Core Viewpoint - Daqo New Energy (688303.SH) reported a significant decline in financial performance for the first half of 2025, primarily due to the imbalance in supply and demand in the silicon material market, leading to a sharp drop in polysilicon prices [1] Financial Performance - The company achieved a revenue of 1.47 billion yuan, representing a year-on-year decrease of 67.93% [1] - The net profit attributable to shareholders was a loss of 1.147 billion yuan [1] - The non-recurring net profit also showed a loss of 1.154 billion yuan [1] - Basic earnings per share were reported at -0.53 yuan [1]

北京市建国门北大街 8 号华润大厦 20 层 邮编：100005 电话：(86.10) 8519.1300 传真：(86.10) 8519.1350 junhebj@junhe.com 北京市君合律师事务所 关于 新疆大全新能源股份有限公司 部分限制性股票作废事项 之 法律意见书 二零二五年八月 北京市君合律师事务所 目 录 关于新疆大全新能源股份有限公司 2022 年限制性股票激励计划 部分限制性股票作废事项 之法律意见书 致：新疆大全新能源股份有限公司 北京市君合律师事务所（以下简称"本所"）为在北京市司法局注册设立 并依法执业的律师事务所。 本所接受新疆大全新能源股份有限公司（以下简称"公司"、"上市公司" 或"大全能源"）的委托，担任大全能源 2022 年限制性股票激励计划（以下简 称"本次激励计划"）的专项法律顾问，根据《中华人民共和国公司法》（以下 简称《公司法》）、 本法律意见书仅依据中国现行有效的法律、法规和规范性文件的有关规定 发表法律意见，并不对境外法律发表法律意见。 本法律意见书仅供大全能源本次作废之目的使用，不得用作任何其他目的。 本所同意将本法律意见书作为大全能源本次作废所必备的法定 ...

Core Viewpoint - The company announced the cancellation of a portion of the restricted stock from the 2022 incentive plan that had been granted but not yet vested, following the approval of relevant meetings and compliance with legal requirements [1][2][3]. Group 1: Decision Process and Disclosure - The company held multiple board meetings to review and approve the cancellation of the unvested restricted stocks, ensuring compliance with legal and regulatory frameworks [1][2][3]. - Independent directors provided opinions affirming that the incentive plan aligns with the company's sustainable development and does not harm the interests of shareholders [1][2][7]. Group 2: Specifics of the Canceled Stocks - A total of 5.328 million shares of restricted stock were canceled due to the failure to meet performance targets set for the third vesting period, which required a revenue growth rate of no less than 170% compared to 2021 or a production of at least 220,000 tons of polysilicon in 2024 [5][6]. - The company's 2024 revenue was reported at 741.05 million yuan, with polysilicon production at 205,100 tons, both falling short of the established targets [5]. Group 3: Impact and Opinions - The cancellation of these restricted stocks is not expected to have a significant impact on the company's operations or the stability of its core management and employees [6][7]. - The supervisory board and independent directors unanimously agreed that the cancellation complies with relevant laws and regulations and does not adversely affect the company's financial status or shareholder interests [7][8].

Core Viewpoint - The report highlights a significant decline in revenue and net profit for Xinjiang Daqo New Energy Co., Ltd. in the first half of 2025, primarily due to a substantial drop in polysilicon prices and a strategic reduction in production to mitigate market pressures [3][5][6]. Financial Performance - The company reported a revenue of 147,011.27 million RMB, a decrease of 67.93% compared to the same period last year [3][5]. - The net profit attributable to shareholders was -114,667.36 million RMB, with a net profit of -115,409.83 million RMB after deducting non-recurring gains and losses [3][5]. - The operating cash flow was a net outflow of -160,780.47 million RMB, reflecting a significant decrease in cash flow compared to -346,531.43 million RMB in the previous year [3][4]. Production and Sales - The company's polysilicon production for the first half of 2025 was 50,821 tons, a year-on-year decrease of approximately 60% [5][7]. - The average selling price per kilogram of polysilicon was 31.20 RMB, down 33.63% from the previous year [7]. - The unit cash cost decreased to 37.66 RMB/kg, a reduction of 6.6% compared to the previous year [7][8]. Market Position and Strategy - The company maintained an 8.52% share of the domestic polysilicon production market, positioning itself among the top players in the industry [4][5]. - A strategic reduction in production was implemented to alleviate market supply pressure and avoid intense competition, demonstrating the company's adaptability [5][8]. - The company plans to continue its production reduction strategy in the third quarter, with an expected output of 27,000 to 30,000 tons of polysilicon [8]. Financial Health - As of June 30, 2025, the company had a total cash reserve of 12.09 billion RMB and a low debt ratio of 8.04%, indicating a strong financial position [6][8]. - The absence of any interest-bearing debt provides the company with a solid foundation to navigate industry cycles [6]. Research and Development - The company invested 12,428.35 million RMB in R&D during the reporting period, a decrease of 59.92% compared to the previous year [16]. - Continuous investment in R&D and technological innovation is emphasized as a core competitive advantage, with a focus on enhancing production efficiency and reducing costs [9][10][16]. Industry Context - The domestic polysilicon market experienced a rebound in prices from late June to August 2025, influenced by government policies aimed at reducing irrational competition and promoting sustainable development in the photovoltaic industry [8][9]. - The company remains optimistic about the future development of the photovoltaic industry and product price trends [8].

