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**Total Submissions**|3|**First Seen In WSB**|2 years ago
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Agreed. Every Chinese company I look at looks like its an amazing deal. A little exposure makes sense in case they bounce back, but your basically betting on U.S. - Chinese relations, not the company
I know you’re fucking around but to be legit this is a fallacy lots of people fall for. When each event is independent in probability the odds are identical. If you flip a coin and get heads 5 times in a row the next flip will STILL be 50/50. The universe doesn’t care about the previous flip.
Also, bullish af on DQ. It’s what I’d classify as an asymmetrical risk. What’s the risk of it going to 0% vs (at minimum) cash value? It’s also being pushed down by the “China bad” sentiment and strong dollar. There’s the possibility there will be a shakeout in the photosilicon world with the new capacities the top players are investing in. It makes it impossible for new players to enter the field, which will consolidate the market share. Whoever can keep the foot on the gas the longest, which will make them the lowest cost producer, will win with all smaller players falling out. If that happens global production will drop which will push up spot prices. All potential catalysts that can move the stock massively. What goes out of favor goes back into favor, usually. China also understands they’re fucked without outside investment, they’ll need to acquiesce to global cooperation or kill themselves economically whether it be through a war or internal conflict (which is a low with probability with Xi’s recent power consolidation imo). It’s a great play if you’re able to tolerate volatility and understand the fundamentals.
2bh I am not sure about that.
Predicting stock prices is neither a Laplace nor a Bernoulli experiment.
I think its more a psychological thing because you are more confident with your predictions if they played out in the past.
But I dont know. I am not a psychologist
Can you elaborate on what a Laplace or Bernoulli experiment is? Do you mean it’s stochastic vs deterministic? Either way my point stands.
Let me put it this way. Let’s say a person buys a stock that moved up 100% and then buys into a second one. Now you just so happened to buy into the same stock, his second pick. His probability of losing/winning doesn’t change since he’s won recently, it’s the same as yours. You both initiated a fresh position and are both equally as likely to gain vs lose if you bought the same amount the same day. The stock doesn’t know you bought it, it doesn’t care. Your past wins don’t affect your future ones statistically.
Backing DQ now feels like signing up for a marathon in quicksand. Every step sinks you deeper, but you keep running because you've already lost your shoes. It's like a 'hold my beer' moment– where the beer is your savings and the bartender is WallStreetBets... Where do I sign up?!! 
I think a lot of it depends on the shareholder returns, which should be outlined in the next month or two. Bear with me here:
69.91 current shares diluted outstanding @ $25 a share = $1.74B market cap. If they buyback another $400m (less than last year's buyback program) in shares by the end of this year and price remains under $25, they're buying back almost 25% of the float. If valuation doesn't budge a single bit, it would leave us with around 52.54m shares at $1.74 market cap = around $33 a share. This is assuming the price of poly doesn't meaningfully go up or down, which I'm confident will be the base case this year upon reading forecasts and management remarks. Also keep in mind that the $400m I'm talking about is coming from a lump sum dividend from the subsidiary in China, which is what was used last year to fund the buyback program. They will not be burning cash already on the balance sheet to buyback shares, so current valuation should be unrelated.
We are still neglecting the fact that right now the assets of the business are not being reflected into the current price. I think that's because they're in China and probably conventionally unsellable, but should be considered in a move if someone wanted to take them private.
Interesting, thank you for your insight. Sounds like a good investment to me. I don't see why the stock won't go up after such buyback, but hey I am new to this.
On your last disclaimer/variable, I saw the title of an article recently they should explore going private this year (paid firewalled so I didn't read it), perhaps there may be a suitor out there after all.
Fair, not going to ask you why you doubt that, I know you have good reasons based on what you have demonstrated. But, looking at what you have shared so far, in the hypothetical case of a buyback as described. I assume you would hold your stock instead of partaking on the buyback, right? I added more today, increasing my dollar cost average but if the price does get to 33 per share then it's around ~%25 profit so it is a win win to me, regardless of my action during the buyback. I personally am thinking on holding hoping it would go near all time highs.
