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DQ, DAQO New Energy Corp.

Semiconductors capital-intensive Cyclical

A semiconductor business, riding a brutal capacity cycle on the edge of Moore's Law.

Latest annual: FY2025 20-F · 1 ADS = 5 ordinary shares

DQ · DAQO New Energy Corp.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$665M

−35.3% YoY · −0% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $665M 5-yr avg $2.1B

Gross margin −21% 5-yr avg 28%

Operating margin −40.6% 5-yr avg 13.4%

ROIC −6% 5-yr avg 53%

Owner-earnings margin −19% 5-yr avg 13%

Free cash flow margin −19% 5-yr avg −8%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 35% and operating margin about 28% through the cycle, a spread the cycle sets more than the company does. The margin is cyclical, swinging between −55% and 66% over the years, so the through-cycle figure carries more than any single year — and the balance sheet at the trough more than the peak. Capital spending runs about 30% of sales, well above depreciation, so the return earned on what it sinks into that plant weighs as much as the margin. Read this kind of business on process leadership and the capex cycle. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run in the teens (median 15%, above 15% in 5 of 10 years). Owner earnings agree: roughly 35% of revenue reaches owners as cash, though it swings. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMDec 2025
											Income statement
$196M	$323M	$302M	$350M	$676M	$1.7B	$4.6B	$2.3B	$1.0B	$665M	$665M	RevenueRevenue
40%	45%	33%	23%	35%	65%	74%	40%	−21%	−21%	−21%	Gross marginGross mgn
$61M	$131M	$81M	$47M	$188M	$1.1B	$3.0B	$783M	($564M)	($270M)	($270M)	Operating incomeOp. inc.
31.2%	40.5%	26.9%	13.6%	27.8%	62.6%	66.0%	33.9%	−54.8%	−40.6%	−40.6%	Operating marginOp. mgn
$44M	$94M	$39M	$30M	$134M	$865M	$2.5B	$653M	($448M)	($216M)	($216M)	Net incomeNet inc.
14%	16%	23%	25%	17%	16%	19%	20%	—	—	—	Effective tax rateTax rate
											Cash flow & returns
$99M	$143M	$96M	$181M	$210M	$639M	$2.5B	$1.6B	($435M)	$50M	$50M	Operating cash flowOp. cash
$23M	$28M	$28M	$47M	$69M	$77M	$107M	$149M	$206M	$237M	$237M	DepreciationDeprec.
$32M	$21M	$29M	$104M	$7M	($303M)	($124M)	$814M	($194M)	$29M	$29M	Working capital & otherWC & other
$67M	$64M	$143M	$279M	$118M	$499M	$1.2B	$1.1B	$359M	$173M	$173M	CapexCapex
33.9%	19.8%	47.4%	79.7%	17.5%	29.7%	26.2%	48.1%	34.9%	26.0%	26.0%	Capex / revenueCapex/rev
$76M	$115M	$68M	$134M	$141M	$562M	$2.4B	$1.5B	($642M)	($123M)	($123M)	Owner earningsOwner earn.
38.8%	35.6%	22.5%	38.2%	20.9%	33.5%	51.1%	63.6%	−62.4%	−18.5%	−18.5%	Owner earnings marginOE mgn
$32M	$79M	($48M)	($98M)	$91M	$140M	$1.3B	$505M	($794M)	($123M)	($123M)	Free cash flowFCF
16.4%	24.3%	−15.8%	−28.0%	13.5%	8.4%	27.3%	21.9%	−77.2%	−18.5%	−18.5%	Free cash flow marginFCF mgn
—	—	—	—	—	—	$125M	$486M	$5M	—	—	BuybacksBuybacks
13%	23%	10%	5%	18%	61%	189%	36%	-13%	-6%	-6%	ROICROIC
16%	24%	7%	5%	17%	40%	52%	14%	-10%	-5%	-5%	Return on equityROE
16%	24%	7%	5%	17%	40%	52%	14%	−10%	−5%	−5%	Retained to equityRetained/eq
											Balance sheet
$16M	$61M	$88M	$53M	$77M	$1.0B	$3.5B	$3.0B	$1.0B	$856M	$856M	Cash & investmentsCash+inv
$5M	$701K	$1M	$13K	$0	$0	$0	—	—	—	$0	ReceivablesReceiv.
$12M	$16M	$15M	$36M	$42M	$328M	$170M	$173M	$150M	$169M	$169M	InventoryInvent.
$19M	$19M	$9M	$13M	$19M	$81M	$82M	$93M	$26M	$27M	$27M	Accounts payablePayables
($2M)	($3M)	$7M	$24M	$23M	$246M	$88M	$80M	$123M	$142M	$142M	Operating working capitalOper. WC
$73M	$142M	$160M	$174M	$180M	$1.7B	$4.9B	$3.6B	$2.6B	$2.7B	$2.7B	Current assetsCur. assets
$250M	$217M	$150M	$445M	$284M	$550M	$737M	$836M	$521M	$502M	$502M	Current liabilitiesCur. liab.
0.3×	0.7×	1.1×	0.4×	0.6×	3.2×	6.6×	4.3×	5.0×	5.4×	5.4×	Current ratioCurr. ratio
$657M	$749M	$855M	$1.2B	$1.2B	$3.3B	$7.6B	$7.4B	$6.4B	$6.4B	$6.4B	Total assetsAssets
$162M	$141M	$137M	$201M	$178M	$0	—	—	—	—	$0	Total debtDebt
$146M	$81M	$49M	$148M	$102M	($1.0B)	—	—	—	—	($856M)	Net debt / (cash)Net debt
4.8×	8.0×	7.5×	5.0×	7.3×	51.3×	—	—	—	—	-13.2×	Interest coverageInt. cov.
$270M	$392M	$525M	$567M	$767M	$2.2B	$4.8B	$4.8B	$4.4B	$4.4B	$4.4B	Shareholders’ equityEquity
											Per share
265M	273M	326M	350M	375M	384M	386M	375M	331M	337M	338M	Shares out (diluted)Shares
$0.74	$1.18	$0.93	$1.00	$1.80	$4.37	$11.92	$6.16	$3.11	$1.98	$1.97	Revenue / shareRev/sh
$0.17	$0.34	$0.12	$0.08	$0.36	$2.25	$6.42	$1.74	$-1.35	$-0.64	$-0.64	EPS (diluted)EPS
$0.29	$0.42	$0.21	$0.38	$0.38	$1.46	$6.10	$3.91	$-1.94	$-0.37	$-0.36	Owner earnings / shareOE/sh
$0.12	$0.29	$-0.15	$-0.28	$0.24	$0.37	$3.25	$1.35	$-2.40	$-0.37	$-0.36	Free cash flow / shareFCF/sh
$0.25	$0.23	$0.44	$0.80	$0.32	$1.30	$3.12	$2.96	$1.08	$0.51	$0.51	Cap. spending / shareCapex/sh
$1.02	$1.44	$1.61	$1.62	$2.05	$5.63	$12.44	$12.70	$13.18	$13.09	$13.02	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+11.5%/yr	+1.9%/yr
Capital spending / share	+8.3%/yr	+10.2%/yr
Book value / share	+32.8%/yr	+44.9%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

