From "industry self-discipline" to policy-driven pressure, when will the roller coaster stock price of Daqo New Energy Corp Sponsored ADR (DQ.US) stop falling and rebound?

After experiencing a continuous increase in stock prices for six months in 2025, Daqo New Energy Corp Sponsored ADR (DQ.US) has seen a significant drop in stock prices in the past three months. From November last year to now, the stock price of Daqo New Energy Corp Sponsored ADR in the U.S. has dropped from a high of $36.59 to $25.59 at the close on January 15, a 30% decline. This price fluctuation reflects the temporary attitude of secondary market investors towards the previous "photovoltaic industry storage and consolidation" issue and its subsequent progress. It is understood that in May 2025, there were rumors in the market that an industry alliance similar to a polysilicon storage and consolidation alliance would be established to eliminate approximately 1 million tons of outdated production capacity. Later, there were reports that the alliance (storage platform) was expected to be established within 2025, which temporarily stimulated the rebound in the stock prices of several photovoltaic listed companies, including Daqo New Energy Corp Sponsored ADR. With the convening of the photovoltaic industry manufacturing enterprise symposium on July 3 last year, the "anti-industrial enclosure" in the photovoltaic industry gained higher-level attention, increasing market expectations for the cleanup of disorderly competition in the domestic photovoltaic industry. This also drove the continuous rise in the stock price of Daqo New Energy Corp Sponsored ADR in the U.S., with the company's stock price rebounding since May last year, lasting for 6 months, and the cumulative increase reaching 153.97%. It is evident that the recent stock price trend of Daqo New Energy Corp Sponsored ADR is closely related to the progress of the industry's "anti-industrial enclosure." The so-called "industry storage and consolidation alliance" was the key support for the rising stock price trend since May last year. However, in early January this year, regulatory authorities directly halted the "self-regulation of storage" operations in the domestic photovoltaic industry and announced the cancellation of value-added tax rebates for exports of photovoltaic products from April 1 this year. In short, the mature photovoltaic industry can no longer rely on "crutches" but needs to clear out outdated production capacity through market regulation. From this perspective, investors can easily understand the reason for the recent sharp decline in the company's stock price. On January 16, Daqo New Energy Corp Sponsored ADR released its annual performance forecast for 2025. Could this be the key to reversing the decline in its U.S. stock price? "Anti-industrial enclosure" performance as a driving factor of stock price fluctuations Looking at the recent U.S. stock market performance of Daqo New Energy Corp Sponsored ADR, since it announced its unaudited financial results for Q3 25Q3 on October 27 last year, the company's stock price has shown a "M-shaped" roller coaster trend. The overall market sentiment has been switching between hot and cold, and various industry-related news that emerged have become important factors affecting short-term trading decisions of investors in the market. In fact, before the release of Daqo New Energy Corp Sponsored ADR's Q3 financial report, benefiting from the favorable impact of the "storage and consolidation 'small essay'" in May, the technical aspect of Daqo New Energy Corp Sponsored ADR had been in a state of technical fluctuations along the BOLL line. It only touched the lower BOLL line on October 10 when it sharply dropped by 14.52%. On that day, the enlarged trading volume of 2.836 million shares also indicated that a new batch of holders entered the market. However, on the day of the release of the Q3 financial report, although Daqo New Energy Corp Sponsored ADR's stock price rose by 14%, the daily trading volume was only about 2 million shares, significantly lower than before, and the volume further decreased on the next day, indicating a significant wait-and-see attitude among holders in the market. The Q3 financial performance within the industry has become a critical signal that investors are focusing on. It can be seen that after October 27, the stock price of Daqo New Energy Corp Sponsored ADR continued to rise. This was because by the end of October last year, major companies in the silicon industry chain had basically disclosed their Q3 financial reports, and the net cash flow from operations of most leading companies in that period was positive, compared to a significant improvement in the previous two quarters. This indicates that although the photovoltaic industry still faced issues such as losses, financing tightening, and high debt levels in Q3 25, leading companies still maintained a good cash flow