Core Viewpoint - The company *ST Kaixin (300899.SZ)* has confirmed that its membrane separation technology can be applied in various industrial processes, including wastewater treatment and other sectors, but it has not specifically mentioned collaboration with rare earth companies for extraction purposes [2]. Group 1: Company Technology Application - The membrane separation technology of the company is applicable in industrial fluid processing and wastewater treatment [2]. - The technology can be utilized in multiple industries such as chemical fiber, biopharmaceuticals, textile printing and dyeing, chemical, petrochemical, coal chemical, new energy, pulp, and metallurgy [2].

Financial Data and Key Metrics Changes - The company reported a strong quarter of sales execution with improved mega project shipments and a rebound in wastewater revenue, reiterating its four-year revenue guidance [3] - Operating expenses (OpEx) guidance has been reduced further due to effective cost control measures [3] Business Line Data and Key Metrics Changes - The CO2 business had a successful summer testing season, demonstrating energy savings of up to 15% at peak times and significant water savings in specific regions [8][9] - The company is focused on gaining traction in the CO2 market with plans for further updates in 2026 [4] Market Data and Key Metrics Changes - The company is optimistic about long-term trends in desalination and water treatment, although it cautions against expecting near-term results due to the lengthy infrastructure build-out [13] Company Strategy and Development Direction - The company is prioritizing efficiency and cost reduction while continuing to invest in its growing wastewater business [3] - The strategy has shifted to a top-down approach, working closely with OEMs to engage large retailers for technology adoption [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing interest from OEMs and the potential for commercialization in 2027, despite a likely delay in signing commercial agreements [25] - The company expects to see backlog building for 2026, although it will be relatively small, with a pattern of heavy second-half activity continuing [27] Other Important Information - The company has secured a $350,000 lithium extraction project in Argentina, indicating potential growth in this niche area [32] Q&A Session Summary Question: Key takeaways from the recent white paper on CO2 - The white paper validated energy savings of up to 15% and significant water savings in specific regions, along with increased performance during high heat load days [8][9] Question: Progress with OEMs and commercial agreements - OEMs are beginning discussions with large end users, but a commercial agreement is likely a year away, with an MOU signed with Hillphoenix [10][12] Question: Potential government initiatives for desalination - Long-term trends in desalination are encouraged, but near-term results are uncertain due to infrastructure timelines [13] Question: Updates on data center opportunities - No near-term opportunities in CO2 for refrigeration, but water reuse and treatment for data centers are being monitored [16] Question: Operating cost reductions and international footprint - Cost reductions were achieved independently of international expansion efforts, with proactive measures taken in response to tariffs [31] Question: Hiring criteria for wastewater efforts - The company seeks candidates with a track record in wastewater and relevant industry relationships [33] Question: Retailer tests for CO2 technology - Most installations for upcoming tests are expected to be skid installations at existing CO2 locations [34]

