Summary of Calix Limited (CXL) Update / Briefing July 30, 2025 Company Overview - **Company**: Calix Limited (CXL) - **Core Technology**: Development of a zero emissions steel technology known as Zesty, applicable in multiple industries including cement, lime, iron, steel, lithium, and alumina [5][12][28] Key Points and Arguments Zesty Technology - **Technology Description**: Zesty utilizes a unique heating method via a large steel tube, allowing for energy flexibility by using various energy sources such as fossil fuels, biomass, waste, and renewable electrons [6][14] - **Environmental Impact**: The cement and lime industry contributes approximately 8% of global CO2 emissions, with Zesty technology aiming to capture CO2 emissions during the heating process [9][12] - **Iron Production**: Zesty can reduce iron ore using hydrogen, potentially addressing 16% of global CO2 emissions from the iron and steel industry [12][28] Recent Developments - **Demonstration Project**: A new plant is being developed with a capacity of 30,000 tonnes per year, supported by a grant of AUD 44.9 million from Arena for a total project cost of AUD 90 million [15][17] - **Government Support**: Strong backing from the Australian government, including discussions on green iron opportunities with China, which produces about 50% of the world's steel [18][19] Economic Viability - **Cost Projections**: The goal is to produce green iron at around USD 400 per ton, contingent on achieving low electricity costs (AUD 20-30 per megawatt hour) [19][20] - **Market Potential**: The transition to low emissions technologies in iron production is expected to grow significantly, with projections indicating that by 2050, 50% of global iron ore production will utilize alternative low emissions technologies [28][29] Competitive Landscape - **Global Context**: The Zesty technology is positioned favorably against traditional methods, with a focus on reducing emissions and capital costs through flexible operations [35][36] - **Market Drivers**: The need for new technologies is urgent due to increasing CO2 emissions from ironmaking, with government policies supporting the transition to green iron [37][54] Additional Important Content - **Hydrogen Supply**: The technology can utilize various hydrogen sources, addressing concerns about the supply of renewable hydrogen in Australia [89][90] - **Business Model**: Calix aims to be capital light, focusing on licensing agreements and engineering design services rather than building and operating facilities themselves [67][81] - **Future Outlook**: The demonstration plant is expected to be operational by 2028, with plans for commercial facilities to follow, potentially generating revenue through toll processing and engineering studies [94][95] Conclusion - **Strategic Positioning**: Calix's Zesty technology represents a significant opportunity in the green iron market, supported by government initiatives and a growing demand for low-emission steel production. The company is well-positioned to capitalize on the transition towards sustainable industrial practices, with a clear roadmap for development and commercialization [80][81][96]

Core Viewpoint - The article highlights the journey of Delong Steel, particularly its successful establishment and expansion in Indonesia, showcasing the company's strategic vision and adaptability in the steel industry [1][5][6]. Group 1: Establishment and Growth in Indonesia - Delong Steel, under the leadership of Ding Liguo, established a significant presence in the Morowali Industrial Park in Central Sulawesi, Indonesia, with the founding of Dexin Steel in 2017, which integrates various steel production processes [3][4]. - The first phase of Dexin Steel's project was completed in March 2020, achieving an annual production capacity of 4 million tons of steel and 1.3 million tons of coke [3]. - By September 2023, the expansion of the first phase was completed, further solidifying its position as the largest single steel production enterprise built by a Chinese company overseas, with a crude steel capacity reaching 7 million tons [4]. Group 2: Strategic Market Approach - Ding Liguo's strategy involves selling only 30% of the 7 million tons of crude steel produced in Indonesia domestically, while 70% is targeted for international markets, emphasizing a global sales approach [6][8]. - The company aims to create a symbiotic relationship with local enterprises, fostering a truly integrated ecological industrial chain rather than merely exporting products [9][10]. Group 3: Environmental and Operational Transformation - Delong Steel's commitment to environmental sustainability began in 2009, leading to significant improvements in its environmental standards and operational efficiency [21][25]. - The company underwent a major