Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document and Entity Information | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | DAQO NEW ENERGY CORP. |
Entity Central Index Key | 0001477641 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Trading Symbol | DQ |
Entity Common Stock, Shares Outstanding | 347,419,152 |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Entity Interactive Data Current | Yes |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 51,839,535 | $ 65,419,389 |
Restricted cash | 62,609,361 | 28,609,307 |
Short-term investments | 21,807,000 | |
Accounts receivable, net of allowance for doubtful accounts of nil as of December 31, 2018 and 2019 | 13,287 | 1,180,598 |
Notes receivable | 5,644,392 | 8,111,044 |
Prepaid expenses and other current assets | 15,343,671 | 10,335,501 |
Advances to suppliers | 1,544,474 | 3,327,951 |
Inventories, net | 36,391,463 | 15,449,367 |
Amount due from related parties | 16,521 | 815,035 |
Current assets associated with discontinued operations | 925,657 | 5,013,615 |
Total current assets | 174,328,361 | 160,068,807 |
Property, plant and equipment, net | 995,027,214 | 616,974,820 |
Prepaid land use rights, net | 29,593,265 | 23,923,272 |
Deferred tax assets | 1,351,883 | 821,137 |
Investment in an affiliate | 641,972 | 649,839 |
Operating lease right-of-use assets | 196,628 | 0 |
Non-current assets associated with discontinued operations | 216,698 | 52,491,206 |
TOTAL ASSETS | 1,201,356,021 | 854,929,081 |
Current liabilities: | ||
Short-term bank borrowings, including current portion of long-term bank borrowings | 128,611,710 | 38,205,864 |
Accounts payable | 12,713,395 | 9,195,467 |
Notes payable | 101,170,607 | 29,209,130 |
Advances from customers - short-term portion | 33,027,795 | 10,213,940 |
Payables for purchases of property, plant and equipment | 112,538,482 | 27,220,943 |
Accrued expenses and other current liabilities | 12,222,100 | 9,417,702 |
Amount due to related parties - short-term portion | 38,824,827 | 2,260,007 |
Income tax payable | 4,788,730 | 5,454,951 |
Lease liability - short-term portion | 84,819 | 0 |
Current liabilities associated with discontinued operations | 1,163,872 | 18,675,930 |
Total current liabilities | 445,146,337 | 149,853,934 |
Long-term bank borrowings | 151,518,023 | 133,312,370 |
Advances from customers - long-term portion | 2,154,300 | 7,269,000 |
Deferred government subsidies | 21,033,638 | 21,462,621 |
Amount due to related parties - long-term portion | 7,899,100 | 15,991,800 |
Deferred tax liabilities | 6,367,880 | 1,184,644 |
Lease liability - long-term portion | 77,323 | 0 |
Non-current liabilities associated with discontinued operations | 0 | 723,035 |
Total liabilities | 634,196,601 | 329,797,404 |
Commitments and contingencies (Note 17) | ||
Ordinary shares; | ||
$0.0001 par value 500,000,000 shares authorized as of December 31, 2018 and 2019; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018; 351,823,578 shares issued and 347,419,152 shares outstanding as of December 31, 2019 | 34,977 | 33,439 |
Additional paid-in capital | 387,371,083 | 368,681,449 |
Retained earnings | 200,922,577 | 171,398,185 |
Accumulated other comprehensive loss | (19,936,848) | (13,232,560) |
Treasury shares, at cost (4,643,150 shares as of December 31, 2018 and 2019) | (1,748,836) | (1,748,836) |
Total shareholders' equity | 566,642,953 | 525,131,677 |
Non-controlling interest | 516,467 | |
Total equity | 567,159,420 | 525,131,677 |
TOTAL LIABILITIES AND EQUITY | $ 1,201,356,021 | $ 854,929,081 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts | $ 0 | $ 0 |
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued | 351,823,578 | 351,823,578 |
Ordinary shares, shares outstanding | 347,419,152 | 332,029,752 |
Treasury Stock, shares | 4,643,150 | 4,643,150 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Revenues | $ 349,990,753 | $ 301,599,897 | $ 323,199,694 |
Cost of revenues | (269,887,185) | (203,486,191) | (179,151,930) |
Gross profit | 80,103,568 | 98,113,706 | 144,047,764 |
Operating (expenses) income: | |||
Selling, general and administrative expenses | (32,456,520) | (27,076,669) | (16,042,494) |
Research and development expenses | (5,708,325) | (2,736,520) | (676,323) |
Other operating income, net | 5,546,487 | 12,904,390 | 3,483,481 |
Total operating expenses, net | (32,618,358) | (16,908,799) | (13,235,336) |
Income from operations | 47,485,210 | 81,204,907 | 130,812,428 |
Interest expense | (10,396,961) | (10,762,677) | (16,262,205) |
Interest income | 983,158 | 1,235,873 | 464,515 |
Exchange (loss) gain | (184,926) | 1,836,160 | (5,853) |
Income before income taxes | 37,886,481 | 73,514,263 | 115,008,885 |
Income tax expense | (9,623,447) | (11,716,545) | (17,332,226) |
Net income from continuing operations | 28,263,034 | 61,797,718 | 97,676,659 |
(Loss) income from discontinued operations, net of tax | 1,260,790 | (23,032,181) | (3,821,259) |
Net income | 29,523,824 | 38,765,537 | 93,855,400 |
Net income (loss) attributable to non-controlling interest | (568) | 640,832 | 1,014,272 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | $ 29,524,392 | $ 38,124,705 | $ 92,841,128 |
NET EARNINGS (LOSS) PER ORDINARY SHARE | |||
Continuing operations | $ 0.08 | $ 0.20 | $ 0.36 |
Discontinued operations | 0.01 | (0.08) | (0.01) |
Basic-ordinary shares | 0.09 | 0.12 | 0.35 |
Continuing operations | 0.08 | 0.19 | 0.35 |
Discontinued operations | 0 | (0.07) | (0.01) |
Diluted-ordinary shares | $ 0.08 | $ 0.12 | $ 0.34 |
ORDINARY SHARES USED IN CALCULATING EARNINGS (LOSS) PER ORDINARY SHARE | |||
Basic-ordinary shares | 339,571,054 | 311,715,158 | 265,070,961 |
Diluted-ordinary shares | 349,961,558 | 325,506,335 | 272,926,319 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 29,523,824 | $ 38,765,537 | $ 93,855,400 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (6,701,765) | (26,356,406) | 21,978,054 |
Total other comprehensive income (loss) | (6,701,765) | (26,356,406) | 21,978,054 |
Comprehensive income | 22,822,059 | 12,409,131 | 115,833,454 |
Comprehensive income attributable to non-controlling interest | 1,955 | 500,505 | 1,163,319 |
Comprehensive income attributable to Daqo New Energy Corp. ordinary shareholders | $ 22,820,104 | $ 11,908,626 | $ 114,670,135 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Ordinary shares [Member] | Treasury Stock [Member] | Additional paid in capital [Member] | Retained Earnings [Member] | Accumulated other comprehensive income (loss) income [Member] | Noncontrolling interest [Member] | Total |
Balance at Dec. 31, 2016 | $ 262,956,278 | $ 240,111,533 | $ 40,432,352 | $ (8,721,820) | $ 1,629,161 | $ 271,728,922 | |
Balance, shares at Dec. 31, 2016 | 26,532 | (1,748,836) | |||||
Net income | 92,841,128 | 1,014,272 | 93,855,400 | ||||
Other comprehensive loss | 21,829,007 | 149,047 | 21,978,054 | ||||
Share-based compensation | 4,200,273 | 4,200,273 | |||||
Options exercised | $ 5,596,050 | 2,764,858 | 2,765,418 | ||||
Options exercised, shares | 560 | ||||||
Restricted shares vested | $ 2,366,374 | (236) | |||||
Restricted shares vested, shares | 236 | ||||||
Balance at Dec. 31, 2017 | $ 270,918,702 | 247,076,428 | 133,273,480 | 13,107,187 | 2,792,480 | 394,528,067 | |
Balance, shares at Dec. 31, 2017 | 27,328 | (1,748,836) | |||||
Net income | 38,124,705 | 640,832 | 38,765,537 | ||||
Other comprehensive loss | (26,216,079) | (140,327) | (26,356,406) | ||||
Share-based compensation | 13,788,049 | 13,788,049 | |||||
Options exercised | $ 230,225 | 110,845 | 110,868 | ||||
Options exercised, shares | 23 | ||||||
Restricted shares vested | $ 9,271,350 | (927) | |||||
Restricted shares vested, shares | 927 | ||||||
Follow-on equity offering, net of issuance costs of $6,919,202 | $ 51,609,475 | 106,616,482 | 106,621,643 | ||||
Follow-on equity offering, net of issuance costs of $6,919,202 shares | 5,161 | ||||||
Acquisition of non-controlling interest | 1,090,572 | (123,668) | (3,292,985) | (2,326,081) | |||
Balance at Dec. 31, 2018 | $ 332,029,752 | 368,681,449 | 171,398,185 | (13,232,560) | 525,131,677 | ||
Balance, shares at Dec. 31, 2018 | 33,439 | (1,748,836) | |||||
Net income | 29,524,392 | (568) | 29,523,824 | ||||
Other comprehensive loss | (6,704,288) | 2,523 | (6,701,765) | ||||
Share-based compensation | 17,896,942 | 17,896,942 | |||||
Options exercised | $ 2,474,950 | 793,983 | $ 794,230 | ||||
Options exercised, shares | 247 | 2,474,950 | |||||
Restricted shares vested | $ 12,914,450 | (1,291) | |||||
Restricted shares vested, shares | 1,291 | ||||||
Paid-in capital from non-controlling interests | 514,512 | $ 514,512 | |||||
Balance at Dec. 31, 2019 | $ 347,419,152 | $ 387,371,083 | $ 200,922,577 | $ (19,936,848) | $ 516,467 | $ 567,159,420 | |
Balance, shares at Dec. 31, 2019 | 34,977 | (1,748,836) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |
Follow-on equity offering, issuance costs | $ 6,919,202 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities: | |||
Net income | $ 29,523,824 | $ 38,765,537 | $ 93,855,400 |
Less: (Loss) income from discontinued operations, net of tax | 1,260,790 | (23,032,181) | (3,821,259) |
Net income from continuing operations | 28,263,034 | 61,797,718 | 97,676,659 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share-based compensation | 17,896,942 | 13,788,049 | 4,200,273 |
Depreciation of property, plant and equipment | 47,371,130 | 27,718,260 | 27,801,924 |
Non-cash lease expense | 49,226 | ||
Loss on disposal of property plant and equipment | 130,666 | ||
Inventory write-down | 326,598 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,162,813 | (539,597) | 1,172,506 |
Notes receivable | 2,388,577 | 12,022,847 | (10,197,038) |
Prepaid expenses and other current assets | (5,174,161) | (4,699,699) | 496,485 |
Advances to suppliers | 1,757,996 | (1,914,816) | (62,384) |
Inventories | (21,635,212) | (641,481) | (7,919,605) |
Amount due from related parties | 82 | 212 | |
Prepaid land use rights | 582,469 | 586,034 | 572,722 |
Right-of-use assets | (247,524) | ||
Accounts payable | 3,660,080 | (9,449,164) | 4,038,950 |
Notes payable | 78,385,678 | (14,204,999) | 199,562 |
Accrued expenses and other current liabilities | 2,943,201 | (918,399) | 4,581,224 |
Income tax payable | (605,281) | (7,314,062) | 7,253,601 |
Advances from customers | 18,062,953 | 2,076,037 | 8,386,416 |
Amount due to related parties | 102,542 | 8,793 | 1,000 |
Deferred government subsidies | (170,589) | (605,268) | (591,519) |
Lease liability | 163,517 | ||
Deferred taxes | 4,696,450 | (151,843) | (85,302) |
Net cash provided by operating activities-continuing operations | 179,980,439 | 77,558,492 | 137,656,352 |
Net cash provided by operating activities-discontinued operations | 1,010,130 | 17,994,548 | 5,048,042 |
Net cash provided by operating activities | 180,990,569 | 95,553,040 | 142,704,394 |
Investing activities: | |||
Purchases of property, plant and equipment | (279,044,684) | (143,064,872) | (64,084,712) |
Purchases of land use rights | (6,592,707) | ||
Investment in an affiliate | (63,793) | ||
Purchase of short-term investments | (37,860,000) | ||
Repayment of short-term investments | 21,726,000 | 15,144,000 | |
Acquisition of Xinjian Daqo Investment | 627,157 | 443,579 | |
Net cash used in investing activities-continuing operations | (263,284,234) | (165,337,293) | (64,148,505) |
Net cash (used in) provided by investing activities-discontinued operations | 1,456,521 | 616,988 | (3,752,066) |
Net cash used in investing activities | (261,827,713) | (164,720,305) | (67,900,571) |
Financing activities: | |||
Proceeds from related parties loans | 20,388,371 | 34,831,200 | 19,382,389 |
Repayment of related parties loans | (20,388,371) | (34,831,200) | (19,382,389) |
Proceeds from bank borrowings | 178,225,620 | 56,002,512 | 65,349,400 |
Repayment of bank borrowings | (74,553,606) | (59,819,936) | (96,200,000) |
Proceeds from options exercised | 791,493 | 686,596 | 2,238,854 |
Proceeds from follow-on equity offering | 113,540,845 | ||
Insurance costs for follow-on equity offering | (6,919,202) | ||
Paid-in capital received from non-controlling interests | 514,512 | ||
Net cash (used in) provided by financing activities-continuing operations | 104,978,019 | 103,490,815 | (28,611,746) |
Net cash used in financing activities-discontinued operations | (2,650,931) | (16,778,925) | (8,742,573) |
Net cash (used in) provided by financing activities | 102,327,088 | 86,711,890 | (37,354,319) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,315,735) | 4,909,097 | 3,335,715 |
Net increase in cash, cash equivalents and restricted cash | 20,174,209 | 22,453,722 | 40,785,219 |
Cash, cash equivalents and restricted cash at the beginning of the year (includes $3,723,807, $8,952,260 and $1,091,190 of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2016, 2017 and 2018) | 95,119,886 | 72,666,164 | 31,880,945 |
Cash, cash equivalents and restricted cash at the end of the year (includes $8,952,260, $1,091,190 and $845,199 of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2017, 2018 and 2019) | 115,294,095 | 95,119,886 | 72,666,164 |
Cash and cash equivalents | 52,684,734 | 66,401,408 | 60,676,605 |
Restricted cash | 62,609,361 | 28,718,478 | 11,989,559 |
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | 115,294,095 | 95,119,886 | 72,666,164 |
Supplemental disclosure of cash flow information: | |||
Interest paid, net of capitalized interest | 10,214,566 | 10,787,862 | 16,308,829 |
Income taxes paid | 5,546,373 | 19,452,799 | 9,526,485 |
Supplemental schedule of non-cash investing activities: | |||
Purchases of property, plant and equipment included in payables | 135,701,791 | 56,153,860 | 22,018,200 |
Purchase of property, plant and equipment included in amounts due to related parties - short-term portion | 26,539,448 | 2,240,686 | $ 1,825,617 |
Payables for acquisition of Xinjiang Daqo Investment included in amounts due to related parties - short-term portion | 7,899,100 | ||
Payables for acquisition of Xinjiang Daqo Investment included in amounts due to related parties - long-term portion | $ 7,899,100 | $ 15,991,800 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | $ 1,091,190 | $ 8,952,260 | $ 3,723,807 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | $ 845,199 | $ 1,091,190 | $ 8,952,260 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2019 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Daqo New Energy Corp. (the “Company”) and its wholly owned subsidiaries, Chongqing Daqo New Energy Co., Ltd. (“Chongqing Daqo”), Xinjiang Daqo New Energy Co., Ltd. (“Xinjiang Daqo”), Xinjiang Daqo Investment Co., Ltd. (“Xinjiang Daqo Investment”), Xinjiang Daqo Guodi Silicon Material Technology Co.,Ltd. (“Xinjiang Daqo Guodi”), and Xinjiang Daqo Lvchuang Environmental Technology Co.,Ltd. (“Xinjiang Daqo Lvchuang”) are collectively referred to as the Group. The Company was incorporated on November 22, 2007 in the Cayman Islands. Chongqing Daqo and Xinjiang Daqo were incorporated by the Company on January 14, 2008 and February 22, 2011, respectively, in the Peoples’ Republic of China (“PRC”). Xinjiang Daqo Investment was incorporated by Daqo Group Co, Ltd. (“Daqo Group”), the Company’s ultimate parent company, on March 10, 2011. Xinjiang Daqo Investment was acquired by Xinjiang Daqo in December 2018 and therefore became the Group’s wholly-owned subsidiary. Prior to September 7, 2018, the Group manufactured and sold polysilicon and wafers through Xinjiang Daqo and Chongqing Daqo. In September 2018, the Group made a strategic decision to discontinue its solar wafer manufacturing operations in its Chongqing business subsidiary. The operational results of the Chongqing wafer business have been excluded from the Groups financial results from continuing operations and have been separately presented under discontinued operations. Retrospective adjustments to the historical statements have also been made to provide a consistent basis of comparison for the financial results (see Note 3). Unless otherwise indicated, amounts provided in the Notes pertain to continuing operations only. In August 2015, Xinjiang Daqo issued stock representing 1% equity interest to Xinjiang Daqo Investment for total cash proceeds of $2.5 million, which was based on the fair value of Xinjiang Daqo. Xinjiang Daqo Investment’s equity interests in Xinjiang Daqo was presented as a non-controlling interest in the Group’s consolidated financial statements. On December 20, 2018, Xinjiang Daqo acquired 100% equity interest of Xinjiang Daqo Investment for a total cash consideration of $16.0 million. Following this acquisition, Xinjiang Daqo Investment became a subsidiary of Xinjiang Daqo and has been consolidated into the Group’s financial statements as of December 31, 2018. As a result of transaction above, the Group also acquired the non-controlling interest. (see Note 2). |
SUMMARY OF PRINCIPAL ACCOUNTING
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