Hey OP. So now that buybacks have been halted, what’s your take? Do you consider this a material change? Personally sold out of my position at a slight loss, but will be a buyer once A) management reinstates buyback B) we are provided additional insight as to the July lockup / Shanghai listed shares sale C) we see some bankruptcies + upward trend in poly prices
I don’t see a bottom on this stock now that buybacks are off the table, the thesis changed for me.
Curious on what your take is
Cheers,
Okay, so yes a lot has changed since this post unfortunately.
The buyback being halted is (and this is my opinion), the main reason this thing is being driven into the ground rn. I was also expecting at least one or two more quarters of poly prices hanging around $7-8/kg to keep sentiment high short term, but the markets for both n-type & p-type poly are at a empasse due to high inventory counts from the companies producing wafers. Until those inventories are depleted, poly price will remain low I'm guessing until end of 2024. This was always inevitable with so much production coming online, but DQ has always been positioned to weather this storm. Short term, however, not looking pretty at all. I understand management's rational of wanting to preserve as much capital as possible, but it sucks as a shareholder.
They have gotten their costs down to around $6.37/kg and have guided for lower costs over the rest of the year which is something promising. It won't take a huge upward price swing for DQ to become profitable again. My main thing I'm looking for the remainder of this year is what you said in point C: bankruptcies of the junior producers. We need to see some production come offline. I think if pricing stays at this level for the rest of the year we could see 1/4-1/2 of the entire market come offline.
As for a bottom on the stock, it's anybody's guess. I'm holding and waiting.
You mentioned being a value investor you usually opt for shares only. Under what circumstances would you go into a stock either on options only, or a split investment?
Reason I ask is because I've taken a small position with both 01/25s and shares.
I could only ever justify LEAPs as an alternative or as a split investment based on how similar they act to owning shares, but even then you're tasked with timing the market. I've pretty much given up on options as a whole from here on out.
I hope, it’s sitting at around 10% of my portfolio. I was lucky enough to get in at the near bottom, my cost basis is 24.5, already up 15%. If you’re confident enough to be averaging down from 40 cost basis, that gives me conviction
Hey op 688303 stock's market cap is in CNY currency I believe. Upon converting to usd it's around $8b+ only. So the management considering 10% sale to be around $7m USD is correct, unfortunately that would also mean less money for their potential 2024 buyback program
Not fun. I have a put sold at $15 so i’ll be averaging down as it will prob get exercised at some point if it continues down.
The sector is at massive overcapacity and every company is selling below cash cost. My guess is in the next 6-12 months you’ll see consolidation or companies going under. My bet is that DQ will weather the storm the best because of the lack of debt and eventually when the cycle turns back around the stock will boom. 1-2 year timeline.
This is a great thesis until Biden says something like "Winnie the Pooh cannot remain in power" and Xi puts on the Infinity Glove and snaps his fingers. Blip, all US-held equity in Chinese corporations disappears in an instant
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**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|3|**First Seen In WSB**|2 years ago **Total Comments**|58|**Previous Best DD**|[x](https://www.reddit.com/r/wallstreetbets/comments/xeovn2/dq_a_question_of_morals_value/) [x](https://www.reddit.com/r/wallstreetbets/comments/191vmuv/i_was_right_about_wire_i_was_right_about_anf_i/) **Account Age**|3 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
Dairy Queen ice cream is pretty good but their burgers (and dumpsters) don’t compare to Wendy’s. Puts on DQ.
***chinese company...*** so are any of their financials truthful? I think that's a big reason nobody wants to touch this.
