You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the historical consolidated financial statements of our company for the years ended December 31, 2023 2024 and 2025 and related notes included elsewhere in this annual report on Form 20-F. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this annual report. A. OPERATING RESULTS This annual report on Form 20-F contains forward-looking statements. These statements are made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “may,” “intend,” “it is possible” “subject to” and similar statements. Among other things, the sections titled “Item 3. Key Information-D. Risk Factors” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects,” as well as our strategic and operational plans, contain forward-looking statements. We may also make written or oral forward-looking statements in our filings with the Securities and Exchange Commission, in our annual report to shareholders, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material adverse effect on our financial condition and results of operations for one or more prior periods. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any forward-looking statement in this annual report on Form 20-F, including the following: the demand for photovoltaic products and the development of photovoltaic technologies; global supply and demand for polysilicon; alternative technologies in cell manufacturing; our ability to significantly expand our polysilicon production capacity and output; the reduction in or elimination of government subsidies and economic incentives for solar energy applications; our ability to lower our production costs; and changes in the political and regulatory environment. All information provided in this annual report on Form 20-F and in the exhibits is as of the date of this annual report on Form 20-F, and we do not undertake any obligation to update any such information, except as required under applicable law. Overview We are a leading high-purity polysilicon manufacturer based in China currently with an annual production capacity of 305,000 MT. We believe our production cost for polysilicon is one of the lowest and our product quality is one of the best in China. We strive to improve our polysilicon production efficiency and to increase our output through technological improvements, adoption of process innovation and refinement, as well as equipment enhancement. We began our Phase 4B project in March 2021 and completed the construction of the project in December 2021. We ramped it up to its full capacity of 35,000 MT in January 2022, which increased our total annual production capacity to 105,000 MT. We began the construction of our Phase 5A project in Baotou in March 2022 and completed it in April 2023. We ramped it up to its full capacity in June 2023, which increased our total annual production capacity to 205,000 MT. We began the construction of our Phase 5B project in March 2023 and began production in May 2024, which increased our total annual production capacity to 305,000 MT. In addition, we began the construction of a 1,000 MT polysilicon project for the semiconductor industry in March 2022 and began trial production in May 2024. We currently sell polysilicon to China-based photovoltaic product manufacturers. The majority of our sales are made under framework contracts, with the prices to be determined at the time when specific sales orders are made. As of December 31, 2025, our major polysilicon customers included operating entities of major silicon wafer producers and vertical integrated solar manufacturers. We expanded to the downstream photovoltaic manufacturing business by commencing commercial production of wafers in July 2011. In September 2018, we decided to discontinue our operations in Chongqing, including wafer manufacturing, which have since been recognized as our discontinued operations. By the end of 2020, Chongqing Daqo had completely ceased operations. 56 Table of Contents We have achieved considerable developments since we commenced commercial production of polysilicon in July 2008. We produced 197,831 MT, 205,068 MT and 123,652 MT of polysilicon and sold 200,002 MT, 181,362 and 126,707 MT in 2023, 2024 and 2025, respectively. We generated revenues of $2,307.7 million, $1,029.1 million and $665.4 million in 2023, 2024 and 2025, respectively. We had a gross profit of $920.7 million in 2023 and a gross loss of $212.9 million and $137.9 million in 2024 and 2025, respectively. Our gross margin was 39.9%, negative 20.7% and negative 20.7% in 2023, 2024 and 2025 respectively. We achieved net income attributable to Daqo New Energy Corp. shareholders of $429.5 million in 2023 and net loss attributable to Daqo New Energy Corp. shareholders of $345.2 million in 2024 and $170.5 million in 2025. Key Factors Affecting Our Results of Operations The following are key factors that affect our financial condition and results of operations and are important to understand our business: ● demand for photovoltaic products, including government incentives to promote the usage of solar energy; ● product prices; ● our product mix; ● our production capacity and utilization; and ● our production costs, in particular the cost of metallurgical grade silicon and electricity. Demand for photovoltaic products Our business and revenue growth are, in part, dependent on the demand for photovoltaic products. The photovoltaic industry remains at a relatively early stage of development and it is uncertain whether solar energy will be widely adopted. Although demand for photovoltaic products has grown significantly in recent years, the global economic slowdown and turmoil in the global financial markets, including the impact of COVID-19; slowdown of the Chinese economy; rising geopolitical conflicts, such as the Russia-Ukraine war and related sanctions against Russia and energy crisis, and the Israel-Hamas war and other conflicts in the Middle East; and higher inflation and relatively high interest rate levels despite recent interest rate cuts, have made solar energy less cost competitive and less attractive as an alternative source of energy. Demand for photovoltaic products is driven, in part, by government incentives that make the economic cost