Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | DAQO NEW ENERGY CORP. |
Entity Central Index Key | 0001477641 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Trading Symbol | DQ |
Entity Common Stock, Shares Outstanding | 332,029,752 |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 65,419,389 | $ 53,802,946 |
Restricted cash | 28,609,307 | 9,910,957 |
Short-term investments | 21,807,000 | 0 |
Accounts receivable, net of allowance for doubtful accounts of nil as of December 31, 2017 and 2018 | 1,180,598 | 700,558 |
Notes receivable | 8,111,044 | 20,778,855 |
Prepaid expenses and other current assets | 10,335,501 | 6,689,623 |
Advances to suppliers | 3,327,951 | 1,575,118 |
Inventories | 15,449,367 | 15,683,490 |
Amount due from related parties | 815,035 | 5,799 |
Current assets associated with discontinued operations | 5,013,615 | 33,215,204 |
Total current assets | 160,068,807 | 142,362,550 |
Property, plant and equipment, net | 611,616,459 | 485,466,417 |
Prepaid land use rights, net | 22,249,251 | 24,076,516 |
Deferred tax assets | 821,137 | 714,068 |
Investment in an affiliate | 649,839 | 687,074 |
Non-current assets associated with discontinued operations | 59,523,588 | 95,474,608 |
TOTAL ASSETS | 854,929,081 | 748,781,233 |
Current liabilities: | ||
Short-term bank borrowings, including current portion of long-term bank borrowings | 38,205,864 | 73,784,258 |
Accounts payable | 9,195,467 | 19,311,691 |
Notes payable | 29,209,130 | 14,798,268 |
Advances from customers – short-term portion | 10,213,940 | 16,377,524 |
Payables for purchases of property, plant and equipment | 27,220,943 | 21,736,058 |
Accrued expenses and other current liabilities | 9,417,702 | 10,821,785 |
Amount due to related parties – short-term portion | 2,260,007 | 1,837,120 |
Income tax payable | 5,454,951 | 13,191,205 |
Current liabilities associated with discontinued operations | 18,675,930 | 44,653,470 |
Total current liabilities | 149,853,934 | 216,511,379 |
Long-term bank borrowings | 133,312,370 | 111,436,292 |
Advances from customers – long-term portion | 7,269,000 | 0 |
Deferred government subsidies | 21,462,621 | 23,306,729 |
Amount due to related parties – long-term portion | 15,991,800 | 0 |
Deferred tax liabilities | 1,184,644 | 0 |
Non-current liabilities associated with discontinued operations | 723,035 | 2,998,766 |
Total liabilities | 329,797,404 | 354,253,166 |
Commitments and contingencies (Note 17) | ||
Ordinary shares; | ||
$0.0001 par value 500,000,000 shares authorized as of December 31, 2017 and 2018; 279,214,103 shares issued and 270,918,702 shares outstanding as of December 31, 2017; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018 | 33,439 | 27,328 |
Additional paid-in capital | 368,681,449 | 247,076,428 |
Retained earnings | 171,398,185 | 133,273,480 |
Accumulated other comprehensive income (loss) | (13,232,560) | 13,107,187 |
Treasury shares, at cost (4,643,150 shares as of December 31, 2017 and 2018) | (1,748,836) | (1,748,836) |
Total shareholders' equity | 525,131,677 | 391,735,587 |
Non-controlling interest | 0 | 2,792,480 |
Total equity | 525,131,677 | 394,528,067 |
TOTAL LIABILITIES AND EQUITY | $ 854,929,081 | $ 748,781,233 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, allowance for doubtful accounts | $ 0 | $ 0 |
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued | 351,823,578 | 279,214,103 |
Ordinary shares, shares outstanding | 332,029,752 | 270,918,702 |
Treasury Stock, shares | 4,643,150 | 4,643,150 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Revenues | $ 301,599,897 | $ 323,199,694 | $ 196,219,101 |
Cost of revenues | (203,486,191) | (179,151,930) | (118,408,302) |
Gross profit | 98,113,706 | 144,047,764 | 77,810,799 |
Operating (expenses) income: | |||
Selling, general and administrative expenses | (27,076,669) | (16,042,494) | (15,081,878) |
Research and development expenses | (2,736,520) | (676,323) | (3,878,414) |
Other operating income, net | 13,177,254 | 3,750,147 | 2,285,331 |
Total operating expenses, net | (16,635,935) | (12,968,670) | (16,674,961) |
Income from operations | 81,477,771 | 131,079,094 | 61,135,838 |
Interest expense | (10,762,677) | (16,262,205) | (12,720,155) |
Interest income | 1,235,873 | 464,515 | 149,259 |
Exchange gain (loss) | 1,836,160 | (5,853) | 6,553 |
Income before income taxes | 73,787,127 | 115,275,551 | 48,571,495 |
Income tax expense | (11,716,545) | (17,332,226) | (7,358,089) |
Net income from continuing operations | 62,070,582 | 97,943,325 | 41,213,406 |
Income (loss) from discontinued operations, net of tax | (23,305,045) | (4,087,925) | 2,710,591 |
Net income | 38,765,537 | 93,855,400 | 43,923,997 |
Net income attributable to non-controlling interest | 640,832 | 1,014,272 | 430,241 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | $ 38,124,705 | $ 92,841,128 | $ 43,493,756 |
NET EARNINGS (LOSS) PER ORDINARY SHARE | |||
Continuing operations | $ 0.19 | $ 0.37 | $ 0.16 |
Discontinued operations | (0.07) | (0.02) | 0.01 |
Basic—ordinary shares | 0.12 | 0.35 | 0.17 |
Continuing operations | 0.19 | 0.35 | 0.15 |
Discontinued operations | (0.07) | (0.01) | 0.01 |
Diluted—ordinary shares | $ 0.12 | $ 0.34 | $ 0.16 |
ORDINARY SHARES USED IN CALCULATING EARNINGS (LOSS) PER ORDINARY SHARE | |||
Basic—ordinary shares | 311,715,158 | 265,070,961 | 261,742,244 |
Diluted—ordinary shares | 325,506,335 | 272,926,319 | 264,817,755 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income | $ 38,765,537 | $ 93,855,400 | $ 43,923,997 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (26,356,406) | 21,978,054 | (17,605,240) |
Total other comprehensive (loss) income | (26,356,406) | 21,978,054 | (17,605,240) |
Comprehensive income | 12,409,131 | 115,833,454 | 26,318,757 |
Comprehensive income attributable to non-controlling interest | 500,505 | 1,163,319 | 327,134 |
Comprehensive income attributable to Daqo New Energy Corp. ordinary shareholders | $ 11,908,626 | $ 114,670,135 | $ 25,991,623 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Total | Ordinary shares [Member] | Treasury Stock [Member] | Additional paid in capital [Member] | Retained earnings (accumulated losses) [Member] | Accumulated other comprehensive income (loss) income [Member] | Noncontrolling interest [Member] |
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 exercised | 1,051,586 | $ 212 | 1,051,374 | ||||
Options exercised, shares | 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 | ||||||
Net income | 93,855,400 | 92,841,128 | 1,014,272 | ||||
Other comprehensive loss | 21,978,054 | 21,829,007 | 149,047 | ||||
Share-based compensation | 4,200,273 | 4,200,273 | |||||
Options exercised | 2,765,418 | $ 560 | 2,764,858 | ||||
Options exercised, shares | 5,596,050 | ||||||
Restricted shares vested | $ 236 | (236) | |||||
Restricted shares vested, shares | 2,366,374 | ||||||
Balance at Dec. 31, 2017 | 394,528,067 | $ 27,328 | (1,748,836) | 247,076,428 | 133,273,480 | 13,107,187 | 2,792,480 |
Balance, shares at Dec. 31, 2017 | 270,918,702 | ||||||
Net income | 38,765,537 | 38,124,705 | 640,832 | ||||
Other comprehensive loss | (26,356,406) | (26,216,079) | (140,327) | ||||
Share-based compensation | 13,788,049 | 13,788,049 | |||||
Options exercised | $ 110,868 | $ 23 | 110,845 | ||||
Options exercised, shares | 230,225 | 230,225 | |||||
Restricted shares vested | $ 927 | (927) | |||||
Restricted shares vested, shares | 9,271,350 | ||||||
Follow-on equity offering, net of issuance costs of $6,919,202 | 106,621,643 | $ 5,161 | 106,616,482 | ||||
Follow-on equity offering, net of issuance costs of $6,919,202 shares | 51,609,475 | ||||||
Acquisition of non-controlling interest | (2,326,081) | 1,090,572 | (123,668) | (3,292,985) | |||
Balance at Dec. 31, 2018 | $ 525,131,677 | $ 33,439 | $ (1,748,836) | $ 368,681,449 | $ 171,398,185 | $ (13,232,560) | |
Balance, shares at Dec. 31, 2018 | 332,029,752 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Follow-on equity offering, issuance costs | $ 6,919,202 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | |||
Net income | $ 38,765,537 | $ 93,855,400 | $ 43,923,997 |
Less: Income (loss) from discontinued operations, net of tax | (23,305,045) | (4,087,925) | 2,710,591 |
Net income from continuing operations | 62,070,582 | 97,943,325 | 41,213,406 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share-based compensation | 13,788,049 | 4,200,273 | 2,702,089 |
Depreciation of property, plant and equipment | 27,487,163 | 27,576,077 | 22,620,885 |
Loss on disposal of property plant and equipment | 130,666 | ||
Deferred tax assets | (151,843) | (85,302) | 445 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (539,597) | 1,172,506 | 13,794,121 |
Notes receivable | 12,022,847 | (10,197,038) | (3,948,804) |
Prepaid expenses and other current assets | (4,699,699) | 496,485 | 2,895,291 |
Advances to suppliers | (1,914,816) | (62,384) | (735,105) |
Inventories | (641,481) | (7,919,605) | (1,601,970) |
Amount due from related parties | 82 | 212 | (5,897) |
Prepaid land use rights | 544,267 | 531,903 | 517,448 |
Accounts payable | (9,449,164) | 4,038,950 | 3,104,177 |
Notes payable | (14,204,999) | 199,562 | 7,860,687 |
Accrued expenses and other current liabilities | (918,399) | 4,581,224 | 805,730 |
Income tax payable | (7,314,062) | 7,253,601 | 4,420,313 |
Advances from customers | 2,076,037 | 8,386,416 | 2,726,889 |
Amount due to related parties | 8,793 | 1,000 | (11,232,335) |
Deferred government subsidies | (605,268) | (591,519) | (588,308) |
Net cash provided by operating activities-continuing operations | 77,558,492 | 137,656,352 | 84,549,062 |
Net cash provided by operating activities-discontinued operations | 17,994,548 | 5,048,042 | 14,122,875 |
Net cash provided by operating activities | 95,553,040 | 142,704,394 | 98,671,937 |
Investing activities: | |||
Purchases of property, plant and equipment | (143,064,872) | (64,084,712) | (66,503,592) |
Investment in an affiliate | (63,793) | (581,581) | |
Purchase of short-term investments | (37,860,000) | ||
Repayment of short-term investments | 15,144,000 | ||
Acquisition of Xinjian Daqo Investment | 443,579 | ||
Net cash used in investing activities-continuing operations | (165,337,293) | (64,148,505) | (67,085,173) |
Net cash (used in) provided by investing activities-discontinued operations | 616,988 | (3,752,066) | (975,550) |
Net cash used in investing activities | (164,720,305) | (67,900,571) | (68,060,723) |
Financing activities: | |||
Proceeds from related parties loans | 34,831,200 | 19,382,389 | 56,923,289 |
Repayment of related parties loans | (34,831,200) | (19,382,389) | (48,286,149) |
Proceeds from bank borrowings | 56,002,512 | 65,349,400 | 91,927,666 |
Repayment of bank borrowings | (59,819,936) | (96,200,000) | (98,184,680) |
Proceeds from options exercised | 686,596 | 2,238,854 | 1,051,586 |
Proceeds from follow-on equity offering | 113,540,845 | ||
Insurance costs for follow-on equity offering | (6,919,202) | ||
Net cash provided by (used in) financing activities–continuing operations | 103,490,815 | (28,611,746) | 3,431,712 |
Net cash used in financing activities–discontinued operations | (16,778,925) | (8,742,573) | (33,711,235) |
Net cash provided by (used in) financing activities | 86,711,890 | (37,354,319) | (30,279,523) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,909,097 | 3,335,715 | (2,003,470) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 22,453,722 | 40,785,219 | (1,671,779) |
Cash, cash equivalents and restricted cash at the beginning of the year (includes $20,590,084, $3,723,807 and $8,952,260 of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2015, 2016 and 2017) | 72,666,164 | 31,880,945 | 33,552,724 |
Cash, cash equivalents and restricted cash at the end of the year (includes $3,723,807, $8,952,260 and $1,091,190 of cash, cash equivalents and restricted cash in current assets associated with discontinued operations on December 31, 2016, 2017 and 2018) | 95,119,886 | 72,666,164 | 31,880,945 |
Cash and cash equivalents | 65,419,389 | 53,802,946 | 15,987,478 |
Restricted cash | 28,718,478 | 11,989,559 | 15,893,467 |
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | 95,119,886 | 72,666,164 | 31,880,945 |
Supplemental disclosure of cash flow information: | |||
Interest paid, net of capitalized interest | 10,787,862 | 16,308,829 | 12,350,570 |
Income taxes paid | 19,452,799 | 9,526,485 | 2,998,658 |
Supplemental schedule of non-cash investing activities: | |||
Purchases of property, plant and equipment included in payables | 56,153,860 | 22,018,200 | 61,475,715 |
Purchase of property, plant and equipment included in amounts due to related parties – short-term portion | 2,240,686 | 1,825,617 | 3,341,201 |
Payables for acquisition of Xinjiang Daqo Investment included in amounts due to related parties – long-term portion | $ 15,991,800 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | $ 8,952,260 | $ 3,723,807 | $ 3,723,807 | $ 20,590,084 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | $ 1,091,190 | $ 8,952,260 | $ 3,723,807 | $ 3,723,807 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [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”), Xinjiang Daqo New Energy Co., Ltd. (“Xinjiang Daqo”) and Xinjiang Daqo Investment Co., Ltd. (“Xinjiang Daqo Investment”) are collectively referred to as the Group. The Company was incorporated on November 22, 2007 in the Cayman Islands. Chongqing Daqo and Xinjiang Daqo were incorporated by the Company on January 14, 2008 and February 22, 2011, respectively, in the Peoples’ Republic of China (“PRC”). Xinjiang Daqo Investment was incorporated by Daqo Group Co, Ltd. (“Daqo Group”), the Company's ultimate parent company, on March 10, 2011. Xinjiang Daqo Investment was acquired by Xinjiang Daqo in December 2018 and therefore became the Group's wholly-owned subsidiary. Prior to September 7, 2018, the Group manufactured and sold polysilicon and wafers through Xinjiang Daqo and Chongqing Daqo. In September 2018, the Group made a strategic decision to discontinue its solar wafer manufacturing operations in its Chongqing business subsidiary. The operational results of the Chongqing business have been excluded from the Groups financial results from continuing operations and have been separately presented under discontinued operations. Retrospective adjustments to the historical statements have also been made to provide a consistent basis of comparison for the financial results (see Note 3). Unless otherwise indicated, amounts provided in the Notes pertain to continuing operations only. In August 2015, Xinjiang Daqo issued stock representing 1% equity interest to Xinjiang Daqo Investment for total cash proceeds of $2.5 million, which was based on the fair value of Xinjiang Daqo. Xinjiang Daqo Investment's equity interests in Xinjiang Daqo was presented as a non-controlling interest in the Group’s consolidated financial statements. On December 20, 2018, Xinjiang Daqo acquired 100% equity interest of Xinjiang Daqo Investment for a total cash consideration of $16.0 million. Following this acquisition, Xinjiang Daqo Investment became a subsidiary of Xinjiang Daqo and has been consolidated into the Group’s financial statements as of December 31, 2018. |
SUMMARY OF PRINCIPAL ACCOUNTING
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). (b) Basis of consolidations The consolidated financial statements include the financial statements of the Group. All intercompany transactions and balances have been eliminated upon consolidation. (c) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Management has made significant estimates in a variety of areas, including but not limited to allowance for doubtful accounts, useful lives and residual values of long-lived assets, impairment for long lived assets, valuation allowances for deferred tax assets, interest capitalization and certain assumptions used in the computation of share-based compensation and related forfeiture rates. (d) Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, accounts receivable and notes receivable. The Group places its cash, cash equivalents and restricted cash in various financial institutions in the PRC. The Group believes that no significant credit risk exists as these banks are principally government-owned financial institutions with high credit ratings. Accounts receivable represent those receivables derived in the ordinary course of business. The Group conducts credit evaluations of customers to whom credit terms are extended. The Group establishes an allowance for doubtful accounts mainly based on aging of the receivables and other factors surrounding the credit risk of specific customers. There is no allowance for doubtful accounts as of December 31, 2017 and 2018, based on the aging of the receivables and the Group’s assessment of the customers’ credit risk. There is one customer that accounted for 10% or more of accounts receivable amounting to $682,264 and $1,087,719 as of December 31, 2017 and 2018, respectively. From time to time, certain accounts receivable balances are settled in the form of notes receivable. As of December 31, 2017 and 2018, notes receivable represents bank acceptance drafts that are non-interest bearing and due within 6~12 months. (e) Cash, cash equivalents and restricted cash Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have maturities of three months or less when purchased. Restricted cash of $9,910,957 and $28,609,307 as of December 31, 2017 and 2018, respectively, are restricted bank deposits for (f) Short-term investments Short-term investments include wealth management products with variable interest rates or principal not-guaranteed with certain financial institutions, whereby the Group has the intent and the ability to hold to maturity within one year. The Group classifies the short-term investments as "held-to-maturity" securities and stated at amortized cost. For investments classified as held-to-maturity securities, the Group evaluates whether a decline in fair value below the amortized cost basis is other-than-temporary in accordance with ASC 320. The other-than-temporary impairment loss is recognized in earnings equal to the excess of the investments' amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. No impairment loss in relation to its short-term investments was recorded for the year ended December 31, 2018. (g) Allowance for doubtful accounts The Group determines its allowance for doubtful accounts by actively monitoring the financial condition of its customers to determine the potential for any nonpayment of trade receivables. In determining its allowance for doubtful accounts, the Group also considers other economic factors, such as aging trends. The Group believes that its process of specific review of customers combined with overall analytical review provides an effective evaluation of ultimate collectability of trade receivables. Provisions for allowance for doubtful accounts are recorded as general and administrate expense in the consolidated statements of operations. (h) Inventories Inventories are stated at lower of cost or net realizable value. Costs are determined using weighted average costs. Costs comprise direct materials, direct labor and overhead costs incurred in bringing the inventories to their present location and condition. The Group writes down the cost of excess inventories to the estimated net realizable value based on historical and forecasted demand. Estimated net realizable value is measured as the estimated selling price of each class of inventory in the ordinary course of business less estimated costs of completion and disposal. The charges to inventory for the years ended December 31, 2016, 2017 and 2018 were nil, nil, and $851,008 from discontinued operations, respectively. (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 plants 30 years Machinery and equipment 15 years Furniture, fixtures and equipment 3-5 years Motor vehicles 6 years The Group reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable. Factors that the Group considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include, but are not limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use of the assets. The analysis will be performed at the asset or asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors. Costs incurred on construction are capitalized and transferred to property, plant and equipment upon completion, at which time depreciation commences. Interest expense incurred for construction of property, plant, and equipment is capitalized as part of the costs of such assets. The Group capitalizes interest to the extent that expenditures to construct an asset have occurred and interest costs have been incurred. Interest expense capitalized for the years ended December 