Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Addresses [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2022 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-34602 |
Entity Registrant Name | DAQO NEW ENERGY CORP. |
Entity Address, Address Line One | Unit 29 |
Entity Address, Address Line Two | Huadu Mansion |
Entity Address, Address Line Three | 838 Zhangyang Road, |
Entity Address, City or Town | Shanghai |
Entity Address, Postal Zip Code | 200122 |
Entity Address, Country | CN |
Entity Incorporation, State or Country Code | E9 |
Entity Central Index Key | 0001477641 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 391,023,327 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Auditor Name | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
Auditor Firm ID | 1113 |
Auditor Location | Shanghai, China |
Document Accounting Standard | U.S. GAAP |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
ICFR Auditor Attestation Flag | false |
Common Stock [Member] | |
Entity Addresses [Line Items] | |
Title of 12(b) Security | Ordinary shares, par value US$0.0001 per share* |
American depositary shares[Member] | |
Entity Addresses [Line Items] | |
Title of 12(b) Security | American depositary shares, each representing5 ordinary sharesOrdinary shares, par value US$0.0001 per share* |
Trading Symbol | DQ |
Security Exchange Name | NYSE |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | Unit 29 |
Entity Address, Address Line Two | Huadu Mansion |
Entity Address, Address Line Three | 838 Zhangyang Road |
Entity Address, City or Town | Shanghai |
Entity Address, Postal Zip Code | 200122, |
Entity Address, Country | CN |
Contact Personnel Name | Ming Yang |
Contact Personnel Email Address | mingyang@daqo.com |
City Area Code | 86-21 |
Local Phone Number | 5075-2918 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 3,499,488 | $ 723,775 |
Restricted cash | 20,863 | 191 |
Notes receivable | 1,131,566 | 365,911 |
Short-term investments | 13,927 | 280,251 |
Prepaid expenses and other current assets | 52,932 | 41,684 |
Advances to suppliers | 852 | 3,397 |
Inventories | 169,517 | 327,771 |
Amounts due from related parties- short-term portion | 18 | 0 |
Total current assets | 4,889,163 | 1,742,980 |
Property, plant and equipment, net | 2,605,195 | 1,559,110 |
Prepaid land use rights, net | 80,330 | 40,741 |
Deferred tax assets | 1,809 | 0 |
Amounts due from related parties- long-term portion | 16,864 | 0 |
Other non-current assets | 735 | 820 |
TOTAL ASSETS | 7,594,096 | 3,343,651 |
Current liabilities: | ||
Accounts payable | 81,875 | 81,469 |
Notes payable | 20,687 | 0 |
Advances from customers - short-term portion | 121,992 | 202,958 |
Payables for purchases of property, plant and equipment | 230,440 | 142,937 |
Accrued expenses and other current liabilities | 51,497 | 40,848 |
Amounts due to related parties - short-term portion | 8,417 | 10,815 |
Income tax payable | 221,634 | 71,472 |
Total current liabilities | 736,542 | 550,499 |
Advances from customers - long-term portion | 153,176 | 90,661 |
Deferred government subsidies | 19,232 | 21,935 |
Deferred tax liabilities | 80,540 | 16,726 |
Total liabilities | 989,490 | 679,821 |
Ordinary shares; | ||
$0.0001 par value 500,000,000 shares authorized as of December 31, 2021 and 2022; 377,177,802 shares issued and 372,534,652 shares outstanding as of December 31, 2021; 405,620,792 shares issued and 391,023,327 shares outstanding as of December 31, 2022 | 40 | 38 |
Additional paid-in capital | 2,211,203 | 1,016,855 |
Retained earnings | 2,898,843 | 1,079,042 |
Accumulated other comprehensive income (loss) | (176,032) | 67,773 |
Treasury shares, at cost (4,643,150 shares as of December 31, 2021; 14,597,465 shares as of December 31, 2022) | (126,678) | (1,749) |
Total Daqo New Energy Corp. shareholders' equity | 4,807,376 | 2,161,959 |
Non-controlling interest | 1,797,230 | 501,871 |
Total shareholders' equity | 6,604,606 | 2,663,830 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 7,594,096 | $ 3,343,651 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued | 405,620,792 | 377,177,802 |
Ordinary shares, shares outstanding | 391,023,327 | 372,534,652 |
Treasury Stock, shares | 14,597,465 | 4,643,150 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Revenues | $ 4,608,350 | $ 1,678,793 | $ 675,602 |
Cost of revenues | (1,200,428) | (581,585) | (441,610) |
Gross profit | 3,407,922 | 1,097,208 | 233,992 |
Operating (expenses) income: | |||
Selling, general and administrative expenses | (354,074) | (39,904) | (39,472) |
Research and development expenses | (10,041) | (6,495) | (6,856) |
Other operating income (expense), net | (3,181) | 609 | 191 |
Total operating expenses, net | (367,296) | (45,790) | (46,137) |
Income from operations | 3,040,626 | 1,051,418 | 187,855 |
Interest (expense) income, net | 14,473 | (20,482) | (25,725) |
Exchange gain | 680 | ||
Investment income, net | 1,110 | 4,012 | |
Income before income taxes | 3,056,889 | 1,034,948 | 162,130 |
Income tax expense | (577,247) | (170,101) | (28,182) |
Net income from continuing operations | 2,479,642 | 864,847 | 133,948 |
Loss from discontinued operations, net of tax | (141) | ||
Net income | 2,479,642 | 864,847 | 133,807 |
Net income attributable to non-controlling interest | 659,841 | 115,923 | 4,612 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | $ 1,819,801 | $ 748,924 | $ 129,195 |
Net earnings per ordinary share | |||
Continuing operations | $ 4.80 | $ 2.03 | $ 0.36 |
Discontinued operations | 0 | ||
Basic-ordinary shares | 4.80 | 2.03 | 0.36 |
Continuing operations | 4.67 | 1.95 | 0.34 |
Discontinued operations | 0 | ||
Diluted-ordinary shares | $ 4.67 | $ 1.95 | $ 0.34 |
Ordinary shares used in calculating earnings per ordinary share | |||
Basic-ordinary shares | 379,365,310 | 369,341,105 | 355,087,013 |
Diluted-ordinary shares | 386,459,841 | 383,766,406 | 375,017,150 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 2,479,642 | $ 864,847 | $ 133,807 |
Other comprehensive income: | |||
Foreign currency translation adjustments, net of tax of nil | (325,930) | 55,045 | 48,438 |
Total other comprehensive (loss)income | (325,930) | 55,045 | 48,438 |
Comprehensive income | 2,153,712 | 919,892 | 182,245 |
Comprehensive income attributable to non-controlling interest | 586,711 | 125,808 | 6,846 |
Comprehensive income attributable to Daqo New Energy Corp. shareholders | $ 1,567,001 | $ 794,084 | $ 175,399 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Foreign currency translation adjustments | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Ordinary shares | Treasury shares | Additional paid-in capital | Retained Earnings | Accumulated other comprehensive (loss) income | Non controlling interest | Total |
Balance at Dec. 31, 2019 | $ 35 | $ (1,749) | $ 387,371 | $ 200,923 | $ (19,937) | $ 515 | $ 567,158 |
Balance, shares at Dec. 31, 2019 | 347,419,152 | 4,643,150 | |||||
Net income | 129,195 | 4,612 | 133,807 | ||||
Other comprehensive income | 46,204 | 2,234 | 48,438 | ||||
Share-based compensation | 17,908 | 17,908 | |||||
Options exercised | $ 1 | 2,676 | 2,677 | ||||
Options exercised, shares | 4,916,850 | ||||||
Restricted shares vested | $ 1 | (1) | |||||
Restricted shares vested, shares | 12,899,400 | ||||||
Contribution from related parties | 839 | 839 | |||||
Proceeds from sale of non-controlling interest | 3,657 | 24,431 | 28,088 | ||||
Balance at Dec. 31, 2020 | $ 37 | $ (1,749) | 412,450 | 330,118 | 26,267 | 31,792 | 798,915 |
Balance, shares at Dec. 31, 2020 | 365,235,402 | 4,643,150 | |||||
Net income | 748,924 | 115,923 | 864,847 | ||||
Other comprehensive income | 45,160 | 9,885 | 55,045 | ||||
Subsidiary's follow-on offering of its equity interests (see Note 10) | 594,301 | (3,654) | 344,271 | 934,918 | |||
Share-based compensation | 10,077 | 10,077 | |||||
Options exercised | 28 | 28 | |||||
Options exercised, shares | 47,000 | ||||||
Restricted shares vested | $ 1 | (1) | |||||
Restricted shares vested, shares | 7,252,250 | ||||||
Balance at Dec. 31, 2021 | $ 38 | $ (1,749) | 1,016,855 | 1,079,042 | 67,773 | 501,871 | 2,663,830 |
Balance, shares at Dec. 31, 2021 | 372,534,652 | 4,643,150 | |||||
Net income | 1,819,801 | 659,841 | 2,479,642 | ||||
Other comprehensive income | (252,800) | (73,130) | (325,930) | ||||
Subsidiary's follow-on offering of its equity interests (see Note 10) | 878,768 | 8,951 | 742,845 | 1,630,564 | |||
Share-based compensation | 314,973 | 314,973 | |||||
Options exercised | 995 | $ 995 | |||||
Options exercised, shares | 1,672,350 | 1,672,350 | |||||
Restricted shares vested | $ 2 | (2) | |||||
Restricted shares vested, shares | 26,770,640 | ||||||
Repurchase stock | $ (124,929) | $ (124,929) | |||||
Repurchase stock (in shares) | (9,954,315) | 9,954,315 | |||||
Subsidiary's dividend payment | (33,762) | (33,762) | |||||
Acquisition of non-controlling interests | (386) | 44 | (435) | (777) | |||
Balance at Dec. 31, 2022 | $ 40 | $ (126,678) | $ 2,211,203 | $ 2,898,843 | $ (176,032) | $ 1,797,230 | $ 6,604,606 |
Balance, shares at Dec. 31, 2022 | 391,023,327 | 14,597,465 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net income | $ 2,479,642 | $ 864,847 | $ 133,807 |
Less: Loss from discontinued operations, net of tax | (141) | ||
Net income from continuing operations | 2,479,642 | 864,847 | 133,948 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share-based compensation | 307,447 | 10,077 | 17,908 |
Depreciation of property, plant and equipment | 107,097 | 77,366 | 68,686 |
Prepaid land use rights | 1,220 | 821 | 693 |
Loss on disposal of property plant and equipment | 8,904 | 2,749 | 1,103 |
Inventory write-down | 0 | 0 | 1,956 |
Fair value change of short-term investments | (1,110) | (2,407) | |
Others | 8,407 | 4,378 | 616 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 13 | ||
Notes receivable | (816,238) | (360,259) | 5,553 |
Prepaid expenses and other current assets | (14,923) | (31,556) | 6,689 |
Advances to suppliers | 2,341 | 4,755 | (6,018) |
Inventories | 138,258 | (280,187) | (5,125) |
Amounts due from related parties | (4) | 118 | (94) |
Operating lease right-of-use assets | 65 | ||
Other non-current assets | 62 | (145) | |
Accounts payable | 6,999 | 61,067 | 4,556 |
Notes payable | (26,068) | (54,345) | |
Accrued expenses and other current liabilities | 14,241 | 9,727 | 16,138 |
Income tax payable | 160,058 | 47,451 | 16,629 |
Advances from customers | (3,616) | 243,695 | 3,335 |
Amounts due to related parties | (124) | 25 | (38) |
Deferred government subsidies | (1,005) | (562) | (497) |
Lease liability | (83) | (86) | |
Deferred taxes | 65,058 | 12,973 | (1,787) |
Net cash provided by operating activities-continuing operations | 2,462,652 | 638,989 | 209,753 |
Net cash used in operating activities-discontinued operations | (50) | ||
Net cash provided by operating activities | 2,462,652 | 638,989 | 209,703 |
Investing activities: | |||
Purchases of property, plant and equipment | (1,205,330) | (498,505) | (118,292) |
Purchases of land use rights | (45,188) | (9,755) | |
Purchase of short-term investments | (46,192) | (501,441) | |
Redemption of short-term investments | 298,294 | 227,807 | |
Net cash used in investing activities-continuing operations | (998,416) | (781,894) | (118,292) |
Net cash used in investing activities-discontinued operations | (195) | ||
Net cash used in investing activities | (998,416) | (781,894) | (118,487) |
Financing activities: | |||
Proceeds from related parties loans | 13,213 | 22,869 | |
Repayment of related parties loans | (18,133) | (47,538) | |
Proceeds from bank borrowings | 178,752 | 48,822 | 98,573 |
Repayment of bank borrowings | (178,752) | (244,776) | (198,043) |
Proceeds from options exercised | 995 | 2,139 | 580 |
Proceeds from sales of equity interest in the Group's subsidiary | 28,088 | ||
Acquisition of minority interest of a subsidiary | (776) | ||
Proceeds from subsidiary's public offering of ordinary shares, net of issuance costs paid of $59 million | 934,960 | ||
Payments for repurchase of common shares | (124,929) | ||
Subsidiary's dividend payment | (33,762) | ||
Proceeds from Subsidiary's follow-on offering of its equity interests, net of issuance costs paid of $9.4 million | 1,630,563 | ||
Net cash (used in) provided by financing activities-continuing operations | 1,472,091 | 736,225 | (95,471) |
Net cash used in financing activities-discontinued operations | |||
Net cash (used in) provided by financing activities | 1,472,091 | 736,225 | (95,471) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (139,942) | 12,242 | 7,365 |
Net increase in cash, cash equivalents and restricted cash | 2,796,385 | 605,562 | 3,110 |
Cash, cash equivalents and restricted cash at the beginning of the year (includes $845,199, nil and nil of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2020, 2021 and 2022) | 723,966 | 118,404 | 115,294 |
Cash, cash equivalents and restricted cash at the end of the year | 3,520,351 | 723,966 | 118,404 |
Cash and cash equivalents | 3,499,488 | 723,775 | 76,596 |
Restricted cash | 20,863 | 191 | 41,808 |
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | 3,520,351 | 723,966 | 118,404 |
Supplemental disclosure of cash flow information: | |||
Interest paid, net of capitalized interest | 7,926 | 21,158 | 24,696 |
Income taxes paid | 350,583 | 108,099 | 12,808 |
Supplemental schedule of non-cash investing activities: | |||
Purchases of property, plant and equipment included in payables | 251,127 | 142,937 | 73,148 |
Purchase of property, plant and equipment included in amounts due to related parties - short-term portion | $ 4,082 | $ 5,979 | $ 198 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | $ 0 | $ 0 | $ 845,199 | |
Ordinary shares | ||||
Net of issuance cost paid | $ 59,000 | |||
Equity interests | ||||
Net of issuance cost paid | $ 9,400 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Daqo New Energy Corp. (the “Company”) and its subsidiaries are collectively referred to as the Group, which is a manufacturer of high-purity polysilicon for the global solar PV industry. Founded in 2007, the Company manufactures and sells high-purity polysilicon to photovoltaic product manufactures. The Group’s major operational subsidiary Xinjiang Daqo completed the initial public offering (“IPO”) on the Shanghai Stock Exchange’s Sci-Tech Innovation Board on July 22, 2021, and raised net proceeds of approximately $935.0 million, to fund its business operations. Following the IPO, the Company holds approximately a total ownership of 80.7% of Xinjiang Daqo, directly and indirectly. In June 2022, Xinjiang Daqo, received the total gross proceeds of approximately RMB11 billion (an equivalence of $1,640 million) from its private offering on the Shanghai Stock Exchange. Upon completion of the private offering, the Company beneficially owns approximately 72.68% of Xinjiang Daqo. Proceeds from the offering were primarily used for Phase 5A polysilicon project of 100,000 MT in Inner Mongolia. |
SUMMARY OF PRINCIPAL ACCOUNTING
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). (b) Basis of consolidations The consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. (c) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Areas where management uses subjective judgment include, but not limited to, useful lives and residual values of long-lived assets, valuation allowances for deferred tax assets and grant-date fair value of share-based award. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. (d) Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments and notes receivable. As of December 31, 2021 and 2022, all of the Group’s cash, cash equivalents, restricted cash and short-term investments were held by major financial institutions in the PRC and international institutions outside of the PRC which management believes are of high credit ratings and no significant credit risk exists for these accounts. As of December 31, 2021 and 2022, notes receivable represents bank acceptance drafts that are non-interest bearing and due within three to twelve months. During the year ended December 31, 2021 and 2022, bank’s acceptance notes were used to collect the payment or settle the payable based on an administrative convenience, given these notes are readily convertible to known amounts of cash. In accordance with the procurement agreements, whether cash or bank acceptance notes to settle the payables is at the Group’s discretion, and this selection does not impact the agreed contractual purchase prices. The Group accounts for the transfer of bank acceptance notes, including endorsing bank’s acceptance notes to suppliers and discounting the notes to other banks, as a sale of financial instrument, and derecognizes the notes receivables accordingly. The Group is not directly involved in the cash exchange based on convenience; therefore the Group still reports corresponding constructive receipts and disbursements as cash flows from operating activities on the consolidated statements of cash flows. (e) Cash, cash equivalents and restricted cash Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have maturities of three months or less when purchased. Restricted cash of $0.2 million and $20.9 million as of December 31, 2021 and 2022, respectively, are restricted bank deposits for notes issued by several banks mainly for the Group’s purchases of raw materials, and plant and equipment, etc. These restricted bank deposits carry fixed interest rates and will be released when the related notes or debts are settled by the Group. (f) Short-term investments Short-term investments consist of financial products of the following types: Structured financial products The structured financial products are mainly deposits due within 6 months with secured principal and variable interest rates and are restricted as to withdrawal before maturity. The Company elects to adopt the fair value option in accordance with ASC 825 Financial Instruments for such financial products. Changes in the fair value of the investments are recorded as investment income in the consolidated statements of operations. Wealth management products The wealth management products are mainly deposits with unsecured principal and variable interest rates placed with financial institutions and are not restricted as to withdrawal before maturity. These products were bought and held principally for the purpose of selling them in the near term, so the Company classified them as trading securities. Unrealized holding gains/losses and realized gains/losses for trading securities are recorded as investment income in the consolidated statements of operations. (g) Allowance for credit losses After the adoption of ASU 2016-13 Financial instruments- credit losses on January 1, 2020, the Group applied a current expected credit losses (“CECL”) model for financial instruments measured at amortized cost, including notes receivable, amount due from related parties and other receivable. The Group establishes CECL for pools of assets with similar risk characteristics by evaluating aging trends. According to historical levels of credit losses and current economic conditions, no allowance for credit losses was provided on the aforementioned financial instruments outstanding as of December 31, 2021 and 2022. (h) Property, plant and equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation is recognized on a straight-line basis over the following estimated useful lives: Buildings and plant 30 years Machinery and equipment 15 years Furniture, fixtures and equipment 3-10 years Motor vehicles 6 years The Group reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable. Factors that the Group considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include, but are not limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use of the assets. The analysis will be performed at the asset or asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors. Costs incurred on construction are capitalized and transferred to property, plant and equipment upon completion, at which time depreciation commences. Interest expense incurred for construction of property, plant, and equipment is capitalized as part of the costs of such assets. The Group capitalizes interest to the extent that expenditures to construct an asset have occurred and interest costs have been incurred. Interest expense capitalized for the years ended December 31, 2020, 2021 and 2022 was $0.3 million, nil and nil, respectively. (i) Inventories Inventories are stated at lower of cost or net realizable value. Costs are determined using weighted average costs. Costs comprise direct materials, direct labor and overhead costs incurred in bringing the inventories to their present location and condition. The Group writes down the cost of excess inventories to the estimated net realizable value based on historical and forecasted demand. Estimated net realizable value is measured as the estimated selling price of each class of inventory in the ordinary course of business less estimated costs of completion and disposal. The write-down to inventories was $2.0 million for the year ended December 31, 2020, and nil for the years ended December 31, 2021 and 2022. (j) Prepaid land use rights All land in the PRC is owned by the PRC government. The PRC government, according to PRC law, may sell the land use rights for a specified period of time. The purchase price of land use right represents the operating lease prepayments for the rights to use the land in the PRC under ASC 842 and is amortized over the remaining lease term. The Group recorded lease expenses of $0.7 million, $0.8 million and $1.2 million, for the years ended December 31, 2020, 2021 and 2022, respectively. (k) Impairment of long-lived assets The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Factors that the Group considers in deciding when performing an impairment review include, but are not limited to, significant under-performance of a business or product line in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. An impairment analysis is performed at the lowest level of identifiable independent cash flows for an asset or asset group. The Group makes subjective judgments in determining the independent cash flows that’s related to a specific asset group based on the asset usage model and manufacturing capabilities. The Group measures the recoverability of assets that will continue to be used in the operations by comparing the carrying value of the asset group to the estimate of the related total future undiscounted cash flows. If an asset group’s carrying value is not recoverable through the related undiscounted cash flows, the impairment loss is measured by comparing the difference between the asset group’s carrying value and its fair value. The Group determines the fair value of an asset or asset group utilizing estimated future discounted cash flows and incorporates assumptions that it believes marketplace participants would utilize. The Group did not recognize any impairment losses for the years ended December 31, 2020, 2021 and 2022 respectively. (l) Lease The Group adopted ASC 842, Lease on January 1, 2019. As of December 31, 2021 and 2022, the Group only has lease for its corporate and administrative office located in Shanghai. At the commencement of the lease, management determines its classification as an operating lease. The Group recognizes the associated lease expense on a straight-line basis over the term of the lease beginning on the date of initial possession, which is generally when the Group enters the leased premises and begins to make improvements in preparation for its intended use. At the commencement date of a lease, the Group recognizes a lease liability for future fixed lease payments and a right-of-use (“ROU”) asset representing the right to use the underlying asset during the lease term. The future fixed lease payments are discounted using the incremental borrowing rate, as the rate implicit in the lease is not readily determinable. Given the Group has only one leased property, the financial impact in the consolidated balance sheet and statement of operations is immaterial. (m) Revenue recognition The Group recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Substantially all of the Group’s revenue is generated from sales of polysilicon to customers in the PRC. The Group recognizes sales of polysilicon at a point in time following the transfer of control of its products to the customers, which occurs upon delivery according to the terms of the underlying contracts. The Group’s standalone selling prices are based on the prices charged to customers for the single performance obligation which is transfer of control of polysilicon upon acceptance by the customers. Variable consideration that could affect the Group’s reported revenues is sales returns, which is recorded as a reduction of revenues. Return rights of defective products are typically contractually limited within a period ranging from 3 to 30 days upon acceptance. There were no sales returns occurred for each reporting period presented. No warranties, incentives, or rebates arrangements has been offered to the customers. For a majority of the sales arrangements, the Group requires advanced payments prior to shipments. For customers with trade credit granted on a short-term basis within 30 days, the Group records accounts receivable at the invoiced amount, net of an estimated allowance for credit losses. As of both December 31, 2021 and 2022, accounts receivable was nil. Advances from customers are to secure polysilicon supply, which are applied against future purchases and deducted according to the agreed proportion. Contract liabilities represent the obligations to transfer polysilicon for which the Group has received considerations from customers. The Group refers to contract liabilities as “advances from customers” on the consolidated financial statements and the related disclosures. The balance of advances from customers inclusive of the short-term and long-term portion was $293.6 million and $275.2 million as of December 31, 2021 and 2022, respectively. Revenue recognized from the beginning advances from customers balance as of January 1, 2021 and January 1, 2022 during the years ended December 31, 2021 and 2022 was $37.8 million and $203.0 million, respectively. The ending balance of advances from customers was $122.0 million as of December 31, 2022, expected to be recognized in revenue within one year. The Group receives long-term advance payments from some customers according to the contracts. The Group determines if there is a significant financing component for these contracts considering the length of time between the customers’ payment and the transfer of control of the goods. When a significant financing component has been identified, the transaction price for these contracts is discounted, using the rate that would be reflected in a separate financing transaction at contract inception. Practical Expedients and Exemptions The Company applies the practical expedient for short-term advances received from customers and long-term advance payments - short term portion. That is, the promised amount of consideration is not adjusted for the effects of a significant financing component if the period between the transfer of the promised good or service and the payment is one year or less. The Company elects not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. (n) Cost of revenues Cost of revenues consists of production related costs including costs of silicon raw materials, electricity and other utilities, consumables, direct labor, overhead costs, depreciation of property, plant and equipment, and manufacturing waste treatment processing fees. Cost of revenues does not include shipping and handling expenses, therefore the Group’s cost of revenues may not be comparable to other companies which include such expenses in their cost of revenues. (o) Shipping and handling Costs to ship products to customers are recorded as selling, general and administrative expenses in the consolidated statements of operations, which amounted to $8.6 million, $8.3 million and $15.9 million, for the years ended December 31, 2020, 2021 and 2022, respectively. (p) Research and development expenses Research and development expenses include materials, low-value consumption goods and utilities consumed in research and development activities, payroll and related costs and depreciation of property and equipment associated with the research and development activities, which are expensed when incurred. The Group’s research and development activities are mainly focused on technical improvements to increase production volume and efficiency, and to lower unit cost. (q) Government subsidies The Group receives unrestricted cash subsidies from local government agencies. The government agencies, at their discretion, determine the amount of the subsidies with reference to fixed assets and land use right payments, value-added tax and income taxes paid, bank loan interest expenses paid or electricity consumed by the Group. The subsidies are unrestricted as to use and can be utilized by the Group in any manner it deems appropriate. The Group has utilized, and expects to continue to utilize, these subsidies to fund general operating expenses. The Group records unrestricted cash government subsidies as other operating income in the consolidated statements of operations. Unrestricted cash government subsidies received for the years ended December 31, 2020, 2021 and 2022 were $0.5 million, $1.1 million and $3.2 million respectively. Government subsidies related to funding purchase of fixed assets are recorded as long term liabilities and amortized on a straight-line basis over the useful life of the associated asset in other operating income, net. Government grants related to fixed assets received were $0.4 million for the year ended December 31, 2020, and were nil for the years ended December 31, 2021 and 2022. (r) Income taxes Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry-forwards and credits by applying enacted tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of operations in the period of the enactment of the change. (s) Share-based compensation The Group recognizes share-based compensation in the consolidated statements of operations based on the fair value of equity awards at the date of the grant, with compensation expense recognized over the period in which the grantee is required to provide service to the Group in exchange for the equity award. The share-based compensation expense related to an award that contains both service-based and performance-based vesting condition will be recognized when it is probable that the performance-based condition will be met. The share-based compensation expense related to the award with performance-based vesting condition is recognized on an accelerated basis as though each separately vesting portion of the award was, in substance, a separate award. The fair value of share options is determined using the Binomial option pricing model and the fair value of restricted share units (“RSUs”) is determined with reference to the fair value of the underlying equity share at the grant date. The probability of the performance condition to be met is not reflected when determining the fair value of the award. The Group has made an estimate of expected forfeiture based on historical experience of forfeiture and is recognizing compensation costs only for those equity awards expected to vest. The share-based compensation expenses are categorized as either selling, general and administrative expenses, cost of sales, or research and development expenses depending on the job functions of the grantees. The compensation cost arising from share-based payment awards may be capitalized as part of an asset, if a grantee’s compensation is included in the cost of acquiring or constructing an asset, in the same manner as cash compensation. In September 2022, Xinjiang Daqo adopted its 2022 Restricted Stock Incentive Plan (2022 PRC Incentive Plan) and granted stock options of Xinjiang Daqo to its directors, senior executives and other personnel deemed necessary by the board of directors of Xinjiang Daqo to purchase Xinjiang Daqo's shares. The fair value of such stock options is determined using Black-Scholes option-pricing model based on the estimated fair value of the ordinary share of Xinjiang Daqo on the grant date. A change in any of the terms or conditions of share options is accounted for as a modification of stock options. The Company calculates the incremental compensation cost of a modification as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. For vested options, the Company recognizes incremental compensation cost in the period the modification occurred. For unvested options, the Company recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. For the years ended December 31, 2020, 2021 and 2022, the Group recognized share-based compensation cost of $17.9 million, $10.1 million and $315.0 million, respectively. The following table presents the amounts recognized as expenses in the statements of operations and the amounts capitalized as part of an asset on balance sheets: Year ended December 31, 2020 2021 2022 Selling, general and administrative expenses $ 15,929 $ 8,389 $ 299,346 Cost of revenues 1,857 1,586 7,739 Property, plant and equipment, net — — 5,383 Inventories — — 2,143 Research and development expenses 122 102 362 Total $ 17,908 $ 10,077 $ 314,973 (t) Earnings (loss) per ordinary share Basic earnings (loss) per ordinary share is computed by dividing the net income attributable to ordinary shares holders by the weighted average number of ordinary shares outstanding during the year. Diluted earnings (loss) per ordinary share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the year. Diluted earnings per share is computed using the treasury stock method. (u) Foreign currency translation The reporting currency of the Group is the United States dollar (“U.S. dollar”). The functional currency of the Company is the U.S. dollar. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange in effect at the balance sheet dates. Transactions dominated in currencies other than the U.S. dollar during the year are converted into U.S. dollar at the applicable rates of exchange prevailing when the transactions occur. Transaction gains and losses are recorded in the statements of operations. The financial records of the Company’s subsidiaries in the PRC are maintained in Chinese Renminbi (“RMB”), which is their functional currency. Assets and liabilities are translated at the exchange rates at the balance sheet date. Equity accounts (other than earnings generated in the current period) are translated at historical exchange rates. Revenues, expenses, gains and losses are translated at average rate of exchange prevailing during the periods presented. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the statement of changes in equity and comprehensive income. The RMB is not a freely convertible currency. The State Administration for Foreign Exchange of People’s Republic of China, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Group’s aggregate amount of cash, cash equivalents, restricted cash and short-term investment denominated in RMB amounted to (v) Comprehensive (loss) income Comprehensive (loss) income includes all changes in equity except those resulting from investments by owners and distributions to owners, and included net income and foreign currency translation adjustments. As of December 31, 2020, 2021 and 2022, accumulated other comprehensive (loss) income was comprised entirely of foreign currency translation adjustments, net of tax. (w) Fair value of financial instruments The Group estimates fair value of financial assets and liabilities as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price). The fair value measurement guidance establishes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. Valuation techniques used to measure fair value shall maximize the use of observable inputs. ● Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. ● Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. ● Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use to price an asset or liability. When available, the Group measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. Pricing information the Group obtains from third parties is internally validated for reasonableness prior to use in the consolidated financial statements. When observable market prices are not readily available, the Group generally estimates fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. In certain cases, fair values are not subject to precise quantification or verification and may fluctuate as economic and market factors vary and the Group’s evaluation of those factors changes. Although the Group uses its best judgment in estimating the fair value of these financial instruments, there are inherent limitations in any estimation technique. In these cases, a minor change in an assumption could result in a significant change in its estimate of fair value, thereby increasing or decreasing the amounts of the Group’s consolidated assets, liabilities, shareholders’ equity and net income or loss. The Group’s financial instruments include cash and cash equivalents, restricted cash, short-term investments, notes receivable, amount due from related parties, accounts payable, notes payable, payables for purchase of property, plant and equipment and amounts due to related parties. The carrying amounts of these short-term financial instruments, other than short-term investments which is subject to recurring fair value measurement, approximate their fair values due to the short-term maturity of these instruments. (x) Non-controlling interest The Group classified the ownership interest in the consolidated entity held by a party other than the Group to non-controlling interest in the consolidated financial statements. It also reported the consolidated net income at amounts that include the amounts attributable to both the parent and the non-controlling interest on the face of the consolidated statements of operations. (y) Treasury shares Treasury shares represent ordinary shares repurchased by the Company that are no longer outstanding and are held by the Company. The repurchase of ordinary shares is accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. When treasury stock is retired, treasury stock is reduced by the cost of such stock on the first-in, first-out basis and an excess of repurchase price over par or stated value is allocated between additional paid-in capital and retained earnings. |
EXIT AND DISPOSAL ACTIVITIES
EXIT AND DISPOSAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2022 | |
EXIT AND DISPOSAL ACTIVITIES | |
EXIT AND DISPOSAL ACTIVITIES | 3. EXIT AND DISPOSAL ACTIVITIES In 2018, the Company decided to discontinue the operation in Chongqing Daqo, including wafer manufacturing, and presented it as discontinued operation. The discontinued operation was completely terminated as of the end of 2020. Therefore, it has no impact on the consolidated financial statements for the years ended December 31, 2021 and 2022. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
