Apr. 30 at 6:16 AM
$DQ i am bullish long term BUT right now DA is highly overvalued. Why?
- 2025 projected sales of 600ml = 1.3 p/s at current market cap when Historically it has to be around 0.5 - 0.8 to be considered undervalued, basically a - 50% vs now.
- negative outlook: oversupply will persist longer than expected. OK they have huge cash reserves but as Nobody knows its end market uncertainty will persist
- even assuming the next poly shortage I don't think that poly price will be over 10usd again and even considering daqo full production capacity it might generate 3bil of revenues and 1 bil of net income. A 3.2x p/s and 0.9x p/e, not huge multiples.
So, it might not be unrealistic see stock price in a range of 7-10 usd again.
I mean the current scenario is the worst one as I don't see daqo operating at less than 33% capacity so the market might have embedded it but I am afraid that we will have difficult quarters ahead.
Any thoughts?
