Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2016 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
Trading Symbol | DQ |
Entity Registrant Name | DAQO NEW ENERGY CORP. |
Entity Central Index Key | 1,477,641 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 262,956,278 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 15,987,478 | $ 14,490,011 |
Restricted cash | 15,893,467 | 19,062,713 |
Accounts receivable, net of allowance for doubtful accounts of $1,087,465 and $10,163 as of December 31, 2015 and 2016, respectively | 4,836,499 | 19,849,608 |
Note receivables | 13,025,552 | 11,109,695 |
Prepaid expenses and other current assets | 8,027,667 | 12,235,141 |
Advances to suppliers | 1,722,783 | 1,028,287 |
Inventories | 12,280,700 | 10,715,939 |
Amounts due from related parties | 1,528,712 | 284,633 |
Total current assets | 73,302,858 | 88,776,027 |
Property, plant and equipment, net | 557,427,884 | 544,326,125 |
Prepaid land use rights, net | 24,809,809 | 27,122,287 |
Deferred tax assets | 585,944 | 626,965 |
Investment accounted for under the cost-method | 581,581 | |
TOTAL ASSETS | 656,708,076 | 660,851,404 |
Current liabilities: | ||
Short-term bank borrowings, including current portion of long-term bank borrowings | 105,980,320 | 123,936,995 |
Accounts payable | 18,745,297 | 17,491,292 |
Note payables | 25,732,489 | 20,152,962 |
Advances from customers | 7,519,605 | 8,183,376 |
Payables for purchases of property, plant and equipment | 51,322,901 | 49,674,887 |
Accrued expenses and other current liabilities | 8,320,041 | 8,616,831 |
Amounts due to related parties | 26,829,605 | 46,396,527 |
Income tax payable | 5,300,163 | 940,732 |
Total current liabilities | 249,750,421 | 275,393,602 |
Long-term bank borrowings | 111,948,913 | 118,548,430 |
Deferred government subsidies | 23,279,820 | 25,252,882 |
Total liabilities | 384,979,154 | 419,194,914 |
Commitments and contingencies (Note 18) | ||
Ordinary shares; | ||
$0.0001 per value 500,000,000 shares authorized as of December 31, 2015 and 2016; 279,214,103 and 279,214,103 shares issued as of December 31, 2015 and 2016, respectively and 260,836,578 and 262,956,278 shares outstanding as of December 31, 2015 and 2016, respectively | 26,532 | 26,320 |
Additional paid in capital | 240,111,533 | 236,358,070 |
Retained Earnings (accumulated deficit) | 40,432,352 | (3,061,404) |
Accumulated other comprehensive income (loss) | (8,721,820) | 8,780,313 |
Treasury Stock, at cost (4,643,150 and 4,643,150 shares as of December 31, 2015 and 2016, respectively) | (1,748,836) | (1,748,836) |
Total shareholders' equity | 270,099,761 | 240,354,463 |
Noncontrolling interest | 1,629,161 | 1,302,027 |
Total equity | 271,728,922 | 241,656,490 |
TOTAL LIABILITIES AND EQUITY | $ 656,708,076 | $ 660,851,404 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts receivable, allowance for doubtful accounts | $ 10,163 | $ 1,087,465 |
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued | 279,214,103 | 279,214,103 |
Ordinary shares, shares outstanding | 262,956,278 | 260,836,578 |
Treasury Stock, shares | 4,643,150 | 4,643,150 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | |||
Revenues | $ 229,101,211 | $ 182,040,968 | $ 182,571,852 |
Cost of revenues | |||
Total cost of revenues | (148,672,693) | (144,491,083) | (139,308,511) |
Gross profit | 80,428,518 | 37,549,885 | 43,263,341 |
Operating (expenses) income: | |||
Selling, general and administrative expenses | (16,104,057) | (12,603,824) | (10,293,851) |
Research and development expenses | (4,001,438) | (923,664) | (1,486,978) |
Other operating income, net | 5,325,336 | 3,824,881 | 552,444 |
Long-lived assets impairment | (198,689) | (1,622,588) | |
Total operating expenses | (14,978,848) | (11,325,195) | (11,228,385) |
Income from operations | 65,449,670 | 26,224,690 | 32,034,956 |
Interest expense | (14,568,158) | (13,173,958) | (15,654,106) |
Interest income | 407,996 | 493,995 | 324,118 |
Exchange (loss) gain | (7,422) | 640,678 | (55,792) |
Income before income taxes | 51,282,086 | 14,185,405 | 16,649,176 |
Income tax expense | (7,358,089) | (1,137,821) | |
Net income | 43,923,997 | 13,047,584 | 16,649,176 |
Net income attributable to noncontrolling interest | 430,241 | 90,695 | |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | $ 43,493,756 | $ 12,956,889 | $ 16,649,176 |
NET (LOSS) EARNINGS PER ORDINARY SHARE | |||
Basicordinary shares | $ 0.17 | $ 0.05 | $ 0.08 |
Dilutedordinary shares | $ 0.16 | $ 0.05 | $ 0.08 |
ORDINARY SHARES USED IN CALCULATING EARNINGS PER ORDINARY SHARE | |||
Basicordinary shares | 261,742,244 | 258,015,851 | 206,349,976 |
Diluteddiluted shares | 264,817,755 | 261,411,933 | 211,353,643 |
Products [Member] | Third parties [Member] | |||
Revenues | |||
Revenues | $ 217,907,014 | $ 166,942,726 | $ 158,256,598 |
Products [Member] | Related parties [Member] | |||
Revenues | |||
Revenues | 10,900,252 | 9,069,816 | 15,840,748 |
Service fees [Member] | Third parties [Member] | |||
Revenues | |||
Revenues | 3,203,298 | 5,165,254 | |
Service fees [Member] | Related parties [Member] | |||
Revenues | |||
Revenues | $ 293,945 | $ 2,825,128 | $ 3,309,252 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income | $ 43,923,997 | $ 13,047,584 | $ 16,649,176 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (17,605,240) | (11,286,150) | (3,662,013) |
Total other comprehensive loss | (17,605,240) | (11,286,150) | (3,662,013) |
Comprehensive income | 26,318,757 | 1,761,434 | 12,987,163 |
Comprehensive income attributable to noncontrolling interest | 327,134 | 61,415 | |
Comprehensive income attributable to Daqo New Energy Corp. shareholders | $ 25,991,623 | $ 1,700,019 | $ 12,987,163 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Total | Ordinary shares [Member] | Treasury Stock [Member] | Additional paid in capital [Member] | Accumulated Loss [Member] | Accumulated other comprehensive income (loss) [Member] | Noncontrolling interest [Member] |
Balance at Dec. 31, 2013 | $ 137,326,561 | $ 17,343 | $ (398,672) | $ 146,676,163 | $ (32,667,469) | $ 23,699,196 | |
Balance, shares at Dec. 31, 2013 | 173,427,853 | ||||||
Net income | 16,649,176 | 16,649,176 | |||||
Other comprehensive loss | (3,662,013) | (3,662,013) | |||||
Share-based compensation | 1,792,819 | 1,792,819 | |||||
Follow-on equity offering, net of issuance costs | 54,624,447 | $ 5,000 | 54,619,447 | ||||
Follow-on equity offering, net of issuance costs shares | 50,000,000 | ||||||
Options Exercise | 37,080 | $ 15 | 37,065 | ||||
Options Exercise, shares | 150,000 | ||||||
Balance at Dec. 31, 2014 | 206,768,070 | $ 22,358 | (398,672) | 203,125,494 | (16,018,293) | 20,037,183 | |
Balance, shares at Dec. 31, 2014 | 223,577,853 | ||||||
Net income | 13,047,584 | 12,956,889 | 90,695 | ||||
Other comprehensive loss | (11,286,150) | (11,256,870) | (29,280) | ||||
Share-based compensation | 3,687,951 | 3,687,951 | |||||
Follow-on equity offering, net of issuance costs | 27,996,959 | $ 3,850 | 27,993,109 | ||||
Follow-on equity offering, net of issuance costs shares | 38,500,000 | ||||||
Options Exercise | 275,783 | $ 112 | 275,671 | ||||
Options Exercise, shares | 1,115,625 | ||||||
Repurchase of stock | $ (1,350,164) | (1,350,164) | |||||
Repurchase of stock, shares | (2,356,900) | (2,356,900) | |||||
Capital injection from noncontrolling shareholders | $ 2,516,457 | 1,275,845 | 1,240,612 | ||||
Balance at Dec. 31, 2015 | 241,656,490 | $ 26,320 | (1,748,836) | 236,358,070 | (3,061,404) | 8,780,313 | 1,302,027 |
Balance, shares at Dec. 31, 2015 | 260,836,578 | ||||||
Net income | 43,923,997 | 43,493,756 | 430,241 | ||||
Other comprehensive loss | (17,605,240) | (17,502,133) | (103,107) | ||||
Share-based compensation | 2,702,089 | 2,702,089 | |||||
Options Exercise | $ 1,051,586 | $ 212 | 1,051,374 | ||||
Options Exercise, shares | 2,119,700 | 2,119,700 | |||||
Balance at Dec. 31, 2016 | $ 271,728,922 | $ 26,532 | $ (1,748,836) | $ 240,111,533 | $ 40,432,352 | $ (8,721,820) | $ 1,629,161 |
Balance, shares at Dec. 31, 2016 | 262,956,278 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Follow-on equity offering, issuance costs | $ 2,033,041 | $ 3,375,553 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net income | $ 43,923,997 | $ 13,047,584 | $ 16,649,176 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Long-lived assets impairment | 198,689 | 1,622,588 | |
Share-based compensation | 2,702,089 | 3,687,951 | 1,792,819 |
Inventory write-down | 62,422 | 175,568 | |
Provision of allowance for doubtful accounts | (1,053,041) | (2,026,567) | (3,823,744) |
Depreciation of property, plant and equipment | 33,822,082 | 31,361,026 | 28,007,943 |
Loss on disposal of Property Plant and Equipment | 181,028 | 166,283 | 314,728 |
Deferred tax assets | 445 | (626,965) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 14,890,598 | (10,399,283) | 4,775,333 |
Note receivables | (2,634,860) | 36,898,166 | (34,702,180) |
Prepaid expenses and other current assets | 3,415,637 | 30,465 | 10,217,835 |
Advances to suppliers | (761,045) | 264,361 | (513,373) |
Inventories | (2,258,281) | (1,622,269) | 484,562 |
Amount due from related parties | (1,318,195) | 5,481,362 | 2,193,604 |
Prepaid land use rights | 557,162 | 595,716 | 623,413 |
Other non-current assets | 161,657 | 229,688 | |
Accounts payable | 2,386,015 | 1,452,811 | (475,966) |
Note payables | (1,403,994) | (14,733,475) | 31,992,814 |
Accrued expenses and other current liabilities | 260,879 | 59,045 | 1,677,622 |
Income tax payable | 4,420,313 | 940,732 | |
Advances from customers | (134,155) | (2,051,000) | (13,813,120) |
Amount due to related parties | 1,815,307 | 2,178,445 | (453,075) |
Deferred government subsidies | (338,733) | (124,842) | 266,082 |
Net cash provided by operating activities | 98,671,937 | 66,426,213 | 45,619,729 |
Investing activities: | |||
Purchases of property, plant and equipment | (67,477,008) | (81,364,037) | (77,028,755) |
(Decrease)/Increase in restricted cash | 1,935,536 | 2,121,603 | (13,560,277) |
Proceeds from disposition of Nanjing Daqo | 5,110,085 | ||
Investment accounted for under the cost-method | (581,581) | ||
Net cash used in investing activities | (66,123,053) | (74,132,349) | (90,589,032) |
Financing activities: | |||
Proceeds from related parties loans | 126,400,842 | 245,957,818 | 275,134,122 |
Repayment of related parties loans | (148,463,137) | (276,575,346) | (275,088,560) |
Proceeds from bank borrowings | 106,986,666 | 237,031,976 | 176,114,553 |
Repayment of bank borrowings | (116,255,480) | (220,611,404) | (186,549,888) |
Purchase and retirement of treasury shares | (1,350,164) | ||
Proceeds from options exercised | 1,051,586 | 275,783 | 37,080 |
Proceeds from follow-on equity offering | 30,030,000 | 58,000,000 | |
Insurance cost for follow-on equity offering | (2,033,041) | (3,375,553) | |
Capital injection from noncontrolling shareholders | 2,516,457 | ||
Net cash provided by (used in) financing activities | (30,279,523) | 15,242,079 | 44,271,754 |
Effect of exchange rate changes on cash and cash equivalents | (771,894) | (114,415) | (65,052) |
Net increase (decrease) in cash and cash equivalents | 1,497,467 | 7,421,528 | (762,601) |
Cash and cash equivalents at the beginning of the year | 14,490,011 | 7,068,483 | 7,831,084 |
Cash and cash equivalents at the end of the year | 15,987,478 | 14,490,011 | 7,068,483 |
Supplemental disclosure of cash flow information: | |||
Interest paid, net of capitalized interest | 14,215,745 | 13,284,899 | 17,771,457 |
Income taxes paid | 2,998,658 | 2,726,825 | |
Supplemental schedule of non-cash investing activities: | |||
Accrued purchases of property, plant and equipment | 65,625,603 | 52,786,103 | 85,640,643 |
Purchases of property, plant and equipment included in amounts due to related parties | $ 3,351,004 | $ 262,974 | $ 5,651,053 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES [Abstract] | |
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”) and Xinjiang Daqo New Energy Co., Ltd. (“Xinjiang Daqo”) are collectively referred to as the Group. The Group’s consolidated financial statements for the periods presented have been prepared by including the financial statements of the Company and its subsidiaries. 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”). The Group manufactured and sold polysilicon and wafers through Chongqing Daqo and Xinjiang Daqo. In August 2015, Xinjiang Daqo issued stock representing 1 100 2.5 |
SUMMARY OF PRINCIPAL ACCOUNTING
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES 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, 2016, the Group’s current liabilities exceed its current assets by $ 176.4 0.3 16.0 106.0 4.7 Such negative working capital and adverse current ratio 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 $ 99 2. With the completion of the polysilicon Phase 3A expansion project in Xinjiang, the nameplate capacity of polysilicon increased by 48 3. The Group has completed a series of cost reduction activities such as technology improvement. 4. 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 March 21, 2017, 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. Further, the support letter provides that Daqo Group will not require the Group to pay the amount owed to the Daqo Group and subsidiaries of Daqo Group before 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. The consolidated financial statements include the financial statements of the Group. All intercompany transactions and balances have been eliminated on consolidation. 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. 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 and cash equivalents 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. Allowance for doubtful accounts is $ 1,087,465 10,163 Accounts December 31, receivable 2015 2016 Customer A $ * $ 1,576,400 Customer B $ * $ 1,368,956 Customer C $ 2,996,042 $ 1,294,342 Customer D $ 6,354,510 $ * Customer F $ 2,315,035 $ * Customer G $ 2,299,732 $ * * Represents less than 10% From time to time, certain accounts receivable balances are settled in the form of notes receivable. As of December 31, 2015 and 2016, notes receivable represents bank acceptance drafts that are non-interest bearing and due within 6 months. Furthermore, all of the Group's long-term bank borrowings are guaranteed by Daqo Group, our related party, who has also committed to provide financial support to meet the Group's short term bank borrowings obligations, other liabilities and commitments as they become due (see Note 2(a)). The Group's access to credit is significantly reliant on Daqo Group's ability and willingness to continue to provide sufficient financial support. 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 $ 19,062,714 15,893,467 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 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 market 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 inventory for the years ended December 31, 2014, 2015 and 2016 were $ 175,568 62,422 The Group has outsourced portions of its manufacturing process, including cutting ingots into wafers, and converting wafers into solar cells, to various third-party manufacturers. These outsourcing arrangements may or may not include transfer of title of the raw material inventory (ingots, wafers or cells) to the third-party manufacturers. For those outsourcing arrangements in which title does not transfer, the Group maintains the inventory in the balance sheet as raw materials inventory while it is in physical possession of the third-party manufacturers. Upon receipt of the processed inventory from the third-party manufacturers, it is reclassified to work-in-progress inventory with the processing fee capitalized as cost of inventory. For those outsourcing arrangements in which title (including risk of loss) does transfer to the third-party manufacturer, the Group is contractually obligated to repurchase the processed inventory. To accomplish this, it enters into raw material sales agreements and processed inventory purchase agreements simultaneously with the third-party manufacturer. In such instances, where they are, in substance tolling arrangements, the Group retains the inventory in the consolidated balance sheets while it is in the physical possession of the third-party manufacturer. The cash received from the third-party manufacturer is recorded as a current liability on the balance sheet rather than revenue or deferred revenue. Upon receipt of the processed inventory, it is reclassified from raw materials to work-in-progress inventory and the processing fee paid to the third-party manufacturer is added to inventory cost. Cash payments for outsourcing arrangements which require prepayment for repurchase of the processed inventory are classified as current assets on the balance sheet. If there is no legal right of offset established by these arrangements, the associated assets and liabilities are presented separately on the balance sheet until the processed inventory is returned to the Group. Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation is recognized on a straight-line basis over the following estimated useful lives: Buildings and plant 30 Machinery and equipment 15 Furniture, fixtures and equipment 3 5 Motor vehicles 6 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 cost 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, 2014, 2015 and 2016 was $ 1,960,259 2,825,879 1,757,547 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 $ 628,052 595,716 557,162 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 planed 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. 1,622,588 198,689 1.6 0.2 Product sales The Group recognizes revenue when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, delivery of the product has occurred, title and risk of loss have transferred to the customers and collectability of the receivable is reasonably assured. The majority of the sales contracts transfer title and risk of loss to customers upon receipt. Sales agreements for polysilicon and wafers typically do not contain product warranties except for return and replacement of defective products within a period generally ranging from 3 to 30 days from delivery. Sales agreements typically do not contain post-shipment obligations or other return or credit provisions. Customers frequently pay for products prior to the delivery of the products. Advance payments are recorded as advances from customers. Service revenue The Group also provides OEM services to customers, such as the provision of service to process polysilicon into ingots and wafers. The Group recognizes revenue when there is persuasive evidence of an arrangement, the service has been rendered, the sales price is fixed or determinable and collectability is reasonably assured. 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. Costs to ship products to customers are recorded as selling expenses in the consolidated statements of operations. Costs to ship products to customers were $ 2,054,786 2,708,962 3,147,594 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. In the years ended December 31, 2015 and 2016, the Group incurred additional research and development expenses for its Xinjiang Phase II polysilicon facilities to achieve the targets for quality, capacity and cost during the pilot production period. 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; however, these subsidies do not represent tax refunds or reimbursements of expenditures. 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, 2014, 2015 and 2016 were $ 926,173 3,578,865 4,742,635 113,735 690,889 323,769 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. 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 Black-Scholes valuation model and the fair value of restricted share units ("RSUs") is determined with reference to the fair value of the underlying shares. 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, research and development expenses or cost of sales, depending on the job functions of the grantees. For the years ended December 31, 2014, 2015 and 2016, the Group recognized share-based compensation expense of $1,792,819, $3,687,951 and $2,702,089, respectively, which was classified as follows: Year ended December 31, 2014 2015 2016 Selling, general and administrative expenses $ 1,544,078 $ 3,323,948 $ 2,501,957 Research and development expenses 12,310 Cost of sales 236,431 364,003 200,132 Total $ 1,792,819 $ 3,687,951 $ 2,702,089 Basic earnings per ordinary share are computed by dividing the net income attributable to ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per 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. The reporting currency of the Company is the United States dollar (“U.S. dollar”). The functional currency of the Company is the U.S. dollar. Monetary assets and liabilities denominated in 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 Company’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 and cash equivalents and restricted cash denominated in RMB amounted to $ 30,891,550 28,839,371 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 1Valuation 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 2Valuation 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 3Valuation 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, accounts receivable, note receivables other current assets, amount due from related parties, accounts payable, other current liabilities, payables for purchase of property, plant and equipment, amounts due to related parties and short-term and current portion of long-term 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 fair value of the Group’s long-term bank borrowings as of December 31, 2015 and 2016 is estimated by discounted cash flow technique using an interest rate corresponding to debt with similar maturities and risks on the measurement date. The long-term bank borrowings approximate their fair values because market interest rates have no fluctuated significantly since the contract signed. The Group classified the ownership interest in the consolidated entity held by a party other than the Group to noncontrolling 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 noncontrolling interest on the face of the Consolidated Statements of Operations. Xinjiang Daqo Investment's equity interests in Xinjiang Daqo are presented as a noncontrolling interest as of December 31, 2015. The non-controlling interest was $ 1,302,027 1,629,161 On July 9, 2012, the Company's Board of Directors authorized the Company to repurchase up to $ 5 2,356,900 1,350,164 On February 17, 2016, Xinjiang Daqo entered into an agreement to invest in Syned Fire Safety Service Co., Ltd.(“Syned Fire Safety Services”), a company engaging in fire safety activities. Pursuant to the agreement, Xinjiang Daqo contributed a capital investment of $ 581,581 4,038,900 15.29 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 year ended December 31, 2016. 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. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial StatementsGoing Concern, which requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The new standard is effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. The Group has adopted ASU 2014-15, assessed its ability to continue as a going concern and concluded that substantial doubt about its ability to continue as a going concern does not exist. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes which simplifies the presentation of deferred taxes on the balance sheet by requiring classification of all deferred tax items as noncurrent including valuation allowances by jurisdiction. The ASU is effective for public entities for annual and interim periods beginning after December 15, 2016, and interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Group adopted the ASU and has already considered the impact on its consolidated financial statements and related disclosures as of December 31, 2016 and the effect is not material. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. The core principle of the new guidance is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new guidance also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple element arrangements. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company must adopt ASU 2016-10, ASU 2016-12 and ASU 2016-20 with ASU 2014-09 (collectively, the "new revenue standards"). The new revenue standards may be applied retrospectively to each prior period presented (full retrospective method) or retrospectively with the cumulative effect recognized as of the date of initial application (the modified retrospective method). The new revenue standards become effective for the Company on January 1, 2018. The Company currently anticipates adopting the new revenue standards using the full retrospective method. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330), which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LIFO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Group will adopt this ASU on its effective date of January 1, 2017 and is in the process of evaluating the impact on its consolidated financial statements upon adoption. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. The ASU also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. Entities will have to assess the realizability of such deferred tax assets in combination with the entities other deferred tax assets. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017 and for interim periods within that reporting period. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. 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. This ASU will become effective for the Company in the first quarter of fiscal year 2019, and requires adoption using a modified retrospective approach. The Group is in the process of evaluating the impact on its consolidated financial statements, as well as the impact of adoption on policies, practices and systems. As of December 31, 2016, the Group has $ 2.9 In March 2016, |
EXIT and DISPOSAL ACTIVITIES
EXIT and DISPOSAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2016 | |
EXIT and DISPOSAL ACTIVITIES [Abstract] | |
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 In August 2014, the Board of Directors approved the Company to launch an early stage research for the Polysilicon Phase III Expansion Project in Xinjiang. After a comprehensive analysis of the capacity and comparability of the Chongqing machinery and equipment, the Company concluded that it would be more efficient to use part of the machinery and equipment in Phrase III, rather than using all of them in Phrase II Expansion Project. As a result, the Company has changed its original relocation plan and determined to utilize a portion of these equipment and machinery in Polysilicon Phase III Expansion Project in Xinjiang. As of December 31, 2014, about $ 46.1 286.4 116.1 720.5 70.0 434.1 During the year ended December 31, 2014, additional $ 0.8 In November 2015, the Group together with a professional transport company reviewed all the remaining assets for the relocation preparation under the Phase III Expansion Project. Along with the complicated and comprehensive relocation preparation, the Group identified assets of $ 1.6 1.6 1.1 7.0 0.3 0.2 0.1 0.1 During the year ended December 31, 2016, the Company relocated additional machinery and equipment of $ 34.1 236.7 15.7 109.0 Along with the complicated and comprehensive relocation preparation, the Group identified assets of $ 0.2 0.2 During the year ended December 31, 2016, additional $ 2.6 1.1 |
FOLLOW-ON EQUITY OFFERINGS
FOLLOW-ON EQUITY OFFERINGS | 12 Months Ended |
Dec. 31, 2016 | |
FOLLOW-ON EQUITY OFFERING [Abstract] | |
FOLLOW-ON EQUITY OFFERINGS | 4. FOLLOW-ON EQUITY OFFERINGS In May 2014, the Company issued and sold 2,000,000 50,000,000 3.4 54.6 In February 2015, the Company issued 1,540,000 38,500,000 2.0 28.0 |
ALLOWANCES FOR DOUBTFUL RECEIVA
ALLOWANCES FOR DOUBTFUL RECEIVABLES | 12 Months Ended |
Dec. 31, 2016 | |
ALLOWANCES FOR DOUBTFUL RECEIVABLES [Abstract] | |
ALLOWANCES FOR DOUBTFUL RECEIVABLES | 5. ALLOWANCES FOR DOUBTFUL RECEIVABLES Along with the recovery of solar industry and continued legal actions, the Group was able to collect payments on these receivable, as such, allowance of $ 3,823,744 2,026,567 1,053,041 Analysis of allowances for accounts receivable is as follows: Year ended December 31, 2014 2015 2016 Beginning of the year $ 7,160,782 $ 3,189,110 $ 1,087,465 Reversal during the year (3,823,744) (2,026,567) (1,053,041) Foreign exchange effect (147,928) (75,078) (24,261) Closing balance $ 3,189,110 $ 1,087,465 $ 10,163 |
PREPAID EXPENSE AND OTHER CURRE
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS [Abstract] | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 6. PREPAID EXPENSE AND OTHER CURRENT ASSETS Prepaid expense and other current assets consist of the following: December 31, 2015 2016 Spare parts $ 6,052,315 $ 5,732,914 Prepaid Value added tax (“VAT”) 5,552,772 1,808,141 Prepaid insurance fee 347,631 259,650 Others 282,423 226,962 Total $ 12,235,141 $ 8,027,667 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2016 | |
INVENTORIES [Abstract] | |
INVENTORIES | 7. INVENTORIES Inventories consist of the following: December 31, 2015 2016 Raw materials $ 2,343,104 $ 2,947,296 Work-in-process 5,626,531 4,878,905 Finished goods 2,746,304 4,454,499 Total $ 10,715,939 $ 12,280,700 Inventory write-down was $ 175,568 62,422 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | 8. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consist of the following: December 31, 2015 2016 Cost Buildings and plant $ 313,290,516 $ 286,302,082 Machinery and equipment 389,373,554 371,703,665 Furniture, fixtures and equipment 22,418,768 21,355,517 Motor vehicles 293,331 334,025 Less: Accumulated depreciation (188,680,279) (206,725,215) Property, plant and equipment, net $ 536,695,889 $ 472,970,074 Construction in process 7,630,236 84,457,810 Total $ 544,326,125 $ 557,427,884 Depreciation expense was $ 28,007,943 31,361,026 33,822,082 $ 84.5 The Company recognized impairments for long-lived assets of $nil, $ 1,622,588 198,689 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2016 | |
BORROWINGS [Abstract] | |
BORROWINGS | 9. BORROWINGS The Group’s bank borrowings consisted of the following: December 31, 2015 2016 Short-term bank borrowings $ 72,360,730 $ 55,582,070 Long-term bank borrowings, current portion 51,576,265 50,398,250 Total borrowings, current 123,936,995 105,980,320 Long-term bank borrowings, non-current portion 118,548,430 111,948,913 Total $ 242,485,425 $ 217,929,233 Short-term bank borrowings The Group’s short-term bank borrowing consisted of the following: December 31, 2015 2016 Short-term borrowings 72,360,730 55,582,070 Total $ 72,360,730 $ 55,582,070 These short-term borrowings are guaranteed by Daqo Group and its related parties. The weight average interest rate on the short-term bank borrowing was 5.4 5.0 Long-term bank borrowings The long-term bank borrowings, including current portion, as of December 31, 2015 and 2016 are comprised of: December 31, 2015 2016 Borrowing from Huaxia Bank 3,079,180 Borrowing from Bank of China 70,821,140 33,118,850 Borrowing from Chongqing Rural Commercial Bank 96,224,375 129,228,313 Total $ 170,124,695 $ 162,347,163 On September 28, 2011, Chongqing Daqo entered into a four-year credit facility agreement with Huaxia Bank with maximum amount of $ 57.6 400 57.6 400 21.6 150 36.0 250 54.6 380 3.0 20 3.0 20 On September 30, 2011, Xinjiang Daqo entered into a six-year long term facility agreement with Bank of China. Such borrowing is restricted to the purchase of fixed assets and has a maximum borrowing credit amounted to $ 108.0 750 5 63.3 108.0 750 5.39 37.2 290 70.8 460 37.7 230 33.1 230 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 $ 96.2 625 20 96.2 625 5.9 18.5 85 77.7 540 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 $ 72.0 500 20 51.5 357.5 5.9 51.5 357.5 20.5 142.6 The weighted average interest rate as of December 31, 2015 and 2016 for the Group’s long-term bank borrowings was 5.7 5.8 The principal maturities of these long-term bank borrowings as of December 31, 2016 are as follows: December 31, 2016 Amount 2017 $ 50,398,250 2018 25,003,292 2019 27,577,922 2020 27,577,922 2021 18,938,223 2022 10,298,523 2023 2,553,031 Total $ 162,347,163 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: December 31, 2015 2016 Accrued payroll and welfare $ 3,524,876 $ 3,798,472 Accrued professional fees 776,518 374,944 Other tax payables 2,298,780 1,802,962 Interest payable 38,054 390,467 Others 1,978,603 1,953,196 Total $ 8,616,831 $ 8,320,041 |