INVENTORIES | 4. INVENTORIES Inventories consist of the following: December 31, 2021 2022 Raw materials $ 108,925 $ 59,780 Work-in-process 20,593 12,531 Finished goods 198,253 97,206 Total $ 327,771 $ 169,517 Inventory write-down was $2.0 million, nil and nil for the years ended December 31, 2020, 2021 and 2022. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET. | |
PROPERTY, PLANT AND EQUIPMENT, NET | 5. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consist of the following: December 31, 2021 2022 Cost Buildings and plant $ 468,309 $ 555,712 Machinery and equipment 910,070 1,094,834 Furniture, fixtures and equipment 59,549 79,593 Motor vehicles 1,176 2,140 Less: Accumulated depreciation 466,549 405,412 Property, plant and equipment, net $ 972,555 $ 1,326,867 Construction in process 586,555 1,278,328 Total $ 1,559,110 $ 2,605,195 Depreciation expense was $68.7 million, $77.4 million and $107.1 million for the years ended December 31, 2020, 2021 and 2022, respectively. |
ADVANCES FROM CUSTOMERS
ADVANCES FROM CUSTOMERS | 12 Months Ended |
Dec. 31, 2022 | |
ADVANCES FROM CUSTOMERS | |
ADVANCES FROM CUSTOMERS | 6. ADVANCES FROM CUSTOMERS Advances from customers represent prepayments from customers and are recognized as revenue in accordance with the Group’s revenue recognition policy. Advances from customers consist of the following and is analyzed as long-term and short-term portion respectively: December 31, 2021 2022 Customer B 67,026 35,040 Customer D 28,813 37,331 Customer E 18,379 76,393 Others 179,401 126,404 Total $ 293,619 $ 275,168 Less: Advances from customers – short-term portion $ 202,958 $ 121,992 Advances from customers – long-term portion $ 90,661 $ 153,176 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements As of December 31, 2021 and 2022, short-term investments are measured and recorded at fair value initially and on a recurring basis in periods subsequent to their initial recognition and are as follows: Fair Value Measurement As of December 31, 2022 Quoted Prices in Significant Significant Active Market for Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Short-term investments - Wealth management products $ — $ 13,927 $ — $ 13,927 Total $ — $ 13,927 $ — $ 13,927 Fair Value Measurement As of December 31, 2021 Quoted Prices in Significant Significant Active Market for Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Short-term investments - Structured financial products $ — $ 269,946 $ — $ 269,946 - Wealth management products 10,305 — — 10,305 Total $ 10,305 $ 269,946 $ — $ 280,251 The fair value of structured financial products is determined based on the investment principal and historical spot exchange rate. As the significant inputs are observable in active markets over the terms of the instruments the Group holds, the fair value of such financial products is classified within Level 2 measurement. The wealth management products purchased in 2022 are measured at fair value which is based on current redemption price quoted by the selling bank. As such, the fair value of such financial products is classified within Level 2 measurement. Nonrecurring Fair Value Measurements The Group measures long-lived assets at fair value on a nonrecurring basis only if an impairment is recognized in the current period. There is no impairment losses recorded on its long-lived assets for the years ended December 31, 2020, 2021 and 2022. |
MAINLAND CHINA CONTRIBUTION PLA
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 12 Months Ended |
Dec. 31, 2022 | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 8. MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION (a) China Contribution Plan Full time employees of the Group in the PRC participate in a government-mandated, multi-employer, defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. Contributions to defined contribution plans are expensed as incurred. During the years ended December 31, 2020, 2021 and 2022, the Group recognized expenses relating to its contribution to the government sponsored defined contribution plans of $3.7 million, $5.7 million and $10.0 million, respectively. (b) Statutory Reserves and Restricted Assets PRC entities are required under PRC laws to distribute its after-tax profits of the current year and draw 10 percent of the profits as the company’s statutory common reserve. The Company may stop drawing the profits if the aggregate balance of the common reserves has already accounted for over 50 percent of the company’s registered capital. The common reserves shall be used for making up losses, expanding the production and business scale or increasing the registered capital of the company. As of December 31, 2020, 2021 and 2022, the Group’s aggregate balance of the statutory common reserves was $58.2 million, $149.5 million and $171.7 million, respectively. In accordance with relevant PRC laws and regulations, the Group’s PRC subsidiaries are prohibited to make distribution of their registered capital, statutory reserves and the proceeds received from the IPO in STAR market in the form of cash dividends, loans or advances and the related restricted portion amounted to $3,090.3 million as of December 31, 2022. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES The Company was incorporated in the Cayman Islands and is not subject to tax in this jurisdiction. Under the current Hong Kong Inland Revenue Ordinance, the Company’s subsidiary domiciled in Hong Kong has applied a two-tiered profits tax rate regime which is applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first HK$2 million of profits of corporations is 8.25%, while profits above that amount is subject to the tax rate of 16.5%. The Company’s subsidiaries are registered in the PRC as foreign invested enterprises. Under the Laws of the People’s Republic of China on Enterprise Income Tax (the “EIT Law”) which are effective January 1, 2008, the statutory enterprise income tax rate is 25%. Xinjiang Daqo is a foreign-invested enterprise established on February 22, 2011 located in Shihezi Economic Development Area in Xinjiang Autonomous Region. Inner Mongolia Daqo New Energy is a subsidiary of Xinjiang Daqo established on October 25, 2021 located in Baotou in Inner Mongolia Autonomous Region. According to Announcement [2020] No.23 of the Ministry of Finance, State Taxation Administration and National Development and Reform Commission, Xinjiang Daqo and Inner Mongolia Daqo New Energy were established in western China and meets certain requirements under the announcement and therefore is entitled to a preferential tax rate of 15% until December 31, 2030. During the years ended December 31, 2021 and 2022, Xinjiang Daqo and Inner Mongolia Daqo New Energy were entitled to a preferential tax rate of Under the current EIT Law and implementation regulations issued by the PRC State Council, an income tax rate of 10% is applicable to interest and dividends payable to investors that are “non-resident enterprises”, which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such interest or dividends have their sources within the PRC. In accordance with applicable accounting principles of ASC 740-30, a deferred tax liability shall be recorded for taxable temporary differences attributable to the excess of financial reporting basis over tax basis of an investment in a foreign subsidiary, except for the indefinite reinvestment exception. Before Xinjiang Daqo’s initial public offering in China in 2021, the Company determined that the undistributed earnings of Xinjiang Daqo had been and would be indefinitely reinvested, and no deferred tax liability was recognized on the undistributed earnings of Xinjiang Daqo. Upon the completion of Xinjiang Daqo’s IPO in 2021, Xinjiang Daqo’s dividends distribution policy was changed to be that, its accumulated dividends distributed in cash in the recent three years shall not be less than 30% of its average annual distributable profits in the past three years, to be in compliance with the PRC listing rules. That means, no less than 10% of its annual attributable profit shall be distributed during the recent three years since 2021. Therefore, the Company recorded a deferred tax liability of $14.5 million as of December 31, 2021 based on an estimate that 20.18% of distributable profit from Xinjiang Daqo and its subsidiaries (“PRC listed group”) for the year ended December 31, 2021 would be distributed in 2022. The Company recorded a deferred tax liability of $79.9 million as of December 31, 2022 based on an estimate that 40.24% of distributable profit from Xinjiang Daqo and its subsidiaries (“PRC listed group”) for the year ended December 31, 2022 will be distributed in 2023 (refer to Note 17). The remaining undistributed profit will be indefinitely reinvested in the PRC. Uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties, occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income taxes, at a statutory income tax rate of 25%. The Group is not subject to any other uncertain tax position. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended for five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. From inception to 2022, the Group’s PRC subsidiaries were subject to examination of the PRC tax authorities. The Company classifies interest and penalties associated with taxes as income tax expense. Such charges were immaterial in the years ended December 31, 2020, 2021 and 2022, respectively. Income before income taxes from the PRC was $179.6 million, $1,046.2 million and $3,214.4 million for the years ended December 31, 2020, 2021 and 2022, respectively. Loss before income taxes from outside the PRC was $17.5 million, $11.3 million and $157.5 million for the years ended December 31, 2020, 2021 and 2022, respectively. Income tax expenses comprise: Year ended December 31, 2020 2021 2022 Current tax expenses $ 29,436 $ 156,894 $ 500,743 Deferred tax (benefit) expenses (1,254) 13,207 76,504 Total $ 28,182 $ 170,101 $ 577,247 The principal components of deferred income tax assets and liabilities from continuing operations are as follows: December 31, 2021 2022 Deferred tax assets: Long-lived assets depreciation $ 1,546 $ 2,068 Deferred government subsidies 68 — Share-based compensation — 1,781 Donation expenses — 66 Net operating loss carried forward 816 1,690 Sub-total $ 2,430 $ 5,605 Valuation Allowance (816) (1,060) Total deferred tax assets $ 1,614 $ 4,545 Deferred tax liabilities: Long-lived assets depreciation $ (3,258) $ (2,736) Difference in basis of buildings (621) (595) Dividend withholding tax (14,461) (79,945) Total deferred tax liabilities $ (18,340) $ (83,276) Deferred tax assets, net — 1,809 Deferred tax liabilities, net $ (16,726) $ (80,540) The changes of valuation allowance from continuing operation are as follows: Year ended December 31, 2020 2021 2022 Beginning balance $ 729 $ 709 816 Addition (Reversal) (65) 87 316 Foreign exchange effect 45 20 (72) Ending Balance $ 709 $ 816 1,060 The Group uses the asset and liability method to record related deferred tax assets and liabilities. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more likely than not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgement and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying businesses. Valuation allowances are established for deferred tax assets based on a more likely than not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward periods provided for in the tax law. The Group provided a full valuation allowance for the deferred tax assets relating to its PRC subsidiaries from continuing operation other than Xinjiang Daqo as of December 31, 2020, 2021 and 2022 in the amount of $0.7 million, $0.8million and $1.1 million, respectively, as management is not able to conclude that the future realization of those net operating loss carry forwards and other deferred tax assets are more likely than not. The Group also provided a full valuation allowance for the deferred tax assets relating to Chongqing Daqo’s historical operation amounted to $24.3 million, $20.5 million and $19.2 million as of December 31, 2020, 2021 and 2022, respectively. The effective income tax rate from continuing operation is different from the expected PRC statutory rate as a result of the following items: Year ended December 31, 2020 2021 2022 PRC Enterprise Income Tax 25 % 25 % 25 % Preferential income tax rate of a subsidiary (11) % (10) % (10) % R&D super deduction (1) % — % — % Different tax rate in other jurisdictions 4 % — % 1 % Dividend withholding tax — % 1 % 3 % Effective tax rate 17 % 16 % 19 % Xinjiang Daqo and Inner Mongolia Daqo New Energy enjoy the preferential tax rate of 15% until December 31, 2030 if the requirements of Western (Region) Development Enterprise are satisfied. The impact of the preferential tax rates decreased income taxes by $17.4 million, $104.3 million and $300.4 million for the years of 2020, 2021 and 2022, respectively. The benefit on net income per share was $0.05, $0.28 and $0.77 for the years of 2020, 2021 and 2022, respectively. |
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2022 | |
NON-CONTROLLING INTERESTS | |
NON-CONTROLLING INTERESTS | 10. NON-CONTROLLING INTERESTS In July 2021, the Group’s major operational subsidiary Xinjiang Daqo completed its IPO in China and started trading on the Shanghai Stock Exchange’s Sci-Tech Innovation Board. The IPO raised net proceeds of approximately $935.0 million, of which, $344.3 million was recorded in non-controlling interest and $590.7 million was recorded in additional paid-in capital. Following the IPO, the Company holds approximately a total ownership of 80.7% of Xinjiang Daqo, directly and indirectly. Xinjiang Daqo’s non-controlling interests’ ownership of the subsidiary changed from 4.40% to 19.30% due to the IPO. In June 2022, the Company’s major operational subsidiary Xinjiang Daqo completed its follow-on private offering in China and. The offering raised net proceeds of $1.63 billion, of which, $742.8 million was recorded in the non-controlling interest and $878.8 million was recorded in the additional paid in capital. Following the private offering, the Company holds approximately a total ownership of 72.68% of Xinjiang Daqo, directly and indirectly. The non-controlling interests' ownership of the subsidiary changed to 27.32% due to the private offering. The following schedule shows the effects of changes in the Company’s ownership interest in less than wholly owned subsidiaries on equity attributable to Daqo New Energy Corp. shareholders: Year ended December 31, 2020 2021 2022 Net income attributable to Daqo New Energy Corp. shareholders $ 129,195 $ 748,924 $ 1,819,801 Transfers from the non-controlling interests: Increase in the Company’s paid-in capital from sale of non-controlling interest 3,658 — — Decrease in the Company’s paid-in capital from acquisition of non-controlling interest — — (386) Increase in the Company’s paid-in capital from subsidiary’s offering of its equity interests to third parties — 594,301 878,768 Net transfers from non-controlling interests 3,658 594,301 878,382 Change from net income attributable to Daqo New Energy Corp. shareholders and transfers from non-controlling interests 132,853 1,343,225 2,698,183 |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
SHARE BASED COMPENSATION. | |
SHARE BASED COMPENSATION | 11. SHARE BASED COMPENSATION In December 2014, The Company’s shareholders adopted the 2014 share incentive plan. The Company’s shareholders have authorized the issuance of up to 21,000,000 ordinary shares underlying all options (including incentive share options, or ISOs), restricted shares and restricted share units (“RSUs”) granted to a participant under the plan, or the awards. In April 2018, The Company’s shareholders adopted the 2018 share incentive plan. The Company’s shareholders have authorized the issuance of up to 38,600,000 ordinary shares underlying all options (including incentive share options, or ISOs), restricted shares and RSUs granted to a participant under the plan, or the awards. In September 2022, the Company's shareholders adopted the 2022 share incentive plan. The Company's shareholders have authorized the issuance of up to 37,253,465 ordinary shares underlying all restricted shares and RSUs granted to a participant under the plan, or the awards. The Company granted share options to certain officers, directors and employees in 2015, and didn’t grant any during the years ended December 31, 2020, 2021 and 2022. The Company utilized the Binomial option pricing model to evaluate the fair value of the stock options with reference to the closing price of the Company on the measurement dates. A summary of the aggregate option activity and information regarding options outstanding as of December 31, 2022 is as follows: Weighted Weighted Weighted Average Average Average Aggregate Number of Exercise Remaining Grant Date Intrinsic Options Price Contract Life Fair Value Value Options outstanding on January 1, 2022 1,775,417 0.59 2.74 0.73 13,261 Granted — — — — — Forfeited — — — — — Expired — — — — — Exercised (1,672,350) 0.59 — 0.74 19,410 Options outstanding on December 31, 2022 103,067 0.59 2.08 0.58 735 Options exercisable on December 31, 2022 103,067 0.59 2.08 0.58 735 Note: All the Company’s options have been vested as of December 31, 2022. The share-based compensation expense related to stock options were nil for the years ended December 31, 2020, 2021 and 2022, respectively. The total intrinsic value of options exercised during the years ended December 31, 2020, 2021, and 2022, was $44.1 million, $0.7 million, and $19.4 million, respectively. The Company granted non-vested RSUs to certain directors, executive officers and employees in 2017, 2018 and 2022. The Company recorded compensation expenses based on the fair value of RSUs on the grant dates over the requisite service period of award using the straight-line vesting attribution method. On February 3, 2017, the Company granted restricted share units (“RSUs”) to acquire 12,653,992 ordinary shares to certain directors, executive officers and employees pursuant to the Daqo New Energy Corp. 2014 Share Incentive Plan. The RSUs will be vested quarterly in each of the next four years starting from May 6, 2017. On June 6, 2018, the Company granted RSUs to acquire 10,984,761 ordinary shares to chief executive officer pursuant to the Daqo New Energy Corp. 2018 Share Incentive Plan, where 1/6 5/6 On December 21, 2018, the Company granted RSUs to acquire 8,105,000 ordinary shares to certain directors, executive officers and employees pursuant to the Daqo New Energy Corp. 2014 and 2018 Share Incentive Plan. The RSUs will be vested monthly in each of the next five years starting from January 6, 2019. On September 6, 2022, the Company granted RSUs to acquire 37,253,465 ordinary shares to certain directors, executive officers and employees pursuant to the Daqo New Energy Corp. 2022 Share Incentive Plan, where 1/2 1/72 A summary of the non-vested RSU activity in 2022 is as follows: Weighted Average Number of Grant Date RSUs Fair Value Non-vested RSUs on January 1, 2022 10,289,352 1.38 Granted 37,253,465 14.14 Vested (26,770,640) 11.01 Forfeited (14,000) 1.61 Non-vested RSUs on December 31, 2022 20,758,177 11.86 The share-based compensation expense related to RSUs of $17.9 million, $10.1 million and $294.8 were recognized by the Group for the years ended December 31, 2020, 2021 and 2022. The total fair value of RSUs vested during the years ended December 31, 2020, 2021, and 2022, was $17.9 million, $10.1 million, and $294.8 million, respectively. As of December 31, 2022, there was $244.1 million in total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of 2.70 years. In September 2022, Xinjiang Daqo adopted its 2022 Restricted