31, 2016, 2017 and 2018 was $1,757,547, $47,507 and $1,203,547, respectively. (j) Prepaid land use rights All land in the PRC is owned by the PRC government. The PRC government, according to PRC law, may sell the land use rights for a specified period of time. The Group’s land use rights in the PRC are stated at cost less recognized lease expenses. Lease expense is recognized over the term of the agreement on a straight-line basis. The Group recorded lease expenses of $517,448, $531,903 and $544,267, for the years ended December 31, 2016, 2017 and 2018, respectively. (k) Impairment of long-lived assets The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Factors that the Group considers in deciding when to perform an impairment review include, but are not limited to significant under-performance of a business or product line in relation to expectations, significant negative industry or economic trends, and significant changes or 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. For the years ended December 31, 2016, 2017 and 2018, the Group recorded impairment losses for long-lived assets from discontinued operations of $198,689, $2,987,668 and $18,769,938, of $7,287,033 incurred in 2018 were related to the assets of discontinued wafer manufacturing operations. (l) Revenue recognition As of January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 The Group's revenue is all derived from the sale of polysilicon from the polysilicon segment, which is the only remaining segment after the discontinuation of the wafer business in September 2018. The sale of polysilicon is all in PRC and the Group's operations is in one PRC location, Xinjiang. Revenue cannot be disaggregated to a lower level or more than one categories to provide meaningful information. See Note 18 Segment Information. The Group recognizes sale of polysilicon at a point in time following the transfer of control of the products to the customers, which occurs upon delivery according to the terms of the underlying contracts. The Group's standalone selling prices are based on the prices charged to customers for the single performance obligation which is transfer of control of polysilicon upon delivery to the customers. Variable consideration that could affect the Group's reported revenues is sales returns, which would be recorded as a reduction of revenue. Return rights of defective products are typically contractually limited, which allows sales returns within a period ranging from 3 to 30 days upon delivery. Sales returns have been nil for each reporting period presented. No warranties, incentives, or rebates arrangements has been offered to customers. For majority of the sales arrangements, the Group requires payments prior to shipments. For customers with trade credit granted on a short-term basis within 30 days, the Group records accounts receivable at the invoiced amount, net of an estimated allowance for doubtful accounts. As of December 31, 2017 and 2018, accounts receivable totaled $700,558 and $1,180,598, respectively. The Group did not record any allowance for doubtful accounts as of December 31, 2017 and 2018. Practical Expedients and Exemptions We apply the new revenue standard requirements to a portfolio of contracts (or performance obligations) with similar characteristics for transactions where it is expected that the effects on the financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio. Therefore, we have elected the portfolio approach in applying the new revenue guidance. Our revenue contracts provide for performance obligations that are fulfilled and transfer control to customers at point in time, involve the same pattern of transfer to the customer, and provide a right to consideration from our customers in an amount that corresponds directly with the value to the customer for the performance completed. Therefore, we recognize revenue in the amount to which we have a right to invoice. We have made an accounting policy election to not assess whether promised products are performance obligations if they are immaterial in the context of the contract with the customer. If the revenue related to a performance obligation that includes products that are immaterial in the context of the contract is recognized before those immaterial products are transferred to the customer, then the related costs to transfer those products are accrued. We generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling, general and administrative expenses. (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. (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 $2,873,147, $4,099,716 and $4,474,956, respectively for the years ended December 31, 2016, 2017 and 2018. (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. The Group's research and development activities are mainly focused on technical improvement to improve the production volume, efficiency and lower unit cost. (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; 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, 2016, 2017 and 2018 were $1,675,016, $3,704,144 and $13,136,922, respectively. Government grants related to fixed assets are recorded as long term liabilities and amortized on a straight-line basis over the useful life of the associated asset as an offset to depreciation expense. The Group did not receive any government grants related to fixed assets during the years ended December 31, 2016, 2017 and 2018. (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. (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 Binomial option pricing model and the fair value of restricted share units ("RSUs") is determined with reference to the fair value of the underlying shares on the grant date. The Group has made an estimate of expected forfeiture and is recognizing compensation costs only for those equity awards expected to vest. The share-based compensation expenses have been categorized as either selling, general and administrative expenses or cost of sales, depending on the job functions of the grantees. For the years ended December 31, 2016, 2017 and 2018, the Group recognized share-based compensation expense of $2,702,089, $4,200,273 and $13,788,049, respectively, which was recognized in the statements of operations as follows: Year ended December 31, 2016 2017 2018 Selling, general and administrative expenses $ 2,501,957 $ 3,679,145 $ 12,461,838 Cost of revenues 200,132 521,128 1,326,211 Total $ 2,702,089 $ 4,200,273 $ 13,788,049 (s) Earnings (loss) per share Basic earnings (loss) per ordinary share is computed by dividing the net income attributable to ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted earnings (loss) per 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. (t) Foreign currency translation The reporting currency of the Group is the United States dollar (“U.S. dollar”). The functional currency of the Group is the U.S. dollar. Monetary assets and liabilities denominated in other currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange in effect at the balance sheet dates. Transactions dominated in currencies other than the U.S. dollar during the year are converted into U.S. dollar at the applicable rates of exchange prevailing when the transactions occur. Transaction gains and losses are recorded in the statements of operations. The financial records of the Group’s PRC subsidiaries are maintained in Chinese Renminbi (“RMB”), which is their functional currency. Assets and liabilities are translated at the exchange rates at the balance sheet date. Equity accounts are translated at historical exchange rates. Revenues, expenses, gains and losses are translated at average rate of exchange prevailing during the periods presented. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the statement of changes in equity and comprehensive income. The RMB is not a freely convertible currency. The State Administration for Foreign Exchange of People’s Republic of China, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Group’s aggregate amount of cash, cash equivalents and restricted cash denominated in RMB amounted to $66,433,887 and $81,476,636 as of December 31, 2017 and 2018, respectively. (u) Comprehensive income (loss) Comprehensive income (loss) is the change in equity during a period from transactions and other events and circumstances from non-shareholder sources and included net income and foreign currency translation adjustments. As of December 31, 2016, 2017 and 2018, accumulated other comprehensive income (loss) was comprised entirely of foreign currency translation adjustments. (v) Fair value of financial instruments The Group estimates fair value of financial assets and liabilities as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price). The fair value measurement guidance establishes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. Valuation techniques used to measure fair value shall maximize the use of observable inputs. Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use to price an asset or liability. When available, the Group measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. Pricing information the Group obtains from third parties is internally validated for reasonableness prior to use in the consolidated financial statements. When observable market prices are not readily available, the Group generally estimates fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. In certain cases, fair values are not subject to precise quantification or verification and may fluctuate as economic and market factors vary and the Group’s evaluation of those factors changes. Although the Group uses its best judgment in estimating the fair value of these financial instruments, there are inherent limitations in any estimation technique. In these cases, a minor change in an assumption could result in a significant change in its estimate of fair value, thereby increasing or decreasing the amounts of the Group’s consolidated assets, liabilities, shareholders’ equity and net income or loss. The Group’s financial instruments include cash and cash equivalents, restricted cash, short-term investments, accounts receivable, notes receivable, amount due from related parties, accounts payable, other current liabilities, payables for purchase of property, plant and equipment, amounts due to related parties and bank borrowings. The carrying amounts of these short-term financial instruments approximate their fair values due to the short-term maturity of these instruments. The Group’s long-term bank borrowing consists of floating rate loans. The fair value of long-term borrowings is measured using discounted cash flow technique based on current rates for comparable loans on the respective valuation date and is therefore considered a level 2 measurement. The long-term bank borrowings approximate their fair values because market interest rates have not fluctuated significantly since the commencement of loan contracts signed. (w) Non-controlling interest The Group classified the ownership interest in the consolidated entity held by a party other than the Group to non-controlling interest in the consolidated financial statements. It also reported the consolidated net income at amounts that include the amounts attributable to both the parent and the non-controlling interest on the face of the Consolidated Statements of Operations. Xinjiang Daqo Investment's equity interests in Xinjiang Daqo was presented as a non-controlling interest before it was acquired by Xinjiang Daqo in December 2018. The non-controlling interest was $2,792,480 and nil as of December 31, 2017 and 2018, respectively. (x) Investment in an affiliate 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 in cash, which represents 15.29% of the share capital of Syed Fire Safety Services and holds one of the seven seats on the board of the director of the investee. In October 2017, Xinjiang Daqo contributed an additional capital investment of $63,793 and its percentage of ownership remained the same. The Group accounts for the investment using the cost method as the Group is unable to exercise significant influence on the investee. The Group reviews its investment in Syed Fire Safety Service to determine whether a decline in fair value below the carrying value, if any, is other-than-temporary. No impairment loss occurred during the years ended December 31, 2016, 2017 and 2018. 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. (y) Adoption of new accounting pronouncement 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 Group on January 1, 2018. As a result of the adoption of the ASU as of December 31, 2018, the Group has changed its presentation to combine restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. 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 adopted the ASU for the year ended December 31, 2018 and has already considered the impact on its consolidated financial statements and related disclosures and the effects upon adoption are not material. 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 Group on January 1, 2018. As a result of the adoption of the ASU as of December 31, 2018, the Group has included amounts generally described as "restricted with cash and cash equivalents" when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows, and it did not have any other material impact on the Group's consolidated financial statements. (z) Recent accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to recognize right-of-use assets and liabilities for operating leases, initially measured at the present value of the lease payments, on the balance sheet. In addition, it requires lessees to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. The definition of a lease has been revised in regards to when an arrangement conveys the right to control the use of the identified asset under the arrangement which may result in changes to the classification of an arrangement as a lease. The ASU expands the disclosure requirements of lease arrangements. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided an optional transition method to apply the new lease requirements through a cumulative-effect adjustments in the period of adoption. The Group expects to adopt the standard in the first quarter of 2019using the modified retrospective method and will not restate comparative periods, as permitted by the standard. In addition, the Group will elect the transition practical referred to as the “package of three”, that must be taken together and allows entities to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing leases. As of December 31, 2018, the Group has $11,729 of future minimum operating lease commitments that are not currently recognized on its consolidated balance sheets (Note 17). Therefore, the Group does not expect material changes to its consolidated financial statements. 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 Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes certain disclosure requirements, including those related to Level 3 fair value measurements. The standard will be effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. The Group is evaluating the impact on its consolidated financial statements upon adoption. |
EXIT and DISPOSAL ACTIVITIES
EXIT and DISPOSAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [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 million, from Chongqing Daqo to its Xinjiang plant. In connection with this relocation plan, the Group determined i) to cease a retooling project at its polysilicon production line located at Chongqing Daqo in the second quarter of 2013, and During the year ended December 31, 2016, the Group relocated additional machinery and equipment of $34.1 million from Chongqing to its Xinjiang plant for the first stage of Phase III Expansion Project, which had already completed the construction and installation of Phase 3A at the end of 2016 and has fully ramped up since February 2017 as planned. The capacity of Xinjiang Daqo increased from 12,150 MT to 18,000 MT. The Group identified assets of $0.2 million that were not transferrable and could not be reutilized by its Xinjiang expansion project in 2016. Accordingly, an impairment charge of $0.2 million was recognized during the year ended December 31, 2016. During the year ended December 31, 2016, an additional $2.6 million relocation cost was incurred, which was recorded in selling, general and administrative expenses. In the year ended December 31, 2017, the Group relocated machinery and equipment of $0.2 million from Chongqing to its Xinjiang plant for technology improvement. In August 2017, the Board of Directors approved the Phase 3B Expansion Project for its polysilicon facilities in Xinjiang, which is expected to increase capacity from 18,000MT to 25,000 MT. By adopting additional technology improvement and debottlenecking projects, the Group may be able to further increase its capacity to 30,000 MT per annum by mid 2019. After a comprehensive analysis of the expansion projects and comparability of the remained machinery and equipment, the Group identified assets of $3.0 million that were not transferrable and could not be reutilized by Xinjiang expansion project in 2017. Accordingly, an impairment charge of $2,987,668 was recognized during the year. During the year ended December 31, 2017, an additional $0.2 million relocation cost was incurred, which was recorded in selling, general and administrative expenses. In the year ended December 31, 2018, the Group identified the remaining polysilicon assets neither transferrable nor could be utilized for future expansion or renovations projects. Accordingly, an impairment charge of $11.5 million was recognized during the year. Discontinued operations In September 2018, the Group made a strategic decision to discontinue its Chongqing business subsidiary, including its solar wafer manufacturing operations, to accommodate the increasingly challenging market conditions. Accordingly, the Company recorded impairment losses of $7.3 million for the wafer manufacturing operations in the year ended December 31, 2018. The remaining long-lived assets located in Chongqing including property, plant and equipment of $57.8 million and prepaid land use rights of $1.7 million were considered held for sale as of December 31, 2018. The discontinuation of the solar wafer manufacturing operations represents a strategic shift and has a major effect on the Group's result of operations. Accordingly, assets and liabilities related to the discontinued Chongqing subsidiary have been reclassified as assets and liabilities associated with discontinued operations, while results of operations and cash flows related to the Chongqing subsidiary were reported as income (loss) and cash flows from discontinued operations, including comparatives in the accompanying consolidated financial statements for all periods presented. Assets and liabilities of the discontinued operations December 31, 2017 2018 ASSETS: Cash and cash equivalents $ 6,873,659 $ 982,019 Restricted cash 2,078,601 109,171 Accounts receivable, net of allowance for doubtful accounts of $7,993 and nil as of December 31, 2017 and 2018 2,271,372 - Notes receivable 6,506,648 1,524,747 Prepaid expenses and other current assets 1,492,944 23,889 Advances to suppliers 1,080,506 6,132 Inventories 3,919,834 - Amount due from related parties 8,991,640 2,367,657 Total current assets associated with discontinued operations $ 33,215,204 $ 5,013,615 Property, plant and equipment, net 93,662,275 - Prepaid land use rights, net 1,812,333 - Long-lived assets held-for-sale - 59,523,588 Total non-current assets associated with discontinued operations $ 95,474,608 $ 59,523,588 LIABILITIES: Short-term bank borrowings, including current portion of long-term bank borrowings $ 25,515,860 $ 10,176,600 Accounts payable 3,092,222 685,569 Notes payable 2,078,601 109,171 Advances from customers 313,371 - Payables for purchases of property, plant and equipment 3,408,015 1,074,155 Accrued expenses and other current liabilities 5,312,623 1,315,848 Amount due to related parties 4,932,778 5,314,587 Total current liabilities associated with discontinued operations $ 44,653,470 $ 18,675,930 Long-term bank borrowings 2,151,940 - Deferred government subsidies 846,826 723,035 Total non-current liabilities associated with discontinued operations $ 2,998,766 $ 723,035 Results of the discontinued operations Year ended December 31, 2016 2017 2018 Revenues $ 32,882,110 $ 29,652,458 $ 7,112,528 Cost of revenues (30,264,391 ) (30,227,536 ) (9,782,928 ) Gross profit (loss) 2,617,719 (575,078 ) (2,670,400 ) Operating (expenses) income: Selling, general and administrative expenses (1,022,179 ) (1,621,977 ) (2,723,335 ) Research and development expenses (123,024 ) (204,658 ) (608 ) Long-lived assets impairment (198,689 ) (2,987,668 ) (18,769,938 ) Other operating income, net 3,040,004 3,019,556 1,928,362 Total operating income (expenses) 1,696,112 (1,794,747 ) (19,565,519 ) Income (loss) from operations 4,313,831 (2,369,825 ) (22,235,919 ) Interest expense (1,848,002 ) (1,743,124 ) (1,074,251 ) Interest income 258,737 22,716 22,794 Exchange (loss) gain (13,975 ) 2,308 (17,669 ) Income (loss) from discontinued operations, net of tax of nil $ 2,710,591 $ (4,087,925 ) $ (23,305,045 ) All notes to the accompanying consolidated financial statements have been retrospectively adjusted to reflect the effect of the discontinued operations, where applicable. Condensed cash flow of the discontinued operations Year ended December 31, 2016 2017 2018 Net cash provided by operating activities $ 14,122,875 $ 5,048,042 $ 17,994,548 Net cash (used in) provided by investing activities (975,550 ) (3,752,066 ) 616,988 Net cash used in financing activities (33,711,235 ) (8,742,573 ) (16,778,925 ) |
