DQ – Solar Powerhouse In the Making – Chinese Clean Tech Bubble In the Mainland via /r/wallstreetbets #stocks #wallstreetbets #investing


DQ – Solar Powerhouse In the Making – Chinese Clean Tech Bubble In the Mainland

Background

Daqo New Energy Corp (DQ)., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufactures in the People's Republic of China. The photovoltaic product manufactures further process its polysilicon into ingots, wafers, cells, and modules for solar power solutions. It offers ready-to-use polysilicon, and packaged to meet crucible stacking, pulling, and solidification products.

It is the top polysilicon PV maker in the world. So as long as solar polysilicon PV growth is exponential, so will the demand for the material.

2021 has brought a host of climate news.

Recently, the US and China may adopt a collaboration framework to tackle climate change [1]

https://www.theguardian.com/environment/2021/jul/20/us-seeks-cooperation-with-china-on-climate-but-not-at-any-price [1]

Growth Story

Another leg of growth is China's exponential demand for solar [2]

https://www.pv-magazine.com/2021/07/19/china-added-13-gw-of-solar-to-the-end-of-june/ [2]

Technicals

Technically, DQ is retracing back to its high above $100 [3]

https://finance.yahoo.com/quote/DQ?p=DQ [3]

Lastly, DQ is now trading on the Shanghai exchange. So it has a dual listing.

https://finance.yahoo.com/news/daqo-energys-subsidiary-xinjiang-daqo-112600191.html

https://finance.yahoo.com/quote/688303.SS?p=688303.SS&.tsrc=fin-srch

https://finance.yahoo.com/news/daqo-energys-subsidiary-xinjiang-daqos-123000247.html

The IPO

Xinjiang Daqo has issued 300,000,000 shares representing approximately 15.58% of the total 1,925,000,000 shares outstanding after the IPO. The shares were issued at a public offering price of RMB 21.49 per share and the total gross proceeds of the IPO are approximately RMB 6.45 billion. After the IPO, Daqo New Energy owns approximately 80.7% of Xinjiang Daqo. On the first trading day of 22 July, 2021, Xinjiang Daqo's shares closed at RMB 61.11 per share, up 184.4% as compared to the IPO price.

1.925B x 61.11 RMB = 122B RMB

1USD = 6.47 yuan.

Therefore 122/6.47 = 18.85B USD.

Current market cap of DQ ADR on US exchange is ~5B USD

QED: massive trade arbitrage

Mainland Chinese Cleantech Bubble

The mainland Chinese don't have a lot of areas to invest it. They focus on real estate and tech. However, on Weibo, clean tech investing is trending. So if more people pivot to clean tech from inflated real estate, we'll get the Chinese clean tech bubble like we saw in the US in 2020.

Submitted July 22, 2021 at 02:11PM by hello-world-foo-bar2
via reddit https://ift.tt/3BE7hgb

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