RMB744.9m claim in Daqo New Energy (NYSE: DQ) contract dispute appeal

Rhea-AI Filing Summary

Daqo New Energy reported an update on a contract dispute involving its subsidiary Xinjiang Daqo New Energy and two former service providers, Xinjiang Xian’an New Materials and Xinjiang Dengbo New Energy. The plaintiffs initially sought economic losses of RMB1,958.5 million, later reduced to RMB742.7 million.

The first instance court’s original verdict in July 2024 terminated the business cooperation agreement and awarded the plaintiffs RMB3.16 million for losses and attorney fees, while rejecting consequential damage claims. After appeal and remand, a retrial verdict in September 2025 again terminated the agreement and increased compensation to RMB3.30 million, still rejecting consequential damages.

The plaintiffs have now appealed this retrial decision, requesting vacation of the first instance verdict and compensation of RMB744.9 million plus litigation costs and attorney fees. The company states that the impact on Xinjiang Daqo will depend on the final verdict.

Positive

• None.

Negative

• Potentially large liability exposure: Plaintiffs are appealing the retrial verdict and now seek economic losses of RMB744.9 million plus litigation costs and attorney fees, creating the possibility of a materially higher obligation than the RMB3.30 million currently awarded.
• Ongoing legal uncertainty: The case has already gone through an initial verdict, appeal, remand, and retrial, and is again before the second instance court, leaving the final financial impact unresolved.

Insights

Litigation risk analyst

Large claimed damages contrast with small awarded sums, leaving material legal uncertainty.

The dispute centers on a terminated business cooperation agreement between Xinjiang Daqo and its former silicon core processing service providers. Plaintiffs’ claimed economic losses rose as high as RMB1,958.5 million, later reduced to RMB742.7 million and now RMB744.9 million in the latest appeal.

So far, two first instance decisions after retrial have ordered relatively modest payments: RMB3.16 million and then RMB3.30 million, both rejecting consequential damage claims. This gap between awarded amounts and requested damages highlights substantial downside risk if a higher court were to accept more of the plaintiffs’ claims.

The plaintiffs’ new appeal to the second instance court keeps the case active, and the company notes the ultimate impact will depend on the final verdict. Subsequent court decisions will determine whether the liability remains near current levels or moves closer to the much larger claimed sums.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934

For the month of October 2025

Commission File Number: 001-34602

DAQO NEW ENERGY CORP.

Unit 29, Huadu Mansion, 838 Zhangyang Road, 

Shanghai, 200122

The People’s Republic of China

(+86-21) 5075-2918

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Daqo New Energy’s Subsidiary Xinjiang Daqo Provides Latest Update on its Litigation Event

In April 2024, Xinjiang Daqo New Energy Co., Ltd. (“Xinjiang Daqo”), a subsidiary of Daqo New Energy (the “Company”), received a court summons relating to a contract dispute lawsuit filed against it by Xinjiang Xian’an New Materials Co., Ltd. and its affiliate, Xinjiang Dengbo New Energy Co., Ltd. The plaintiffs previously provided silicon core processing services to Xinjiang Daqo. The plaintiffs requested for termination of the business cooperation agreement with Xinjiang Daqo and for compensation from Xinjiang Daqo for their economic losses totaling RMB1,958.5 million (which was later reduced to RMB742.7 million), which consisted largely of alleged consequential damages of the plaintiffs. This litigation was previously disclosed in the Company’s annual report on Form 20-F for the year ended December 31, 2023 filed with the Securities and Exchange Commission on April 29, 2024, its press release dated July 17, 2024, its Form 6-K dated March 17, 2025, its Form 6-K dated April 22, 2025, and its press release dated September 11, 2025.

In July 2024, the Company received the first instance court’s verdict, which affirmed termination of the business cooperation agreement and ordered Xinjiang Daqo to compensate the plaintiffs for their losses and attorney fees totaling RMB3.16 million, while rejecting the plaintiffs’ claims for consequential damages. The plaintiffs appealed to the second instance court, and the second instance court vacated the decision of the first instance court and remanded the case for a retrial. In September 2025, the Company received the verdict of the first instance court’s retrial, which affirmed termination of the business cooperation agreement and ordered Xinjiang Daqo to compensate the plaintiffs for their losses and attorney fees totaling RMB3.30 million, while rejecting the plaintiffs’ claims for consequential damages.

Recently, the Company has received a court summons, in which the plaintiffs appealed to the second instance court, requesting for vacation of the first instance court’s decision and compensation from Xinjiang Daqo for their economic losses totaling RMB744.9 million, as well as costs of litigation and attorneys’ fees for the trials. The litigation’s impact on Xinjiang Daqo will be contingent upon the final verdict.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DAQO NEW ENERGY CORP.
	By:	/s/ Xiang Xu
	Name:	Xiang Xu
	Title:	Chairman of the Board of Directors and Chief Executive Officer
Date: October 9, 2025

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FAQ

What litigation update did Daqo New Energy (DQ) disclose for Xinjiang Daqo?

Daqo New Energy reported that its subsidiary Xinjiang Daqo is involved in an ongoing contract dispute with Xinjiang Xian’an New Materials and Xinjiang Dengbo New Energy. The case has gone through an initial verdict, appeal, retrial, and is now again under appeal in the second instance court.

How much are plaintiffs currently claiming in the Xinjiang Daqo lawsuit?

The plaintiffs are currently requesting economic losses totaling RMB744.9 million, plus litigation costs and attorneys’ fees. Earlier in the case, their claims had been as high as RMB1,958.5 million before being reduced to RMB742.7 million and then updated in the latest appeal.

What have the courts ordered Xinjiang Daqo to pay so far in this dispute?

The first instance court initially ordered Xinjiang Daqo to pay RMB3.16 million in losses and attorney fees, rejecting consequential damages. After remand, a retrial verdict increased compensation slightly to RMB3.30 million while again rejecting the plaintiffs’ consequential damage claims.

Did the court terminate Xinjiang Daqo’s business cooperation agreement in the dispute?

Yes. Both the initial first instance verdict and the subsequent retrial verdict affirmed termination of the business cooperation agreement between Xinjiang Daqo and the plaintiffs. The core issue now centers on the amount of compensation owed rather than whether the agreement remains in force.

What is the potential impact of this litigation on Daqo New Energy (DQ)?

The company states that the litigation’s impact on Xinjiang Daqo will depend on the final verdict. Current court decisions require payment of RMB3.30 million, but the plaintiffs’ pending appeal seeks RMB744.9 million plus costs, which could be materially higher if granted.

Which entities are suing Xinjiang Daqo New Energy Co., Ltd.?

The lawsuit was filed by Xinjiang Xian’an New Materials Co., Ltd. and its affiliate Xinjiang Dengbo New Energy Co., Ltd. These companies previously provided silicon core processing services to Xinjiang Daqo under the business cooperation agreement that has now been terminated by court decisions.