FOLLOW-ON EQUITY OFFERINGS
FOLLOW-ON EQUITY OFFERINGS | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
FOLLOW-ON EQUITY OFFERINGS | 4. FOLLOW-ON EQUITY OFFERINGS In 2018, the Company issued 2,064,379 America depositary shares ("ADSs"), representing 51,609,475 ordinary shares, through a follow-on equity offering. The proceeds, net of issuance cost of $6.9 million, were $106.6 million. |
PREPAID EXPENSE AND OTHER CURRE
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 5. PREPAID EXPENSE AND OTHER CURRENT ASSETS Prepaid expense and other current assets consist of the following: December 31, 2017 2018 Spare parts $ 5,598,073 $ 5,011,781 Prepaid value added tax (“VAT”) - 4,768,552 Prepaid insurance fee 285,650 153,751 Others 805,900 401,417 Total $ 6,689,623 $ 10,335,501 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 6. INVENTORIES Inventories consist of the following: December 31, 2017 2018 Raw materials $ 3,944,796 $ 3,821,620 Work-in-process 6,536,395 5,711,848 Finished goods 5,202,299 5,915,899 Total $ 15,683,490 $ 15,449,367 Inventory write-down was nil for the years ended December 31, 2016, 2017 and 2018. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | 7. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consist of the following: December 31, 2017 2018 Cost Buildings and plant $ 313,210,971 $ 322,914,381 Machinery and equipment 237,606,822 335,808,916 Furniture, fixtures and equipment 23,035,493 25,953,939 Motor vehicles 254,630 582,375 Less: Accumulated depreciation (109,191,519 ) (131,106,712 ) Property, plant and equipment, net $ 464,916,397 $ 554,152,899 Construction in process 20,550,020 57,463,560 Total $ 485,466,417 $ 611,616,459 Depreciation expense was $22,620,885, $27,576,077 and $27,487,163 for the years ended December 31, 2016, 2017 and 2018, respectively. Construction in process of $57.5 million as of December 31, 2018 was mostly related to the Phase 4A expansion project. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
BORROWINGS | 8. BORROWINGS The Group’s bank borrowings consist of the following: December 31, 2017 2018 Short-term bank borrowings $ 43,807,350 $ 34,135,224 Long-term bank borrowings, current portion 29,976,908 4,070,640 Total borrowings, current 73,784,258 38,205,864 Long-term bank borrowings, non-current portion 111,436,292 133,312,370 Total $ 185,220,550 $ 171,518,234 Short-term bank borrowings The Group’s short-term bank borrowings consist of the following: December 31, 2017 2018 Short-term borrowings guaranteed by Daqo Group and its related parties $ 43,807,350 $ 29,076,000 Short-term borrowings pledged by certificate of deposit - 5,059,224 Total $ 43,807,350 $ 34,135,224 The weighted average interest rate on the short-term bank borrowing was 5.0%, 5.1% and 5.0% in the years ended December 31, 2016, 2017 and 2018, respectively. Long-term bank borrowings The long-term bank borrowings, including current portion, as of December 31, 2017 and 2018 are comprised of: December 31, 2017 2018 Borrowing from Shihezi Rural Cooperative Bank $ - $ 17,445,600 Borrowing from Chongqing Rural Commercial Bank 141,413,200 119,937,410 Total $ 141,413,200 $ 137,383,010 On June 25, 2015, Xinjiang Daqo entered into a six-year long term facility agreement with Chongqing Rural Commercial Bank. Such borrowing is restricted to renovation and extension project of polysilicon and has a maximum borrowing credit amounted to $96.1 million, with an interest rate of 20% above the five-year long term interest rate issued by People’s Bank of China. The borrowing is guaranteed by Daqo Group and four affiliated companies under Daqo Group. On May 30, 2016, an amendment to this credit facility was signed between Xinjiang Daqo and Chongqing Rural Commercial Bank, under which the borrowing is guaranteed by Chongqing Daqo, Daqo Group and three affiliated companies under Daqo Group. During the year ended December 31, 2015, Xinjiang Daqo drew down the maximum borrowing credit of $96.1 million at an interest rate of 5.9%. During the year ended December 31, 2016, Xinjiang Daqo had repaid $13.1 million. During the year ended December 31, 2017, Xinjiang Daqo had repaid $18.4 million. During the year ended December 31, 2018, Xinjiang Daqo has repaid $13.7 million. The outstanding bank borrowing was $50.9 million as of December 31, 2018. Xinjiang Daqo had no facility available for future draw down as of December 31, 2018. There is no financial covenants associated with the facility. On May 30, 2016, Xinjiang Daqo entered into a seven-year long term facility agreement with Chongqing Rural Commercial Bank. Such borrowing is restricted to extension project of polysilicon Phase 3A and has a maximum credit amounted to $76.8 million, with an interest rate of 20% above the five-year long term interest rate issued by People’s Bank of China. The borrowing is guaranteed by Chongqing Daqo, Daqo Group and three affiliated companies under Daqo Group. As of December 31, 2016, Xinjiang Daqo had drawn down $54.9 million at an interest rate of 5.9%. As of December 31, 2017, Xinjiang Daqo had drawn down the remaining facility $21.9 million at an interest rate of 5.9%. During the year ended December 31, 2018. Xinjiang Daqo has repaid $7.7 million. The outstanding bank borrowing was $69.1million as of December 31, 2018. Xinjiang Daqo had no facility available for future draw down as of December 31, 2018. There is no financial covenants associated with the facility. On November 1, 2018, Xinjiang Daqo entered into a three-year long term facility agreement with Xinjiang Shihezi Rural Cooperative Bank. Such borrowing is restricted to renovation and extension project of polysilicon and has a maximum borrowing credit amounted to $29.0 million, with an interest rate of 6.2%. Xinjiang Daqo pledged its land use rights and equipment as collaterals for this credit facility. As of December 31, 2018, $17.4 million at an interest rate of 6.2% and The weighted average interest rate in the years ended December 31, 2016, 2017 and 2018 for the Group’s long-term bank borrowings was 5.7%, 5.9% and 5.9%, respectively. The principal maturities of these long-term bank borrowings as of December 31, 2018 are as follows: Year ending December 31, Amount 2019 $ 4,070,640 2020 36,345,000 2021 40,997,160 2022 29,076,000 2023 26,894,210 Total $ 137,383,010 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: December 31, 2017 2018 Accrued payroll and welfare $ 4,320,005 $ 6,526,287 Accrued professional fees 368,753 187,027 Other tax payables 4,203,074 364,223 Interest payable 322,962 297,776 Others 1,606,991 2,042,389 Total $ 10,821,785 $ 9,417,702 |
ADVANCES FROM CUSTOMERS
ADVANCES FROM CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | 10. ADVANCES FROM CUSTOMERS Advances from customers represent prepayments from customers and are recognized as revenue in accordance with the Group's revenue recognition policy. Advances from customers consist of the following and is analyzed as long-term and short-term portion respectively: December 31, 2017 2018 Customer A $ 994,196 $ 15,827,579 Customer B - 1,017,427 Customer C 4,651,317 - Customer D 2,856,363 - Customer E 2,291,448 - Others 5,584,200 637,934 Total $ 16,377,524 $ 17,482,940 Less: Advances from customers – short-term portion $ 16,377,524 $ 10,213,940 Advances from customers – long-term portion $ - $ 7,269,000 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 11. FAIR VALUE MEASUREMENTS Nonrecurring Fair Value Measurements The following table displays assets that were measured at fair value on a non-recurring basis after initial recognition: Year ended December 31, 2017 Description Carrying Quoted Prices in Significant Significant Total Losses Property, plant and equipment – cannot be relocated to Xinjiang plant (Note 3) $ 2,987,668 $ $ $ — $ 2,987,668 Year ended December 31, 2018 Description Carrying Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Losses Property, plant and equipment – cannot be relocated to Xinjiang plant (Note 3) $ 11,482,905 $ $ $ — $ 11,482,905 Machinery and equipment related to discontinued wafer manufacturing operations (Note 3) $ 66,810,621 $ $ $ 59,523,588 $ 7,287,033 Total $ 78,293,526 $ 59,523,588 $ 18,769,938 |
MAINLAND CHINA CONTRIBUTION PLA
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 12. MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION (a) China Contribution Plan Full time employees of the Group in the PRC participate in a government-mandated, multi-employer, defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. Contributions to defined contribution plans are expensed as incurred. During the years ended December 31, 2016, 2017 and 2018, the Group recognized expenses relating to its contribution to the government sponsored defined contribution plans of $1,948,725, $2,242,577 and $2,915,327, respectively. (b) Statutory Reserves and Restricted Assets Foreign invested enterprises in PRC are required under PRC laws to distribute its after-tax profits of the current year and draw 10 percent of the profits as the company's statutory common reserve. The company may stop drawing the profits if the aggregate balance of the common reserves has already accounted for over 50 percent of the company's registered capital. The common reserves shall be used for making up losses, expanding the production and business scale or increasing the registered capital of the company. As of December 31, 2016, 2017 and 2018, the Group's aggregate balance of the statutory common reserves was $21,969,950, $31,991,537 and $39,387,239 respectively. In accordance with relevant PRC laws and regulations, the Group’s PRC subsidiaries are prohibited to make distribution of their registered capital and statutory reserves in the form of cash dividends, loans or advances and the related restricted portion amounted to $366,649,034 as of December 31, 2018. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 13. INCOME TAXES Cayman Islands Tax The Company is incorporated in the Cayman Islands and is not subject to tax in this jurisdiction. PRC Tax The Company’s subsidiaries are registered in the PRC as foreign invested enterprises. Under the Laws of the People’s Republic of China on Enterprise Income Tax (the “EIT Law”) which are effective January 1, 2008, the statutory enterprise income tax rate is 25%. Chongqing Daqo is a foreign invested enterprise established on January 14, 2008 located in Chongqing. 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 (“HNTE”) certificate and renewed it on November 10, 2015, which is valid till 2017. During the years ended December 31, 2016 and 2017, Chongqing Daqo was entitled to a preferential tax rate of 15 Xinjiang Daqo is a foreign-invested enterprise established on February 22, 2011 located in Shihezi Economic Development Area in Xinjiang Autonomous Region. On November 25, 2014, Xinjiang Daqo obtained a HNTE certificate and renewed it on August 28, 2017, which is valid till 2019. During the years ended December 31, 2016, 2017 and 2018, Xinjiang Daqo was entitled to a preferential tax rate of 15% because of its HNTE status. Xinjiang Daqo Investment is a foreign-invested enterprise established on March 10, 2011 located in Shihezi Economic Development Area in Xinjiang Autonomous Region. During the year ended December 31, 2018, the statutory enterprise income tax rate of 25% is applicable to Xinjiang Daqo Investment. Under the current EIT Law and implementation regulations issued by the PRC State Council, an income tax rate of 10% is applicable to interest and dividends payable to investors that are “non-resident enterprises”, which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such interest or dividends have their sources within the PRC. The Company's PRC subsidiaries' retained earnings have been and will be permanently reinvested to the PRC subsidiaries. Therefore, no dividend withholding tax was accrued. Uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties, occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income taxes, at a statutory income tax rate of 25%. The Group is not subject to any other uncertain tax position. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. From inception to 2014, the Group’s PRC subsidiaries are subject to examination of the PRC tax authorities. The Company classifies interest and penalties associated with taxes as income tax expense. Such charges were immaterial in the years ended December 31, 2016, 2017 and 2018, respectively. Income tax expenses comprise: Year ended December 31, 2016 2017 2018 Current tax expenses $ 7,357,623 $ 17,417,528 $ 11,868,388 Deferred tax expenses (benefit) 466 (85,302 ) (151,843 ) Total $ 7,358,089 $ 17,332,226 $ 11,716,545 The principal components of deferred income tax assets and liabilities from continuing operations are as follows: December 31, 2017 2018 Deferred tax assets: Long-lived assets impairment & depreciation $ 714,068 $ 821,137 Total deferred tax assets $ 714,068 $ 821,137 Deferred tax liabilities: Difference in basis of buildings $ — $ (1,184,644 ) Total deferred tax liabilities $ — $ (1,184,644 ) The principal components of deferred income tax assets and liabilities from discontinued operations December 31, 2017 2018 Deferred tax assets: Net operating loss carried forward $ 21,182,813 $ 17,293,577 Allowance for doubtful accounts 1,998 - Government grants related to assets 211,707 180,759 Long-lived assets impairment & depreciation 18,904,406 8,358,235 Others 1,015,525 1,229,693 Sub-total 41,316,449 27,062,264 Valuation Allowance (41,316,449) (27,062,264) Total deferred tax assets $ — $ — The changes of valuation allowance from discontinued operations Year ended December 31, 2016 2017 2018 Beginning balance $ 42,362,849 $ 38,729,208 $ 41,316,449 Reversal (932,833) (24,771) (12,515,962) Foreign exchange effect (2,700,808) 2,612,012 (1,738,223) Ending Balance $ 38,729,208 $ 41,316,449 $ 27,062,264 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 effective income tax rate from continuing operation Year ended December 31, 2016 2017 2018 PRC Enterprise Income Tax 25 % 25 % 25 % Preferential income tax rate of a subsidiary (11 )% (10 )% (11 )% Additional tax deductions (1 )% (1 )% (3 )% Different tax rate in other jurisdictions 2 % 1 % 5 % Tax credits 1 % 0 % 0 % Effective tax rate 16 % 15 % 16 % Xinjiang Daqo enjoys the preferential tax rate of 15%, which may be extended if the requirements of High and New Technology Enterprise are satisfied. The impact of the preferential tax rates decreased income taxes by $5.2 million, $11.3 million and $7.8 million for the years of 2016, 2017 and 2018, respectively. The benefit on net income per share was $0.02, $0.04 and $0.02 for the years of 2016, 2017 and 2018, respectively. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE BASED COMPENSATION | 14. SHARE BASED COMPENSATION In December 2014, The Company’s shareholders adopted the 2014 share incentive plan. The Company’s shareholders have authorized the issuance of up to 21,000,000 ordinary shares underlying all options (including incentive share options, or ISOs), restricted shares and restricted share units ("RSUs") granted to a participant under the plan, or the awards. In April 2018, The Company’s shareholders adopted the 2018 share incentive plan. The Company’s shareholders have authorized the issuance of up to 38,600,000 ordinary shares underlying all options (including incentive share options, or ISOs), restricted shares and RSUs granted to a participant under the plan, or the awards. During the year ended December 31, 2015, the Company granted 8,134,375 share options to its officers, directors and employees at the weighted average grant date fair value of $0.59. No options were granted during the years ended December 31, 2016, 2017 and 2018. On January 12, 2015, the Company modified the exercise price to $0.87 for a total number of 6,274,166 previously granted options, in order to provide appropriate incentives to the relevant employees and executive officers of the Group. The fair value of the options under revised terms was $0.55 and $0.52. The total incremental cost associated with the modification was $241,557, of which $60,107 was recognized immediately for the options vested prior to the date of the modification and the remaining share-based compensation charges of $181,470 are recognized over the remaining vesting period of the modified options. On September 9, 2015, the Company modified the exercise price for a total number of 12,569,166 options granted before to $0.59, in order to provide appropriate incentives to the relevant employees and executive officers of the Company. The fair value of the options under revised terms for five batches granted on January 28, 2014, January 12, 2015 and July 6, 2015 was $0.38, $0.35, $0.38, $0.37 and $0.40, respectively. The total incremental cost associated with the modification was $282,581, of which $123,322 was recognized immediately for the options vested prior to the date of the modification and the remaining share-based compensation charges of $159,259 are recognized over the remaining vesting period of the modified options. The Company utilized the Binomial option pricing model to evaluate the fair value of the stock options with reference to the closing price of the Company on the measurement dates. The following assumptions were used in the Binomial option pricing model: Year Ended December 31, 2015 Options granted Average risk-free rate of return Exercise multiple Volatility rate Dividend yield Post- vesting forfeiture rate January 12, 2015 2.82% 1.8-3 times 93.0% 0% 5%-8% July 6, 2015 3.20% 3 times 91.0% 0% 5% September 9, 2015 2.94%-3.08% 1.8-3 times 91.0%-92.0% 0% 5%-8% The risk-free rate of return is based on the yield curve of China USD sovereign bond commensurate with the same maturity at the respective grant dates. The exercise multiple is estimated by reference to the proprietary research and empirical studies. The expected volatility is based on the average of historical daily annualized share price volatility of 6 comparable companies over a normalized period that commensurate with the option life of 10 years. The post-vesting forfeiture rate is based on the historical data and management’s best Estimation. A summary of the aggregate option activity and information regarding options outstanding as of December 31, 2018 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contract Life Aggregate Intrinsic Value Options outstanding on January 1, 2018 9,634,542 0.50 Granted - - Forfeited (161,724 ) 0.59 Expired (2,526 ) 0.59 Exercised (230,225 ) 0.59 Options outstanding on December 31, 2018 9,240,067 0.49 4.53 4,049,496 Options vested or expected to vest on December 31, 2018 20,043,353 0.47 4.11 9,351,312 Options exercisable on December 31, 2018 9,075,709 0.49 4.49 3,993,944 The share-based compensation expense related to stock options of approximately $2,702,089, $1,559,863 and $684,773 were recognized by the Group for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2018, there was $76,911 in total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 0.41 years. On February 3, 2017, the Company granted restricted share units ("RSUs") to acquire 12,653,992 ordinary shares to certain directors, executive officers and employees pursuant to the Daqo New Energy Corp. 2014 Share Incentive Plan. The RSUs will be vested quarterly in each of the next four years starting from May 6, 2017. On June 6, 2018, the Company granted RSUs to acquire 10,984,761 25,275,880 On December 21, 2018, the Company granted RSUs to acquire 8,105,000 ordinary shares to certain directors, executive officers and employees pursuant to the Daqo New Energy Corp. 2014 and 2018 Share Incentive Plan. The RSUs will be vested monthly in each of the next five years starting from January 6, 2019. The weighted average fair value of RSUs granted during the year ended December 31, 2018 was $1.48. The Company recorded compensation expenses based on the fair value of RSUs on the grant dates over the requisite service period of award using the straight line vesting attribution method. A summary of the non-vested RSU activity in 2018 is as follows: Number of RSUs Weighted Average Grant Date Fair Value Nonvested RSUs on January 1, 2018 10,240,743 $ 0.98 Granted 44,365,641 1.48 Vested (9,272,063 ) 1.43 Forfeited (1,846,708 ) 1.07 Nonvested RSUs on December 31, 2018 43,487,613 $ 1.39 The share-based compensation expense related to RSUs of $13,103,276 was recognized by the Group for the years ended December 31, 2018. As of December 31, 2018, there was $60,140,629 in total unrecognized compensation cost related to nonvested RSUs, which is expected to be recognized over a weighted-average period of 3.82 years. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | 15. 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% held by Daqo Group Daqo Solar Co. Ltd (“Daqo Solar”) An affiliated company which is 100% held by Daqo Group Xinjiang Daqo Investment Co., Ltd. ("Xinjiang Daqo Investment") An affiliated company which is 100% held by Daqo Group before December 20,2018 and is 100% held by the Group since December 20,2018 Daqo New Material Co., Ltd. ("Daqo New Material") An affiliated company which was 100% held by Daqo Group, and was consolidated by the Group as VIE on December 31, 2013 Chongqing Daqo Tailai Electric Co., Ltd. (“Chongqing Daqo Tailai”) An affiliated company which is 100% held by Daqo Group Nanjing Daqo Transformer Systems Co., Ltd. (“Nanjing Daqo Transformer”) An affiliated company which is 100% held by Daqo Group Jiangsu Daqo Changjiang Electric Co., Ltd. (“Jiangsu Daqo”) An affiliated company which is 100% held by Daqo Group Nanjing Daqo Electric Co., Ltd. (“Nanjing Daqo Electric”) An affiliated company which is 100% held by Daqo Group Zhenjiang Klockner-Moeller Electrical Systems Co., Ltd. (“Zhenjiang Moeller”) An affiliated company which is 100% held by Daqo Group Nanjing Intelligent Apparatus Co., Ltd. (“Intelligent Apparatus”) An affiliated company which is 100% held by Daqo Group Shanghai Sailfar Electric Technology Co., Ltd. (“Daqo Sailfar”) An affiliated company which is 100% held by Daqo Group Jiangsu Daqo Kai-fan Electric Co., Ltd. ( “Jiangsu Daqo Kai-fan”) An affiliated company which is 100% held by Daqo Group Zhenjiang Electric Equipment Co., Ltd. ( “Zhenjiang Electric”) An affiliated company which is 100% held by Daqo Group Jiangsu Daqo ETE Electronic Systerm Co., Ltd.(“Jiangsu Daqo ETE Electronic”) An affiliated company which is 75% held by Daqo Group Jiangsu Daquan Kai-fan Switchgear Co., Ltd (“Jiangsu Daquan Kai-fan Switchgear”) An affiliated company which is 100% held by Daqo Group Nanjing Yidian Huichuang information technology Co., Ltd (“Nanjing Yidian”) An affiliated company which is 100% held by Daqo Group Xinjiang Daqo Tianfu Thermoelectric Co., Ltd. ("Xinjiang Daqo Tianfu Thermoelectric") A joint-venture which is 50% held by Xinjiang Daqo Investment Nanjing Daqo Automation Technology Co., Ltd.("Nanjing Daqo Automation") An affiliated company which is 100% held by Daqo Group (2) Related party balances: The balances due from related parties of continuing operations mainly included the receivables from Xinjiang Daqo Tianfu Thermoelectric for investment fund as of December 31, 2018, which has been subsequently collected in January 2019. The balances due from related parties of discontinued operations mainly included the notes receivable from Zhenjiang Daqo for sales of wafer. The balances are as follows: December 31, 2017 2018 Amounts due from related parties (continuing operations) Xinjiang Daqo Tianfu Thermoelectric $ - $ 629,495 Others 5,799 185,540 Total $ 5,799 $ 815,035 Amounts due from related parties (discontinued operations) Zhenjiang Daqo $ 8,585,337 $ 1,453,800 Others 406,303 913,857 Total $ 8,991,640 $ 2,367,657 The balances due to related parties – short-term portion of continuing operations mainly included payables to Chongqing Daqo Tailai for purchases of machines for polysilicon expansion as of December 31, 2018. The balances due to related parties – short-term portion of discontinued operations mainly included payables to Daqo New Material for rental expenses. The balances are payable on demand and are as follows: December 31, 2017 2018 Amounts due to related parties – short term portion (continuing operations) Chongqing Daqo Tailai $ 494,954 $ 1,825,680 Others 1,342,166 434,327 Total $ 1,837,120 $ 2,260,007 Amounts due to related parties – short term portion (discontinued operations) Daqo New Material $ 4,852,819 $ 5,314,587 Others 79,959 - Total $ 4,932,778 $ 5,314,587 The balance due to related parties – long-term portion of $16.9 million represents the consideration payables to Daqo Group for the acquisition of Xinjiang Daqo Investment as of December 31, 2018, which will be paid in two equal installments in 2020 and 2021. (3) Related party transactions: The transactions with Daqo Group and its subsidiaries were as follows: Transaction Year Ended December 31, Name of Related parties Nature 2016 2017 2018 Daqo Group Proceeds from interest free loans $ - $ 2,696,513 $ 25,744,800 Repayment of interest free loans 10,974,807 2,696,513 36,648,480 Repayment of interest bearing loans 15,059,000 15,495,451 - Interest charged 850,380 440,368 - Rental expense 27,997 37,756 38,633 Zhenjiang Daqo Proceeds from interest free loans - - 10,903,680 Sales 11,194,197 13,442,273 6,694,997 Daqo Solar Proceeds from interest free loans 60,300,896 40,089,689 55,613,463 Repayment of interest free loans 68,766,506 40,388,195 55,650,696 Nanjing Daqo Transformer Purchase-Fixed assets - - 6,201,243 Xinjiang Daqo Investment Proceeds from interest free loans 56,270,085 14,356,000 3,937,440 Repayment of interest free loans 38,715,449 14,356,000 4,020,732 Rental expense 890,168 874,858 895,192 Daqo New Material Purchase-Fixed assets - 7,390,693 - Proceeds from interest free loans 9,607,344 6,029,877 1,893,000 Repayment of interest free loans 12,262,592 10,818,493 1,893,000 Rental expense 993,894 976,800 499,752 Chongqing Daqo Tailai Purchase-Fixed assets 3,534,248 715,361 8,240,830 Income from sales of materials - - 15,899 Income from disposal of fixed assets - - 478,565 Proceeds from interest free loans 222,517 - 6,209,040 Repayment of interest free loans 2,684,783 - 6,209,040 Jiangsu Daqo Purchase-Fixed assets - - 1,326,634 Nanjing Daqo Electric Purchase-Fixed assets - - 1,439,332 Zhenjiang Electric Purchase-Raw material - - 331,353 Others subsidiaries under Daqo Group Purchase-Fixed assets 2,120,768 80,240 296,887 Purchase-Raw material 129,219 17,651 13,688 Total Sales $ 11,194,197 $ 13,442,273 $ 6,694,997 Income from disposal of fixed assets $ - $ - $ 478,565 Income from sales of materials $ - $ - $ 15,899 Purchase-Fixed assets $ 5,655,016 $ 8,186,294 $ 17,504,926 Purchase-Raw material $ 129,219 $ 17,651 $ 345,041 Rental expense $ 1,912,059 $ 1,889,414 $ 1,433,577 Interest expense $ 850,380 $ 440,368 $ - Proceeds from related parties loans $ 126,400,842 $ 63,172,079 $ 104,301,423 Repayment of related parties loans $ 148,463,137 $ 83,754,652 $ 104,421,948 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 16. EARNINGS PER SHARE The calculation of earnings (loss) per share is as follows: Year ended December 31, 2016 2017 2018 Numerator used in basic and diluted earnings per share: Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations $ 40,783,165 $ 96,929,053 $ 61,429,750 Income (loss) from discontinued operations, net of tax 2,710,591 (4,087,925 ) (23,305,045 ) Net income attributable to Daqo New Energy Corp. ordinary shareholders—basic and diluted $ 43,493,756 $ 92,841,128 $ 38,124,705 Denominator used in basic and diluted earnings per share: Weighted average number of ordinary shares outstanding used in computing earnings per share-basic 261,742,244 265,070,961 311,715,158 Plus: Dilutive effects of share options 3,075,511 6,020,839 6,346,349 Dilutive effects of RSUs - 1,834,519 7,444,828 Weighted average number of ordinary shares outstanding used in computing earnings per share—diluted 264,817,755 272,926,319 325,506,335 Basic earnings per share-continuing operations $ 0.16 $ 0.37 $ 0.19 Basic earnings (loss) per share-discontinued operations $ 0.01 $ (0.02 ) $ (0.07 ) NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Basic $ 0.17 $ 0.35 $ 0.12 Diluted earnings per share-continuing operations $ 0.15 $ 0.35 $ 0.19 Diluted earnings (loss) per share-discontinued operations $ 0.01 $ (0.01 ) $ (0.07 ) NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Diluted $ 0.16 $ 0.34 $ 0.12 Outstanding employee options totaling of 10,899,141 and 263,900 were excluded from the computation of diluted earnings per share as their effects would have been anti-dilutive for the years ended December 31, 2016 and 2017, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES Capital commitments As of December 31, 2018, commitments outstanding for the purchases of property, plant and equipment approximated 222.7 million, which will be due subsequent to receipt of the purchases. Lease commitments The operating lease commitments as of December 31, 2018 were principally for the office rental from Daqo Group. The lease expense was $31,076, $37,756 and $38,633 for the years ended December 31, 2016, 2017 and 2018, respectively. Future minimum lease payments are as follows: Year ending December 31, 2019 $ 11,279 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 18. SEGMENT INFORMATION The Group’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. Following the further expansion of module business and entering into the wafer business in 2011, the Group operated and viewed its performance in three segments. However, the module business was disposed in September 2012 and the wafer business was discontinued in September 2018. Therefore, only one segment remained as of December 31, 2018. All of its revenues are derived in the PRC. The Group’s long-lived assets and operations are all located in the PRC and no geographical information is presented. The following customers individually accounted for 10% or more of revenues: Year ended December 31, 2016 2017 2018 Customer A * $ 39,219,089 $ 115,411,965 Customer B $ 47,696,332 $ 43,258,204 $ 57,858,670 Customer C * $ 39,099,677 * * Represents less than 10% Total sales to the Group’s largest customers whose sales constitute over 10% of revenue accounted for approximately 24%, 38% and 57% of revenues for the years ended December 31, 2016, 2017 and 2018, respectively. The Group is substantially dependent upon the continued participation of these customers in order to maintain its total revenues. Significantly reduction in the Group’s dependence on these customers is likely to take time and there can be no assurance that the Group will succeed in reducing such dependence. |
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
FINANCIAL STATEMENT SCHEDULE I | FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY BALANCE SHEET DECEMBER 31, 2017 AND 2018 (In U.S. dollars, except share and per share data) December 31, 2017 2018 ASSETS Current assets: Cash and cash equivalents $ 4,536,809 $ 1,487,517 Prepaid expenses and other current assets 700,064 186,641 Total current assets 5,236,873 1,674,158 Investments in subsidiaries 386,872,629 523,650,516 TOTAL ASSETS $ 392,109,502 $ 525,324,674 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses and other current liabilities $ 373,915 $ 192,997 Total current liabilities 373,915 192,997 Equity: Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2017 and 2018; 279,214,103 shares issued and 270,918,702 shares outstanding as of December 31, 2017; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018) 27,328 33,439 Additional paid-in capital 247,076,428 368,681,449 Retained earnings 133,273,480 171,398,185 Accumulated other comprehensive income (loss) 13,107,187 (13,232,560 ) Treasury shares, at cost (4,643,150 shares as of December 31, 2017 and 2018) (1,748,836 ) (1,748,836 ) Total shareholders’ equity 391,735,587 525,131,677 TOTAL LIABILITIES AND EQUITY $ 392,109,502 $ 525,324,674 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, 2016, 2017 AND 2018 (In U.S. dollars) Year ended December 31, 2016 2017 2018 Operating expenses: General and administrative $ (3,175,482 ) $ (4,987,820 ) $ (14,513,869 ) Total operating expenses (3,175,482 ) (4,987,820 ) (14,513,869 ) Loss from operations (3,175,482 ) (4,987,820 ) (14,513,869 ) Interest income - - 289,773 Net loss before share of results of subsidiaries (3,175,482 ) (4,987,820 ) (14,224,096 ) Equity in earnings of subsidiaries 46,669,238 97,828,948 52,348,801 Net income attributable to Daqo New Energy Corp. ordinary shareholders $ 43,493,756 $ 92,841,128 $ 38,124,705 Other comprehensive (loss) income: Foreign currency translation adjustments (17,502,133 ) 21,829,007 (26,216,079 ) Total other comprehensive (loss) income: (17,502,133 ) 21,829,007 (26,216,079 ) Comprehensive income $ 25,991,623 $ 114,670,135 $ 11,908,626 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FOR YEARS ENDED DECEMBER 31, 2016, 2017 AND 2018 (In U.S. dollars, except share and per share data) Ordinary shares Treasury shares Additional paid-in capital Retained earnings (accumulated losses) Accumulated other comprehensive income (loss) Total Number $ Balance at January 1, 2016 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 Options 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 Net income - - - - 92,841,128 - 92,841,128 Other comprehensive income - - - - - 21,829,007 21,829,007 Share-based compensation - - - 4,200,273 - - 4,200,273 Options exercised 5,596,050 560 - 2,764,858 - - 2,765,418 Restricted shares vested 2,366,374 236 - (236 ) - - - Balance at December 31, 2017 270,918,702 27,328 (1,748,836 ) 247,076,428 133,273,480 13,107,187 391,735,587 Net income - - - - 38,124,705 - 38,124,705 Other comprehensive loss - - - - - (26,216,079 ) (26,216,079 ) Share-based compensation - - - 13,788,049 - - 13,788,049 Options exercised 230,225 23 - 110,845 - - 110,868 Restricted shares vested 9,271,350 927 - (927 ) - - - Follow-on equity offering, net of issuance costs of $6,919,202 51,609,475 5,161 - 106,616,482 - - 106,621,643 Acquisition of non-controlling interest - - - 1,090,572 - (123,668 ) 966,904 Balance at December 31, 2018 332,029,752 $ 33,439 $ (1,748,836 ) $ 368,681,449 $ 171,398,185 $ (13,232,560 ) $ 525,131,677 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016, 2017 AND 2018 (In U.S. dollars) Year ended December 31, 2016 2017 2018 OPERATING ACTIVITIES Net income $ 43,493,756 $ 92,841,128 $ 38,124,705 Equity in earnings of subsidiaries (46,669,238 ) (97,828,948 ) (52,348,801 ) Share-based compensation 2,702,089 4,200,273 13,788,049 Adjustments to reconcile net income to net cash used in operating activities: Prepaid expenses and other current assets (29,976 ) 50,059 (62,305 ) Accrued expense and other current liabilities (58,806 ) 91,941 (80,418 ) Income tax payable (108,992 ) - - Net cash used in operating activities (671,167 ) (645,547 ) (578,770 ) INVESTING ACTIVITIES Capital contributed to subsidiaries - - (109,778,761 ) Net cash used in investing activities - - (109,778,761 ) FINANCING ACTIVITIES Proceeds from follow-on equity offering - - 113,540,845 Insurance cost for follow-on equity offering - - (6,919,202 ) Proceeds from options exercised 1,051,586 2,238,854 686,596 Net cash provided by financing activities 1,051,586 2,238,854 107,308,239 NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS 380,419 1,593,307 (3,049,292 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 2,563,083 2,943,502 4,536,809 CASH AND CASH EQUIVALENTS AT END OF THE YEAR $ 2,943,502 $ 4,536,809 $ 1,487,517 FINANCIAL STATEMENT SCHEDULE I DAQO NEW ENERGY CORP. FINANCIAL INFORMATION OF PARENT COMPANY Notes to Financial Information of Parent Company 1. Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. 2. The condensed financial information of Daqo New Energy Corp. has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. 3. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the Consolidated Financial Statements of the Group. No dividend was paid by the Company's subsidiaries to their parent company in 2018. 4. As of December 31, 2018, there were no material contingencies, significant provisions of long-term obligations, and mandatory dividend or redemption requirements of redeemable shares or guarantees of the Company, except for those which have been separately disclosed in the Consolidated Financial Statements, if any. |
SUMMARY OF PRINCIPAL ACCOUNTI_2
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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"). |
Basis of consolidations | (b) Basis of consolidations The consolidated financial statements include the financial statements of the Group. All intercompany transactions and balances have been eliminated upon consolidation. |
Use of estimates | (c) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Management has made significant estimates in a variety of areas, including but not limited to allowance for doubtful accounts, useful lives and residual values of long-lived assets, impairment for long lived assets, valuation allowances for deferred tax assets, interest capitalization and certain assumptions used in the computation of share-based compensation and related forfeiture rates. |
Concentration of credit risk | (d) Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, accounts receivable and notes receivable. The Group places its cash, cash equivalents and restricted cash in various financial institutions in the PRC. The Group believes that no significant credit risk exists as these banks are principally government-owned financial institutions with high credit ratings. Accounts receivable represent those receivables derived in the ordinary course of business. The Group conducts credit evaluations of customers to whom credit terms are extended. The Group establishes an allowance for doubtful accounts mainly based on aging of the receivables and other factors surrounding the credit risk of specific customers. There is no allowance for doubtful accounts as of December 31, 2017 and 2018, based on the aging of the receivables and the Group’s assessment of the customers’ credit risk. There is one customer that accounted for 10% or more of accounts receivable amounting to $682,264 and $1,087,719 as of December 31, 2017 and 2018, respectively. From time to time, certain accounts receivable balances are settled in the form of notes receivable. As of December 31, 2017 and 2018, notes receivable represents bank acceptance drafts that are non-interest bearing and due within 6~12 months. |
Cash and cash equivalents | (e) Cash, cash equivalents and restricted cash Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have maturities of three months or less when purchased. Restricted cash of $9,910,957 and $28,609,307 as of December 31, 2017 and 2018, respectively, are restricted bank deposits for |
short-term investments | (f) Short-term investments Short-term investments include wealth management products with variable interest rates or principal not-guaranteed with certain financial institutions, whereby the Group has the intent and the ability to hold to maturity within one year. The Group classifies the short-term investments as "held-to-maturity" securities and stated at amortized cost. For investments classified as held-to-maturity securities, the Group evaluates whether a decline in fair value below the amortized cost basis is other-than-temporary in accordance with ASC 320. The other-than-temporary impairment loss is recognized in earnings equal to the excess of the investments' amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. No impairment loss in relation to its short-term investments was recorded for the year ended December 31, 2018. |
Allowance for Doubtful Accounts | (g) Allowance for doubtful accounts The Group determines its allowance for doubtful accounts by actively monitoring the financial condition of its customers to determine the potential for any nonpayment of trade receivables. In determining its allowance for doubtful accounts, the Group also considers other economic factors, such as aging trends. The Group believes that its process of specific review of customers combined with overall analytical review provides an effective evaluation of ultimate collectability of trade receivables. Provisions for allowance for doubtful accounts are recorded as general and administrate expense in the consolidated statements of operations. |