ADVANCES FROM CUSTOMERS
ADVANCES FROM CUSTOMERS | 12 Months Ended |
Dec. 31, 2016 | |
ADVANCES FROM CUSTOMERS [Abstract] | |
ADVANCES FROM CUSTOMERS | 11. 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, 2015 2016 Customer F $ $ 3,035,415 Customer G 1,608,539 Customer H 3,237,308 Customer I 1,517,402 Customer J 1,539,590 1,343,600 Others 1,889,076 1,532,051 Total $ 8,183,376 $ 7,519,605 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | Nonrecurring Fair Value Measurements Year ended December 31, 2015 Quoted Prices in Significant Active Markets Other Significant Carrying for Identical Observable Unobservable Description amount Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Losses Property, plant and equipment cannot be relocated to Xinjiang plant (Note 3) $ 1,622,588 $ $ $ $ 1,622,588 Year ended December 31, 2016 Description Carrying Quoted Prices in Significant Significant Total Losses Property, plant and equipment cannot be relocated to Xinjiang plant (Note 3) $ 198,689 $ $ $ $ 198,689 There were no assets and liabilities that were measured at fair value on a non-recurring basis after its initial recognition for the year ended December 31, 2014. |
MAINLAND CHINA CONTRIBUTION PLA
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 12 Months Ended |
Dec. 31, 2016 | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION [Abstract] | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 13. 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, 2014, 2015 and 2016, the Group recognized expenses relating to its contribution to the government sponsored defined contribution plans of $ 3,130,308 4,087,334 3,147,927 (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, 2014, 2015 and 2016, the Group's aggregate balance of the statutory common reserves was $ 20,190,729 17,720,748 21,969,950 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 relating restricted portion amounted to $ 218,043,299 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 14. 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 located in Chongqing. In accordance with a PRC tax regulation which encourages investment in China’s southwest region, Chongqing Daqo is entitled to a preferential tax rate of 15% from its establishment through 2012. On November 19, 2012, Chongqing Daqo obtained a High and New Technology Enterprise (“HTNE”) certificate for a valid period of 3 years till 2014. On November 10, 2015, Chongqing Daqo renewed the HTNE certificate for a valid period of 3 years till 2018. During the years ended December 31, 2015 and 2016, Chongqing Daqo was entitled to a preferential tax rate of 15 Xinjiang Daqo is a foreign-invested enterprise established on February, 2012 located in Shihezi Economic Development Area in Xinjiang Autonomous Region. The entity was subject to an income tax rate of 25 15 Under the current EIT Law and implementation regulations issued by the PRC State Council, an income tax rate of 10 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 RMB 0.1 Income tax expenses comprise: Year ended December 31, 2014 2015 2016 Current Tax Expenses $ $ 1,786,092 $ 7,357,623 Deferred Tax Expenses (Benefit) (648,271) 466 Total $ $ 1,137,821 $ 7,358,089 The principal components of deferred income tax assets and liabilities are as follows: December 31, 2015 2016 Net operating loss carried forward $ 22,549,975 $ 20,039,534 Bad debt provision 163,120 1,524 Government grants related to assets 166,922 217,661 Long-lived asset impairment&depreciation 19,624,021 18,113,967 Others 485,776 942,466 Sub-total 42,989,814 39,315,152 Valuation Allowance (42,362,849) (38,729,208) Total $ 626,965 $ 585,944 The changes of valuation allowance are as follows: Year ended December 31, 2014 2015 2016 Beginning balance $ 56,633,867 $ 50,109,751 $ 42,362,849 Reversal (5,168,917) (5,708,268) (932,833) Foreign exchange effect (1,355,199) (2,038,634) (2,700,808) Ending Balance $ 50,109,751 $ 42,362,849 $ 38,729,208 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 as of December 31, 2015 and December 31, 2016 in the amount of $ 42,362,849 38,729,208 80.2 The effective income tax rate of the Group is different from the expected PRC statutory rate as a result of the following items: Year ended December 31, 2014 2015 2016 PRC Enterprise Income Tax 25 % 25 % 25 % Preferential income tax rate of a subsidiary (9) % (8) % (10) % Effect of different reversal rate 1 % % % Additional tax deductions (8) % (12) % (1) % Different tax rate in other jurisdictions 6 % 8 % 1 % Changes in valuation allowance % (3) % (1) % Tax credits (15) % (3) % % Withhold tax % 1 % % Effective tax rate % 8 % 14 % Xinjiang Daqo and Chongqing Daqo enjoy 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 $ 3.0 1.2 5.2 0.01 0.01 0.02 |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
SHARE BASED COMPENSATION [Abstract] | |
SHARE BASED COMPENSATION | 15. 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 During the years ended December 31, 2014 and 2015, the Company granted 6,274,166 8,134,375 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, 2014 Average Post- risk-free vesting Options rate of Exercise Volatility Dividend forfeiture granted return multiple rate yield rate January 28, 2014 2.77% 3.0-3.5 times 93.0% 0% 3-9.5% 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 06, 2015 3.20% 3 times 91.0% 0% 5% September 09, 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, 2016 is as follows: Weighted Weighted Average Average Aggregate Number of Exercise Remaining Intrinsic Options Price Contract Life Value Options outstanding on January 1, 2016 17,528,541 0.50 Granted Forfeited (147,235) 0.59 Expired (2,465) 0.15 Exercised (2,119,700) 0.50 Options outstanding on December 31, 2016 15,259,141 0.50 6.46 4,304,907 Options vested or expected to vest on December 31, 2016 17,037,682 0.44 5.79 5,691,147 Options exercisable on December 31, 2016 11,902,422 0.47 6.05 3,691,299 The share-based compensation expenses related to share options of approximately $ 1,792,819 3,687,951 2,702,089 The weighted average grant date fair value of options granted during the year ended December 31, 2014, and 2015 was $ 0.98 0.59 As of December 31, 2016, there was $ 2,268,104 1.75 |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Dec. 31, 2016 | |
RELATED PARTY TRANSACTIONS AND BALANCES [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | 16. RELATED PARTY TRANSACTIONS AND BALANCES (1) The relationships between the Group and related party 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 Daqo Solar Co. Ltd (“Daqo Solar”) An affiliated company which is 100 Nanjing Daqo New Energy Co., Ltd. (“Nanjing Daqo”) An affiliated company which was 100 100 Daqo Xinjiang Investment Co., Ltd. ("Xinjiang Daqo Investment") An affiliated company which is 100 Daqo New Material Co., Ltd. ("Daqo New Material") An affiliated company which is 100 Group, and was consolidated by the Company as VIE on December 31, 2013 Chongqing Daqo Tailai Electric Co., Ltd. (“Chongqing Daqo Tailai”) An affiliated company which is 100 Nanjing Daqo Transformer Systems Co., Ltd. (“Nanjing Daqo Transformer”) An affiliated company which is 100 Jiangsu Daqo Changjiang Electric Co., Ltd. (“Jiangsu Daqo”) An affiliated company which is 100 Nanjing Daqo Electric Co., Ltd. (“Nanjing Daqo Electric”) An affiliated company which is 100 Zhenjiang Klockner-Moeller Electrical Systems Co., Ltd. (“Zhenjiang Moeller”) An affiliated company which is 100 Nanjing Intelligent Apparatus Co., Ltd. (“Intelligent Apparatus”) An affiliated company which is 100 Nanjing Intelligent Software Co., Ltd. (“Intelligent Software”) An affiliated company which is 100 Daqo Investment Co., Ltd. (“Daqo Investment”) An affiliated company which is 100 Shanghai Sailfar Electric Technology Co., Ltd. (“Daqo Sailfar”) An affiliated company which is 100 Jiangsu Daquan High Voltage Switchgear Co., Ltd.( “Jiangsu Daquan High Voltage”) An affiliated company which is 75 Jiangsu Daqo Kai-fan Electric Co., Ltd. ( “Jiangsu Daqo Kai-fan”) An affiliated company which is 100 Zhenjiang Electric Equipment Co., Ltd. ( “Zhenjiang Electric”) An affiliated company which is 100 Jiangsu Daqo ETE Electronic Systerm Co., Ltd.(“Jiangsu Daqo ETE Electronic”) An affiliated company which is 75 Jiangsu Daquan Kai-fan Switchgear Co., Ltd (“Jiangsu Daquan Kai-fan Switchgear”) An affiliated company which is 100 (2) Related party balances: The balances due from related parties mainly included the amount due from Zhenjiang Daqo for sales of wafer and polysilicon. The balances are as follows: December 31, 2015 2016 Amounts due from related parties Zhenjiang Daqo $ 229,989 $ 1,449,824 Others 54,644 78,888 Total $ 284,633 $ 1,528,712 The balances due to related parties mainly included payables to Chongqing Daqo Tailai and Nanjing Daqo Transformer for purchases of machines for polysilicon expansion, payables to Daqo Solar, Xinjiang Daqo Investment and Daqo New Material for interest free loans, and interest bearing loan from Daqo Group with an interest rate of 5.7 The balances are payable on demand and are as follows: December 31, 2015 2016 Amounts due to related parties Daqo Group $ 33,758 $ 15,076,133 Daqo New Material 5,563,165 8,323,271 Xinjiang Daqo investment 3,146,054 79,197 Daqo Solar 37,390,575 Chongqing Daqo Tailai 144,102 2,107,488 Nanjing Daqo Transformer 1,022,075 Others* 118,873 221,441 Total $ 46,396,527 $ 26,829,605 * The remaining balance of amounts due to related parties of $ 221,441 37,679 85,332 9,804 88,626 The transactions with Daqo Group and its subsidiaries were as follows: Transaction Year Ended December 31, Name of Related parties Nature 2014 2015 2016 Daqo Group Purchase-Fixed asset 486,948 Proceeds from interest free loans 10,821,462 15,043,550 Repayment of interest free loans 8,115,813 20,217,257 10,974,807 Repayment of interest bearing loan 15,059,000 Interest charged 850,380 Rental expense 27,997 Zhenjiang Daqo Sales 9,554,320 11,111,239 11,194,197 Daqo Solar Sales 9,595,680 783,705 Proceeds from interest free loans 157,241,390 127,060,826 60,300,896 Repayment of interest free loans 166,231,092 151,990,672 68,766,506 Nanjing Daqo Proceeds from interest free loans 973,898 13,456,861 Repayment of interest free loans 2,921,693 13,456,861 Xinjiang Daqo Investment Proceeds from interest free loans 98,367,234 72,946,700 56,270,085 Repayment of interest free loans 93,219,846 73,252,506 38,715,449 Daqo New Material Proceeds from interest free loans 7,729,501 11,082,241 9,607,344 Repayment of interest free loans 4,600,117 11,285,114 12,262,592 Rental expense 1,071,287 1,050,661 993,894 Chongqing Daqo Tailai Purchase-Fixed asset 2,724,790 375,528 3,534,248 Purchase-Raw material 9,938 Income from disposal of fixed assets 6,458 Proceeds from interest free loans 6,367,640 222,517 Repayment of interest free loans 6,367,640 2,684,783 Others subsidiaries under Daqo Group Proceeds from interest free loans 636 Repayment of interest free loans 5,296 Purchase-Fixed asset* 3,989,686 3,488,330 2,120,768 Purchase-Raw material 22,817 129,219 Total Sales $ 19,150,000 $ 11,894,944 $ 11,194,197 Income from disposal of fixed assets $ $ 6,458 $ Purchase-Fixed asset $ 7,201,424 $ 3,863,858 $ 5,655,016 Purchase-Raw material $ $ 32,755 $ 129,219 Rental expense $ 1,071,287 $ 1,050,661 $ 1,021,891 Interest expense $ $ 850,380 Proceeds from related parties loans $ 275,134,122 $ 245,957,818 $ 126,400,842 Repayment of related parties loans $ 275,088,560 $ 276,575,346 $ 148,463,137 *The purchases of fixed assets of $2,120,768 were comprised of purchases from Nanjing Daqo Transformer, Zhenjiang Moeller, Jiangsu Daqo, Intelligent Apparatus and Jiangsu Daqo ETE Electronic in the amount of $ 1,410,655 236,415 336,791 93,841 43,066 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 17. EARNINGS PER SHARE The calculation of earnings per share is as follows: Year ended December 31, 2014 2015 2016 Numerator used in basic and diluted earnings per share: Net income attributable to Daqo New Energy Corp. ordinary shareholdersbasic and diluted $ 16,649,176 $ 12,956,889 $ 43,493,756 Denominator used in basic and diluted earnings per share: Weighted average number of ordinary shares outstanding used in computing earnings per share-basic 206,349,976 258,015,851 261,742,244 Plus: share options 5,003,667 3,396,082 3,075,511 Weighted average number of ordinary shares outstanding used in computing earnings per sharediluted 211,353,643 261,411,933 264,817,755 NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHAREBasic $ 0.08 $ 0.05 $ 0.17 NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHAREDiluted $ 0.08 0.05 0.16 Outstanding share options totaling of 6,154,166 12,563,541 10,899,141 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES Capital commitments As of December 31, 2016, commitments outstanding for the purchases of property, plant and equipment approximated $ 4.7 Lease commitments The operating lease commitments as of December 31, 2016 were principally for the housing rental from Daqo New Material and Daqo Group. The lease expense was $ 1,071,287 1,050,661 1,024,970 Year ending December 31 2017 $ 991,142 2018 $ 991,142 2019 $ 961,538 Total $ 2,943,822 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
SEGMENT INFORMATION [Abstract] | |
SEGMENT INFORMATION | 19. 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, on September 28, 2012, the module business was disposed. Therefore, only two segments remained in 2014, 2015 and 2016. Furthermore, the Group's chief operating decision maker is not provided with asset information by segment. As such, no asset information by segment is presented. The following tables summarized the Group’s revenue and cost generated from different revenue streams. Substantially all of its revenues are derived in the PRC. The Group’s long lived assets and operations are substantially all located in the PRC. Year ended December 31, 2014 Polysilicon Wafer Elimination Total Revenue External $ 127,692,325 54,879,527 - 182,571,852 Revenue - Intersegment 29,424,883 - (29,424,883) - Total revenue 157,117,208 54,879,527 (29,424,883) 182,571,852 Total Cost of revenue 119,703,550 47,861,811 (28,256,850) 139,308,511 Gross Profit $ 37,413,658 7,017,716 (1,168,033) 43,263,341 Year ended December 31, 2015 Polysilicon Wafer Elimination Total Revenue External $ 125,916,457 56,124,511 - 182,040,968 Revenue - Intersegment 23,485,364 - (23,485,364) - Total Revenue 149,401,821 56,124,511 (23,485,364) 182,040,968 Total Cost of revenue 121,193,840 46,763,308 (23,466,065) 144,491,083 Gross Profit $ 28,207,981 9,361,203 (19,299) 37,549,885 Year ended December 31, 2016 Polysilicon Wafer Elimination Total Revenue External $ 167,530,309 61,570,902 - 229,101,211 Revenue - Intersegment 28,688,793 - (28,688,793) - Total Revenue 196,219,102 61,570,902 (28,688,793) 229,101,211 Total Cost of revenue 125,320,832 52,413,007 (29,061,146) 148,672,693 Gross Profit $ 70,898,270 9,157,895 372,353 80,428,518 Year ended December 31, 2014 2015 2016 Customer C * $ 35,094,472 $ 48,739,001 Customer A * 20,465,558 * Customer B $ 18,210,196 $ 19,595,911 $ * Customer F $ 23,882,302 $ 18,125,773 $ * * Represents less than 10% |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS On February 3, 2017, the Group granted restricted share units ("RSUs") to acquire 12,653,992 11.8 |
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I | 12 Months Ended |
Dec. 31, 2016 | |
FINANCIAL STATEMENT SCHEDULE I [Abstract] | |