337Mpeak FY2022

ROIC

−6%low FY2024

Gross margin

−21%low FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($123M)owner earningsvs.($216M)net incomelow FY2024

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $216M loss into ($123M) of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($216M)	($448M)	$653M	$2.5B	$865M
Depreciation & amortizationnon-cash charge added back	+$237M	+$206M	+$149M	+$107M	+$77M
Working capital & othertiming of cash in and out, other non-cash items	+$29M	−$194M	+$814M	−$124M	−$303M
Cash from operations	$50M	($435M)	$1.6B	$2.5B	$639M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$173M	−$206M	−$149M	−$107M	−$77M
Owner earnings	($123M)	($642M)	$1.5B	$2.4B	$562M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	—	−$152M	−$962M	−$1.1B	−$421M
Free cash flow	($123M)	($794M)	$505M	$1.3B	$140M
Owner-earnings marginowner earnings ÷ revenue	-19%	-62%	64%	51%	33%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 20-F · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -13.2×

Does not cover its interest

Operating income ($270M) ÷ interest expense $20M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? +$856M

Net cash, debt-free

Cash $856M − debt $0

What this means
Cash and short-term investments exceed every dollar of debt by $856M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 65d

Long (60+ days)

DSO 0 + DIO 77 − DPO 12 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 13%

Solid through the cycle

10-yr median, range -13%–189%; -6% latest = NOPAT ($213M) ÷ invested capital $3.6B

Industry peers: median 5%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran -6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 33%

High through the cycle

10-yr median margin, range -62%–64%; latest ($123M) = operating cash $50M − maintenance capex $173M

Industry peers: median 2%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -19% of revenue this year, a 33% median across 10 years.
Are earnings backed by cash? $50M

Loss, but cash-generative

Net income ($216M) · cash from operations $50M

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? —

Not enough data

What this means
The filing data didn't include the inputs for this check.
Investing or harvesting? 0.73×

Harvesting

Capex $173M ÷ depreciation $237M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $665M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 5.37×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $0 vs $2.2B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 2 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −106%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.01/share (latest year $-0.64), the averaged base the calculator's gate runs on, and book value is $13.02/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 8 of 10

What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 3 of 6 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 33% → −20% (3-yr avg ends)

In the filing’s words The words explain the slip: the filing names price competition rather than pricing actions of its own — a business that looks to take its price, not set it.