Inventories | (h) Inventories Inventories are stated at lower of cost or net realizable value. Costs are determined using weighted average costs. Costs comprise direct materials, direct labor and overhead costs incurred in bringing the inventories to their present location and condition. The Group writes down the cost of excess inventories to the estimated net realizable value based on historical and forecasted demand. Estimated net realizable value is measured as the estimated selling price of each class of inventory in the ordinary course of business less estimated costs of completion and disposal. The charges to inventory for the years ended December 31, 2016, 2017 and 2018 were nil, nil, and $851,008 from discontinued operations, respectively. |
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 plants 30 years Machinery and equipment 15 years Furniture, fixtures and equipment 3-5 years Motor vehicles 6 years The Group reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable. Factors that the Group considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include, but are not limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use of the assets. The analysis will be performed at the asset or asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors. Costs incurred on construction are capitalized and transferred to property, plant and equipment upon completion, at which time depreciation commences. Interest expense incurred for construction of property, plant, and equipment is capitalized as part of the costs of such assets. The Group capitalizes interest to the extent that expenditures to construct an asset have occurred and interest costs have been incurred. Interest expense capitalized for the years ended December 31, 2016, 2017 and 2018 was $1,757,547, $47,507 and $1,203,547, respectively. |
Prepaid land use rights | (j) Prepaid land use rights All land in the PRC is owned by the PRC government. The PRC government, according to PRC law, may sell the land use rights for a specified period of time. The Group’s land use rights in the PRC are stated at cost less recognized lease expenses. Lease expense is recognized over the term of the agreement on a straight-line basis. The Group recorded lease expenses of $517,448, $531,903 and $544,267, for the years ended December 31, 2016, 2017 and 2018, respectively. |
Impairment of long-lived assets | (k) Impairment of long-lived assets The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Factors that the Group considers in deciding when to perform an impairment review include, but are not limited to significant under-performance of a business or product line in relation to expectations, significant negative industry or economic trends, and significant changes or 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. For the years ended December 31, 2016, 2017 and 2018, the Group recorded impairment losses for long-lived assets from discontinued operations of $198,689, $2,987,668 and $18,769,938, of $7,287,033 incurred in 2018 were related to the assets of discontinued wafer manufacturing operations. |
Revenue recognition | (l) Revenue recognition As of January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 The Group's revenue is all derived from the sale of polysilicon from the polysilicon segment, which is the only remaining segment after the discontinuation of the wafer business in September 2018. The sale of polysilicon is all in PRC and the Group's operations is in one PRC location, Xinjiang. Revenue cannot be disaggregated to a lower level or more than one categories to provide meaningful information. See Note 18 Segment Information. The Group recognizes sale of polysilicon at a point in time following the transfer of control of the products to the customers, which occurs upon delivery according to the terms of the underlying contracts. The Group's standalone selling prices are based on the prices charged to customers for the single performance obligation which is transfer of control of polysilicon upon delivery to the customers. Variable consideration that could affect the Group's reported revenues is sales returns, which would be recorded as a reduction of revenue. Return rights of defective products are typically contractually limited, which allows sales returns within a period ranging from 3 to 30 days upon delivery. Sales returns have been nil for each reporting period presented. No warranties, incentives, or rebates arrangements has been offered to customers. For majority of the sales arrangements, the Group requires payments prior to shipments. For customers with trade credit granted on a short-term basis within 30 days, the Group records accounts receivable at the invoiced amount, net of an estimated allowance for doubtful accounts. As of December 31, 2017 and 2018, accounts receivable totaled $700,558 and $1,180,598, respectively. The Group did not record any allowance for doubtful accounts as of December 31, 2017 and 2018. Practical Expedients and Exemptions We apply the new revenue standard requirements to a portfolio of contracts (or performance obligations) with similar characteristics for transactions where it is expected that the effects on the financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio. Therefore, we have elected the portfolio approach in applying the new revenue guidance. Our revenue contracts provide for performance obligations that are fulfilled and transfer control to customers at point in time, involve the same pattern of transfer to the customer, and provide a right to consideration from our customers in an amount that corresponds directly with the value to the customer for the performance completed. Therefore, we recognize revenue in the amount to which we have a right to invoice. We have made an accounting policy election to not assess whether promised products are performance obligations if they are immaterial in the context of the contract with the customer. If the revenue related to a performance obligation that includes products that are immaterial in the context of the contract is recognized before those immaterial products are transferred to the customer, then the related costs to transfer those products are accrued. We generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling, general and administrative expenses. |
Cost of revenues | (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 $2,873,147, $4,099,716 and $4,474,956, respectively for the years ended December 31, 2016, 2017 and 2018. |
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. The Group's research and development activities are mainly focused on technical improvement to improve the production volume, efficiency and lower unit cost. |
Government subsidies | (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; 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, 2016, 2017 and 2018 were $1,675,016, $3,704,144 and $13,136,922, respectively. Government grants related to fixed assets are recorded as long term liabilities and amortized on a straight-line basis over the useful life of the associated asset as an offset to depreciation expense. The Group did not receive any government grants related to fixed assets during the years ended December 31, 2016, 2017 and 2018. |
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 Binomial option pricing model and the fair value of restricted share units ("RSUs") is determined with reference to the fair value of the underlying shares on the grant date. The Group has made an estimate of expected forfeiture and is recognizing compensation costs only for those equity awards expected to vest. The share-based compensation expenses have been categorized as either selling, general and administrative expenses or cost of sales, depending on the job functions of the grantees. For the years ended December 31, 2016, 2017 and 2018, the Group recognized share-based compensation expense of $2,702,089, $4,200,273 and $13,788,049, respectively, which was recognized in the statements of operations as follows: Year ended December 31, 2016 2017 2018 Selling, general and administrative expenses $ 2,501,957 $ 3,679,145 $ 12,461,838 Cost of revenues 200,132 521,128 1,326,211 Total $ 2,702,089 $ 4,200,273 $ 13,788,049 |
Earnings (loss) per share | (s) Earnings (loss) per share Basic earnings (loss) per ordinary share is computed by dividing the net income attributable to ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted earnings (loss) per 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 Group is the United States dollar (“U.S. dollar”). The functional currency of the Group is the U.S. dollar. Monetary assets and liabilities denominated in other currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange in effect at the balance sheet dates. Transactions dominated in currencies other than the U.S. dollar during the year are converted into U.S. dollar at the applicable rates of exchange prevailing when the transactions occur. Transaction gains and losses are recorded in the statements of operations. The financial records of the Group’s PRC subsidiaries are maintained in Chinese Renminbi (“RMB”), which is their functional currency. Assets and liabilities are translated at the exchange rates at the balance sheet date. Equity accounts are translated at historical exchange rates. Revenues, expenses, gains and losses are translated at average rate of exchange prevailing during the periods presented. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the statement of changes in equity and comprehensive income. The RMB is not a freely convertible currency. The State Administration for Foreign Exchange of People’s Republic of China, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Group’s aggregate amount of cash, cash equivalents and restricted cash denominated in RMB amounted to $66,433,887 and $81,476,636 as of December 31, 2017 and 2018, respectively. |
Comprehensive income (loss) | (u) Comprehensive income (loss) Comprehensive income (loss) is the change in equity during a period from transactions and other events and circumstances from non-shareholder sources and included net income and foreign currency translation adjustments. As of December 31, 2016, 2017 and 2018, accumulated other comprehensive income (loss) was comprised entirely of foreign currency translation adjustments. |
Fair value of financial instruments | (v) Fair value of financial instruments The Group estimates fair value of financial assets and liabilities as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price). The fair value measurement guidance establishes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. Valuation techniques used to measure fair value shall maximize the use of observable inputs. Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use to price an asset or liability. When available, the Group measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. Pricing information the Group obtains from third parties is internally validated for reasonableness prior to use in the consolidated financial statements. When observable market prices are not readily available, the Group generally estimates fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. In certain cases, fair values are not subject to precise quantification or verification and may fluctuate as economic and market factors vary and the Group’s evaluation of those factors changes. Although the Group uses its best judgment in estimating the fair value of these financial instruments, there are inherent limitations in any estimation technique. In these cases, a minor change in an assumption could result in a significant change in its estimate of fair value, thereby increasing or decreasing the amounts of the Group’s consolidated assets, liabilities, shareholders’ equity and net income or loss. The Group’s financial instruments include cash and cash equivalents, restricted cash, short-term investments, accounts receivable, notes receivable, amount due from related parties, accounts payable, other current liabilities, payables for purchase of property, plant and equipment, amounts due to related parties and bank borrowings. The carrying amounts of these short-term financial instruments approximate their fair values due to the short-term maturity of these instruments. The Group’s long-term bank borrowing consists of floating rate loans. The fair value of long-term borrowings is measured using discounted cash flow technique based on current rates for comparable loans on the respective valuation date and is therefore considered a level 2 measurement. The long-term bank borrowings approximate their fair values because market interest rates have not fluctuated significantly since the commencement of loan contracts signed. |
Noncontrolling interest | (w) Non-controlling interest The Group classified the ownership interest in the consolidated entity held by a party other than the Group to non-controlling interest in the consolidated financial statements. It also reported the consolidated net income at amounts that include the amounts attributable to both the parent and the non-controlling interest on the face of the Consolidated Statements of Operations. Xinjiang Daqo Investment's equity interests in Xinjiang Daqo was presented as a non-controlling interest before it was acquired by Xinjiang Daqo in December 2018. The non-controlling interest was $2,792,480 and nil as of December 31, 2017 and 2018, respectively. |
Investment in an affiliate | (x) Investment in an affiliate 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 in cash, which represents 15.29% of the share capital of Syed Fire Safety Services and holds one of the seven seats on the board of the director of the investee. In October 2017, Xinjiang Daqo contributed an additional capital investment of $63,793 and its percentage of ownership remained the same. The Group accounts for the investment using the cost method as the Group is unable to exercise significant influence on the investee. The Group reviews its investment in Syed Fire Safety Service to determine whether a decline in fair value below the carrying value, if any, is other-than-temporary. No impairment loss occurred during the years ended December 31, 2016, 2017 and 2018. 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 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 Group on January 1, 2018. As a result of the adoption of the ASU as of December 31, 2018, the Group has changed its presentation to combine restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. 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 adopted the ASU for the year ended December 31, 2018 and has already considered the impact on its consolidated financial statements and related disclosures and the effects upon adoption are not material. 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 Group on January 1, 2018. As a result of the adoption of the ASU as of December 31, 2018, the Group has included amounts generally described as "restricted with cash and cash equivalents" when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows, and it did not have any other material impact on the Group's consolidated financial statements. |
Recent accounting pronouncements | (z) Recent accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to recognize right-of-use assets and liabilities for operating leases, initially measured at the present value of the lease payments, on the balance sheet. In addition, it requires lessees to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. The definition of a lease has been revised in regards to when an arrangement conveys the right to control the use of the identified asset under the arrangement which may result in changes to the classification of an arrangement as a lease. The ASU expands the disclosure requirements of lease arrangements. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided an optional transition method to apply the new lease requirements through a cumulative-effect adjustments in the period of adoption. The Group expects to adopt the standard in the first quarter of 2019using the modified retrospective method and will not restate comparative periods, as permitted by the standard. In addition, the Group will elect the transition practical referred to as the “package of three”, that must be taken together and allows entities to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing leases. As of December 31, 2018, the Group has $11,729 of future minimum operating lease commitments that are not currently recognized on its consolidated balance sheets (Note 17). Therefore, the Group does not expect material changes to its consolidated financial statements. 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 Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes certain disclosure requirements, including those related to Level 3 fair value measurements. The standard will be effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. The Group is evaluating the impact on its consolidated financial statements upon adoption. |
SUMMARY OF PRINCIPAL ACCOUNTI_3
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Property, Plant and Equipment, Depreciation, Estimated Lives | Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation is recognized on a straight-line basis over the following estimated useful lives: Buildings and plants 30 years Machinery and equipment 15 years Furniture, fixtures and equipment 3-5 years Motor vehicles 6 years |
Schedule of Share-Based Compensation Expenses | Year ended December 31, 2016 2017 2018 Selling, general and administrative expenses $ 2,501,957 $ 3,679,145 $ 12,461,838 Cost of revenues 200,132 521,128 1,326,211 Total $ 2,702,089 $ 4,200,273 $ 13,788,049 |
EXIT and DISPOSAL ACTIVITIES (T
EXIT and DISPOSAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | Assets and liabilities of the discontinued operations December 31, 2017 2018 ASSETS: Cash and cash equivalents $ 6,873,659 $ 982,019 Restricted cash 2,078,601 109,171 Accounts receivable, net of allowance for doubtful accounts of $7,993 and nil as of December 31, 2017 and 2018 2,271,372 - Notes receivable 6,506,648 1,524,747 Prepaid expenses and other current assets 1,492,944 23,889 Advances to suppliers 1,080,506 6,132 Inventories 3,919,834 - Amount due from related parties 8,991,640 2,367,657 Total current assets associated with discontinued operations $ 33,215,204 $ 5,013,615 Property, plant and equipment, net 93,662,275 - Prepaid land use rights, net 1,812,333 - Long-lived assets held-for-sale - 59,523,588 Total non-current assets associated with discontinued operations $ 95,474,608 $ 59,523,588 LIABILITIES: Short-term bank borrowings, including current portion of long-term bank borrowings $ 25,515,860 $ 10,176,600 Accounts payable 3,092,222 685,569 Notes payable 2,078,601 109,171 Advances from customers 313,371 - Payables for purchases of property, plant and equipment 3,408,015 1,074,155 Accrued expenses and other current liabilities 5,312,623 1,315,848 Amount due to related parties 4,932,778 5,314,587 Total current liabilities associated with discontinued operations $ 44,653,470 $ 18,675,930 Long-term bank borrowings 2,151,940 - Deferred government subsidies 846,826 723,035 Total non-current liabilities associated with discontinued operations $ 2,998,766 $ 723,035 Results of the discontinued operations Year ended December 31, 2016 2017 2018 Revenues $ 32,882,110 $ 29,652,458 $ 7,112,528 Cost of revenues (30,264,391 ) (30,227,536 ) (9,782,928 ) Gross profit (loss) 2,617,719 (575,078 ) (2,670,400 ) Operating (expenses) income: Selling, general and administrative expenses (1,022,179 ) (1,621,977 ) (2,723,335 ) Research and development expenses (123,024 ) (204,658 ) (608 ) Long-lived assets impairment (198,689 ) (2,987,668 ) (18,769,938 ) Other operating income, net 3,040,004 3,019,556 1,928,362 Total operating income (expenses) 1,696,112 (1,794,747 ) (19,565,519 ) Income (loss) from operations 4,313,831 (2,369,825 ) (22,235,919 ) Interest expense (1,848,002 ) (1,743,124 ) (1,074,251 ) Interest income 258,737 22,716 22,794 Exchange (loss) gain (13,975 ) 2,308 (17,669 ) Income (loss) from discontinued operations, net of tax of nil $ 2,710,591 $ (4,087,925 ) $ (23,305,045 ) All notes to the accompanying consolidated financial statements have been retrospectively adjusted to reflect the effect of the discontinued operations, where applicable. Condensed cash flow of the discontinued operations Year ended December 31, 2016 2017 2018 Net cash provided by operating activities $ 14,122,875 $ 5,048,042 $ 17,994,548 Net cash (used in) provided by investing activities (975,550 ) (3,752,066 ) 616,988 Net cash used in financing activities (33,711,235 ) (8,742,573 ) (16,778,925 ) |