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"). The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Group's ability to generate cash flows from operations, and the Group's ability to arrange adequate financing arrangements, including the renewal or rollover of its bank borrowings, to support its working capital requirements. As of December 31, 2019, the Group's current liabilities exceed its current assets by $270.8 million. Additionally, the Company had capital commitments of $53.9 million relating to the purchases of property, plant and equipment to be fulfilled in the next twelve months. Such negative working capital may raise substantial doubt about the Group's ability to continue as a going concern, which indicates that it is probable that the Group will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. However, the management has evaluated the significance of the conditions and regards the going concern assumption as appropriate based on the following considerations: 1. The Group generated net income and positive cash flow from operations for three consecutive years with a net operating cash inflow of $180.0 million for the year ended December 31, 2019. 2. In connection with the completion of the polysilicon Phase 4A expansion project in Xinjiang, the nameplate capacity of polysilicon increased from 30,000 MT per annum to 70,000 MT per annum starting from January 2020. The Company is expecting more operating cash flow will be generated and unit cost will be furthered reduced starting the year ending December 31, 2020. 3. The Group has performed a review of its cash flow forecasts for the twelve month period after the date that the financial statements are issued and believes that its operating cash flow will be positive. Furthermore, the management also has plans to alleviate substantial doubt about its ability to continue as a going concern: 1. On February 25, 2020, the Group obtained a letter of financial support from Daqo Group which has committed to provide sufficient financial support to the Group to ensure the Group has the funds required to satisfy its obligations as they come due in the normal course during the twelve months after the date that the financial statements are issued. 2. While there can be no assurance that the Group will be able to refinance its short-term bank borrowings as they become due, historically, the Group has renewed or rolled over most of its short term bank loans upon the maturity of the loans and believes the Group will continue to be able to do so. Based on the above factors and plans, management believes that adequate sources of liquidity will exist to fund the Group's working capital and capital expenditures requirements, and to meet its short term debt obligations, other liabilities and commitments as they become due during the twelve month period after the date that the financial statements are issued. (b) Basis of consolidations The consolidated financial statements include the financial statements of the Group. 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. 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. Management has made significant estimates in a variety of areas, including but not limited to allowance for doubtful accounts, useful lives and residual values of long-lived assets, impairment for long lived assets, valuation allowances for deferred tax assets, interest capitalization and certain assumptions used in the computation of share-based compensation and related forfeiture rates. (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, accounts receivable and notes receivable. The Group places its cash, cash equivalents and restricted cash in various financial institutions in the PRC. The Group believes that no significant credit risk exists as these banks are principally government-owned financial institutions with high credit ratings. Accounts receivable represent those receivables derived in the ordinary course of business. The Group conducts credit evaluations of customers to whom credit terms are extended. The Group establishes an allowance for doubtful accounts mainly based on aging of the receivables and other factors surrounding the credit risk of specific customers. There is no allowance for doubtful accounts as of December 31, 2018 and 2019, based on the aging of the receivables and the Group’s assessment of the customers’ credit risk. There is one customer that accounted for 10% or more of accounts receivable amounted to $1,087,719 as of December 31, 2018. There is another customer that accounted for 10% or more of accounts receivable amounted to $13,287 as of December 31, 2019. From time to time, certain accounts receivable balances are settled in the form of notes receivable. As of December 31, 2018 and 2019, notes receivable represents bank acceptance drafts that are non-interest bearing and due within six to twelve months. (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 $28,609,307 and $62,609,361 as of December 31, 2018 and 2019, respectively, are restricted bank deposits for notes issued by several banks for purchases of raw materials, plant and equipment and pledge of short-term bank borrowings. These 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 include wealth management products with variable interest rates or principal not-guaranteed with certain financial institutions, whereby the Group has the intent and the ability to hold to maturity within one year. The Group classifies the short-term investments as "held-to-maturity" securities and stated at amortized cost. For investments classified as held-to-maturity securities, the Group evaluates whether a decline in fair value below the amortized cost basis is other-than-temporary in accordance with ASC 320. The other-than-temporary impairment loss is recognized in earnings equal to the excess of the investments’ amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. No impairment loss in relation to its short-term investments was recorded for the year ended December 31, 2018 and 2019. (g) Allowance for doubtful accounts The Group determines its allowance for doubtful accounts by actively monitoring the financial condition of its customers to determine the potential for any nonpayment of trade receivables. In determining its allowance for doubtful accounts, the Group also considers other economic factors, such as aging trends. The Group believes that its process of specific review of customers combined with overall analytical review provides an effective evaluation of ultimate collectability of trade receivables. Provisions for allowance for doubtful accounts are recorded as general and administrate expense in the consolidated statements of operations. (h) 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 charges to inventories for the years ended December 31, 2017, 2018 and 2019 were nil, $851,008, and $326,598, respectively, of which $851,008 for the year ended December 31, 2018 is from discontinued operations. (i) 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 years Machinery and equipment years Furniture, fixtures and equipment 3-5 years Motor vehicles 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, 2017, 2018 and 2019 was $47,507, $1,203,547 and $6,608,928, respectively. (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 Group’s land use rights in the PRC are stated at cost less recognized lease expenses. Lease expense is recognized over the term of the agreement on a straight-line basis. The Group recorded lease expenses of $572,722, $586,034 and $582,469, for the years ended December 31, 2017, 2018 and 2019, 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 to perform 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 can be 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. For the years ended December 31, 2017, 2018 and 2019, the Group recorded impairment losses for long-lived assets associated with discontinued operations of $2,987,668, $18,769,938 and nil, respectively. Out the recorded total impairment losses, impairment losses of $2,987,668, $11,482,905 and nil incurred in 2017, 2018 and 2019 respectively, were related to the polysilicon assets identified as non-transferrable and/or not able to be reutilized by its Xinjiang polysilicon manufacturing or expansion projects. The remaining impairment losses of $7,287,033 incurred in 2018 were related to the assets of discontinued wafer manufacturing operations. No impairment loss for long-lived assets was recorded from continuing operations. (l) Lease Before January 1, 2019, the Group used the Accounting Standards Codification ("ASC Topic 840"), Leases, each lease is classified at the inception date as either a capital lease or an operating lease. All the Group's leases are classified as operating lease under ASC Topic 840. The Group's reporting for periods prior to January 1, 2019 continued to be reported in accordance with Leases (Topic 840). In February 2016, the FASB issued Accounting Standards Updates ("ASU") 2016-02, which supersedes existing guidance on accounting for leases in ASC Topic 840-Leases ("ASC 840") and generally requires all leases, including operating leases, to be recognized in the statement of financial position of lessees as right-of-use ("ROU") assets and lease liabilities, with certain practical expedients available. The Group 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 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 for its January 1, 2019 adoption of ASC 842 and at the commencement date of the lease for agreements commencing after adoption, as the rate implicit in the lease is not readily determinable. The Group uses the parent company's incremental borrowing rate as the discount rate for the lease as the group is unable to secure outside funding on their own without a parent company guarantee based on the nature of their business and structure within the group. For the initial measurement of the lease liabilities, the Group uses the discount rate as of the commencement date of the lease, incorporating the entire lease term. Current maturities and long-term portions of operating lease liabilities are classified as lease liabilities, current and lease liabilities, non-current, respectively, in the consolidated balance sheets. The lease liabilities, current were $84,819 and lease liabilities - long term portion were $77,323 for the year ended December 31, 2019. The ROU asset is measured at the amount of the lease liabilities with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred and lease incentives. There is no variable lease payments of the Group. The Right-of-use assets were $196,628 for the year ended December 31, 2019. (m) Revenue recognition As of January 1, 2018, the Company adopted ASU 2014‑09 Revenue from Contracts with Customers - Topic 606 and all subsequent ASUs that modified ASC 606. The Company has elected to apply the ASU and all related ASUs retrospectively to each prior reporting period presented. The implementation of the guidance had no impact on the measurement or recognition of revenue of prior periods, however, additional disclosures have been added in accordance with the ASU. The Group’s revenue is all derived from the sale of polysilicon from the polysilicon segment, which is the only remaining segment after the discontinuation of the wafer business in September 2018. The sale of polysilicon is all in PRC and the Group’s operations is in one PRC location, Xinjiang. Revenue cannot be disaggregated to a lower level or more than one categories to provide meaningful information. See Note 18 Segment Information. The Group recognizes sale of polysilicon at a point in time following the transfer of control of the 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 delivery to the customers. Variable consideration that could affect the Group’s reported revenues is sales returns, which would be recorded as a reduction of revenue. Return rights of defective products are typically contractually limited, which allows sales returns within a period ranging from 3 to 30 days upon delivery. Sales returns have been nil for each reporting period presented. No warranties, incentives, or rebates arrangements has been offered to customers. For majority of the sales arrangements, the Group requires 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 doubtful accounts. As of December 31, 2018 and 2019, accounts receivable totaled $1,180,598 and $13,287, respectively. The Group did not record any allowance for doubtful accounts as of December 31, 2018 and 2019. Advances from customers are to secure their polysilicon supply, which are applied against future purchases. Contract liabilities represent our obligations to transfer polysilicon for which the Group have 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 in the short-term and long-term advances from customers was $17.5 million and $35.2 million as of December 31, 2018 and 2019, respectively. Revenue recognized from the beginning advances from customers balance as of January 1, 2018 and January 1, 2019 was $16.4 million and $10.2 million, respectively. Practical Expedients and Exemptions The Group apply the new revenue standard requirements to a portfolio of contracts (or performance obligations) with similar characteristics for transactions where it is expected that the effects on the financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio. Therefore, the Group have elected the portfolio approach in applying the new revenue guidance. The Group’s revenue contracts provide for performance obligations that are fulfilled and transfer control to customers at point in time, involve the same pattern of transfer to the customer, and provide a right to consideration from our customers in an amount that corresponds directly with the value to the customer for the performance completed. Therefore, the Group recognize revenue in the amount to which the Group have a right to invoice. The Group generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling, general and administrative expenses. (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 expenses in the consolidated statements of operations. Costs to ship products to customers were $4,099,716, $4,474,956 and $6,311,797, respectively, for the years ended December 31, 2017, 2018 and 2019. (p) Research and development expenses Research and development expenses include materials 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 improvement to improve the production volume, efficiency and 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, 2017, 2018 and 2019 were $3,704,144, $13,136,922 and $5,576,300, respectively. Government grants related to fixed assets are recorded as long term liabilities and amortized on a straight-line basis over the useful life of the associated asset as an offset to depreciation expense. The Group did not receive any government grants related to fixed assets during the years ended December 31, 2017, 2018 and 2019. (r) Income taxes Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amount 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 on 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 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 shares on the grant date. The Group has made an estimate of expected forfeiture and is recognizing compensation costs only for those equity awards expected to vest. The share-based compensation expenses have been categorized as either selling, general and administrative expenses or cost of sales, depending on the job functions of the grantees. 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, 2017, 2018 and 2019, the Group recognized share-based compensation expense of $4,200,273, $13,788,049 and $17,896,942, respectively, which was recognized in the statements of operations as follows: Year ended December 31, 2017 2018 2019 Selling, general and administrative expenses $ 3,679,145 $ 12,461,838 $ 15,463,171 Cost of revenues 521,128 1,326,211 2,083,771 Research and development expenses — — 350,000 Total $ 4,200,273 $ 13,788,049 $ 17,896,942 (t) Earnings (loss) per ordinary share Basic earnings (loss) per ordinary share is computed by dividing the net income attributable to ordinary shares 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 Group is the U.S. dollar. Monetary assets and liabilities denominated in other 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 Group’s PRC subsidiaries 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 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 and restricted cash denominated in RMB amounted to $81,476,636 and $113,101,494 as of December 31, 2018 and 2019, respectively. (v) Comprehensive income (loss) Comprehensive income (loss) is the change in equity during a period from transactions and other events and circumstances from non-shareholder sources and included net income and foreign currency translation adjustments. As of December 31, 2017, 2018 and 2019, accumulated other comprehensive income (loss) was comprised entirely of foreign currency translation adjustments. (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, accounts receivable, notes receivable, amount due from related parties, accounts payable, notes payable, payables for purchase of property, plant and equipment, amounts due to related parties and bank borrowings. The carrying amounts of these short-term financial instruments approximate their fair values due to the short-term maturity of these instruments. The Group’s long-term bank borrowing consists of floating rate loans. The |
EXIT AND DISPOSAL ACTIVITIES
EXIT AND DISPOSAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2019 | |
EXIT AND DISPOSAL ACTIVITIES | |
EXIT AND DISPOSAL ACTIVITIES | 3. EXIT AND DISPOSAL ACTIVITIES Relocation of polysilicon operations to Xinjiang Starting 2013, the Group commenced a plan to expand the capacity at the Xinjiang plant and relocate significant production assets, with a carrying value of $144.7 million, from Chongqing Daqo to its Xinjiang plant and implemented a series of relocation process since then. In the year ended December 31, 2017, the Group relocated machinery and equipment of $0.2 million from Chongqing to its Xinjiang plant for technology improvement. After a comprehensive analysis of the expansion projects and comparability of the remained machinery and equipment, the Group identified assets of $3.0 million that were not transferrable and could not be reutilized by Xinjiang expansion project in 2017. Accordingly, an impairment charge of $3.0 million was recognized during the year. During the year ended December 31, 2017, an additional $0.2 million relocation cost was incurred, which was recorded in selling, general and administrative expenses. In the year ended December 31, 2018, the Group has continuously assessed the remaining polysilicon assets with a carrying value of $11.5 million in Chongqing and considering the remaining assets became no longer practicable in 2018, and the Group fully impaired the remaining assets. Discontinued operations In September 2018, the Group made a strategic decision to discontinue its Chongqing business subsidiary, including its solar wafer manufacturing operations, to accommodate the increasingly challenging market conditions. Accordingly, the Company recorded impairment losses of $7.3 million for the machinery and equipment related to the discontinued wafer manufacturing operations in 2018. The remaining long-lived assets located in Chongqing including property, plant and equipment of $57.8 million and prepaid land use rights of $1.7 million were considered held for sale as of December 31, 2018. As described earlier, the Group gradually transferred and reutilized significant polysilicon productions assets to Xinjiang plant since 2013. Chongqing Daqo and Xinjiang Daqo entered into long-term lease contract for the machinery and equipment relocated. Considering these assets will continuously and steadily operate along with existing polysilicon facility in Xinjiang plant, the Group decided to record these assets as continuing operations in financial statements as of December 31, 2019, which amounted to $43.1 million. During the year ended December 31, 2019, following a comprehensive analysis, the Group suspended its plan to sell the idle wafer plant and land use right, instead the Group decided to rent out the idle wafer plant and land in the next 5 years and then sell these assets as appropriate. Accordingly, the Group recorded these assets, amounted to $6.7 million and the related $0.2 million depreciation and amortization expenses, as continuing operations in financial statements. Retrospective adjustments to the historical statements are made to provide a consistent basis of comparison for the financial results. The discontinuation of the solar wafer manufacturing operations represents a strategic shift and has a major effect on the Group's result of operations. Accordingly, assets and liabilities related to the discontinued Chongqing subsidiary have been reclassified as assets and liabilities associated with discontinued operations, while results of operations and cash flows related to the Chongqing subsidiary were reported as income (loss) and cash flows from discontinued operations, including comparatives in the accompanying consolidated financial statements for all periods presented. Assets and liabilities of the discontinued operations December 31, 2018 2019 ASSETS: Cash and cash equivalents $ 982,019 $ 845,199 Restricted cash 109,171 — Notes receivable 1,524,747 64,629 Prepaid expenses and other current assets 23,889 15,341 Advances to suppliers 6,132 488 Amount due from related parties 2,367,657 — Total current assets associated with discontinued operations $ 5,013,615 $ 925,657 Long-lived assets held-for-sale 52,491,206 216,698 Total non-current assets associated with discontinued operations $ 52,491,206 $ 216,698 LIABILITIES: Short-term bank borrowings, including current portion of long-term bank borrowings $ 10,176,600 $ — Accounts payable 685,569 541,696 Notes payable 109,171 — Advances from customers — 2,046 Payables for purchases of property, plant and equipment 1,074,155 359,119 Accrued expenses and other current liabilities 1,315,848 73,129 Amount due to related parties 5,314,587 187,882 Total current liabilities associated with discontinued operations $ 18,675,930 $ 1,163,872 Deferred government subsidies 723,035 — Total non-current liabilities associated with discontinued operations $ 723,035 $ — Results of the discontinued operations Year ended December 31, 2017 2018 2019 Revenues $ 29,652,458 $ 7,112,528 $ — Cost of revenues (29,960,870) (9,510,064) — Gross loss (308,412) (2,397,536) — Operating (expenses) income: Selling, general and administrative expenses (1,621,977) (2,723,335) (147,057) Research and development expenses (204,658) (608) — Long-lived assets impairment (2,987,668) (18,769,938) — Other operating income, net 3,019,556 1,928,362 1,485,183 Total operating income (expenses) (1,794,747) (19,565,519) 1,338,126 (Loss) income from operations (2,103,159) (21,963,055) 1,338,126 Interest expense (1,743,124) (1,074,251) (78,728) Interest income 22,716 22,794 1,391 Exchange gain (loss) 2,308 (17,669) 1 (Loss) income from discontinued operations, net of tax of nil $ (3,821,259) $ (23,032,181) $ 1,260,790 All notes to the accompanying consolidated financial statements have been retrospectively adjusted to reflect the effect of the discontinued operations, where applicable. Condensed cash flow of the discontinued operations Year ended December 31, 2017 2018 2019 Net cash provided by operating activities $ 5,048,042 $ 17,994,548 $ 1,010,130 Net cash (used in) provided by investing activities (3,752,066) 616,988 1,456,521 Net cash used in financing activities (8,742,573) (16,778,925) (2,650,931) |
