Daqo New Energy Corp. Q4 FY2025 earnings call

• Market conditions: 2025 China's NT evolution initiative supported solar PV industry emergence from cyclical downturn, prices rebounded from Q3, silicon sector had notable gains. - Production and sales: Utilization rate increased from 33% in Q1 to 55% in Q4, annual production 123,652 metric tons (in line with guidance), sales volume 126,707 metric tons in 2025. Second half 2025 ramped up sales efforts. - Financial improvement: Narrowed losses, EBITDA turned positive, net loss narrowed, operating cash flow turned positive, strong balance sheet. - Operational measures: Fourth quarter 2025 mitigated market oversupply, reduced production costs, idle facility related costs fell. - Industry initiatives: Chinese authorities tackling irrational competition and overcapacity, designating NTM Volution as national priority, solar PV industry focus, updating legislative frameworks, drafting new standards, major polysilicon manufacturers responding. - Future outlook: Anti - involution initiatives to continue, solar PV industry long - term growth prospects, China's new solar PV installed capacity growth, space - based solar power as new growth engine. Company aims to strengthen competitive edge via high - efficiency N - type technologies and cost optimization via digital transformation and AI

In 2025, the utilization rate increased from 33% in Q1 to 55% in Q4, annual production volumes were 123,652 metric tons (in line with guidance of 121,000 - 124,000 metric tons), a 39.7% year - over - year decrease from 2024. Sales volume reached 126,707 metric tons in 2025. Revenue in 2025 was $665 million compared to $1 billion in 2024. EBITDA swung to positive $1.7 million in 2025 from negative $337.4 million in 2024. Net loss attributed to shareholders narrowed to $1.7 million in 2025 from $345.2 million in 2024. Operating cash flow was $56.1 million in 2025 compared to a $435 million outflow in 2024. At end - 2025, cash balance was $980 million, short - term investments $114 million, bank notes receivable $136 million, fixed - term bank deposit $1 billion, total highly liquid assets $2.27 billion. Fourth quarter 2025 revenues $221.7 million, gross profit $15.4 million, gross margin 7%, SG&A expenses $18.7 million, non - cash expense related to allowance for credit loss $19.3 million, R&D expenses $0.7 million, loss from operations $20.9 million, operating margin negative 9.4%, net loss attributable to shareholders $7.3 million, EBITDA $52 million, EBITDA margin 23.7%. Full year 2025 revenues $665 million, gross loss $137.9 million, gross margin negative 20.7%, SG&A expenses $118.2 million, R&D expenses $2.6 million, loss from operations $270 million, operating margin negative 40.6%, net interest income $9 million, net loss attributable to shareholders $170.5 million, EBITDA $1.7 million, EBITDA margin 0.3%. Cash and equivalents as of 2025 - 12 - 31 $980 million, short - term investments $114 million, bank notes receivable $135.5 million, fixed - term deposit within one year $972.4 million. Net cash provided by operating activities in 2025 $56.1 million, net cash used in investment activities $140.7 million, net cash used in finance activities $0.9 million

• 2026 first quarter total policy income production volume expected to be approximately 35,000 - 40,000 metric tons. - 2026 full year production volume expected to be in range of 140,000 - 170,000 metric tons. - For 2026, currently expects approximately $100 - $150 million of capital expenditures, primarily linked to remaining payments for Inner Mongolia project and maintenance capital. - Free cash flow expected to turn positive, especially in second half of 2026, based on volume, average selling price held steady, and costs stable to lower

• Forward - looking statements involve inherent risks and uncertainties, actual results may differ materially. - Factors causing actual results to differ from forward - looking statements include risks and uncertainties. - Repayment of funds lent to local government - affiliated entity for Inner Mongolia polysilicon project was delayed due to industry downturn, leading to allowance for credit loss. - The progress of anti - involution policies and industry consolidation has uncertainties, including how quickly outdated capacities will exit and how prices will be affected

Q: Potential buyback strategy?

A: Shared repurchase is monitored as part of capital allocation strategy, waiting for more clarity on policy implementation and outcomes to optimize timing.

Q: Industry consolidation, peer M&A?

A: Peers' M&A is their strategic decision, company is open - minded to value - creating opportunities, national anti - involution policy aims at rational and efficient industry structure, discussions on consolidation ongoing with emphasis on market - oriented approach.

Q: Key milestones for mandatory national standard, anti - unfair competition law?

A: Difficult to say exactly as details not released until policies land, but pricing law requires sales not below industry level cost.

Q: Poly prices outlook in Q1 and Q2?

A: At least around 53 - 54 RMB per kilogram in coming quarters, depends on consolidation pace.

Q: Further lowering of cash costs by end - 2026?

A: Continue to make progress, likely similar to Q4 level in Q1 and Q2, further reduction in second half.

Q: Acquisition consideration?

A: Open - minded to opportunities, primary focus on SPV developments in near term, but acquisition directly could be considered.

Q: Market share target, anti - involution success in poly sector?

A: No specific market share target, anti - involution extends over years until outdated and smaller players exit and prices restore to healthy level, key aim is to sustain polyprice and facilitate outdated capacity exit.

Q: Polysilicon prices outlook, free cash flow trend?

A: Prices should be at least around 53 - 54 RMB per kilogram in first and second quarter, free cash flow expected to turn positive, especially in second half of 2026, based on volume, price, and cost factors