PREPAID EXPENSE AND OTHER CUR_2
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expense and Other Current Assets | Prepaid expense and other current assets consist of the following: December 31, 2017 2018 Spare parts $ 5,598,073 $ 5,011,781 Prepaid value added tax (“VAT”) - 4,768,552 Prepaid insurance fee 285,650 153,751 Others 805,900 401,417 Total $ 6,689,623 $ 10,335,501 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: December 31, 2017 2018 Raw materials $ 3,944,796 $ 3,821,620 Work-in-process 6,536,395 5,711,848 Finished goods 5,202,299 5,915,899 Total $ 15,683,490 $ 15,449,367 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net, consist of the following: December 31, 2017 2018 Cost Buildings and plant $ 313,210,971 $ 322,914,381 Machinery and equipment 237,606,822 335,808,916 Furniture, fixtures and equipment 23,035,493 25,953,939 Motor vehicles 254,630 582,375 Less: Accumulated depreciation (109,191,519 ) (131,106,712 ) Property, plant and equipment, net $ 464,916,397 $ 554,152,899 Construction in process 20,550,020 57,463,560 Total $ 485,466,417 $ 611,616,459 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Bank Borrowings | The Group’s bank borrowings consist of the following: December 31, 2017 2018 Short-term bank borrowings $ 43,807,350 $ 34,135,224 Long-term bank borrowings, current portion 29,976,908 4,070,640 Total borrowings, current 73,784,258 38,205,864 Long-term bank borrowings, non-current portion 111,436,292 133,312,370 Total $ 185,220,550 $ 171,518,234 |
Schedule of Short-term Debt | The Group’s short-term bank borrowings consist of the following: December 31, 2017 2018 Short-term borrowings guaranteed by Daqo Group and its related parties $ 43,807,350 $ 29,076,000 Short-term borrowings pledged by certificate of deposit - 5,059,224 Total $ 43,807,350 $ 34,135,224 |
Schedule of Long-Term Bank Borrowings | The long-term bank borrowings, including current portion, as of December 31, 2017 and 2018 are comprised of: December 31, 2017 2018 Borrowing from Shihezi Rural Cooperative Bank $ - $ 17,445,600 Borrowing from Chongqing Rural Commercial Bank 141,413,200 119,937,410 Total $ 141,413,200 $ 137,383,010 |
Schedule of Principal Maturities of Long-term Bank Borrowings | The principal maturities of these long-term bank borrowings as of December 31, 2018 are as follows: Year ending December 31, Amount 2019 $ 4,070,640 2020 36,345,000 2021 40,997,160 2022 29,076,000 2023 26,894,210 Total $ 137,383,010 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: December 31, 2017 2018 Accrued payroll and welfare $ 4,320,005 $ 6,526,287 Accrued professional fees 368,753 187,027 Other tax payables 4,203,074 364,223 Interest payable 322,962 297,776 Others 1,606,991 2,042,389 Total $ 10,821,785 $ 9,417,702 |
ADVANCES FROM CUSTOMERS (Tables
ADVANCES FROM CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | Advances from customers consist of the following and is analyzed as long-term and short-term portion respectively: December 31, 2017 2018 Customer A $ 994,196 $ 15,827,579 Customer B - 1,017,427 Customer C 4,651,317 - Customer D 2,856,363 - Customer E 2,291,448 - Others 5,584,200 637,934 Total $ 16,377,524 $ 17,482,940 Less: Advances from customers – short-term portion $ 16,377,524 $ 10,213,940 Advances from customers – long-term portion $ - $ 7,269,000 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Nonrecurring Fair Value Measurements | Year ended December 31, 2017 Description Carrying Quoted Prices in Significant Significant Total Losses Property, plant and equipment – cannot be relocated to Xinjiang plant (Note 3) $ 2,987,668 $ $ $ — $ 2,987,668 Year ended December 31, 2018 Description Carrying Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Losses Property, plant and equipment – cannot be relocated to Xinjiang plant (Note 3) $ 11,482,905 $ $ $ — $ 11,482,905 Machinery and equipment related to discontinued wafer manufacturing operations (Note 3) $ 66,810,621 $ $ $ 59,523,588 $ 7,287,033 Total $ 78,293,526 $ 59,523,588 $ 18,769,938 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Income Tax Expenses | Income tax expenses comprise: Year ended December 31, 2016 2017 2018 Current tax expenses $ 7,357,623 $ 17,417,528 $ 11,868,388 Deferred tax expenses (benefit) 466 (85,302 ) (151,843 ) Total $ 7,358,089 $ 17,332,226 $ 11,716,545 |
Schedule of Deferred Tax Assets and Liabilities | The principal components of deferred income tax assets and liabilities from continuing operations are as follows: December 31, 2017 2018 Deferred tax assets: Long-lived assets impairment & depreciation $ 714,068 $ 821,137 Total deferred tax assets $ 714,068 $ 821,137 Deferred tax liabilities: Difference in basis of buildings $ — $ (1,184,644 ) Total deferred tax liabilities $ — $ (1,184,644 ) |
Schedule of Effective Income Tax Rate Reconciliation | The effective income tax rate from continuing operation Year ended December 31, 2016 2017 2018 PRC Enterprise Income Tax 25 % 25 % 25 % Preferential income tax rate of a subsidiary (11 )% (10 )% (11 )% Additional tax deductions (1 )% (1 )% (3 )% Different tax rate in other jurisdictions 2 % 1 % 5 % Tax credits 1 % 0 % 0 % Effective tax rate 16 % 15 % 16 % |
Discontinued Operations [Member] | |
Schedule of Deferred Tax Assets and Liabilities | The principal components of deferred income tax assets and liabilities from discontinued operations December 31, 2017 2018 Deferred tax assets: Net operating loss carried forward $ 21,182,813 $ 17,293,577 Allowance for doubtful accounts 1,998 - Government grants related to assets 211,707 180,759 Long-lived assets impairment & depreciation 18,904,406 8,358,235 Others 1,015,525 1,229,693 Sub-total 41,316,449 27,062,264 Valuation Allowance (41,316,449) (27,062,264) Total deferred tax assets $ — $ — |
Schedule of Changes of Valuation Allowance | The changes of valuation allowance from discontinued operations Year ended December 31, 2016 2017 2018 Beginning balance $ 42,362,849 $ 38,729,208 $ 41,316,449 Reversal (932,833) (24,771) (12,515,962) Foreign exchange effect (2,700,808) 2,612,012 (1,738,223) Ending Balance $ 38,729,208 $ 41,316,449 $ 27,062,264 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Assumptions Used | The following assumptions were used in the Binomial option pricing model: Year Ended December 31, 2015 Options granted Average risk-free rate of return Exercise multiple Volatility rate Dividend yield Post- vesting forfeiture rate January 12, 2015 2.82% 1.8-3 times 93.0% 0% 5%-8% July 6, 2015 3.20% 3 times 91.0% 0% 5% September 9, 2015 2.94%-3.08% 1.8-3 times 91.0%-92.0% 0% 5%-8% |
Summary of Stock Option Activity | A summary of the aggregate option activity and information regarding options outstanding as of December 31, 2018 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contract Life Aggregate Intrinsic Value Options outstanding on January 1, 2018 9,634,542 0.50 Granted - - Forfeited (161,724 ) 0.59 Expired (2,526 ) 0.59 Exercised (230,225 ) 0.59 Options outstanding on December 31, 2018 9,240,067 0.49 4.53 4,049,496 Options vested or expected to vest on December 31, 2018 20,043,353 0.47 4.11 9,351,312 Options exercisable on December 31, 2018 9,075,709 0.49 4.49 3,993,944 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the non-vested RSU activity in 2018 is as follows: Number of RSUs Weighted Average Grant Date Fair Value Nonvested RSUs on January 1, 2018 10,240,743 $ 0.98 Granted 44,365,641 1.48 Vested (9,272,063 ) 1.43 Forfeited (1,846,708 ) 1.07 Nonvested RSUs on December 31, 2018 43,487,613 $ 1.39 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Balances, Loans | December 31, 2017 2018 Amounts due from related parties (continuing operations) Xinjiang Daqo Tianfu Thermoelectric $ - $ 629,495 Others 5,799 185,540 Total $ 5,799 $ 815,035 Amounts due from related parties (discontinued operations) Zhenjiang Daqo $ 8,585,337 $ 1,453,800 Others 406,303 913,857 Total $ 8,991,640 $ 2,367,657 |
Schedule of Related Party Balances, Payables | December 31, 2017 2018 Amounts due to related parties – short term portion (continuing operations) Chongqing Daqo Tailai $ 494,954 $ 1,825,680 Others 1,342,166 434,327 Total $ 1,837,120 $ 2,260,007 Amounts due to related parties – short term portion (discontinued operations) Daqo New Material $ 4,852,819 $ 5,314,587 Others 79,959 - Total $ 4,932,778 $ 5,314,587 |
Schedule of Related Party Transactions | The transactions with Daqo Group and its subsidiaries were as follows: Transaction Year Ended December 31, Name of Related parties Nature 2016 2017 2018 Daqo Group Proceeds from interest free loans $ - $ 2,696,513 $ 25,744,800 Repayment of interest free loans 10,974,807 2,696,513 36,648,480 Repayment of interest bearing loans 15,059,000 15,495,451 - Interest charged 850,380 440,368 - Rental expense 27,997 37,756 38,633 Zhenjiang Daqo Proceeds from interest free loans - - 10,903,680 Sales 11,194,197 13,442,273 6,694,997 Daqo Solar Proceeds from interest free loans 60,300,896 40,089,689 55,613,463 Repayment of interest free loans 68,766,506 40,388,195 55,650,696 Nanjing Daqo Transformer Purchase-Fixed assets - - 6,201,243 Xinjiang Daqo Investment Proceeds from interest free loans 56,270,085 14,356,000 3,937,440 Repayment of interest free loans 38,715,449 14,356,000 4,020,732 Rental expense 890,168 874,858 895,192 Daqo New Material Purchase-Fixed assets - 7,390,693 - Proceeds from interest free loans 9,607,344 6,029,877 1,893,000 Repayment of interest free loans 12,262,592 10,818,493 1,893,000 Rental expense 993,894 976,800 499,752 Chongqing Daqo Tailai Purchase-Fixed assets 3,534,248 715,361 8,240,830 Income from sales of materials - - 15,899 Income from disposal of fixed assets - - 478,565 Proceeds from interest free loans 222,517 - 6,209,040 Repayment of interest free loans 2,684,783 - 6,209,040 Jiangsu Daqo Purchase-Fixed assets - - 1,326,634 Nanjing Daqo Electric Purchase-Fixed assets - - 1,439,332 Zhenjiang Electric Purchase-Raw material - - 331,353 Others subsidiaries under Daqo Group Purchase-Fixed assets 2,120,768 80,240 296,887 Purchase-Raw material 129,219 17,651 13,688 Total Sales $ 11,194,197 $ 13,442,273 $ 6,694,997 Income from disposal of fixed assets $ - $ - $ 478,565 Income from sales of materials $ - $ - $ 15,899 Purchase-Fixed assets $ 5,655,016 $ 8,186,294 $ 17,504,926 Purchase-Raw material $ 129,219 $ 17,651 $ 345,041 Rental expense $ 1,912,059 $ 1,889,414 $ 1,433,577 Interest expense $ 850,380 $ 440,368 $ - Proceeds from related parties loans $ 126,400,842 $ 63,172,079 $ 104,301,423 Repayment of related parties loans $ 148,463,137 $ 83,754,652 $ 104,421,948 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Earnings Per Share | The calculation of earnings (loss) per share is as follows: Year ended December 31, 2016 2017 2018 Numerator used in basic and diluted earnings per share: Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations $ 40,783,165 $ 96,929,053 $ 61,429,750 Income (loss) from discontinued operations, net of tax 2,710,591 (4,087,925 ) (23,305,045 ) Net income attributable to Daqo New Energy Corp. ordinary shareholders—basic and diluted $ 43,493,756 $ 92,841,128 $ 38,124,705 Denominator used in basic and diluted earnings per share: Weighted average number of ordinary shares outstanding used in computing earnings per share-basic 261,742,244 265,070,961 311,715,158 Plus: Dilutive effects of share options 3,075,511 6,020,839 6,346,349 Dilutive effects of RSUs - 1,834,519 7,444,828 Weighted average number of ordinary shares outstanding used in computing earnings per share—diluted 264,817,755 272,926,319 325,506,335 Basic earnings per share-continuing operations $ 0.16 $ 0.37 $ 0.19 Basic earnings (loss) per share-discontinued operations $ 0.01 $ (0.02 ) $ (0.07 ) NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Basic $ 0.17 $ 0.35 $ 0.12 Diluted earnings per share-continuing operations $ 0.15 $ 0.35 $ 0.19 Diluted earnings (loss) per share-discontinued operations $ 0.01 $ (0.01 ) $ (0.07 ) NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Diluted $ 0.16 $ 0.34 $ 0.12 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments are as follows: Year ending December 31, 2019 $ 11,279 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenues of Major Customers | The following customers individually accounted for 10% or more of revenues: Year ended December 31, 2016 2017 2018 Customer A * $ 39,219,089 $ 115,411,965 Customer B $ 47,696,332 $ 43,258,204 $ 57,858,670 Customer C * $ 39,099,677 * * Represents less than 10% |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) - USD ($) $ in Millions | 1 Months Ended | |
Dec. 20, 2018 | Aug. 31, 2015 | |
Xinjiang Daqo Investment [Member] | ||
Related Party Transaction [Line Items] | ||
Equity interest acquired (as a percent) | 100.00% | 1.00% |
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 1.00% |
Payments to Acquire Businesses, Gross | $ 16 | |
Daqo Group [Member] | Xinjiang Daqo [Member] | ||
Related Party Transaction [Line Items] | ||
Proceeds from non-controlling interest | $ 2.5 |
SUMMARY OF PRINCIPAL ACCOUNTI_4
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Additional Information) (Details) - USD ($) | Jan. 02, 2018 | Jan. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2017 | Feb. 17, 2016 |
Restricted cash | |||||||
Restricted cash | $ 28,609,307 | $ 9,910,957 | |||||
Inventories | |||||||
Inventory write-down | 0 | 0 | $ 0 | ||||
Property, Plant and Equipment | |||||||
Interest expense capitalized | 1,203,547 | 47,507 | 1,757,547 | ||||
Prepaid land use rights | |||||||
Lease Expenses | 544,267 | 531,903 | 517,448 | ||||
Impairment of long-lived assets | |||||||
Long-lived asset impairment | 11,482,905 | 2,987,668 | 198,689 | ||||
Revenue recognition | |||||||
Accounts Receivable, Net, Current | 1,180,598 | 700,558 | |||||
Government subsidies | |||||||
Unrestricted cash government subsidies | 13,136,922 | 3,704,144 | 1,675,016 | ||||
Foreign currency translation | |||||||
Aggregate amount of cash and cash equivalents and restricted cash denominated in RMB | 81,476,636 | 66,433,887 | |||||
Noncontrolling interest | |||||||
Noncontrolling interest | 0 | 2,792,480 | |||||
Investment accounted for under cost-method | |||||||
Allocated Share-based Compensation Expense | 13,788,049 | 4,200,273 | 2,702,089 | ||||
Operating Leases, Future Minimum Payments Due | 11,729 | ||||||
Contract with Customer, Liability | 17,482,940 | 16,377,524 | |||||
Contract with Customer, Liability, Revenue Recognized | $ 16,400,000 | $ 7,200,000 | |||||
Customer One [Member] | |||||||
Revenue recognition | |||||||
Accounts Receivable, Net, Current | 1,087,719 | 682,264 | |||||
Discontinued Operations [Member] | |||||||
Inventories | |||||||
Inventory write-down | 851,008 | ||||||
Impairment of long-lived assets | |||||||
Long-lived asset impairment | 18,769,938 | 2,987,668 | 198,689 | ||||
Discontinued Operations [Member] | Solar wafer manufacturing operations [Member] | |||||||
Impairment of long-lived assets | |||||||
Long-lived asset impairment | 7,287,033 | ||||||
Shipping and Handling [Member] | |||||||
Shipping and handling | |||||||
Cost of Goods and Services Sold | $ 4,474,956 | $ 4,099,716 | $ 2,873,147 | ||||
Syed Fire Safety Service Co [Member] | |||||||
Investment accounted for under cost-method | |||||||
Cost Method Investment, Ownership Percentage | 15.29% | ||||||
Cost Method Investments | $ 63,793 | $ 581,581 |
SUMMARY OF PRINCIPAL ACCOUNTI_5
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Building [Member] | |
Property, plant and equipment | |
Estimated useful lives | 30 years |
Machinery and Equipment [Member] | |
Property, plant and equipment | |
Estimated useful lives | 15 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, plant and equipment | |
Estimated useful lives | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, plant and equipment | |
Estimated useful lives | 5 years |
Vehicles [Member] | |
Property, plant and equipment | |
Estimated useful lives | 6 years |
SUMMARY OF PRINCIPAL ACCOUNTI_6
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Share-based Compensation) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | $ 13,788,049 | $ 4,200,273 | $ 2,702,089 |
Selling, General and Administrative Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | 12,461,838 | 3,679,145 | 2,501,957 |
Cost of revenues [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | $ 1,326,211 | $ 521,128 | $ 200,132 |
EXIT and DISPOSAL ACTIVITIES (A
EXIT and DISPOSAL ACTIVITIES (Additional Information) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2013 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Impairment of Long-Lived Assets Held-for-use | $ 2,987,668 | |||||
Maintenance expenses | $ 3,000,000 | |||||
Property, Plant and Equipment, Net | $ 611,616,459 | 485,466,417 | ||||
Prepaid land use rights [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Property, Plant and Equipment, Net | 1,700,000 | |||||
Selling, General and Administrative Expenses [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Relocation costs | $ 2,600,000 | |||||
polysilicon assets [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Impairment of Long-Lived Assets Held-for-use | 11,500,000 | |||||
Property, Plant and Equipment, Net | 11,500,000 | |||||
Wafer Manufacturing operations [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Impairment of Long-Lived Assets Held-for-use | 7,300,000 | |||||
Carrying Value [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Property, Plant, and Equipment, Fair Value Disclosure | 78,293,526 | |||||
Carrying Value [Member] | Significant Production Assets [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Property, Plant, and Equipment, Fair Value Disclosure | 200,000 | $ 144,700,000 | ||||
Impairment of Long-Lived Assets Held-for-use | $ 1,600,000 | 200,000 | ||||
Carrying value of assets relocated | $ 34,100,000 | |||||
Relocation costs | $ 200,000 | |||||
Property Plant And Equipment, Expected to be Relocated | $ 200,000 |
EXIT and DISPOSAL ACTIVITIES (D
EXIT and DISPOSAL ACTIVITIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
ASSETS: | |||
Cash and cash equivalents | $ 982,019 | $ 6,873,659 | |
Restricted cash | 109,171 | 2,078,601 | |
Accounts receivable, net of allowance for doubtful accounts of $7,993 and nil as of December 31, 2017 and 2018 | 0 | 2,271,372 | |
Notes receivable | 1,524,747 | 6,506,648 | |
Prepaid expenses and other current assets | 23,889 | 1,492,944 | |
Advances to suppliers | 6,132 | 1,080,506 | |
Inventories | 0 | 3,919,834 | |
Amount due from related parties | 2,367,657 | 8,991,640 | |
Total current assets associated with discontinued operations | 5,013,615 | 33,215,204 | |
Property, plant and equipment, net | 0 | 93,662,275 | |
Prepaid land use rights, net | 0 | 1,812,333 | |
Long-lived assets held-for-sale | 59,523,588 | 0 | |
Total non-current assets associated with discontinued operations | 59,523,588 | 95,474,608 | |
LIABILITIES: | |||
Short-term bank borrowings, including current portion of long-term bank borrowings | 10,176,600 | 25,515,860 | |
Accounts payable | 685,569 | 3,092,222 | |
Notes payable | 109,171 | 2,078,601 | |
Advances from customers | 0 | 313,371 | |
Payables for purchases of property, plant and equipment | 1,074,155 | 3,408,015 | |
Accrued expenses and other current liabilities | 1,315,848 | 5,312,623 | |
Amount due to related parties | 5,314,587 | 4,932,778 | |
Total current liabilities associated with discontinued operations | 18,675,930 | 44,653,470 | |
Long-term bank borrowings | 0 | 2,151,940 | |
Deferred government subsidies | 723,035 | 846,826 | |
Total non-current liabilities associated with discontinued operations | 723,035 | 2,998,766 | |
Revenues | 7,112,528 | 29,652,458 | $ 32,882,110 |
Cost of revenues | (9,782,928) | (30,227,536) | (30,264,391) |
Gross profit (loss) | (2,670,400) | (575,078) | 2,617,719 |
Operating (expenses) income: | |||
Selling, general and administrative expenses | (2,723,335) | (1,621,977) | (1,022,179) |
Research and development expenses | (608) | (204,658) | (123,024) |
Long-lived assets impairment | (18,769,938) | (2,987,668) | (198,689) |
Other operating income, net | 1,928,362 | 3,019,556 | 3,040,004 |
Total operating income (expenses) | (19,565,519) | (1,794,747) | 1,696,112 |
Income (loss) from operations | (22,235,919) | (2,369,825) | 4,313,831 |
Interest expense | (1,074,251) | (1,743,124) | (1,848,002) |
Interest income | 22,794 | 22,716 | 258,737 |
Exchange (loss) gain | (17,669) | 2,308 | (13,975) |
Income (loss) from discontinued operations, net of tax of nil | $ (23,305,045) | $ (4,087,925) | $ 2,710,591 |
EXIT and DISPOSAL ACTIVITIES (P
EXIT and DISPOSAL ACTIVITIES (Parenthetical) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for Doubtful Accounts Receivable | $ 0 | $ 7,993 |