FOLLOW-ON EQUITY OFFERINGS
FOLLOW-ON EQUITY OFFERINGS | 12 Months Ended |
Dec. 31, 2019 | |
FOLLOW-ON EQUITY OFFERINGS | |
FOLLOW-ON EQUITY OFFERINGS | 4. FOLLOW-ON EQUITY OFFERINGS In 2018, the Company issued 2,064,379 America depositary shares ("ADSs"), representing 51,609,475 ordinary shares, through a follow-on equity offering. The proceeds, net of issuance cost of $6.9 million, were $106.6 million. |
PREPAID EXPENSE AND OTHER CURRE
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 5. PREPAID EXPENSE AND OTHER CURRENT ASSETS Prepaid expense and other current assets consist of the following: December 31, 2018 2019 Spare parts $ 5,011,781 $ 2,912,745 Prepaid value added tax (“VAT”) 4,768,552 11,525,475 Prepaid insurance fee 153,751 260,395 Others 401,417 645,056 Total $ 10,335,501 $ 15,343,671 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
INVENTORIES | 6. INVENTORIES Inventories consist of the following: December 31, 2018 2019 Raw materials $ 3,821,620 $ 12,965,337 Work-in-process 5,711,848 7,262,021 Finished goods 5,915,899 16,164,105 Total $ 15,449,367 $ 36,391,463 Inventory write-down was nil, nil and $326,598 for the years ended December 31, 2017, 2018 and 2019. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
PROPERTY, PLANT AND EQUIPMENT, NET | 7. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consist of the following: December 31, 2018 2019 Cost Buildings and plant $ 330,500,911 $ 400,843,258 Machinery and equipment 335,808,916 821,582,040 Furniture, fixtures and equipment 25,953,939 44,550,155 Motor vehicles 582,375 905,217 Less: Accumulated depreciation (133,334,881) (288,194,536) Property, plant and equipment, net $ 559,511,260 $ 979,686,134 Construction in process 57,463,560 15,341,080 Total $ 616,974,820 $ 995,027,214 Due to the change of management's plan as described in Note 3, machinery and equipment of $43.1 million as well as plant of $5.1 million are reclassified from assets held for sale to property, plant and equipment as of December 31, 2019. Depreciation expense was $27,801,924, $27,718,260 and $47,371,130 for the years ended December 31, 2017, 2018 and 2019, respectively. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2019 | |
BORROWINGS | |
BORROWINGS | 8. BORROWINGS The Group’s bank borrowings consist of the following: December 31, 2018 2019 Short-term bank borrowings $ 34,135,224 $ 79,062,810 Long-term bank borrowings, current portion 4,070,640 49,548,900 Total borrowings, current 38,205,864 128,611,710 Long-term bank borrowings, non-current portion 133,312,370 151,518,023 Total $ 171,518,234 $ 280,129,733 Short-term bank borrowings The Group’s short-term bank borrowings consist of the following: December 31, 2018 2019 Short-term borrowings guaranteed by Daqo Group and its related parties $ 29,076,000 $ 79,062,810 Short-term borrowings pledged by certificate of deposit 5,059,224 — Total $ 34,135,224 $ 79,062,810 The weighted average interest rate on the short-term bank borrowing was 5.1%, 5.0% and 5.3% in the years ended December 31, 2017, 2018 and 2019, respectively. Long-term bank borrowings The long-term bank borrowings, including current portion, as of December 31, 2018 and 2019 are comprised of: December 31, 2018 2019 Borrowing from Shihezi Rural Cooperative Bank $ 17,445,600 $ 27,287,800 Borrowing from Chongqing Rural Commercial Bank 119,937,410 117,049,223 Borrowing from Bank of China — 56,729,900 Total $ 137,383,010 $ 201,066,923 On June 25, 2015, Xinjiang Daqo entered into a six-year long term facility agreement with Chongqing Rural Commercial Bank. Such borrowing is restricted to renovation and extension project of polysilicon and has a maximum borrowing credit amounted to $96.1 million, with an interest rate of 20% above the five-year long term interest rate issued by People’s Bank of China. On May 30, 2016, an amendment to this credit facility was signed between Xinjiang Daqo and Chongqing Rural Commercial Bank, under which the borrowing is guaranteed by Chongqing Daqo, Daqo Group and three affiliated companies under Daqo Group. During the year ended December 31, 2019, Xinjiang Daqo has repaid $1.4 million. The outstanding bank borrowing was $48.8 million as of December 31, 2019. Xinjiang Daqo had no facility available for future draw down as of December 31, 2019. There is no financial covenants associated with the facility. On May 30, 2016, Xinjiang Daqo entered into a seven-year long term facility agreement with Chongqing Rural Commercial Bank. Such borrowing is restricted to extension project of polysilicon Phase 3A and has a maximum credit amounted to $76.8 million, with an interest rate of 20% above the five-year long term interest rate issued by People’s Bank of China. The borrowing is guaranteed by Chongqing Daqo, Daqo Group and three affiliated companies under Daqo Group. During the year ended December 31, 2019, there was no repayment occurred. The outstanding bank borrowing was $68.2 million as of December 31, 2019. Xinjiang Daqo had no facility available for future draw down as of December 31, 2019. There is no financial covenants associated with the facility. On June 25, 2018, Xinjiang Daqo pledged its land use rights of $17.2 million, plants and buildings of $270.8 million, as well as machine and equipment of $190.7 million as collaterals for these above credit facilities with Chongqing Rural Commercial Bank. On November 1, 2018, Xinjiang Daqo entered into a three-year long term facility agreement with Xinjiang Shihezi Rural Cooperative Bank. Such borrowing is restricted to renovation and extension project of polysilicon and has a maximum borrowing credit amounted to $29.0 million, with an interest rate of 6.2%. Xinjiang Daqo pledged its land use rights and equipment as collaterals for this credit facility in 2018. During the year ended December 31, 2019, Xinjiang Daqo had drawn down the rest of facility at an interest rate of 6.2% and repaid $29.0 million. The outstanding bank borrowing was nil as of December 31, 2019 and the facility agreement terminated. On March 25, 2019, Xinjiang Daqo entered into a three-year long term facility agreement with Xinjiang Shihezi Rural Cooperative Bank. Such borrowing is restricted to operating and manufacturing expenditure and has a maximum borrowing credit amounted to $28.7 million , with an interest rate of 6.2%. The borrowing is guaranteed by Daqo Group. During the year ended December 31, 2019, Xinjiang Daqo had drawn down $28.7 million at an interest rate of 6.2% and repaid $1.4 million. The outstanding bank borrowing was $27.3 million as of December 31, 2019. Xinjiang Daqo had no facility available for future draw down as of December 31, 2019. There is no financial covenants associated with the facility. On April 15, 2019, Xinjiang Daqo entered into a five-year long term facility agreement with Bank of China. Such borrowing is restricted to extension project of polysilicon Phase 4A and has a maximum credit amounted to $57.4 million, with an interest rate of 10% above the five-year long term interest rate issued by People's Bank of China. The borrowing is guaranteed by Daqo Group and Daqo New Energy Corp.. Xinjiang Daqo pledged its land use rights of $6.6 million as well as machinery and equipment of $98.0 million as collaterals for this credit facility. During the year ended December 31, 2019, Xinjiang Daqo has repaid $0.7 million. The outstanding bank borrowing was $56.7 million as of December 31, 2019. Xinjiang Daqo had no facility available for future draw down as of December 31, 2019. The borrowing contains a financial covenant of asset-liability ratio not reach to 70%, and Xinjiang Daqo was in compliance as of December 31, 2019. The weighted average interest rate in the years ended December 31, 2017, 2018 and 2019 for the Group’s long-term bank borrowings was 5.9%, 5.9% and 5.7%, respectively. The principal maturities of these long-term bank borrowings as of December 31, 2019 are as follows: Year ending December 31, Amount 2020 $ 49,548,900 2021 56,729,900 2022 56,011,800 2023 33,749,623 2024 5,026,700 Total $ 201,066,923 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: December 31, 2018 2019 Accrued payroll and welfare $ 6,526,287 $ 6,970,058 Exercised shared based compensation due to employee — 1,093,257 Accrued shipment expenses 567,438 1,011,320 Bid Bond 936,294 810,868 Accrued professional fees 187,027 368,587 Other tax payables 364,223 367,467 Interest payable 297,776 468,013 Others 538,657 1,132,530 Total $ 9,417,702 $ 12,222,100 |
ADVANCES FROM CUSTOMERS
ADVANCES FROM CUSTOMERS | 12 Months Ended |
Dec. 31, 2019 | |
ADVANCES FROM CUSTOMERS | |
ADVANCES FROM CUSTOMERS | 10. 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, 2018 2019 Customer A $ 15,827,579 $ 28,123,324 Customer B 392,037 4,184,426 Customer D — 1,503,529 Customer E 1,017,427 905,840 Others 245,897 464,976 Total $ 17,482,940 $ 35,182,095 Less: Advances from customers – short-term portion $ 10,213,940 $ 33,027,795 Advances from customers – long-term portion $ 7,269,000 $ 2,154,300 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 11. FAIR VALUE MEASUREMENTS Nonrecurring Fair Value Measurements The Group measures long-lived assets at fair value on a nonrecurring basis only if an impairment or observable price adjustment is recognized in the current period. The Group recorded $18.8 million and nil impairment losses on its long-lived assets for the years ended December 31, 2018 and 2019 respectively. The following table displays assets that were measured at fair value on a non-recurring basis in 2018: Year ended December 31, 2018 Carrying amount Quoted Prices in Significant before Active Markets Other Significant impairment for Identical Observable Unobservable Total Description losses Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Losses Property, plant and equipment – cannot be relocated to Xinjiang plant (Note 3) $ $ — $ — $ — $ Machinery and equipment related to discontinued wafer manufacturing operations (Note 3) $ $ — $ — $ $ Total $ 78,293,526 $ — $ — $ 59,523,588 $ 18,769,938 |
MAINLAND CHINA CONTRIBUTION PLA
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 12 Months Ended |
Dec. 31, 2019 | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 12. 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, 2017, 2018 and 2019, the Group recognized expenses relating to its contribution to the government sponsored defined contribution plans of $2,242,577, $2,915,327 and $3,538,470, respectively. (b) Statutory Reserves and Restricted Assets Foreign invested enterprises in PRC 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, 2017, 2018 and 2019, the Group’s aggregate balance of the statutory common reserves was $31,991,537, $39,387,239 and $43,326,113, respectively. In accordance with relevant PRC laws and regulations, the Group’s PRC subsidiaries are prohibited to make distribution of their registered capital and statutory reserves in the form of cash dividends, loans or advances and the related restricted portion amounted to $362,059,176 as of December 31, 2019. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | 13. INCOME TAXES Cayman Islands Tax The Company is incorporated in the Cayman Islands and is not subject to tax in this jurisdiction. PRC Tax 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%. Chongqing Daqo is a foreign invested enterprise established on January 14, 2008 located in Chongqing . During the year ended December 31, 2018 and 2019, the statutory enterprise income tax rate of 25% is applicable to Chongqing Daqo. Xinjiang Daqo is a foreign-invested enterprise established on February 22, 2011 located in Shihezi Economic Development Area in Xinjiang Autonomous Region. On November 25, 2014, Xinjiang Daqo obtained a HNTE certificate and renewed it on August 28, 2017, which is valid till 2019. During the years ended December 31, 2017, 2018 and 2019, Xinjiang Daqo was entitled to a preferential tax rate of 15% because of its HNTE status. Xinjiang Daqo Investment is a foreign-invested enterprise established on March 10, 2011 located in Shihezi Economic Development Area in Xinjiang Autonomous Region. During the year ended December 31, 2019, the statutory enterprise income tax rate of 25% is applicable to Xinjiang Daqo Investment. During the year ended December 31, 2019, the statutory enterprise income tax rate of 25% is applicable to Xinjiang Daqo Guodi and Xinjiang Daqo Lvchuang, which both located in Shihezi Economic Development Area in Xinjiang Autonomous Region. 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. The Company’s PRC subsidiaries’ retained earnings have been and will be permanently reinvested to the PRC subsidiaries. Therefore, no dividend withholding tax was accrued. 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 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 2014, the Group’s PRC subsidiaries are 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, 2017, 2018 and 2019, respectively. Income tax expenses comprise: Year ended December 31, 2017 2018 2019 Current tax expenses $ 17,417,528 $ 11,868,388 $ 4,941,092 Deferred tax (benefit) expenses (85,302) (151,843) 4,682,355 Total $ 17,332,226 $ 11,716,545 $ 9,623,447 The principal components of deferred income tax assets and liabilities from continuing operations are as follows: December 31, 2018 2019 Deferred tax assets: Long-lived assets depreciation $ 821,137 $ 1,351,883 Net operating loss carried forward — 729,231 Sub-total 821,137 2,081,114 Valuation Allowance — (729,231) Total deferred tax assets $ 821,137 $ 1,351,883 Deferred tax liabilities: Long-lived assets depreciation $ — $ (5,226,521) Difference in basis of buildings $ (1,184,644) $ (1,141,359) Total deferred tax liabilities $ (1,184,644) $ (6,367,880) The principal components of deferred income tax assets and liabilities from discontinued operations are as follows: December 31, 2018 2019 Deferred tax assets: Net operating loss carried forward $ 17,293,577 $ 17,880,855 Government grants related to assets 180,759 98,492 Long-lived assets impairment & depreciation 8,358,235 4,283,974 Others 1,229,693 1,066,379 Sub-total 27,062,264 23,329,700 Valuation Allowance (27,062,264) (23,329,700) Total deferred tax assets $ — $ — The changes of valuation allowance are as follows: Year ended December 31, 2017 2018 2019 Beginning balance $ 38,729,208 $ 41,316,449 $ 27,062,264 Reversal (24,771) (12,515,962) (2,698,440) Foreign exchange effect 2,612,012 (1,738,223) (304,893) Ending Balance $ 41,316,449 $ 27,062,264 $ 24,058,931 The Group uses the asset and liability method to record related deferred tax assets and liabilities. The Group considers positive and negative evidences 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 has provided a full valuation allowance for the deferred tax assets relating to Chongqing Daqo and Xinjiang Investment as of December 31, 2017, 2018 and 2019 in the amount of $41,316,449, $27,062,264 and $24,058,931, 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 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, 2017 2018 2019 PRC Enterprise Income Tax 25 % 25 % 25 % Preferential income tax rate of a subsidiary (10) % (11) % (14) % Effect of different reversal rate — — 5 % Additional tax deductions (1) % (3) % (3) % Different tax rate in other jurisdictions 1 % 5 % 12 % Effective tax rate 15 % 16 % 25 % Xinjiang Daqo enjoys the preferential tax rate of 15%, which may be extended if the requirements of High and New Technology Enterprise are satisfied. The impact of the preferential tax rates decreased income taxes by $11.3 million, $7.8 million and $5.2 million for the years of 2017, 2018 and 2019, respectively. The benefit on net income per share was $0.04, $0.02 and $0.02 for the years of 2017, 2018 and 2019, respectively. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
SHARE BASED COMPENSATION | |
SHARE BASED COMPENSATION | 14. 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. During the year ended December 31, 2015, the Company granted 8,134,375 share options to its officers, directors and employees at the weighted average grant date fair value of $0.59. No options were granted during the years ended December 31, 2017, 2018 and 2019. On January 12, 2015, the Company modified the exercise price to $0.87 for a total number of 6,274,166 previously granted options, in order to provide appropriate incentives to the relevant employees and executive officers of the Group. The fair value of the options under revised terms was $0.55 and $0.52. The total incremental cost associated with the modification was $241,557, of which $60,107 was recognized immediately for the options vested prior to the date of the modification and the remaining share-based compensation charges of $181,470 are recognized over the remaining vesting period of the modified options. On September 9, 2015, the Company modified the exercise price for a total number of 12,569,166 options granted before to $0.59, in order to provide appropriate incentives to the relevant employees and executive officers of the Company. The fair value of the options under revised terms for five batches granted on January 28, 2014, January 12, 2015 and July 6, 2015 was $0.38, $0.35, $0.38, $0.37 and $0.40, respectively. The total incremental cost associated with the modification was $282,581, of which $123,322 was recognized immediately for the options vested prior to the date of the modification and the remaining share-based compensation charges of $159,259 are recognized over the remaining vesting period of the modified options. 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. The following assumptions were used in the Binomial option pricing model: Year Ended December 31, 2015 Average Post- risk-free vesting Options rate of Exercise Volatility Dividend forfeiture granted return multiple rate yield rate January 12, 2015 2.82 % 1.8 - 3 times 93.0 % 0 % 5 % - 8 % July 6, 2015 3.20 % 3 times 91.0 % 0 % 5 % September 9, 2015 2.94 % - 3.08 % 1.8 - 3 times 91.0 % - 92.0 % 0 % 5 % - 8 % The risk-free rate of return is based on the yield curve of China USD sovereign bond commensurate with the same maturity at the respective grant dates. The exercise multiple is estimated by reference to the proprietary research and empirical studies. The expected volatility is based on the average of historical daily annualized share price volatility of 6 comparable companies over a normalized period that commensurate with the option life of 10 years. The post-vesting forfeiture rate is based on the historical data and management’s best Estimation. A summary of the aggregate option activity and information regarding options outstanding as of December 31, 2019 is as follows: Weighted Weighted Average Average Aggregate Number of Exercise Remaining Intrinsic Options Price Contract Life Value Options outstanding on January 1, 2019 9,240,067 0.49 — — Granted — — — — Forfeited — — — — Expired — — — — Exercised (2,474,950) 0.32 — — Options outstanding on December 31, 2019 6,765,117 0.56 10,079,601 Options vested or expected to vest on December 31, 2019 20,207,103 0.47 31,941,622 Options exercisable on December 31, 2019 6,764,509 0.56 10,078,718 The share-based compensation expense related to stock options of approximately $1,559,863, $684,773 and $99,895 were recognized by the Group for the years ended December 31, 2017, 2018 and 2019, respectively. 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 of the RSUs will be vested on the grant date and the remaining 5/6 of the RSUs will be vested on each of the monthly anniversary from July 6, 2018 for thirty months. In addition, on June 6, 2018, the Company granted RSUs to acquire 25,275,880 ordinary shares to certain directors, executive officers other than the chief executive officer and employees pursuant to the Daqo New Energy Corp. 2018 Share Incentive Plan, where the RSUs will be vested monthly in each of the next five years starting from June 6, 2018. 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. 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. A summary of the non-vested RSU activity in 2019 is as follows: Weighted Average Number of Grant Date RSUs Fair Value Nonvested RSUs on January 1, 2019 43,487,613 $ 1.39 Granted — — Vested (12,914,511) 1.39 Forfeited (55,250) 1.42 Nonvested RSUs on December 31, 2019 30,517,852 $ 1.39 The share-based compensation expense related to RSUs of $17,797,047 was recognized by the Group for the years ended December 31, 2019. As of December 31, 2019, there was $42,276,119 in total unrecognized compensation cost related to nonvested RSUs, which is expected to be recognized over a weighted-average period of 2.74 years. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