of solar power competitive with the cost of traditional and other forms of energy. We believe that the near-term growth of the market for solar energy applications depends in large part on the availability and size of government subsidies and economic incentives. Reduction in or elimination of government subsidies and economic incentives may hinder the growth of this market or result in lower selling prices for solar energy products, which could cause our revenues to decline. According to industry research, global solar PV installations in 2025 totaled approximately 580 GW, representing an increase of 9.4% from 530 GW in 2024. The annual newly added solar PV installations in China were estimated to be approximately 317 GW in 2025, compared to 278 GW in 2024 and 217 GW in 2023. China continued to rank as the largest solar PV market globally. According to several solar PV market reports and our estimation, we currently expect global PV solar installations in 2026 to be approximately 500 to 667 GW. Product prices The selling prices of our photovoltaic products are volatile and cannot be predicted with certainty. Our gross margin decreased to 39.9% in 2023, primarily due to decreases in ASPs of polysilicon. In 2024, our gross margin decreased to negative 20.7%, primarily due to lower ASPs and inventory impairment. In 2025, our gross margin remained stable at negative 20.7%. 57 Table of Contents Company’s quarterly polysilicon external sales volume and ASPs from 2020 to 2025 (VAT excluded): Product mix The proportion of our revenues that are generated from the sales of other photovoltaic products, also referred to as product mix, affects our revenues and profitability. We generate revenues primarily from sales of polysilicon. We also historically generated revenues from other products. For example, we generated revenue from sales of modules for the first three quarters of 2012 before we sold 100% of our equity interests of Nanjing Daqo in September 2012. We also generated revenue from sales of wafers produced in our facilities in Chongqing from 2011 to 2018, when we decided to discontinue our wafer manufacturing business. Since our discontinuation of the wafer manufacturing business, we have focused on our core business of polysilicon manufacturing, which is currently the only segment to generate revenue. Our production capacity and utilization We focus on our core businesses and are committed to expanding our capacity and further improving our operational efficiency, cost structure and product quality by adopting new technologies and optimizing the manufacturing processes. We began our Phase 4B project in March 2021 and completed the construction of the project in December 2021. We ramped it up to its full capacity of 35,000 MT and increased our total annual production capacity to 105,000 MT in January 2022. Our Phase 5 project of polysilicon for the solar industry in Baotou comprises Phase 5A and Phase 5B. We began the construction of our Phase 5A project in March 2022 and completed it in April 2023. We ramped it up to its full capacity in June 2023, which increased our total annual production capacity to 205,000 MT. We began the construction of our Phase 5B project in March 2023 and began production in May 2024, which increased our total annual production capacity to 305,000 MT. We also began the construction of a 1,000 MT polysilicon project for the semiconductor industry in March 2022 and began trial production in May 2024. 58 Table of Contents Our polysilicon production costs consist primarily of the costs of electricity and other utilities, raw materials, labor and depreciation. In our polysilicon manufacturing facilities in Xinjiang, because of the abundant coal resources, the local electricity rate is much lower than that in most areas in China. This cost advantage, along with our operational expertise, enables us to become one of the lowest cost producers around the globe. We have implemented additional measures to reduce our production costs through technology, process and equipment improvement. During 2021, our production cost increased as compared to 2020, primarily due to increasing cost of raw materials. However, if the impact of higher raw material cost is excluded, we still achieved lower production cost, primarily due to our efforts in additional energy savings and improvement on manufacturing efficiency. During 2022, our production cost decreased as compared to 2021, primarily due to lower raw material cost and improved operational efficiency. Effective cost-reduction measures will have a direct impact on our financial condition and results of operations. During 2023, our production cost decreased to $6.78/kg as compared to 2022, primarily due to continued improvement in operational efficiency and greater economies of scale. During 2024, our production cost decreased to $6.44/kg as compared to 2023, primarily due to continued improvement in our operational efficiency, lower cost of raw materials, and temporary shut-down of our older production lines in light of market downturns. Our production cost increased from 2024 to $6.61/kg in 2025, primarily due to higher depreciation resulting from the decrease in the capacity utilization rate. Indicative polysilicon production cost breakdown in Q4 2025: Components of Results of Operations Revenues Our revenues are derived from the sale of polysilicon. We plan to continue to focus on our current polysilicon production business to further improve operation efficiency, cost structure and product quality. 