EXIT and DISPOSAL ACTIVITIES (C
EXIT and DISPOSAL ACTIVITIES (Condensed Cash Flow of the Discontinued Operations) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net cash provided by operating activities | $ 17,994,548 | $ 5,048,042 | $ 14,122,875 |
Net cash (used in) provided by investing activities | 616,988 | (3,752,066) | (975,550) |
Net cash used in financing activities | $ (16,778,925) | $ (8,742,573) | $ (33,711,235) |
FOLLOW-ON EQUITY OFFERINGS (Det
FOLLOW-ON EQUITY OFFERINGS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
America depositary shares (ADSs) issued, shares | 2,064,379 | |||
Follow-on equity offering, net of issuance costs, shares | 51,609,475 | |||
Issuance cost for ordinary shares | $ 6,900,000 | $ 6,919,202 | ||
Follow-on equity offering, net of issuance costs | $ 106,600,000 | $ 106,621,643 |
PREPAID EXPENSE AND OTHER CUR_3
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Spare parts | $ 5,011,781 | $ 5,598,073 |
Prepaid value added tax ("VAT") | 4,768,552 | 0 |
Prepaid insurance fee | 153,751 | 285,650 |
Others | 401,417 | 805,900 |
Total | $ 10,335,501 | $ 6,689,623 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Inventory [Line Items] | |||
Raw materials | $ 3,821,620 | $ 3,944,796 | |
Work-in-process | 5,711,848 | 6,536,395 | |
Finished goods | 5,915,899 | 5,202,299 | |
Total | 15,449,367 | 15,683,490 | |
Inventory write-down | $ 0 | $ 0 | $ 0 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 611,616,459 | $ 485,466,417 | |
Depreciation of property, plant and equipment | 27,487,163 | 27,576,077 | $ 22,620,885 |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 322,914,381 | 313,210,971 | |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 335,808,916 | 237,606,822 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 25,953,939 | 23,035,493 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 582,375 | 254,630 | |
Depreciable Asset [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Less: Accumulated depreciation | (131,106,712) | (109,191,519) | |
Total | 554,152,899 | 464,916,397 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 57,463,560 | $ 20,550,020 | |
Construction in Progress [Member] | Phase 3B expansion [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 57,500,000 |
BORROWINGS (Schedule of Bank Bo
BORROWINGS (Schedule of Bank Borrowings) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Short-term bank borrowings | $ 34,135,224 | $ 43,807,350 |
Long-term bank borrowings, current portion | 4,070,640 | 29,976,908 |
Total borrowings, current | 38,205,864 | 73,784,258 |
Long-term bank borrowings, non-current portion | 133,312,370 | 111,436,292 |
Total | $ 171,518,234 | $ 185,220,550 |
BORROWINGS (Short-Term Borrowin
BORROWINGS (Short-Term Borrowings) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | |||
Short-term bank borrowings | $ 34,135,224 | $ 43,807,350 | |
Interest rate on short-term bank borrowings | 5.00% | 5.10% | 5.00% |
Daqo Group and its related parties [Member] | |||
Short-term Debt [Line Items] | |||
Short-term bank borrowings | $ 29,076,000 | $ 43,807,350 | |
Certificate of deposit [Member] | |||
Short-term Debt [Line Items] | |||
Short-term bank borrowings | $ 5,059,224 | $ 0 |
BORROWINGS (Long-Term Borrowing
BORROWINGS (Long-Term Borrowings) (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 01, 2018 | |
Debt Instrument [Line Items] | |||||
Long-term bank borrowings | $ 137,383,010 | ||||
Bank of China [Member] | |||||
Debt Instrument [Line Items] | |||||
Amount repaid | 13,700,000 | $ 18,400,000 | $ 13,100,000 | ||
Long-term bank borrowings | 50,900,000 | ||||
Chongqing Rural Commercial Bank [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing amount of credit facility | $ 96,100,000 | ||||
Interest rate spread over rate issued by People's Bank of China | 20.00% | ||||
Fixed interest rate | 5.90% | 5.90% | 5.90% | ||
Long-term bank borrowings | $ 69,100,000 | ||||
Line of Credit Facility, Maximum Amount Outstanding During Period | $ 54,900,000 | $ 96,100,000 | |||
Proceeds from Lines of Credit | $ 21,900,000 | ||||
Repayments of Long-term Debt | 7,700,000 | ||||
Chongqing Rural Commercial Bank [Member] | Facility One [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing amount of credit facility | $ 76,800,000 | ||||
Shihezi Rural Cooperative Bank [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing amount of credit facility | $ 29,000,000 | ||||
Fixed interest rate | 6.20% | ||||
Weighted average interest rate | 6.20% | ||||
Long-term bank borrowings | $ 17,400,000 | ||||
Proceeds from Lines of Credit | 17,400,000 | ||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 11,600,000 | ||||
Line of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Weighted average interest rate | 5.90% | 5.90% | 5.70% | ||
Long-term bank borrowings | $ 137,383,010 | $ 141,413,200 | |||
Line of Credit [Member] | Chongqing Rural Commercial Bank [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term bank borrowings | 119,937,410 | 141,413,200 | |||
Line of Credit [Member] | Shihezi Rural Cooperative Bank [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term bank borrowings | $ 17,445,600 | $ 0 |
BORROWINGS (Schedule of Princip
BORROWINGS (Schedule of Principal Maturities of Bank Borrowings) (Details) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
2019 | $ 4,070,640 |
2020 | 36,345,000 |
2021 | 40,997,160 |
2022 | 29,076,000 |
2023 | 26,894,210 |
Total | $ 137,383,010 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued payroll and welfare | $ 6,526,287 | $ 4,320,005 |
Accrued professional fees | 187,027 | 368,753 |
Other tax payables | 364,223 | 4,203,074 |
Interest payable | 297,776 | 322,962 |
Others | 2,042,389 | 1,606,991 |
Total | $ 9,417,702 | $ 10,821,785 |
ADVANCES FROM CUSTOMERS (Detail
ADVANCES FROM CUSTOMERS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Total | $ 17,482,940 | $ 16,377,524 |
Less: Advances from customers – short-term portion | 10,213,940 | 16,377,524 |
Advances from customers – long-term portion | 7,269,000 | 0 |
Customer A [Member] | ||
Total | 15,827,579 | 994,196 |
Customer B [Member] | ||
Total | 1,017,427 | 0 |
Customer C [Member] | ||
Total | 0 | 4,651,317 |
Customer D [Member] | ||
Total | 0 | 2,856,363 |
Customer E [Member] | ||
Total | 0 | 2,291,448 |
OtherCustomer [Member] | ||
Total | $ 637,934 | $ 5,584,200 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | $ 11,482,905 | $ 2,987,668 | $ 198,689 |
Discontinued Operations [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | 18,769,938 | 2,987,668 | $ 198,689 |
Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | 11,482,905 | 2,987,668 | |
Fair Value, Measurements, Nonrecurring [Member] | Discontinued Operations [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived asset impairment | 7,287,033 | ||
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferrable relocation assets | 59,523,588 | ||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferrable relocation assets | 0 | 0 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Discontinued Operations [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferrable relocation assets | 59,523,588 | ||
Carrying Value [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferrable relocation assets | 78,293,526 | ||
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 | 11,482,905 | $ 2,987,668 | |
Carrying Value [Member] | Fair Value, Measurements, Nonrecurring [Member] | Discontinued Operations [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property, plant and equipment - identified untransferrable relocation assets | $ 66,810,621 |
MAINLAND CHINA CONTRIBUTION P_2
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined contribution plan expenses | $ 2,915,327 | $ 2,242,577 | $ 1,948,725 |
Aggregate balance of statutory common reserves | 39,387,239 | $ 31,991,537 | $ 21,969,950 |
Restrictions of statutory reserves | $ 366,649,034 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) ¥ in Millions | Jan. 14, 2008 | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Operating Loss Carryforwards [Line Items] | |||||
Income tax paid | $ 19,452,799 | $ 9,526,485 | $ 2,998,658 | ||
Statutory enterprise income tax rate | 25.00% | 25.00% | 25.00% | 25.00% | |
Preferential tax rate | 15.00% | 15.00% | |||
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% | |
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 | ||||
Preferential tax rate | 25.00% | 25.00% | |||
Chongqing Daqo New Energy Co., Ltd. [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Deferred Tax Assets, Valuation Allowance | $ 27,062,264 | $ 41,316,449 | |||
Preferential tax rate | 15.00% | 25.00% | 25.00% | 15.00% |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Expenses) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current Tax Expenses | $ 11,868,388 | $ 17,417,528 | $ 7,357,623 |
Deferred Tax Expenses (Benefit) | (151,843) | (85,302) | 466 |
Total | $ 11,716,545 | $ 17,332,226 | $ 7,358,089 |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Income Tax Assets and Liabilities) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Long-lived assets impairment & depreciation | $ 821,137 | $ 714,068 |
Total deferred tax assets | 821,137 | 714,068 |
Deferred tax liabilities: | ||
Difference in basis of buildings | (1,184,644) | 0 |
Total deferred tax liabilities | $ (1,184,644) | $ 0 |
INCOME TAXES (Schedule of Def_2
INCOME TAXES (Schedule of Deferred Income Tax Assets and Liabilities from Discontinued Operations) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||||
Long-lived assets impairment & depreciation | $ 821,137 | $ 714,068 | ||
Discontinued Operations [Member] | ||||
Deferred tax assets: | ||||
Net operating loss carried forward | 17,293,577 | 21,182,813 | ||
Allowance for doubtful accounts | 0 | 1,998 | ||
Government grants related to assets | 180,759 | 211,707 | ||
Long-lived assets impairment & depreciation | 8,358,235 | 18,904,406 | ||
Others | 1,229,693 | 1,015,525 | ||
Sub-total | 27,062,264 | 41,316,449 | ||
Valuation Allowance | (27,062,264) | (41,316,449) | $ (38,729,208) | $ (42,362,849) |
Total deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Schedule of Chang
INCOME TAXES (Schedule of Changes of Valuation Allowance) (Details) - Discontinued Operations [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Beginning balance | $ 41,316,449 | $ 38,729,208 | $ 42,362,849 |
Reversal | (12,515,962) | (24,771) | (932,833) |
Foreign exchange effect | (1,738,223) | 2,612,012 | (2,700,808) |
Ending Balance | $ 27,062,264 | $ 41,316,449 | $ 38,729,208 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective income tax rate: | |||
PRC Enterprise Income Tax | 25.00% | 25.00% | 25.00% |
Preferential income tax rate of a subsidiary | (11.00%) | (10.00%) | (11.00%) |
Additional tax deductions | (3.00%) | (1.00%) | (1.00%) |
Different tax rate in other jurisdictions | 5.00% | 1.00% | 2.00% |
Tax credits | 0.00% | 0.00% | 1.00% |
Effective tax rate | 16.00% | 15.00% | 16.00% |
INCOME TAXES (Schedule of Eff_2
INCOME TAXES (Schedule of Effect of Tax Holidays) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
The aggregate dollar effect | $ 7.8 | $ 11.3 | $ 5.2 |
Per share effect-basic and diluted | $ 0.02 | $ 0.04 | $ 0.02 |
SHARE BASED COMPENSATION (Narra
SHARE BASED COMPENSATION (Narrative) (Details) - USD ($) | Feb. 03, 2017 | Sep. 09, 2015 | Jan. 12, 2015 | Dec. 21, 2018 | Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted | 12,569,166 | 6,274,166 | 0 | 8,134,375 | ||||||
Weighted average fair value of stock options granted | $ 0.59 | |||||||||
Share-based compensation | $ 13,788,049 | $ 4,200,273 | $ 2,702,089 | |||||||
Unrecognized compensation cost related to non-vested stock options | $ 76,911 | |||||||||
Unrecognized compensation cost, recognition period | 4 months 27 days | |||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.59 | $ 0.87 | $ 0.59 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost Adjustment Description | The total incremental cost associated with the modification was $282,581, of which $123,322 was recognized immediately for the options vested prior to the date of the modification and the remaining share-based compensation charges of $159,259 are recognized over the remaining vesting period of the modified options. | The total incremental cost associated with the modification was $241,557, of which $60,107 was recognized immediately for the options vested prior to the date of the modification and the remaining share-based compensation charges of $181,470 are recognized over the remaining vesting period of the modified options. | ||||||||
Restricted Stock or Unit Expense | $ 13,103,276 | |||||||||
Share Incentive Plan 2014 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Ordinary shares authorized | 21,000,000 | |||||||||
Share Incentive Plan 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Ordinary shares authorized | 38,600,000 | |||||||||
Share-based Compensation Award, Batch One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | $ 0.38 | |||||||||
Share-based Compensation Award, Batch Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | 0.35 | |||||||||
Share-based Compensation Award, Batch Three [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | 0.38 | |||||||||
Share-based Compensation Award, Batch Four [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | 0.37 | |||||||||
Share-based Compensation Award, Batch Five [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | $ 0.40 | |||||||||
Executive officers [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | $ 0.52 | |||||||||
Employees [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted | $ 0.55 | |||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unrecognized compensation cost, recognition period | 3 years 9 months 25 days | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.48 | |||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 60,140,629 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 44,365,641 | |||||||||
Restricted Stock Units (RSUs) [Member] | Share Incentive Plan 2014 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 12,653,992 | |||||||||
Restricted Stock Units (RSUs) [Member] | Share Incentive Plan 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 25,275,880 | |||||||||
Restricted Stock Units (RSUs) [Member] | Share Incentive Plan 2014 and 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 8,105,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | Chief Executive Officer [Member] | Share Incentive Plan 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 10,984,761 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | where 1/6 of the RSUs will be vested on the grant date and the remaining will be vested 1/30 at each of the monthly anniversary for the grant date from July 6, 2018. | |||||||||
Employee Stock Option [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation | $ 684,773 | $ 1,559,863 | $ 2,702,089 |
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, 2018 | |
January 12, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free rate of return | 2.82% |
Volatility rate | 93.00% |
Dividend yield | 0.00% |
July 06, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free rate of return | 3.20% |
Exercise multiple | 3 |
Volatility rate | 91.00% |
Dividend yield | 0.00% |
Post-vesting forfeiture rate | 5.00% |
September 09, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Minimum [Member] | January 12, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise multiple | 1.8 |
Post-vesting forfeiture rate | 5.00% |
Minimum [Member] | September 09, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free rate of return | 2.94% |
Exercise multiple | 1.8 |
Volatility rate | 91.00% |
Post-vesting forfeiture rate | 5.00% |
Maximum [Member] | January 12, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise multiple | 3 |
Post-vesting forfeiture rate | 8.00% |
Maximum [Member] | September 09, 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free rate of return | 3.08% |
Exercise multiple | 3 |
Volatility rate | 92.00% |
Post-vesting forfeiture rate | 8.00% |
SHARE BASED COMPENSATION (Summa
SHARE BASED COMPENSATION (Summary of Stock Option Activity) (Details) - USD ($) | Sep. 09, 2015 | Jan. 12, 2015 | Dec. 31, 2018 | Dec. 31, 2015 |
Number of Options | ||||
Options outstanding | 9,634,542 | |||
Granted | 12,569,166 | 6,274,166 | 0 | 8,134,375 |
Forfeited | (161,724) | |||
Expired | (2,526) | |||
Exercised | (230,225) | |||
Options outstanding | 9,240,067 | |||
Options vested or expected to vest | 20,043,353 | |||
Options exercisable | 9,075,709 | |||
Weighted Average Exercise Price | ||||
Options outstanding | $ 0.50 | |||
Granted | 0 | |||
Forfeited | 0.59 | |||
Expired | 0.59 | |||
Exercised | $ 0.59 | $ 0.87 | 0.59 | |
Options outstanding | 0.49 | |||
Options vested or expected to vest | 0.47 | |||
Options exercisable | $ 0.49 | |||
Weighted Average Remaining Contract Life | ||||
Options outstanding | 4 years 6 months 10 days | |||
Options vested or expected to vest | 4 years 1 month 9 days | |||
Options exercisable | 4 years 5 months 26 days | |||
Aggregate Intrinsic Value | ||||
Options outstanding | $ 4,049,496 | |||
Options vested or expected to vest | 9,351,312 | |||
Options exercisable | $ 3,993,944 |
SHARE BASED COMPENSATION (sum_2
SHARE BASED COMPENSATION (summary of the non-vested RSU activity) (Details) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested RSUs on January 1, 2018 | shares | 10,240,743 |
Granted | shares | 44,365,641 |
Vested | shares | (9,272,063) |
Forfeited | shares | (1,846,708) |
Nonvested RSUs on December 31, 2018 | shares | 43,487,613 |
Nonvested RSUs on January 1, 2018 | $ / shares | $ 0.98 |
Granted | $ / shares | 1.48 |
Vested | $ / shares | 1.43 |
Forfeited | $ / shares | 1.07 |
Nonvested RSUs on December 31, 2018 | $ / shares | $ 1.39 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Additional Information) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Daqo Group [Member] | |
Notes Payable, Related Parties, Current | $ 16.9 |
RELATED PARTY TRANSACTIONS AN_4
RELATED PARTY TRANSACTIONS AND BALANCES (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 20, 2018 | |
Related Party Transaction [Line Items] | ||||
Sales | $ 6,694,997 | $ 13,442,273 | $ 11,194,197 | |
Related party balances: | ||||
Amounts due from related parties | 815,035 | 5,799 | ||
Amounts due to related parties | 2,260,007 | 1,837,120 | ||
Discontinued Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | 2,367,657 | 8,991,640 | ||
Amounts due to related parties | 5,314,587 | 4,932,778 | ||
Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | 815,035 | 5,799 | ||
Amounts due to related parties | 2,260,007 | 1,837,120 | ||
Zhenjiang Daqo [Member] | Discontinued Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | 1,453,800 | 8,585,337 | ||
Others [Member] | Discontinued Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | 913,857 | 406,303 | ||
Amounts due to related parties | 0 | 79,959 | ||
Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 17,504,926 | 8,186,294 | 5,655,016 | |
Purchases of Raw Materials [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 345,041 | 17,651 | 129,219 | |
Rental Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expense | 1,433,577 | 1,889,414 | 1,912,059 | |
Rental Expenses [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expense | 38,633 | 37,756 | 27,997 | |
Proceeds From Interest Free Loans [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 25,744,800 | 2,696,513 | ||
Repayment of Interest Free Loans [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 36,648,480 | 2,696,513 | 10,974,807 | |
Income (Loss) from Disposal of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 478,565 | |||
Repayment of Interest Bearing Loan [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 15,495,451 | 15,059,000 | ||
Interest Expenses Related Party [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expense | 440,368 | 850,380 | ||
Interest Expenses Related Party [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expense | 440,368 | 850,380 | ||
Proceeds From Related Parties Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 104,301,423 | 63,172,079 | 126,400,842 | |
Repayment Of Related Parties Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 104,421,948 | 83,754,652 | 148,463,137 | |
Income From Sale Of Materials [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | $ 15,899 | |||
Zhengjiang Daqo Solar Co. Ltd [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Sales | $ 6,694,997 | 13,442,273 | 11,194,197 | |
Zhengjiang Daqo Solar Co. Ltd [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | $ 10,903,680 | |||
Daqo Solar Co Ltd [Member] | ||||