RELATED PARTY TRANSACTIONS AND BALANCES | 15. 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 which is 100% held by Daqo Group Daqo Solar Co. Ltd (“Daqo Solar”) An affiliated company which is 100% held by Daqo Group Xinjiang Daqo Investment Co., Ltd. ("Xinjiang Daqo Investment") An affiliated company which is 100% held by Daqo Group before December 20,2018 and is 100% held by the Group since December 20,2018 Daqo New Material Co., Ltd. ("Daqo New Material") An affiliated company which was 100% held by Daqo Group Chongqing Daqo Tailai Electric Co., Ltd. (“Chongqing Daqo Tailai”) An affiliated company which is 100% held by Daqo Group Nanjing Daqo Transformer Systems Co., Ltd. (“Nanjing Daqo Transformer”) An affiliated company which is 100% held by Daqo Group Jiangsu Daqo Changjiang Electric Co., Ltd. (“Jiangsu Daqo”) An affiliated company which is 100% held by Daqo Group Nanjing Daqo Electric Co., Ltd. (“Nanjing Daqo Electric”) An affiliated company which is 100% held by Daqo Group Zhenjiang Electric Equipment Co., Ltd. ( “Zhenjiang Electric”) An affiliated company which is 100% held by Daqo Group Daqo Investmsnt Co.,Ltd.("Daqo Investment") An affiliated company which is 100% held by Daqo Group (2) Related party balances: The balances due from related parties of continuing and discontinued operations are as follows: December 31, 2018 2019 Amounts due from related parties (continuing operations) Xinjiang Daqo Tianfu Thermoelectric $ 629,495 $ — Others 185,540 16,521 Total $ 815,035 $ 16,521 Amounts due from related parties (discontinued operations) Zhenjiang Daqo $ 1,453,800 $ — Others 913,857 — Total $ 2,367,657 $ — The balances due to related parties – short-term portion of continuing operations are as follows: December 31, 2018 2019 Amounts due to related parties – short term portion (continuing operations) Nanjing Daqo Transformer — 9,637,251 Chongqing Daqo Tailai $ 1,825,680 $ 8,004,373 Daqo Group 10,365 7,904,387 Daqo New Material — 4,265,514 Nanjing Daqo Electric 126,332 3,240,501 Jiangsu Daqo 143,527 3,162,300 Zhenjiang Electric — 1,489,553 Others 154,103 1,120,948 Total $ 2,260,007 $ 38,824,827 Amounts due to related parties – short term portion (discontinued operations) Daqo New Material $ 5,314,587 $ — Others — 187,882 Total $ 5,314,587 $ 187,882 The balance due to related parties – long-term portion (continuing operations) of $7.9 million and $16.0 million represents the consideration payables to Daqo Group for the acquisition of Xinjiang Daqo Investment as of December 31, 2019 and 2018, respectively. (3) Related party transactions: The material transactions with Daqo Group and its subsidiaries were as follows: Transaction Year Ended December 31, Name of Related parties Nature 2017 2018 2019 Daqo Group Proceeds from interest free loans $ 2,696,513 $ 25,744,800 $ — Repayment of interest free loans 2,696,513 36,648,480 — Repayment of interest bearing loans 15,495,451 — — Zhenjiang Daqo Proceeds from interest free loans — 10,903,680 — Repayment of interest free loans — — — Sales 13,442,273 6,694,997 3,987,080 Daqo Solar Proceeds from interest free loans 40,089,689 55,613,463 16,004,820 Repayment of interest free loans 40,388,195 55,650,696 16,004,820 Nanjing Daqo Transformer Purchase-Fixed assets — 6,201,243 12,337,022 Proceeds from interest free loans — — 1,842,582 Repayment of interest free loans — — 1,842,582 Xinjiang Daqo Investment Proceeds from interest free loans 14,356,000 3,937,440 * Repayment of interest free loans 14,356,000 4,020,732 * Daqo New Material Purchase-Fixed assets 7,390,693 — — Proceeds from interest free loans 6,029,877 1,893,000 — Repayment of interest free loans 10,818,493 1,893,000 — Chongqing Daqo Tailai Purchase-Fixed assets 715,361 8,240,830 15,212,713 Proceeds from interest free loans — 6,209,040 2,540,969 Repayment of interest free loans — 6,209,040 2,540,969 Jiangsu Daqo Purchase-Fixed assets — 1,326,634 4,115,164 Nanjing Daqo Electric Purchase-Fixed assets — 1,439,332 6,228,522 Zhenjiang Electric Purchase-Raw material — 331,353 1,699,536 Total Sales $ 13,442,273 $ 6,694,997 $ 3,987,080 Purchase-Fixed assets $ 8,106,054 $ 17,208,039 $ 37,893,421 Purchase-Raw material $ — $ 331,353 $ 1,699,536 Proceeds from related parties loans $ 63,172,079 $ 104,301,423 $ 20,388,371 Repayment of related parties loans $ 83,754,652 $ 104,421,948 $ 20,388,371 * Xinjiang Daqo Investment became the Group's subsidiary since December 20, 2018 and was consolidated into the Group's financial results as of December 31 2018 and 2019, accordingly its transaction in 2019 will not be presented as related party transaction. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 16. EARNINGS PER SHARE The calculation of earnings (loss) per share is as follows: Year ended December 31, 2017 2018 2019 Numerator used in basic and diluted earnings per share: Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations $ 96,662,387 $ 61,156,886 $ 28,263,602 (Loss) income from discontinued operations, net of tax (3,821,259) (23,032,181) 1,260,790 Net income attributable to Daqo New Energy Corp. ordinary shareholders—basic and diluted $ 92,841,128 $ 38,124,705 $ 29,524,392 Denominator used in basic and diluted earnings per share: Weighted average number of ordinary shares outstanding used in computing earnings per share-basic 265,070,961 311,715,158 339,571,054 Plus: Dilutive effects of share options 6,020,839 6,346,349 5,568,144 Dilutive effects of RSUs 1,834,519 7,444,828 4,822,360 Weighted average number of ordinary shares outstanding used in computing earnings per share—diluted 272,926,319 325,506,335 349,961,558 Basic earnings per share-continuing operations $ 0.36 $ 0.20 $ 0.08 Basic earnings (loss) per share-discontinued operations $ (0.01) $ (0.08) $ 0.01 NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Basic $ 0.35 $ 0.12 $ 0.09 Diluted earnings per share-continuing operations $ 0.35 $ 0.19 $ 0.08 Diluted earnings (loss) per share-discontinued operations $ (0.01) $ (0.07) $ 0.00 NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Diluted $ $ $ 0.08 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES Capital commitments As of December 31, 2019, commitments outstanding for the purchases of property, plant and equipment approximated $53.9 million, which will be due subsequent to receipt of the purchases. Lease commitments The operating lease commitments as of December 31, 2019 were principally for the office rental from Daqo Group. The lease expense was $37,756, $38,633 and $69,028 for the years ended December 31, 2017, 2018 and 2019, respectively. Future minimum lease payments are as follows: Year ending December 31, $ 2020 90,565 2021 90,318 2022 23,864 Total 204,747 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 18. 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. Following the further expansion of module business and entering into the wafer business in 2011, the Group operated and viewed its performance in three segments. However, the module business was disposed in September 2012 and the wafer business was discontinued in September 2018. Therefore, only one segment - Polysilicon remained as of December 31, 2018 and 2019. All of its 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. The following customers individually accounted for 10% or more of revenues: Year ended December 31, 2017 2018 2019 Customer A $ 43,258,204 $ 57,858,670 $ 187,216,802 Customer B $ 39,219,089 $ 115,411,965 $ 84,225,661 Customer C $ 39,099,677 $ * $ * * Total sales to the Group’s largest customers whose sales constitute over 10% of revenue accounted for approximately 38%, 57% and 78% of revenues for the years ended December 31, 2017, 2018 and 2019, respectively. The Group is substantially dependent upon the continued participation of these customers in order to maintain its total revenues. Significantly 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. |
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
FINANCIAL STATEMENT SCHEDULE I | FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY BALANCE SHEET DECEMBER 31, 2018 AND 2019 (In U.S. dollars, except share and per share data) December 31, 2018 2019 ASSETS Current assets: Cash and cash equivalents $ 1,487,517 $ 1,346,183 Prepaid expenses and other current assets 186,641 276,876 Total current assets 1,674,158 1,623,059 Investments in subsidiaries 523,650,516 565,242,087 TOTAL ASSETS $ 525,324,674 $ 566,865,146 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses and other current liabilities $ 192,997 $ 222,193 Total current liabilities 192,997 222,193 Equity: Ordinary shares($0.0001 par value 500,000,000 shares authorized as of December 31, 2018 and 2019; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018; 351,823,578 shares issued and 347,419,152 shares outstanding as of December 31, 2019) 33,439 34,977 Additional paid-in capital 368,681,449 387,371,083 Retained earnings 171,398,185 200,922,577 Accumulated other comprehensive loss (13,232,560) (19,936,848) Treasury shares, at cost (4,643,150 shares as of December 31, 2018 and 2019) (1,748,836) (1,748,836) Total shareholders’ equity 525,131,677 566,642,953 TOTAL LIABILITIES AND EQUITY $ 525,324,674 $ 566,865,146 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2017, 2018 AND 2019 (In U.S. dollars) Year ended December 31, 2017 2018 2019 Operating expenses: General and administrative $ (4,987,820) $ (14,513,869) $ (11,975,105) Total operating expenses (4,987,820) (14,513,869) (11,975,105) Loss from operations (4,987,820) (14,513,869) (11,975,105) Interest income — 289,773 20,698 Net loss before share of results of subsidiaries (4,987,820) (14,224,096) (11,954,407) Equity in earnings of subsidiaries 97,828,948 52,348,801 41,478,799 Net income attributable to Daqo New Energy Corp. ordinary shareholders $ 92,841,128 $ 38,124,705 $ 29,524,392 Other comprehensive (loss) income: Foreign currency translation adjustments 21,829,007 (26,216,079) (6,704,288) Total other comprehensive income (loss): 21,829,007 (26,216,079) (6,704,288) Comprehensive income $ 114,670,135 $ 11,908,626 $ 22,820,104 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017, 2018 AND 2019 (In U.S. dollars) Year ended December 31, 2017 2018 2019 OPERATING ACTIVITIES Net cash used in operating activities (645,547) (578,770) (932,827) INVESTING ACTIVITIES Capital contributed to subsidiaries — (109,778,761) — Net cash used in investing activities — (109,778,761) — FINANCING ACTIVITIES Proceeds from follow-on equity offering — 113,540,845 Insurance cost for follow-on equity offering — (6,919,202) Proceeds from options exercised 2,238,854 686,596 791,493 Net cash provided by financing activities 2,238,854 107,308,239 791,493 NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS 1,593,307 (3,049,292) (141,334) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 2,943,502 4,536,809 1,487,517 CASH AND CASH EQUIVALENTS AT END OF THE YEAR $ 4,536,809 $ 1,487,517 $ 1,346,183 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY Notes to Financial Information of Parent Company 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 of Daqo New Energy Corp. has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. 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 contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the Consolidated Financial Statements of the Group. No dividend was paid by the Company’s subsidiaries to their parent company in 2019. 4. As of December 31, 2019, there were no material contingencies, significant provisions of long-term obligations, and mandatory dividend or redemption requirements of redeemable shares or guarantees of the Company, except for those which have been separately disclosed in the Consolidated Financial Statements, if any. * * * * * * |
SUMMARY OF PRINCIPAL ACCOUNTI_2
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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"). The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Group's ability to generate cash flows from operations, and the Group's ability to arrange adequate financing arrangements, including the renewal or rollover of its bank borrowings, to support its working capital requirements. As of December 31, 2019, the Group's current liabilities exceed its current assets by $270.8 million. Additionally, the Company had capital commitments of $53.9 million relating to the purchases of property, plant and equipment to be fulfilled in the next twelve months. Such negative working capital may raise substantial doubt about the Group's ability to continue as a going concern, which indicates that it is probable that the Group will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. However, the management has evaluated the significance of the conditions and regards the going concern assumption as appropriate based on the following considerations: 1. The Group generated net income and positive cash flow from operations for three consecutive years with a net operating cash inflow of $180.0 million for the year ended December 31, 2019. 2. In connection with the completion of the polysilicon Phase 4A expansion project in Xinjiang, the nameplate capacity of polysilicon increased from 30,000 MT per annum to 70,000 MT per annum starting from January 2020. The Company is expecting more operating cash flow will be generated and unit cost will be furthered reduced starting the year ending December 31, 2020. 3. The Group has performed a review of its cash flow forecasts for the twelve month period after the date that the financial statements are issued and believes that its operating cash flow will be positive. Furthermore, the management also has plans to alleviate substantial doubt about its ability to continue as a going concern: 1. On February 25, 2020, the Group obtained a letter of financial support from Daqo Group which has committed to provide sufficient financial support to the Group to ensure the Group has the funds required to satisfy its obligations as they come due in the normal course during the twelve months after the date that the financial statements are issued. 2. While there can be no assurance that the Group will be able to refinance its short-term bank borrowings as they become due, historically, the Group has renewed or rolled over most of its short term bank loans upon the maturity of the loans and believes the Group will continue to be able to do so. Based on the above factors and plans, management believes that adequate sources of liquidity will exist to fund the Group's working capital and capital expenditures requirements, and to meet its short term debt obligations, other liabilities and commitments as they become due during the twelve month period after the date that the financial statements are issued. |
Basis of consolidations | (b) Basis of consolidations The consolidated financial statements include the financial statements of the Group. 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. 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. Management has made significant estimates in a variety of areas, including but not limited to allowance for doubtful accounts, useful lives and residual values of long-lived assets, impairment for long lived assets, valuation allowances for deferred tax assets, interest capitalization and certain assumptions used in the computation of share-based compensation and related forfeiture rates. |
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, accounts receivable and notes receivable. The Group places its cash, cash equivalents and restricted cash in various financial institutions in the PRC. The Group believes that no significant credit risk exists as these banks are principally government-owned financial institutions with high credit ratings. Accounts receivable represent those receivables derived in the ordinary course of business. The Group conducts credit evaluations of customers to whom credit terms are extended. The Group establishes an allowance for doubtful accounts mainly based on aging of the receivables and other factors surrounding the credit risk of specific customers. There is no allowance for doubtful accounts as of December 31, 2018 and 2019, based on the aging of the receivables and the Group’s assessment of the customers’ credit risk. There is one customer that accounted for 10% or more of accounts receivable amounted to $1,087,719 as of December 31, 2018. There is another customer that accounted for 10% or more of accounts receivable amounted to $13,287 as of December 31, 2019. From time to time, certain accounts receivable balances are settled in the form of notes receivable. As of December 31, 2018 and 2019, notes receivable represents bank acceptance drafts that are non-interest bearing and due within six to twelve months. |
Cash and cash equivalents | (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 $28,609,307 and $62,609,361 as of December 31, 2018 and 2019, respectively, are restricted bank deposits for notes issued by several banks for purchases of raw materials, plant and equipment and pledge of short-term bank borrowings. These 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 include wealth management products with variable interest rates or principal not-guaranteed with certain financial institutions, whereby the Group has the intent and the ability to hold to maturity within one year. The Group classifies the short-term investments as "held-to-maturity" securities and stated at amortized cost. For investments classified as held-to-maturity securities, the Group evaluates whether a decline in fair value below the amortized cost basis is other-than-temporary in accordance with ASC 320. The other-than-temporary impairment loss is recognized in earnings equal to the excess of the investments’ amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. No impairment loss in relation to its short-term investments was recorded for the year ended December 31, 2018 and 2019. |
