Shares of Daqo New Energy Corp. (NYSE: DQ) surged 5.3% in pre-market trading on Monday, as the polysilicon manufacturer reported a narrower-than-expected loss in the fourth quarter and provided an optimistic outlook for polysilicon demand recovery in 2025.

For the quarter ended December 31, 2024, Daqo New Energy reported a net loss of $180.2 million, or $2.71 per American Depositary Share (ADS), compared to a net income of $53.3 million, or $0.76 per ADS, in the same period last year. However, the company's adjusted loss of $2.56 per ADS beat analysts' estimates of a $2.08 loss per ADS.

Revenue for the quarter decreased by 59.1% year-over-year to $195.4 million, due to lower polysilicon average selling prices (ASP) and sales volume. The company's gross margin was negative 33.4%, compared to a positive 18.3% in the prior-year quarter, as polysilicon ASPs fell below production costs.

Despite the challenges posed by excess capacity in the solar PV industry, Daqo New Energy implemented cost-cutting measures, including curtailing polysilicon production to reduce cash burn, particularly in the third and fourth quarters of 2024. The company's cash cost of production declined by 6% quarter-over-quarter to $5.04 per kilogram.

Looking ahead, Daqo New Energy expects polysilicon demand to recover in 2025, driven by the global transition towards renewable energy sources. The company forecasts polysilicon production volumes of 25,000 MT to 28,000 MT in the first quarter of 2025 and 110,000 MT to 140,000 MT for the full year, inclusive of planned maintenance.