Stock Incentive Plan (2022 PRC Incentive Plan). Under the 2022 PRC Incentive Plan, Xinjiang Daqo may grant stock options of Xinjiang Daqo (2022 PRC stock options) to its directors, senior executives and other personnel deemed necessary by the board of directors of Xinjiang Daqo to purchase Xinjiang Daqo's common stock at the agreed price after meeting the vesting conditions. The total number of stock options granted is 23,660,000 shares, which will vest over four years starting from the first date of the 13rd month since the grant date at a rate of 40%, 30% and 30% upon the second, third and fourth anniversary of the grant date. The vesting is subject to both the operational performance of Xinjiang Daqo and the grantees personal performance. The Company concluded that the achievement of the performance targets over the next three vesting periods is probable at the initial grant date in September 2022. The Company recorded stock-based compensation expense for 2022 PRC stock options based on the estimated fair value of those stock options on the date of the grant using the Black-Scholes option-pricing model. A summary of the aggregate 2022 PRC stock options activity and information regarding those stock options outstanding as of December 31, 2022 is as follows: Weighted Weighted Weighted Average Average Average Aggregate Number of Exercise Remaining Grant Date Intrinsic 2022 PRC stock options Price Contract Life Fair Value Value 2022 PRC stock options outstanding on January 1, 2022 — — — — — Granted 23,660,000 4.76 — 3.94 — Forfeited (100,000) 4.76 — 3.94 — Expired — — — — — Exercised — — — — — 2022 PRC stock options outstanding on December 31, 2022 23,560,000 4.76 2.59 3.94 50,143 2022 PRC stock options exercisable on December 31, 2022 23,560,000 4.76 2.59 3.94 50,143 The share-based compensation expense related to 2022 PRC stock options of nil, nil and $20.1 million were recognized by the Group for the years ended December 31, 2020, 2021 and 2022. As of December 31, 2022, there was $75.6 million in total unrecognized compensation cost related to non-vested 2022 PRC stock options, which is expected to be recognized over a weighted-average period of 2.59 years. The assumptions in the Black-Scholes option-pricing models used to determine the fair value of 2022 PRC stock options granted during the years ended December 31, 2022 were as follows: Year Ended December 31, 2022 Expected term (months) 24, 36, and 48 months from the date of grant Expected dividends 0.96 % Expected volatility 51.86%-54.00 % Risk-free interest rate 1.76%-2.18 % Fair value of common stock $ 8.15 Weighted average exercise price $ 4.76 The risk-free interest rate is based on the China Treasury Bond yield with a maturity equal to the expected term of the option in effect at the time of grant. The expected volatility was determined by using an average of historical volatilities of selected industry peers deemed to be comparable to the Company’s business corresponding to the expected term of the awards. An analysis of historical dividend yield was used to develop the estimate of expected dividend yield. The expected term is calculated based on the contractual term. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
RELATED PARTY TRANSACTIONS AND BALANCES | 12. RELATED PARTY TRANSACTIONS AND BALANCES (1) The relationships between the Group and major related parties are as follows: Name of the related party Relationship Daqo Group Co., Ltd. (“Daqo Group”) Daqo Group and the Group are controlled by same group of shareholders Zhenjiang Daqo Solar Co. Ltd.(“Zhenjiang Daqo”) An affiliated company controlled by Daqo Group Daqo Solar Co. Ltd (“Daqo Solar”) An affiliated company controlled by Daqo Group Daqo New Material Co., Ltd. (“Daqo New Material”) An affiliated company controlled by Daqo Group Chongqing Daqo Tailai Electric Co., Ltd. (“Chongqing Daqo Tailai”) An affiliated company controlled by Daqo Group Nanjing Daqo Transformer Systems Co., Ltd. (“Nanjing Daqo Transformer”) An affiliated company controlled by Daqo Group Jiangsu Daqo Changjiang Electric Co., Ltd. (“Jiangsu Daqo”) An affiliated company controlled by Daqo Group Nanjing Daqo Electric Co., Ltd. (“Nanjing Daqo Electric”) An affiliated company controlled by Daqo Group Zhenjiang Electric Equipment Co., Ltd. (“Zhenjiang Electric”) An affiliated company controlled by Daqo Group Daqo Investment Co.,Ltd.(“Daqo Investment”) An affiliated company controlled by Daqo Group Zhenjiang Moeller Electric Appliance Co., Ltd.(“Zhenjiang Moeller”) An affiliated company controlled by Daqo Group Zhenjiang Daqo Intelligent Electric Co., Ltd ("Zhenjiang Daqo Intelligent") An affiliated company controlled by Daqo Group (2) Related party balances: The balances due from related parties– short term portion of continuing and discontinued operations are as follows: December 31, 2021 2022 Amounts due from related parties-short term Nanjing Daqo Transformer $ — $ 14 Others — 4 Total $ — $ 18 The balances due from related parties– long-term portion of continuing and discontinued operations are as follows: December 31, 2021 2022 Amounts due from related parties-long term Chongqing Daqo Tailai $ — $ 9,588 Nanjing Daqo Electric — 2,739 Zhenjiang Moeller — 1,181 Zhenjiang Daqo Intelligent — 793 Others — 2,563 Total $ — $ 16,864 The balances due to related parties – short-term portion of continuing operations are as follows: December 31, 2021 2022 Amounts due to related parties – short term portion Nanjing Daqo Transformer $ 1,729 $ 3,429 Chongqing Daqo Tailai 2,085 80 Daqo New Material 4,673 4,161 Nanjing Daqo Electric 981 — Jiangsu Daqo 612 4 Zhenjiang Electric 231 613 Others 504 130 Total $ 10,815 $ 8,417 (3) Related party transactions: The material transactions with the Group's related parties were as follows: Transaction Year Ended December 31, Name of Related parties Nature 2020 2021 2022 Daqo Group Repayment of interest free loans $ 11,597 $ 4,650 $ — Zhenjiang Daqo Proceeds from interest free loans 4,349 — — Repayment of interest free loans 4,349 — — Zhenjiang Daqo Intelligent Purchase-Fixed assets — — 6,271 Daqo Solar Proceeds from interest free loans 18,520 13,213 — Repayment of interest free loans 18,412 13,483 — Nanjing Daqo Transformer Purchase-fixed assets 40 12,913 29,874 Purchase-raw material — — 39 Repayment of interest free loans 8,131 — — Chongqing Daqo Tailai Purchase-fixed assets 111 17,812 22,511 Repayment of interest free loans 5,049 — — Jiangsu Daqo Purchase-fixed assets — 5,299 — Nanjing Daqo Electric Purchase-fixed assets 45 8,553 8,209 Zhenjiang Electric Purchase-raw material — 1,967 4,241 Zhenjiang Moeller Purchase-fixed assets — — 9,331 Total Purchase-fixed assets $ 196 $ 44,577 $ 76,196 Purchase-raw material $ — $ 1,967 $ 4,280 Proceeds from related parties loans $ 22,869 $ 13,213 $ — Repayment of related parties loans $ 47,538 $ 18,133 $ — Note: The Group's transactions with related parties were carried out on an arm's-length basis. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 13. EARNINGS PER SHARE The calculation of earnings per share is as follows: Year ended December 31, 2020 2021 2022 Numerator used in basic and diluted earnings per share: Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations—basic $ 129,336 $ 748,924 $ 1,819,801 Loss attributable to Daqo New Energy Corp. ordinary shareholders from discontinued operations, net of tax (141) — — Net income attributable to Daqo New Energy Corp. ordinary shareholders—basic $ 129,195 $ 748,924 $ 1,819,801 Diluted earnings from the subsidiary — — (15,432) Net income attributable to Daqo New Energy Corp. ordinary shareholders—diluted $ 129,195 $ 748,924 $ 1,804,369 Denominator used in diluted earnings per share: Weighted average number of ordinary shares outstanding used in computing earnings per share-basic 355,087,013 369,341,105 379,365,310 Plus: Dilutive effects of share options 4,421,397 1,735,798 885,140 Dilutive effects of RSUs 15,508,740 12,689,503 6,209,391 Weighted average number of ordinary shares outstanding used in computing earnings per share—diluted 375,017,150 383,766,406 386,459,841 Basic earnings per share-continuing operations $ 0.36 $ 2.03 $ 4.80 Basic earnings per share-discontinued operations $ 0.00 $ — $ — Net income attributable to Daqo New Energy Corp. per ordinary share—basic $ 0.36 $ 2.03 $ 4.80 Diluted earnings per share-continuing operations $ 0.34 $ 1.95 $ 4.67 Diluted earnings per share-discontinued operations $ 0.00 $ — $ — Net income attributable to Daqo New Energy Corp. per ordinary share—diluted $ 0.34 $ 1.95 $ 4.67 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Capital commitments As of December 31, 2022, commitments outstanding for the purchases of property, plant and equipment approximated $414.3 million, which will be due subsequent to receipt of the purchases. In December 2021, Xinjiang Daqo, the Company’s subsidiary, signed the framework agreement with the government of Baotou city that, the Company plans to build polysilicon projects for the solar industry with a total annual production capacity of 200,000 metric tons("MT"), polysilicon projects for the semiconductor industry with a total annual capacity of 21,000 MT, silicon metal projects with a total annual capacity of 300,000 MT and silicone projects with a total annual capacity of 200,000 MT in Baotou city. Regarding the polysilicon project for the solar and semiconductor industries, the Company plans to invest in two phases. The first phase is to build 100,000 MT polysilicon project for the solar industry and a 1,000 MT polysilicon project for the semiconductor industry with an estimated investment of about RMB8.55 billion. The Phase 5A project (a 100,000 MT polysilicon project for the solar industry) started in March 2022 and completed in April 2023. The 1,000 MT polysilicon project for the semiconductor industry started in March 2022 and expect to be completed in September or the fourth quarter of 2023. The Company began the construction of Phase 5B project (a 100,000 MT polysilicon project for the solar industry) in March 2023 and expect to complete it by the end of 2023. Repurchase of common stock On June 1, 2022, the Company announced a one-year share repurchase program approved by the board of directors to repurchase up to $120 million worth of ordinary shares or ADSs on the open market, in negotiated transactions off the market, in block trades or through other legally permissible means in accordance with applicable U.S. securities laws. The Company completed this repurchase program by the end of September 2022 by spending $119.9 million to repurchase 1,881,368 ADSs. On November 7, 2022, the Company announced another share repurchase program approved by the board of directors to repurchase up to $700 million worth of ordinary shares or ADSs on the open market, in negotiated transactions off the market, in block trades or through other legally permissible means in accordance with applicable U.S. securities laws from November 7, 2022 to December 31, 2023. During the year ended December 31, 2022, the Company repurchased 109,495 ADSs for a total of $5.0 million under this share repurchase program. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 15. SEGMENT INFORMATION The Group’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The chief operation decision makes reviews the consolidated results when making decision about allocating resources and assessing performance of the Group as a whole and hence, the Company has only one reportable segment - Polysilicon. Although Xinjiang Daqo got listed in the PRC in 2021, considering the PRC listed group generates all the revenues and possesses substantially all the assets of the Group, the chief operating decision maker does not change the way he reviews the consolidated results. All of the Group’s revenues are derived in the PRC. The Group’s long-lived assets and operations are all located in the PRC and no geographical information is presented. |
CONCENTRATION AND RISK
CONCENTRATION AND RISK | 12 Months Ended |
Dec. 31, 2022 | |
CONCENTRATION AND RISK | |
CONCENTRATION OF CUSTOMERS | 16. CONCENTRATION AND RISKS The following customers individually accounted for 10% or more of revenues: Year ended December 31, 2020 2021 2022 Customer A $ 369,333 $ 532,129 $ 1,379,796 Customer B 67,431 230,088 614,698 Customer C * * 529,037 Customer D * 268,466 516,634 * Total sales to the Group’s large customers whose sales constitute over 10% of revenue accounted for approximately 83%, 75% and 66% of revenues for the years ended December 31, 2020, 2021 and 2022, respectively. The Group is substantially dependent upon the continued participation of these customers in order to maintain its revenues. Significant reduction in the Group’s dependence on these customers is likely to take time and there can be no assurance that the Group will succeed in reducing such dependence. The Group’s polysilicon manufacturing facilities are located in Xinjiang to be close to sources of raw materials and energy for polysilicon production. Raw materials required for the Group’s polysilicon manufacturing process primarily include metallurgical grade silicon, electricity and other utilities, and other significant inputs for production, such as argon gas, caustic soda and graphite parts. The Group purchased most of its metallurgical grade silicon from two suppliers in Xinjiang. Most of the electricity and other utilities like steam are purchased from one supplier in Xinjiang. Although there are a limited number of manufacturers of the particular metallurgical grade silicon, electricity and other utilities, management believes that other suppliers could provide similar inputs on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would affect operating results adversely. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS. | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS Xinjiang Daqo’s 2022 Profit Distribution Plan The Board of Xinjiang Daqo has approved the Profit Distribution Plan of 2022("2022 Distribution Plan") which decides to distribute cash dividends inclusive of taxes of RMB 7,694,626,374.0 (an approximate equivalence of USD 1,115,566,931.7). As such, an estimation of 40.24% of distributable profit from PRC listed group will be distributed in 2023. The 2022 Distribution Plan was approved by the annual shareholders’ meeting of Xinjiang Daqo on April 6, 2023. Facility Agreement In February 2023, the Company entered into a facility agreement with China Merchants Bank Co., Ltd., Hong Kong Branch for US$140 million facility, of which US$100 million and US$40 million was drawn on February 28, 2023 and March 27, 2023, respectively, and the entire principal amount is due to be repaid in 6 months. The interest rate is the sum of the margin 0.85% and the term SOFR (referred as "secured overnight financing rate") reference rate. Under the terms of the facility agreement, the Company is required to comply with certain financial covenant that the market value of the Company's investment in Xinjiang Daqo shall be not less than five times of the sum of the outstanding principal and any accrued but unpaid interest, fees and expenses. As of date of this report, the Company is in compliance of the financial covenant. The purpose of the loan was for stock repurchase. |
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL STATEMENT SCHEDULE I | |
FINANCIAL STATEMENT SCHEDULE I | FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED BALANCE SHEETS DECEMBER 31, 2021 AND 2022 (U.S. dollars in thousands, except share and per share data) December 31, 2021 2022 ASSETS Current assets: Cash and cash equivalents $ 2,263 $ 2,377 Prepaid expenses and other current assets 379 371 Total current assets 2,642 2,748 Investments in subsidiaries 2,159,482 4,884,756 TOTAL ASSETS $ 2,162,124 $ 4,887,504 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses and other current liabilities $ 165 $ 80,128 Total current liabilities 165 80,128 Equity: Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2021 and 2022; 377,177,802 shares issued and 372,534,652 shares outstanding as of December 31, 2021, 405,620,792 shares issued and 391,023,327 shares outstanding as of December 31, 2022) 38 40 Additional paid-in capital 1,016,855 2,211,203 Retained earnings 1,079,042 2,898,843 Accumulated other comprehensive income (loss) 67,773 (176,032) Treasury shares, at cost (4,643,150 shares as of December 31, 2021; 14,597,465 shares as of December 31, 2022) (1,749) (126,678) Total shareholders’ equity 2,161,959 4,807,376 TOTAL LIABILITIES AND EQUITY $ 2,162,124 $ 4,887,504 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 AND 2022 (U.S. dollars in thousands) Year ended December 31, 2020 2021 2022 Operating expenses: General and administrative $ (12,728) $ (11,292) $ (295,431) Total operating expenses (12,728) (11,292) (295,431) Loss from operations (12,728) (11,292) (295,431) Interest income 7 — 144 Income tax expense (2,391) — (79,945) Net loss before share of results of subsidiaries (15,112) (11,292) (375,232) Equity in earnings of subsidiaries 144,307 760,216 2,195,033 Net income attributable to Daqo New Energy Corp. ordinary shareholders $ 129,195 $ 748,924 $ 1,819,801 Other comprehensive (loss) income: Foreign currency translation adjustments, net of tax of nil 46,204 45,160 (252,800) Total other comprehensive income (loss): 46,204 45,160 (252,800) Comprehensive income $ 175,399 $ 794,084 $ 1,567,001 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 AND 2022 (U.S. dollars in thousands) Year ended December 31, 2020 2021 2022 OPERATING ACTIVITIES Net cash provided by (used in) operating activities (1,066) (736) 124,048 FINANCING ACTIVITIES Proceeds from options exercised 580 2,139 995 Repurchase of ordinary shares — — (124,929) Net cash provided by (used in) financing activities 580 2,139 (123,934) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (486) 1,403 114 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 1,346 860 2,263 CASH AND CASH EQUIVALENTS AT END OF THE YEAR $ 860 $ 2,263 $ 2,377 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. Notes 1. Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. 2. The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. For the parent company, Daqo New Energy Corp records its investments in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments-Equity Method and Joint Ventures. Such investments are presented on the Condensed Balance Sheets as “Investment in subsidiaries”. Ordinarily under the equity, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of this Schedule I, the parent company will continue to reflect its share, based on its proportionate interest, of the losses of subsidiaries regardless of the carrying value of the investment even though the parent company is not obligated to provide continuing support or fund losses. 3. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The footnote disclosures provide certain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying consolidated financial statements. 4. As of December 31, 2021 and 2022, there were no material contingencies, significant provisions of long-term obligations of the Company, except for those which have been disclosed separately in the consolidated financial statements. |
SUMMARY OF PRINCIPAL ACCOUNTI_2
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). |
Basis of consolidations | (b) Basis of consolidations The consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. |
Use of estimates | (c) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Areas where management uses subjective judgment include, but not limited to, useful lives and residual values of long-lived assets, valuation allowances for deferred tax assets and grant-date fair value of share-based award. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. |
