Fundamental analysis: Daqo New Energy Corp. (DQ)

Awarener score: 8.1

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Bottom) and growth (Superb), and the company's inclination to return cash to the stockholders (Modest).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.5

Business has been growing at an extremely fast pace. It's been top tier when measured against peer companies.
Daqo New Energy Corp. business varies wildly, ups and downs could be very frequent. It's very risky. It looks bottom tier against rivals.

Margins score: 8.8

DQ profit margins -on goods and services sold- are usually good. They stand somewhat worse than rival companies.
Business profit on sales tends to be huge. It's great when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually excellent. They remain excellent in relation to peers.
Earnings -before income taxes and interests on loans taken- tend to be excellent in relation to total revenues. They're still better than most similar companies.
Profits -before income taxes- are usually excellent considering total sales, and remain great when measured against rivals.
Total net profit tends to be excellent when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 10.0

Daqo New Energy Corp. profit -on goods and services sold- has been growing at an extremely fast pace. It's been impressive in relation to competitors.
In recent years, earnings -on operations- have been growing at an extremely fast step, which has been top-notch against comparable firms.
Profits -available to repay debt and purchase properties- have been growing at an extremely fast pace, which compares top tier when measured against peer enterprises.
Earnings -before income taxes and interests on loans taken- have been growing at an extremely fast tempo. It turns to be excellent in relation to similar stocks.
In past years, profits -before income taxes- grew at an extremely fast speed. It was top-notch against rivals.
In the previous years, growth trend on total net profit has been extremely high, and top tier when measured against peer companies.
Earnings per share have grown at an extremely fast rhythm in past years. It's been impressive in relation to industry peers.

Miscellaneous score: 9.0

DQ had hardly to pay income taxes in relation to profits made in the past years. It's been slightly worse than peers.
Research and development expenses hardly consume a portion of revenues. It's top tier when measured against competitors.
The company shows excellent business growth in relation to research and development efforts. It stands impressive in relation to rival companies.

Profitability score: 9.5

Daqo New Energy Corp. usually gets huge returns on the resources it controls. It proves more than average in relation to peer firms.
The company normally gets huge proceeds -on the resources directly invested in the business-. They remain in good shape compared to similar companies.
There's usually excellent profitability -in relation to owned resources-. It ranks more than average in relation to competitors.
In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's more than average in relation to comparable enterprises.

Usage of Funds score: 5.0

DQ usually uses a significant portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is abundant. It stands more than average in relation to rival firms.
The company is usually heavily investing in new property, plant, and equipment, to expand its operating capabilities, which is great when measured against industry peers.
In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
The company pays no dividend, so measuring its growth is meaningless. The company has behaved in an conservative way compared to similar firms.
As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
The company usually significantly enlarges the pool of investors, resulting in more mouths feeding on the pie of profits. It remains in a very weak position compared to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 5.3

Daqo New Energy Corp. intangible assets (like brands and goodwill) represent a non-significant portion of resources controlled, according to accounting books, which is safer. It happens to be similar to peer companies.
The company has more than enough short-term resources to face short-term obligations. Liquidity concerns are non-significant. It turns to be lacking compared to similar firms.
All resources are company owned, with virtually no financial debt. Financial position is outstanding. The company could significantly borrow money if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains better than most rival firms.
Resources controlled can be quickly made into cash, which is very good for liquidity and risk. It looks encouraging in relation to rivals.
For every dollar of short-term obligations, the company has more than enough dollars in cash and short-term receivables. It's rather normal in relation to peer firms.
For every dollar of short-term obligations, the company has roughly another of cash and equivalents, which is slightly worse than similar enterprises.
Usually, sales are on many months credit. It still ranks last-in-rank when measured against peers.
Normally has approximately somewhat less than two months of sales worth in inventory. It comes up as excellent in relation to competitors.
On average, it takes a lot of months from the purchase to charging customers. It happens to be somewhat worse than peers.
On average pays suppliers before a month from the purchase. It ranks substantially worse when measured against industry peers.
The company pays its suppliers plenty of months before charging its customers, so there's a lot of money invested in working capital. It's lacking compared to similar companies.
Net interest expenses consume a slight portion of usual business earnings, and are very easily bearable. It stands slightly better than rival firms.
There is insufficient data to conclude on the relationship of EBITDA and debt for this company. It ranks unknown against comparable enterprises.
Revenues are low in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks in a very weak position compared to similar firms.
Resource exploitation is quite good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 8.6

Daqo New Energy Corp. looks extremely cheap in relation to profits and financial position. It happens to be top tier when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains excellent in relation to peers.
In the past twelve months, the company generated extraordinary free funds in relation to the stock price, which stands top-notch against similar companies.
The company usually generates plenty more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share looks to be very attractive. It's still top tier when measured against industry firms.
In the past twelve months, the company has slightly enlarged the pool of investors by issuing new shares. The pie of earnings will now be split among a little more stockholders. It came up lacking compared to peer ventures.
This company is a cash hoarder. It might be well poised to substantially increase stockholder payments, or to fund new business projects. It looks better than most similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation looks extremely cheap. Possible reasons are that the market might be betting current earnings will be very hard to sustain through time, or that the company has very high fund needs, a weak financial position, or that earnings aren't representative. If that isn't the case, the stock price could be extremely attractive. It ranks top tier when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a more than one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks a slight improvement compared to rival firms.
The relation between the stock price and accounting book value might be reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains better than most peer firms.
In the past twelve months, the operating business earned huge money when compared to the current stock price and financial position. It happens to be top tier when measured against industry peers.
In an alternate metric of bang for the buck, the company has usually shown an extreme earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be significantly undervalued. It's still impressive in relation to peer companies.

Total score: 7.7

Company at a glance: Daqo New Energy Corp. (DQ)

Sector, industry: Technology, Semiconductor Equipment & Materials

Market Cap: 3.51 billions

Revenues TTM: 2.70 billions

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufactures in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.