transformation during the restructuring of Bohai Steel, focusing on core steel operations and implementing rigorous cost management and operational efficiency measures [13][15]. - As a result of these efforts, the new Tiansteel Group, formed from the restructuring, achieved a significant reduction in pollutant emissions by 70%, becoming one of the nationally rated A environmental steel plants [19][24]. Group 4: Historical Context and Future Outlook - Ding Liguo's journey in the steel industry began in the early 1990s, with a focus on seizing opportunities during market fluctuations, which has led to Delong Steel's consistent growth and recognition, including its entry into the Fortune Global 500 list in 2022 [30][31][18]. - The article emphasizes the importance of adaptability and strategic foresight in navigating the challenges of the steel industry, with Ding Liguo's philosophy of viewing environmental challenges as opportunities for innovation and growth [24][28].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core View of the Report On Tuesday, the HC2510 contract continued to rise. With positive macro - policy expectations, the week - on - week hot - rolled coil production slightly declined, factory and social inventories both decreased, and terminal demand was resilient, which supported the strong operation of hot - rolled coil futures. Technically, the 1 - hour MACD indicator of the HC2510 contract showed that DIFF and DEA were running at a high level. The recommended operation was to conduct long - biased trading while paying attention to rhythm and risk control [2]. 3. Summary by Relevant Catalogs 3.1 Futures Market - HC main contract closing price: 3,477 yuan/ton, up 83 yuan [2]. - HC main contract position: 1,582,445 lots, down 18,031 lots [2]. - Net position of the top 20 in HC contracts: - 51,658 lots, up 10,293 lots [2]. - HC10 - 1 contract spread: - 15 yuan/ton, up 1 yuan [2]. - HC warehouse receipts at the Shanghai Futures Exchange: 59,549 tons, down 905 tons [2]. - HC2510 - RB2510 contract spread: 170 yuan/ton, unchanged [2]. 3.2 Spot Market - Hangzhou 4.75 hot - rolled coil: 3,450 yuan/ton, up 10 yuan [2]. - Guangzhou 4.75 hot - rolled coil: 3,490 yuan/ton, up 60 yuan [2]. - Wuhan 4.75 hot - rolled coil: 3,460 yuan/ton, up 10 yuan [2]. - Tianjin 4.75 hot - rolled coil: 3,350 yuan/ton, up 10 yuan [2]. - HC main contract basis: - 27 yuan/ton, down 73 yuan [2]. - Hangzhou hot - rolled coil - rebar spread: 30 yuan/ton, down 40 yuan [2]. 3.3 Upstream Situation - Qingdao Port 61.5% PB iron ore fines: 783 yuan/wet ton, down 6 yuan [2]. - Hebei quasi - first - grade metallurgical coke: 1,265 yuan/ton, unchanged [2]. - Tangshan 6 - 8mm scrap steel: 2,240 yuan/ton, unchanged [2]. - Hebei Q235 billet: 3,120 yuan/ton, up 60 yuan [2]. - 45 - port iron ore inventory: 137.8521 million tons, up 0.1932 million tons [2]. - Sample coking plant coke inventory: 554,200 tons, down 43,500 tons [2]. - Sample steel mill coke inventory: 6.3909 million tons, up 11,200 tons [2]. - Hebei billet inventory: 1.0362 million tons, up 60,900 tons [2]. 3.4 Industry Situation - 247 steel mill blast furnace operating rate: 83.48%, up 0.35% [2]. - 247 steel mill blast furnace capacity utilization rate: 90.92%, up 1.05% [2]. - Sample steel mill hot - rolled coil output: 3.2114 million tons, down 20,000 tons [2]. - Sample steel mill hot - rolled coil capacity utilization rate: 82.04%, down 0.51% [2]. - Sample steel mill hot - rolled coil factory inventory: 773,100 tons, down 5,000 tons [2]. - 33 - city hot - rolled coil social inventory: 2.656 million tons, down 21,500 tons [2]. - Domestic crude steel output: 83.18 million tons, down 3.36 million tons [2]. - Steel net export volume: 9.21 million tons, down 0.89 million tons [2]. 3.5 Downstream Situation - Automobile production: 2.7941 million vehicles, up 0.1456 million vehicles [2]. - Automobile sales: 2.9045 million vehicles, up 0.2181 million vehicles [2]. - Air - conditioner production: 28.3831 million units, down 1.0969 million units [2]. - Household refrigerator production: 9.0474 million units, up 0.5374 million units [2]. - Household washing machine production: 9.5079 million units, up 0.0959 million units [2]. 3.6 Industry News - At the 10th Shaanxi - Shanxi - Sichuan - Gansu Steel Enterprises Summit Forum from July 19th to 20th, steel enterprise representatives agreed to implement the central government's requirement to break the "involution" and strengthen industry self - discipline for the development of the regional steel industry [2]. - In June, the domestic billet export volume was 1.1757 million tons, a month - on - month decrease of 14.33% and a year - on - year increase of 280.19%. From January to June, the domestic billet export volume was 5.8922 million tons, a year - on - year increase of 300.31% [2].