FINANCIAL STATEMENT SCHEDULE I | FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY BALANCE SHEET DECEMBER 31, 2015 AND 2016 (In U.S. dollars, except share and per share data) December 31, 2015 2016 ASSETS CURRENT ASSETS Cash and cash equivalents $ 2,563,083 $ 2,943,502 Prepaid expenses and other current assets 193,583 223,559 Total current assets 2,756,666 3,167,061 Investments in subsidiaries 238,112,877 267,322,549 TOTAL ASSETS $ 240,869,543 $ 270,489,610 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accrued expenses and other current liabilities $ 406,088 $ 389,849 Amount due to a related party - Income tax payable 108,992 Total current liabilities 515,080 389,849 EQUITY Ordinary shares ($0.0001 per value 500,000,000 shares authorized as of December 31, 2015 and 2016; 279,214,103 and 279,214,103 shares issued as of December 31, 2015 and 2016, respectively and 260,836,578 and 262,956,278 shares outstanding as of December 31, 2015 and 2016, respectively) 26,320 26,532 Additional paid in capital 236,358,070 240,111,533 Retained Earnings (accumulated deficit) (3,061,404) 40,432,352 Accumulated other comprehensive income (loss) 8,780,313 (8,721,820) Treasury stock (1,748,836) (1,748,836) Total shareholders’ equity 240,354,463 270,099,761 TOTAL LIABILITIES AND EQUITY $ 240,869,543 $ 270,489,610 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, 2014, 2015 AND 2016 (In U.S. dollars) Year ended December 31, 2014 2015 2016 OPERATING EXPENSES General and administrative $ (2,738,085) $ (4,142,634) $ (3,175,482) Research and development (12,310) - - Total operating expenses (2,750,395) (4,142,634) (3,175,482) LOSS FROM OPERATION (2,750,395) (4,142,634) (3,175,482) Interest income 8,144 1,641 - Exchange gain - 118,679 - Income tax expense - (108,992) - Other income - - - NET LOSS BEFORE SHARE OF RESULTS OF SUBSIDIARIES (2,742,251) (4,131,306) (3,175,482) Equity in earnings of subsidiaries 19,391,427 17,088,195 46,669,238 Net income attributable to Daqo New Energy Corporation ordinary shareholders $ 16,649,176 $ 12,956,889 $ 43,493,756 Other comprehensive (loss) income: Foreign currency translation adjustments (3,662,013) (11,256,870) (17,502,133) Total other comprehensive loss (3,662,013) (11,256,870) (17,502,133) Comprehensive income $ 12,987,163 $ 1,700,019 $ 25,991,623 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FOR YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016 (In U.S. dollars, except share and per share data) Accumulated Retained other Additional earnings (accumulated) comprehensive Ordinary shares Treasury Stock paid in capital losses) income (loss) Total Number $ Balance at January 1, 2014 173,427,853 $ 17,343 $ (398,672) $ 146,676,163 $ (32,667,469) $ 23,699,196 $ 137,326,561 Net income 16,649,176 16,649,176 Other comprehensive loss (3,662,013) (3,662,013) Share-based compensation 1,792,819 1,792,819 Option Exercised 150,000 15 37,065 37,080 Follow-on equity offering, net of issuance cost of $3,375,553 50,000,000 5,000 54,619,447 54,624,447 Balance at December 31, 2014 223,577,853 22,358 (398,672) 203,125,494 (16,018,293) 20,037,183 206,768,070 Net income 12,956,889 12,956,889 Other comprehensive loss (11,256,870) (11,256,870) Share-based compensation 3,687,951 3,687,951 Option Exercised 1,115,625 112 275,671 275,783 Follow-on equity offering, net of issuance costs of $2,033,041 38,500,000 3,850 27,993,109 27,996,959 Repurchase of Stock (2,356,900) (1,350,164) (1,350,164) Capital injection from noncontrolling shareholders 1,275,845 1,275,845 Balance at December 31, 2015 260,836,578 26,320 (1,748,836) 236,358,070 (3,061,404) 8,780,313 240,354,463 Net income 43,493,756 43,493,756 Other comprehensive loss (17,502,133) (17,502,133) Share-based compensation 2,702,089 2,702,089 Option Exercised 2,119,700 212 1,051,374 1,051,586 Balance at December 31, 2016 262,956,278 26,532 (1,748,836) 240,111,533 40,432,352 (8,721,820) 270,099,761 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014, 2015 AND 2016 (In U.S. dollars) Year ended December 31, 2014 2015 2016 OPERATING ACTIVITIES Net (loss) income $ 16,649,176 $ 12,956,889 $ 43,493,756 Share of results of subsidiaries (19,391,427) (17,088,195) (46,669,238) Share-based compensation 1,792,819 3,687,951 2,702,089 Adjustments to reconcile net income to net cash used in operating activities: Prepaid expenses and other current assets (27,195) 11,099 (29,976) Changes in other current liabilities (26,901) (96,166) (58,806) Amount due to a related party 286,526 (286,526) Income tax payable 108,992 (108,992) Net cash used in operating activities (717,002) (705,956) (671,167) INVESTING ACTIVITIES Capital contributed to subsidiaries (54,638,421) (33,256,774) Cash collected from subsidiaries when liquidation Disposition of minority interest in subsidiary 5,110,085 Net cash used in investing activities (54,638,421) (28,146,689) FINANCING ACTIVITIES Repurchase of ordinary shares (1,350,164) Proceeds from follow-on equity offering 58,000,000 30,030,000 Insurance cost for follow-on equity offering (3,375,553) (2,033,041) Proceeds from options exercised 37,080 275,783 1,051,586 Net cash provided by financing activities 54,661,527 26,922,578 1,051,586 NET DECREASE IN CASH AND CASH EQUIVALENTS (693,896) (1,930,067) 380,419 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,187,046 4,493,150 2,563,083 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,493,150 $ 2,563,083 $ 2,943,502 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. Notes to Schedule I 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 2016. 4. As of December 31, 2016, there were no material contingencies, significant provisions of long-term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of the Company, except for those which have been separately disclosed in the Consolidated Financial Statement, if any. |
SUMMARY OF PRINCIPAL ACCOUNTI30
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES [Abstract] | |
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, 2016, the Group’s current liabilities exceed its current assets by $ 176.4 0.3 16.0 106.0 4.7 Such negative working capital and adverse current ratio 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 $ 99 2. With the completion of the polysilicon Phase 3A expansion project in Xinjiang, the nameplate capacity of polysilicon increased by 48 3. The Group has completed a series of cost reduction activities such as technology improvement. 4. 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 March 21, 2017, 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. Further, the support letter provides that Daqo Group will not require the Group to pay the amount owed to the Daqo Group and subsidiaries of Daqo Group before 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 on 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 and cash equivalents 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. Allowance for doubtful accounts is $ 1,087,465 10,163 Accounts December 31, receivable 2015 2016 Customer A $ * $ 1,576,400 Customer B $ * $ 1,368,956 Customer C $ 2,996,042 $ 1,294,342 Customer D $ 6,354,510 $ * Customer F $ 2,315,035 $ * Customer G $ 2,299,732 $ * * Represents less than 10% From time to time, certain accounts receivable balances are settled in the form of notes receivable. As of December 31, 2015 and 2016, notes receivable represents bank acceptance drafts that are non-interest bearing and due within 6 months. Furthermore, all of the Group's long-term bank borrowings are guaranteed by Daqo Group, our related party, who has also committed to provide financial support to meet the Group's short term bank borrowings obligations, other liabilities and commitments as they become due (see Note 2(a)). The Group's access to credit is significantly reliant on Daqo Group's ability and willingness to continue to provide sufficient financial support. |
Cash and cash equivalents | (e) Cash and cash equivalents 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 | (f) Restricted cash Restricted cash of $ 19,062,714 15,893,467 |
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 market 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 inventory for the years ended December 31, 2014, 2015 and 2016 were $ 175,568 62,422 The Group has outsourced portions of its manufacturing process, including cutting ingots into wafers, and converting wafers into solar cells, to various third-party manufacturers. These outsourcing arrangements may or may not include transfer of title of the raw material inventory (ingots, wafers or cells) to the third-party manufacturers. For those outsourcing arrangements in which title does not transfer, the Group maintains the inventory in the balance sheet as raw materials inventory while it is in physical possession of the third-party manufacturers. Upon receipt of the processed inventory from the third-party manufacturers, it is reclassified to work-in-progress inventory with the processing fee capitalized as cost of inventory. For those outsourcing arrangements in which title (including risk of loss) does transfer to the third-party manufacturer, the Group is contractually obligated to repurchase the processed inventory. To accomplish this, it enters into raw material sales agreements and processed inventory purchase agreements simultaneously with the third-party manufacturer. In such instances, where they are, in substance tolling arrangements, the Group retains the inventory in the consolidated balance sheets while it is in the physical possession of the third-party manufacturer. The cash received from the third-party manufacturer is recorded as a current liability on the balance sheet rather than revenue or deferred revenue. Upon receipt of the processed inventory, it is reclassified from raw materials to work-in-progress inventory and the processing fee paid to the third-party manufacturer is added to inventory cost. Cash payments for outsourcing arrangements which require prepayment for repurchase of the processed inventory are classified as current assets on the balance sheet. If there is no legal right of offset established by these arrangements, the associated assets and liabilities are presented separately on the balance sheet until the processed inventory is returned to the Group. |
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 30 Machinery and equipment 15 Furniture, fixtures and equipment 3 5 Motor vehicles 6 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 cost 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, 2014, 2015 and 2016 was $ 1,960,259 2,825,879 1,757,547 |
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 $ 628,052 595,716 557,162 |
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 planed 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. 1,622,588 198,689 1.6 0.2 |
Revenue recognition | (l) Revenue recognition Product sales The Group recognizes revenue when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, delivery of the product has occurred, title and risk of loss have transferred to the customers and collectability of the receivable is reasonably assured. The majority of the sales contracts transfer title and risk of loss to customers upon receipt. Sales agreements for polysilicon and wafers typically do not contain product warranties except for return and replacement of defective products within a period generally ranging from 3 to 30 days from delivery. Sales agreements typically do not contain post-shipment obligations or other return or credit provisions. Customers frequently pay for products prior to the delivery of the products. Advance payments are recorded as advances from customers. Service revenue The Group also provides OEM services to customers, such as the provision of service to process polysilicon into ingots and wafers. The Group recognizes revenue when there is persuasive evidence of an arrangement, the service has been rendered, the sales price is fixed or determinable and collectability is reasonably assured. |
Cost of revenues | (m) 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 | (n) 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 $ 2,054,786 2,708,962 3,147,594 |
Research and development expenses | (o) 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. In the years ended December 31, 2015 and 2016, the Group incurred additional research and development expenses for its Xinjiang Phase II polysilicon facilities to achieve the targets for quality, capacity and cost during the pilot production period. |
Government subsidies | (p) 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; however, these subsidies do not represent tax refunds or reimbursements of expenditures. 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, 2014, 2015 and 2016 were $ 926,173 3,578,865 4,742,635 113,735 690,889 323,769 |
Income taxes | (q) 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 | (r) 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 Black-Scholes valuation model and the fair value of restricted share units ("RSUs") is determined with reference to the fair value of the underlying shares. 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, research and development expenses or cost of sales, depending on the job functions of the grantees. For the years ended December 31, 2014, 2015 and 2016, the Group recognized share-based compensation expense of $1,792,819, $3,687,951 and $2,702,089, respectively, which was classified as follows: Year ended December 31, 2014 2015 2016 Selling, general and administrative expenses $ 1,544,078 $ 3,323,948 $ 2,501,957 Research and development expenses 12,310 Cost of sales 236,431 364,003 200,132 Total $ 1,792,819 $ 3,687,951 $ 2,702,089 |
Earnings (loss) per share | (s) Earnings per share Basic earnings per ordinary share are computed by dividing the net income attributable to ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per 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 | (t) Foreign currency translation The reporting currency of the Company is the United States dollar (“U.S. dollar”). The functional currency of the Company is the U.S. dollar. Monetary assets and liabilities denominated in 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 Company’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 and cash equivalents and restricted cash denominated in RMB amounted to $ 30,891,550 28,839,371 |
Fair value of financial instruments | (u) 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 1Valuation 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 2Valuation 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 3Valuation 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, accounts receivable, note receivables other current assets, amount due from related parties, accounts payable, other current liabilities, payables for purchase of property, plant and equipment, amounts due to related parties and short-term and current portion of long-term 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 fair value of the Group’s long-term bank borrowings as of December 31, 2015 and 2016 is estimated by discounted cash flow technique using an interest rate corresponding to debt with similar maturities and risks on the measurement date. The long-term bank borrowings approximate their fair values because market interest rates have no fluctuated significantly since the contract signed. |
Noncontrolling interest | (v) Noncontrolling interest The Group classified the ownership interest in the consolidated entity held by a party other than the Group to noncontrolling 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 noncontrolling interest on the face of the Consolidated Statements of Operations. Xinjiang Daqo Investment's equity interests in Xinjiang Daqo are presented as a noncontrolling interest as of December 31, 2015. The non-controlling interest was $ 1,302,027 1,629,161 |
Treasury Stock | (w) Treasury Stock On July 9, 2012, the Company's Board of Directors authorized the Company to repurchase up to $ 5 2,356,900 1,350,164 |
Investment accounted for under cost-method | (x) Investment accounted for under the cost-method On February 17, 2016, Xinjiang Daqo entered into an agreement to invest in Syned Fire Safety Service Co., Ltd.(“Syned Fire Safety Services”), a company engaging in fire safety activities. Pursuant to the agreement, Xinjiang Daqo contributed a capital investment of $ 581,581 4,038,900 15.29 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 year ended December 31, 2016. 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 | (y) Adoption of New Accounting Pronouncement In August 2014, the FASB issued ASU 2014-15, Presentation of Financial StatementsGoing Concern, which requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The new standard is effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. The Group has adopted ASU 2014-15, assessed its ability to continue as a going concern and concluded that substantial doubt about its ability to continue as a going concern does not exist. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes which simplifies the presentation of deferred taxes on the balance sheet by requiring classification of all deferred tax items as noncurrent including valuation allowances by jurisdiction. The ASU is effective for public entities for annual and interim periods beginning after December 15, 2016, and interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Group adopted the ASU and has already considered the impact on its consolidated financial statements and related disclosures as of December 31, 2016 and the effect is not material. |