Core Points - The report indicates a significant decline in the company's financial performance, with total revenue dropping by 67.93% to 147,011.27 million RMB compared to the previous year [1] - The net profit attributable to shareholders also saw a substantial loss, amounting to -114,667.36 million RMB, reflecting a worsening financial situation [1] - The total assets of the company decreased by 4.01% to 4,242,659.59 million RMB at the end of the reporting period [1] Financial Summary - Total revenue for the reporting period was 147,011.27 million RMB, down from 458,378.56 million RMB, marking a decrease of 67.93% [1] - The total profit for the period was -129,490.50 million RMB, compared to -73,416.02 million RMB in the previous year [1] - The net profit attributable to shareholders was -114,667.36 million RMB, worsening from -67,016.21 million RMB year-on-year [1] - The net cash flow from operating activities was -160,780.47 million RMB, an improvement from -346,531.43 million RMB in the previous year [1] - The basic and diluted earnings per share were both -0.53 RMB, compared to -0.31 RMB in the previous year [2] Shareholder Information - The total number of shareholders as of the reporting period was 35,062 [2] - Daqo New Energy Corp. holds a significant stake of 71.40% in the company, with 1,531,718,500 shares [2] - Other notable shareholders include various investment funds and individuals, with the top ten shareholders holding a combined significant percentage of the company's shares [2][3]

Core Viewpoint - The board of directors of Xinjiang Daqo New Energy Co., Ltd. held its 19th meeting of the third session, where several key resolutions were unanimously passed, including the approval of the 2025 semi-annual report and the special report on the use of raised funds [1][2][3][4]. Group 1 - The board approved the 2025 semi-annual report and its summary with a unanimous vote of 9 in favor [1]. - The board approved the special report on the storage and actual use of raised funds for the first half of 2025, also with a unanimous vote of 9 in favor [2]. - The board approved the revision of the company's articles of association, pending approval from the shareholders' meeting, with a unanimous vote of 9 in favor [2][3]. - The board approved the semi-annual evaluation report of the "Quality Improvement and Efficiency Enhancement Return" action plan for 2025, with a unanimous vote of 9 in favor [3]. - The board agreed to annul 5.328 million shares of restricted stock from the 2022 incentive plan that were granted but not vested, due to not meeting performance assessment requirements, with a unanimous vote of 9 in favor [3]. - The board proposed to convene the first temporary shareholders' meeting of 2025, with a unanimous vote of 9 in favor [4].

Group 1 - The third meeting of the supervisory board of Xinjiang Daqo New Energy Co., Ltd. was held on August 26, 2025, with all three supervisors present, and the meeting complied with relevant laws and regulations [1][2] - The supervisory board unanimously approved the company's 2025 semi-annual report and its summary, confirming that the report accurately reflects the company's financial status and operating results [1][2] - The supervisory board also approved a special report on the management and actual use of the funds raised in the first half of 2025, with all votes in favor [2] - The board agreed to annul part of the restricted stock incentive plan from 2022 that had been granted but not yet vested, stating that this decision would not materially impact the company's financial status or harm the interests of shareholders [2]