Allowance for Doubtful Accounts | (g) Allowance for doubtful accounts The Group determines its allowance for doubtful accounts by actively monitoring the financial condition of its customers to determine the potential for any nonpayment of trade receivables. In determining its allowance for doubtful accounts, the Group also considers other economic factors, such as aging trends. The Group believes that its process of specific review of customers combined with overall analytical review provides an effective evaluation of ultimate collectability of trade receivables. Provisions for allowance for doubtful accounts are recorded as general and administrate expense in the consolidated statements of operations. |
Inventories | (h) 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 charges to inventories for the years ended December 31, 2017, 2018 and 2019 were nil, $851,008, and $326,598, respectively, of which $851,008 for the year ended December 31, 2018 is from discontinued operations. |
Property, plant and equipment | (i) 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 years Machinery and equipment years Furniture, fixtures and equipment 3-5 years Motor vehicles 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, 2017, 2018 and 2019 was $47,507, $1,203,547 and $6,608,928, respectively. |
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 Group’s land use rights in the PRC are stated at cost less recognized lease expenses. Lease expense is recognized over the term of the agreement on a straight-line basis. The Group recorded lease expenses of $572,722, $586,034 and $582,469, for the years ended December 31, 2017, 2018 and 2019, 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 to perform 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 can be 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. For the years ended December 31, 2017, 2018 and 2019, the Group recorded impairment losses for long-lived assets associated with discontinued operations of $2,987,668, $18,769,938 and nil, respectively. Out the recorded total impairment losses, impairment losses of $2,987,668, $11,482,905 and nil incurred in 2017, 2018 and 2019 respectively, were related to the polysilicon assets identified as non-transferrable and/or not able to be reutilized by its Xinjiang polysilicon manufacturing or expansion projects. The remaining impairment losses of $7,287,033 incurred in 2018 were related to the assets of discontinued wafer manufacturing operations. No impairment loss for long-lived assets was recorded from continuing operations. |
Lease | (l) Lease Before January 1, 2019, the Group used the Accounting Standards Codification ("ASC Topic 840"), Leases, each lease is classified at the inception date as either a capital lease or an operating lease. All the Group's leases are classified as operating lease under ASC Topic 840. The Group's reporting for periods prior to January 1, 2019 continued to be reported in accordance with Leases (Topic 840). In February 2016, the FASB issued Accounting Standards Updates ("ASU") 2016-02, which supersedes existing guidance on accounting for leases in ASC Topic 840-Leases ("ASC 840") and generally requires all leases, including operating leases, to be recognized in the statement of financial position of lessees as right-of-use ("ROU") assets and lease liabilities, with certain practical expedients available. The Group 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 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 for its January 1, 2019 adoption of ASC 842 and at the commencement date of the lease for agreements commencing after adoption, as the rate implicit in the lease is not readily determinable. The Group uses the parent company's incremental borrowing rate as the discount rate for the lease as the group is unable to secure outside funding on their own without a parent company guarantee based on the nature of their business and structure within the group. For the initial measurement of the lease liabilities, the Group uses the discount rate as of the commencement date of the lease, incorporating the entire lease term. Current maturities and long-term portions of operating lease liabilities are classified as lease liabilities, current and lease liabilities, non-current, respectively, in the consolidated balance sheets. The lease liabilities, current were $84,819 and lease liabilities - long term portion were $77,323 for the year ended December 31, 2019. The ROU asset is measured at the amount of the lease liabilities with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred and lease incentives. There is no variable lease payments of the Group. The Right-of-use assets were $196,628 for the year ended December 31, 2019. |
Revenue recognition | (m) Revenue recognition As of January 1, 2018, the Company adopted ASU 2014‑09 Revenue from Contracts with Customers - Topic 606 and all subsequent ASUs that modified ASC 606. The Company has elected to apply the ASU and all related ASUs retrospectively to each prior reporting period presented. The implementation of the guidance had no impact on the measurement or recognition of revenue of prior periods, however, additional disclosures have been added in accordance with the ASU. The Group’s revenue is all derived from the sale of polysilicon from the polysilicon segment, which is the only remaining segment after the discontinuation of the wafer business in September 2018. The sale of polysilicon is all in PRC and the Group’s operations is in one PRC location, Xinjiang. Revenue cannot be disaggregated to a lower level or more than one categories to provide meaningful information. See Note 18 Segment Information. The Group recognizes sale of polysilicon at a point in time following the transfer of control of the 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 delivery to the customers. Variable consideration that could affect the Group’s reported revenues is sales returns, which would be recorded as a reduction of revenue. Return rights of defective products are typically contractually limited, which allows sales returns within a period ranging from 3 to 30 days upon delivery. Sales returns have been nil for each reporting period presented. No warranties, incentives, or rebates arrangements has been offered to customers. For majority of the sales arrangements, the Group requires 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 doubtful accounts. As of December 31, 2018 and 2019, accounts receivable totaled $1,180,598 and $13,287, respectively. The Group did not record any allowance for doubtful accounts as of December 31, 2018 and 2019. Advances from customers are to secure their polysilicon supply, which are applied against future purchases. Contract liabilities represent our obligations to transfer polysilicon for which the Group have 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 in the short-term and long-term advances from customers was $17.5 million and $35.2 million as of December 31, 2018 and 2019, respectively. Revenue recognized from the beginning advances from customers balance as of January 1, 2018 and January 1, 2019 was $16.4 million and $10.2 million, respectively. Practical Expedients and Exemptions The Group apply the new revenue standard requirements to a portfolio of contracts (or performance obligations) with similar characteristics for transactions where it is expected that the effects on the financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio. Therefore, the Group have elected the portfolio approach in applying the new revenue guidance. The Group’s revenue contracts provide for performance obligations that are fulfilled and transfer control to customers at point in time, involve the same pattern of transfer to the customer, and provide a right to consideration from our customers in an amount that corresponds directly with the value to the customer for the performance completed. Therefore, the Group recognize revenue in the amount to which the Group have a right to invoice. The Group generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling, general and administrative expenses. |
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 expenses in the consolidated statements of operations. Costs to ship products to customers were $4,099,716, $4,474,956 and $6,311,797, respectively, for the years ended December 31, 2017, 2018 and 2019. |
Research and development expenses | (p) Research and development expenses Research and development expenses include materials 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 improvement to improve the production volume, efficiency and 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, 2017, 2018 and 2019 were $3,704,144, $13,136,922 and $5,576,300, respectively. Government grants related to fixed assets are recorded as long term liabilities and amortized on a straight-line basis over the useful life of the associated asset as an offset to depreciation expense. The Group did not receive any government grants related to fixed assets during the years ended December 31, 2017, 2018 and 2019. |
Income taxes | (r) Income taxes Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amount 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 on 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 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 shares on the grant date. The Group has made an estimate of expected forfeiture and is recognizing compensation costs only for those equity awards expected to vest. The share-based compensation expenses have been categorized as either selling, general and administrative expenses or cost of sales, depending on the job functions of the grantees. 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, 2017, 2018 and 2019, the Group recognized share-based compensation expense of $4,200,273, $13,788,049 and $17,896,942, respectively, which was recognized in the statements of operations as follows: Year ended December 31, 2017 2018 2019 Selling, general and administrative expenses $ 3,679,145 $ 12,461,838 $ 15,463,171 Cost of revenues 521,128 1,326,211 2,083,771 Research and development expenses — — 350,000 Total $ 4,200,273 $ 13,788,049 $ 17,896,942 |
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 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 Group is the U.S. dollar. Monetary assets and liabilities denominated in other 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 Group’s PRC subsidiaries 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 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 and restricted cash denominated in RMB amounted to $81,476,636 and $113,101,494 as of December 31, 2018 and 2019, respectively. |
Comprehensive income (loss) | (v) Comprehensive income (loss) Comprehensive income (loss) is the change in equity during a period from transactions and other events and circumstances from non-shareholder sources and included net income and foreign currency translation adjustments. As of December 31, 2017, 2018 and 2019, accumulated other comprehensive income (loss) was comprised entirely of foreign currency translation adjustments. |
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, accounts receivable, notes receivable, amount due from related parties, accounts payable, notes payable, payables for purchase of property, plant and equipment, amounts due to related parties and bank borrowings. The carrying amounts of these short-term financial instruments approximate their fair values due to the short-term maturity of these instruments. The Group’s long-term bank borrowing consists of floating rate loans. The fair value of long-term borrowings is measured using discounted cash flow technique based on current rates for comparable loans on the respective valuation date and is therefore considered a level 2 measurement. The long-term bank borrowings approximate their fair values because market interest rates have not fluctuated significantly since the commencement of loan contracts signed. |
Noncontrolling 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. |
Investment in an affiliate | (y) Investment in an affiliate In January 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-01 Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The ASU requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Subsequent to ASU 2016-02, the FASB issued ASU 2018-03, "Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" to clarify certain narrow aspects of guidance concerning the recognition of financial assets and liabilities established in ASU 2016-01. The Group adopted ASC 321, Investments-Equity Securities on January 1, 2018. Prior to fiscal year 2018, for investee companies over which the Group do not have significant influence or a controlling interest, it were accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. Starting from fiscal year 2018, for equity securities without readily determinable fair value that do not qualify for the practical expedient to estimate fair value using net asset value per share, the Group elected to use the measurement alternative to measure those investments at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. On February 17, 2016, the Group paid $581,581 to acquire 15.29% equity interest in Syned Fire Safety Service Co., Ltd. ("Syned Fire Safety Services"), a company engaging in fire safety activities. The Group measured the investment using the measurement alternative (cost method investment prior to January 1, 2018) as Syned Fire Safety Service is a private company without readily determinable fair value. The Group reviews its investment in Syed Fire Safety Service to determine whether a decline in fair value below the carrying value, if any, is other-than-temporary. No impairment loss occurred during the years ended December 31, 2017, 2018 and 2019. Although assumptions used in estimates of fair value of the investment in Syed Fire Safety Service are management best estimates, such assumptions are, by nature, highly judgmental and may vary significantly from actual results. |
Adoption of New Accounting Pronouncement | (z) Adoption of new accounting pronouncement In February 2016, the FASB issued ASU 2016‑02, Leases. This ASU requires lessees to recognize right-of-use assets and liabilities for operating leases, initially measured at the present value of the lease payments, on the balance sheet. In addition, it requires lessees to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. The definition of a lease has been revised in regards to when an arrangement conveys the right to control the use of the identified asset under the arrangement which may result in changes to the classification of an arrangement as a lease. The ASU expands the disclosure requirements of lease arrangements. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. In July 2018, the FASB issued ASU 2018‑11, Leases (Topic 842): Targeted Improvements, which provided an optional transition method to apply the new lease requirements through a cumulative-effect adjustments in the period of adoption. The Group adopted the standard in the first quarter of 2019 using the modified retrospective method and did not restate comparative periods, as permitted by the standard. In addition, the Group elected the transition practical referred to as the “package of three”, that must be taken together and allows entities to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing leases. The Group adopted ASC Topic 842-Leases ("ASC 842") on January 1, 2019 using the modified retrospective transition approach under ASU 2018-11, without adjusting comparative periods presented. The Group elected the practical expedient package to not reassess prior conclusions related to contracts containing leases, lease classification, and initial direct costs for any existing leases and the Group elected to use hindsight in determining the lease term. The adoption did not have a material impact on the Group's consolidated statements of operations or consolidated statements of cash flows, and the adoption of ASC 842 did not result in a cumulative-effect adjustment to retained earnings. Related accounting policies adopted refer to Note 2(l) Leases. |
Recent accounting pronouncements | (aa) Recent accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016‑13, Credit Losses, Measurement of Credit Losses on Financial Instruments. This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s incurred loss approach with an expected loss model for instruments measured at amortized cost. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for all entities for annual periods beginning after December 15, 2019, and interim periods therein. The amendments in this Update should be applied on a modified-retrospective basis by means of a cumulative-effect adjustment to the opening balance of retained earnings balance in the statement of financial position as of the date that an entity adopted the amendments in Update 2016-13. The Group does not expect that the related disclosures and the effects upon adoption are material. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes certain disclosure requirements, including those related to Level 3 fair value measurements. The standard will be effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. The Group does not expect that the related disclosures and the effects upon adoption are material. |
SUMMARY OF PRINCIPAL ACCOUNTI_3
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 years Machinery and equipment years Furniture, fixtures and equipment 3-5 years Motor vehicles years |
Schedule of Share-Based Compensation Expenses | Year ended December 31, 2017 2018 2019 Selling, general and administrative expenses $ 3,679,145 $ 12,461,838 $ 15,463,171 Cost of revenues 521,128 1,326,211 2,083,771 Research and development expenses — — 350,000 Total $ 4,200,273 $ 13,788,049 $ 17,896,942 |
EXIT AND DISPOSAL ACTIVITIES (T
EXIT AND DISPOSAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EXIT AND DISPOSAL ACTIVITIES | |
Disposal Groups, Including Discontinued Operations | Assets and liabilities of the discontinued operations December 31, 2018 2019 ASSETS: Cash and cash equivalents $ 982,019 $ 845,199 Restricted cash 109,171 — Notes receivable 1,524,747 64,629 Prepaid expenses and other current assets 23,889 15,341 Advances to suppliers 6,132 488 Amount due from related parties 2,367,657 — Total current assets associated with discontinued operations $ 5,013,615 $ 925,657 Long-lived assets held-for-sale 52,491,206 216,698 Total non-current assets associated with discontinued operations $ 52,491,206 $ 216,698 LIABILITIES: Short-term bank borrowings, including current portion of long-term bank borrowings $ 10,176,600 $ — Accounts payable 685,569 541,696 Notes payable 109,171 — Advances from customers — 2,046 Payables for purchases of property, plant and equipment 1,074,155 359,119 Accrued expenses and other current liabilities 1,315,848 73,129 Amount due to related parties 5,314,587 187,882 Total current liabilities associated with discontinued operations $ 18,675,930 $ 1,163,872 Deferred government subsidies 723,035 — Total non-current liabilities associated with discontinued operations $ 723,035 $ — Results of the discontinued operations Year ended December 31, 2017 2018 2019 Revenues $ 29,652,458 $ 7,112,528 $ — Cost of revenues (29,960,870) (9,510,064) — Gross loss (308,412) (2,397,536) — Operating (expenses) income: Selling, general and administrative expenses (1,621,977) (2,723,335) (147,057) Research and development expenses (204,658) (608) — Long-lived assets impairment (2,987,668) (18,769,938) — Other operating income, net 3,019,556 1,928,362 1,485,183 Total operating income (expenses) (1,794,747) (19,565,519) 1,338,126 (Loss) income from operations (2,103,159) (21,963,055) 1,338,126 Interest expense (1,743,124) (1,074,251) (78,728) Interest income 22,716 22,794 1,391 Exchange gain (loss) 2,308 (17,669) 1 (Loss) income from discontinued operations, net of tax of nil $ (3,821,259) $ (23,032,181) $ 1,260,790 All notes to the accompanying consolidated financial statements have been retrospectively adjusted to reflect the effect of the discontinued operations, where applicable. Condensed cash flow of the discontinued operations Year ended December 31, 2017 2018 2019 Net cash provided by operating activities $ 5,048,042 $ 17,994,548 $ 1,010,130 Net cash (used in) provided by investing activities (3,752,066) 616,988 1,456,521 Net cash used in financing activities (8,742,573) (16,778,925) (2,650,931) |