59 Table of Contents We commenced polysilicon production in 2008. We produced 197,831 MT, 205,068 MT and 123,652 MT of polysilicon and sold 200,002 MT, 181,362 MT and 126,707 MT of polysilicon in 2023, 2024 and 2025, respectively. Our polysilicon selling prices are directly affected by global supply and demand conditions. In 2023, the annual average selling price decreased by 66.7% as compared to 2022, primarily due to new production capacities and oversupply of polysilicon in the market. In 2024, the annual average selling price decreased by 50.7% as compared to 2023, primarily due to the continued oversupply in the market. In 2025, the annual average selling price decreased by 7.3% as compared to 2024, primarily due to the continued market oversupply, although this decline was mitigated by China’s anti-involution initiatives since the second half of 2025. We generated revenues of $2,307.7 million, $1,029.1 million and $665.4 million in 2023, 2024 and 2025, respectively. We achieved net income attributable to our shareholders of $429.5 million in 2023 and net loss attributable to our shareholders of $345.2 million in 2024 and $170.5 million in 2025. We have entered into framework agreements with some of our customers. These contracts typically contain binding terms related to the sales volume of our polysilicon during the contract term. The pricing terms are typically agreed upon between us and our customers based on the prevailing market prices when specific sales orders are placed. Such pricing determination method has caused, and is expected to continue to cause, fluctuations in our revenues and results of operations. In 2023, our top three customers accounted for approximately 22.7%, 22.7% and 19.0% of our revenues, respectively, and the three customers in aggregate accounted for approximately 64.4% of our revenues. In 2024, our top three customers accounted for approximately 21.5%, 16.3% and 16.0% of our revenues, respectively, and the three customers in aggregate accounted for approximately 53.8% of our revenues. In 2025, our top three customers accounted for approximately 38.9%, 18.1% and 6.5% of our revenues, respectively, and the three customers in aggregate accounted for approximately 63.5% of our revenues. Cost of revenues Our cost of revenues primarily consists of: ● depreciation of property, plant and equipment; ● electricity and other utilities, such as steam, water and natural gas; ● raw materials, including metallurgical grade silicon, liquid chlorine, nitrogen, calcium oxide and hydrogen; and ● direct labor, including salaries and benefits for personnel directly involved in production activities. We began our Phase 4B project in March 2021 and completed the construction of the project in December 2021. We ramped it up to its full capacity of 35,000 MT in January 2022. We began the construction of our Phase 5A project in March 2022, completed it in April 2023 and ramped it up to its full capacity in June 2023. We began the construction of our Phase 5B project in March 2023 and began production in May 2024, which increased our total annual production capacity to 305,000 MT. We also began the construction of a 1,000 MT polysilicon project for the semiconductor industry in March 2022 and began trial production in May 2024. Operating expenses/income Our operating expenses include selling, general and administrative expenses and research and development expenses, which are partially offset by other operating income as described below. Selling, general and administrative expenses Our selling, general and administrative expenses consist primarily of share-based compensation, salaries and benefits for our administrative, finance and sales personnel, packaging and shipping costs, consulting fee and taxes. We expect that the amount of our selling, general and administrative expenses will fluctuate based on changes in our sales volume, our sales efforts, and the number of our personnel, and we expect to continue incurring professional expenses to support our operations as a listed company in the United States. Long-lived assets impairment Our long-lived assets impairment is mainly related to our older polysilicon production facilities, primarily attributable to the continuous downward trend in the polysilicon selling prices that impaired the recoverability of carrying amounts of these assets. 60 Table of Contents Allowance for expected credit loss Our allowance for expected credit loss is primarily attributable to uncertainties in recoverability of long-aged receivables. Research and development expenses Our research and development expenses consist primarily of costs of raw materials used in research and development activities, salaries and employee benefits for research and development personnel, and equipment costs relating to the design, development, testing and enhancement of our production process. We expect our research and development expenses to increase in the future as we continue to hire additional research and development personnel and focus on improvement of process technologies for our products, and expand our polysilicon manufacturing business. Our research and development expenses in 2023, 2024 and 2025 primarily resulted from continuous technology improvement projects for polysilicon production. Other operating income Our other operating income reflects unrestricted government subsidies that we receive from time to time, including financial incentives from the Xinjiang and Inner Mongolia local governments, which are unrestricted as to usage and can be utilized in any manner we deem appropriate. We have utilized, and expect to continue to utilize, these subsidies to fund general operating expenses. We record unrestricted government subsidies as other operating income when we receive them. The amount and timing of subsidies cannot be predicted with certainty. Interest income and expense Our interest income represents interest on our cash balances. Our interest expenses relate primarily to our short-term and long-term borrowings. Taxation We are an exempted company incorporated in the Cayman Islands and are not subject to tax in this jurisdiction. Under the current Hong Kong Inland Revenue Ordinance, the Company’s subsidiary domiciled in Hong Kong has applied a two-tiered profits tax rate regime which is applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first HK$2 million of profits of corporations is 8.25%, while profits above that amount is subject to the tax rate of 16.5%. Our Chinese subsidiaries are foreign invested enterprises in China. Under the EIT Law amended in December 2018 and its implementation rules, the Chinese enterprise income tax rate is 25%. However, qualified foreign invested enterprises located in central or western China may enjoy preferential tax rate under a series of national policies adopted to encourage investment in central and western China. Under the EIT Law, an enterprise established