[Management View]
Revenue for Q2 2025 was $75.2 million, down 39% from Q1 2025 and 66% from Q2 2024. Management emphasized the strategic priority of curtailing sales below production volume to respond to low prices and maintain industry stability. The company announced a new $100 million share repurchase program effective immediately through year-end 2025.

[Outlook]
Management projects full-year 2025 production volume to be 110,000–130,000 metric tons, with ongoing reductions in utilization to match market demand. The company is optimistic about future industry developments and regulatory actions aimed at curbing irrational competition and promoting high-quality growth.

[Financial Performance]
Revenue decreased by 39% QoQ and 66% YoY. Gross loss was $81.4 million in Q2 2025, compared to $81.5 million in Q1 2025. Operating loss was $115 million in Q2 2025, up slightly from $114 million in Q1 2025. Net loss attributable to shareholders was $76.5 million in Q2 2025, up from $71.8 million in Q1 2025.

[Q&A Highlights]
Question 1: Can you share some color on the latest development on the discussions on the consolidation fund or other policy development right now? (Line breaks here)
Answer: On August 19, MIT, NDRC, and other authorities held a symposium on the solar PV industry, reinforcing the need to curb irrational competition and phase out outdated production capacity. The meeting emphasized strengthening industry regulation, improving price monitoring, and standardizing product quality. The buyout SPV for acquiring outdated capacity is still being worked out, and prices have recently increased, especially in the futures market.

Question 2: How sustainable do you think that higher pricing can be with the anti-involution initiatives? What's your outlook for industry production volumes? (Line breaks here)
Answer: Selling below cash cost is unsustainable and detrimental to the industry. Production volume in the next couple of months is expected to be around 100,000 to 110,000 metric tons per month, balanced with demand. The SPV strategy is still in progress, and we are optimistic about its impact on the industry.

Question 3: What's the thinking behind the $100 million share repurchase program? What's the timeline? (Line breaks here)
Answer: The share repurchase program is authorized until the end of next year. We are optimistic about the future of the industry and believe a turning point is near. The pace of the program will depend on market development, but it aims to strengthen shareholder confidence.

Question 4: How do you see yourself in terms of the end game like the amount of volume you will be able to produce? (Line breaks here)
Answer: The overall capacity built or in process is around 3,500,000 metric tons. Production volume will depend on remaining market capacity and annual demand. Companies will reduce utilization rates to match demand, not operating at 100% in the coming years.

Question 5: Do we have any color on the benchmark production costs to derive the policy regulated pricing? How do we balance the price and inventory dynamic? (Line breaks here)
Answer: The industry will need to sell at a price above production costs, which is in the mid-forty-ish range. Recent transactional and futures pricing reflects this policy. Inventory management will depend on utilization rates and regulatory developments. We are actively engaged in the futures market to hedge against price volatility.

Question 6: Can we conclude from that you'll sell more in the third quarter? Are you transacting at the high 40s, low 50s levels right now? (Line breaks here)
Answer: We held back sales in Q2 due to low prices. Prices have recently increased, and we will adjust our sales strategy accordingly. Current transactional prices are reflective of the market, and we aim to generate positive cash margin from sales.

[Sentiment Analysis]
Analysts expressed concerns about industry pricing and regulatory impacts. Management maintained an optimistic tone, emphasizing strategic adjustments and regulatory support for industry stability.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | Q2 2024 |
|-------------------------------|---------------|---------------|---------------|
| Revenue | $75.2 million | $123.9 million| $219.9 million|
| Gross Loss | $81.4 million | $81.5 million | $159 million |
| Operating Loss | $115 million | $114 million | $195.6 million|
| Net Loss Attributable | $76.5 million | $71.8 million | $119.8 million|
| Cash Position | $599 million | $792 million | $998 million |
| Short-term Investments | $418.8 million| $168 million | $219.5 million|
| Notes Receivable | $49 million | $62.7 million | $80.7 million |
| Fixed-term Deposits | $960.7 million| $1.12 billion | $1.17 billion |

[Risks and Concerns]
Gross margin was negative 108% for Q2 2025, reflecting continued market prices below cash cost levels and persistent operating and net losses. Net cash used in operating activities reached $105.4 million in the first six months of 2025, indicating ongoing cash outflows from core operations. Selling below cash cost is unsustainable and detrimental to the industry.

[Final Takeaway]
Daqo New Energy faced significant challenges in Q2 2025, with revenue and sales volume declining sharply. Management's strategic adjustments, including curtailing sales below production volume and engaging in regulatory discussions, aim to stabilize the industry. The company remains optimistic about future industry developments and regulatory support, with a new share repurchase program to strengthen shareholder confidence. Despite ongoing losses, Daqo maintains a strong financial position and is well-positioned to capitalize on long-term growth in the global solar PV industry.