PREPAID EXPENSE AND OTHER CUR_2
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS | |
Schedule of Prepaid Expense and Other Current Assets | Prepaid expense and other current assets consist of the following: December 31, 2018 2019 Spare parts $ 5,011,781 $ 2,912,745 Prepaid value added tax (“VAT”) 4,768,552 11,525,475 Prepaid insurance fee 153,751 260,395 Others 401,417 645,056 Total $ 10,335,501 $ 15,343,671 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
Schedule of Inventories | Inventories consist of the following: December 31, 2018 2019 Raw materials $ 3,821,620 $ 12,965,337 Work-in-process 5,711,848 7,262,021 Finished goods 5,915,899 16,164,105 Total $ 15,449,367 $ 36,391,463 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net, consist of the following: December 31, 2018 2019 Cost Buildings and plant $ 330,500,911 $ 400,843,258 Machinery and equipment 335,808,916 821,582,040 Furniture, fixtures and equipment 25,953,939 44,550,155 Motor vehicles 582,375 905,217 Less: Accumulated depreciation (133,334,881) (288,194,536) Property, plant and equipment, net $ 559,511,260 $ 979,686,134 Construction in process 57,463,560 15,341,080 Total $ 616,974,820 $ 995,027,214 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
BORROWINGS | |
Schedule of Bank Borrowings | The Group’s bank borrowings consist of the following: December 31, 2018 2019 Short-term bank borrowings $ 34,135,224 $ 79,062,810 Long-term bank borrowings, current portion 4,070,640 49,548,900 Total borrowings, current 38,205,864 128,611,710 Long-term bank borrowings, non-current portion 133,312,370 151,518,023 Total $ 171,518,234 $ 280,129,733 |
Schedule of Short-term Debt | The Group’s short-term bank borrowings consist of the following: December 31, 2018 2019 Short-term borrowings guaranteed by Daqo Group and its related parties $ 29,076,000 $ 79,062,810 Short-term borrowings pledged by certificate of deposit 5,059,224 — Total $ 34,135,224 $ 79,062,810 |
Schedule of Long-Term Bank Borrowings | The long-term bank borrowings, including current portion, as of December 31, 2018 and 2019 are comprised of: December 31, 2018 2019 Borrowing from Shihezi Rural Cooperative Bank $ 17,445,600 $ 27,287,800 Borrowing from Chongqing Rural Commercial Bank 119,937,410 117,049,223 Borrowing from Bank of China — 56,729,900 Total $ 137,383,010 $ 201,066,923 |
Schedule of Principal Maturities of Long-term Bank Borrowings | The principal maturities of these long-term bank borrowings as of December 31, 2019 are as follows: Year ending December 31, Amount 2020 $ 49,548,900 2021 56,729,900 2022 56,011,800 2023 33,749,623 2024 5,026,700 Total $ 201,066,923 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: December 31, 2018 2019 Accrued payroll and welfare $ 6,526,287 $ 6,970,058 Exercised shared based compensation due to employee — 1,093,257 Accrued shipment expenses 567,438 1,011,320 Bid Bond 936,294 810,868 Accrued professional fees 187,027 368,587 Other tax payables 364,223 367,467 Interest payable 297,776 468,013 Others 538,657 1,132,530 Total $ 9,417,702 $ 12,222,100 |
ADVANCES FROM CUSTOMERS (Tables
ADVANCES FROM CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ADVANCES FROM CUSTOMERS | |
Contract with Customer, Asset and Liability | Advances from customers consist of the following and is analyzed as long-term and short-term portion respectively: December 31, 2018 2019 Customer A $ 15,827,579 $ 28,123,324 Customer B 392,037 4,184,426 Customer D — 1,503,529 Customer E 1,017,427 905,840 Others 245,897 464,976 Total $ 17,482,940 $ 35,182,095 Less: Advances from customers – short-term portion $ 10,213,940 $ 33,027,795 Advances from customers – long-term portion $ 7,269,000 $ 2,154,300 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of Nonrecurring Fair Value Measurements | Year ended December 31, 2018 Carrying amount Quoted Prices in Significant before Active Markets Other Significant impairment for Identical Observable Unobservable Total Description losses Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Losses Property, plant and equipment – cannot be relocated to Xinjiang plant (Note 3) $ $ — $ — $ — $ Machinery and equipment related to discontinued wafer manufacturing operations (Note 3) $ $ — $ — $ $ Total $ 78,293,526 $ — $ — $ 59,523,588 $ 18,769,938 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Income Tax Expenses | Income tax expenses comprise: Year ended December 31, 2017 2018 2019 Current tax expenses $ 17,417,528 $ 11,868,388 $ 4,941,092 Deferred tax (benefit) expenses (85,302) (151,843) 4,682,355 Total $ 17,332,226 $ 11,716,545 $ 9,623,447 |
Schedule of Deferred Tax Assets and Liabilities | The principal components of deferred income tax assets and liabilities from continuing operations are as follows: December 31, 2018 2019 Deferred tax assets: Long-lived assets depreciation $ 821,137 $ 1,351,883 Net operating loss carried forward — 729,231 Sub-total 821,137 2,081,114 Valuation Allowance — (729,231) Total deferred tax assets $ 821,137 $ 1,351,883 Deferred tax liabilities: Long-lived assets depreciation $ — $ (5,226,521) Difference in basis of buildings $ (1,184,644) $ (1,141,359) Total deferred tax liabilities $ (1,184,644) $ (6,367,880) |
Schedule of Effective Income Tax Rate Reconciliation | 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, 2017 2018 2019 PRC Enterprise Income Tax 25 % 25 % 25 % Preferential income tax rate of a subsidiary (10) % (11) % (14) % Effect of different reversal rate — — 5 % Additional tax deductions (1) % (3) % (3) % Different tax rate in other jurisdictions 1 % 5 % 12 % Effective tax rate 15 % 16 % 25 % |
Discontinued Operations | |
Schedule of Deferred Tax Assets and Liabilities | The principal components of deferred income tax assets and liabilities from discontinued operations are as follows: December 31, 2018 2019 Deferred tax assets: Net operating loss carried forward $ 17,293,577 $ 17,880,855 Government grants related to assets 180,759 98,492 Long-lived assets impairment & depreciation 8,358,235 4,283,974 Others 1,229,693 1,066,379 Sub-total 27,062,264 23,329,700 Valuation Allowance (27,062,264) (23,329,700) Total deferred tax assets $ — $ — |
Schedule of Changes of Valuation Allowance | The changes of valuation allowance are as follows: Year ended December 31, 2017 2018 2019 Beginning balance $ 38,729,208 $ 41,316,449 $ 27,062,264 Reversal (24,771) (12,515,962) (2,698,440) Foreign exchange effect 2,612,012 (1,738,223) (304,893) Ending Balance $ 41,316,449 $ 27,062,264 $ 24,058,931 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHARE BASED COMPENSATION | |
Schedule of Assumptions Used | The following assumptions were used in the Binomial option pricing model: Year Ended December 31, 2015 Average Post- risk-free vesting Options rate of Exercise Volatility Dividend forfeiture granted return multiple rate yield rate January 12, 2015 2.82 % 1.8 - 3 times 93.0 % 0 % 5 % - 8 % July 6, 2015 3.20 % 3 times 91.0 % 0 % 5 % September 9, 2015 2.94 % - 3.08 % 1.8 - 3 times 91.0 % - 92.0 % 0 % 5 % - 8 % |
Summary of Stock Option Activity | A summary of the aggregate option activity and information regarding options outstanding as of December 31, 2019 is as follows: Weighted Weighted Average Average Aggregate Number of Exercise Remaining Intrinsic Options Price Contract Life Value Options outstanding on January 1, 2019 9,240,067 0.49 — — Granted — — — — Forfeited — — — — Expired — — — — Exercised (2,474,950) 0.32 — — Options outstanding on December 31, 2019 6,765,117 0.56 10,079,601 Options vested or expected to vest on December 31, 2019 20,207,103 0.47 31,941,622 Options exercisable on December 31, 2019 6,764,509 0.56 10,078,718 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the non-vested RSU activity in 2019 is as follows: Weighted Average Number of Grant Date RSUs Fair Value Nonvested RSUs on January 1, 2019 43,487,613 $ 1.39 Granted — — Vested (12,914,511) 1.39 Forfeited (55,250) 1.42 Nonvested RSUs on December 31, 2019 30,517,852 $ 1.39 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 which is 100% held by Daqo Group Daqo Solar Co. Ltd (“Daqo Solar”) An affiliated company which is 100% held by Daqo Group Xinjiang Daqo Investment Co., Ltd. ("Xinjiang Daqo Investment") An affiliated company which is 100% held by Daqo Group before December 20,2018 and is 100% held by the Group since December 20,2018 Daqo New Material Co., Ltd. ("Daqo New Material") An affiliated company which was 100% held by Daqo Group Chongqing Daqo Tailai Electric Co., Ltd. (“Chongqing Daqo Tailai”) An affiliated company which is 100% held by Daqo Group Nanjing Daqo Transformer Systems Co., Ltd. (“Nanjing Daqo Transformer”) An affiliated company which is 100% held by Daqo Group Jiangsu Daqo Changjiang Electric Co., Ltd. (“Jiangsu Daqo”) An affiliated company which is 100% held by Daqo Group Nanjing Daqo Electric Co., Ltd. (“Nanjing Daqo Electric”) An affiliated company which is 100% held by Daqo Group Zhenjiang Electric Equipment Co., Ltd. ( “Zhenjiang Electric”) An affiliated company which is 100% held by Daqo Group Daqo Investmsnt Co.,Ltd.("Daqo Investment") An affiliated company which is 100% held by Daqo Group |
Schedule of Related Party Balances, Loans | December 31, 2018 2019 Amounts due from related parties (continuing operations) Xinjiang Daqo Tianfu Thermoelectric $ 629,495 $ — Others 185,540 16,521 Total $ 815,035 $ 16,521 Amounts due from related parties (discontinued operations) Zhenjiang Daqo $ 1,453,800 $ — Others 913,857 — Total $ 2,367,657 $ — |
Schedule of Related Party Balances, Payables | December 31, 2018 2019 Amounts due to related parties – short term portion (continuing operations) Nanjing Daqo Transformer — 9,637,251 Chongqing Daqo Tailai $ 1,825,680 $ 8,004,373 Daqo Group 10,365 7,904,387 Daqo New Material — 4,265,514 Nanjing Daqo Electric 126,332 3,240,501 Jiangsu Daqo 143,527 3,162,300 Zhenjiang Electric — 1,489,553 Others 154,103 1,120,948 Total $ 2,260,007 $ 38,824,827 Amounts due to related parties – short term portion (discontinued operations) Daqo New Material $ 5,314,587 $ — Others — 187,882 Total $ 5,314,587 $ 187,882 |
Schedule of Related Party Transactions | The material transactions with Daqo Group and its subsidiaries were as follows: Transaction Year Ended December 31, Name of Related parties Nature 2017 2018 2019 Daqo Group Proceeds from interest free loans $ 2,696,513 $ 25,744,800 $ — Repayment of interest free loans 2,696,513 36,648,480 — Repayment of interest bearing loans 15,495,451 — — Zhenjiang Daqo Proceeds from interest free loans — 10,903,680 — Repayment of interest free loans — — — Sales 13,442,273 6,694,997 3,987,080 Daqo Solar Proceeds from interest free loans 40,089,689 55,613,463 16,004,820 Repayment of interest free loans 40,388,195 55,650,696 16,004,820 Nanjing Daqo Transformer Purchase-Fixed assets — 6,201,243 12,337,022 Proceeds from interest free loans — — 1,842,582 Repayment of interest free loans — — 1,842,582 Xinjiang Daqo Investment Proceeds from interest free loans 14,356,000 3,937,440 * Repayment of interest free loans 14,356,000 4,020,732 * Daqo New Material Purchase-Fixed assets 7,390,693 — — Proceeds from interest free loans 6,029,877 1,893,000 — Repayment of interest free loans 10,818,493 1,893,000 — Chongqing Daqo Tailai Purchase-Fixed assets 715,361 8,240,830 15,212,713 Proceeds from interest free loans — 6,209,040 2,540,969 Repayment of interest free loans — 6,209,040 2,540,969 Jiangsu Daqo Purchase-Fixed assets — 1,326,634 4,115,164 Nanjing Daqo Electric Purchase-Fixed assets — 1,439,332 6,228,522 Zhenjiang Electric Purchase-Raw material — 331,353 1,699,536 Total Sales $ 13,442,273 $ 6,694,997 $ 3,987,080 Purchase-Fixed assets $ 8,106,054 $ 17,208,039 $ 37,893,421 Purchase-Raw material $ — $ 331,353 $ 1,699,536 Proceeds from related parties loans $ 63,172,079 $ 104,301,423 $ 20,388,371 Repayment of related parties loans $ 83,754,652 $ 104,421,948 $ 20,388,371 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
Schedule of Calculation of Earnings Per Share | The calculation of earnings (loss) per share is as follows: Year ended December 31, 2017 2018 2019 Numerator used in basic and diluted earnings per share: Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations $ 96,662,387 $ 61,156,886 $ 28,263,602 (Loss) income from discontinued operations, net of tax (3,821,259) (23,032,181) 1,260,790 Net income attributable to Daqo New Energy Corp. ordinary shareholders—basic and diluted $ 92,841,128 $ 38,124,705 $ 29,524,392 Denominator used in basic and diluted earnings per share: Weighted average number of ordinary shares outstanding used in computing earnings per share-basic 265,070,961 311,715,158 339,571,054 Plus: Dilutive effects of share options 6,020,839 6,346,349 5,568,144 Dilutive effects of RSUs 1,834,519 7,444,828 4,822,360 Weighted average number of ordinary shares outstanding used in computing earnings per share—diluted 272,926,319 325,506,335 349,961,558 Basic earnings per share-continuing operations $ 0.36 $ 0.20 $ 0.08 Basic earnings (loss) per share-discontinued operations $ (0.01) $ (0.08) $ 0.01 NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Basic $ 0.35 $ 0.12 $ 0.09 Diluted earnings per share-continuing operations $ 0.35 $ 0.19 $ 0.08 Diluted earnings (loss) per share-discontinued operations $ (0.01) $ (0.07) $ 0.00 NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Diluted $ $ $ 0.08 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments are as follows: Year ending December 31, $ 2020 90,565 2021 90,318 2022 23,864 Total 204,747 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
Schedule of Revenues of Major Customers | The following customers individually accounted for 10% or more of revenues: Year ended December 31, 2017 2018 2019 Customer A $ 43,258,204 $ 57,858,670 $ 187,216,802 Customer B $ 39,219,089 $ 115,411,965 $ 84,225,661 Customer C $ 39,099,677 $ * $ * * |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 20, 2018 | Aug. 31, 2015 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Proceeds from non-controlling interest | $ 514,512 | ||
Xinjiang Daqo Investment [Member] | |||
Related Party Transaction [Line Items] | |||
Equity interest acquired (as a percent) | 100.00% | 1.00% | |
Payments to Acquire Businesses, Gross | $ 16,000,000 | ||
Daqo Group [Member] | Xinjiang Daqo | |||
Related Party Transaction [Line Items] | |||
Proceeds from non-controlling interest | $ 2,500,000 |
SUMMARY OF PRINCIPAL ACCOUNTI_4
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Additional Information) (Details) | Jan. 01, 2019USD ($) | Feb. 17, 2016USD ($) | Jan. 31, 2020item | Jan. 31, 2018USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Restricted cash | |||||||
Restricted cash | $ 62,609,361 | $ 28,609,307 | |||||
Inventories | |||||||
Inventory write-down | 326,598 | 0 | $ 0 | ||||
Property, Plant and Equipment | |||||||
Interest expense capitalized | 6,608,928 | 1,203,547 | 47,507 | ||||
Prepaid land use rights | |||||||
Lease Expenses | 582,469 | 586,034 | 572,722 | ||||
Impairment of long-lived assets | |||||||
Long-lived asset impairment | 0 | 11,482,905 | 2,987,668 | ||||
Revenue recognition | |||||||
Accounts Receivable, Net, Current | 13,287 | 1,180,598 | |||||
Government subsidies | |||||||
Unrestricted cash government subsidies | 5,576,300 | 13,136,922 | 3,704,144 | ||||
Foreign currency translation | |||||||
Aggregate amount of cash and cash equivalents and restricted cash denominated in RMB | 113,101,494 | 81,476,636 | |||||
Noncontrolling interest | |||||||
Noncontrolling interest | 516,467 | ||||||
Allocated Share-based Compensation Expense | 17,896,942 | 13,788,049 | 4,200,273 | ||||
Operating Leases, Future Minimum Payments Due | 204,747 | ||||||
Contract with Customer, Liability | 35,182,095 | 17,482,940 | |||||
Contract with Customer, Liability, Revenue Recognized | $ 10,200,000 | $ 16,400,000 | |||||
Basis of presentation | |||||||
Excess of current liabilities over current assets | 270,800,000 | ||||||
Capital commitments for purchases of property, plant and equipment | $ 53,900,000 | ||||||
Net income and positive cash flow from operations, generation period | 3 years | ||||||
Net operating cash inflow | $ 180,990,569 | 95,553,040 | 142,704,394 | ||||
Capacity of polysilicon per annum (in MT) | item | 30,000 | ||||||
Concentration of credit risk | |||||||
Allowance for doubtful accounts | $ 0 | 0 | |||||
Leases | |||||||
Right-of-use assets | 196,628 | 0 | |||||
Lease liability, current | 84,819 | 0 | |||||
Lease liability - long-term portion | 77,323 | 0 | |||||
Accounts receivable | Credit concentration | |||||||
Revenue recognition | |||||||
Accounts Receivable, Net, Current | 13,287 | 1,087,719 | |||||
Discontinued Operations | |||||||
Inventories | |||||||
Inventory write-down | 326,598 | 851,008 | 0 | ||||
Impairment of long-lived assets | |||||||
Long-lived asset impairment | 0 | 18,769,938 | 2,987,668 | ||||
Discontinued Operations | Wafer Manufacturing operations | |||||||
Impairment of long-lived assets | |||||||
Long-lived asset impairment | 7,287,033 | ||||||
Shipping and Handling [Member] | |||||||
Shipping and handling | |||||||
Cost of Goods and Services Sold | $ 6,311,797 | $ 4,474,956 | $ 4,099,716 | ||||
Subsequent events | |||||||
Basis of presentation | |||||||
Capacity of polysilicon per annum (in MT) | item | 70,000 | ||||||
Syned Fire Safety Service Co Ltd [Member] | |||||||
Investment In Affiliate [Abstract] | |||||||
Consideration paid | $ 581,581 | ||||||
Equity interest acquired (as a percent) | 15.29% |
SUMMARY OF PRINCIPAL ACCOUNTI_5
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings and plant [Member] | |
Property, plant and equipment | |
Estimated useful lives | 30 years |
Machine and equipment | |
Property, plant and equipment | |
Estimated useful lives | 15 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, plant and equipment | |
Estimated useful lives | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, plant and equipment | |
Estimated useful lives | 5 years |
Vehicles [Member] | |
Property, plant and equipment | |
Estimated useful lives | 6 years |
SUMMARY OF PRINCIPAL ACCOUNTI_6
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Share-based Compensation) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | $ 17,896,942 | $ 13,788,049 | $ 4,200,273 |
Selling, General and Administrative Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | 15,463,171 | 12,461,838 | 3,679,145 |
Cost of Sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | 2,083,771 | $ 1,326,211 | $ 521,128 |
Research and Development Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | $ 350,000 |
EXIT AND DISPOSAL ACTIVITIES (A
EXIT AND DISPOSAL ACTIVITIES (Additional Information) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2013 | |
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of Long-Lived Assets Held-for-use | $ 3,000,000 | |||
Maintenance expenses | 3,000,000 | |||
Impairment losses | $ 0 | $ 11,482,905 | 2,987,668 | |
Assets reclassified from long lived assets held for sale | $ 6,700,000 | |||
Period within which the reclassified assets will be rented out | 5 years | |||
Depreciation and amortization expenses | $ 200,000 | |||