Concentration of credit risk | (d) Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments and notes receivable. As of December 31, 2021 and 2022, all of the Group’s cash, cash equivalents, restricted cash and short-term investments were held by major financial institutions in the PRC and international institutions outside of the PRC which management believes are of high credit ratings and no significant credit risk exists for these accounts. As of December 31, 2021 and 2022, notes receivable represents bank acceptance drafts that are non-interest bearing and due within three to twelve months. During the year ended December 31, 2021 and 2022, bank’s acceptance notes were used to collect the payment or settle the payable based on an administrative convenience, given these notes are readily convertible to known amounts of cash. In accordance with the procurement agreements, whether cash or bank acceptance notes to settle the payables is at the Group’s discretion, and this selection does not impact the agreed contractual purchase prices. The Group accounts for the transfer of bank acceptance notes, including endorsing bank’s acceptance notes to suppliers and discounting the notes to other banks, as a sale of financial instrument, and derecognizes the notes receivables accordingly. The Group is not directly involved in the cash exchange based on convenience; therefore the Group still reports corresponding constructive receipts and disbursements as cash flows from operating activities on the consolidated statements of cash flows. |
Cash, cash equivalents and restricted cash | (e) Cash, cash equivalents and restricted cash Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have maturities of three months or less when purchased. Restricted cash of $0.2 million and $20.9 million as of December 31, 2021 and 2022, respectively, are restricted bank deposits for notes issued by several banks mainly for the Group’s purchases of raw materials, and plant and equipment, etc. These restricted bank deposits carry fixed interest rates and will be released when the related notes or debts are settled by the Group. |
Short-term investments | (f) Short-term investments Short-term investments consist of financial products of the following types: Structured financial products The structured financial products are mainly deposits due within 6 months with secured principal and variable interest rates and are restricted as to withdrawal before maturity. The Company elects to adopt the fair value option in accordance with ASC 825 Financial Instruments for such financial products. Changes in the fair value of the investments are recorded as investment income in the consolidated statements of operations. Wealth management products The wealth management products are mainly deposits with unsecured principal and variable interest rates placed with financial institutions and are not restricted as to withdrawal before maturity. These products were bought and held principally for the purpose of selling them in the near term, so the Company classified them as trading securities. Unrealized holding gains/losses and realized gains/losses for trading securities are recorded as investment income in the consolidated statements of operations. |
Allowance for credit losses | (g) Allowance for credit losses After the adoption of ASU 2016-13 Financial instruments- credit losses on January 1, 2020, the Group applied a current expected credit losses (“CECL”) model for financial instruments measured at amortized cost, including notes receivable, amount due from related parties and other receivable. The Group establishes CECL for pools of assets with similar risk characteristics by evaluating aging trends. According to historical levels of credit losses and current economic conditions, no allowance for credit losses was provided on the aforementioned financial instruments outstanding as of December 31, 2021 and 2022. |
Property, plant and equipment | (h) Property, plant and equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation is recognized on a straight-line basis over the following estimated useful lives: Buildings and plant 30 years Machinery and equipment 15 years Furniture, fixtures and equipment 3-10 years Motor vehicles 6 years The Group reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable. Factors that the Group considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include, but are not limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use of the assets. The analysis will be performed at the asset or asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors. Costs incurred on construction are capitalized and transferred to property, plant and equipment upon completion, at which time depreciation commences. Interest expense incurred for construction of property, plant, and equipment is capitalized as part of the costs of such assets. The Group capitalizes interest to the extent that expenditures to construct an asset have occurred and interest costs have been incurred. Interest expense capitalized for the years ended December 31, 2020, 2021 and 2022 was $0.3 million, nil and nil, respectively. |
Inventories | (i) Inventories Inventories are stated at lower of cost or net realizable value. Costs are determined using weighted average costs. Costs comprise direct materials, direct labor and overhead costs incurred in bringing the inventories to their present location and condition. The Group writes down the cost of excess inventories to the estimated net realizable value based on historical and forecasted demand. Estimated net realizable value is measured as the estimated selling price of each class of inventory in the ordinary course of business less estimated costs of completion and disposal. The write-down to inventories was $2.0 million for the year ended December 31, 2020, and nil for the years ended December 31, 2021 and 2022. |
Prepaid land use rights | (j) Prepaid land use rights All land in the PRC is owned by the PRC government. The PRC government, according to PRC law, may sell the land use rights for a specified period of time. The purchase price of land use right represents the operating lease prepayments for the rights to use the land in the PRC under ASC 842 and is amortized over the remaining lease term. The Group recorded lease expenses of $0.7 million, $0.8 million and $1.2 million, for the years ended December 31, 2020, 2021 and 2022, respectively. |
Impairment of long-lived assets | (k) Impairment of long-lived assets The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Factors that the Group considers in deciding when performing an impairment review include, but are not limited to, significant under-performance of a business or product line in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. An impairment analysis is performed at the lowest level of identifiable independent cash flows for an asset or asset group. The Group makes subjective judgments in determining the independent cash flows that’s related to a specific asset group based on the asset usage model and manufacturing capabilities. The Group measures the recoverability of assets that will continue to be used in the operations by comparing the carrying value of the asset group to the estimate of the related total future undiscounted cash flows. If an asset group’s carrying value is not recoverable through the related undiscounted cash flows, the impairment loss is measured by comparing the difference between the asset group’s carrying value and its fair value. The Group determines the fair value of an asset or asset group utilizing estimated future discounted cash flows and incorporates assumptions that it believes marketplace participants would utilize. The Group did not recognize any impairment losses for the years ended December 31, 2020, 2021 and 2022 respectively. |
Lease | (l) Lease The Group adopted ASC 842, Lease on January 1, 2019. As of December 31, 2021 and 2022, the Group only has lease for its corporate and administrative office located in Shanghai. At the commencement of the lease, management determines its classification as an operating lease. The Group recognizes the associated lease expense on a straight-line basis over the term of the lease beginning on the date of initial possession, which is generally when the Group enters the leased premises and begins to make improvements in preparation for its intended use. At the commencement date of a lease, the Group recognizes a lease liability for future fixed lease payments and a right-of-use (“ROU”) asset representing the right to use the underlying asset during the lease term. The future fixed lease payments are discounted using the incremental borrowing rate, as the rate implicit in the lease is not readily determinable. Given the Group has only one leased property, the financial impact in the consolidated balance sheet and statement of operations is immaterial. |
Revenue recognition | (m) Revenue recognition The Group recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Substantially all of the Group’s revenue is generated from sales of polysilicon to customers in the PRC. The Group recognizes sales of polysilicon at a point in time following the transfer of control of its products to the customers, which occurs upon delivery according to the terms of the underlying contracts. The Group’s standalone selling prices are based on the prices charged to customers for the single performance obligation which is transfer of control of polysilicon upon acceptance by the customers. Variable consideration that could affect the Group’s reported revenues is sales returns, which is recorded as a reduction of revenues. Return rights of defective products are typically contractually limited within a period ranging from 3 to 30 days upon acceptance. There were no sales returns occurred for each reporting period presented. No warranties, incentives, or rebates arrangements has been offered to the customers. For a majority of the sales arrangements, the Group requires advanced payments prior to shipments. For customers with trade credit granted on a short-term basis within 30 days, the Group records accounts receivable at the invoiced amount, net of an estimated allowance for credit losses. As of both December 31, 2021 and 2022, accounts receivable was nil. Advances from customers are to secure polysilicon supply, which are applied against future purchases and deducted according to the agreed proportion. Contract liabilities represent the obligations to transfer polysilicon for which the Group has received considerations from customers. The Group refers to contract liabilities as “advances from customers” on the consolidated financial statements and the related disclosures. The balance of advances from customers inclusive of the short-term and long-term portion was $293.6 million and $275.2 million as of December 31, 2021 and 2022, respectively. Revenue recognized from the beginning advances from customers balance as of January 1, 2021 and January 1, 2022 during the years ended December 31, 2021 and 2022 was $37.8 million and $203.0 million, respectively. The ending balance of advances from customers was $122.0 million as of December 31, 2022, expected to be recognized in revenue within one year. The Group receives long-term advance payments from some customers according to the contracts. The Group determines if there is a significant financing component for these contracts considering the length of time between the customers’ payment and the transfer of control of the goods. When a significant financing component has been identified, the transaction price for these contracts is discounted, using the rate that would be reflected in a separate financing transaction at contract inception. Practical Expedients and Exemptions The Company applies the practical expedient for short-term advances received from customers and long-term advance payments - short term portion. That is, the promised amount of consideration is not adjusted for the effects of a significant financing component if the period between the transfer of the promised good or service and the payment is one year or less. The Company elects not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. |
Cost of revenues | (n) Cost of revenues Cost of revenues consists of production related costs including costs of silicon raw materials, electricity and other utilities, consumables, direct labor, overhead costs, depreciation of property, plant and equipment, and manufacturing waste treatment processing fees. Cost of revenues does not include shipping and handling expenses, therefore the Group’s cost of revenues may not be comparable to other companies which include such expenses in their cost of revenues. |
Shipping and handling | (o) Shipping and handling Costs to ship products to customers are recorded as selling, general and administrative expenses in the consolidated statements of operations, which amounted to $8.6 million, $8.3 million and $15.9 million, for the years ended December 31, 2020, 2021 and 2022, respectively. |
Research and development expenses | (p) Research and development expenses Research and development expenses include materials, low-value consumption goods and utilities consumed in research and development activities, payroll and related costs and depreciation of property and equipment associated with the research and development activities, which are expensed when incurred. The Group’s research and development activities are mainly focused on technical improvements to increase production volume and efficiency, and to lower unit cost. |
Government subsidies | (q) Government subsidies The Group receives unrestricted cash subsidies from local government agencies. The government agencies, at their discretion, determine the amount of the subsidies with reference to fixed assets and land use right payments, value-added tax and income taxes paid, bank loan interest expenses paid or electricity consumed by the Group. The subsidies are unrestricted as to use and can be utilized by the Group in any manner it deems appropriate. The Group has utilized, and expects to continue to utilize, these subsidies to fund general operating expenses. The Group records unrestricted cash government subsidies as other operating income in the consolidated statements of operations. Unrestricted cash government subsidies received for the years ended December 31, 2020, 2021 and 2022 were $0.5 million, $1.1 million and $3.2 million respectively. Government subsidies related to funding purchase of fixed assets are recorded as long term liabilities and amortized on a straight-line basis over the useful life of the associated asset in other operating income, net. Government grants related to fixed assets received were $0.4 million for the year ended December 31, 2020, and were nil for the years ended December 31, 2021 and 2022. |
Income taxes | (r) Income taxes Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry-forwards and credits by applying enacted tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of operations in the period of the enactment of the change. |
Share-based compensation | (s) Share-based compensation The Group recognizes share-based compensation in the consolidated statements of operations based on the fair value of equity awards at the date of the grant, with compensation expense recognized over the period in which the grantee is required to provide service to the Group in exchange for the equity award. The share-based compensation expense related to an award that contains both service-based and performance-based vesting condition will be recognized when it is probable that the performance-based condition will be met. The share-based compensation expense related to the award with performance-based vesting condition is recognized on an accelerated basis as though each separately vesting portion of the award was, in substance, a separate award. The fair value of share options is determined using the Binomial option pricing model and the fair value of restricted share units (“RSUs”) is determined with reference to the fair value of the underlying equity share at the grant date. The probability of the performance condition to be met is not reflected when determining the fair value of the award. The Group has made an estimate of expected forfeiture based on historical experience of forfeiture and is recognizing compensation costs only for those equity awards expected to vest. The share-based compensation expenses are categorized as either selling, general and administrative expenses, cost of sales, or research and development expenses depending on the job functions of the grantees. The compensation cost arising from share-based payment awards may be capitalized as part of an asset, if a grantee’s compensation is included in the cost of acquiring or constructing an asset, in the same manner as cash compensation. In September 2022, Xinjiang Daqo adopted its 2022 Restricted Stock Incentive Plan (2022 PRC Incentive Plan) and granted stock options of Xinjiang Daqo to its directors, senior executives and other personnel deemed necessary by the board of directors of Xinjiang Daqo to purchase Xinjiang Daqo's shares. The fair value of such stock options is determined using Black-Scholes option-pricing model based on the estimated fair value of the ordinary share of Xinjiang Daqo on the grant date. A change in any of the terms or conditions of share options is accounted for as a modification of stock options. The Company calculates the incremental compensation cost of a modification as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. For vested options, the Company recognizes incremental compensation cost in the period the modification occurred. For unvested options, the Company recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. For the years ended December 31, 2020, 2021 and 2022, the Group recognized share-based compensation cost of $17.9 million, $10.1 million and $315.0 million, respectively. The following table presents the amounts recognized as expenses in the statements of operations and the amounts capitalized as part of an asset on balance sheets: Year ended December 31, 2020 2021 2022 Selling, general and administrative expenses $ 15,929 $ 8,389 $ 299,346 Cost of revenues 1,857 1,586 7,739 Property, plant and equipment, net — — 5,383 Inventories — — 2,143 Research and development expenses 122 102 362 Total $ 17,908 $ 10,077 $ 314,973 |
Earnings (loss) per ordinary share | (t) Earnings (loss) per ordinary share Basic earnings (loss) per ordinary share is computed by dividing the net income attributable to ordinary shares holders by the weighted average number of ordinary shares outstanding during the year. Diluted earnings (loss) per ordinary share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the year. Diluted earnings per share is computed using the treasury stock method. |