Recent accounting pronouncements | (z) Recent accounting pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. The core principle of the new guidance is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new guidance also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple element arrangements. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company must adopt ASU 2016-10, ASU 2016-12 and ASU 2016-20 with ASU 2014-09 (collectively, the "new revenue standards"). The new revenue standards may be applied retrospectively to each prior period presented (full retrospective method) or retrospectively with the cumulative effect recognized as of the date of initial application (the modified retrospective method). The new revenue standards become effective for the Company on January 1, 2018. The Company currently anticipates adopting the new revenue standards using the full retrospective method. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330), which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LIFO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Group will adopt this ASU on its effective date of January 1, 2017 and is in the process of evaluating the impact on its consolidated financial statements upon adoption. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. The ASU also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. Entities will have to assess the realizability of such deferred tax assets in combination with the entities other deferred tax assets. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017 and for interim periods within that reporting period. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. 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. This ASU will become effective for the Company in the first quarter of fiscal year 2019, and requires adoption using a modified retrospective approach. The Group is in the process of evaluating the impact on its consolidated financial statements, as well as the impact of adoption on policies, practices and systems. As of December 31, 2016, the Group has $ 2.9 In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Compensation Stock Compensation. The objective of this amendment is part of the FASB’s Simplification Initiative as it applies to several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The effective date of the amendment is for fiscal years beginning after December 31, 2016 and interim periods within that reporting period. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. 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, 2018, and interim periods therein. The Company is in the process of evaluating the impact on its consolidated financial statements upon adoption. In August 2016, the FASB issued ASU 2016-15 which amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017 and is applied retrospectively. Early adoption is permitted including adoption in an interim period. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows, Restricted Cash, which clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. ASU 2016-18 becomes effective for the Company on January 1, 2018. The adoption of this accounting pronouncement will impact the presentation of restricted cash in the Company’s Consolidated Statements of Cash Flows. The new guidance permits early adoption. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. |
SUMMARY OF PRINCIPAL ACCOUNTI31
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES [Abstract] | |
Schedule of Accounts Receivable | Accounts December 31, receivable 2015 2016 Customer A $ * $ 1,576,400 Customer B $ * $ 1,368,956 Customer C $ 2,996,042 $ 1,294,342 Customer D $ 6,354,510 $ * Customer F $ 2,315,035 $ * Customer G $ 2,299,732 $ * * Represents less than 10% |
Schedule of Property, Plant and Equipment, Depreciation, Estimated Lives | Buildings and plant 30 Machinery and equipment 15 Furniture, fixtures and equipment 3 5 Motor vehicles 6 |
Schedule of Share-Based Compensation Expenses | Year ended December 31, 2014 2015 2016 Selling, general and administrative expenses $ 1,544,078 $ 3,323,948 $ 2,501,957 Research and development expenses 12,310 Cost of sales 236,431 364,003 200,132 Total $ 1,792,819 $ 3,687,951 $ 2,702,089 |
ALLOWANCES FOR DOUBTFUL RECEI32
ALLOWANCES FOR DOUBTFUL RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ALLOWANCES FOR DOUBTFUL RECEIVABLES [Abstract] | |
Schedule of Allowances for Accounts Receivable | Year ended December 31, 2014 2015 2016 Beginning of the year $ 7,160,782 $ 3,189,110 $ 1,087,465 Reversal during the year (3,823,744) (2,026,567) (1,053,041) Foreign exchange effect (147,928) (75,078) (24,261) Closing balance $ 3,189,110 $ 1,087,465 $ 10,163 |
PREPAID EXPENSE AND OTHER CUR33
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS [Abstract] | |
Schedule of Prepaid Expense and Other Current Assets | December 31, 2015 2016 Spare parts $ 6,052,315 $ 5,732,914 Prepaid Value added tax (“VAT”) 5,552,772 1,808,141 Prepaid insurance fee 347,631 259,650 Others 282,423 226,962 Total $ 12,235,141 $ 8,027,667 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INVENTORIES [Abstract] | |
Schedule of Inventories | December 31, 2015 2016 Raw materials $ 2,343,104 $ 2,947,296 Work-in-process 5,626,531 4,878,905 Finished goods 2,746,304 4,454,499 Total $ 10,715,939 $ 12,280,700 |
PROPERTY, PLANT AND EQUIPMENT35
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | |
Schedule of Property, Plant and Equipment, Net | December 31, 2015 2016 Cost Buildings and plant $ 313,290,516 $ 286,302,082 Machinery and equipment 389,373,554 371,703,665 Furniture, fixtures and equipment 22,418,768 21,355,517 Motor vehicles 293,331 334,025 Less: Accumulated depreciation (188,680,279) (206,725,215) Property, plant and equipment, net $ 536,695,889 $ 472,970,074 Construction in process 7,630,236 84,457,810 Total $ 544,326,125 $ 557,427,884 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
BORROWINGS [Abstract] | |
Schedule of Bank Borrowings | December 31, 2015 2016 Short-term bank borrowings $ 72,360,730 $ 55,582,070 Long-term bank borrowings, current portion 51,576,265 50,398,250 Total borrowings, current 123,936,995 105,980,320 Long-term bank borrowings, non-current portion 118,548,430 111,948,913 Total $ 242,485,425 $ 217,929,233 |
Schedule of Short-Term Borrowings | December 31, 2015 2016 Short-term borrowings 72,360,730 55,582,070 Total $ 72,360,730 $ 55,582,070 |
Schedule of Long-Term Bank Borrowings | December 31, 2015 2016 Borrowing from Huaxia Bank 3,079,180 Borrowing from Bank of China 70,821,140 33,118,850 Borrowing from Chongqing Rural Commercial Bank 96,224,375 129,228,313 Total $ 170,124,695 $ 162,347,163 |
Schedule of Principal Maturities of Long-term Bank Borrowings | December 31, 2016 Amount 2017 $ 50,398,250 2018 25,003,292 2019 27,577,922 2020 27,577,922 2021 18,938,223 2022 10,298,523 2023 2,553,031 Total $ 162,347,163 |
ACCRUED EXPENSES AND OTHER CU37
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | December 31, 2015 2016 Accrued payroll and welfare $ 3,524,876 $ 3,798,472 Accrued professional fees 776,518 374,944 Other tax payables 2,298,780 1,802,962 Interest payable 38,054 390,467 Others 1,978,603 1,953,196 Total $ 8,616,831 $ 8,320,041 |
ADVANCES FROM CUSTOMERS (Tables
ADVANCES FROM CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ADVANCES FROM CUSTOMERS [Abstract] | |
Schedule of Advances from Customers | December 31, 2015 2016 Customer F $ $ 3,035,415 Customer G 1,608,539 Customer H 3,237,308 Customer I 1,517,402 Customer J 1,539,590 1,343,600 Others 1,889,076 1,532,051 Total $ 8,183,376 $ 7,519,605 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Schedule of Nonrecurring Fair Value Measurements | Year ended December 31, 2015 Quoted Prices in Significant Active Markets Other Significant Carrying for Identical Observable Unobservable Description amount Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Losses Property, plant and equipment cannot be relocated to Xinjiang plant (Note 3) $ 1,622,588 $ $ $ $ 1,622,588 Year ended December 31, 2016 Description Carrying Quoted Prices in Significant Significant Total Losses Property, plant and equipment cannot be relocated to Xinjiang plant (Note 3) $ 198,689 $ $ $ $ 198,689 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
Schedule of Income Tax Expenses | Year ended December 31, 2014 2015 2016 Current Tax Expenses $ $ 1,786,092 $ 7,357,623 Deferred Tax Expenses (Benefit) (648,271) 466 Total $ $ 1,137,821 $ 7,358,089 |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2015 2016 Net operating loss carried forward $ 22,549,975 $ 20,039,534 Bad debt provision 163,120 1,524 Government grants related to assets 166,922 217,661 Long-lived asset impairment&depreciation 19,624,021 18,113,967 Others 485,776 942,466 Sub-total 42,989,814 39,315,152 Valuation Allowance (42,362,849) (38,729,208) Total $ 626,965 $ 585,944 |
Schedule of Changes of Valuation Allowance | Year ended December 31, 2014 2015 2016 Beginning balance $ 56,633,867 $ 50,109,751 $ 42,362,849 Reversal (5,168,917) (5,708,268) (932,833) Foreign exchange effect (1,355,199) (2,038,634) (2,700,808) Ending Balance $ 50,109,751 $ 42,362,849 $ 38,729,208 |
Schedule of Effective Income Tax Rate Reconciliation | Year ended December 31, 2014 2015 2016 PRC Enterprise Income Tax 25 % 25 % 25 % Preferential income tax rate of a subsidiary (9) % (8) % (10) % Effect of different reversal rate 1 % % % Additional tax deductions (8) % (12) % (1) % Different tax rate in other jurisdictions 6 % 8 % 1 % Changes in valuation allowance % (3) % (1) % Tax credits (15) % (3) % % Withhold tax % 1 % % Effective tax rate % 8 % 14 % |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SHARE BASED COMPENSATION [Abstract] | |
Schedule of Assumptions Used | Year Ended December 31, 2014 Average Post- risk-free vesting Options rate of Exercise Volatility Dividend forfeiture granted return multiple rate yield rate January 28, 2014 2.77% 3.0-3.5 times 93.0% 0% 3-9.5% 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 06, 2015 3.20% 3 times 91.0% 0% 5% September 09, 2015 2.94%-3.08% 1.8-3 times 91.0%-92.0% 0% 5%-8% |
Summary of Stock Option Activity | Weighted Weighted Average Average Aggregate Number of Exercise Remaining Intrinsic Options Price Contract Life Value Options outstanding on January 1, 2016 17,528,541 0.50 Granted Forfeited (147,235) 0.59 Expired (2,465) 0.15 Exercised (2,119,700) 0.50 Options outstanding on December 31, 2016 15,259,141 0.50 6.46 4,304,907 Options vested or expected to vest on December 31, 2016 17,037,682 0.44 5.79 5,691,147 Options exercisable on December 31, 2016 11,902,422 0.47 6.05 3,691,299 |
RELATED PARTY TRANSACTIONS AN42
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
RELATED PARTY TRANSACTIONS AND BALANCES [Abstract] | |
Schedule of Related Party Balances, Loans | December 31, 2015 2016 Amounts due from related parties Zhenjiang Daqo $ 229,989 $ 1,449,824 Others 54,644 78,888 Total $ 284,633 $ 1,528,712 |
Schedule of Related Party Balances, Payables | December 31, 2015 2016 Amounts due to related parties Daqo Group $ 33,758 $ 15,076,133 Daqo New Material 5,563,165 8,323,271 Xinjiang Daqo investment 3,146,054 79,197 Daqo Solar 37,390,575 Chongqing Daqo Tailai 144,102 2,107,488 Nanjing Daqo Transformer 1,022,075 Others* 118,873 221,441 Total $ 46,396,527 $ 26,829,605 * The remaining balance of amounts due to related parties of $ 221,441 37,679 85,332 9,804 88,626 |
Schedule of Related Party Transactions | Transaction Year Ended December 31, Name of Related parties Nature 2014 2015 2016 Daqo Group Purchase-Fixed asset 486,948 Proceeds from interest free loans 10,821,462 15,043,550 Repayment of interest free loans 8,115,813 20,217,257 10,974,807 Repayment of interest bearing loan 15,059,000 Interest charged 850,380 Rental expense 27,997 Zhenjiang Daqo Sales 9,554,320 11,111,239 11,194,197 Daqo Solar Sales 9,595,680 783,705 Proceeds from interest free loans 157,241,390 127,060,826 60,300,896 Repayment of interest free loans 166,231,092 151,990,672 68,766,506 Nanjing Daqo Proceeds from interest free loans 973,898 13,456,861 Repayment of interest free loans 2,921,693 13,456,861 Xinjiang Daqo Investment Proceeds from interest free loans 98,367,234 72,946,700 56,270,085 Repayment of interest free loans 93,219,846 73,252,506 38,715,449 Daqo New Material Proceeds from interest free loans 7,729,501 11,082,241 9,607,344 Repayment of interest free loans 4,600,117 11,285,114 12,262,592 Rental expense 1,071,287 1,050,661 993,894 Chongqing Daqo Tailai Purchase-Fixed asset 2,724,790 375,528 3,534,248 Purchase-Raw material 9,938 Income from disposal of fixed assets 6,458 Proceeds from interest free loans 6,367,640 222,517 Repayment of interest free loans 6,367,640 2,684,783 Others subsidiaries under Daqo Group Proceeds from interest free loans 636 Repayment of interest free loans 5,296 Purchase-Fixed asset* 3,989,686 3,488,330 2,120,768 Purchase-Raw material 22,817 129,219 Total Sales $ 19,150,000 $ 11,894,944 $ 11,194,197 Income from disposal of fixed assets $ $ 6,458 $ Purchase-Fixed asset $ 7,201,424 $ 3,863,858 $ 5,655,016 Purchase-Raw material $ $ 32,755 $ 129,219 Rental expense $ 1,071,287 $ 1,050,661 $ 1,021,891 Interest expense $ $ 850,380 Proceeds from related parties loans $ 275,134,122 $ 245,957,818 $ 126,400,842 Repayment of related parties loans $ 275,088,560 $ 276,575,346 $ 148,463,137 *The purchases of fixed assets of $2,120,768 were comprised of purchases from Nanjing Daqo Transformer, Zhenjiang Moeller, Jiangsu Daqo, Intelligent Apparatus and Jiangsu Daqo ETE Electronic in the amount of $ 1,410,655 236,415 336,791 93,841 43,066 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
EARNINGS PER SHARE [Abstract] | |
Schedule of Calculation of Earnings Per Share | Year ended December 31, 2014 2015 2016 Numerator used in basic and diluted earnings per share: Net income attributable to Daqo New Energy Corp. ordinary shareholdersbasic and diluted $ 16,649,176 $ 12,956,889 $ 43,493,756 Denominator used in basic and diluted earnings per share: Weighted average number of ordinary shares outstanding used in computing earnings per share-basic 206,349,976 258,015,851 261,742,244 Plus: share options 5,003,667 3,396,082 3,075,511 Weighted average number of ordinary shares outstanding used in computing earnings per sharediluted 211,353,643 261,411,933 264,817,755 NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHAREBasic $ 0.08 $ 0.05 $ 0.17 NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHAREDiluted $ 0.08 0.05 0.16 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments are as follows: Year ending December 31 2017 $ 991,142 2018 $ 991,142 2019 $ 961,538 Total $ 2,943,822 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SEGMENT INFORMATION [Abstract] | |
Summary of Financial Information by Segment | The following table summarizes the Group’s revenue by segment: Year ended December 31, 2014 Polysilicon Wafer Elimination Total Revenue External $ 127,692,325 54,879,527 - 182,571,852 Revenue - Intersegment 29,424,883 - (29,424,883) - Total revenue 157,117,208 54,879,527 (29,424,883) 182,571,852 Total Cost of revenue 119,703,550 47,861,811 (28,256,850) 139,308,511 Gross Profit $ 37,413,658 7,017,716 (1,168,033) 43,263,341 Year ended December 31, 2015 Polysilicon Wafer Elimination Total Revenue External $ 125,916,457 56,124,511 - 182,040,968 Revenue - Intersegment 23,485,364 - (23,485,364) - Total Revenue 149,401,821 56,124,511 (23,485,364) 182,040,968 Total Cost of revenue 121,193,840 46,763,308 (23,466,065) 144,491,083 Gross Profit $ 28,207,981 9,361,203 (19,299) 37,549,885 Year ended December 31, 2016 Polysilicon Wafer Elimination Total Revenue External $ 167,530,309 61,570,902 - 229,101,211 Revenue - Intersegment 28,688,793 - (28,688,793) - Total Revenue 196,219,102 61,570,902 (28,688,793) 229,101,211 Total Cost of revenue 125,320,832 52,413,007 (29,061,146) 148,672,693 Gross Profit $ 70,898,270 9,157,895 372,353 80,428,518 |