outside of China with its “de facto management bodies” within China may be considered a resident enterprise for Chinese tax purposes and be subject to the enterprise income tax at the rate of 25% on its global income. The implementation rules of the EIT Law provide that the term “de facto management bodies” refers to management bodies which have material management and control over all aspects of the business, including production, operations, personnel, finance, and assets. It is unclear whether Chinese tax authorities would determine that, notwithstanding our status as the Cayman Islands holding company of our operating business in China, we should be classified as a resident enterprise. Currently, substantially all of our income is already China-source income subject to Chinese taxes. However, a portion of the net proceeds received from our initial public offering were deposited into interest bearing bank accounts. Xinjiang Daqo is a foreign-invested enterprise established on February 22, 2011, located in Shihezi Economic Development Area in Xinjiang Autonomous Region. Inner Mongolia Daqo New Energy is a subsidiary of Xinjiang Daqo established on October 25, 2021, located in Baotou in Inner Mongolia Autonomous Region. According to Announcement No.23 [2020] of the Ministry of Finance, State Taxation Administration and National Development and Reform Commission, Xinjiang Daqo and Inner Mongolia Daqo New Energy were established in western China and meet certain requirements for a preferential tax rate under the announcement, and therefore are entitled to a preferential tax rate of 15% until December 31, 2030. During the years ended December 31, 2023, 2024 and 2025, Xinjiang Daqo and Inner Mongolia Daqo New Energy were entitled to a preferential tax rate of 15%. Other PRC subsidiaries are subject to the statutory rate of 25%. 61 Table of Contents Under the current EIT Law and implementation regulations issued by the PRC State Council, an income tax rate of 10% is applicable to interest and dividends payable to investors that are “non-resident enterprises”, which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such interest or dividends have their sources within the PRC. In accordance with applicable accounting principles of ASC 740-30, a deferred tax liability shall be recorded for taxable temporary differences attributable to the excess of financial reporting basis over tax basis of an investment in a foreign subsidiary, except for the indefinite reinvestment exception. Before Xinjiang Daqo’s initial public offering in China in 2021, we determined that the undistributed earnings of Xinjiang Daqo had been and would be indefinitely reinvested, and no deferred tax liability was recognized on the undistributed earnings of Xinjiang Daqo. Upon the completion of Xinjiang Daqo’s IPO in 2021, Xinjiang Daqo’s dividends distribution policy changed to that its accumulated dividends distributed in cash in the recent three years must not be less than 30% of its average annual distributable profits in the past three years, to be compliant with PRC listing rules. That means, no less than 10% of its annual attributable profit would be distributed during each of the recent three years since 2022. We recorded liabilities for withholding income tax based on an estimate that 15.50% of distributable profit from Xinjiang Daqo and its subsidiaries for the years ended December 31, 2023 would be distributed, and the remaining distributable profit will be used indefinitely for reinvestments within the PRC. For the years ended December 31, 2024 and 2025, Xinjiang Daqo recorded net losses and therefore did not have any distributable profit. Pursuant to the Interim Regulations on Value Added Tax and their implementation rules, starting from May 1, 2018, all entities and individuals that are engaged in the sale of goods, the provision of repairs and replacement services or the importation of goods in China are generally required to pay value-added tax, or VAT, at a rate of 16% of the gross sales proceeds received, less any deductible VAT already paid or borne by the taxpayer. On March 20, 2019, the Ministry of Finance, SAT and the General Administration of Customs jointly promulgated the Announcement on Relevant Policies for Deepening Value-Added Tax Reform, pursuant to which, gross proceeds from the sale of goods, the provision of repairs and replacement services or the importation of goods are generally subject to a VAT rate of 13% effective from April 1, 2019. When exporting certain goods, excluding polysilicon currently, the exporter is entitled to VAT refund, which amount will be a portion of or all of the VAT that it has already paid or borne. For our sales of polysilicon products, we are subject to the 13% VAT without any VAT refunds for such sales after April 1, 2019. The Interim Regulations on Value Added Tax and their implementation rules have been repealed by the Value-Added Tax Law of the People’s Republic of China (promulgated on December 25, 2024 and effective from January 1, 2026) and its Regulations for the Implementation (promulgated on December 25, 2025 and effective from January 1, 2026). On January 8, 2026, the Ministry of Finance and State Administration of Taxation promulgated Announcement on Adjusting the Export Tax Rebate Policies for Photovoltaic and Other Products, effective from April 1, 2026, which announced that as of April 1, 2026, the value-added tax (VAT) export tax rebate for photovoltaic and other products shall be canceled. 