Foreign currency translation | (u) Foreign currency translation The reporting currency of the Group is the United States dollar (“U.S. dollar”). The functional currency of the Company is the U.S. dollar. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange in effect at the balance sheet dates. Transactions dominated in currencies other than the U.S. dollar during the year are converted into U.S. dollar at the applicable rates of exchange prevailing when the transactions occur. Transaction gains and losses are recorded in the statements of operations. The financial records of the Company’s subsidiaries in the PRC are maintained in Chinese Renminbi (“RMB”), which is their functional currency. Assets and liabilities are translated at the exchange rates at the balance sheet date. Equity accounts (other than earnings generated in the current period) are translated at historical exchange rates. Revenues, expenses, gains and losses are translated at average rate of exchange prevailing during the periods presented. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the statement of changes in equity and comprehensive income. The RMB is not a freely convertible currency. The State Administration for Foreign Exchange of People’s Republic of China, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Group’s aggregate amount of cash, cash equivalents, restricted cash and short-term investment denominated in RMB amounted to |
Comprehensive (loss) income | (v) Comprehensive (loss) income Comprehensive (loss) income includes all changes in equity except those resulting from investments by owners and distributions to owners, and included net income and foreign currency translation adjustments. As of December 31, 2020, 2021 and 2022, accumulated other comprehensive (loss) income was comprised entirely of foreign currency translation adjustments, net of tax. |
Fair value of financial instruments | (w) Fair value of financial instruments The Group estimates fair value of financial assets and liabilities as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price). The fair value measurement guidance establishes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. Valuation techniques used to measure fair value shall maximize the use of observable inputs. ● Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. ● Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. ● Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use to price an asset or liability. When available, the Group measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. Pricing information the Group obtains from third parties is internally validated for reasonableness prior to use in the consolidated financial statements. When observable market prices are not readily available, the Group generally estimates fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. In certain cases, fair values are not subject to precise quantification or verification and may fluctuate as economic and market factors vary and the Group’s evaluation of those factors changes. Although the Group uses its best judgment in estimating the fair value of these financial instruments, there are inherent limitations in any estimation technique. In these cases, a minor change in an assumption could result in a significant change in its estimate of fair value, thereby increasing or decreasing the amounts of the Group’s consolidated assets, liabilities, shareholders’ equity and net income or loss. The Group’s financial instruments include cash and cash equivalents, restricted cash, short-term investments, notes receivable, amount due from related parties, accounts payable, notes payable, payables for purchase of property, plant and equipment and amounts due to related parties. The carrying amounts of these short-term financial instruments, other than short-term investments which is subject to recurring fair value measurement, approximate their fair values due to the short-term maturity of these instruments. |
Non-controlling interest | (x) Non-controlling interest The Group classified the ownership interest in the consolidated entity held by a party other than the Group to non-controlling interest in the consolidated financial statements. It also reported the consolidated net income at amounts that include the amounts attributable to both the parent and the non-controlling interest on the face of the consolidated statements of operations. |
Treasury shares | (y) Treasury shares Treasury shares represent ordinary shares repurchased by the Company that are no longer outstanding and are held by the Company. The repurchase of ordinary shares is accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. When treasury stock is retired, treasury stock is reduced by the cost of such stock on the first-in, first-out basis and an excess of repurchase price over par or stated value is allocated between additional paid-in capital and retained earnings. |
SUMMARY OF PRINCIPAL ACCOUNTI_3
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
Schedule of property, plant and equipment, depreciation, estimated lives | Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation is recognized on a straight-line basis over the following estimated useful lives: Buildings and plant 30 years Machinery and equipment 15 years Furniture, fixtures and equipment 3-10 years Motor vehicles 6 years |
Schedule of share-based compensation expenses | Year ended December 31, 2020 2021 2022 Selling, general and administrative expenses $ 15,929 $ 8,389 $ 299,346 Cost of revenues 1,857 1,586 7,739 Property, plant and equipment, net — — 5,383 Inventories — — 2,143 Research and development expenses 122 102 362 Total $ 17,908 $ 10,077 $ 314,973 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
Schedule of inventories | December 31, 2021 2022 Raw materials $ 108,925 $ 59,780 Work-in-process 20,593 12,531 Finished goods 198,253 97,206 Total $ 327,771 $ 169,517 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET. | |
Schedule of property, plant and equipment, net | December 31, 2021 2022 Cost Buildings and plant $ 468,309 $ 555,712 Machinery and equipment 910,070 1,094,834 Furniture, fixtures and equipment 59,549 79,593 Motor vehicles 1,176 2,140 Less: Accumulated depreciation 466,549 405,412 Property, plant and equipment, net $ 972,555 $ 1,326,867 Construction in process 586,555 1,278,328 Total $ 1,559,110 $ 2,605,195 |
ADVANCES FROM CUSTOMERS (Tables
ADVANCES FROM CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ADVANCES FROM CUSTOMERS | |
Schedule of advances from customers | December 31, 2021 2022 Customer B 67,026 35,040 Customer D 28,813 37,331 Customer E 18,379 76,393 Others 179,401 126,404 Total $ 293,619 $ 275,168 Less: Advances from customers – short-term portion $ 202,958 $ 121,992 Advances from customers – long-term portion $ 90,661 $ 153,176 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
Schedule of fair value measurement | Fair Value Measurement As of December 31, 2022 Quoted Prices in Significant Significant Active Market for Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Short-term investments - Wealth management products $ — $ 13,927 $ — $ 13,927 Total $ — $ 13,927 $ — $ 13,927 Fair Value Measurement As of December 31, 2021 Quoted Prices in Significant Significant Active Market for Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Short-term investments - Structured financial products $ — $ 269,946 $ — $ 269,946 - Wealth management products 10,305 — — 10,305 Total $ 10,305 $ 269,946 $ — $ 280,251 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of income tax expenses | Year ended December 31, 2020 2021 2022 Current tax expenses $ 29,436 $ 156,894 $ 500,743 Deferred tax (benefit) expenses (1,254) 13,207 76,504 Total $ 28,182 $ 170,101 $ 577,247 |
Schedule of deferred tax assets and liabilities | December 31, 2021 2022 Deferred tax assets: Long-lived assets depreciation $ 1,546 $ 2,068 Deferred government subsidies 68 — Share-based compensation — 1,781 Donation expenses — 66 Net operating loss carried forward 816 1,690 Sub-total $ 2,430 $ 5,605 Valuation Allowance (816) (1,060) Total deferred tax assets $ 1,614 $ 4,545 Deferred tax liabilities: Long-lived assets depreciation $ (3,258) $ (2,736) Difference in basis of buildings (621) (595) Dividend withholding tax (14,461) (79,945) Total deferred tax liabilities $ (18,340) $ (83,276) Deferred tax assets, net — 1,809 Deferred tax liabilities, net $ (16,726) $ (80,540) |
Schedule of changes of valuation allowance | Year ended December 31, 2020 2021 2022 Beginning balance $ 729 $ 709 816 Addition (Reversal) (65) 87 316 Foreign exchange effect 45 20 (72) Ending Balance $ 709 $ 816 1,060 |
Schedule of effective income tax rate reconciliation | Year ended December 31, 2020 2021 2022 PRC Enterprise Income Tax 25 % 25 % 25 % Preferential income tax rate of a subsidiary (11) % (10) % (10) % R&D super deduction (1) % — % — % Different tax rate in other jurisdictions 4 % — % 1 % Dividend withholding tax — % 1 % 3 % Effective tax rate 17 % 16 % 19 % |
NON-CONTROLLING INTERESTS (Tabl
NON-CONTROLLING INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NON-CONTROLLING INTERESTS | |
Schedule of effects of changes in the company's ownership interest in less than wholly owned subsidiaries on equity | Year ended December 31, 2020 2021 2022 Net income attributable to Daqo New Energy Corp. shareholders $ 129,195 $ 748,924 $ 1,819,801 Transfers from the non-controlling interests: Increase in the Company’s paid-in capital from sale of non-controlling interest 3,658 — — Decrease in the Company’s paid-in capital from acquisition of non-controlling interest — — (386) Increase in the Company’s paid-in capital from subsidiary’s offering of its equity interests to third parties — 594,301 878,768 Net transfers from non-controlling interests 3,658 594,301 878,382 Change from net income attributable to Daqo New Energy Corp. shareholders and transfers from non-controlling interests 132,853 1,343,225 2,698,183 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Assumptions Used | The assumptions in the Black-Scholes option-pricing models used to determine the fair value of 2022 PRC stock options granted during the years ended December 31, 2022 were as follows: Year Ended December 31, 2022 Expected term (months) 24, 36, and 48 months from the date of grant Expected dividends 0.96 % Expected volatility 51.86%-54.00 % Risk-free interest rate 1.76%-2.18 % Fair value of common stock $ 8.15 Weighted average exercise price $ 4.76 |
Summary of Stock Option Activity | A summary of the aggregate option activity and information regarding options outstanding as of December 31, 2022 is as follows: Weighted Weighted Weighted Average Average Average Aggregate Number of Exercise Remaining Grant Date Intrinsic Options Price Contract Life Fair Value Value Options outstanding on January 1, 2022 1,775,417 0.59 2.74 0.73 13,261 Granted — — — — — Forfeited — — — — — Expired — — — — — Exercised (1,672,350) 0.59 — 0.74 19,410 Options outstanding on December 31, 2022 103,067 0.59 2.08 0.58 735 Options exercisable on December 31, 2022 103,067 0.59 2.08 0.58 735 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the non-vested RSU activity in 2022 is as follows: Weighted Average Number of Grant Date RSUs Fair Value Non-vested RSUs on January 1, 2022 10,289,352 1.38 Granted 37,253,465 14.14 Vested (26,770,640) 11.01 Forfeited (14,000) 1.61 Non-vested RSUs on December 31, 2022 20,758,177 11.86 |
2022 Restricted Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity | A summary of the aggregate 2022 PRC stock options activity and information regarding those stock options outstanding as of December 31, 2022 is as follows: Weighted Weighted Weighted Average Average Average Aggregate Number of Exercise Remaining Grant Date Intrinsic 2022 PRC stock options Price Contract Life Fair Value Value 2022 PRC stock options outstanding on January 1, 2022 — — — — — Granted 23,660,000 4.76 — 3.94 — Forfeited (100,000) 4.76 — 3.94 — Expired — — — — — Exercised — — — — — 2022 PRC stock options outstanding on December 31, 2022 23,560,000 4.76 2.59 3.94 50,143 2022 PRC stock options exercisable on December 31, 2022 23,560,000 4.76 2.59 3.94 50,143 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
Schedule of material related party relationship | Name of the related party Relationship Daqo Group Co., Ltd. (“Daqo Group”) Daqo Group and the Group are controlled by same group of shareholders Zhenjiang Daqo Solar Co. Ltd.(“Zhenjiang Daqo”) An affiliated company controlled by Daqo Group Daqo Solar Co. Ltd (“Daqo Solar”) An affiliated company controlled by Daqo Group Daqo New Material Co., Ltd. (“Daqo New Material”) An affiliated company controlled by Daqo Group Chongqing Daqo Tailai Electric Co., Ltd. (“Chongqing Daqo Tailai”) An affiliated company controlled by Daqo Group Nanjing Daqo Transformer Systems Co., Ltd. (“Nanjing Daqo Transformer”) An affiliated company controlled by Daqo Group Jiangsu Daqo Changjiang Electric Co., Ltd. (“Jiangsu Daqo”) An affiliated company controlled by Daqo Group Nanjing Daqo Electric Co., Ltd. (“Nanjing Daqo Electric”) An affiliated company controlled by Daqo Group Zhenjiang Electric Equipment Co., Ltd. (“Zhenjiang Electric”) An affiliated company controlled by Daqo Group Daqo Investment Co.,Ltd.(“Daqo Investment”) An affiliated company controlled by Daqo Group Zhenjiang Moeller Electric Appliance Co., Ltd.(“Zhenjiang Moeller”) An affiliated company controlled by Daqo Group Zhenjiang Daqo Intelligent Electric Co., Ltd ("Zhenjiang Daqo Intelligent") An affiliated company controlled by Daqo Group |
Schedule of Related Party Balances, Loans | December 31, 2021 2022 Amounts due from related parties-short term Nanjing Daqo Transformer $ — $ 14 Others — 4 Total $ — $ 18 The balances due from related parties– long-term portion of continuing and discontinued operations are as follows: December 31, 2021 2022 Amounts due from related parties-long term Chongqing Daqo Tailai $ — $ 9,588 Nanjing Daqo Electric — 2,739 Zhenjiang Moeller — 1,181 Zhenjiang Daqo Intelligent — 793 Others — 2,563 Total $ — $ 16,864 |
Schedule of Related Party Balances, Payables | December 31, 2021 2022 Amounts due to related parties – short term portion Nanjing Daqo Transformer $ 1,729 $ 3,429 Chongqing Daqo Tailai 2,085 80 Daqo New Material 4,673 4,161 Nanjing Daqo Electric 981 — Jiangsu Daqo 612 4 Zhenjiang Electric 231 613 Others 504 130 Total $ 10,815 $ 8,417 |
Schedule of Related Party Transactions | Transaction Year Ended December 31, Name of Related parties Nature 2020 2021 2022 Daqo Group Repayment of interest free loans $ 11,597 $ 4,650 $ — Zhenjiang Daqo Proceeds from interest free loans 4,349 — — Repayment of interest free loans 4,349 — — Zhenjiang Daqo Intelligent Purchase-Fixed assets — — 6,271 Daqo Solar Proceeds from interest free loans 18,520 13,213 — Repayment of interest free loans 18,412 13,483 — Nanjing Daqo Transformer Purchase-fixed assets 40 12,913 29,874 Purchase-raw material — — 39 Repayment of interest free loans 8,131 — — Chongqing Daqo Tailai Purchase-fixed assets 111 17,812 22,511 Repayment of interest free loans 5,049 — — Jiangsu Daqo Purchase-fixed assets — 5,299 — Nanjing Daqo Electric Purchase-fixed assets 45 8,553 8,209 Zhenjiang Electric Purchase-raw material — 1,967 4,241 Zhenjiang Moeller Purchase-fixed assets — — 9,331 Total Purchase-fixed assets $ 196 $ 44,577 $ 76,196 Purchase-raw material $ — $ 1,967 $ 4,280 Proceeds from related parties loans $ 22,869 $ 13,213 $ — Repayment of related parties loans $ 47,538 $ 18,133 $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
Schedule of Calculation of Earnings Per Share | The calculation of earnings per share is as follows: Year ended December 31, 2020 2021 2022 Numerator used in basic and diluted earnings per share: Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations—basic $ 129,336 $ 748,924 $ 1,819,801 Loss attributable to Daqo New Energy Corp. ordinary shareholders from discontinued operations, net of tax (141) — — Net income attributable to Daqo New Energy Corp. ordinary shareholders—basic $ 129,195 $ 748,924 $ 1,819,801 Diluted earnings from the subsidiary — — (15,432) Net income attributable to Daqo New Energy Corp. ordinary shareholders—diluted $ 129,195 $ 748,924 $ 1,804,369 Denominator used in diluted earnings per share: Weighted average number of ordinary shares outstanding used in computing earnings per share-basic 355,087,013 369,341,105 379,365,310 Plus: Dilutive effects of share options 4,421,397 1,735,798 885,140 Dilutive effects of RSUs 15,508,740 12,689,503 6,209,391 Weighted average number of ordinary shares outstanding used in computing earnings per share—diluted 375,017,150 383,766,406 386,459,841 Basic earnings per share-continuing operations $ 0.36 $ 2.03 $ 4.80 Basic earnings per share-discontinued operations $ 0.00 $ — $ — Net income attributable to Daqo New Energy Corp. per ordinary share—basic $ 0.36 $ 2.03 $ 4.80 Diluted earnings per share-continuing operations $ 0.34 $ 1.95 $ 4.67 Diluted earnings per share-discontinued operations $ 0.00 $ — $ — Net income attributable to Daqo New Energy Corp. per ordinary share—diluted $ 0.34 $ 1.95 $ 4.67 |
CONCENTRATION AND RISK (Tables)
CONCENTRATION AND RISK (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
CONCENTRATION AND RISK | |
Schedule of Revenues of Major Customers | The following customers individually accounted for 10% or more of revenues: Year ended December 31, 2020 2021 2022 Customer A $ 369,333 $ 532,129 $ 1,379,796 Customer B 67,431 230,088 614,698 Customer C * * 529,037 Customer D * 268,466 516,634 * |
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL STATEMENT SCHEDULE I | |
Schedule of CONDENSED BALANCE SHEETS | December 31, 2021 2022 ASSETS Current assets: Cash and cash equivalents $ 2,263 $ 2,377 Prepaid expenses and other current assets 379 371 Total current assets 2,642 2,748 Investments in subsidiaries 2,159,482 4,884,756 TOTAL ASSETS $ 2,162,124 $ 4,887,504 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses and other current liabilities $ 165 $ 80,128 Total current liabilities 165 80,128 Equity: Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2021 and 2022; 377,177,802 shares issued and 372,534,652 shares outstanding as of December 31, 2021, 405,620,792 shares issued and 391,023,327 shares outstanding as of December 31, 2022) 38 40 Additional paid-in capital 1,016,855 2,211,203 Retained earnings 1,079,042 2,898,843 Accumulated other comprehensive income (loss) 67,773 (176,032) Treasury shares, at cost (4,643,150 shares as of December 31, 2021; 14,597,465 shares as of December 31, 2022) (1,749) (126,678) Total shareholders’ equity 2,161,959 4,807,376 TOTAL LIABILITIES AND EQUITY $ 2,162,124 $ 4,887,504 |
Schedule of CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | Year ended December 31, 2020 2021 2022 Operating expenses: General and administrative $ (12,728) $ (11,292) $ (295,431) Total operating expenses (12,728) (11,292) (295,431) Loss from operations (12,728) (11,292) (295,431) Interest income 7 — 144 Income tax expense (2,391) — (79,945) Net loss before share of results of subsidiaries (15,112) (11,292) (375,232) Equity in earnings of subsidiaries 144,307 760,216 2,195,033 Net income attributable to Daqo New Energy Corp. ordinary shareholders $ 129,195 $ 748,924 $ 1,819,801 Other comprehensive (loss) income: Foreign currency translation adjustments, net of tax of nil 46,204 45,160 (252,800) Total other comprehensive income (loss): 46,204 45,160 (252,800) Comprehensive income $ 175,399 $ 794,084 $ 1,567,001 |