Schedule of Revenues of Major Customers | The following customers individually accounted for 10% or more of revenues: Year ended December 31, 2014 2015 2016 Customer C * $ 35,094,472 $ 48,739,001 Customer A * 20,465,558 * Customer B $ 18,210,196 $ 19,595,911 $ * Customer F $ 23,882,302 $ 18,125,773 $ * * Represents less than 10% |
ORGANIZATION AND PRINCIPAL AC46
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||||
Proceeds from non-controlling interest | $ 2,516,457 | |||
Xinjiang Daqo Investment [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest acquired (as a percent) | 1.00% | |||
Daqo Group [Member] | Xinjiang Daqo [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 100.00% | |||
Proceeds from non-controlling interest | $ 2,500,000 |
SUMMARY OF PRINCIPAL ACCOUNTI47
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Additional Information) (Details) | 12 Months Ended | ||||||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($) | Jan. 31, 2017 | Feb. 17, 2016USD ($) | Feb. 17, 2016CNY (¥) | Dec. 31, 2013USD ($) | |
Basis of presentation | |||||||
Working capital | $ 176,400,000 | ||||||
Cash and cash equivalents | 15,987,478 | $ 14,490,011 | $ 7,068,483 | $ 7,831,084 | |||
Short-term bank borrowings, including current portion of long-term bank borrowings | 105,980,320 | 123,936,995 | |||||
Capital commitments relating to purchases of property, plant and equipment | $ 4,700,000 | ||||||
Consecutive years in which net income and positive cash flow from operations generated | 3 years | ||||||
Current Ratio | 0.3 | ||||||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | $ 98,671,937 | 66,426,213 | 45,619,729 | ||||
Restricted cash | |||||||
Restricted cash | 15,893,467 | 19,062,714 | |||||
Inventories | |||||||
Inventory write-down | 62,422 | 175,568 | |||||
Prepaid land use rights | |||||||
Lease Expenses | 557,162 | 595,716 | 628,052 | ||||
Impairment of long-lived assets | |||||||
Long-lived asset impairment | 198,689 | 1,622,588 | |||||
Impairment charges included in loss from discontinued operations | 200,000 | 1,600,000 | |||||
Shipping and handling | |||||||
Shipping and handling costs | 3,147,594 | 2,708,962 | 2,054,786 | ||||
Government subsidies | |||||||
Unrestricted cash government subsidies | 4,742,635 | 3,578,865 | 926,173 | ||||
Government grants related to assets | 323,769 | 690,889 | 113,735 | ||||
Foreign currency translation | |||||||
Aggregate amount of cash and cash equivalents and restricted cash denominated in RMB | 28,839,371 | 30,891,550 | |||||
Noncontrolling interest | |||||||
Noncontrolling interest | 1,629,161 | $ 1,302,027 | |||||
Treasury Stock | |||||||
Share repurchase program, authorized amount | 5,000,000 | ||||||
Number of shares repurchased | shares | 2,356,900 | ||||||
Purchase price of treasury stock | $ 1,350,164 | ||||||
Investment accounted for under cost-method | |||||||
Cost Method Investments | 581,581 | ||||||
Operating Leases, Future Minimum Payments Due | $ 2,943,822 | ||||||
Syed Fire Safety Service Co [Member] | |||||||
Investment accounted for under cost-method | |||||||
Cost Method Investment, Ownership Percentage | 15.29% | 15.29% | |||||
Cost Method Investments | $ 581,581 | ¥ 4,038,900 | |||||
Subsequent Event [Member] | |||||||
Basis of presentation | |||||||
Percentage Of Capacity Increase In Expansion Project | 48.00% |
SUMMARY OF PRINCIPAL ACCOUNTI48
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Concentration of Credit Risk) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | ||
Concentration of credit risk | ||||
Accounts receivable, allowance for doubtful accounts | $ 10,163 | $ 1,087,465 | ||
Accounts receivable | 4,836,499 | 19,849,608 | ||
Customer A [Member] | ||||
Concentration of credit risk | ||||
Accounts receivable | 1,576,400 | [1] | ||
Customer B [Member] | ||||
Concentration of credit risk | ||||
Accounts receivable | 1,368,956 | [1] | ||
Customer C [Member] | ||||
Concentration of credit risk | ||||
Accounts receivable | 1,294,342 | 2,996,042 | ||
Customer D [Member] | ||||
Concentration of credit risk | ||||
Accounts receivable | [1] | 6,354,510 | ||
Customer F [Member] | ||||
Concentration of credit risk | ||||
Accounts receivable | [1] | 2,315,035 | ||
Customer G [Member] | ||||
Concentration of credit risk | ||||
Accounts receivable | [1] | $ 2,299,732 | ||
[1] | Represents less than 10% |
SUMMARY OF PRINCIPAL ACCOUNTI49
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, plant and equipment | |||
Interest expense capitalized | $ 1,757,547 | $ 2,825,879 | $ 1,960,259 |
Buildings and plant [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 30 years | ||
Machinery and equipment [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 15 years | ||
Furniture, fixtures and equipment [Member] | Minimum [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 3 years | ||
Furniture, fixtures and equipment [Member] | Maximum [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 5 years | ||
Motor vehicles [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 6 years |
SUMMARY OF PRINCIPAL ACCOUNTI50
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Share-based Compensation) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 2,702,089 | $ 3,687,951 | $ 1,792,819 |
Selling, general and administrative expenses [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 2,501,957 | 3,323,948 | 1,544,078 |
Research and development expenses [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 12,310 | ||
Cost of sales [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 200,132 | $ 364,003 | $ 236,431 |
EXIT and DISPOSAL ACTIVITIES (D
EXIT and DISPOSAL ACTIVITIES (Details) ¥ in Millions | 12 Months Ended | ||||||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2013USD ($) | |
Operating results reported as discontinued operations: | |||||||
Impairment charge | $ 198,689 | $ 1,622,588 | |||||
Relocation costs | 1,100,000 | ||||||
Expected relocation costs | 2,600,000 | ||||||
Maintenance expenses | 300,000 | ||||||
Wages [Member] | |||||||
Operating results reported as discontinued operations: | |||||||
Maintenance expenses | 200,000 | ||||||
Electricity fees [Member] | |||||||
Operating results reported as discontinued operations: | |||||||
Maintenance expenses | 100,000 | ||||||
Selling, general and administrative expenses [Member] | |||||||
Operating results reported as discontinued operations: | |||||||
Relocation costs | 100,000 | 800,000 | |||||
Carrying Value [Member] | Significant Production Assets [Member] | |||||||
Operating results reported as discontinued operations: | |||||||
Carrying value of assets | 200,000 | 1,600,000 | 116,100,000 | ¥ 720.5 | $ 144,700,000 | ||
Impairment charge | 200,000 | 1,600,000 | |||||
Carrying value of assets relocated | 34,100,000 | $ 1,100,000 | 46,100,000 | ¥ 236.7 | ¥ 7 | 286.4 | |
Carrying value of assets yet to be relocated | $ 15,700,000 | $ 70,000,000 | ¥ 109 | ¥ 434.1 |
FOLLOW-ON EQUITY OFFERINGS (Det
FOLLOW-ON EQUITY OFFERINGS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2015 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
America depositary shares (ADSs) issued, shares | 1,540,000 | 2,000,000 | |||
Follow-on equity offering, net of issuance costs, shares | 38,500,000 | 50,000,000 | |||
Issuance cost for ordinary shares | $ 2,000,000 | $ 3,400,000 | $ 2,033,041 | $ 3,375,553 | |
Follow-on equity offering, net of issuance costs | $ 28,000,000 | $ 54,600,000 | $ 27,996,959 | $ 54,624,447 |
ALLOWANCES FOR DOUBTFUL RECEI53
ALLOWANCES FOR DOUBTFUL RECEIVABLES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Analysis of allowances for accounts receivable is as follows: | |||
Beginning of the year | $ 1,087,465 | $ 3,189,110 | $ 7,160,782 |
Reversal during the year | (1,053,041) | (2,026,567) | (3,823,744) |
Foreign exchange effect | (24,261) | (75,078) | (147,928) |
Closing balance | 10,163 | 1,087,465 | 3,189,110 |
Allowances reversed during the period | $ 1,053,041 | $ 2,026,567 | $ 3,823,744 |
PREPAID EXPENSE AND OTHER CUR54
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Spare parts | $ 5,732,914 | $ 6,052,315 |
Prepaid Value added tax ("VAT") | 1,808,141 | 5,552,772 |
Prepaid insurance fee | 259,650 | 347,631 |
Others | 226,962 | 282,423 |
Total | $ 8,027,667 | $ 12,235,141 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Inventory [Line Items] | |||
Raw materials | $ 2,947,296 | $ 2,343,104 | |
Work-in-process | 4,878,905 | 5,626,531 | |
Finished goods | 4,454,499 | 2,746,304 | |
Total | 12,280,700 | 10,715,939 | |
Inventory write-down | $ 62,422 | $ 175,568 |
PROPERTY, PLANT AND EQUIPMENT56
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 557,427,884 | $ 544,326,125 | |
Depreciation of property, plant and equipment | 33,822,082 | 31,361,026 | $ 28,007,943 |
Long-lived asset impairment | 198,689 | 1,622,588 | |
Buildings and plant [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 286,302,082 | 313,290,516 | |
Machinery and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 371,703,665 | 389,373,554 | |
Furniture, fixtures and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 21,355,517 | 22,418,768 | |
Motor vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 334,025 | 293,331 | |
Depreciable Asset [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Less: Accumulated depreciation | (206,725,215) | (188,680,279) | |
Total | 472,970,074 | 536,695,889 | |
Construction in process [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 84,457,810 | $ 7,630,236 | |
Construction in process [Member] | Phase 3A Expansion [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 84,500,000 |
BORROWINGS (Schedule of Bank Bo
BORROWINGS (Schedule of Bank Borrowings) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Short-term bank borrowings | $ 55,582,070 | $ 72,360,730 |
Long-term bank borrowings, current portion | 50,398,250 | 51,576,265 |
Total borrowings, current | 105,980,320 | 123,936,995 |
Long-term bank borrowings, non-current portion | 111,948,913 | 118,548,430 |
Total | $ 217,929,233 | $ 242,485,425 |
BORROWINGS (Short-Term Borrowin
BORROWINGS (Short-Term Borrowings) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Short-term Debt [Line Items] | ||
Short-term borrowings | $ 55,582,070 | $ 72,360,730 |
Interest rate on short-term bank borrowings | 5.00% | 5.40% |
Short Term Borrowing Guaranteed By Daqo Group And Related Parties [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings | $ 55,582,070 | $ 72,360,730 |
BORROWINGS (Long-Term Borrowing
BORROWINGS (Long-Term Borrowings) (Details) ¥ in Millions | 12 Months Ended | ||||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Jun. 30, 2014USD ($) | |
Debt Instrument [Line Items] | |||||||
Long-term bank borrowings | $ 162,347,163 | ||||||
Huaxia Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Initiation date of credit facility | Sep. 28, 2011 | Sep. 28, 2011 | |||||
Term of facility | 4 years | 4 years | |||||
Maximum borrowing amount of credit facility | $ 57,600,000 | ¥ 400 | |||||
Amount drawn down | $ 57,600,000 | ¥ 400 | |||||
Amount repaid | $ 3,000,000 | ¥ 20 | 3,000,000 | 20 | |||
Amount available for future draw down | 54,600,000 | ¥ 380 | |||||
Line of Credit Facility, Maximum Amount Outstanding During Period | 57,600,000 | 400 | |||||
Huaxia Bank [Member] | Facility One [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amount drawn down | 21,600,000 | 150 | |||||
Line of Credit Facility, Maximum Amount Outstanding During Period | 21,600,000 | 150 | |||||
Huaxia Bank [Member] | Facility Two [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amount drawn down | 36,000,000 | 250 | |||||
Line of Credit Facility, Maximum Amount Outstanding During Period | 36,000,000 | 250 | |||||
Bank of China [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Initiation date of credit facility | Sep. 30, 2011 | Sep. 30, 2011 | |||||
Term of facility | 6 years | 6 years | |||||
Maximum borrowing amount of credit facility | $ 108,000,000 | 108,000,000 | 750 | 750 | |||
Interest rate spread over rate issued by People's Bank of China | 5.00% | 5.00% | |||||
Amount repaid | 37,200,000 | ¥ 290 | |||||
Amount of collateral | $ 63,300,000 | ||||||
Long-term bank borrowings | $ 33,100,000 | $ 70,800,000 | 230 | ¥ 460 | |||
Chongqing Rural Commercial Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Initiation date of credit facility | Jun. 25, 2015 | Jun. 25, 2015 | |||||
Term of facility | 6 years | 6 years | |||||
Maximum borrowing amount of credit facility | $ 96,200,000 | ¥ 625 | |||||
Interest rate spread over rate issued by People's Bank of China | 20.00% | 20.00% | |||||
Amount drawn down | $ 96,200,000 | ¥ 625 | |||||
Amount repaid | $ 18,500,000 | 85 | |||||
Fixed interest rate | 5.90% | 5.90% | |||||
Long-term bank borrowings | $ 77,700,000 | ¥ 540 | |||||
Line of Credit Facility, Maximum Amount Outstanding During Period | 96,200,000 | 625 | |||||
Chongqing Rural Commercial Bank [Member] | First Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amount drawn down | 51,500,000 | 357.5 | |||||
Line of Credit Facility, Maximum Amount Outstanding During Period | $ 51,500,000 | ¥ 357.5 | |||||
Chongqing Rural Commercial Bank [Member] | Facility One [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Initiation date of credit facility | May 30, 2016 | May 30, 2016 | |||||
Term of facility | 7 years | 7 years | |||||
Maximum borrowing amount of credit facility | $ 72,000,000 | 500 | |||||
Amount drawn down | 51,500,000 | ¥ 357.5 | |||||
Amount available for future draw down | $ 20,500,000 | ¥ 142.6 | |||||
Weighted average interest rate | 5.90% | 5.90% | |||||
Line of Credit Facility, Maximum Amount Outstanding During Period | $ 51,500,000 | ¥ 357.5 | |||||
Bank Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted average interest rate | 5.80% | 5.70% | 5.80% | 5.70% | |||
Long-term bank borrowings | $ 162,347,163 | $ 170,124,695 | |||||
Bank Facilities [Member] | Huaxia Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term bank borrowings | 0 | 3,079,180 | |||||
Bank Facilities [Member] | Bank of China [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term bank borrowings | 33,118,850 | 70,821,140 | |||||
Bank Facilities [Member] | Chongqing Rural Commercial Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term bank borrowings | $ 129,228,313 | $ 96,224,375 |
BORROWINGS (Schedule of Princip
BORROWINGS (Schedule of Principal Maturities of Bank Borrowings) (Details) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |
2,017 | $ 50,398,250 |
2,018 | 25,003,292 |
2,019 | 27,577,922 |
2,020 | 27,577,922 |
2,021 | 18,938,223 |
2,022 | 10,298,523 |
2,023 | 2,553,031 |
Total | $ 162,347,163 |
ACCRUED EXPENSES AND OTHER CU61
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued payroll and welfare | $ 3,798,472 | $ 3,524,876 |
Accrued professional fees | 374,944 | 776,518 |
Other tax payables | 1,802,962 | 2,298,780 |
Interest payable | 390,467 | 38,054 |
Others | 1,953,196 | 1,978,603 |
Total | $ 8,320,041 | $ 8,616,831 |
ADVANCES FROM CUSTOMERS (Detail
ADVANCES FROM CUSTOMERS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Total | $ 7,519,605 | $ 8,183,376 |
Customer F [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total | 3,035,415 | |
Customer G [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total | 1,608,539 | |
Customer H [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total | 3,237,308 | |
Customer I [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total | 1,517,402 | |
Customer J [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total | 1,343,600 | 1,539,590 |
Others [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total | $ 1,532,051 | $ 1,889,076 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | $ 198,689 | $ 1,622,588 | |
Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | 198,689 | 1,622,588 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferrable relocation assets | |||
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferrable relocation assets | |||
