The latest: Polysilicon maker Daqo New Energy Corp. (DQ.US) announced  Thursday its subsidiary, Xinjiang Daqo New Energy Co. Ltd. (688303.SH), has received approval from the China Securities Regulatory Commission for its planned private share offering in China’s A-share market to no more than 35 institutional investors.

Looking up: The private offering will raise 11 billion yuan ($165 million) for Xinjiang Daqo, of which approximately 8 billion yuan will be used for a 100,000 metric tons of polysilicon expansion project in Baotou City, Inner Mongolia, China, and the rest of the proceeds for working capital. 

Take Note: While investors are worried that polysilicon prices are peaking and falling, it may not be the right time for Xinjiang Daqo to expand its production capacity.

Digging Deeper: Daqo New Energy spun off Xinjiang Daqo in July last year and successfully raised about 6.5 billion yuan on the Shanghai STAR Market. This is one of the many examples of Chinese companies listed in the U.S. that have listed their subsidiaries on the “Shanghai version of Nasdaq” to achieve better valuations and reduce regulatory risk. As a subsidiary, Xinjiang Daqo is currently valued at 130 billion yuan, more than three times the $4.5 billion (30 billion yuan) of its parent company, reflecting the huge valuation gap developing between Chinese companies listed in the U.S. and those listed in China in recent years.

Market Reaction: Shares of Daqo New Energy sank 4.2% to $60.99 in New York on Thursday. Xinjiang Daqo fell – and then rose – on Friday morning in Shanghai, closing up 1.1% to $68.08 at the midday break, in the middle of its range for the past 52 weeks.

Translation by Jony Ho

To subscribe to Bamboo Works free weekly newsletter, click here

Recent Articles

So-Young dolls up with move to high-end cosmetic surgery

So-Young dolls up with pivot to high-end services

The cosmetic services social media platform is developing its own clinics as well as a premium platform for high-end users Key Takeaways: So-Young reported an annual profit last year, reversing…

NEWS WRAP: Nayuki pours up first annual profit

The premium tea chain aims to expand through franchising to boost its growth amid intense competition  By Teri Yu  Premium tea seller Nayuki Holdings Ltd. (2150.HK) on Wednesday reported its first annual profit since…
Buoyed by bumper earnings, the biotech has announced a share placement to raise HK$1.17 billion to invest in developing its portfolio of anti-cancer drugs.

Akeso marks profit milestone with swift rights issue

Buoyed by bumper earnings, the biotech has announced a share placement to raise HK$1.17 billion to invest in developing its portfolio of anti-cancer drugs Key Takeaways: Akeso swung to an…