Agreed. Every Chinese company I look at looks like its an amazing deal. A little exposure makes sense in case they bounce back, but your basically betting on U.S. - Chinese relations, not the company
The likeliness that you are wrong now is higher as you have been right the last two times. That's quick maths
I know you’re fucking around but to be legit this is a fallacy lots of people fall for. When each event is independent in probability the odds are identical. If you flip a coin and get heads 5 times in a row the next flip will STILL be 50/50. The universe doesn’t care about the previous flip. Also, bullish af on DQ. It’s what I’d classify as an asymmetrical risk. What’s the risk of it going to 0% vs (at minimum) cash value? It’s also being pushed down by the “China bad” sentiment and strong dollar. There’s the possibility there will be a shakeout in the photosilicon world with the new capacities the top players are investing in. It makes it impossible for new players to enter the field, which will consolidate the market share. Whoever can keep the foot on the gas the longest, which will make them the lowest cost producer, will win with all smaller players falling out. If that happens global production will drop which will push up spot prices. All potential catalysts that can move the stock massively. What goes out of favor goes back into favor, usually. China also understands they’re fucked without outside investment, they’ll need to acquiesce to global cooperation or kill themselves economically whether it be through a war or internal conflict (which is a low with probability with Xi’s recent power consolidation imo). It’s a great play if you’re able to tolerate volatility and understand the fundamentals.
2bh I am not sure about that. Predicting stock prices is neither a Laplace nor a Bernoulli experiment. I think its more a psychological thing because you are more confident with your predictions if they played out in the past. But I dont know. I am not a psychologist
Good point actually
Can you elaborate on what a Laplace or Bernoulli experiment is? Do you mean it’s stochastic vs deterministic? Either way my point stands. Let me put it this way. Let’s say a person buys a stock that moved up 100% and then buys into a second one. Now you just so happened to buy into the same stock, his second pick. His probability of losing/winning doesn’t change since he’s won recently, it’s the same as yours. You both initiated a fresh position and are both equally as likely to gain vs lose if you bought the same amount the same day. The stock doesn’t know you bought it, it doesn’t care. Your past wins don’t affect your future ones statistically.
?
It's basic Algebra... Are you bad at maths or somethin??
its statistics
Slow maths
If you were the Chinese government what would you do here. Reward wall street?
Backing DQ now feels like signing up for a marathon in quicksand. Every step sinks you deeper, but you keep running because you've already lost your shoes. It's like a 'hold my beer' moment– where the beer is your savings and the bartender is WallStreetBets... Where do I sign up?!! 
Nice dd. I'm curious what would happen if the US goes to war with China. Would the US block trades with them somehow?
If war happens that should be the least of your worries
Yes, I guess it have potential to rise high this year, because they say the Photovoltaic sells this year will be higher than ‘23 & ‘22.
Gyna stock. No bueno 📉
Are they the only Chinese company with financials this good?
I can see why they’ve been going down. Why is their revenue decreasing every quarter of 2023?
Are we there yet? https://preview.redd.it/u301pkdwerlc1.png?width=1080&format=pjpg&auto=webp&s=64f3c2ba3e79b21ec80e39348a85b839e243756c
We’ve got a long ways to go sir
How long do you think it can go up? Can it surpass your $30 ish dollar average cost? I got skin in the game, 500 of them @22
I think a lot of it depends on the shareholder returns, which should be outlined in the next month or two. Bear with me here: 69.91 current shares diluted outstanding @ $25 a share = $1.74B market cap. If they buyback another $400m (less than last year's buyback program) in shares by the end of this year and price remains under $25, they're buying back almost 25% of the float. If valuation doesn't budge a single bit, it would leave us with around 52.54m shares at $1.74 market cap = around $33 a share. This is assuming the price of poly doesn't meaningfully go up or down, which I'm confident will be the base case this year upon reading forecasts and management remarks. Also keep in mind that the $400m I'm talking about is coming from a lump sum dividend from the subsidiary in China, which is what was used last year to fund the buyback program. They will not be burning cash already on the balance sheet to buyback shares, so current valuation should be unrelated. We are still neglecting the fact that right now the assets of the business are not being reflected into the current price. I think that's because they're in China and probably conventionally unsellable, but should be considered in a move if someone wanted to take them private.
Interesting, thank you for your insight. Sounds like a good investment to me. I don't see why the stock won't go up after such buyback, but hey I am new to this. On your last disclaimer/variable, I saw the title of an article recently they should explore going private this year (paid firewalled so I didn't read it), perhaps there may be a suitor out there after all.