Significant Unobservable 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 untransferrable relocation assets | |||
Carrying Value [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferrable relocation assets | $ 198,689 | $ 1,622,588 |
MAINLAND CHINA CONTRIBUTION P64
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined contribution plan expenses | $ 3,147,927 | $ 4,087,334 | $ 3,130,308 |
Aggregate balance of statutory common reserves | 21,969,950 | $ 17,720,748 | $ 20,190,729 |
Restrictions of statutory reserves | $ 218,043,299 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | |||||
Nov. 25, 2014 | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012 | |
Operating Loss Carryforwards [Line Items] | |||||||
Income tax paid | $ 2,998,658 | $ 2,726,825 | |||||
Deferred Tax Assets, Valuation Allowance | $ 38,729,208 | $ 42,362,849 | $ 50,109,751 | $ 56,633,867 | |||
Statutory enterprise income tax rate | 25.00% | 25.00% | 25.00% | 25.00% | |||
State Administration of Taxation, China [Member] | |||||||
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% | 25.00% | 25.00% | |
PRC State Council, income tax rate | 10.00% | 10.00% | |||||
Xinjiang Daqo New Energy Co., Ltd. [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Income tax paid | ¥ | ¥ 0.1 | ||||||
Chongqing Daqo New Energy Co., Ltd. [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Net operating losses carried forward | $ 80,200,000 | ||||||
Deferred Tax Assets, Valuation Allowance | $ 38,729,208 | $ 42,362,849 |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Expenses) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current Tax Expenses | $ 7,357,623 | $ 1,786,092 | |
Deferred Tax Expenses (Benefit) | 466 | (648,271) | |
Total | $ 7,358,089 | $ 1,137,821 |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Income Tax Assets and Liabilities) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||||
Net operating loss carried forward | $ 20,039,534 | $ 22,549,975 | ||
Bad debt provision | 1,524 | 163,120 | ||
Government grants related to assets | 217,661 | 166,922 | ||
Long-lived asset impairment&depreciation | 18,113,967 | 19,624,021 | ||
Others | 942,466 | 485,776 | ||
Sub-total | 39,315,152 | 42,989,814 | ||
Valuation Allowance | (38,729,208) | (42,362,849) | $ (50,109,751) | $ (56,633,867) |
Total | $ 585,944 | $ 626,965 |
INCOME TAXES (Schedule of Chang
INCOME TAXES (Schedule of Changes of Valuation Allowance) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Beginning balance | $ 42,362,849 | $ 50,109,751 | $ 56,633,867 |
Reversal | (932,833) | (5,708,268) | (5,168,917) |
Foreign exchange effect | (2,700,808) | (2,038,634) | (1,355,199) |
Ending Balance | $ 38,729,208 | $ 42,362,849 | $ 50,109,751 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective income tax rate: | |||
PRC Enterprise Income Tax | 25.00% | 25.00% | 25.00% |
Preferential income tax rate of a subsidiary | (10.00%) | (8.00%) | (9.00%) |
Effect of different reversal rate | 1.00% | ||
Additional tax deductions | (1.00%) | (12.00%) | (8.00%) |
Different tax rate in other jurisdictions | 1.00% | 8.00% | 6.00% |
Changes in valuation allowance | (1.00%) | (3.00%) | |
Tax credits | (3.00%) | (15.00%) | |
Withhold tax | 1.00% | 0.00% | |
Effective tax rate | 14.00% | 8.00% | 0.00% |
INCOME TAXES (Schedule of Eff70
INCOME TAXES (Schedule of Effect of Tax Holidays) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
The aggregate dollar effect | $ 5.2 | $ 1.2 | $ 3 |
Per share effect-basic and diluted | $ 0.02 | $ 0.01 | $ 0.01 |
SHARE BASED COMPENSATION (Narra
SHARE BASED COMPENSATION (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Ordinary shares authorized | 21,000,000 | ||
Granted | 0 | 8,134,375 | 6,274,166 |
Weighted average fair value of stock options granted | $ 0.59 | $ 0.98 | |
Share-based compensation | $ 2,702,089 | $ 3,687,951 | $ 1,792,819 |
Unrecognized compensation cost related to non-vested stock options | $ 2,268,104 | ||
Unrecognized compensation cost, recognition period | 1 year 9 months |
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, 2015 | Dec. 31, 2014 | |
January 28, 2014 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average risk-free rate of return | 2.77% | |
Volatility rate | 93.00% | |
Dividend yield | 0.00% | |
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 28, 2014 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise multiple | 3 | |
Post-vesting forfeiture rate | 3.00% | |
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 28, 2014 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise multiple | 3.5 | |
Post-vesting forfeiture rate | 9.50% | |
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 Stock Option Activity) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Options | |||
Options outstanding | 17,528,541 | ||
Granted | 0 | 8,134,375 | 6,274,166 |
Forfeited | (147,235) | ||
Expired | (2,465) | ||
Exercised | (2,119,700) | ||
Options outstanding | 15,259,141 | 17,528,541 | |
Options vested or expected to vest | 17,037,682 | ||
Options exercisable | 11,902,422 | ||
Weighted Average Exercise Price | |||
Options outstanding | $ 0.50 | ||
Granted | 0 | ||
Forfeited | 0.59 | ||
Expired | 0.15 | ||
Exercised | 0.50 | ||
Options outstanding | 0.50 | $ 0.50 | |
Options vested or expected to vest | 0.44 | ||
Options exercisable | $ 0.47 | ||
Weighted Average Remaining Contract Life | |||
Options outstanding | 6 years 5 months 16 days | ||
Options vested or expected to vest | 5 years 9 months 14 days | ||
Options exercisable | 6 years 18 days | ||
Aggregate Intrinsic Value | |||
Options outstanding | $ 4,304,907 | ||
Options vested or expected to vest | 5,691,147 | ||
Options exercisable | $ 3,691,299 |
RELATED PARTY TRANSACTIONS AN74
RELATED PARTY TRANSACTIONS AND BALANCES (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 28, 2012 | ||
Related Party Transaction [Line Items] | |||||
Sales | $ 11,194,197 | $ 11,894,944 | $ 19,150,000 | ||
Related party balances: | |||||
Amounts due from related parties | 1,528,712 | 284,633 | |||
Amounts due to related parties | 26,829,605 | 46,396,527 | |||
Daqo Group [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 15,076,133 | 33,758 | |||
Related Party Transaction, Rate | 5.70% | ||||
Purchases of Fixed Assets [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | $ 5,655,016 | 3,863,858 | 7,201,424 | ||
Purchases of Fixed Assets [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | 486,948 | ||||
Purchases of Raw Materials [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | 129,219 | 32,755 | |||
Rental Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense | 1,021,891 | 1,050,661 | 1,071,287 | ||
Rental Expenses [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense | 27,997 | ||||
Proceeds From Interest Free Loans [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 15,043,550 | 10,821,462 | |||
Repayment of Interest Free Loans [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 10,974,807 | 20,217,257 | 8,115,813 | ||
Income (Loss) from Disposal of Fixed Assets [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 6,458 | ||||
Repayment of Interest Bearing Loan [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 15,059,000 | ||||
Interest Expenses Related Party [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense | 850,380 | ||||
Interest Expenses Related Party [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense | 850,380 | ||||
Proceeds From Related Parties Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 126,400,842 | 245,957,818 | 275,134,122 | ||
Repayment Of Related Parties Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 148,463,137 | 276,575,346 | 275,088,560 | ||
Zhengjiang Daqo Solar Co. Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Sales | 11,194,197 | 11,111,239 | 9,554,320 | ||
Related party balances: | |||||
Amounts due from related parties | $ 1,449,824 | 229,989 | |||
Zhengjiang Daqo Solar Co. Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Daqo Solar Co Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Sales | 783,705 | 9,595,680 | |||
Related party balances: | |||||
Amounts due to related parties | 37,390,575 | ||||
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 | $ 60,300,896 | 127,060,826 | 157,241,390 | ||
Daqo Solar Co Ltd [Member] | Repayment of Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 68,766,506 | 151,990,672 | 166,231,092 | ||
Daqo Xinjiang Investment Co., Ltd. [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 79,197 | 3,146,054 | |||
Daqo Xinjiang Investment Co., Ltd. [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Daqo Xinjiang Investment Co., Ltd. [Member] | Proceeds From Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | $ 56,270,085 | 72,946,700 | 98,367,234 | ||
Daqo Xinjiang Investment Co., Ltd. [Member] | Repayment of Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 38,715,449 | 73,252,506 | 93,219,846 | ||
Daqo New Material [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 8,323,271 | 5,563,165 | |||
Daqo New Material [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Daqo New Material [Member] | Rental Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense | $ 993,894 | 1,050,661 | 1,071,287 | ||
Daqo New Material [Member] | Proceeds From Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 9,607,344 | 11,082,241 | 7,729,501 | ||
Daqo New Material [Member] | Repayment of Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 12,262,592 | 11,285,114 | 4,600,117 | ||
Chongqing Daqo Tailai [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 2,107,488 | 144,102 | |||
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 | $ 3,534,248 | 375,528 | 2,724,790 | ||
Chongqing Daqo Tailai [Member] | Purchases of Raw Materials [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | 9,938 | ||||
Chongqing Daqo Tailai [Member] | Proceeds From Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 222,517 | 6,367,640 | |||
Chongqing Daqo Tailai [Member] | Repayment of Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 2,684,783 | 6,367,640 | |||
Chongqing Daqo Tailai [Member] | Income (Loss) from Disposal of Fixed Assets [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 6,458 | ||||
Jiangsu Daqo [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 37,679 | ||||
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 | $ 336,791 | ||||
Nanjing Daqo Electric [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Zhenjiang Klockner-Moeller Electrical Systems Co., Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Zhenjiang Klockner-Moeller Electrical Systems Co., Ltd [Member] | Purchases of Fixed Assets [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | $ 236,415 | ||||
Nanjing Daqo [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | 100.00% | |||
Nanjing Daqo [Member] | Proceeds From Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 13,456,861 | 973,898 | |||
Nanjing Daqo [Member] | Repayment of Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 13,456,861 | 2,921,693 | |||
Other Subsidiaries of Daqo Group [Member] | |||||
Related party balances: | |||||
Amounts due from related parties | 78,888 | 54,644 | |||
Amounts due to related parties | [1] | 221,441 | 118,873 | ||
Other Subsidiaries of Daqo Group [Member] | Purchases of Fixed Assets [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | 2,120,768 | 3,488,330 | 3,989,686 | ||
Other Subsidiaries of Daqo Group [Member] | Purchases of Raw Materials [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | 129,219 | 22,817 | |||
Other Subsidiaries of Daqo Group [Member] | Proceeds From Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 636 | ||||
Other Subsidiaries of Daqo Group [Member] | Repayment of Interest Free Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other transactions | 5,296 | ||||
Nanjing Intelligent Apparatus Co., Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Nanjing Intelligent Apparatus Co., Ltd [Member] | Purchases of Fixed Assets [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | $ 93,841 | ||||
Nanjing Intelligent Software Co., Ltd. [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 88,626 | ||||
Nanjing Intelligent Software Co., Ltd. [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Daqo Investment Co., Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Shanghai Sailfar Electric Technology Co., Ltd. [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 9,804 | ||||
Shanghai Sailfar Electric Technology Co., Ltd. [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Jiangsu Daquan High Voltage Switchgear Co Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 75.00% | ||||
Jiangsu Daqo Kai-fan Electric Co Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Zhenjiang Electric Equipment Co Ltd [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 85,332 | ||||
Zhenjiang Electric Equipment Co Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
Nanjing Daqo Transformer [Member] | |||||
Related party balances: | |||||
Amounts due to related parties | $ 1,022,075 | ||||
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 | $ 1,410,655 | ||||
Jiangsu Daqo ETE Electronic Systerm Co., Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 75.00% | ||||
Jiangsu Daqo ETE Electronic Systerm Co., Ltd [Member] | Purchases of Fixed Assets [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases | $ 43,066 | ||||
Jiangsu Daquan Kai-fan Switchgear Co., Ltd [Member] | Daqo Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity interest held | 100.00% | ||||
[1] | The remaining balance of amount due to related party of $221,441 as of December 31, 2016 was comprised of Jiangsu Daqo, Zhenjiang Electric, Daqo Sailfar and Intelligent Software in the amount of $37,679, $85,332, $9,804 and $88,626 respectively. |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator used in basic and diluted earnings per share: | |||
Net income attributable to Daqo New Energy Corp. ordinary shareholders-basic and diluted | $ 43,493,756 | $ 12,956,889 | $ 16,649,176 |
Denominator used in basic and diluted earnings per share: | |||
Weighted average number of ordinary shares outstanding used in computing earnings per share-basic | 261,742,244 | 258,015,851 | 206,349,976 |
Plus: share options | 3,075,511 | 3,396,082 | 5,003,667 |
Weighted average number of ordinary shares outstanding used in computing earnings per share-diluted | 264,817,755 | 261,411,933 | 211,353,643 |
NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE-Basic | $ 0.17 | $ 0.05 | $ 0.08 |
NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE-Diluted | $ 0.16 | $ 0.05 | $ 0.08 |
Outstanding employee options excluded from computation of diluted earnings per share | 10,899,141 | 12,563,541 | 6,154,166 |
COMMITMENTS AND CONTINGENCIES76
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Capital commitments: | |||
Commitments outstanding for the purchase of property, plant and equipment | $ 4,700,000 | ||
Lease commitments: | |||
Lease expense | 1,024,970 | $ 1,050,661 | $ 1,071,287 |
2,017 | 991,142 | ||
2,018 | 991,142 | ||
2,019 | 961,538 | ||
Total | $ 2,943,822 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 229,101,211 | $ 182,040,968 | $ 182,571,852 | ||
Total Cost of revenue | 148,672,693 | 144,491,083 | 139,308,511 | ||
Gross profit | $ 80,428,518 | $ 37,549,885 | $ 43,263,341 | ||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Concentration Risk, Percentage | 21.00% | 51.00% | 23.00% | ||
Polysilicon [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 167,530,309 | $ 125,916,457 | $ 127,692,325 | ||
Wafer [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 61,570,902 | 56,124,511 | 54,879,527 | ||
Operating Segments [Member] | Polysilicon [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 196,219,102 | 149,401,821 | 157,117,208 | ||
Total Cost of revenue | 125,320,832 | 121,193,840 | 119,703,550 | ||
Gross profit | 70,898,270 | 28,207,981 | 37,413,658 | ||
Operating Segments [Member] | Wafer [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 61,570,902 | 56,124,511 | 54,879,527 | ||
Total Cost of revenue | 52,413,007 | 46,763,308 | 47,861,811 | ||
Gross profit | 9,157,895 | 9,361,203 | 7,017,716 | ||
Elimination [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (28,688,793) | (23,485,364) | (29,424,883) | ||
