Auriga starts coverage on Daqo New Energy with "buy" rating

(ADPnews) - Nov 15, 2010 - Auriga has started covering the stock of Chinese polysilicon maker Daqo New Energy (NYSE:DQ) with a "buy" stance and a share price target of USD 20 apiece.

According to Auriga analyst, the shares of Daqo are "meaningfully undervalued".

The broker considers the company has a unique status as it targets to become a vertically integrated supplier and has foundation of a low-cost polysilicon manufacturer.

Daqo's s capacity to produce USD 30 (EUR 22) per kilogram, which is under the marginal producer costs at present, has likely faced suspicion, said Auriga. But "once investors become familiar with Daqo's cost structure, they are likely to find shares of Daqo highly attractive", the broker advised.

Daqo New Energy closed at USD 13.96, down 4.45%, on the New York Stock Exchange on Friday.

(USD 1 = EUR 0.734)

Choose your newsletter by Renewables Now. Join for free!