situation. The Q3 financial performance of Daqo New Energy Corp Sponsored ADR was impressive, with an operating cash flow of 55.52 million yuan during the period, the first time since Q4 2023 that quarterly operating cash flow had turned positive, reflecting the initial effect of the "anti-industrial enclosure" in the silicon material segment. The downward channel formed, releasing sustained market sentiment However, the current situation of the industrial silicon market's "weak reality and strong cost" game did not change substantially. This made it difficult for market sentiment to continue to rise, reflected in the stock price of Daqo New Energy Corp Sponsored ADR on November 10th when it rose above the upper BOLL line, only to experience a technical retreat in just two trading days. After that, within 8 trading days, it fluctuated and returned to the lower BOLL line, and after the oversold signal appeared, it rose again, leading to a technical rebound from November 24th to December 10th. However, this rebound was different from the performance between October 27 and November 10. Firstly, in terms of DRIVE, compared to the first segment led by the Q3 results, the second segment was more of a technically-driven market under stable market sentiment; secondly, the second segment did not touch the upper BOLL line when it reached its peak on December 10, indicating lower market sentiment; finally, in terms of trading volume, the daily trading volume in the second segment was significantly lower compared to the first segment, indicating weaker external support and stronger wait-and-see sentiment among holders. From a news perspective, December 9 was undoubtedly a key point. On December 9, according to market reports, a company called Beijing Guanghe Qiancheng Technology Co., Ltd. was registered and established with a registered capital of 3 billion yuan. Due to its shareholder list including giants in the silicon material industry such as Tongwei and Xinjiang Daqo New Energy, the market believed it to be the rumored polysilicon production capacity integration and acquisition platform. With the "small essay" content landing continuously over the past six months, some holders in the market began to take advantage of the good news to sell, only to suddenly realize that there were no takers outside the market. From the perspective of trading volume, from December 12 to December 31 last year, there were only two trading days with daily trading volume exceeding 1 million shares, and both of these days closed with more than a 5% decrease, showing a clear weak external support phenomenon, leading to continuous price pressure within the market and sustaining low market sentiment. From December 29 onwards, the stock price of Daqo New Energy Corp Sponsored ADR also ran along the lower BOLL line, showing no signs of rebound. Rumors also circulated in the market about the self-regulation of the silicon material industry involving "monopoly," to some extent intensifying the release of negative market sentiment. On January 8, Daqo New Energy Corp Sponsored ADR's stock price fell by 11.41%, as there were market rumors that the market regulatory authority had interviewed the China Photovoltaic Industry Association and top companies including Daqo New Energy Corp Sponsored ADR, regarding the disclosure of relevant risks of monopoly and providing clear rectification opinions and requirements for companies to conduct rectification work. On January 8, it was announced domestically that starting from April 1, the export tax rebate for photovoltaic products would be cancelled, forcing the domestic photovoltaic industry to develop with high quality. Since January 8, Daqo New Energy Corp Sponsored ADR saw a significant downward opening in the BOLL line, and it ran below the lower BOLL line for two consecutive trading days, showing clear oversold signals. However, it is worth noting that in the five consecutive trading days after January 9, the stock price of Daqo New Energy Corp Sponsored ADR did not continue to probe downward as the BOLL line opened up significantly, but instead showed a trend of bottoming out and rebounding away from the BOLL line. Before the market on January 16, Daqo New Energy Corp Sponsored ADR announced its performance forecast for 2025 on the A-share market, revealing that while its current net loss had narrowed compared to the 27 billion net loss recorded in the 2024 fiscal year, the loss still ranged between 10-13 billion yuan. This news obviously did not lead to a rapid halt in the decline of Daqo New Energy Corp Sponsored ADR's stock price. On January 16, during the trading day, the stock price of Daqo New Energy Corp Sponsored ADR rapidly declined after the opening, with a maximum intraday decline of over 3%. However, in the afternoon of the U.S. stock market, the stock price of Daqo New Energy Corp Sponsored ADR stabilized in the fluctuation and narrowed the daily decline to 1.6% at the close.