Piper Jaffray Initiates Coverage on Daqo New Energy

Piper Jaffray has initiated coverage with an Overweight rating and $17 price target on Daqo New Energy DQ. In a note to clients, Piper Jaffray writes, "We initiate coverage of Daqo New Energy at Overweight and a PT of $17. Daqo is well positioned to benefit from continued tightness in polysilicon, which has driven spot prices to near $100/kg, a growing focus on higher quality polysilicon by Chinese cell manufacturers, and Daqo's low cost manufacturing footprint with industry leading costs of ~$30/kg." Risks to achieving the price target include, "1. Oversupply of polysilicon leads to price declines; 2. Execution issues on poly, wafer, module ramps; 3. High cell prices persist." DQ closed Monday at $14.13.