What this means
Through the cycle the operating margin slipped — about 33% early to −20% lately, median 28% — competition or costs are biting in.
Reinvestment, incremental ROIC −17%

What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
Worst year 2024 · −54.8% op. margin

What this means
Operations went underwater in 2024, understand why before trusting the good years.
Share count +2.7%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of fiscal year-end, Dec 31, 2025

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$2.7B

Cash & short-term investments$856M
Inventory$169M
Other current assets$1.7B

Current liabilities$502M

Accounts payable$27M
Other current liabilities$475M

Current ratio5.37×all current assets ÷ what's due · Graham looked for 2×

Quick ratio5.04×stricter: inventory excluded

Cash ratio1.71×strictest: cash alone against what's due

Working capital$2.2Bthe cushion left after near-term bills

Deeper floors

Tangible book value$4.4Bequity stripped of goodwill & intangibles

Net current asset value$2.2BGraham's net-net: current assets less all liabilities

Debt incl. operating leases$82K$82K of it operating leases

Deferred revenue$49Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $5.1B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$4.0B · 79%
Buybacks$616M · 12%
Retained (debt / cash)$426M · 8%

Returned to owners$616M
15% of the owner earnings the business produced over the span, $0 as dividends and $616M as buybacks.
Average price paid for buybacks—
Buybacks ran $616M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count27.8%
The diluted count rose from 265M to 338M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Return on what it retained5%
Of the earnings it kept rather than paid out ($3.1B over the span), annual owner earnings (first three years vs last three) grew $148M, so each retained $1 added about 0.05 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Inverting the record

Invert: instead of why DAQO New Energy Corp. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

3 of the 5 tests turned up something to look into; the other 2 came back clean.

Look hereIs it less profitable than it was?−5.8% vs 32.3%
The owner-earnings margin averaged 32.3% early in the record and −5.8% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid the share count rise anyway?27.8%
Diluted shares grew 27.8% over 2016–2025, even as the company spent $616M on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.
Look hereDid receivables and inventory outpace sales?9% → 25% of sales
Receivables and inventory grew from $17M to $169M while revenue grew 239%: working capital is climbing faster than sales (9% of revenue then, 25% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.

And these came back clean

Did debt outgrow the business?
Did reported profit become cash?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Semiconductors

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
PLABPhotronics	$849M	25%	13.3%	11%	13%
FORMFormFactor	$785M	40%	8.4%	7%	12%
PLUGPlug Power Inc.	$710M	-34%	-92.0%	-50%	-70%
DQDAQO New Energy Corp.	$665M	37%	29.5%	15%	35%
KNKnowles Corporation	$593M	40%	9.5%	5%	—
AAOIApplied Optoelectronics Inc.	$456M	26%	-19.9%	-13%	-13%
SITMSiTime	$327M	53%	-8.3%	-8%	8%
MXMagnachip Semiconductor Corporation	$179M	24%	2.5%	8%	-5%
Group median	—	32%	5.5%	6%	8%

The price

What a price has to assume.

What the price implies

reverse-DCF

Enter the US price, in dollars: the NYSE/Nasdaq quote you hold. Per the filing's own cover, “American depositary shares, each representing 5 ordinary”; DAQO New Energy Corp. reports in USD, so every figure in this tool is stated per ADS so your dollar quote reconciles exactly. The record tables elsewhere on this page remain as filed.

DAQO New Energy Corp. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

Today’s price $

The assumptions Required return 9% Years to get there 10 Revenue growth 0%

Revenue, delivered−6%/yr’20→’25

Mature owner-earnings margin 15%

Enter a price to run it.

Owner earnings it must reach—

Margin the price demands—

Owner-earnings margin today−19%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh DQ against another business →

Cite: Owner Scorecard, "DAQO New Energy Corp. (DQ), the owner's record," https://ownerscorecard.com/c/DQ, data as of 2026-07-09.

Manual order: ← DPRO its page in the Manual DRD →

Industry order: ← DIOD the Semiconductors chapter ENPH →