Total Cost of revenue | (29,061,146) | (23,466,065) | (28,256,850) | ||
Gross profit | 372,353 | (19,299) | |||
Elimination [Member] | Polysilicon [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (23,485,364) | (29,424,883) | |||
Customer B [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | [1] | 19,595,911 | 18,210,196 | ||
Customer C [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 48,739,001 | 35,094,472 | [1] | ||
Customer A [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | [1] | 20,465,558 | [1] | ||
Customer F [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | [1] | $ 18,125,773 | $ 23,882,302 | ||
[1] | Represents less than 10% |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) $ in Millions | Feb. 03, 2017 | Dec. 31, 2016 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 1 year 9 months | |
Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 11.8 | |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 4 years | |
Share Incentive Plan 2014 [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 12,653,992 |
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I (BALANCE SHEET) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 15,987,478 | $ 14,490,011 | $ 7,068,483 | $ 7,831,084 |
Prepaid expenses and other current assets | 8,027,667 | 12,235,141 | ||
Total current assets | 73,302,858 | 88,776,027 | ||
TOTAL ASSETS | 656,708,076 | 660,851,404 | ||
CURRENT LIABILITIES | ||||
Accrued expenses and other current liabilities | 8,320,041 | 8,616,831 | ||
Amount due to a related party | 26,829,605 | 46,396,527 | ||
Income tax payable | 5,300,163 | 940,732 | ||
Total current liabilities | 249,750,421 | 275,393,602 | ||
EQUITY | ||||
Ordinary shares ($0.0001 per value 500,000,000 shares authorized as of December 31, 2015 and 2016; 279,214,103 and 279,214,103 shares issued as of December 31, 2015 and 2016, respectively and 260,836,578 and 262,956,278 shares outstanding as of December 31, 2015 and 2016, respectively) | 26,532 | 26,320 | ||
Additional paid in capital | 240,111,533 | 236,358,070 | ||
Retained Earnings (accumulated deficit) | 40,432,352 | (3,061,404) | ||
Accumulated other comprehensive income (loss) | (8,721,820) | 8,780,313 | ||
Treasury stock | (1,748,836) | (1,748,836) | ||
Total shareholders' equity | 270,099,761 | 240,354,463 | ||
TOTAL LIABILITIES AND EQUITY | $ 656,708,076 | $ 660,851,404 | ||
Ordinary shares: | ||||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | ||
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | ||
Ordinary shares, shares issued | 279,214,103 | 279,214,103 | ||
Ordinary shares, shares outstanding | 262,956,278 | 260,836,578 | ||
Parent Company [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 2,943,502 | $ 2,563,083 | $ 4,493,150 | $ 5,187,046 |
Prepaid expenses and other current assets | 223,559 | 193,583 | ||
Total current assets | 3,167,061 | 2,756,666 | ||
Investments in subsidiaries | 267,322,549 | 238,112,877 | ||
TOTAL ASSETS | 270,489,610 | 240,869,543 | ||
CURRENT LIABILITIES | ||||
Accrued expenses and other current liabilities | 389,849 | 406,088 | ||
Amount due to a related party | ||||
Income tax payable | ||||
Total current liabilities | 389,849 | 515,080 | ||
EQUITY | ||||
Ordinary shares ($0.0001 per value 500,000,000 shares authorized as of December 31, 2015 and 2016; 279,214,103 and 279,214,103 shares issued as of December 31, 2015 and 2016, respectively and 260,836,578 and 262,956,278 shares outstanding as of December 31, 2015 and 2016, respectively) | 26,532 | 26,320 | ||
Additional paid in capital | 240,111,533 | 236,358,070 | ||
Retained Earnings (accumulated deficit) | 40,432,352 | (3,061,404) | ||
Accumulated other comprehensive income (loss) | (8,721,820) | 8,780,313 | ||
Treasury stock | (1,748,836) | (1,748,836) | ||
Total shareholders' equity | 270,099,761 | 240,354,463 | ||
TOTAL LIABILITIES AND EQUITY | $ 270,489,610 | $ 240,869,543 | ||
Ordinary shares: | ||||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | ||
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | ||
Ordinary shares, shares issued | 279,214,103 | 279,214,103 | ||
Ordinary shares, shares outstanding | 262,956,278 | 260,836,578 |
FINANCIAL STATEMENT SCHEDULE 80
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
OPERATING EXPENSES | |||
Research and development | $ (4,001,438) | $ (923,664) | $ (1,486,978) |
Total operating expenses | (14,978,848) | (11,325,195) | (11,228,385) |
Income from operations | 65,449,670 | 26,224,690 | 32,034,956 |
Interest income | 407,996 | 493,995 | 324,118 |
Exchange gain | (7,422) | 640,678 | (55,792) |
Income tax expense | (7,358,089) | (1,137,821) | |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | 43,493,756 | 12,956,889 | 16,649,176 |
Other comprehensive (loss) income: | |||
Comprehensive income attributable to Daqo New Energy Corp. shareholders | 25,991,623 | 1,700,019 | 12,987,163 |
Parent Company [Member] | |||
OPERATING EXPENSES | |||
General and administrative | (3,175,482) | (4,142,634) | (2,738,085) |
Research and development | (12,310) | ||
Total operating expenses | (3,175,482) | (4,142,634) | (2,750,395) |
Income from operations | (3,175,482) | (4,142,634) | (2,750,395) |
Interest income | 1,641 | 8,144 | |
Exchange gain | 118,679 | ||
Income tax expense | (108,992) | ||
Other income | |||
NET LOSS BEFORE SHARE OF RESULTS OF SUBSIDIARIES | (3,175,482) | (4,131,306) | (2,742,251) |
Equity in earnings of subsidiaries | 46,669,238 | 17,088,195 | 19,391,427 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | 43,493,756 | 12,956,889 | 16,649,176 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (17,502,133) | (11,256,870) | (3,662,013) |
Total other comprehensive loss | (17,502,133) | (11,256,870) | (3,662,013) |
Comprehensive income attributable to Daqo New Energy Corp. shareholders | $ 25,991,623 | $ 1,700,019 | $ 12,987,163 |
FINANCIAL STATEMENT SCHEDULE 81
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF CHANGES IN EQUITY) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2015 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | $ 241,656,490 | $ 206,768,070 | $ 137,326,561 | ||
Net income | 43,493,756 | 12,956,889 | 16,649,176 | ||
Share-based compensation | 2,702,089 | 3,687,951 | 1,792,819 | ||
Option Exercised | $ 1,051,586 | 275,783 | 37,080 | ||
Option Exercised, shares | 2,119,700 | ||||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | $ 28,000,000 | $ 54,600,000 | 27,996,959 | 54,624,447 | |
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively,shares | 38,500,000 | 50,000,000 | |||
Repurchase of Stock | $ (1,350,164) | ||||
Repurchase of Stock, shares | (2,356,900) | ||||
Capital injection from noncontrolling shareholders | $ 2,516,457 | ||||
Balance | $ 271,728,922 | 241,656,490 | 206,768,070 | ||
Ordinary shares [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | $ 26,320 | $ 22,358 | $ 17,343 | ||
Balance, shares | 260,836,578 | 223,577,853 | 173,427,853 | ||
Share-based compensation | |||||
Option Exercised | $ 212 | $ 112 | $ 15 | ||
Option Exercised, shares | 2,119,700 | 1,115,625 | 150,000 | ||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | $ 3,850 | $ 5,000 | |||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively,shares | 38,500,000 | 50,000,000 | |||
Repurchase of Stock | |||||
Repurchase of Stock, shares | (2,356,900) | ||||
Capital injection from noncontrolling shareholders | |||||
Balance | $ 26,532 | $ 26,320 | $ 22,358 | ||
Balance, shares | 262,956,278 | 260,836,578 | 223,577,853 | ||
Treasury Stock [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | $ (1,748,836) | $ (398,672) | $ (398,672) | ||
Share-based compensation | |||||
Option Exercised | |||||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | |||||
Repurchase of Stock | (1,350,164) | ||||
Capital injection from noncontrolling shareholders | |||||
Balance | (1,748,836) | (1,748,836) | (398,672) | ||
Additional paid in capital [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | 236,358,070 | 203,125,494 | 146,676,163 | ||
Share-based compensation | 2,702,089 | 3,687,951 | 1,792,819 | ||
Option Exercised | 1,051,374 | 275,671 | 37,065 | ||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | 27,993,109 | 54,619,447 | |||
Repurchase of Stock | |||||
Capital injection from noncontrolling shareholders | 1,275,845 | ||||
Balance | 240,111,533 | 236,358,070 | 203,125,494 | ||
Retained earnings (accumulated losses) [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | (3,061,404) | (16,018,293) | (32,667,469) | ||
Share-based compensation | |||||
Option Exercised | |||||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | |||||
Repurchase of Stock | |||||
Capital injection from noncontrolling shareholders | |||||
Balance | 40,432,352 | (3,061,404) | (16,018,293) | ||
Accumulated other comprehensive income (loss) [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | 8,780,313 | 20,037,183 | 23,699,196 | ||
Share-based compensation | |||||
Option Exercised | |||||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | |||||
Repurchase of Stock | |||||
Capital injection from noncontrolling shareholders | |||||
Balance | (8,721,820) | 8,780,313 | 20,037,183 | ||
Parent Company [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | 240,354,463 | 206,768,070 | 137,326,561 | ||
Net income | 43,493,756 | 12,956,889 | 16,649,176 | ||
Other comprehensive loss | (17,502,133) | (11,256,870) | (3,662,013) | ||
Share-based compensation | 2,702,089 | 3,687,951 | 1,792,819 | ||
Option Exercised | 1,051,586 | 275,783 | 37,080 | ||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | 27,996,959 | 54,624,447 | |||
Repurchase of Stock | (1,350,164) | ||||
Capital injection from noncontrolling shareholders | 1,275,845 | ||||
Balance | 270,099,761 | 240,354,463 | 206,768,070 | ||
Parent Company [Member] | Ordinary shares [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | $ 26,320 | $ 22,358 | $ 17,343 | ||
Balance, shares | 260,836,578 | 223,577,853 | 173,427,853 | ||
Net income | |||||
Other comprehensive loss | |||||
Share-based compensation | |||||
Option Exercised | $ 212 | $ 112 | $ 15 | ||
Option Exercised, shares | 2,119,700 | 1,115,625 | 150,000 | ||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | $ 3,850 | $ 5,000 | |||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively,shares | 38,500,000 | 50,000,000 | |||
Repurchase of Stock | |||||
Repurchase of Stock, shares | (2,356,900) | ||||
Capital injection from noncontrolling shareholders | |||||
Balance | $ 26,532 | $ 26,320 | $ 22,358 | ||
Balance, shares | 262,956,278 | 260,836,578 | 223,577,853 | ||
Parent Company [Member] | Treasury Stock [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | $ (1,748,836) | $ (398,672) | $ (398,672) | ||
Net income | |||||
Other comprehensive loss | |||||
Share-based compensation | |||||
Option Exercised | |||||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | |||||
Repurchase of Stock | (1,350,164) | ||||
Capital injection from noncontrolling shareholders | |||||
Balance | (1,748,836) | (1,748,836) | (398,672) | ||
Parent Company [Member] | Additional paid in capital [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | 236,358,070 | 203,125,494 | 146,676,163 | ||
Net income | |||||
Other comprehensive loss | |||||
Share-based compensation | 2,702,089 | 3,687,951 | 1,792,819 | ||
Option Exercised | 1,051,374 | 275,671 | 37,065 | ||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | 27,993,109 | 54,619,447 | |||
Repurchase of Stock | |||||
Capital injection from noncontrolling shareholders | 1,275,845 | ||||
Balance | 240,111,533 | 236,358,070 | 203,125,494 | ||
Parent Company [Member] | Retained earnings (accumulated losses) [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | (3,061,404) | (16,018,293) | (32,667,469) | ||
Net income | 43,493,756 | 12,956,889 | 16,649,176 | ||
Other comprehensive loss | |||||
Share-based compensation | |||||
Option Exercised | |||||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | |||||
Repurchase of Stock | |||||
Capital injection from noncontrolling shareholders | |||||
Balance | 40,432,352 | (3,061,404) | (16,018,293) | ||
Parent Company [Member] | Accumulated other comprehensive income (loss) [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Balance | 8,780,313 | 20,037,183 | 23,699,196 | ||
Net income | |||||
Other comprehensive loss | (17,502,133) | (11,256,870) | (3,662,013) | ||
Share-based compensation | |||||
Option Exercised | |||||
Follow-on equity offering, net of issuance costs of $3,375,553 and $2,033,041 for the year ended December 31,2014 and 2015 respectively | |||||
Repurchase of Stock | |||||
Capital injection from noncontrolling shareholders | |||||
Balance | $ (8,721,820) | $ 8,780,313 | $ 20,037,183 |
FINANCIAL STATEMENT SCHEDULE 82
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF CHANGES IN EQUITY) (Parenthetical) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Follow-on equity offering, issuance costs | $ 2,033,041 | $ 3,375,553 |
FINANCIAL STATEMENT SCHEDULE 83
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF CASH FLOWS) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2015 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
OPERATING ACTIVITIES | |||||
Net (loss) income | $ 43,493,756 | $ 12,956,889 | $ 16,649,176 | ||
Share-based compensation | 2,702,089 | 3,687,951 | 1,792,819 | ||
Adjustments to reconcile net income to net cash used in operating activities: | |||||
Prepaid expenses and other current assets | 3,415,637 | 30,465 | 10,217,835 | ||
Amount due to a related party | 1,815,307 | 2,178,445 | (453,075) | ||
Income tax payable | 4,420,313 | 940,732 | |||
Net cash provided by operating activities | 98,671,937 | 66,426,213 | 45,619,729 | ||
INVESTING ACTIVITIES | |||||
Disposition of minority interest in subsidiary | 5,110,085 | ||||
Net cash used in investing activities | (66,123,053) | (74,132,349) | (90,589,032) | ||
FINANCING ACTIVITIES | |||||
Repurchase of ordinary shares | (1,350,164) | ||||
Proceeds from follow-on equity offering | 30,030,000 | 58,000,000 | |||
Insurance cost for follow-on equity offering | $ (2,000,000) | $ (3,400,000) | (2,033,041) | (3,375,553) | |
Proceeds from options exercised | 1,051,586 | 275,783 | 37,080 | ||
Net cash provided by (used in) financing activities | (30,279,523) | 15,242,079 | 44,271,754 | ||
Net increase (decrease) in cash and cash equivalents | 1,497,467 | 7,421,528 | (762,601) | ||
Cash and cash equivalents at the beginning of the year | 14,490,011 | 7,068,483 | 7,831,084 | ||
Cash and cash equivalents at the end of the year | 15,987,478 | 14,490,011 | 7,068,483 | ||
Parent Company [Member] | |||||
OPERATING ACTIVITIES | |||||
Net (loss) income | 43,493,756 | 12,956,889 | 16,649,176 | ||
Share of results of subsidiaries | (46,669,238) | (17,088,195) | (19,391,427) | ||
Share-based compensation | 2,702,089 | 3,687,951 | 1,792,819 | ||
Adjustments to reconcile net income to net cash used in operating activities: | |||||
Prepaid expenses and other current assets | (29,976) | 11,099 | (27,195) | ||
Changes in other current liabilities | (58,806) | (96,166) | (26,901) | ||
Amount due to a related party | (286,526) | 286,526 | |||
Income tax payable | (108,992) | 108,992 | |||
Net cash provided by operating activities | (671,167) | (705,956) | (717,002) | ||
INVESTING ACTIVITIES | |||||
Capital contributed to subsidiaries | (33,256,774) | (54,638,421) | |||
Cash collected from subsidiaries when liquidation | |||||
Disposition of minority interest in subsidiary | 5,110,085 | ||||
Net cash used in investing activities | (28,146,689) | (54,638,421) | |||
FINANCING ACTIVITIES | |||||
Repurchase of ordinary shares | (1,350,164) | ||||
Proceeds from follow-on equity offering | 30,030,000 | 58,000,000 | |||
Insurance cost for follow-on equity offering | (2,033,041) | (3,375,553) | |||
Proceeds from options exercised | 1,051,586 | 275,783 | 37,080 | ||
Net cash provided by (used in) financing activities | 1,051,586 | 26,922,578 | 54,661,527 | ||
Net increase (decrease) in cash and cash equivalents | 380,419 | (1,930,067) | (693,896) | ||
Cash and cash equivalents at the beginning of the year | 2,563,083 | 4,493,150 | 5,187,046 | ||
Cash and cash equivalents at the end of the year | $ 2,943,502 | $ 2,563,083 | $ 4,493,150 |