The Associated Press October 6, 2010, 6:18PM ET

Daqo New Energy aims to raise $115M in IPO

Daqo New Energy Corp. expects to raise $115 million in an initial public offering this week, nearly 10 months after canceling its planned debut.

The Chinese maker of polysilicon used in solar panels expects to offer 8 million American Depository shares at between $10.50 and $12.50 each. It has given underwriters the right to buy about 1.2 million additional shares if demand exceeds initial supply.

The company expects shares will be listed on the New York Stock Exchange under the symbol "DQ."

It nixed an offer in January for 6.5 million U.S.-traded shares at between $10 to $11 apiece, citing weak market conditions. The week Daqo was expected to launch, three companies postponed their debuts, two traded below their initial sale price and three cut the size of their offerings.

Daqo New Energy sells polysilicon to Chinese solar companies. It sells mostly under contracts, but also sells a significant portion of its polysilicon on the spot market, which means prices aren't locked in. When prices aren't locked in, companies are vulnerable to price swings in the market. Polysilicon prices have tumbled in the past two years as competition heightened. Most analysts expect they have farther to fall.

Daqo said in a regulatory filing before the offering that it thinks it has a competitive advantage over its competitors because of its relatively low production, raw material and labor costs.

The company is expanding into producing wafers and modules. It expects to begin commercial production of wafers in the first three months of next year. It also expects to start producing solar cells.


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