62 Table of Contents Results of Operations The following table sets forth a summary of our consolidated statements of operations for the periods. Our historical results presented below are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ US$ in thousands Revenues 2,307,695 1,029,080 665,415 Cost of revenues (1,387,045) (1,242,012) (803,266) Gross profit (loss) 920,650 (212,932) (137,851) Operating income (expenses): ​ ​ ​ Selling, general and administrative expenses (213,241) (143,089) (118,224) Long-lived assets impairment ​ — ​ (175,627) ​ — Allowance for expected credit loss ​ — ​ (18,072) ​ (18,497) Research and development expenses (10,116) (4,559) (2,584) Other operating (expenses) income, net 86,137 (9,813) 6,921 Total operating expenses, net (137,220) (351,160) (132,384) Income (expense) from operations 783,430 (564,092) (270,235) Interest income, net 52,302 30,223 9,029 Exchange gain (loss) (17,367) (2,378) 31 Investment income, net ​ 109 ​ 18,186 ​ 24,058 Income (loss) before income taxes 818,474 (518,061) (237,117) Income tax (expense) benefit (165,588) 69,907 21,034 Net income (loss) 652,886 (448,154) (216,083) Net income (loss) attributable to non-controlling interest 223,341 (102,939) (45,569) Net income (loss) attributable to Daqo New Energy Corp.’s ordinary shareholders 429,545 (345,215) (170,514) ​ Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Revenue. The revenue was $665.4 million in 2025, representing a 35.3% decrease from $1,029.1 million in 2024, primarily due to lower sales volume and lower polysilicon ASPs. All the polysilicon sold in 2024 and 2025 was manufactured in our Xinjiang and Inner Mongolia facilities. Our sales volume decreased by 30.1% from 181,362 MT in 2024 to 126,707 MT in 2025. Our annual average selling prices decreased by 7.3% from $5.66/kg in 2024 to $5.25/kg in 2025. Cost of revenue. The cost of revenue was $803.3 million in 2025, representing a 35.3% decrease from $1,242.0 million in 2024. The decrease in cost of revenue from product sales was primarily attributable to lower sales volume, our continued improvement in operational efficiency and production process, and the cost reduction of raw materials. Gross loss. We had a gross loss of $137.9 million in 2025, representing a 35.3% decrease from gross loss of $212.9 million in 2024. Selling, general and administrative expenses. Our selling, general and administrative expenses for continuing operations decreased to $118.2 million in 2025 from $143.1 million in 2024, primarily due to the reduction in non-cash share-based compensation cost related to our share incentive plan, which was $55.8 and $72.4 million in 2025 and 2024, respectively. Long-lived assets impairment. We had long-lived assets impairment decreased from $175.6 million in 2024 to nil in 2025, mainly because the polysilicon selling prices rebounded substantially in 2025, which enhanced the recoverability of the carrying amount of our long-lived assets. Allowance for expected credit loss. Our allowance for expected credit loss increased from $18.1 million in 2024 to $19.3 million in 2025, mainly due to uncertainties in the recoverability of long-aged receivables. Research and development expenses. Our research and development expenses were $2.6 million in 2025, compared to $4.6 million in 2024. The research and development expenses vary from period to period reflecting the R&D activities that occur in such period. 63 Table of Contents Other operating (expenses) income, net. Other operating income was $6.9 million in 2025, as compared to other operating expenses of $9.8 million in 2024. Our other operating income in 2025 was mainly attributable to government subsidies. Our other operating expenses in 2024 were primarily attributable to loss of disposal on fixed assets. Interest income, net. Our net interest income decreased from $30.2 million in 2024 to $9.0 million in 2025. The decrease in interest income was primarily due to lower cash at bank balance as well as lower bank interest rates. Income tax benefit. Income tax benefit decreased from $69.9 million in 2024 to $21.0 million in 2025, primarily because our loss recognized in 2025 was lower than that in 2024. Net loss. As a result of the foregoing, net loss decreased from $448.2 million in 2024 to $216.1 million in 2025. Net loss attributable to our shareholders. As a result of the factors described above, our net loss decreased from $345.2 million in 2024 to $170.5 million in 2025. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue. The revenue was $1,029.1million in 2024, representing a 55.4% decrease from $2,307.7 million in 2023, primarily due to significantly lower polysilicon ASPs and lower sales volume. All the polysilicon sold in 2023 was manufactured in our Xinjiang facilities, and the polysilicon sold in 2024 was manufactured in our Xinjiang and Inner Mongolia facilities. Our external sales volume decreased by 9.3% from 200,002 MT in 2023 to 181,362 MT in 2024. Our annual average selling prices decreased by 50.7% from $11.48/kg in 2023 to $5.66/kg in 2024. Cost of revenue. The cost of revenue was $1,242.0 million in 2024, representing a 10.5% decrease from $1,387.0 million in 2023. The decrease in cost of revenue from product sales was primarily attributable to lower sales volume, as well as continued improvement in our operational efficiency and production process and the cost reduction in raw materials. Gross profit (loss). We had a gross loss of $212.9 million in 2024, as compared with a gross profit of $920.7 million in 2023. Selling, general and administrative expenses. Our selling, general and administrative expenses for continuing operations decreased to $143.1 million in 2024 from $213.2 million in 2023, primarily due to the reduction in non-cash share-based compensation cost related to our share incentive plan, which was $72.4 million and $121.0 million in 2024 and 2023, respectively. Long-lived assets impairment. While we did not have this item in 2023, we had long-lived assets impairment of $175.6 million in 2024, mainly related to our older polysilicon facilities. Our long-lived assets impairment in 2024 was mainly because the continuous downward trend of the polysilicon selling prices impaired the recoverability of the carrying amounts of these assets. Allowance for expected credit loss. Our allowance for expected credit loss was $18.1 million in 2024, mainly due to uncertainties in the recoverability of long-aged receivables. We did not have allowance for expected credit loss in 2023. Research and development expenses. Our research and development expenses were $4.6 million in 2024, compared to $10.1 million in 2023. The research and development expenses vary from period to period reflecting the R&D activities that occur in such period. Other operating (expenses) income, net. Other operating expenses were $9.8 million in 2024, compared to other operating income of $86.1 million in 2023. Our other operating expenses in 2024 