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 | $ 55,613,463 | 40,089,689 | 60,300,896 | |
Daqo Solar Co Ltd [Member] | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | $ 55,650,696 | 40,388,195 | 68,766,506 | |
Xinjiang Daqo Investment Co., Ltd [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | 100.00% | ||
Xinjiang Daqo Investment Co., Ltd [Member] | Rental Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expense | $ 895,192 | 874,858 | 890,168 | |
Xinjiang Daqo Investment Co., Ltd [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 3,937,440 | 14,356,000 | 56,270,085 | |
Xinjiang Daqo Investment Co., Ltd [Member] | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | $ 4,020,732 | 14,356,000 | 38,715,449 | |
Daqo New Material [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Daqo New Material [Member] | Discontinued Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | $ 5,314,587 | 4,852,819 | ||
Daqo New Material [Member] | Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 7,390,693 | |||
Daqo New Material [Member] | Rental Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expense | 499,752 | 976,800 | 993,894 | |
Daqo New Material [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 1,893,000 | 6,029,877 | 9,607,344 | |
Daqo New Material [Member] | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 1,893,000 | 10,818,493 | 12,262,592 | |
Chongqing Daqo Tailai [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due to related parties | $ 1,825,680 | 494,954 | ||
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 | $ 8,240,830 | 715,361 | 3,534,248 | |
Chongqing Daqo Tailai [Member] | Proceeds From Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 6,209,040 | 222,517 | ||
Chongqing Daqo Tailai [Member] | Repayment of Interest Free Loans [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 6,209,040 | 2,684,783 | ||
Chongqing Daqo Tailai [Member] | Income (Loss) from Disposal of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | 478,565 | |||
Chongqing Daqo Tailai [Member] | Income From Sale Of Materials [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other transactions | $ 15,899 | |||
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 | $ 1,326,634 | |||
Nanjing Daqo Electric [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Nanjing Daqo Electric [Member] | Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 1,439,332 | |||
Zhenjiang Klockner-Moeller Electrical Systems Co., Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Other Subsidiaries of Daqo Group [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | $ 185,540 | 5,799 | ||
Amounts due to related parties | 434,327 | 1,342,166 | ||
Other Subsidiaries of Daqo Group [Member] | Purchases of Fixed Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 296,887 | 80,240 | 2,120,768 | |
Other Subsidiaries of Daqo Group [Member] | Purchases of Raw Materials [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 13,688 | 17,651 | 129,219 | |
Nanjing Intelligent Apparatus Co., Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Shanghai Sailfar Electric Technology Co., Ltd. [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
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] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Zhenjiang Electric Equipment Co Ltd [Member] | Purchases of Raw Materials [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 331,353 | |||
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 | $ 6,201,243 | |||
Jiangsu Daqo ETE Electronic Systerm Co., Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 75.00% | |||
Jiangsu Daquan Kai-fan Switchgear Co., Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Nanjing Yidian Huichuang information technology Co., Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% | |||
Xinjiang Daqo Tianfu Thermoelectric Co Ltd [Member] | Continuing Operations [Member] | ||||
Related party balances: | ||||
Amounts due from related parties | $ 629,495 | $ 0 | ||
Xinjiang Daqo Tianfu Thermoelectric Co Ltd [Member] | Xinjiang Daqo Investment [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 50.00% | |||
Nanjing Daqo Automation Technology Co Ltd [Member] | Daqo Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity interest held | 100.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator used in basic and diluted earnings per share: | |||
Net income attributable to Daqo New Energy Corp. ordinary shareholders from continuing operations | $ 61,429,750 | $ 96,929,053 | $ 40,783,165 |
Income (loss) from discontinued operations, net of tax | (23,305,045) | (4,087,925) | 2,710,591 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders—basic and diluted | $ 38,124,705 | $ 92,841,128 | $ 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 | 311,715,158 | 265,070,961 | 261,742,244 |
Weighted average number of ordinary shares outstanding used in computing earnings per share—diluted | 325,506,335 | 272,926,319 | 264,817,755 |
Basic earnings per share-continuing operations | $ 0.19 | $ 0.37 | $ 0.16 |
Basic earnings (loss) per share-discontinued operations | (0.07) | (0.02) | 0.01 |
NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Basic | 0.12 | 0.35 | 0.17 |
Diluted earnings per share-continuing operations | 0.19 | 0.35 | 0.15 |
Diluted earnings (loss) per share-discontinued operations | (0.07) | (0.01) | 0.01 |
NET INCOME ATTRIBUTABLE TO DAQO NEW ENERGY CORP. PER ORDINARY SHARE—Diluted | $ 0.12 | $ 0.34 | $ 0.16 |
Outstanding employee options excluded from computation of diluted earnings per share | 263,900 | 10,899,141 | |
Employee Stock Option [Member] | |||
Denominator used in basic and diluted earnings per share: | |||
Dilutive effects of RSUs | 6,346,349 | 6,020,839 | 3,075,511 |
Restricted Stock Units (RSUs) [Member] | |||
Denominator used in basic and diluted earnings per share: | |||
Dilutive effects of RSUs | 7,444,828 | 1,834,519 | 0 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Capital commitments: | |||
Commitments outstanding for the purchase of property, plant and equipment | $ 222,700,000 | ||
Lease commitments: | |||
Lease expense | 38,633 | $ 37,756 | $ 31,076 |
2019 | $ 11,279 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 301,599,897 | $ 323,199,694 | $ 196,219,101 | ||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Concentration Risk, Percentage | 57.00% | 38.00% | 24.00% | ||
Customer A [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 115,411,965 | $ 39,219,089 | [1] | ||
Customer B [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 57,858,670 | 43,258,204 | 47,696,332 | ||
Customer C [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | [1] | $ 39,099,677 | [1] | ||
[1] | Represents less than 10% |
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I (BALANCE SHEET) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 65,419,389 | $ 53,802,946 | $ 15,987,478 | |
Prepaid expenses and other current assets | 10,335,501 | 6,689,623 | ||
Total current assets | 160,068,807 | 142,362,550 | ||
TOTAL ASSETS | 854,929,081 | 748,781,233 | ||
CURRENT LIABILITIES | ||||
Accrued expenses and other current liabilities | 9,417,702 | 10,821,785 | ||
Total current liabilities | 149,853,934 | 216,511,379 | ||
EQUITY | ||||
Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2017 and 2018; 279,214,103 shares issued and 270,918,702 shares outstanding as of December 31, 2017; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018) | 33,439 | 27,328 | ||
Additional paid in capital | 368,681,449 | 247,076,428 | ||
Retained earnings | 171,398,185 | 133,273,480 | ||
Accumulated other comprehensive income (loss) | (13,232,560) | 13,107,187 | ||
Treasury shares, at cost (4,643,150 shares as of December 31, 2017 and 2018) | (1,748,836) | (1,748,836) | ||
Total shareholders' equity | 525,131,677 | 391,735,587 | ||
TOTAL LIABILITIES AND EQUITY | $ 854,929,081 | $ 748,781,233 | ||
Ordinary shares: | ||||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | ||
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | ||
Ordinary shares, shares issued | 351,823,578 | 279,214,103 | ||
Ordinary shares, shares outstanding | 332,029,752 | 270,918,702 | ||
Treasury Stock, Shares | 4,643,150 | 4,643,150 | ||
Parent Company [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 1,487,517 | $ 4,536,809 | $ 2,943,502 | $ 2,563,083 |
Prepaid expenses and other current assets | 186,641 | 700,064 | ||
Total current assets | 1,674,158 | 5,236,873 | ||
Investments in subsidiaries | 523,650,516 | 386,872,629 | ||
TOTAL ASSETS | 525,324,674 | 392,109,502 | ||
CURRENT LIABILITIES | ||||
Accrued expenses and other current liabilities | 192,997 | 373,915 | ||
Total current liabilities | 192,997 | 373,915 | ||
EQUITY | ||||
Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2017 and 2018; 279,214,103 shares issued and 270,918,702 shares outstanding as of December 31, 2017; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018) | 33,439 | 27,328 | ||
Additional paid in capital | 368,681,449 | 247,076,428 | ||
Retained earnings | 171,398,185 | 133,273,480 | ||
Accumulated other comprehensive income (loss) | (13,232,560) | 13,107,187 | ||
Treasury shares, at cost (4,643,150 shares as of December 31, 2017 and 2018) | (1,748,836) | (1,748,836) | ||
Total shareholders' equity | 525,131,677 | 391,735,587 | ||
TOTAL LIABILITIES AND EQUITY | $ 525,324,674 | $ 392,109,502 | ||
Ordinary shares: | ||||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | ||
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | ||
Ordinary shares, shares issued | 351,823,578 | 279,214,103 | ||
Ordinary shares, shares outstanding | 332,029,752 | 270,918,702 | ||
Treasury Stock, Shares | 4,643,150 | 4,643,150 |
FINANCIAL STATEMENT SCHEDULE _2
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING EXPENSES | |||
Total operating expenses, net | $ (16,635,935) | $ (12,968,670) | $ (16,674,961) |
Income from operations | 81,477,771 | 131,079,094 | 61,135,838 |
Interest income | 1,235,873 | 464,515 | 149,259 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | 38,124,705 | 92,841,128 | 43,493,756 |
Other comprehensive (loss) income: | |||
Comprehensive income attributable to Daqo New Energy Corp. ordinary shareholders | 11,908,626 | 114,670,135 | 25,991,623 |
Parent Company [Member] | |||
OPERATING EXPENSES | |||
General and administrative | (14,513,869) | (4,987,820) | (3,175,482) |
Total operating expenses, net | (14,513,869) | (4,987,820) | (3,175,482) |
Income from operations | (14,513,869) | (4,987,820) | (3,175,482) |
Interest income | 289,773 | 0 | 0 |
Net loss before share of results of subsidiaries | (14,224,096) | (4,987,820) | (3,175,482) |
Equity in earnings of subsidiaries | 52,348,801 | 97,828,948 | 46,669,238 |
Net income attributable to Daqo New Energy Corp. ordinary shareholders | 38,124,705 | 92,841,128 | 43,493,756 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (26,216,079) | 21,829,007 | (17,502,133) |
Total other comprehensive (loss) income: | (26,216,079) | 21,829,007 | (17,502,133) |
Comprehensive income attributable to Daqo New Energy Corp. ordinary shareholders | $ 11,908,626 | $ 114,670,135 | $ 25,991,623 |
FINANCIAL STATEMENT SCHEDULE _3
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF CHANGES IN EQUITY) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | $ 394,528,067 | $ 271,728,922 | $ 241,656,490 | |
Net income | 38,124,705 | 92,841,128 | 43,493,756 | |
Share-based compensation | 13,788,049 | 4,200,273 | 2,702,089 | |
Option Exercised | $ 110,868 | 2,765,418 | 1,051,586 | |
Option Exercised, shares | 230,225 | |||
Follow-on equity offering, net of issuance costs of $6,919,202 | $ 106,600,000 | $ 106,621,643 | ||
Follow-on equity offering, net of issuance costs of $6,919,202, Shares | 51,609,475 | |||
Restricted shares vested | ||||
Acquisition of non-controlling interest | (2,326,081) | |||
Balance | 525,131,677 | 394,528,067 | 271,728,922 | |
Ordinary shares [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | $ 27,328 | $ 26,532 | $ 26,320 | |
Balance, shares | 270,918,702 | 262,956,278 | 260,836,578 | |
Share-based compensation | ||||
Option Exercised | $ 23 | $ 560 | $ 212 | |
Option Exercised, shares | 230,225 | 5,596,050 | 2,119,700 | |
Follow-on equity offering, net of issuance costs of $6,919,202 | $ 5,161 | |||
Follow-on equity offering, net of issuance costs of $6,919,202, Shares | 51,609,475 | |||
Restricted shares vested | $ 927 | $ 236 | ||
Restricted shares vested, Shares | 9,271,350 | 2,366,374 | ||
Acquisition of non-controlling interest | ||||
Balance | $ 33,439 | $ 27,328 | $ 26,532 | |
Balance, shares | 332,029,752 | 270,918,702 | 262,956,278 | |
Treasury Stock [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | $ (1,748,836) | $ (1,748,836) | $ (1,748,836) | |
Share-based compensation | ||||
Option Exercised | ||||
Follow-on equity offering, net of issuance costs of $6,919,202 | ||||
Restricted shares vested | ||||
Acquisition of non-controlling interest | ||||
Balance | (1,748,836) | (1,748,836) | (1,748,836) | |
Additional paid-in capital [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | 247,076,428 | 240,111,533 | 236,358,070 | |
Share-based compensation | 13,788,049 | 4,200,273 | 2,702,089 | |
Option Exercised | 110,845 | 2,764,858 | 1,051,374 | |
Follow-on equity offering, net of issuance costs of $6,919,202 | 106,616,482 | |||
Restricted shares vested | (927) | (236) | ||
Acquisition of non-controlling interest | 1,090,572 | |||
Balance | 368,681,449 | 247,076,428 | 240,111,533 | |
Retained earnings (accumulated losses) [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | 133,273,480 | 40,432,352 | (3,061,404) | |
Share-based compensation | ||||
Option Exercised | ||||
Follow-on equity offering, net of issuance costs of $6,919,202 | ||||
Restricted shares vested | ||||
Acquisition of non-controlling interest | ||||
Balance | 171,398,185 | 133,273,480 | 40,432,352 | |
Accumulated other comprehensive income (loss) [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | 13,107,187 | (8,721,820) | 8,780,313 | |
Share-based compensation | ||||
Option Exercised | ||||
Follow-on equity offering, net of issuance costs of $6,919,202 | ||||
Restricted shares vested | ||||
Acquisition of non-controlling interest | (123,668) | |||
Balance | (13,232,560) | 13,107,187 | (8,721,820) | |
Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | 391,735,587 | 270,099,761 | 240,354,463 | |
Net income | 38,124,705 | 92,841,128 | 43,493,756 | |
Other comprehensive loss | (26,216,079) | 21,829,007 | (17,502,133) | |
Share-based compensation | 13,788,049 | 4,200,273 | 2,702,089 | |
Option Exercised | 110,868 | $ 2,765,418 | 1,051,586 | |
Follow-on equity offering, net of issuance costs of $6,919,202 | $ 106,621,643 | |||
Restricted shares vested, Shares | 0 | 0 | ||
Acquisition of non-controlling interest | $ 966,904 | |||
Balance | 525,131,677 | $ 391,735,587 | 270,099,761 | |
Parent Company [Member] | Ordinary shares [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | $ 27,328 | $ 26,532 | $ 26,320 | |
Balance, shares | 270,918,702 | 262,956,278 | 260,836,578 | |
Net income | $ 0 | $ 0 | $ 0 | |
Other comprehensive loss | 0 | 0 | 0 | |
Share-based compensation | 0 | 0 | 0 | |
Option Exercised | $ 23 | $ 560 | $ 212 | |
Option Exercised, shares | 230,225 | 5,596,050 | 2,119,700 | |
Follow-on equity offering, net of issuance costs of $6,919,202 | $ 5,161 | |||
Follow-on equity offering, net of issuance costs of $6,919,202, Shares | 51,609,475 | |||
Restricted shares vested | $ 927 | $ 236 | ||
Restricted shares vested, Shares | 9,271,350 | 2,366,374 | ||
Acquisition of non-controlling interest | $ 0 | |||
Balance | $ 33,439 | $ 27,328 | $ 26,532 | |
Balance, shares | 332,029,752 | 270,918,702 | 262,956,278 | |
Parent Company [Member] | Treasury Stock [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | $ (1,748,836) | $ (1,748,836) | $ (1,748,836) | |
Net income | 0 | 0 | 0 | |
Other comprehensive loss | 0 | 0 | 0 | |
Share-based compensation | 0 | 0 | 0 | |
Option Exercised | $ 0 | $ 0 | 0 | |
Follow-on equity offering, net of issuance costs of $6,919,202, Shares | 0 | |||
Restricted shares vested, Shares | 0 | 0 | ||
Acquisition of non-controlling interest | $ 0 | |||
Balance | (1,748,836) | $ (1,748,836) | (1,748,836) | |
Parent Company [Member] | Additional paid-in capital [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | 247,076,428 | 240,111,533 | 236,358,070 | |
Net income | 0 | 0 | 0 | |
Other comprehensive loss | 0 | 0 | 0 | |
Share-based compensation | 13,788,049 | 4,200,273 | 2,702,089 | |
Option Exercised | 110,845 | 2,764,858 | 1,051,374 | |
Follow-on equity offering, net of issuance costs of $6,919,202 | $ 106,616,482 | |||
Restricted shares vested | (236) | |||
Restricted shares vested, Shares | (927) | |||
Acquisition of non-controlling interest | $ 1,090,572 | |||
Balance | 368,681,449 | 247,076,428 | 240,111,533 | |
Parent Company [Member] | Retained earnings (accumulated losses) [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | 133,273,480 | 40,432,352 | (3,061,404) | |
Net income | 38,124,705 | 92,841,128 | 43,493,756 | |
Other comprehensive loss | 0 | 0 | 0 | |
Share-based compensation | 0 | 0 | 0 | |
Option Exercised | $ 0 | $ 0 | 0 | |
Follow-on equity offering, net of issuance costs of $6,919,202, Shares | 0 | |||
Restricted shares vested, Shares | 0 | 0 | ||
Acquisition of non-controlling interest | $ 0 | |||
Balance | 171,398,185 | $ 133,273,480 | 40,432,352 | |
Parent Company [Member] | Accumulated other comprehensive income (loss) [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Balance | 13,107,187 | (8,721,820) | 8,780,313 | |
Net income | 0 | 0 | 0 | |
Other comprehensive loss | (26,216,079) | 21,829,007 | (17,502,133) | |
Share-based compensation | 0 | 0 | 0 | |
Option Exercised | $ 0 | $ 0 | 0 | |
Follow-on equity offering, net of issuance costs of $6,919,202, Shares | 0 | |||
Restricted shares vested, Shares | 0 | 0 | ||
Acquisition of non-controlling interest | $ (123,668) | |||
Balance | $ (13,232,560) | $ 13,107,187 | $ (8,721,820) |
FINANCIAL STATEMENT SCHEDULE _4
FINANCIAL STATEMENT SCHEDULE I (STATEMENT OF CASH FLOWS) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES | ||||
Net income | $ 38,124,705 | $ 92,841,128 | $ 43,493,756 | |
Share-based compensation | 13,788,049 | 4,200,273 | 2,702,089 | |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Prepaid expenses and other current assets | (4,699,699) | 496,485 | 2,895,291 | |
Accrued expense and other current liabilities | (918,399) | 4,581,224 | 805,730 | |
Income tax payable | (7,314,062) | 7,253,601 | 4,420,313 | |
Net cash provided by operating activities | 95,553,040 | 142,704,394 | 98,671,937 | |
INVESTING ACTIVITIES | ||||
Net cash used in investing activities | (164,720,305) | (67,900,571) | (68,060,723) | |
FINANCING ACTIVITIES | ||||
Proceeds from follow-on equity offering | 113,540,845 | |||
Insurance cost for follow-on equity offering | $ (6,900,000) | (6,919,202) | ||
Proceeds from options exercised | 686,596 | 2,238,854 | 1,051,586 | |
Net cash provided by (used in) financing activities | 86,711,890 | (37,354,319) | (30,279,523) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 22,453,722 | 40,785,219 | (1,671,779) | |
Cash, cash equivalents and restricted cash at the beginning of the year | 53,802,946 | 15,987,478 | ||
Cash and cash equivalents | 65,419,389 | 53,802,946 | 15,987,478 | |
Parent Company [Member] | ||||
OPERATING ACTIVITIES | ||||
Net income | 38,124,705 | 92,841,128 | 43,493,756 | |
Equity in earnings of subsidiaries | (52,348,801) | (97,828,948) | (46,669,238) | |
Share-based compensation | 13,788,049 | 4,200,273 | 2,702,089 | |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Prepaid expenses and other current assets | (62,305) | 50,059 | (29,976) | |
Accrued expense and other current liabilities | (80,418) | 91,941 | (58,806) | |
Income tax payable | 0 | 0 | (108,992) | |
Net cash provided by operating activities | (578,770) | (645,547) | (671,167) | |
INVESTING ACTIVITIES | ||||
Capital contributed to subsidiaries | (109,778,761) | 0 | 0 | |
Net cash used in investing activities | (109,778,761) | 0 | 0 | |
FINANCING ACTIVITIES | ||||
Proceeds from follow-on equity offering | 113,540,845 | 0 | 0 | |
Insurance cost for follow-on equity offering | (6,919,202) | 0 | 0 | |
Proceeds from options exercised | 686,596 | 2,238,854 | 1,051,586 | |
Net cash provided by (used in) financing activities | 107,308,239 | 2,238,854 | 1,051,586 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (3,049,292) | 1,593,307 | 380,419 | |
Cash, cash equivalents and restricted cash at the beginning of the year | 4,536,809 | 2,943,502 | 2,563,083 | |
Cash and cash equivalents | $ 1,487,517 | $ 4,536,809 | $ 2,943,502 |