Wafer Manufacturing operations | Discontinued Operations | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment losses | 7,300,000 | |||
Chongqing business subsidiary | Discontinued Operations, Held-for-sale | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Property, plant and equipment, held for sale | 57,800,000 | |||
Prepaid land use rights, held for sale | 1,700,000 | |||
Machine and equipment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Assets reclassified from long lived assets held for sale | 43,100,000 | 43,100,000 | ||
Wafer plant | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Assets reclassified from long lived assets held for sale | $ 5,100,000 | |||
polysilicon assets [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of Long-Lived Assets Held-for-use | 11,500,000 | |||
Reported Value Measurement [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Property, Plant, and Equipment, Fair Value Disclosure | $ 78,293,526 | |||
Reported Value Measurement [Member] | Significant Production Assets [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Property, Plant, and Equipment, Fair Value Disclosure | $ 144,700,000 | |||
Relocation costs | 200,000 | |||
Property Plant And Equipment Expected to be Relocated | $ 200,000 |
EXIT AND DISPOSAL ACTIVITIES (D
EXIT AND DISPOSAL ACTIVITIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
ASSETS: | |||
Cash and cash equivalents | $ 845,199 | $ 982,019 | |
Restricted cash | 0 | 109,171 | |
Notes receivable | 64,629 | 1,524,747 | |
Prepaid expenses and other current assets | 15,341 | 23,889 | |
Advances to suppliers | 488 | 6,132 | |
Amount due from related parties | 0 | 2,367,657 | |
Total current assets associated with discontinued operations | 925,657 | 5,013,615 | |
Long-lived assets held-for-sale | 216,698 | 52,491,206 | |
Total non-current assets associated with discontinued operations | 216,698 | 52,491,206 | |
LIABILITIES: | |||
Short-term bank borrowings, including current portion of long-term bank borrowings | 0 | 10,176,600 | |
Accounts payable | 541,696 | 685,569 | |
Notes payable | 0 | 109,171 | |
Advances from customers | 2,046 | 0 | |
Payables for purchases of property, plant and equipment | 359,119 | 1,074,155 | |
Accrued expenses and other current liabilities | 73,129 | 1,315,848 | |
Amount due to related parties | 187,882 | 5,314,587 | |
Total current liabilities associated with discontinued operations | 1,163,872 | 18,675,930 | |
Deferred government subsidies | 0 | 723,035 | |
Total non-current liabilities associated with discontinued operations | 0 | 723,035 | |
Revenues | 7,112,528 | $ 29,652,458 | |
Cost of revenues | (9,510,064) | (29,960,870) | |
Gross (loss) | (2,397,536) | (308,412) | |
Operating (expenses) income: | |||
Selling, general and administrative expenses | (147,057) | (2,723,335) | (1,621,977) |
Research and development expenses | (608) | (204,658) | |
Long-lived assets impairment | (18,769,938) | (2,987,668) | |
Other operating income, net | 1,485,183 | 1,928,362 | 3,019,556 |
Total operating income (expenses) | 1,338,126 | (19,565,519) | (1,794,747) |
(Loss) income from operations | 1,338,126 | (21,963,055) | (2,103,159) |
Interest expense | (78,728) | (1,074,251) | (1,743,124) |
Interest income | 1,391 | 22,794 | 22,716 |
Exchange gain (loss) | 1 | (17,669) | 2,308 |
(Loss) income from discontinued operations, net of tax of nil | $ 1,260,790 | $ (23,032,181) | $ (3,821,259) |
EXIT AND DISPOSAL ACTIVITIES (C
EXIT AND DISPOSAL ACTIVITIES (Condensed Cash Flow of the Discontinued Operations) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EXIT AND DISPOSAL ACTIVITIES | |||
Net cash provided by operating activities | $ 1,010,130 | $ 17,994,548 | $ 5,048,042 |
Net cash (used in) provided by investing activities | 1,456,521 | 616,988 | (3,752,066) |
Net cash used in financing activities | $ (2,650,931) | $ (16,778,925) | $ (8,742,573) |
FOLLOW-ON EQUITY OFFERINGS (Det
FOLLOW-ON EQUITY OFFERINGS (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Dec. 31, 2018 | |
FOLLOW-ON EQUITY OFFERINGS | ||
America depositary shares (ADSs) issued, shares | 2,064,379 | |
Follow-on equity offering, net of issuance costs, shares | 51,609,475 | |
Issuance cost for ordinary shares | $ 6,900,000 | $ 6,919,202 |
Follow-on equity offering, net of issuance costs | $ 106,600,000 | $ 106,621,643 |
PREPAID EXPENSE AND OTHER CUR_3
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
PREPAID EXPENSE AND OTHER CURRENT ASSETS | ||
Spare parts | $ 2,912,745 | $ 5,011,781 |
Prepaid value added tax ("VAT") | 11,525,475 | 4,768,552 |
Prepaid insurance fee | 260,395 | 153,751 |
Others | 645,056 | 401,417 |
Total | $ 15,343,671 | $ 10,335,501 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INVENTORIES | |||
Raw materials | $ 12,965,337 | $ 3,821,620 | |
Work-in-process | 7,262,021 | 5,711,848 | |
Finished goods | 16,164,105 | 5,915,899 | |
Total | 36,391,463 | 15,449,367 | |
Inventory write-down | $ 326,598 | $ 0 | $ 0 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 995,027,214 | $ 616,974,820 | |
Depreciation of property, plant and equipment | 47,371,130 | 27,718,260 | $ 27,801,924 |
Assets reclassified from long lived assets held for sale | 6,700,000 | ||
Buildings and plant [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 400,843,258 | 330,500,911 | |
Machine and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 821,582,040 | 335,808,916 | |
Assets reclassified from long lived assets held for sale | 43,100,000 | 43,100,000 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 44,550,155 | 25,953,939 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 905,217 | 582,375 | |
Depreciable Asset [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Less: Accumulated depreciation | (288,194,536) | (133,334,881) | |
Total | 979,686,134 | 559,511,260 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 15,341,080 | $ 57,463,560 | |
Wafer plant | |||
Property, Plant and Equipment [Line Items] | |||
Assets reclassified from long lived assets held for sale | $ 5,100,000 |
BORROWINGS (Schedule of Bank Bo
BORROWINGS (Schedule of Bank Borrowings) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
BORROWINGS | ||
Short-term bank borrowings | $ 79,062,810 | $ 34,135,224 |
Long-term bank borrowings, current portion | 49,548,900 | 4,070,640 |
Total borrowings, current | 128,611,710 | 38,205,864 |
Long-term bank borrowings, non-current portion | 151,518,023 | 133,312,370 |
Total | $ 280,129,733 | $ 171,518,234 |
BORROWINGS (Short-Term Borrowin
BORROWINGS (Short-Term Borrowings) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | |||
Short-term bank borrowings | $ 79,062,810 | $ 34,135,224 | |
Interest rate on short-term bank borrowings | 5.30% | 5.00% | 5.10% |
Certificate of deposit [Member] | |||
Short-term Debt [Line Items] | |||
Short-term bank borrowings | $ 5,059,224 | ||
Daqo Group And Its Related Parties [Member] | |||
Short-term Debt [Line Items] | |||
Short-term bank borrowings | $ 79,062,810 | $ 29,076,000 |
BORROWINGS (Long-Term Borrowing
BORROWINGS (Long-Term Borrowings) (Details) - USD ($) | Apr. 15, 2019 | Nov. 01, 2018 | Jun. 25, 2018 | Dec. 31, 2019 | Mar. 25, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument | |||||||
Long-term bank borrowings | $ 201,066,923 | ||||||
Bank of China [Member] | |||||||
Debt Instrument | |||||||
Maximum borrowing amount of credit facility | $ 57,400,000 | ||||||
Interest rate spread over rate issued by People's Bank of China | 10.00% | ||||||
Amount repaid | 700,000 | ||||||
Long-term bank borrowings | 56,700,000 | ||||||
Facility available for future draw down | $ 0 | ||||||
Term of the facility | 5 years | 3 years | |||||
Threshold maximum asset-liability ratio (as a percent) | 70.00% | ||||||
Bank of China [Member] | Land use rights | |||||||
Debt Instrument | |||||||
Assets pledged as collateral | $ 6,600,000 | ||||||
Bank of China [Member] | Machine and equipment | |||||||
Debt Instrument | |||||||
Assets pledged as collateral | $ 98,000,000 | ||||||
Bank of China [Member] | Facility one | |||||||
Debt Instrument | |||||||
Amount repaid | $ 1,400,000 | ||||||
Long-term bank borrowings | 48,800,000 | ||||||
Chongqing Rural Commercial Bank [Member] | Facility one | |||||||
Debt Instrument | |||||||
Maximum borrowing amount of credit facility | $ 96,100,000 | ||||||
Interest rate spread over rate issued by People's Bank of China | 20.00% | ||||||
Facility available for future draw down | $ 0 | ||||||
Chongqing Rural Commercial Bank [Member] | Facility one | Land use rights | |||||||
Debt Instrument | |||||||
Assets pledged as collateral | $ 17,200,000 | ||||||
Chongqing Rural Commercial Bank [Member] | Facility one | Buildings and plant [Member] | |||||||
Debt Instrument | |||||||
Assets pledged as collateral | 270,800,000 | ||||||
Chongqing Rural Commercial Bank [Member] | Facility one | Machine and equipment | |||||||
Debt Instrument | |||||||
Assets pledged as collateral | $ 190,700,000 | ||||||
Chongqing Rural Commercial Bank [Member] | Facility two | |||||||
Debt Instrument | |||||||
Maximum borrowing amount of credit facility | $ 76,800,000 | ||||||
Interest rate spread over rate issued by People's Bank of China | 20.00% | ||||||
Long-term bank borrowings | $ 68,200,000 | ||||||
Facility available for future draw down | 0 | ||||||
Shihezi Rural Cooperative Bank [Member] | Facility one | |||||||
Debt Instrument | |||||||
Maximum borrowing amount of credit facility | $ 29,000,000 | ||||||
Amount repaid | $ 29,000,000 | ||||||
Fixed interest rate | 6.20% | ||||||
Weighted average interest rate | 6.20% | ||||||
Proceeds from Lines of Credit | $ 0 | ||||||
Facility available for future draw down | 0 | ||||||
Shihezi Rural Cooperative Bank [Member] | Facility two | |||||||
Debt Instrument | |||||||
Amount repaid | $ 1,400,000 | ||||||
Fixed interest rate | 6.20% | 6.20% | |||||
Proceeds from Lines of Credit | $ 27,300,000 | ||||||
Facility available for future draw down | $ 28,700,000 | ||||||
Line of Credit [Member] | |||||||
Debt Instrument | |||||||
Weighted average interest rate | 5.70% | 5.90% | 5.90% | ||||
Long-term bank borrowings | $ 201,066,923 | $ 137,383,010 | |||||
Line of Credit [Member] | Bank of China [Member] | |||||||
Debt Instrument | |||||||
Long-term bank borrowings | 56,729,900 | 0 | |||||
Line of Credit [Member] | Chongqing Rural Commercial Bank [Member] | |||||||
Debt Instrument | |||||||
Long-term bank borrowings | 117,049,223 | 119,937,410 | |||||
Line of Credit [Member] | Shihezi Rural Cooperative Bank [Member] | |||||||
Debt Instrument | |||||||
Long-term bank borrowings | $ 27,287,800 | $ 17,445,600 |
BORROWINGS (Schedule of Princip
BORROWINGS (Schedule of Principal Maturities of Bank Borrowings) (Details) | Dec. 31, 2019USD ($) |
BORROWINGS | |
2020 | $ 49,548,900 |
2021 | 56,729,900 |
2022 | 56,011,800 |
2023 | 33,749,623 |
2024 | 5,026,700 |
Total | $ 201,066,923 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued payroll and welfare | $ 6,970,058 | $ 6,526,287 |
Exercised shared based compensation due to employee | 1,093,257 | |
Accrued shipment expenses | 1,011,320 | 567,438 |
Bid Bond | 810,868 | 936,294 |
Accrued professional fees | 368,587 | 187,027 |
Other tax payables | 367,467 | 364,223 |
Interest payable | 468,013 | 297,776 |
Others | 1,132,530 | 538,657 |
Total | $ 12,222,100 | $ 9,417,702 |
ADVANCES FROM CUSTOMERS (Detail
ADVANCES FROM CUSTOMERS (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total | $ 35,182,095 | $ 17,482,940 |
Less: Advances from customers - short-term portion | 33,027,795 | 10,213,940 |
Advances from customers - long-term portion | 2,154,300 | 7,269,000 |
Customer A [Member] | ||
Total | 28,123,324 | 15,827,579 |
Customer B [Member] | ||
Total | 4,184,426 | 392,037 |
Customer D [Member] | ||
Total | 1,503,529 | 0 |
Customer E [Member] | ||
Total | 905,840 | 1,017,427 |
Other Customer [Member] | ||
Total | $ 464,976 | $ 245,897 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | $ 0 | $ 11,482,905 | $ 2,987,668 |
Impairment losses on its long-lived assets | 3,000,000 | ||
Discontinued Operations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | 0 | 18,769,938 | $ 2,987,668 |
Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | 11,482,905 | ||
Impairment losses on its long-lived assets | $ 0 | 18,800,000 | |
Fair Value, Measurements, Nonrecurring [Member] | Discontinued Operations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | 7,287,033 | ||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferable relocation assets | 59,523,588 | ||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Discontinued Operations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferable relocation assets | 59,523,588 | ||
Reported Value Measurement [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferable relocation assets | 78,293,526 | ||
Reported Value Measurement [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferable relocation assets | 11,482,905 | ||
Reported Value Measurement [Member] | Fair Value, Measurements, Nonrecurring [Member] | Discontinued Operations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferable relocation assets | $ 66,810,621 |
MAINLAND CHINA CONTRIBUTION P_2
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | |||
Defined contribution plan expenses | $ 3,538,470 | $ 2,915,327 | $ 2,242,577 |
Aggregate balance of statutory common reserves | 43,326,113 | $ 39,387,239 | $ 31,991,537 |
Restrictions of statutory reserves | $ 362,059,176 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) ¥ in Millions | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Operating Loss Carryforwards [Line Items] | ||||
Income tax paid | $ 5,546,373 | $ 19,452,799 | $ 9,526,485 | |
Deferred Tax Assets, Valuation Allowance, Total | $ 729,231 | $ 0 | ||
Statutory enterprise income tax rate | 25.00% | 25.00% | 25.00% | 25.00% |
State Administration of Taxation, China | ||||
Operating Loss Carryforwards [Line Items] | ||||
Statutory enterprise income tax rate | 25.00% | 25.00% | ||
Preferential tax rate | 15.00% | 15.00% | 15.00% | 15.00% |
PRC State Council, income tax rate | 10.00% | 10.00% | ||
Xinjiang Daqo | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax paid | ¥ | ¥ 0.1 | |||
Preferential tax rate | 25.00% | 25.00% | ||
Chongqing Daqo New Energy Co., Ltd. [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Preferential tax rate | 25.00% | 25.00% | 25.00% | |
Xinjiang Daqo Guodi | ||||
Operating Loss Carryforwards [Line Items] | ||||
Preferential tax rate | 25.00% | 25.00% |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Expenses) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAXES | |||
Current tax expenses | $ 4,941,092 | $ 11,868,388 | $ 17,417,528 |
Deferred tax (benefit) expenses | 4,682,355 | (151,843) | (85,302) |
Total | $ 9,623,447 | $ 11,716,545 | $ 17,332,226 |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Income Tax Assets and Liabilities) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets: | ||||
Long-lived assets depreciation | $ 1,351,883 | $ 821,137 | ||
Net operating loss carried forward | 729,231 | 0 | ||
Sub-total | 2,081,114 | 821,137 | ||
Valuation Allowance | (729,231) | 0 | ||
Total deferred tax assets | 1,351,883 | 821,137 | ||
Deferred tax liabilities: | ||||
Long-lived assets depreciation | (5,226,521) | 0 | ||
Difference in basis of buildings | (1,141,359) | (1,184,644) | ||
Total deferred tax liabilities | (6,367,880) | (1,184,644) | ||
Discontinued Operations | ||||
Deferred tax assets: | ||||
Long-lived assets impairment & depreciation | 4,283,974 | 8,358,235 | ||
Net operating loss carried forward | 17,880,855 | 17,293,577 | ||
Sub-total | 23,329,700 | 27,062,264 | ||
Valuation Allowance | (27,062,264) | $ (41,316,449) | $ (38,729,208) | |
Total deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Schedule of Def_2
INCOME TAXES (Schedule of Deferred Income Tax Assets and Liabilities from Discontinued Operations) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||||
Net operating loss carried forward | $ 729,231 | $ 0 | ||
Sub-total | 2,081,114 | 821,137 | ||
Valuation Allowance | (729,231) | 0 | ||
Total deferred tax assets | 1,351,883 | 821,137 | ||
Discontinued Operations | ||||
Deferred tax assets: | ||||
Net operating loss carried forward | 17,880,855 | 17,293,577 | ||
Government grants related to assets | 98,492 | 180,759 | ||
Long-lived assets impairment & depreciation | 4,283,974 | 8,358,235 | ||
Others | 1,066,379 | 1,229,693 | ||
Sub-total | 23,329,700 | 27,062,264 | ||
Valuation Allowance | (27,062,264) | $ (41,316,449) | $ (38,729,208) | |
Total deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Schedule of Chang
INCOME TAXES (Schedule of Changes of Valuation Allowance) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Beginning balance | $ 0 | ||
Ending Balance | 729,231 | $ 0 | |
Discontinued Operations | |||
Beginning balance | 27,062,264 | 41,316,449 | $ 38,729,208 |
Reversal | (2,698,440) | (12,515,962) | (24,771) |
Foreign exchange effect | $ (304,893) | (1,738,223) | 2,612,012 |
Ending Balance | $ 27,062,264 | $ 41,316,449 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective income tax rate: | |||
PRC Enterprise Income Tax | 25.00% | 25.00% | 25.00% |
Preferential income tax rate of a subsidiary | (14.00%) | (11.00%) | (10.00%) |
Effect of different reversal rate | 5.00% | ||
Additional tax deductions | (3.00%) | (3.00%) | (1.00%) |
Different tax rate in other jurisdictions | 12.00% | 5.00% | 1.00% |
Effective tax rate | 25.00% | 16.00% | 15.00% |
INCOME TAXES (Schedule of Eff_2
INCOME TAXES (Schedule of Effect of Tax Holidays) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAXES | |||
The aggregate dollar effect | $ 5.2 | $ 7.8 | $ 11.3 |
Per share effect-basic and diluted | $ 0.02 | $ 0.02 | $ 0.04 |
SHARE BASED COMPENSATION (Sched
SHARE BASED COMPENSATION (Schedule of Assumptions Used with Binomial Option Valuation Model) (Details) - Employee Stock Option [Member] | 12 Months Ended |
Dec. 31, 2019 | |
January 12, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free rate of return | 2.82% |
Volatility rate | 93.00% |
Dividend yield | 0.00% |
July 06, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free rate of return | 3.20% |
Exercise multiple | 3 |
Volatility rate | 91.00% |
Dividend yield | 0.00% |
Post-vesting forfeiture rate | 5.00% |
September 09, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Minimum [Member] | January 12, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise multiple | 1.8 |
Post-vesting forfeiture rate | 5.00% |
Minimum [Member] | September 09, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free rate of return | 2.94% |
Exercise multiple | 1.8 |
Volatility rate | 91.00% |
Post-vesting forfeiture rate | 5.00% |
Maximum [Member] | January 12, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise multiple | 3 |
Post-vesting forfeiture rate | 8.00% |
Maximum [Member] | September 09, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free rate of return | 3.08% |
Exercise multiple | 3 |
Volatility rate | 92.00% |
Post-vesting forfeiture rate | 8.00% |
SHARE BASED COMPENSATION (summa
SHARE BASED COMPENSATION (summary of the non-vested RSU activity) (Details) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested RSUs on January 1, 2018 | shares | 43,487,613 |
Vested | shares | (12,914,511) |
Forfeited | shares | (55,250) |
Nonvested RSUs on December 31, 2018 | shares | 30,517,852 |
Nonvested RSUs on January 1, 2018 | $ / shares | $ 1.39 |
Vested | $ / shares | 1.39 |
Forfeited | $ / shares | 1.42 |
Nonvested RSUs on December 31, 2018 | $ / shares | $ 1.39 |
SHARE BASED COMPENSATION (Narra
SHARE BASED COMPENSATION (Narrative) (Details) - USD ($) | Feb. 03, 2017 | Sep. 09, 2015 | Jan. 12, 2015 | Dec. 21, 2018 | Jun. 06, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | Apr. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted | 12,569,166 | 6,274,166 | 0 | 8,134,375 | ||||||
