Daqo New Energy: An Extreme Mispricing Too Good To Ignore
Source: SeekingAlpha
2025-03-14 14:21:17 ET
Summary
- Daqo's 72.4% stake in Xinjiang Daqo, valued at $4.6 billion, and the subsidiary's high cash position offer substantial downside protection.
- When the polysilicon market turns, Daqo is quickly valued at a low-single digit EV/EBIT multiple due to the subsidiary's high cash generation capabilities and the present pessimism in the market.
- The investment offers an asymmetrical risk/reward ratio and a multi-bagger potential in the medium to long term.
- Risks include potential regulatory issues, overcapacity in the market, and management's ability to execute share buybacks effectively.
Introduction
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Daqo New Energy: An Extreme Mispricing Too Good To Ignore
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