Financial Data and Key Metrics Changes - The company reported a strong quarter of sales execution with improved mega project shipments and a rebound in wastewater revenue, reiterating its four-year revenue guidance [3] - Operating expenses (OPEX) guidance has been reduced further due to effective cost control measures [3] Business Line Data and Key Metrics Changes - The CO2 business had a successful summer testing season, with strong OEM engagement, although commercialization is still in early stages [4] - The company is focused on gaining traction in the CO2 market in 2026 and plans to provide updates on progress [4] Market Data and Key Metrics Changes - The company is optimistic about long-term trends in desalination and water treatment, although it cautions against expecting near-term results due to the lengthy infrastructure build time [13] Company Strategy and Development Direction - The company is prioritizing efficiency and cost reduction while continuing to invest in its growing wastewater business [3] - The strategy has shifted to a top-down approach, working with OEMs to engage large retailers for technology adoption [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the CO2 product, despite a delay in commercial agreements, with expectations for significant testing in 2026 [25] - The company anticipates a slow backlog build for 2026, consistent with past patterns, with a heavier second half [27] Other Important Information - The company has secured a $350,000 lithium extraction project in Argentina, indicating potential growth in this niche area [32] - Hiring efforts are focused on individuals with a track record in the wastewater sector and relevant industry relationships [33] Q&A Session Summary Question: Key takeaways from the recent white paper on CO2 - The white paper validated energy savings of up to 15% at peak times, significant water savings in specific regions, and increased performance during high heat load days [8][9] Question: Progress with OEMs and commercial agreements - OEMs are beginning discussions with large end users, but a commercial agreement is likely a year away, with an MOU signed with Hillphoenix [10][12] Question: Potential for government initiatives in desalination - Long-term trends in desalination are encouraged, but near-term results are uncertain due to infrastructure development timelines [13] Question: Updates on data center opportunities - No near-term opportunities in CO2 for refrigeration, but water reuse and treatment for data centers are being explored [16] Question: Impact of international footprint on operating cost reduction - Cost reductions were achieved independently of international expansion efforts, driven by proactive measures in response to tariffs [31] Question: Future hiring criteria for wastewater efforts - The company seeks candidates with industry experience and existing relationships within targeted verticals [33] Question: Likely installation types for retailer tests next year - Most installations are expected to be skid installations at existing CO2 locations [34]

Financial Data and Key Metrics Changes - The company reiterated its 2025 guidance on all metrics and reinstated its wastewater guidance, indicating resilience in its core desalination business despite macroeconomic challenges [4][5] - An additional share repurchase program was announced, totaling $105 million over the past ten months, aiming to repurchase over 10% of outstanding shares while continuing to invest in growth [5] Business Line Data and Key Metrics Changes - The contracted desalination capacity, water reuse capacity, and CO2 refrigeration installations are all experiencing high growth rates, positioning the company to capture upside trends towards its 2029 goals [5][6] - The company reported shipping over $2 million in the quarter due to improved tariff conditions in China, which allowed previously stalled projects to proceed [24][25] Market Data and Key Metrics Changes - The company has broadened its wastewater footprint significantly, focusing on five key verticals: municipal, chemical, textile, manufacturing, and mining, which are expected to yield the largest market share [27][28] - The reduction in tariffs in China has positively impacted project execution, leading to better-than-expected results in that market [24][25] Company Strategy and Development Direction - The company is focused on long-term trends driving its business, including increasing water scarcity and the need for water reuse, which are expected to enhance growth opportunities [5][35] - The management emphasized the importance of regulatory drivers and economic factors in the increasing demand for wastewater treatment solutions [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving higher revenue targets for desalination in 2026, citing a strong pipeline of contracted capacity [10][11] - The management noted that the current testing season for new products is progressing well, with ongoing engagement with OEMs and the addition of new testing sites [16][17] Other Important Information - The company is developing a business case for data center markets and heat pumps, with initial assessments indicating limited growth potential in the CO2 segment for data centers [18][19] - The management highlighted the importance of reliability testing for new products, which is crucial for converting testers into dedicated users [30][31] Q&A Session Summary Question: Confidence in achieving higher desalination revenue targets - Management indicated that while it's too early to tell, recent awards and contracted capacity give them confidence for 2026, with more guidance expected in the next earnings call [10][11][12] Question: Expectations for next-gen PX product pricing - The company expects to maintain or increase selling prices based on capacity, with fewer units needed to fill a plant [14] Question: Update on CO2 work with OEMs - Discussions with Hill Phoenix are ongoing, and the summer testing season is proceeding as expected with new sites being added [16][17] Question: Progress on data center market business case - Initial assessments suggest limited growth potential for CO2 in data centers, but heat pumps show promise [18][19] Question: Better-than-expected results in China - The reduction in tariffs allowed previously stalled projects to move forward, leading to improved results [24][25] Question: Broadened wastewater footprint - The company has successfully expanded its reference case list in key verticals, meeting its expectations [27][28] Question: Drivers for increasing water reuse - The motivations for increased water reuse are both economic and regulatory, driven by water scarcity issues [35]