Weighted average fair value of stock options granted | $ 0.59 | |||||||||
Share-based compensation | $ 17,896,942 | $ 13,788,049 | $ 4,200,273 | |||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.59 | $ 0.87 | $ 0.32 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost Adjustment Description | The total incremental cost associated with the modification was $282,581, of which $123,322 was recognized immediately for the options vested prior to the date of the modification and the remaining share-based compensation charges of $159,259 are recognized over the remaining vesting period of the modified options. | The total incremental cost associated with the modification was $241,557, of which $60,107 was recognized immediately for the options vested prior to the date of the modification and the remaining share-based compensation charges of $181,470 are recognized over the remaining vesting period of the modified options. | ||||||||
Restricted Stock or Unit Expense | $ 17,797,047 | |||||||||
Share Incentive Plan 2014 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Ordinary shares authorized | 21,000,000 | |||||||||
Share Incentive Plan 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Ordinary shares authorized | 38,600,000 | |||||||||
Share-based Compensation Award, Batch One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | $ 0.38 | |||||||||
Share-based Compensation Award, Batch Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | 0.35 | |||||||||
Share-based Compensation Award, Batch Three [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | 0.38 | |||||||||
Share-based Compensation Award, Batch Four [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | 0.37 | |||||||||
Share-based Compensation Award, Batch Five [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | $ 0.40 | |||||||||
Executive officers [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | $ 0.52 | |||||||||
Employees [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | $ 0.55 | |||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unrecognized compensation cost, recognition period | 2 years 8 months 27 days | |||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 42,276,119 | |||||||||
Restricted Stock Units (RSUs) [Member] | Share Incentive Plan 2014 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 12,653,992 | |||||||||
Restricted Stock Units (RSUs) [Member] | Share Incentive Plan 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 25,275,880 | |||||||||
Restricted Stock Units (RSUs) [Member] | Share Incentive Plan 2014 And 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 8,105,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | Chief Executive Officer [Member] | Share Incentive Plan 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 10,984,761 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | where 1/6 of the RSUs will be vested on the grant date and the remaining 5/6 of the RSUs will be vested on each of the monthly anniversary from July 6, 2018 | |||||||||
Employee Stock Option [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation | $ 99,895 | $ 684,773 | $ 1,559,863 |
SHARE BASED COMPENSATION (Sum_2
SHARE BASED COMPENSATION (Summary of Stock Option Activity) (Details) - USD ($) | Sep. 09, 2015 | Jan. 12, 2015 | Dec. 31, 2019 | Dec. 31, 2015 |
Number of Options | ||||
Options outstanding | 9,240,067 | |||
Granted | 12,569,166 | 6,274,166 | 0 | 8,134,375 |
Exercised | (2,474,950) | |||
Options outstanding | 6,765,117 | |||
Options vested or expected to vest | 20,207,103 | |||
Options exercisable | 6,764,509 | |||
Weighted Average Exercise Price | ||||
Options outstanding | $ 0.49 | |||
Granted | 0 | |||
Exercised | $ 0.59 | $ 0.87 | 0.32 | |
Options outstanding | 0.56 | |||
Options vested or expected to vest | 0.47 | |||
Options exercisable | $ 0.56 | |||
Weighted Average Remaining Contract Life | ||||
Options outstanding | 4 years 5 months 1 day | |||
Options vested or expected to vest | 3 years 1 month 28 days | |||
Options exercisable | 4 years 5 months 1 day | |||
Aggregate Intrinsic Value | ||||
Options outstanding | $ 10,079,601 | |||
Options vested or expected to vest | 31,941,622 | |||
Options exercisable | $ 10,078,718 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Additional Information) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Daqo Group [Member] | ||
Notes Payable, Related Parties, Current | $ 7.9 | $ 16 |
RELATED PARTY TRANSACTIONS AN_4
RELATED PARTY TRANSACTIONS AND BALANCES (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 20, 2018 | |
Related Party Transaction [Line Items] | ||||
Sales | $ 3,987,080 | $ 6,694,997 | $ 13,442,273 | |
Related party balances: | ||||
Amounts due from related parties | 16,521 | 815,035 | ||
Amounts due to related parties | 38,824,827 | 2,260,007 | ||
Discontinued Operations | ||||
Related party balances: | ||||
Amounts due from related parties | 2,367,657 | |||
Amounts due to related parties | 187,882 | 5,314,587 | ||
Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | 16,521 | 815,035 | ||
Amounts due to related parties | 38,824,827 | 2,260,007 | ||
Daqo Group [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | 7,904,387 | 10,365 | ||
ZhenjiangDaqo [Member] | Discontinued Operations | ||||
Related party balances: | ||||
Amounts due from related parties | 1,453,800 | |||
Others [Member] | Discontinued Operations | ||||
Related party balances: | ||||
Amounts due from related parties | 913,857 | |||
Amounts due to related parties | 187,882 | |||
Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 37,893,421 | 17,208,039 | 8,106,054 | |
Purchases of Raw Materials [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 1,699,536 | 331,353 | ||
Proceeds From Interest Free Loans [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 25,744,800 | 2,696,513 | ||
Repayment of Interest Free Loans [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 36,648,480 | 2,696,513 | ||
Repayment of Interest Bearing Loan [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 15,495,451 | |||
Proceeds From Related Parties Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 20,388,371 | 104,301,423 | 63,172,079 | |
Repayment Of Related Parties Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 20,388,371 | 104,421,948 | 83,754,652 | |
Zhengjiang Daqo Solar Co. Ltd [Member] | ||||
Related Party Transaction [Line Items] | ||||
Sales | $ 3,987,080 | 6,694,997 | 13,442,273 | |
Zhengjiang Daqo Solar Co. Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Zhengjiang Daqo Solar Co. Ltd [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 10,903,680 | |||
Daqo Solar Co Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Daqo Solar Co Ltd [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | $ 16,004,820 | 55,613,463 | 40,089,689 | |
Daqo Solar Co Ltd [Member] | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | $ 16,004,820 | 55,650,696 | 40,388,195 | |
Xinjiang Daqo Investment | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | 100.00% | ||
Xinjiang Daqo Investment | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 3,937,440 | 14,356,000 | ||
Xinjiang Daqo Investment | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 4,020,732 | 14,356,000 | ||
Daqo New Material [Member] | Discontinued Operations | ||||
Related party balances: | ||||
Amounts due to related parties | $ 0 | 5,314,587 | ||
Daqo New Material [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | $ 4,265,514 | |||
Daqo New Material [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Daqo New Material [Member] | Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 7,390,693 | |||
Daqo New Material [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 1,893,000 | 6,029,877 | ||
Daqo New Material [Member] | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 1,893,000 | 10,818,493 | ||
Chongqing Daqo Tailai [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | $ 8,004,373 | 1,825,680 | ||
Chongqing Daqo Tailai [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Chongqing Daqo Tailai [Member] | Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 15,212,713 | 8,240,830 | $ 715,361 | |
Chongqing Daqo Tailai [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 2,540,969 | 6,209,040 | ||
Chongqing Daqo Tailai [Member] | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 2,540,969 | 6,209,040 | ||
Jiangsu Daqo [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | $ 3,162,300 | 143,527 | ||
Jiangsu Daqo [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Jiangsu Daqo [Member] | Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 4,115,164 | 1,326,634 | ||
Nanjing Daqo Electric [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | $ 3,240,501 | 126,332 | ||
Nanjing Daqo Electric [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Nanjing Daqo Electric [Member] | Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 6,228,522 | 1,439,332 | ||
Other Subsidiaries of Daqo Group [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | 16,521 | 185,540 | ||
Amounts due to related parties | 1,120,948 | 154,103 | ||
Zhenjiang Electric Equipment Co Ltd [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | $ 1,489,553 | |||
Zhenjiang Electric Equipment Co Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Zhenjiang Electric Equipment Co Ltd [Member] | Purchases of Raw Materials [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 1,699,536 | 331,353 | ||
Nanjing Daqo Transformer [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | $ 9,637,251 | |||
Nanjing Daqo Transformer [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Nanjing Daqo Transformer [Member] | Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 12,337,022 | 6,201,243 | ||
Nanjing Daqo Transformer [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 1,842,582 | |||
Nanjing Daqo Transformer [Member] | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 1,842,582 | |||
Xinjiang Daqo Tianfu Thermoelectric Co Ltd [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | $ 0 | $ 629,495 | ||
Daqo Investmsnt Co Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator used in basic and diluted earnings per share: | |||
Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations | $ 28,263,602 | $ 61,156,886 | $ 96,662,387 |
(Loss) income from discontinued operations, net of tax | 1,260,790 | (23,032,181) | (3,821,259) |
Net income attributable to Daqo New Energy Corp. ordinary shareholders-basic and diluted | $ 29,524,392 | $ 38,124,705 | $ 92,841,128 |
Denominator used in basic and diluted earnings per share: | |||
Weighted average number of ordinary shares outstanding used in computing earnings per share-basic | 339,571,054 | 311,715,158 | 265,070,961 |
Weighted average number of ordinary shares outstanding used in computing earnings per share-diluted | 349,961,558 | 325,506,335 | 272,926,319 |
Basic earnings per share-continuing operations | $ 0.08 | $ 0.20 | $ 0.36 |
Basic earnings (loss) per share-discontinued operations | 0.01 | (0.08) | (0.01) |
NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE-Basic | 0.09 | 0.12 | 0.35 |
Diluted earnings per share-continuing operations | 0.08 | 0.19 | 0.35 |
Diluted earnings (loss) per share-discontinued operations | 0 | (0.07) | (0.01) |
NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE-Diluted | $ 0.08 | $ 0.12 | $ 0.34 |
Employee Stock Option [Member] | |||
Denominator used in basic and diluted earnings per share: | |||
Dilutive effects of RSUs | 5,568,144 | 6,346,349 | 6,020,839 |
Restricted Stock Units (RSUs) [Member] | |||
Denominator used in basic and diluted earnings per share: | |||
Dilutive effects of RSUs | 4,822,360 | 7,444,828 | 1,834,519 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Capital commitments: | |||
Commitments outstanding for the purchase of property, plant and equipment | $ 53,900,000 | ||
Lease commitments: | |||
2020 | 90,565 | ||
2021 | 90,318 | ||
2022 | 23,864 | ||
Total | 204,747 | ||
Lease expense | $ 69,028 | $ 38,633 | $ 37,756 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 349,990,753 | $ 301,599,897 | $ 323,199,694 | |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Concentration Risk, Percentage | 78.00% | 57.00% | 38.00% | |
Customer A [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 187,216,802 | $ 57,858,670 | $ 43,258,204 | |
Another customer | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 84,225,661 | $ 115,411,965 | 39,219,089 | |
Customer C [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | [1] | $ 39,099,677 | ||
[1] | Represents less than 10% |
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I (BALANCE SHEET) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 52,684,734 | $ 66,401,408 | $ 60,676,605 |
Prepaid expenses and other current assets | 15,343,671 | 10,335,501 | |
Total current assets | 174,328,361 | 160,068,807 | |
TOTAL ASSETS | 1,201,356,021 | 854,929,081 | |
Current liabilities: | |||
Accrued expenses and other current liabilities | 12,222,100 | 9,417,702 | |
Total current liabilities | 445,146,337 | 149,853,934 | |
Equity: | |||
Ordinary shares($0.0001 par value 500,000,000 shares authorized as of December 31, 2018 and 2019; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018; 351,823,578 shares issued and 347,419,152 shares outstanding as of December 31, 2019) | 34,977 | 33,439 | |
Additional paid in capital | 387,371,083 | 368,681,449 | |
Retained earnings | 200,922,577 | 171,398,185 | |
Accumulated other comprehensive loss | (19,936,848) | (13,232,560) | |
Treasury shares, at cost (4,643,150 shares as of December 31, 2018 and 2019) | (1,748,836) | (1,748,836) | |
Total shareholders' equity | 566,642,953 | 525,131,677 | |
TOTAL LIABILITIES AND EQUITY | $ 1,201,356,021 | $ 854,929,081 | |
Ordinary shares: | |||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | |
Ordinary shares, shares issued | 351,823,578 | 351,823,578 | |
Ordinary shares, shares outstanding | 347,419,152 | 332,029,752 | |
Treasury Stock, Shares | 4,643,150 | 4,643,150 | |
Parent Company [Member] | |||
Current assets: | |||
Cash and cash equivalents | $ 1,346,183 | $ 1,487,517 | |
Prepaid expenses and other current assets | 276,876 | 186,641 | |
Total current assets | 1,623,059 | 1,674,158 | |
Investments in subsidiaries | 565,242,087 | 523,650,516 | |
TOTAL ASSETS | 566,865,146 | 525,324,674 | |
Current liabilities: | |||
Accrued expenses and other current liabilities | 222,193 | 192,997 | |
Equity: | |||
Ordinary shares($0.0001 par value 500,000,000 shares authorized as of December 31, 2018 and 2019; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018; 351,823,578 shares issued and 347,419,152 shares outstanding as of December 31, 2019) | 34,977 | 33,439 | |
Additional paid in capital | 387,371,083 | 368,681,449 | |
Retained earnings | 200,922,577 | 171,398,185 | |
Accumulated other comprehensive loss | (19,936,848) | (13,232,560) | |
Treasury shares, at cost (4,643,150 shares as of December 31, 2018 and 2019) | (1,748,836) | (1,748,836) | |
Total shareholders' equity | (566,642,953) | (525,131,677) | |
TOTAL LIABILITIES AND EQUITY | $ 566,865,146 | $ 525,324,674 | |
Ordinary shares: | |||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | |
Ordinary shares, shares issued | 351,823,578 | 351,823,578 | |
Ordinary shares, shares outstanding | 347,419,152 | 332,029,752 | |
Treasury Stock, Shares | 4,643,150 | 4,643,150 |
FINANCIAL STATEMENT SCHEDULE _2
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating expenses: | |||
Total operating expenses, net | $ (32,618,358) | $ (16,908,799) | $ (13,235,336) |
Income from operations | 47,485,210 | 81,204,907 | 130,812,428 |
Interest income | 983,158 | 1,235,873 | 464,515 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | 29,524,392 | 38,124,705 | 92,841,128 |
Other comprehensive (loss) income: | |||
Comprehensive income attributable to Daqo New Energy Corp. ordinary shareholders | 22,820,104 | 11,908,626 | 114,670,135 |
Parent Company [Member] | |||
Operating expenses: | |||
General and administrative | (11,975,105) | (14,513,869) | (4,987,820) |
Total operating expenses, net | (11,975,105) | (14,513,869) | (4,987,820) |
Income from operations | (11,975,105) | (14,513,869) | (4,987,820) |
Interest income | 20,698 | 289,773 | 0 |
Net loss before share of results of subsidiaries | (11,954,407) | (14,224,096) | (4,987,820) |
Equity in earnings of subsidiaries | 41,478,799 | 52,348,801 | 97,828,948 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | 29,524,392 | 38,124,705 | 92,841,128 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (6,704,288) | (26,216,079) | 21,829,007 |
Total other comprehensive income (loss): | (6,704,288) | (26,216,079) | 21,829,007 |
Comprehensive income attributable to Daqo New Energy Corp. ordinary shareholders | $ 22,820,104 | $ 11,908,626 | $ 114,670,135 |
FINANCIAL STATEMENT SCHEDULE _3
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF CASH FLOWS) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES | ||||
Net income | $ 29,524,392 | $ 38,124,705 | $ 92,841,128 | |
Share-based compensation | 17,896,942 | 13,788,049 | 4,200,273 | |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Prepaid expenses and other current assets | (5,174,161) | (4,699,699) | 496,485 | |
Accrued expense and other current liabilities | 2,943,201 | (918,399) | 4,581,224 | |
Net cash provided by operating activities | 180,990,569 | 95,553,040 | 142,704,394 | |
INVESTING ACTIVITIES | ||||
Net cash used in investing activities | (261,827,713) | (164,720,305) | (67,900,571) | |
FINANCING ACTIVITIES | ||||
Proceeds from follow-on equity offering | 113,540,845 | |||
Insurance cost for follow-on equity offering | $ (6,900,000) | (6,919,202) | ||
Proceeds from options exercised | 791,493 | 686,596 | 2,238,854 | |
Net cash (used in) provided by financing activities | 102,327,088 | 86,711,890 | (37,354,319) | |
Net increase in cash, cash equivalents and restricted cash | 20,174,209 | 22,453,722 | 40,785,219 | |
Cash, cash equivalents and restricted cash at the beginning of the year (includes $3,723,807, $8,952,260 and $1,091,190 of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2016, 2017 and 2018) | 95,119,886 | 72,666,164 | 31,880,945 | |
Cash, cash equivalents and restricted cash at the end of the year (includes $8,952,260, $1,091,190 and $845,199 of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2017, 2018 and 2019) | 115,294,095 | 95,119,886 | 72,666,164 | |
Parent Company [Member] | ||||
OPERATING ACTIVITIES | ||||
Net income | 29,524,392 | 38,124,705 | 92,841,128 | |
Equity in earnings of subsidiaries | (41,478,799) | (52,348,801) | (97,828,948) | |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Net cash provided by operating activities | (932,827) | (578,770) | (645,547) | |
INVESTING ACTIVITIES | ||||
Capital contributed to subsidiaries | 0 | (109,778,761) | 0 | |
Net cash used in investing activities | 0 | (109,778,761) | 0 | |
FINANCING ACTIVITIES | ||||
Proceeds from follow-on equity offering | 0 | 113,540,845 | 0 | |
Insurance cost for follow-on equity offering | 0 | (6,919,202) | 0 | |
Proceeds from options exercised | 791,493 | 686,596 | 2,238,854 | |
Net cash (used in) provided by financing activities | 791,493 | 107,308,239 | 2,238,854 | |
Net increase in cash, cash equivalents and restricted cash | (141,334) | (3,049,292) | 1,593,307 | |
Cash, cash equivalents and restricted cash at the beginning of the year (includes $3,723,807, $8,952,260 and $1,091,190 of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2016, 2017 and 2018) | 1,487,517 | 4,536,809 | 2,943,502 | |
Cash, cash equivalents and restricted cash at the end of the year (includes $8,952,260, $1,091,190 and $845,199 of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2017, 2018 and 2019) | $ 1,346,183 | $ 1,487,517 | $ 4,536,809 |