Xinjiang DAQO New Energy (XJDQ), a Chinese leading polysilicon company, has received approval from CSRC to register for an IPO in the SSE STAR Market, as reported by Caixin on June 23. The company will issue no more than 300m shares to raise up to RMB5bn, with China International Capital Corporation (CICC) [3908:HK] serving as the sponsor and lead underwriter of the IPO. According to XJDQ’s prospectus, its controlling shareholder, DAQO New Energy’s [DQ:US] stake in the subsidiary, will decline from 94.26% to 79.57% upon completion of the public issuing.
Last June, the US-listed company prepared to spin off XJDQ and have it listed in the STAR Market. Statistically, XJDQ produced 77,300 tons of polycrystalline silicon in 2020, accounting for one-fifth of the total output of China. Benefiting from the growing demand for photovoltaic (PV) installation since 2H20, XJDQ achieved RMB4.66bn in revenue and RMB1.04bn in net profit last year, jumping 92% and 320% YoY, respectively. Moreover, in 1Q21, the company also witnessed 40.8% and 130.4% YoY growth in operating income and net profit. According to the prospectus, XJDQ will use the proceeds in a polysilicon project with 35,000 tons of annual output, a high-purity semiconductor materials project with 1,000 tons of annual production, and supplementary working capital, which respectively makes up RMB420m, RMB3.51bn, and RMB1.07bn of the raised funds.