Daqo New Energy Corporation, the Chinese photovoltaic (PV)-grade polysilicon manufacturer, posted a net income of $323.4 million in Q3, 2022, a year-over-year (YoY) increase of 11%.

The net income growth was a direct result of higher demand for polysilicon and a surge in average sale price (ASP) realization for the product in Q3. The polysilicon sales volume for the July-September quarter rose by 56% YoY to 33,126 metric tons (MT). The ASP during the same period surged by over 32% to $36.44/kg. The average total production cost for the company was $6.82/kg in Q3 compared to $6.84/kg during the same quarter in 2021.

The company projected it would produce approximately 30,000-32,000 MT of polysilicon in Q4, taking the full-year production capacity to 130,000 MT.

Daqo New Energy’s CEO Longgen Zhang said, “The fourth quarter is typically a busy season for China’s solar PV market. Current polysilicon ASPs remain high at approximately $36-38/kg (VAT excluded), and the inventory of polysilicon is low across the value chain. We expect that module prices will be well supported in the range of RMB 1.85-1.95 ($0.254-0.268)/watt, which will provide very strong support for polysilicon ASPs.”

The growth in profitability is also because of relatively faster capacity expansion in downstream sectors, specifically in the wafer segment.

Daqo’s total revenue for Q3 surged by 108% YoY to $1,219.7 million.

The company’s gross profit climbed to $978.6 million, a YoY increase of 124%. The gross margin stood at 80.2% in Q3 compared with 74.3%, mainly due to lower production costs and higher ASP.

The company’s adjusted Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) for the period leaped by 63% to $720 million with an EBITDA margin of 59% owing to increased production to meet the demand for polysilicon.