Schedule of CONDENSED STATEMENT OF CASH FLOWS | Year ended December 31, 2020 2021 2022 OPERATING ACTIVITIES Net cash provided by (used in) operating activities (1,066) (736) 124,048 FINANCING ACTIVITIES Proceeds from options exercised 580 2,139 995 Repurchase of ordinary shares — — (124,929) Net cash provided by (used in) financing activities 580 2,139 (123,934) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (486) 1,403 114 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 1,346 860 2,263 CASH AND CASH EQUIVALENTS AT END OF THE YEAR $ 860 $ 2,263 $ 2,377 Notes 1. Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. 2. The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. For the parent company, Daqo New Energy Corp records its investments in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments-Equity Method and Joint Ventures. Such investments are presented on the Condensed Balance Sheets as “Investment in subsidiaries”. Ordinarily under the equity, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of this Schedule I, the parent company will continue to reflect its share, based on its proportionate interest, of the losses of subsidiaries regardless of the carrying value of the investment even though the parent company is not obligated to provide continuing support or fund losses. 3. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The footnote disclosures provide certain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying consolidated financial statements. 4. As of December 31, 2021 and 2022, there were no material contingencies, significant provisions of long-term obligations of the Company, except for those which have been disclosed separately in the consolidated financial statements. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) $ in Thousands, ¥ in Billions | 1 Months Ended | 12 Months Ended | |||
Jul. 22, 2021 USD ($) | Jun. 30, 2022 USD ($) item | Jun. 30, 2022 CNY (¥) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |||||
Net proceeds from issuance of shares | $ 1,630,563 | ||||
Gross proceeds from issuance of shares | $ 934,960 | ||||
Xinjiang Daqo | |||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | |||||
Total ownership held directly or indirectly | 80.70% | 72.68% | 72.68% | ||
IPO | Xinjiang Daqo | |||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | |||||
Net proceeds from issuance of shares | $ 935,000 | ||||
Private offering | |||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | |||||
Net proceeds from issuance of shares | $ 1,630,000 | ||||
Private offering | Xinjiang Daqo | |||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | |||||
Capacity of polysilicon per annum (in MT) | item | 100,000 | 100,000 | |||
Gross proceeds from issuance of shares | $ 1,640,000 | ¥ 11 |
SUMMARY OF PRINCIPAL ACCOUNTI_4
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Additional Information) (Details) - USD ($) | 12 Months Ended | ||||
Jan. 01, 2022 | Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted cash | |||||
Restricted cash | $ 20,900,000 | $ 200,000 | |||
Inventories | |||||
Inventory write-down | 0 | 0 | $ 1,956,000 | ||
Property, Plant and Equipment | |||||
Interest expense capitalized | 0 | 0 | 300,000 | ||
Prepaid land use rights | |||||
Lease expense | 1,200,000 | 800,000 | 700,000 | ||
Impairment of long-lived assets | |||||
Long-lived asset impairment | 0 | 0 | 0 | ||
Revenue recognition | |||||
Accounts receivable, net, current | 0 | 0 | |||
Government subsidies | |||||
Unrestricted cash government subsidies | 3,200,000 | 1,100,000 | 500,000 | ||
Government grants related to fixed assets | 0 | 0 | 400,000 | ||
Foreign currency translation | |||||
Aggregate amount of cash and cash equivalents and restricted cash denominated in RMB | 3,531,900,000 | 1,002,000,000 | |||
Share-based compensation | 315,000,000 | 10,100,000 | 17,900,000 | ||
Contract with customer, liability | 275,168,000 | 293,619,000 | |||
Contract with customer, liability, revenue recognized | $ 203,000,000 | $ 37,800,000 | |||
Advances from customers expected to be recognized in revenue | 122,000,000 | ||||
Shipping and Handling | |||||
Shipping and handling | |||||
Cost of goods and services sold | $ 15,900,000 | $ 8,300,000 | $ 8,600,000 |
SUMMARY OF PRINCIPAL ACCOUNTI_5
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Buildings and plant | |
Property, plant and equipment | |
Estimated useful lives | 30 years |
Machinery and equipment | |
Property, plant and equipment | |
Estimated useful lives | 15 years |
Furniture, fixtures and equipment | Minimum | |
Property, plant and equipment | |
Estimated useful lives | 3 years |
Furniture, fixtures and equipment | Maximum | |
Property, plant and equipment | |
Estimated useful lives | 10 years |
Motor vehicles | |
Property, plant and equipment | |
Estimated useful lives | 6 years |
SUMMARY OF PRINCIPAL ACCOUNTI_6
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Share-based Compensation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based compensation | |||
Amounts recognized as expenses | $ 315,000 | $ 10,100 | $ 17,900 |
Total | 314,973 | 10,077 | 17,908 |
Property, plant and equipment, net | |||
Share-based compensation | |||
Amounts capitalized as part of an asset | 5,383 | ||
Inventories | |||
Share-based compensation | |||
Amounts capitalized as part of an asset | 2,143 | ||
Selling, general and administrative expenses | |||
Share-based compensation | |||
Amounts recognized as expenses | 299,346 | 8,389 | 15,929 |
Cost of revenues | |||
Share-based compensation | |||
Amounts recognized as expenses | 7,739 | 1,586 | 1,857 |
Research and development expenses | |||
Share-based compensation | |||
Amounts recognized as expenses | $ 362 | $ 102 | $ 122 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INVENTORIES | |||
Raw materials | $ 59,780 | $ 108,925 | |
Work-in-process | 12,531 | 20,593 | |
Finished goods | 97,206 | 198,253 | |
Total | 169,517 | 327,771 | |
Inventory write-down | $ 0 | $ 0 | $ 1,956 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Total | $ 2,605,195 | $ 1,559,110 | |
Depreciation of property, plant and equipment | 107,097 | 77,366 | $ 68,686 |
Buildings and plant | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Cost | 555,712 | 468,309 | |
Machinery and equipment | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Cost | 1,094,834 | 910,070 | |
Furniture, fixtures and equipment | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Cost | 79,593 | 59,549 | |
Motor vehicles | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Cost | 2,140 | 1,176 | |
Depreciable asset | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Less: Accumulated depreciation | 405,412 | 466,549 | |
Total | 1,326,867 | 972,555 | |
Construction in progress | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Cost | $ 1,278,328 | $ 586,555 |
ADVANCES FROM CUSTOMERS (Detail
ADVANCES FROM CUSTOMERS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Advances from customers | $ 275,168 | $ 293,619 |
Less: Advances from customers - short-term portion | 121,992 | 202,958 |
Advances from customers - long-term portion | 153,176 | 90,661 |
Customer B | ||
Advances from customers | 35,040 | 67,026 |
Customer D | ||
Advances from customers | 37,331 | 28,813 |
Customer E | ||
Advances from customers | 76,393 | 18,379 |
Others | ||
Advances from customers | $ 126,404 | $ 179,401 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Short-term investments | |||
Short-term investments | $ 13,927 | $ 280,251 | |
Recurring | |||
Short-term investments | |||
Short-term investments | 13,927 | 280,251 | |
Recurring | Structured Financial Products | |||
Short-term investments | |||
Short-term investments | 269,946 | ||
Recurring | Wealth Management Products | |||
Short-term investments | |||
Short-term investments | 13,927 | 10,305 | |
Nonrecurring | |||
Short-term investments | |||
Impairment losses on its long-lived assets | 0 | 0 | $ 0 |
Level 1 | Recurring | |||
Short-term investments | |||
Short-term investments | 10,305 | ||
Level 1 | Recurring | Wealth Management Products | |||
Short-term investments | |||
Short-term investments | 10,305 | ||
Level 2 | Recurring | |||
Short-term investments | |||
Short-term investments | 13,927 | 269,946 | |
Level 2 | Recurring | Structured Financial Products | |||
Short-term investments | |||
Short-term investments | $ 269,946 | ||
Level 2 | Recurring | Wealth Management Products | |||
Short-term investments | |||
Short-term investments | $ 13,927 |
MAINLAND CHINA CONTRIBUTION P_2
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | |||
Defined contribution plan expenses | $ 10 | $ 5.7 | $ 3.7 |
Aggregate balance of statutory common reserves | 171.7 | $ 149.5 | $ 58.2 |
Restrictions of statutory reserves | $ 3,090.3 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) $ in Thousands, ¥ in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 HKD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | |
INCOME TAXES | ||||||
Income tax paid | $ 350,583 | $ 108,099 | $ 12,808 | |||
Valuation allowance | 1,060 | 816 | $ 709 | $ 729 | ||
Deferred tax liabilities | $ 80,540 | $ 16,726 | ||||
Percentage of distributable profit recorded as deferred tax liability | 40.24% | 40.24% | 40.24% | |||
Statutory enterprise income tax rate | 25% | 25% | 25% | 25% | 25% | |
Income (loss) before income taxes | $ 3,056,889 | $ 1,034,948 | $ 162,130 | |||
State Administration of Taxation, China | ||||||
INCOME TAXES | ||||||
Statutory enterprise income tax rate | 25% | 25% | 25% | |||
Income (loss) before income taxes | $ 3,214,400 | 1,046,200 | 179,600 | |||
PRC state council, income tax rate | 10% | 10% | 10% | |||
HONG KONG | ||||||
INCOME TAXES | ||||||
Amount of profit for which rate of tax changes | $ 2 | |||||
Minimum income tax rate | 8.25% | 8.25% | 8.25% | |||
Maximum income tax rate | 16.50% | 16.50% | 16.50% | |||
Outside PRC | ||||||
INCOME TAXES | ||||||
Statutory enterprise income tax rate | 25% | 25% | 25% | |||
Income (loss) before income taxes | $ 157,500 | 11,300 | 17,500 | |||
Xinjiang Daqo | ||||||
INCOME TAXES | ||||||
Income tax paid | ¥ | ¥ 0.1 | |||||
Deferred tax liabilities | $ 79,900 | $ 14,500 | ||||
Percentage of distributable profit recorded as deferred tax liability | 40.24% | 40.24% | 40.24% | 20.18% | ||
Preferential tax rate | 15% | 15% | 15% | 15% | ||
Minimum dividend distribution (in percent) | 30% | |||||
Inner Mongolia Daqo New Energy | ||||||
INCOME TAXES | ||||||
Preferential tax rate | 15% | 15% | 15% | |||
Chongqing Daqo New Energy Co., Ltd | ||||||
INCOME TAXES | ||||||
Valuation allowance | $ 19,200 | $ 20,500 | $ 24,300 |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Current tax expenses | $ 500,743 | $ 156,894 | $ 29,436 |
Deferred tax (benefit) expenses | 76,504 | 13,207 | (1,254) |
Total | $ 577,247 | $ 170,101 | $ 28,182 |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Income Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||||
Long-lived assets depreciation | $ 2,068 | $ 1,546 | ||
Deferred government subsidies | 68 | |||
Share-based compensation | 1,781 | 0 | ||
Donation expenses | 66 | 0 | ||
Net operating loss carried forward | 1,690 | 816 | ||
Sub-total | 5,605 | 2,430 | ||
Valuation Allowance | (1,060) | (816) | $ (709) | $ (729) |
Total deferred tax assets | 4,545 | 1,614 | ||
Deferred tax liabilities: | ||||
Long-lived assets depreciation | (2,736) | (3,258) | ||
Difference in basis of buildings | (595) | (621) | ||
Dividend withholding tax | (79,945) | (14,461) | ||
Total deferred tax liabilities | (83,276) | (18,340) | ||
Deferred tax assets, net | 1,809 | 0 | ||
Deferred Tax Liabilities, Net | $ 80,540 | $ 16,726 |
INCOME TAXES (Schedule of Chang
INCOME TAXES (Schedule of Changes of Valuation Allowance) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Beginning balance | $ 816 | $ 709 | $ 729 |
Addition (Reversal) | 316 | 87 | (65) |
Foreign exchange effect | (72) | 20 | 45 |
Ending Balance | $ 1,060 | $ 816 | $ 709 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective income tax rate: | |||
PRC Enterprise Income Tax | 25% | 25% | 25% |
Preferential income tax rate of a subsidiary | (10.00%) | (10.00%) | (11.00%) |
R&D Super deduction | (1.00%) | ||
Different tax rate in other jurisdictions | 1% | 4% | |
Dividend withholding tax | 3% | 1% | |
Effective tax rate | 19% | 16% | 17% |
INCOME TAXES (Schedule of Eff_2
INCOME TAXES (Schedule of Effect of Tax Holidays) (Details) - Xinjiang Daqo - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Preferential tax rate | 15% | 15% | |
The aggregate dollar effect | $ 300.4 | $ 104.3 | $ 17.4 |
Per share effect-basic and diluted | $ 0.77 | $ 0.28 | $ 0.05 |
NON-CONTROLLING INTERESTS (Deta
NON-CONTROLLING INTERESTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
NON-CONTROLLING INTERESTS | |||
Net income attributable to Daqo New Energy Corp. shareholders | $ 1,819,801 | $ 748,924 | $ 129,195 |
Transfers from the non-controlling interests: | |||
Increase in the Company's paid-in capital from sale of non-controlling interest | 3,658 | ||
Decrease in the Company's paid-in capital from acquisition of non-controlling interest | (386) | ||
Increase in the Company's paid-in capital from subsidiary's offering of its equity interests to third parties | 878,768 | 594,301 | |
Net transfers from non-controlling interests | 878,382 | 594,301 | 3,658 |
Change from net income attributable to Daqo New Energy Corp. shareholders and transfers from non-controlling interests | $ 2,698,183 | $ 1,343,225 | $ 132,853 |
NON-CONTROLLING INTERESTS - Add
NON-CONTROLLING INTERESTS - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jul. 31, 2021 | Dec. 31, 2022 | |
Noncontrolling Interest [Line Items] | |||
Net proceeds from issuance of shares | $ 1,630,563 | ||
Xinjiang Daqo Investment | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 4.40% | ||
Initial Public Offering | |||
Noncontrolling Interest [Line Items] | |||
Proceeds from Issuance Initial Public Offering | $ 935,000 | ||
Initial Public Offering | Xinjiang Daqo Investment | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Parent | 80.70% | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 19.30% | ||
Private Placement | |||
Noncontrolling Interest [Line Items] | |||
Net proceeds from issuance of shares | $ 1,630,000 | ||
Private Placement | Xinjiang Daqo Investment | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Parent | 72.68% | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 27.32% | ||
Noncontrolling interest | |||
Noncontrolling Interest [Line Items] | |||
Net proceeds from issuance of shares | $ 742,800 | ||
Noncontrolling interest | Initial Public Offering | |||
Noncontrolling Interest [Line Items] | |||
Proceeds from Issuance Initial Public Offering | $ 344,300 | ||
Additional paid-in capital | |||
Noncontrolling Interest [Line Items] | |||
Net proceeds from issuance of shares | $ 878,800 | ||
Additional paid-in capital | Initial Public Offering | |||
Noncontrolling Interest [Line Items] | |||
Proceeds from Issuance Initial Public Offering | $ 590,700 |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
Sep. 06, 2022 shares | Jan. 06, 2019 | Dec. 21, 2018 shares | Jul. 06, 2018 shares | Jun. 06, 2018 shares | May 06, 2017 | Feb. 03, 2017 shares | Sep. 30, 2022 item shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Apr. 30, 2018 shares | Dec. 31, 2014 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation | $ | $ 315,000 | $ 10,100 | $ 17,900 | ||||||||||
intrinsic value of options exercised | $ | 19,410 | ||||||||||||
Restricted Stock or Unit Expense | $ | 294,800 | 10,100 | 17,900 | ||||||||||
Share Incentive Plan 2014 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Ordinary shares authorized | 21,000,000 | ||||||||||||
Share Incentive Plan 2018 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Ordinary shares authorized | 38,600,000 | ||||||||||||
Share Incentive Plan 2022 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Ordinary shares authorized | 37,253,465 | ||||||||||||
2022 Restricted Stock Incentive Plan | Xinjiang Daqo Lvchuang | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 4 years | ||||||||||||
Number of Vesting Period | item | 3 | ||||||||||||
2022 Restricted Stock Incentive Plan | Vested on the grant date | Xinjiang Daqo Lvchuang | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting percentage | 40% | ||||||||||||
2022 Restricted Stock Incentive Plan | Vested after grant date on each month | Xinjiang Daqo Lvchuang | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting percentage | 30% | ||||||||||||
2022 Restricted Stock Incentive Plan | Vesting on fourth anniversary of the grant date | Xinjiang Daqo Lvchuang | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting percentage | 30% | ||||||||||||
Restricted Stock Units (RSUs) | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Total fair value of RSU | $ | 294,800 | 10,100 | 17,900 | ||||||||||
Unrecognized compensation cost | $ | $ 244,100 | ||||||||||||
Unrecognized compensation cost, recognition period | 2 years 8 months 12 days | ||||||||||||
Number of award granted | 37,253,465 | ||||||||||||
Total unrecognized compensation cost expected to be recognized over a weighted-average period | 2 years 8 months 12 days | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2014 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of award granted | 12,653,992 | ||||||||||||
Vesting period | 4 years | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2018 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of award granted | 10,984,761 | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2018 | Chief executive officer | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 30 months | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2018 | Chief executive officer | Vested on the grant date | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting percentage | 0.167% | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2018 | Chief executive officer | Vested after grant date on each month | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting percentage | 0.833% | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2018 | Certain directors, executive officers | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of award granted | 25,275,880 | ||||||||||||
Vesting period | 5 years | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2014 and 2018 [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of award granted | 8,105,000 | ||||||||||||
Vesting period | 5 years | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2022 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of award granted | 37,253,465 | ||||||||||||
Vesting period | 3 years | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2022 | Vested on the grant date | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting percentage | 0.50% | ||||||||||||
Restricted Stock Units (RSUs) | Share Incentive Plan 2022 | Vested after grant date on each month | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting percentage | 0.014% | ||||||||||||
Stock options | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation | $ | $ 0 | 0 | 0 | ||||||||||
intrinsic value of options exercised | $ | $ 19,400 | 700 | 44,100 | ||||||||||
Stock options | 2022 Restricted Stock Incentive Plan | Xinjiang Daqo Lvchuang | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Granted | 23,660,000 | 23,660,000 | |||||||||||
Weighted average fair value of stock options granted | $ / shares | $ 3.94 | ||||||||||||
Share-based compensation | $ | $ 20,100 | $ 0 | $ 0 | ||||||||||
Total unrecognized compensation cost | $75.6 | ||||||||||||
Unrecognized compensation cost, recognition period | 2 years 7 months 2 days | ||||||||||||
Number of option granted | 23,660,000 | 23,660,000 | |||||||||||
Total unrecognized compensation cost expected to be recognized over a weighted-average period | 2 years 7 months 2 days |
SHARE BASED COMPENSATION (Summa
SHARE BASED COMPENSATION (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Options | ||
Stock options outstanding at beginning | 1,775,417 | |
Exercised | (1,672,350) | |
Stock options outstanding at end | 103,067 | 1,775,417 |
Stock options exercisable at end | 103,067 | |
Weighted Average Exercise Price | ||
Stock options outstanding at beginning (in dollars per share) | $ 0.59 | |
Granted | 0 | |
Exercised | 0.59 | |
Stock options outstanding at end (in dollars per share) | 0.59 | $ 0.59 |