were primarily attributable to loss of disposal on fixed assets. Our other operating income in 2023 were mainly attributable government subsidies. Interest income, net. Our net interest income was $30.2 million in 2024, compared to net interest income of $52.3 million in 2023. The decrease in interest income was primarily due to lower cash at bank balance as well as lower bank interest rates. Income tax (expense) benefit. Income tax benefit were $69.9 million in 2024, compared to income tax expense of $165.6 million in 2023, primarily because we recorded a loss before income taxes. Net income (loss). As a result of the foregoing, net loss was $448.2 million in 2024, compared to net income of $652.9 million in 2023. Net income (loss) attributable to our shareholders. As a result of the factors described above, we had net loss attributable to our shareholders of $345.2 million in 2024, compared to net income of $429.5 million in 2023. 64 Table of Contents B. Liquidity and Capital Resources Liquidity Our cash, cash equivalents and restricted cash decreased by $472.4 million during 2023, $2,009.6 million during 2024, and $58.1 million during 2025. Net cash provided by operating activities was $1,616.0 million in 2023 and $56.1 million in 2025, and net cash used in operating activities was $435.4 million in 2024. Net cash used in investing activities was $1,196.0 million, $1,480.8 million and $134.2 million in 2023, 2024 and 2025, respectively. Net cash used in financing activities was $795.4 million, $47.4 million and $0.9 million in 2023, 2024 and 2025, respectively. We believe that our cash, cash equivalents, and fixed term deposits will be sufficient to meet our working capital and capital expenditure needs that will arise in 2026 and beyond. The following significant developments in 2025 and the first quarter of 2026 have impacted our liquidity or are expected to impact our liquidity: ● As of December 31, 2025, our current assets exceeded our current liabilities by $2,110.3 million, and our amounts due to related parties of $5.1 million were included in our current liabilities. As of December 31, 2025, we had cash, cash equivalents and restricted cash of $980.3 million and fixed-term deposits of $1,035.6 million. We did not have any bank borrowings as of the same date. As of December 31, 2025, commitments outstanding for the purchases of property, plant and equipment approximated $70.9 million, which will be due subsequent to our receipt of the property, plant and equipment we purchased. ● In December 2021, we entered into a strategic cooperation framework agreement with Baotou City to build polysilicon projects for the solar industry with a total annual production capacity of 200,000 MT (i.e., our Phase 5 expansion project) and for the semiconductor industry with a total annual production capacity of 21,000 MT, silicon metal projects with a total annual production capacity of 300,000 MT and silicone projects with a total annual production capacity of 200,000 MT in Baotou City, Inner Mongolia. These projects will be conducted in several phases. In the first phase, we began the construction of our Phase 5A project, a 100,000 MT polysilicon project for the solar industry, in March 2022 and completed it in April 2023. We began the construction of a 1,000 MT polysilicon project for the semiconductor industry in March 2022 and began production in May 2024. In the second phase, we began the construction of our Phase 5B project, a 100,000 MT polysilicon project for the solar industry, in March 2023 and began production in May 2024. As of December 31, 2025, we had spent a total of RMB19.6 billion ($2.8 billion) on the above projects, and we estimate our total investments for the above projects of the first and second phases in Baotou City to be approximately RMB21.6 billion ($3.1 billion). Given adverse market conditions, we currently do not expect to incur material capital expenditures in the near future. ● In July 2024, our board of directors approved a $100 million share repurchase program to repurchase up to US$100 million worth of our issued and outstanding ordinary shares or ADSs, effective until June 30, 2025. In August 2025, our board of directors approved a $100 million share repurchase program to repurchase up to US$100 million worth of our issued and outstanding ordinary shares or ADSs, effective until December 31, 2026. We have not repurchased our ordinary shares or ADSs pursuant to these share repurchase programs. The timing of repurchase, number of shares repurchased and prices paid will depend upon our operations and market conditions, as well as corporate governance and regulatory restrictions. Based on the above factors, we believe that adequate sources of liquidity will exist to fund our working capital and capital expenditure requirements, and other liabilities as they become due during the twelve-month period after the date of this annual report and in the long term. 65 Table of Contents Cash Flows and Working Capital Polysilicon production requires intensive capital investment. Due to our relatively short operating history, our financing has been primarily through sales of polysilicon, bank borrowings, advances from customers and equity offerings. The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ (in thousands of US$) Net cash provided by (used in) operating activities 1,616,042 (435,423) 49,666 Net cash used in investing activities (1,195,955) (1,480,780) (134,228) Net cash used in financing activities (795,398) (47,356) (850) Effect of exchange rate changes (97,083) (46,048) 27,355 Net decrease in cash, cash equivalents and restricted cash (472,395) (2,009,607) (58,057) Cash, cash equivalents and restricted cash, at the beginning of the year 3,520,351 3,047,956 1,038,349 Cash, cash equivalents and restricted cash, at the end of the year 3,047,956 1,038,349 980,292 Supplemental disclosure of cash flow information: ​ ​ ​ Interest paid 4,719 — — Income taxes paid 289,529 102,496 4,343 Supplemental schedule of non-cash investing activities: ​ ​ ​ Purchases of property, plant and equipment included in the ending balance of payables 421,024 409,472 278,957 Purchases of property, plant and equipment included in the ending balance of