation and strategic flexibility to navigate the current market environment. Operationally, our nameplate capacity utilization rate was approximately 70% during the period. Total production volume at our two post-sum facilities was 53,469 metric tons, exceeding our guidance range of 50,000 to 55,000 metric tons. Sales volume rose sharply from 15,190 metric tons in Q2 to 46,910 metric tons in Q3. following our shift in June from a wait-and-see stance to a more market-oriented sales and pricing strategy. We believe this increase also reflects greater customer confidence in our product quality and continued preference for our products. Our average selling price increased by 2% sequentially to $4.12 per kg, although the increase lagged the broader market recovery because Q3 shipments fulfilled orders signed before late July. On the cost side, average total production cost and average cash cost fell by 9.7% and 7.4% sequentially, respectively, reaching new record lows of US$5.37 per kg and US$4.23 per kg, respectively, reflecting our continued improvement in manufacturing efficiency and cost control. In light of the current market dynamics, We expect total post-sum production volume in Q4 of 2026 to be approximately 35,000 metric tons to 45,000 metric tons. For the full year of 2026, we expect production volume to be in the range of 175,000 metric tons to 185,000 metric tons. Anti-involution efforts across the solar PV sector continue during Q3. The State Administration for Market Regulation released price compliance guidance targeting the solar PV sector on July 31st, following August by an industry initiative against low-cost sales that we co-signed. Against this backdrop, health sitcom manufacturers halted the low-cost sales, and in-time health sitcom prices rebounded from a drop of RMB 30.5 to 33 per kilogram in Q2 to approximately RMB 40 to 43 per kilogram by the end of Q3. On September 3rd, the National Development and Reform Commission and the FAMR jointly issued the Notice on Matters Concerning Cost Accounting for Low Price Disorder Competition and Key Industrial Products, establishing a firmer regulatory basis for policy comprising. Despite these policy tailings, elevated industry inventories and weak near-term demand continue to make the operating environment challenging. In response, we're taking a disciplined approach and evaluating a reduction in our near-term utilization rate to better align our production with market demand and support the orderly destocking of political inventories. This approach is consistent with our commitment to the long-term healthy development of the solar industry. We are also diversifying beyond our core political business to reduce our exposure to solar PV cyclicality by targeting the fast-growing AI data center power infrastructure market. On June 3, 2026, we announced an investment agreement to establish a manufacturing base for the R&D, manufacturing, and sale of next-generation energy solutions and related equipment for AIDC, including energy storage systems, solid-state transformers, and solid-state circuit breakers. These technologies support the AIDC industry transition to a high-voltage, direct-current architecture such as 800 voltage DC standard advanced by NVIDIA and other leading AI infrastructure providers. The platform is anchored by DACO Group, an affiliated entity under common beneficial ownership with DACO New Energy Corp, which brings over 40 years of power equipment manufacturing expertise, established technology, experienced talent, and deep customer relationship to help accelerate our entry into the segment. We view AIDC power infrastructure as a structural growth opportunity that complements our core business and has the potential to broaden our earnings base. Drawing on our track record of navigating multiple political cycles, we intend to pursue this expansion in a disciplined manner while preserving our balance sheet strength. Despite the challenging market environment, the solar PV industry retains compelling long-term growth prospects. Growing vulnerabilities in global energy markets have heightened concerns about national energy security, underscoring the important role that solar PV and other renewable energy sources can play. As one of the world's lowest-cost producers of high-quality anti-pulse sitcoms supported by a robust balance sheet and zero debt, we remain optimistic about the sector and are well-positioned to capitalize on the anticipated broader market recovery and long-term growth opportunities. We will continue to sharpen our competitive edge by advancing high-end efficiency N-type technology and using digital transformation and AI adoption to optimize costs. As the world accelerates its transition to clean energy, we're confident in our ability to play a leading role in that transition. And now I'll turn the call to our DFO, Mr. Ming Yang, who will discuss the company's financial performance for the quarter. Ming, please go ahead.