Core Insights - The article discusses the evolution and current strategies of Zhaogang Group, a pioneer in the industrial internet sector, emphasizing its focus on efficiency in the steel trading industry and its recent public listing on the Hong Kong Stock Exchange [2][3]. Group 1: Business Model and Operations - Zhaogang Group started as a platform to help businesses find steel products, addressing the pain points in procurement processes for enterprises [3]. - The company has developed a unique business model that enhances efficiency at various stages of the steel trading process, leading to an average procurement frequency of 26 times per year for clients [4]. - The sales radius for steel has significantly expanded, with instances of steel being sourced from as far as Guizhou to Hebei, demonstrating the platform's capability to connect buyers with optimal products [4]. Group 2: AI Integration - AI is a critical component of Zhaogang Group's operations, with applications such as AI procurement and trading assistants significantly improving efficiency [6][7]. - The company has seen its annual steel trading volume increase from under 10 million tons a few years ago to 50 million tons currently, attributed to AI's role in data management and transaction facilitation [6]. - Zhaogang Group has invested over 1 billion yuan in R&D, accumulating nearly 400 software patents, positioning itself as a leader in the industry [7]. Group 3: International Expansion - Zhaogang Group's international business is rapidly growing, with a reported revenue of 339 million yuan in the first half of 2025, marking a year-on-year increase of 38.9% [8]. - The company is expanding its services in regions like the Middle East and Southeast Asia, leveraging existing relationships with Chinese enterprises operating abroad [8][9]. - Plans are underway to establish processing facilities overseas, with the first factory set to open in Dubai by the end of the year [8].

Core Viewpoint - The use of financial tools for price risk management in the steel trading industry is becoming increasingly sophisticated, with companies adopting strategies like the "fuse cumulative purchase option" to effectively manage risks associated with price fluctuations [1][4]. Group 1: Industry Background - The black products market has seen increased price volatility due to concentrated production locations and seasonal demand, complicating risk management for related enterprises [2]. - In April 2023, global crude steel production and sales both declined month-on-month, while domestic demand weakened due to the rainy season in southern China, leading to a downward trend in black product prices [2]. - A steel trading company (referred to as Company A) aimed to hedge against rising procurement costs for rebar, anticipating a price rebound in June after a low in May [2][3]. Group 2: Financial Strategy - Company A initially considered using futures for hedging but opted for a "fuse cumulative purchase option" due to concerns about potential losses in a declining market [3]. - The "fuse cumulative purchase option" was designed to provide a safety net during price fluctuations, allowing for procurement at lower prices during downturns and capturing gains during price surges [4][21]. Group 3: Implementation Process - Company A began trading the fuse cumulative purchase option on May 29, 2023, with a procurement plan of 2,200 tons of rebar at an entry price of 3,500 yuan per ton [5][10]. - The option structure included upper and lower price limits, with a compensation mechanism for price movements, allowing for flexible adjustments based on market conditions [6][10]. Group 4: Performance Analysis - The strategy yielded a total profit of 141,000 yuan over the trading period, with an average profit of 64.09 yuan per ton, demonstrating the effectiveness of the fuse cumulative purchase option compared to standard options [11][12]. - The performance of the fuse cumulative purchase option was superior to that of standard cumulative purchase options, particularly in volatile market conditions, allowing Company A to optimize procurement costs [12][21]. Group 5: Conclusion and Advantages - The fuse cumulative purchase option alleviates timing difficulties in hedging, providing a safety net and optimizing procurement costs [21][22]. - It addresses the limitations of standard cumulative purchase options by allowing for early profit realization during significant price increases, facilitating timely strategy adjustments [21][22]. - The design of the fuse cumulative purchase option can be customized to meet specific risk management needs, enhancing its applicability in various market scenarios [22].