amounts due to related parties - short-term portion 6,492 6,028 744 ​ Our cash, cash equivalents and restricted cash decreased by $472.4 million during 2023, $2,009.6 million during 2024, and $58.1 million during 2025. As of December 31, 2025, we had $856.1 million in cash and cash equivalents and $124.2 million in restricted cash. Restricted cash was primarily composed of cash that we placed in our bank accounts as guarantee deposits for the banks’ issuance of short-term letters of credit and bank notes and cash preserved in relation to our pending litigation with a supplier. Cash and cash equivalents consisted of cash on hand and demand deposits, which were unrestricted as to withdrawal and use and had maturity of three months or less. As of December 31, 2025, we had a positive working capital (total current assets in excess of total current liabilities) of $2,194.6 million. We had cash, cash equivalents and restricted cash of $980.3 million and did not have any short-term or long-term bank borrowings as of December 31, 2025. We had total capital commitments of $70.9 million as of the same date. We are a holding company incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash needs. Current PRC regulations restrict the ability of our subsidiaries to pay dividends to us. See “Item 3. Key Information—D. Risk Factors-Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our wholly owned operating subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our operating subsidiaries to pay dividends to us could have a material adverse effect on our ability to borrow money or pay dividends” and “Item 8. Financial Information—Dividend Policy” for more information. Operating Activities Net cash provided by operating activities for the year ended December 31, 2025 was $49.7 million, primarily resulting from $567.7 million in payments for raw materials and utilities, $100.8 million in employee salaries and welfare payment, and tax paid of $34.3 million, partially offset by $753.9 million in cash received from the sales of our products. We generated positive operating cash flow in 2025. The fluctuation was primarily due to lower cost. Net cash used in operating activities for the year ended December 31, 2024 was $435.4 million, primarily resulting from $1,192.1 million in payments for raw materials and utilities, $157.8 million in employee salaries and welfare payment, and tax paid of $124.1 million, partially offset by $1,038.6 million in cash received from the sales of our products. We generated negative operating cash flow in 2024. The fluctuation was primarily due to lower revenues and negative gross margin. 66 Table of Contents Net cash provided by operating activities for the year ended December 31, 2023 was $1,616.0 million, primarily resulting from $3,760.8 million of cash received from the sales of our products, partially offset by our payments for raw materials and utilities of $1,518.4 million, tax paid of $462.3 million, employee salaries and welfare payment of $159.2 million and interest payment of $4.7 million. We generated positive operating cash flow in 2023. The fluctuation was primarily due to lower revenues and gross margin. Investing Activities Net cash used in investing activities for the year ended December 31, 2025 was $134.2 million, primarily resulting from payments for the purchase of property, plant and equipment, fixed-term deposit and short-term investments in a total amount of $4,787.5 million and offset by redemption of fixed-term deposit and short-term investments of $4,653.2 million. Net cash used in investing activities for the year ended December 31, 2024 was $1,480.8 million, primarily resulting from payments for the purchase of property, plant and equipment, land use rights, fixed-term deposit and short-term investments in a total amount of $4,572.6 million and offset by redemption of fixed-term deposit and short-term investments of $3,091.8 million. Net cash used in investing activities for the year ended December 31, 2023 was $1,196.0 million, primarily resulting from payments for the purchase of property, plant and equipment and land use rights in a total amount of $1,186.8 million and offset by redemption of short-term investments of $13.7 million. Financing Activities Net cash used in financing activities from continuing operation for the year ended December 31, 2025 was $0.9 million, primarily resulting from repurchase of shares of $0.9 million by Xinjiang Daqo. Net cash used in financing activities from continuing operation for the year ended December 31, 2024 was $47.4 million, primarily resulting from dividend payment by Xinjiang Daqo of $35.8 million, payments for repurchase of shares by Xinjiang Daqo of $7.7 million and our share repurchase of $5.0 million. Net cash used in financing activities from continuing operation for the year ended December 31, 2023 was $795.4 million, primarily resulting from our share repurchases of $485.9 million and dividend payment by Xinjiang Daqo of $303.7 million. Capital Expenditures In 2023, we incurred capital expenditure of $1,100.7 million for our Phase 5A and Phase 5B expansion projects and our 1,000 MT polysilicon project for the semiconductor industry. In 2024, we incurred capital expenditure of $346.2 million for our Phase 5A and Phase 5B expansion projects and our 1,000 MT polysilicon project for the semiconductor industry. In 2025, we incurred capital expenditure of $115.8 million for our Phase 5B project. The capital expenditure per unit in Phase 1, Phase 2A, Phase 2B, Phase 3A, Phase 3B, Phase 4A, Phase 4B, Phase 5A, Phase 5B and the 1,000 MT polysilicon project was $114.0/kg, $56.8/kg, $26.7/kg, $16.5/kg, $14.2/kg, $13.0/kg, $18.4/kg, $11.6/kg, $13.3/kg and $141.8/kg, respectively, as of December 31, 2025. For additional information, see also “—B. Liquidity and Capital Resources” and “Item 4. Information on the Company—B. Business Overview—Manufacturing Capacity” in this annual report. The total capital expenditures for our Phase 5A and Phase 5B expansion projects and 1,000 MT polysilicon project for the semiconductor industry are approximately $1,556.5 million, $1,380.8 million and $144.2 million, respectively, of which an aggregate of $2,795.9 million had been spent