Group 1 - ArcelorMittal has shown a significant recovery with Q1 2025 EBITDA of $1.58 billion, driven by increased iron ore production and stable steel shipments, leading to a 35% stock price increase year-to-date [2] - Global steel demand (excluding China) is expected to grow by 2.5–3.5% in 2025, positioning ArcelorMittal to benefit from expanding markets like India and infrastructure-heavy regions such as the U.S. [2] - The company is investing in capacity expansion, facility modernization, and increasing high-grade iron ore exports to enhance its competitive edge [2] Group 2 - Steel prices are cyclical, and rising global trade tensions, particularly between the U.S. and China, could impact market sentiment [3] - The transition to green steel in Europe will require significant investments, potentially putting pressure on margins in the short term [3] Group 3 - ArcelorMittal stock reflects much of the short-term optimism in its current price, with a forward P/S ratio of around 0.4x, indicating it may appear inexpensive [4] - Despite the current valuation, rising expectations and macroeconomic risks, including tariffs and steel price fluctuations, suggest that further upside may be gradual unless new growth catalysts emerge [4] - The company appears fairly valued at present, with gains already factored in unless supportive conditions improve [4]

Core Viewpoint - Company has significantly increased production and sales of steel in 2024 compared to the previous year, indicating a strong operational performance despite the overall industry challenges [2][8]. Production and Sales - In 2024, the company produced 1.2768 million tons of iron, a year-on-year increase of 90.25% - Steel production reached 1.3969 million tons, with an increase of 89.17% - Steel product output was 1.3571 million tons, reflecting a 94.63% increase, showcasing a significant improvement in capacity utilization [2]. Government Support - The company has received substantial support from local government, including tax incentives and subsidies [3]. Business Expansion Plans - The company is open to asset injection plans to expand its steel business, adhering to regulatory disclosure requirements [4]. Product Development - The company has adjusted its product mix in response to changing customer demands, focusing on eight main categories of steel products [5]. - There is a growing emphasis on product quality, with the company investing in quality assurance to meet higher customer expectations [6]. Equipment and Investment - The company is progressively updating its equipment according to an annual plan, with specific investment details available in public announcements [7]. Financial Performance - In 2024, the company achieved revenue of 5.717 billion yuan, a year-on-year growth of 15.75% - The company reported a net loss of 959 million yuan, although this represents a significant narrowing of losses compared to the previous year [8]. Market Strategy - The company is implementing strategies to enhance profitability and operational vitality, including the restoration of various production lines [9]. - The company currently does not own any mines and is focusing on cost control through management optimization and procurement strategies [10]. Environmental Initiatives - The company is committed to environmental upgrades and aims to reduce pollution as part of its corporate social responsibility [13]. Industry Context - The steel industry is facing complex challenges, but there are opportunities for high-end steel demand growth due to the rise of advanced manufacturing sectors [12]. - The company is positioned as a significant player in the special steel market in the western region, despite ongoing losses due to industry-wide downturns [12].