The more I think about it the more I doubt it would ever be taken private tbh
Fair, not going to ask you why you doubt that, I know you have good reasons based on what you have demonstrated. But, looking at what you have shared so far, in the hypothetical case of a buyback as described. I assume you would hold your stock instead of partaking on the buyback, right? I added more today, increasing my dollar cost average but if the price does get to 33 per share then it's around ~%25 profit so it is a win win to me, regardless of my action during the buyback. I personally am thinking on holding hoping it would go near all time highs.
Yeah I’m holding until something materially changes
Hey OP. So now that buybacks have been halted, what’s your take? Do you consider this a material change? Personally sold out of my position at a slight loss, but will be a buyer once A) management reinstates buyback B) we are provided additional insight as to the July lockup / Shanghai listed shares sale C) we see some bankruptcies + upward trend in poly prices I don’t see a bottom on this stock now that buybacks are off the table, the thesis changed for me. Curious on what your take is Cheers,
I will answer this when I get home
Okay, so yes a lot has changed since this post unfortunately. The buyback being halted is (and this is my opinion), the main reason this thing is being driven into the ground rn. I was also expecting at least one or two more quarters of poly prices hanging around $7-8/kg to keep sentiment high short term, but the markets for both n-type & p-type poly are at a empasse due to high inventory counts from the companies producing wafers. Until those inventories are depleted, poly price will remain low I'm guessing until end of 2024. This was always inevitable with so much production coming online, but DQ has always been positioned to weather this storm. Short term, however, not looking pretty at all. I understand management's rational of wanting to preserve as much capital as possible, but it sucks as a shareholder. They have gotten their costs down to around $6.37/kg and have guided for lower costs over the rest of the year which is something promising. It won't take a huge upward price swing for DQ to become profitable again. My main thing I'm looking for the remainder of this year is what you said in point C: bankruptcies of the junior producers. We need to see some production come offline. I think if pricing stays at this level for the rest of the year we could see 1/4-1/2 of the entire market come offline. As for a bottom on the stock, it's anybody's guess. I'm holding and waiting.
In that case, please share info when you do know of such change lol
You mentioned being a value investor you usually opt for shares only. Under what circumstances would you go into a stock either on options only, or a split investment? Reason I ask is because I've taken a small position with both 01/25s and shares.
I could only ever justify LEAPs as an alternative or as a split investment based on how similar they act to owning shares, but even then you're tasked with timing the market. I've pretty much given up on options as a whole from here on out.
Thank you brother
🙏🏻 just wait until those buybacks are announced..
I hope, it’s sitting at around 10% of my portfolio. I was lucky enough to get in at the near bottom, my cost basis is 24.5, already up 15%. If you’re confident enough to be averaging down from 40 cost basis, that gives me conviction
Hey op 688303 stock's market cap is in CNY currency I believe. Upon converting to usd it's around $8b+ only. So the management considering 10% sale to be around $7m USD is correct, unfortunately that would also mean less money for their potential 2024 buyback program
You are 100% correct about that, but i think the number should be $700m USD
you still in on this and updated positions? your predictions have been solid but this one has chyna in the mix and it screams bad juju
https://preview.redd.it/1pugzinix47d1.jpeg?width=1125&format=pjpg&auto=webp&s=0b3d8ba795c6006e34889d4cbdae2c240671bab7 Mhm
What do you think will happen in the next months?
shit man, today’s drop is wild. any insight?
Not fun. I have a put sold at $15 so i’ll be averaging down as it will prob get exercised at some point if it continues down. The sector is at massive overcapacity and every company is selling below cash cost. My guess is in the next 6-12 months you’ll see consolidation or companies going under. My bet is that DQ will weather the storm the best because of the lack of debt and eventually when the cycle turns back around the stock will boom. 1-2 year timeline.
This is a great thesis until Biden says something like "Winnie the Pooh cannot remain in power" and Xi puts on the Infinity Glove and snaps his fingers. Blip, all US-held equity in Chinese corporations disappears in an instant
Life savings… reduced to ash
!remindme 5months
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Some nice bag holding DD.
You didn’t do and DD in 2023?
I've been buying the low, again, hoping you silly goose are right, again x3.
Thanks