Stock options exercisable at end (in dollars per share) | $ 0.59 | |
Weighted Average Remaining Contract Life | ||
Options outstanding | 2 years 29 days | 2 years 8 months 26 days |
Options exercisable | 2 years 29 days | |
Weighted Average Grant Date Fair Value | ||
Options outstanding at beginning (in dollars per share) | $ 0.58 | $ 0.73 |
Exercised (in dollars per share) | 0.74 | |
Options outstanding at end (in dollars per share) | 0.58 | $ 0.73 |
Options exercisable (in dollars per share) | $ 0.58 | |
Aggregate Intrinsic Value | ||
Options outstanding | $ 735 | $ 13,261 |
Options exercised | 19,410 | |
Options exercisable | $ 735 |
SHARE BASED COMPENSATION (sum_2
SHARE BASED COMPENSATION (summary of the non-vested RSU activity) (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested RSUs on January 1, 2021 | shares | 10,289,352 |
Granted | shares | 37,253,465 |
Vested | shares | (26,770,640) |
Forfeited | shares | (14,000) |
Nonvested RSUs on December 31, 2021 | shares | 20,758,177 |
Nonvested RSUs on January 1, 2021 | $ / shares | $ 1.38 |
Granted | $ / shares | 14.14 |
Vested | $ / shares | 11.01 |
Forfeited | $ / shares | 1.61 |
Nonvested RSUs on December 31, 2021 | $ / shares | $ 11.86 |
SHARE BASED COMPENSATION - 2022
SHARE BASED COMPENSATION - 2022 PRC stock options activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options outstanding at beginning | 1,775,417 | |||
Options exercised | $ 995 | $ 28 | $ 2,677 | |
Stock options outstanding at end | 103,067 | 1,775,417 | ||
Stock options exercisable at end | 103,067 | |||
Weighted Average Exercise Price | ||||
Stock options outstanding at beginning (in dollars per share) | $ 0.59 | |||
Granted (in dollars per share) | 0 | |||
Exercised (in dollars per share) | 0.59 | |||
Stock options outstanding at end (in dollars per share) | 0.59 | $ 0.59 | ||
Stock options exercisable at end (in dollars per share) | $ 0.59 | |||
Weighted Average Remaining Contract Life | ||||
Options outstanding | 2 years 29 days | 2 years 8 months 26 days | ||
Options exercisable | 2 years 29 days | |||
Weighted Average Grant Date Fair Value | ||||
Options outstanding at beginning (in dollars per share) | $ 0.73 | |||
Options outstanding at end (in dollars per share) | 0.58 | $ 0.73 | ||
Options exercisable (in dollars per share) | $ 0.58 | |||
Aggregate Intrinsic Value | ||||
Stock options outstanding at beginning (in dollars) | $ 13,261 | |||
Stock options outstanding at end (in dollars) | 735 | $ 13,261 | ||
Stock options exercisable at end (in dollars) | $ 735 | |||
Xinjiang Daqo Lvchuang | 2022 Restricted Stock Incentive Plan | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 23,660,000 | 23,660,000 | ||
Forfeited | (100,000) | |||
Stock options outstanding at end | 23,560,000 | |||
Stock options exercisable at end | 23,560,000 | |||
Weighted Average Exercise Price | ||||
Granted (in dollars per share) | $ 4.76 | |||
Forfeited (in dollars per share) | 4.76 | |||
Stock options outstanding at end (in dollars per share) | 4.76 | |||
Stock options exercisable at end (in dollars per share) | $ 4.76 | |||
Weighted Average Remaining Contract Life | ||||
Options outstanding | 2 years 7 months 2 days | |||
Options exercisable | 2 years 7 months 2 days | |||
Weighted Average Grant Date Fair Value | ||||
Granted | $ 3.94 | |||
Forfeited | 3.94 | |||
Options outstanding at end (in dollars per share) | 3.94 | |||
Options exercisable (in dollars per share) | $ 3.94 | |||
Aggregate Intrinsic Value | ||||
Stock options outstanding at end (in dollars) | $ 50,143 | |||
Stock options exercisable at end (in dollars) | $ 50,143 |
SHARE BASED COMPENSATION - 20_2
SHARE BASED COMPENSATION - 2022 PRC stock options assumptions (Details) - Xinjiang Daqo Lvchuang [Member] - 2022 Restricted Stock Incentive Plan - Stock options | 12 Months Ended |
Dec. 31, 2022 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividends | 0.96% |
Expected volatility, Minimum | 51.86% |
Expected volatility, Maximum | 54% |
Risk-free interest rate, Minimum | 1.76% |
Risk-free interest rate, Maximum | 2.18% |
Fair value of common stock | $ 8.15 |
Weighted average exercise price | $ 4.76 |
Vested on the grant date | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (months) | 24 months |
Vested after grant date on each month | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (months) | 36 months |
Vesting on fourth anniversary of the grant date | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (months) | 48 months |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related party balances: | |||
Amounts due from related parties | $ 18 | $ 0 | |
Amounts due to related parties | 8,417 | 10,815 | |
Amounts due to related parties - short term portion | 16,864 | 0 | |
Continuing Operations | |||
Related party balances: | |||
Amounts due from related parties | 18 | ||
Amounts due to related parties | 8,417 | 10,815 | |
Amounts due to related parties - short term portion | 16,864 | ||
Purchases of Fixed Assets | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 76,196 | 44,577 | $ 196 |
Purchases of Raw Materials | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Sales | 4,280 | 1,967 | |
Proceeds From Related Parties Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 13,213 | 22,869 | |
Repayment Of Related Parties Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 18,133 | 47,538 | |
Zhenjiang Daqo | Proceeds From Interest Free Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Other transactions | 4,349 | ||
Zhenjiang Daqo | Repayment of Interest Free Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Other transactions | 4,349 | ||
Daqo Solar Co Ltd | Proceeds From Interest Free Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Other transactions | 13,213 | 18,520 | |
Daqo Solar Co Ltd | Repayment of Interest Free Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Other transactions | 13,483 | 18,412 | |
Daqo Group | Repayment of Interest Free Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Other transactions | 4,650 | 11,597 | |
Daqo New Material | Continuing Operations | |||
Related party balances: | |||
Amounts due to related parties | 4,161 | 4,673 | |
Chongqing Daqo Taila | Continuing Operations | |||
Related party balances: | |||
Amounts due to related parties | 80 | 2,085 | |
Amounts due to related parties - short term portion | 9,588 | ||
Chongqing Daqo Taila | Purchases of Fixed Assets | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 22,511 | 17,812 | 111 |
Chongqing Daqo Taila | Repayment of Interest Free Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Other transactions | 5,049 | ||
Jiangsu Daqo | Continuing Operations | |||
Related party balances: | |||
Amounts due to related parties | 4 | 612 | |
Jiangsu Daqo | Purchases of Fixed Assets | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 5,299 | ||
Nanjing Daqo Electric | Continuing Operations | |||
Related party balances: | |||
Amounts due to related parties | 981 | ||
Amounts due to related parties - short term portion | 2,739 | ||
Nanjing Daqo Electric | Purchases of Fixed Assets | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 8,209 | 8,553 | 45 |
Other Subsidiaries of Daqo Group | Continuing Operations | |||
Related party balances: | |||
Amounts due from related parties | 4 | ||
Amounts due to related parties | 130 | 504 | |
Amounts due to related parties - short term portion | 2,563 | ||
Jiangsu Daqo Kai-fan Electric Co Ltd | Continuing Operations | |||
Related party balances: | |||
Amounts due to related parties | 613 | 231 | |
Jiangsu Daqo Kai-fan Electric Co Ltd | Purchases of Raw Materials | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 4,241 | 1,967 | |
Nanjing Daqo Transformer | Continuing Operations | |||
Related party balances: | |||
Amounts due from related parties | 14 | ||
Amounts due to related parties | 3,429 | 1,729 | |
Nanjing Daqo Transformer | Purchases of Fixed Assets | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 29,874 | $ 12,913 | 40 |
Nanjing Daqo Transformer | Purchases of Raw Materials | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Other transactions | 39 | ||
Nanjing Daqo Transformer | Repayment of Interest Free Loans | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Other transactions | $ 8,131 | ||
Zhenjiang Moerller | Continuing Operations | |||
Related party balances: | |||
Amounts due to related parties - short term portion | 1,181 | ||
Zhenjiang Moerller | Purchases of Fixed Assets | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Purchases | 9,331 | ||
Zhenjiang Daqo Intelligent | Continuing Operations | |||
Related party balances: | |||
Amounts due to related parties - short term portion | 793 | ||
Zhenjiang Daqo Intelligent | Purchases of Fixed Assets | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Sales | $ 6,271 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator used in basic and diluted earnings per share: | |||
Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations | $ 1,819,801 | $ 748,924 | $ 129,336 |
Income(Loss) attributable to Daqo New Energy Corp. ordinary shareholders from discontinued operations, net of tax | (141) | ||
Net income attributable to Daqo New Energy Corp. ordinary shareholders-basic | 1,819,801 | 748,924 | 129,195 |
Diluted earnings from the subsidiary | (15,432) | 0 | |
Net income attributable to Daqo New Energy Corp. ordinary shareholders-diluted | $ 1,804,369 | $ 748,924 | $ 129,195 |
Denominator used in basic and diluted earnings per share: | |||
Weighted average number of ordinary shares outstanding used in computing earnings per share-basic | 379,365,310 | 369,341,105 | 355,087,013 |
Weighted average number of ordinary shares outstanding used in computing earnings per share-diluted | 386,459,841 | 383,766,406 | 375,017,150 |
Basic earnings per share-continuing operations | $ 4.80 | $ 2.03 | $ 0.36 |
Basic earnings per share-discontinued operations | 0 | ||
Net income attributable to Daqo New Energy Corp. per ordinary share-basic | 4.80 | 2.03 | 0.36 |
Diluted earnings per share-continuing operations | 4.67 | 1.95 | 0.34 |
Diluted earnings per share-discontinued operations | 0 | ||
Net income attributable to Daqo New Energy Corp. per ordinary share-diluted | $ 4.67 | $ 1.95 | $ 0.34 |
Employee Stock Option [Member] | |||
Denominator used in basic and diluted earnings per share: | |||
Dilutive effects | 885,140 | 1,735,798 | 4,421,397 |
Restricted Stock Units (RSUs) [Member] | |||
Denominator used in basic and diluted earnings per share: | |||
Dilutive effects | 6,209,391 | 12,689,503 | 15,508,740 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Dec. 31, 2022 USD ($) t | Dec. 31, 2021 t |
Capital commitments: | ||
Commitments outstanding for the purchase of property, plant and equipment | $ | $ 414.3 | |
Solar Industry [Member] | ||
Capital commitments: | ||
Total annual capacity | 200,000 | |
Solar Industry [Member] | Investment In Project, Phase One [Member] | ||
Capital commitments: | ||
Total annual capacity | 100,000 | |
Solar Industry [Member] | Investment In Project, Phase Two [Member] | ||
Capital commitments: | ||
Total annual capacity | 100,000 | |
Semiconductor Industry [Member] | ||
Capital commitments: | ||
Total annual capacity | 21,000 | |
Semiconductor Industry [Member] | Investment In Project, Phase One [Member] | ||
Capital commitments: | ||
Estimated investment in projects | $ | $ 8,550 | |
Total annual capacity | 1,000 | |
Silicone Projects [Member] | ||
Capital commitments: | ||
Total annual capacity | 200,000 | |
Silicon Metal [Member] | ||
Capital commitments: | ||
Total annual capacity | 300,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Repurchase of common stock (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2022 | Nov. 07, 2022 | Jun. 01, 2022 | |
Repurchase of common stock | ||||
Value of ADS repurchased | $ 124,929 | |||
ADS | ||||
Repurchase of common stock | ||||
Authorized amount for share repurchases | $ 700,000 | $ 120,000 | ||
Number of ADS repurchased | 1,881,368 | 109,495 | ||
Value of ADS repurchased | $ 5,000 | |||
Value of repurchased stock | $ 119,900 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
SEGMENT INFORMATION | |
Number of reportable segments | 1 |
CONCENTRATION AND RISK (Details
CONCENTRATION AND RISK (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Segment Reporting Information [Line Items] | ||||
Revenue from polysilicon sales | $ 4,608,350 | $ 1,678,793 | $ 675,602 | |
Customer A | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from polysilicon sales | 1,379,796 | 532,129 | 369,333 | |
Customer B | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from polysilicon sales | 614,698 | 230,088 | 67,431 | |
Customer C | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from polysilicon sales | 529,037 | |||
Customer D | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from polysilicon sales | [1] | $ 516,634 | $ 268,466 | |
Major customer | Customer Concentration Risk [Member] | Sales revenue | ||||
Segment Reporting Information [Line Items] | ||||
Concentration Risk, Percentage | 66% | 75% | 83% | |
[1]Represents less than 10% |
SUBSEQUENT EVENTS - Xinjiang Da
SUBSEQUENT EVENTS - Xinjiang Daqo's 2022 Profit Distribution Plan (Details) - 12 months ended Dec. 31, 2022 | CNY (¥) | USD ($) |
SUBSEQUENT EVENTS. | ||
Amount Payable As Cash Dividends Inclusive Of Taxes | ¥ 7,694,626,374 | $ 1,115,566,931.7 |
Percentage of distributable profit recorded as deferred tax liability | 40.24% |
SUBSEQUENT EVENTS - Facility Ag
SUBSEQUENT EVENTS - Facility Agreement (Details) $ in Millions | 1 Months Ended | ||
Mar. 27, 2023 USD ($) | Feb. 28, 2023 USD ($) item | Feb. 28, 2023 USD ($) item | |
SUBSEQUENT EVENTS | |||
Term of facility | 6 months | ||
Subsequent events | |||
SUBSEQUENT EVENTS | |||
Maximum borrowing capacity | $ 140 | $ 140 | |
Amount drawn | $ 40 | $ 100 | |
Financial covenants, accrued but unpaid | item | 5 | 5 | |
Subsequent events | SOFR | |||
SUBSEQUENT EVENTS | |||
Margin on interest rate | 0.85% |
FINANCIAL STATEMENT SCHEDULE _2
FINANCIAL STATEMENT SCHEDULE I (BALANCE SHEET) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and Cash Equivalents | $ 3,499,488 | $ 723,775 |
Prepaid expenses and other current assets | 52,932 | 41,684 |
Total current assets | 4,889,163 | 1,742,980 |
TOTAL ASSETS | 7,594,096 | 3,343,651 |
Current liabilities: | ||
Accrued expenses and other current liabilities | 51,497 | 40,848 |
Total current liabilities | 736,542 | 550,499 |
Equity: | ||
Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2020 and 2021; 369,878,552 shares issued and 365,235,402 shares outstanding as of December 31, 2020, 377,177,802 shares issued and 372,534,652 shares outstanding as of December 31, 2021) | 40 | 38 |
Additional paid-in capital | 2,211,203 | 1,016,855 |
Retained earnings | 2,898,843 | 1,079,042 |
Accumulated other comprehensive income (loss) | (176,032) | 67,773 |
Treasury shares, at cost (4,643,150 shares as of December 31, 2020 and 2021) | (126,678) | (1,749) |
Total Daqo New Energy Corp. shareholders' equity | 4,807,376 | 2,161,959 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 7,594,096 | $ 3,343,651 |
Ordinary shares: | ||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued | 405,620,792 | 377,177,802 |
Ordinary shares, shares outstanding | 391,023,327 | 372,534,652 |
Treasury Stock, Shares | 14,597,465 | 4,643,150 |
Parent Company | ||
Current assets: | ||
Cash and Cash Equivalents | $ 2,377 | $ 2,263 |
Prepaid expenses and other current assets | 371 | 379 |
Total current assets | 2,748 | 2,642 |
Investments in subsidiaries | 4,884,756 | 2,159,482 |
TOTAL ASSETS | 4,887,504 | 2,162,124 |
Current liabilities: | ||
Accrued expenses and other current liabilities | 80,128 | 165 |
Total current liabilities | 80,128 | 165 |
Equity: | ||
Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2020 and 2021; 369,878,552 shares issued and 365,235,402 shares outstanding as of December 31, 2020, 377,177,802 shares issued and 372,534,652 shares outstanding as of December 31, 2021) | 40 | 38 |
Additional paid-in capital | 2,211,203 | 1,016,855 |
Retained earnings | 2,898,843 | 1,079,042 |
Accumulated other comprehensive income (loss) | (176,032) | 67,773 |
Treasury shares, at cost (4,643,150 shares as of December 31, 2020 and 2021) | (126,678) | (1,749) |
Total Daqo New Energy Corp. shareholders' equity | 4,807,376 | 2,161,959 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 4,887,504 | $ 2,162,124 |
Ordinary shares: | ||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued | 405,620,792 | 377,177,802 |
Ordinary shares, shares outstanding | 391,023,327 | 372,534,652 |
Treasury Stock, Shares | 14,597,465 | 4,643,150 |
FINANCIAL STATEMENT SCHEDULE _3
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses: | |||
Total operating expenses, net | $ (367,296) | $ (45,790) | $ (46,137) |
Income from operations | 3,040,626 | 1,051,418 | 187,855 |
Income tax expense | 577,247 | 170,101 | 28,182 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | 1,819,801 | 748,924 | 129,195 |
Other comprehensive income: | |||
Comprehensive income attributable to Daqo New Energy Corp. ordinary shareholders | 1,567,001 | 794,084 | 175,399 |
Parent Company | |||
Operating expenses: | |||
General and administrative | (295,431) | (11,292) | (12,728) |
Total operating expenses, net | (295,431) | (11,292) | (12,728) |
Income from operations | (295,431) | (11,292) | (12,728) |
Interest income | 144 | 0 | 7 |
Income tax expense | (79,945) | (2,391) | |
Net loss before share of results of subsidiaries | (375,232) | (11,292) | (15,112) |
Equity in earnings of subsidiaries | 2,195,033 | 760,216 | 144,307 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | 1,819,801 | 748,924 | 129,195 |
Other comprehensive income: | |||
Foreign currency translation adjustments, net of tax of nil | (252,800) | 45,160 | 46,204 |
Total other comprehensive (loss) income: | (252,800) | 45,160 | 46,204 |
Comprehensive income attributable to Daqo New Energy Corp. ordinary shareholders | $ 1,567,001 | $ 794,084 | $ 175,399 |
FINANCIAL STATEMENT SCHEDULE _4
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF CASH FLOWS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES | |||
Net cash provided by operating activities | $ 2,462,652 | $ 638,989 | $ 209,703 |
INVESTING ACTIVITIES | |||
Net cash used in investing activities | (998,416) | (781,894) | (118,487) |
FINANCING ACTIVITIES | |||
Proceeds from options exercised | 995 | 2,139 | 580 |
Repurchase of ordinary shares | 124,929 | ||
Net cash (used in) provided by financing activities | 1,472,091 | 736,225 | (95,471) |
Net increase in cash, cash equivalents and restricted cash | 2,796,385 | 605,562 | 3,110 |
Cash, cash equivalents and restricted cash at the beginning of the year (includes $845,199, nil and nil of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2020, 2021 and 2022) | 723,966 | 118,404 | 115,294 |
Cash, cash equivalents and restricted cash at the end of the year | 3,520,351 | 723,966 | 118,404 |
Parent Company | |||
OPERATING ACTIVITIES | |||
Net cash provided by operating activities | 124,048 | (736) | (1,066) |
FINANCING ACTIVITIES | |||
Proceeds from options exercised | 995 | 2,139 | 580 |
Repurchase of ordinary shares | (124,929) | ||
Net cash (used in) provided by financing activities | (123,934) | 2,139 | 580 |
Net increase in cash, cash equivalents and restricted cash | 114 | 1,403 | (486) |
Cash, cash equivalents and restricted cash at the beginning of the year (includes $845,199, nil and nil of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2020, 2021 and 2022) | 2,263 | 860 | 1,346 |
Cash, cash equivalents and restricted cash at the end of the year | $ 2,377 | $ 2,263 | $ 860 |