as of December 31, 2025. We intend to use cash generated from operating activities and take other actions to obtain alternative sources of financing, such as obtaining loan facilities from financial institutions, raising funds from the capital markets or entering into capital arrangements to meet our capital expenditure requirements. C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Research and Development.” See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” 67 Table of Contents D. Trend Information Market Trends Global solar PV installations in 2025 totaled approximately 580 GW, representing a 9.4% increase from 530 GW in 2024. In 2025, the annual newly added solar PV installations in China were approximately 317 GW, higher than 278 GW in 2024. According to several solar PV market reports and our estimation, we expect global solar PV installations in 2026 to be approximately 500 to 667 GW. Operational Trends We began our Phase 4B project in March 2021 and completed the construction of the project in December 2021. We ramped it up to its full capacity of 35,000 MT and increased our total production capacity to 105,000 MT in January 2022. We also plan to build polysilicon projects for the solar industry with a total annual production capacity of 200,000 MT (i.e. our Phase 5 expansion project) and for the semiconductor industry with a total annual production capacity of 21,000 MT and silicon metal projects with a total annual production capacity of 300,000 MT in Baotou. We completed the construction of the Phase 5A project in April 2023 and ramped it up to its full capacity in June 2023, which increased our annual production capacity of polysilicon for the solar industry to 205,000 MT. We began the construction of our Phase 5B project in March 2023 and began production in May 2024, which increased our annual production capacity of polysilicon for the solar industry to 305,000 MT. We began the construction of a 1,000 MT polysilicon project for the semiconductor industry in March 2022 and began trial production in May 2024. Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since the beginning of our fiscal year 2025 that are reasonably likely to have a material effect on our net revenues, income from operations, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial condition. E.Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (1) the reported amounts of assets and liabilities, (2) disclosure of contingent assets and liabilities at the end of each reporting period, and (3) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, and expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. When reviewing our financial statements, you should consider (1) our selection of critical accounting policies, (2) the judgment and other uncertainties affecting the application of such policies, and (3) the sensitivity of reported results to changes in conditions and assumptions. We made the following critical accounting estimates to prepare our financial statements. Property, plant and equipment Our property, plant and equipment consist primarily of buildings, plants, machinery and equipment used in our operations. Those fixed assets are carried at cost and are depreciated over their estimated useful lives, ranging from 15 to 30 years, using the straight-line method for both financial reporting purposes and tax reporting purposes. The carrying value of our long-lived assets is evaluated periodically based on utilization of the asset and physical condition of the asset, as well as the useful life of the asset to determine if adjustment to the depreciation period or the carrying value is warranted. Estimated lives of the above mentioned depreciable fixed assets may vary over time due to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors. We are not aware of any specific factors that are reasonably likely to significantly change the estimated service lives of our assets. Actual use and retirement of our assets may vary from our current estimates, which would impact the amount of depreciation expense recognized in future periods. 68 Table of Contents We have compared the useful lives and residual value of each asset category with the comparable companies in the industry, and we are not aware of any significant variances. Changes in estimated useful lives of our assets could significantly impact future periods’ depreciation expense and have a material impact on our Consolidated Financial Statements. If the estimated useful lives of all depreciable assets were increased by five years, annual depreciation expense would decrease by approximately $67.05 million. If the estimated useful lives of all depreciable assets were decreased by five years, annual depreciation expense would increase by approximately $248.77 million. We are projecting an increase in our depreciation expense in 2026 versus 2025 which is mainly driven by an increase in our projected depreciable asset base. Impairment of Long-Lived Assets We evaluate our long-lived assets or asset group for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of a group of long-lived assets may not be fully recoverable. When these events occur, we evaluate the impairment by comparing the carrying amount of the assets to future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, we recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value, generally based upon discounted cash flows or market prices. Our management determines the fair value of an asset or asset group utilizing estimated future discounted cash flows and incorporates significant assumptions including revenue growth rate, gross margin, and discount rate. These assumptions might be affected by expectations about future market and economic conditions. We did not recognize any impairment loss on long-lived assets in 2023 and 2025. We recognized impairment loss on long-lived assets of $175.6 million in 2024. Recent Accounting Pronouncements For details of recently issued accounting pronouncements not yet adopted that might have material impact on our consolidated financial statements, please refer to Note 2 to our consolidated financial statements for the years ended December 31, 2023, 2024 and 2025 included elsewhere in this annual report.