Fundraising Overview - The company raised a total of RMB 6,447,000,000.00 from the issuance of 30 million shares at a price of RMB 21.49 per share, with a net amount of RMB 6,067,191,792.45 after deducting issuance costs [1] - As of June 30, 2025, the company has utilized RMB 5,988,460,123.88 of the raised funds, including RMB 1,782,167,500.00 for replacing self-raised funds and RMB 492,850,221.22 for supplementing working capital [1] Fund Management - The company has established dedicated accounts for the management of raised funds, complying with relevant regulations [1] - A tripartite supervision agreement was signed with various banks to ensure proper management of the funds [1] - The initial amount deposited in the dedicated accounts was RMB 6,104,068,000.00, with differences attributed to prepaid underwriting and other issuance costs [1] Fund Usage - During the reporting period, the company did not use raised funds to replace self-raised funds or temporarily supplement working capital [2] - There were no instances of using idle raised funds for cash management or to repay bank loans [2] - The company has completed the transfer of surplus raised funds to working capital and closed the relevant dedicated accounts [1][2] Project Investment Status - The company has completed the investment projects as planned, with the "Annual Production of 35,000 Tons of Polysilicon Project" and "Annual Production of 1,000 Tons of High-Purity Semiconductor Materials Project" reaching their intended operational status [3] - The polysilicon project generated an annual revenue of RMB 51,325.32 million, which was below the expected revenue due to market factors [3] - The high-purity semiconductor materials project is currently in the verification stage and has not yet achieved the expected benefits [4]

Group 1 - The company plans to recognize an asset impairment loss of approximately 67,485.85 million yuan for the first half of 2025, primarily due to inventory write-downs [1][2] - The impairment loss will impact the company's consolidated profit total for the first half of 2025 by 6,932.91 million yuan, excluding tax effects [2] - The recognition of impairment losses is in accordance with the relevant accounting standards and reflects the company's operational results accurately [2][2] Group 2 - The company conducted impairment testing based on actual business conditions and market trends, adhering to the principle of prudence [1] - The inventory write-downs recognized during this period amounted to 60,552.94 million yuan, which were subsequently reversed upon sale [1] - The impairment preparation aligns with the company's accounting policies and legal regulations, ensuring it does not affect normal operations [2][2]

Core Viewpoint - The company, Xinjiang Daqo New Energy Co., Ltd., is actively implementing a "quality improvement and efficiency enhancement" action plan to optimize operations, governance, and investor returns, aiming to boost market confidence and support high-quality economic development [1]. Group 1: Industry Actions and Strategies - The company is leading the industry's "anti-involution" initiative by proactively reducing production, achieving a multi-crystalline silicon output of 50,821 tons, a year-on-year decrease of approximately 60%, which alleviates market supply pressure and avoids harmful competition [1][2]. - The company has successfully implemented cost control measures, with unit cash costs decreasing to 37.66 yuan/kg, reflecting a significant reduction during the production cut period [2]. Group 2: Technological and Financial Position - The company maintains a strong focus on technology-driven development, with a total of 475 patents as of June 30, 2025, an increase of 92 patents from the previous year, representing a 71% year-on-year growth. R&D investment accounted for 8.45% of revenue, up by 1.69 percentage points year-on-year [2][3]. - The company has a robust financial strategy, with total cash reserves, including bank acceptance bills and deposits, amounting to a significant buffer, ensuring stability during market downturns [2][3]. Group 3: Investor Relations and Communication - The company emphasizes high-quality information disclosure, maintaining an A-level rating in information disclosure evaluation by the Shanghai Stock Exchange, and actively engages with investors through various communication channels [3][5]. - The company has initiated a share repurchase plan, buying back 15,323 shares at an average price of 18.79 yuan/share, totaling approximately 290,753.82 yuan, to enhance investor confidence and provide long-term returns [5][6]. Group 4: Commitment to Sustainability and Social Responsibility - The company adheres to a sustainable development philosophy, promoting green operations and environmental protection initiatives, while also focusing on rural revitalization and ecological protection [6]. - The company has established a three-pronged approach in its production bases in Xinjiang and Inner Mongolia, integrating industry support, ecological revitalization, and employee participation to effectively connect poverty alleviation efforts with rural revitalization strategies [6].