Group 1 - The investment promotion conference for the petrochemical industry in Zhanjiang attracted over 60 enterprise representatives, with more than 70% from Shanghai and Jiangsu-Zhejiang regions, including executives from major domestic and international chemical companies [1] - Nine projects were signed at the event, covering new material research and development, photovoltaic power generation, supply chain services, and hydrogen energy industries, with a total investment amounting to 7.961 billion yuan [1] Group 2 - The Donghai Island Chemical Park in Zhanjiang covers a total area of 25 square kilometers with an investment exceeding 200 billion yuan, making it one of the largest and most complete petrochemical bases along the Chinese coast [2] - The park is supported by major projects from Sinopec and BASF, extending the industrial chains of ethylene, propylene, and aromatics, and developing five major industrial clusters including high-end coatings and automotive materials [2] - The park features significant infrastructure, including a 400,000-ton navigation channel and 13 deep-water berths, facilitating seamless transportation connections to the Guangdong-Hong Kong-Macao Greater Bay Area and ASEAN markets [2]

Summary of Conference Call Notes Company and Industry Overview - The conference call primarily discusses the steel industry, focusing on a specific company, which appears to be a leading player in the sector, referred to as "南钢" (Nangang) [1][3][12]. Key Points and Arguments Economic Outlook - The IMF projects a global economic growth rate of 3.2% for 2024, a slowdown from 4.3% in 2023, while China's GDP is expected to grow by 5% [2]. - Global crude steel production is forecasted at 1.883 billion tons in 2024, with China's output at 1.005 billion tons, reflecting a year-on-year increase of 1.7% [2]. Company Performance - The company reported total assets of 69.1 billion yuan, a decrease of 5.5%, with sales of 61.8 billion yuan, down 17.7%. Net profit was 2.192 billion yuan, with earnings per share (EPS) of 0.37 yuan, up 6.38% [3]. - The company has maintained a strong operational efficiency despite market pressures, achieving a production capacity of 10 million tons annually [1][3]. Product and Market Development - The company has received multiple awards for technological advancements, including high-strength steel and applications in various sectors such as renewable energy, shipbuilding, and automotive [4]. - The sales distribution across sectors includes 17.21% for new energy equipment, 19.42% for shipbuilding, and 15.22% for rail transportation [4]. Financial Strategy and Dividends - The company has a consistent dividend policy, maintaining a payout ratio of 50% for 2024, with plans for similar distributions in the future [12][14]. - Cash flow remains strong, with a reported cash inflow of 3.2 billion yuan for 2024, supported by effective inventory management [17]. Challenges and Risks - The company faces challenges from trade protectionism and fluctuating demand in the steel market, particularly in construction and manufacturing sectors [11][21]. - Export dynamics are affected by increased tariffs, particularly from the U.S., but the company has managed to mitigate these impacts due to its focus on specialty steel products [18][19]. Environmental and ESG Initiatives - The company has completed significant emissions reduction projects and is recognized as a leader in environmental practices within the industry [7][10]. - It has achieved various certifications for its products, emphasizing sustainability and compliance with international standards [8]. Future Outlook - The company aims to enhance its product mix towards high-end materials, with a target production increase to 9.9 million tons in 2024 [34]. - There is a focus on maintaining competitive advantages through innovation and differentiation in product offerings [40][41]. Additional Important Content - The company has developed a comprehensive strategy to integrate advanced materials into its production processes, aiming for a higher gross margin from these products [30][31]. - The management emphasizes the importance of adapting to market changes and customer needs, indicating a proactive approach to maintaining market share and profitability [39][40]. This summary encapsulates the key discussions and insights from the conference call, highlighting the company's performance, market conditions, and strategic initiatives within the steel industry.

Core Viewpoint - The steel industry continues to face a "frozen period" in 2024, with persistent supply-demand imbalances leading to declining profitability across the sector [2][6][9]. Industry Performance - As of March 25, 2024, seven listed steel companies reported a combined revenue of 359.66 billion yuan and a net profit of 12.32 billion yuan, indicating a significant decline in performance [2]. - Major companies like Fangda Special Steel and Hualing Steel reported net profit drops of over 60% and nearly 60% respectively, highlighting the industry's struggles [2][3]. Financial Results - Hualing Steel's 2024 revenue was 144.11 billion yuan, down 12.07%, with a net profit of 2.03 billion yuan, a 59.99% decrease [3]. - Fangda Special Steel's revenue fell by 18.67% to 21.56 billion yuan, with a net profit decline of 64.02% to 248 million yuan [4]. - In contrast, CITIC Special Steel experienced a smaller decline, with a revenue drop of 4.22% to 109.20 billion yuan and a net profit decrease of 10.41% to 5.13 billion yuan [4]. Market Conditions - The steel market remains weak due to low downstream demand and high raw material prices, with steel prices declining more than raw material prices [6][7]. - In 2024, China's crude steel production is expected to decrease by 1.7% to 1.005 billion tons, while apparent consumption is projected to drop by 5.4% to 892 million tons [6][7]. Challenges and Opportunities - The industry faces both external pressures and internal competition, with significant capacity release but declining demand [8][9]. - Companies that have shifted focus to high-end products, such as Nanjing Steel, have seen profit increases, indicating a potential path for recovery [7][9]. Future Outlook - Despite current challenges, some companies maintain an optimistic outlook for 2025, citing improvements in downstream demand and potential growth in sectors like new energy and high-end equipment manufacturing [9][10]. - Industry experts suggest the need for a new capacity governance mechanism to address supply-demand imbalances and promote technological innovation for higher product value [9][10].