Daqo New Energy initiated with a Buy at Goldman Sachs

Goldman Sachs initiated coverage of Daqo New Energy with a Buy rating and $21.80 price target. Daqo is a leading poly producer with the strongest balance sheet among Goldman’s China solar coverage, the analyst tells investors in a research note. The analyst believes investors have been too bearish on Daqo, discounting the company’s U.S. shares on book value. The share price assumed Daqo will record EBITDA losses in multiple years, or the poly price would stay at the current below Tier 1 cash cost level in the next few years, which is unjustified, contends Goldman.